1
EXHIBIT 10.7
ACQUISITION AGREEMENT
BY AND AMONG
XXXXXX-XXXXXXX PROPERTIES, INC.,
HI CAPITAL CORP.,
METROPORT REALTY CORPORATION,
HI PRODUCTION COMPANY, INC. AND
DALLAS MAVERICKS, INC.
("SELLER")
AND
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP
("PURCHASER")
2
TABLE OF CONTENTS
ARTICLE I
ASSETS . . . . . . . . . . . . . . . . 1
1.1 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2.1 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2.2 Improvements . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.3 Personal Property . . . . . . . . . . . . . . . . . . . . . . 2
1.2.4 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.5 Ground Leases . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.6 Operating Agreements . . . . . . . . . . . . . . . . . . . . . 2
1.2.7 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.8 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3.1 Number not used . . . . . . . . . . . . . . . . . . . . . . . 3
1.3.2 Rising Star Partnership Interests . . . . . . . . . . . . . . 3
1.3.3 Xxxxx Muse Partnership Interests . . . . . . . . . . . . . . . 3
1.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5.1 Leases, Royalty Interests, Contract Rights . . . . . . . . . . 3
1.5.2 Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5.3 Contracts and Agreements . . . . . . . . . . . . . . . . . . . 4
1.6 Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Citation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.10 Texas Stadium Suite . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12 Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
PURCHASE PRICE . . . . . . . . . . . . . . 6
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Adjustments to Purchase Price . . . . . . . . . . . . . . . . . . . . 6
2.2.1 Partnership Interests . . . . . . . . . . . . . . . . . . . . 6
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2.2.2 Dispositions of Marketable Securities and Municipal Bonds . . 6
2.2.3 Redemption Pursuant to Any Municipal Bonds . . . . . . . . . . 6
2.2.4 The Addison . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2.5 Flower Mound And Other Undeveloped Land . . . . . . . . . . . 7
2.2.6 Radovir Obligation . . . . . . . . . . . . . . . . . . . . . . 7
2.2.7 Promissory Note Payments . . . . . . . . . . . . . . . . . . . 7
2.3 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . 7
2.4 Adjustment Based on DBL Partnership Interest . . . . . . . . . . . . . 8
ARTICLE III
XXXXXXX MONEY . . . . . . . . . . . . . . . 8
3.1 Xxxxxxx Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
DUE DILIGENCE AGREEMENTS . . . . . . . . . . . . 8
4.1 Due Diligence Deliveries . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Real Property Deliveries . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.1 Miscellaneous Agreements . . . . . . . . . . . . . . . . . . . 9
4.2.2 Operating Agreements . . . . . . . . . . . . . . . . . . . . . 9
4.2.3 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . 9
4.2.4 Plans and Specifications . . . . . . . . . . . . . . . . . . . 9
4.2.5 Tax Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.6 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.8 Financial Statements . . . . . . . . . . . . . . . . . . . . . 9
4.2.9 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.10 Ground Leases . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.11 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.12 Operational Documents . . . . . . . . . . . . . . . . . . . . 10
4.2.13 Authorization for Interviews . . . . . . . . . . . . . . . . . 10
4.2.14 Maintenance Records . . . . . . . . . . . . . . . . . . . . . 10
4.2.15 Projected Expenditures . . . . . . . . . . . . . . . . . . . . 10
4.2.16 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . 10
4.2.17 Utility Bills . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.18 Disputes; Major Repairs . . . . . . . . . . . . . . . . . . . 10
4.2.19 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2.20 Confidential Information Concerning Value . . . . . . . . . . 11
4.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.1 Number not used . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.2 Rising Star Partnership Interests . . . . . . . . . . . . . . 11
4.3.2.1 Rising Star Partnership Agreements . . . . . . . . . 11
4.3.2.2 Investments . . . . . . . . . . . . . . . . . . . . 11
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4.3.2.2.1 Division Orders; Title Information . . . 11
4.3.2.2.2 Operating Agreements . . . . . . . . . . 11
4.3.2.2.3 Transfer Orders; Purchase/Sale
Agreements . . . . . . . . . . . . . . 11
4.3.2.2.4 Oil and Gas Leases; Assignment . . . . . 11
4.3.2.2.5 Pooling and Unitization Documents . . . 12
4.3.2.2.6 Well Files . . . . . . . . . . . . . . . 12
4.3.2.2.7 Engineering and Environmental
Reports . . . . . . . . . . . . . . . 12
4.3.2.2.8 Ad Valorem Tax Information . . . . . . . 12
4.3.2.2.9 Maps and Surveys . . . . . . . . . . . . 12
4.3.2.2.10 Lease Records . . . . . . . . . . . . . 12
4.3.2.2.11 Other Oil and Gas Information . . . . . 12
4.3.2.3 Capital Contributions . . . . . . . . . . . . . . . 12
4.3.2.4 Unfunded Commitments . . . . . . . . . . . . . . . . 13
4.3.2.5 Rising Star Financial Information . . . . . . . . . 13
4.3.2.6 Other Information . . . . . . . . . . . . . . . . . 13
4.3.2.7 Tax Records . . . . . . . . . . . . . . . . . . . . 13
4.3.3 Xxxxx Muse Partnership Interests . . . . . . . . . . . . . . . 13
4.3.3.1 Xxxxx Muse Partnership Agreements . . . . . . . . . 13
4.3.3.2 Capital Contributions . . . . . . . . . . . . . . . 13
4.3.3.3 Xxxxx Muse Financial Information . . . . . . . . . . 13
4.3.3.4 Other Information . . . . . . . . . . . . . . . . . 14
4.3.3.5 Tax Information . . . . . . . . . . . . . . . . . . 14
4.4 Xxxxx-Day Stock Deliveries . . . . . . . . . . . . . . . . . . . . . . 14
4.4.1 Organizational Documents; Books and Records . . . . . . . . . 14
4.4.2 Xxxxx-Day Financial Statements . . . . . . . . . . . . . . . . 14
4.4.3 Receivables and Payables . . . . . . . . . . . . . . . . . . . 14
4.4.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4.5 Agreements, Contracts and Commitments . . . . . . . . . . . . 15
4.4.6 Descriptions of Property . . . . . . . . . . . . . . . . . . . 15
4.4.7 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5.1 Division Orders and Title Opinions . . . . . . . . . . . . . . 15
4.5.2 Operating Agreements . . . . . . . . . . . . . . . . . . . . . 15
4.5.3 Production Agreements . . . . . . . . . . . . . . . . . . . . 15
4.5.4 Service Documents . . . . . . . . . . . . . . . . . . . . . . 16
4.5.5 Documents Affecting Title or Value . . . . . . . . . . . . . . 16
4.5.6 Well Files . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5.7 Reports, Studies . . . . . . . . . . . . . . . . . . . . . . . 16
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4.5.8 Taxes and Documents . . . . . . . . . . . . . . . . . . . . . 16
4.5.9 Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5.10 Records and Data . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 Municipal Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8.1 Notes and Security Documents . . . . . . . . . . . . . . . . . 17
4.8.2 Payments Received . . . . . . . . . . . . . . . . . . . . . . 17
4.8.3 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.9 Citation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.9.1 Lease and Purchase Agreements . . . . . . . . . . . . . . . . 17
4.9.2 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Records in Possession of Seller . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
TITLE REVIEW PERIOD . . . . . . . . . . . . . 17
5.1 Real Property Assets Title Review . . . . . . . . . . . . . . . . . . 17
5.2 Real Property Assets Permitted Exceptions . . . . . . . . . . . . . . 18
5.3 Oil and Gas Interests Title Review . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
INSPECTION PERIOD . . . . . . . . . . . . . . 19
6.1 Inspection Period . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Purchaser's Right to Review Books . . . . . . . . . . . . . . . . . . 20
6.3 Sellers' Cooperation Regarding Partnerships and Xxxxx-Day . . . . . . 21
6.4 Continuing Access Prior to Closing . . . . . . . . . . . . . . . . . . 21
ARTICLE VII
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 21
7.1 Representations and Warranties of Seller . . . . . . . . . . . . . . . 21
7.1.1 Organization, Existence and Good Standing . . . . . . . . . . 22
7.1.2 Authorization; Enforceability . . . . . . . . . . . . . . . . 22
7.1.3 No Violation of Laws or Agreements . . . . . . . . . . . . . . 22
7.1.4 No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1.5 No Rights of First Refusal . . . . . . . . . . . . . . . . . . 23
7.1.6 Accuracy of Documents . . . . . . . . . . . . . . . . . . . . 23
7.1.7 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1.8 Shareholder Consent . . . . . . . . . . . . . . . . . . . . . 23
7.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2.1 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2.2 Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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7.2.3 Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2.4 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2.5 No Rent Prepayments . . . . . . . . . . . . . . . . . . . . . 24
7.2.6 Environmental Matters . . . . . . . . . . . . . . . . . . . . 24
7.2.7 RSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2.8 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2.9 Operating Agreements . . . . . . . . . . . . . . . . . . . . . 24
7.2.10 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2.11 Effective Contracts . . . . . . . . . . . . . . . . . . . . . 24
7.2.12 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 25
7.2.13 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . 25
7.2.14 Insurance Compliance . . . . . . . . . . . . . . . . . . . . . 25
7.2.15 Zoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2.16 Agreements Affecting Properties . . . . . . . . . . . . . . . 25
7.2.17 Status of Leases . . . . . . . . . . . . . . . . . . . . . . . 26
7.2.18 Assessments . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2.19 Books and Records; Financial Information . . . . . . . . . . . 26
7.2.20 Number not used . . . . . . . . . . . . . . . . . . . . . . . 26
7.2.21 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.22 Undeveloped Land . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.23 Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.24 Soil Conditions . . . . . . . . . . . . . . . . . . . . . . . 27
7.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3.1 General Representations and Warranties as to Partnership
Interests . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3.1.1 Ownership . . . . . . . . . . . . . . . . . . . . . 27
7.3.1.2 Organization, Existence and Good Standing 27
7.3.1.3 Partnership Agreements; Amendments . . . . . . . . . 27
7.3.1.4 No Default; No Litigation . . . . . . . . . . . . . 28
7.3.1.5 No Obligations . . . . . . . . . . . . . . . . . . . 28
7.3.1.6 Right to Transfer; Right to Become Substitute
Limited Partner . . . . . . . . . . . . . . . . . 28
7.3.2 Number not used . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.3 Rising Star Partnership Interests . . . . . . . . . . . . . . 28
7.3.3.1 Related Agreements and Rights . . . . . . . . . . . 28
7.3.3.2 Approvals; Consents . . . . . . . . . . . . . . . . 28
7.3.3.3 Partners . . . . . . . . . . . . . . . . . . . . . . 28
7.3.4 Xxxxx Muse Partnership Interests . . . . . . . . . . . . . . . 29
7.3.4.1 Related Agreements and Rights . . . . . . . . . . . 29
7.3.4.2 Approvals; Consents . . . . . . . . . . . . . . . . 29
7.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4.1 Shares of Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . 29
7.4.2 Consents and Approvals; No Violation . . . . . . . . . . . . . 29
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7.4.3 Xxxxx-Day Financial Statements . . . . . . . . . . . . . . . . 30
7.4.4 Books and Records . . . . . . . . . . . . . . . . . . . . . . 30
7.4.5 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 30
7.4.6 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4.7 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4.8 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . 31
7.4.9 Agreements, Contracts and Commitments . . . . . . . . . . . . 32
7.4.10 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.4.11 Title to Properties and Related Matters . . . . . . . . . . . 33
7.4.12 Condition and Sufficiency of Assets . . . . . . . . . . . . . 33
7.4.13 Leasehold Interests . . . . . . . . . . . . . . . . . . . . . 33
7.4.14 Personal Property . . . . . . . . . . . . . . . . . . . . . . 34
7.4.15 Compensation and Benefit Plans . . . . . . . . . . . . . . . . 34
7.4.16 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . 34
7.4.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.4.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . 35
7.4.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . 35
7.4.20 Bank Accounts; Powers of Attorney . . . . . . . . . . . . . . 35
7.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 35
7.5.1 Defensible Title . . . . . . . . . . . . . . . . . . . . . . . 35
7.5.2 Seller's Interest in Production and Expenses . . . . . . . . . 35
7.5.3 Compliance with Legal Requirements . . . . . . . . . . . . . . 35
7.5.4 Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . 36
7.5.5 No Excess Production; Volume Imbalance . . . . . . . . . . . . 36
7.5.6 No Hazardous Substances . . . . . . . . . . . . . . . . . . . 36
7.5.7 Rights to Dispose of Interest . . . . . . . . . . . . . . . . 36
7.5.8 Petroleum Engineering Report . . . . . . . . . . . . . . . . . 36
7.5.9 Sales Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 36
7.5.10 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 36
7.5.11 Agreements Valid and Enforceable . . . . . . . . . . . . . . . 37
7.5.12 Payment of Rentals and Royalties . . . . . . . . . . . . . . . 37
7.5.13 No Commitments . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5.14 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5.15 Use of Oil and Gas Interests . . . . . . . . . . . . . . . . . 37
7.5.16 No Encumbrances . . . . . . . . . . . . . . . . . . . . . . . 37
7.6 Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 37
7.7 Municipal Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8.1 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8.2 No Additional Agreements . . . . . . . . . . . . . . . . . . . 38
7.8.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 38
7.8.4 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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7.8.5 No Advances . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8.6 Principal Balances . . . . . . . . . . . . . . . . . . . . . . 38
7.8.7 Valid Liens . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8.8 No Defenses, Setoffs, Counterclaims . . . . . . . . . . . . . 38
7.9 Citation Interest/Texas Stadium License . . . . . . . . . . . . . . . 38
7.9.1 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.9.2 No Modification . . . . . . . . . . . . . . . . . . . . . . . 39
7.9.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 39
7.9.4 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.9.5 No Defenses, Setoffs, Counterclaims . . . . . . . . . . . . . 39
7.10 Representations and Warranties of Purchaser . . . . . . . . . . . . . 39
7.10.1 Organization, Existence and Good Standing . . . . . . . . . . 39
7.10.2 Authorization; Enforceability . . . . . . . . . . . . . . . . 39
7.10.3 No Violation of Laws or Agreements . . . . . . . . . . . . . . 39
7.10.4 No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 40
7.10.5 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
SELLER'S AGREEMENTS PRIOR TO CLOSING . . . . . . . . . 40
8.1 Seller's Agreements prior to Closing . . . . . . . . . . . . . . . . . 40
8.1.1 Untrue Representations . . . . . . . . . . . . . . . . . . . . 40
8.1.2 Notice of Proceedings . . . . . . . . . . . . . . . . . . . . 40
8.1.3 Commercially Reasonable Efforts . . . . . . . . . . . . . . . 40
8.1.4 Notification of Certain Matters . . . . . . . . . . . . . . . 41
8.1.5 Operation Prior to the Closing Date . . . . . . . . . . . . . 41
8.1.6 Performance of Obligations . . . . . . . . . . . . . . . . . . 41
8.1.7 No Transfer or Encumbrances . . . . . . . . . . . . . . . . . 41
8.1.8 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1.9 Compliance with Legal Requirements . . . . . . . . . . . . . . 42
8.1.10 Affiliate Indebtedness . . . . . . . . . . . . . . . . . . . . 42
8.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2.1 Further Conveyances . . . . . . . . . . . . . . . . . . . . . 42
8.2.2 Operation . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2.4 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2.5 New Contracts . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.6 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 43
8.2.7 Sale of Personal Property . . . . . . . . . . . . . . . . . . 43
8.2.8 Trade Accounts . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.9 Performance Under Leases . . . . . . . . . . . . . . . . . . . 43
8.2.10 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.11 Defects Repair . . . . . . . . . . . . . . . . . . . . . . . . 44
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8.2.12 Number not used . . . . . . . . . . . . . . . . . . . . . . . 44
8.2.13 Ground Leases . . . . . . . . . . . . . . . . . . . . . . . . 44
8.2.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.2.15 Seller's Lease at Meridian . . . . . . . . . . . . . . . . . . 44
8.2.16 CompUSA Right of First Refusal . . . . . . . . . . . . . . . . 44
8.2.17 Approved Sale Contracts . . . . . . . . . . . . . . . . . . . 45
8.2.18 Ohio Drive I . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3.1.1 Notices; Participation . . . . . . . . . . . . . . . 45
8.3.1.2 Contributions and Distributions . . . . . . . . . . 46
8.3.1.3 Consents from Partners and Third Parties . . . . . . 46
8.3.2 Number not used . . . . . . . . . . . . . . . . . . . . . . . 46
8.3.3 Rising Star Partnership Interests . . . . . . . . . . . . . . 47
8.3.4 Xxxxx Muse Partnership Interests . . . . . . . . . . . . . . . 47
8.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.4.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . 47
8.4.2 Restricted Activities . . . . . . . . . . . . . . . . . . . . 48
8.4.3 Xxxxx-Day Corporate Matters . . . . . . . . . . . . . . . . . 49
8.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.1 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.2 Performance; No Violations . . . . . . . . . . . . . . . . . . 49
8.5.3 Number not used . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.4 Additional Information . . . . . . . . . . . . . . . . . . . . 49
8.5.5 Number not used . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.6 Number not used . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.7 Number not used . . . . . . . . . . . . . . . . . . . . . . . 49
8.5.8 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 49
8.5.9 No New Commitments; Modification . . . . . . . . . . . . . . . 49
8.5.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 50
8.5.11 No Additional Undertakings . . . . . . . . . . . . . . . . . . 50
8.5.12 Environmental Assessment . . . . . . . . . . . . . . . . . . . 50
8.6 Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 50
8.7 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.8.1 Notice of Proceedings . . . . . . . . . . . . . . . . . . . . 50
8.8.2 No Encumbrances . . . . . . . . . . . . . . . . . . . . . . . 51
8.8.4 No Amendments or Modifications . . . . . . . . . . . . . . . . 51
8.8.5 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.8.6 No Releases . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.8.7 Collateral for Allied Note . . . . . . . . . . . . . . . . . . 51
8.9 Citation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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8.9.1 No Encumbrances . . . . . . . . . . . . . . . . . . . . . . . 51
8.9.2 No Transfers . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.9.3 No Amendments or Modifications . . . . . . . . . . . . . . . . 52
8.10 Purchaser's General Agreements Prior to Closing . . . . . . . . . . . 52
8.10.1 Untrue Representations . . . . . . . . . . . . . . . . . . . . 52
8.10.2 Notice of Proceedings . . . . . . . . . . . . . . . . . . . . 52
8.10.3 Commercially Reasonable Efforts . . . . . . . . . . . . . . . 52
8.10.4 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
DELIVERY OF CONSENTS AND ESTOPPELS . . . . . . . . . 53
9.1 Consents and Estoppels . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2.1 Tenant Estoppels . . . . . . . . . . . . . . . . . . . . . . . 53
9.2.2 Ground Lessor Estoppels . . . . . . . . . . . . . . . . . . . 54
9.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 54
9.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 55
9.6 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE X
CONDITIONS . . . . . . . . . . . . . . . 55
10.1 Purchaser's Conditions . . . . . . . . . . . . . . . . . . . . . . . . 55
10.1.1 Representations, Warranties and Covenants . . . . . . . . . . 55
10.1.2 No Material Adverse Change . . . . . . . . . . . . . . . . . . 55
10.1.3 No Pending Litigation . . . . . . . . . . . . . . . . . . . . 56
10.1.4 Closing Documents . . . . . . . . . . . . . . . . . . . . . . 56
10.1.5 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1.6 No Prohibition of Transaction . . . . . . . . . . . . . . . . 56
10.1.7 Documentation . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1.8 Affiliate Indebtedness . . . . . . . . . . . . . . . . . . . . 56
10.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.2.1 Closing Title Commitments . . . . . . . . . . . . . . . . . . 57
10.2.2 Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.2.3 Material Change . . . . . . . . . . . . . . . . . . . . . . . 57
10.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 57
10.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 58
10.5.1 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 58
10.5.2 Number not used . . . . . . . . . . . . . . . . . . . . . . . 58
10.5.3 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . 58
10.6. Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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10.7 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.8.1 No Default . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.8.2 Principal Balance . . . . . . . . . . . . . . . . . . . . . . 58
10.9 Citation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.9.1 No Default . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.9.2 Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.10 Texas Stadium Suite . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.11 Failure of Consent Conditions . . . . . . . . . . . . . . . . . . . . 59
10.12 Seller's Conditions to Closing . . . . . . . . . . . . . . . . . . . . 59
10.12.1 Representations, Warranties and Covenants . . . . . . . . . . 59
10.12.2 No Pending Litigation . . . . . . . . . . . . . . . . . . . . 59
10.12.3 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 59
10.12.4 No Prohibition of Transaction . . . . . . . . . . . . . . . . 59
10.13 Failure of Seller's Conditions to Closing . . . . . . . . . . . . . . 60
10.14 Evaluation of Liabilities Associated with Oil and Gas Interests . . . 60
10.15 Fairness Opinion Condition . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE XI
CLOSING . . . . . . . . . . . . . . . . 61
ARTICLE XII
SELLER'S OBLIGATIONS AT CLOSING . . . . . . . . . . 61
12.1 Seller's Obligations at Closing . . . . . . . . . . . . . . . . . . . 61
12.1.1 General Closing Obligations of Seller . . . . . . . . . . . . 61
12.1.2 Affiliate Indebtedness . . . . . . . . . . . . . . . . . . . 61
12.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.6 Number not used . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.7 Number not used . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 63
12.4 Xxxxx-Day Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 63
12.5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.5.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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12.5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.6 Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 63
12.7 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.8 Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.8.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.8.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.8.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.8.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.8.5 Number not used . . . . . . . . . . . . . . . . . . . . . . . 64
12.8.6 Number not used . . . . . . . . . . . . . . . . . . . . . . . 64
12.8.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.8.8 Number not used . . . . . . . . . . . . . . . . . . . . . . . 64
12.9 Citation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.9.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.9.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.10 Texas Stadium Suite . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.10.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.10.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE XIII
PURCHASER'S OBLIGATIONS AT CLOSING . . . . . . . . . 64
13.1 Purchaser's Obligations at Closing . . . . . . . . . . . . . . . . . . 64
13.1.1 General Closing Obligations of Purchaser . . . . . . . . . . 65
13.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.3 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . 65
13.4 Texas Stadium Suite . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.5 Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.6 Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XIV
COSTS AND ADJUSTMENTS . . . . . . . . . . . . . 66
14.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
14.2 Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . 66
14.2.1 Rents and Expenses . . . . . . . . . . . . . . . . . . . . . 66
14.2.2 Ordinary Expenses . . . . . . . . . . . . . . . . . . . . . . 66
14.2.3 Lease Payments . . . . . . . . . . . . . . . . . . . . . . . 67
14.2.4 Security Deposits . . . . . . . . . . . . . . . . . . . . . . 67
14.2.5 Operating Expense Rent . . . . . . . . . . . . . . . . . . . 67
14.2.6 Recording Costs . . . . . . . . . . . . . . . . . . . . . . . 68
14.2.7 Tenant Improvements; Commissions . . . . . . . . . . . . . . 68
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14.3 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.4 Xxxxx-Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.5 Oil and Gas Interests . . . . . . . . . . . . . . . . . . . . . . . . 69
14.6 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.7 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.8 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.9 Citation Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.10 Texas Stadium Suite . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.11 Recording of Documents . . . . . . . . . . . . . . . . . . . . . . . . 69
14.12 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XV
AS IS PROVISION . . . . . . . . . . . . . . 70
ARTICLE XVI
INDEMNITY OBLIGATIONS . . . . . . . . . . . . . 71
16.1 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . 71
16.2 Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . . . 71
16.3 Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
16.4 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 72
16.5 Good Faith Efforts to Settle Disputes . . . . . . . . . . . . . . . . 72
16.6 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
16.7 Survival and Limitation of Indemnities . . . . . . . . . . . . . . . . 72
ARTICLE XVII
CONDEMNATION, DAMAGE OR DESTRUCTION PRIOR TO CLOSING . . . . . 73
17.1 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
17.2 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
17.2.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 73
17.2.2 Loss and Restoration Estimates . . . . . . . . . . . . . . . 73
17.2.3 Restoration Not Completed by Closing Date . . . . . . . . . . 74
17.2.4 Maintenance of Insurance Prior to Closing . . . . . . . . . . 74
ARTICLE XVIII
POSSESSION OF ASSETS FOLLOWING CLOSING . . . . . . . . 75
ARTICLE XIX
NOTICES . . . . . . . . . . . . . . . . 75
ARTICLE XX
REMEDIES . . . . . . . . . . . . . . . . 76
20.1 Default by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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20.2 Default by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 77
20.3 Adjustment Events . . . . . . . . . . . . . . . . . . . . . . . . . . 77
20.3.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 77
20.3.2 Adjustment Floor Not Exceeded . . . . . . . . . . . . . . . . 77
20.3.3 Adjustment Floor Exceeded . . . . . . . . . . . . . . . . . . 77
20.3.4 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 78
20.3.5 Effect of Closing . . . . . . . . . . . . . . . . . . . . . . 78
20.3.6 Sole Remedies . . . . . . . . . . . . . . . . . . . . . . . . 79
20.4 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
20.5 Incidental and Consequential Damages . . . . . . . . . . . . . . . . . 80
20.6 Survival of Sections 17.1, 17.2, 20.3 and 20.4 . . . . . . . . . . . . 80
20.7 Termination of DMI Agreement . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XXI
MISCELLANEOUS . . . . . . . . . . . . . . . 81
21.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
21.2 Interpretation and Applicable Law . . . . . . . . . . . . . . . . . . 81
21.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
21.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
21.5 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . 82
21.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
21.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
21.8 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
21.9 Commissions and Finders Fees . . . . . . . . . . . . . . . . . . . . . 82
21.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
21.11 Rule of Construction . . . . . . . . . . . . . . . . . . . . . . . . . 85
21.12 Number not used . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
21.13 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
21.14 Notice of Intent to Sell Xxxxx-Day . . . . . . . . . . . . . . . . . . 85
21.15 Access to Records after Closing . . . . . . . . . . . . . . . . . . . 85
21.16 Special Non-Disclosure Agreement . . . . . . . . . . . . . . . . . . . 86
21.17 Retention by CCP . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE XXII
DEFINITIONS . . . . . . . . . . . . . . . 86
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ACQUISITION AGREEMENT
This Acquisition Agreement ("Agreement") is entered into by and among XXXXXX-
XXXXXXX PROPERTIES, INC., a Texas corporation ("CCP"), HI CAPITAL CORP., a
Texas corporation ("HCC"), METROPORT REALTY CORPORATION, a Texas corporation
("MRC"), HI PRODUCTION COMPANY, INC., a Texas corporation ("HPC"), DALLAS
MAVERICKS, INC., a Texas corporation ("DMI") (CCP, HCC, MRC, HPC, and DMI are
collectively referred to as "Seller" in accordance with Section 1.12) and
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited
partnership ("Purchaser"), as of the 10th day of February, 1997 (the "Effective
Date").
R E C I T A L S :
FOR AND IN CONSIDERATION of the promises, undertakings, and mutual
covenants of the parties herein set forth, Seller hereby agrees to sell and
Purchaser hereby agrees to purchase and pay for all that certain property
hereinafter described in accordance with the following terms and conditions.
ARTICLE I
ASSETS
1.1 Assets. Each respective Seller (as more particularly described in
Section 1.12) agrees to sell and Purchaser agrees to purchase in accordance
with the terms of this Agreement the assets (the "Assets" and each an "Asset")
described in Sections 1.2 through 1.10.
1.2 Real Property Assets. The phrase "Real Property Assets" shall
collectively mean the Land, Improvements, Personal Property, Leases, Ground
Leases, Operating Agreements, Intangibles and Permits as more particularly
defined below in Sections 1.2.1 through 1.2.9.
1.2.1 Land. (i) Seller's fee simple interest in those thirty-two
(32) certain tracts or parcels of land more particularly described as Parcels
1-10, Parcels 12-16, and Parcels 20-35 on Exhibit 1.2.1(i); (ii) all of
Seller's right, title and interest as lessee in that certain leasehold estate
("Airport Leasehold") covering certain land located in Dallas County, Texas,
and more specifically described as Parcel 19 in Exhibit 1.2.1(ii) (the lease
described on Exhibit 1.2.1(ii) is called the "Airport Ground Lease"); (iii) all
of Seller's right, title and interest as lessee in that certain leasehold
estate ("Stemmons Leasehold") covering certain land located in Dallas County,
Texas, and more specifically described as Parcel 11 in Exhibit 1.2.1(iii) (the
lease described on Exhibit 1.2.1(iii) is called the "Stemmons Ground Lease")
together with Seller's option to purchase the Stemmons Leasehold as described
on Exhibit 1.2.1(ii); and (iv) together with any right right, title and
interest of Seller in and to adjacent strips or gores, streets, alleys or
rights-of-way and all rights of ingress and egress thereto (Parcels 1-16 and
19-35 are each referred to individually as a Parcel and collectively as the
"Land").
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1.2.2 Improvements. All buildings, improvements and structures
[including hangers ("Hangers")] (collectively "Improvements") now or hereafter
situated on any part of the Land, including but not limited to all non-
building site improvements and all facilities and installations thereon owned
by Seller.
1.2.3 Personal Property. All personal property owned by Seller upon
the Properties (including, but not limited to, the personal property situated
in Suite 400 of the Meridian), including specifically, without limitation,
heating, ventilation and air conditioning systems and equipment, appliances,
furniture, carpeting, draperies and curtains, tools and supplies, and other
items of personal property (excluding cash) used in connection with the
operation of the Properties, excluding those items of personal property
identified on Exhibit 1.2.3 (collectively, the "Personal Property").
1.2.4 Leases. All of Seller's right, title and interest in all oral
or written agreements pursuant to which any portion of any Parcel is used or
occupied by anyone other than Seller (collectively the "Leases") together with
all security deposits and letters of credit delivered as security deposits not
forfeited or refunded ("Security Deposits") of tenants occupying any portion of
the Properties. The Security Deposits shall not include any security deposits
returned to tenants following lease expiration or applied against rent
following tenant default in the ordinary course of Seller's business.
1.2.5 Ground Leases. All of Seller's right, title and interest in
all ground leases (including but not limited to, the Stemmons Ground Lease and
the Airport Ground Lease) ("Ground Leases") affecting the Properties.
1.2.6 Operating Agreements. All of Seller's right, title and
interest in and to those contracts and agreements relating to the upkeep,
repair, maintenance or operation of the Properties which will extend beyond the
date of closing and all other agreements to which Seller is a party relating to
any of the Parcels, including specifically, without limitation, all assignable
equipment leases (collectively, the "Operating Agreements").
1.2.7 Intangibles. All assignable warranties and guaranties
(express or implied) relating to any of the Properties, all utility deposits,
the use of trade names or trademarks (other than Xxxxxx-Xxxxxxx Properties, HI
Capital, HI Production, and Dallas Mavericks, Inc.) used in connection with any
of the Properties, and any goodwill related to each Property (collectively, the
"Intangibles").
1.2.8 Permits. All assignable building permits, certificates of
occupancy, consents, permits, approvals, and utility rights issued in
connection with or appurtenant to any of the Properties (collectively,
"Permits").
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Each Parcel and the Improvements and Personal Property situated therein is
called each a "Property" and collectively "Properties."
1.3 Partnership Interests. The phrase "Partnership Interests" shall
collectively mean the Rising Star Partnership Interests and the Xxxxx Muse
Partnership Interests, as more particularly defined below in Sections 1.3.2 and
1.3.3.
1.3.1 Number not used.
1.3.2 Rising Star Partnership Interests. The interests of Seller in
(i) RSE Partners-I, L.P., a Texas limited partnership ("RSE-I"), and (ii) RSE
Partners-II, L.P., a Texas limited partnership ("RSE-II"), as more particularly
described in Exhibit 1.3.2 (collectively, the "Rising Star Partnership
Interests").
1.3.3 Xxxxx Muse Partnership Interests. The interests of Seller in
Hicks, Muse, Xxxx & Xxxxx Equity Fund II, L.P., a Delaware limited partnership
("Xxxxx Muse Equity Fund II"), and as a Class A Limited Partner in its general
partner HM2/GP Partners, L.P., a Delaware limited partnership ("HM2/GP") as
more particularly described in Exhibit 1.3.3 (collectively, the "Xxxxx Muse
Partnership Interests").
RSE-I, RSE-II, Xxxxx Muse Equity Fund II and HM2/GP are referred to herein as a
"Partnership" or the "Partnerships," as the case may be, and the agreements
described in Exhibits 1.3.2 and 1.3.3 describing and evidencing the Partnership
Interests, including amendments thereto, are referred to herein as a
"Partnership Agreement" or the "Partnership Agreements," as the case may be.
1.4 Xxxxx-Day Stock. All of the issued and outstanding shares of capital
stock of Xxxxx-Day, Inc., a Texas corporation ("Xxxxx-Day"), which stock
consists of 12,500 shares, no par value per share, of common stock of Xxxxx-Day
("Xxxxx-Day Stock"). (The assets of Xxxxx-Day include certain real property
("Xxxxx-Day Tracts") more particularly described in Exhibit 1.4.
1.5 Oil and Gas Interests. The following interests of Seller
(collectively, the "Oil and Gas Interests"):
1.5.1 Leases, Royalty Interests, Contract Rights. The interest of
Seller in the oil and gas leases, leasehold estates, mineral and royalty
interests, overriding royalty interests, contractual rights, and other
interests owned by Seller described in Exhibit 1.5.
1.5.2 Xxxxx. The interest of Seller in the oil and gas xxxxx
described in Exhibit 1.5 (said interest being described in Exhibit 1.5 by
reference to Seller's leasehold or cost burden interest and Seller's net
revenue interest).
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1.5.3 Contracts and Agreements. Seller's interest in contracts and
agreements that benefit or burden the items listed in Sections 1.5.1 and 1.5.2
including, but not limited to, operating, tax partnership, unitization,
pooling, farmout, gas sale, and gas processing agreements, and all personal
property and fixtures listed in Sections 1.5.1 and 1.5.2 appurtenant thereto
or used or obtained in connection therewith or with the production, treatment,
sale or disposal of hydrocarbons or water produced therefrom, including, but
not limited to xxxxx, tanks, lease equipment, saltwater disposal systems, water
flood facilities, gathering and flowlines, pipelines, processing plants, and
compressor facilities.
1.6 Marketable Securities. 1,000,000 shares of Common Stock of Masco
Corporation (the "Masco Stock"), 29,500 shares of Common Stock of Banc One
Corporation (the "Banc One Stock"), and any and all distributions of cash,
property or securities thereon or additional or other securities, cash, or
other property into which any of the foregoing are converted or for which they
may be exchanged received by Seller on or after the Closing Date (collectively
referred to herein as the "Marketable Securities").
1.7 Bonds. The municipal and other bonds or debt instruments ("Municipal
Bonds") listed on Exhibit 1.7-A and the bonds ("Arena Bonds") listed on Exhibit
1.7-B.
1.8 Promissory Notes. The promissory notes (the "Promissory Notes"), and
all documents securing their payment (the "Security Documents"), and the
guaranty agreements (the "Guaranty Agreements") described on Exhibit 1.8. The
security for the Allied Note (as defined on Exhibit 1.8) includes a deed of
trust ("Allied Deed of Trust") encumbering certain real estate and the
improvements and personal property situated thereon (collectively, the "Allied
Tract") and described as Parcel 17 on Exhibit 1.2.1(i).
1.9 Citation Interest. All of Seller's right, title and interest in and
to (i) that certain Lease Agreement (the "Cessna Citation Lease") dated
November 22, 1996 between Executive Jet Sales, Inc., and CCP, relating to an
undivided 12.5% interest in a Cessna Citation SII and (ii) that certain
Citation V Purchase Agreement (the "Cessna V Ultra PA") dated November 22, 1996
between Executive Jet Sales, Inc., and CCP, relating to an undivided 12.5%
interest in a Cessna Citation V Ultra, and all agreements related thereto, as
more particularly described in Exhibit 1.9 (including but not limited to any
down payments or deposits previously paid) (collectively, the "Citation
Interest").
1.10 Texas Stadium Suite. All of Seller's right, title and interest in
that certain luxury skybox ("Stadium Suite") commonly known as Xxxxx #000,
Xxxxx Xxxxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx and more particularly
described in Exhibit 1.10 (the license agreement described on Exhibit 1.10 is
called the "Stadium License Agreement"), together with (i) all improvements,
fixtures and personal property ("Stadium Improvements") situated in the Stadium
Suite and owned by Seller; (ii) those bonds (collectively "Stadium Bonds")
described on Exhibit 1.10, and (iii) those season ticket options ("Ticket
Options") described on Exhibit 1.10. The
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phrase "Texas Stadium Suite" shall include the Stadium Suite, Stadium
Improvements, Ticket Options and the Stadium Bonds.
1.11 Assets. The Real Property Assets, Partnership Interests, Xxxxx-Day
Stock, Oil and Gas Interests, Marketable Securities, Municipal Bonds, Arena
Bonds, Promissory Notes, Citation Interest, and Texas Stadium Suite are
hereinafter sometimes referred to individually as an "Asset" or collectively as
the "Assets." Each Property may hereafter be referred to by the common name
indicated in parenthesis at the beginning of description of each parcel on
Exhibit 1.2.1(i). The Properties described as Parcels 21-35 on Exhibit
1.2.1(i) are collectively called "Undeveloped Land." The Properties described
as Parcels 1-10 and 12-14 on Exhibit 1.2.1(i) together with the Stemmons
Leasehold ("Parcel") and the Improvements situated thereon are collectively
called the "Office Properties" and the Improvements thereon are called "Office
Buildings." The Properties described as Parcels 15-16 of Exhibit 1.2.1(i) are
called the "Apartments." Each of the Promissory Notes may hereafter be
referred to by the name indicated on Exhibit 1.8. When used in Section 4.2.1
through 4.2.20, 7.2.1 through 7.2.21, Sections 5.1 and 5.2, the term
"Properties" includes the Xxxxx-Day Tracts. When used in Sections 4.2.1
through 4.2.20, the term "Properties" includes the Texas Stadium Suite.
1.12 Seller. The respective Seller for each of the Assets are as follows:
1.12.1 CCP is the owner of (i) all Real Property Assets except for
those Parcels which are owned by the other Sellers as otherwise indicated in
this Section 1.12; (ii) the Xxxxx Muse Partnership Interests; (iii) the Xxxxx-
Day Stock; (iv) the Kosmeo Note and related Security Documents and Guaranty;
(v) the Citation Interest; and (vi) the Promissory Notes, Security Documents
and Guaranty Agreements except the Xxxxxxxx Note.
1.12.2 HCC is the owner of the Marketable Securities.
1.12.3 HPC is the owner of the (i) Rising Star Partnership Interests
and (ii) Oil and Gas Interests.
1.12.4 DMI is the owner of the Xxxxxxxx Note and the Arena Bonds..
1.12.5 MRC is the owner of (i) the Breckenridge Apartments, (ii)
Woodwind Apartments, (iii) the Addison Air Terminal, (iv) the Addison Hangars,
and (v) the Addison Airport Land, Austin Land and Lancaster Tract.
When used herein, "Seller" shall refer to collectively all Sellers but all
covenants, representations and warranties made by each Seller shall be limited
to the Asset or Assets owned by the respective Seller; provided, however, CCP
shall be liable (to the extent provided herein) for any breach of this
Agreement by any of the other Sellers or itself.
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ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Assets shall be the sum of Three Hundred Thirteen
Million Five Hundred Twenty-Five Thousand and No/100 Dollars ($313,525,000.00).
The Purchase Price shall be paid all in cash at the Closing.
2.2 Adjustments to Purchase Price. The Purchase Price may be adjusted in
accordance with the provisions of this Section 2.2:
2.2.1 Partnership Interests. The Purchase Price shall be increased
by an amount equal to any capital contributions made by Seller with respect to
the Partnership Interests from and after January 1, 1997 through the Closing
Date; provided, however, that there shall be no increase to the Purchase Price
for any contribution made by Seller with regard to the Rising Star Partnership
Interests except to the extent such contributions exceed $43,000.00 (any
contribution made with respect to the Rising Star Partnership Interests in
excess of $43,000.00 shall result in an increase to the Purchase Price only if
such contribution has been approved in writing by Purchaser). The Purchase
Price shall be reduced by an amount equal to any distributions made to Seller
from the Partnerships from and after January 1, 1997 through Closing.
2.2.2 Dispositions of Marketable Securities and Municipal Bonds. As
used in this Section 2.2.2 the term: (i) "Disposition Notice" means a written
notice from Purchaser to Seller requesting Seller to sell any of the Marketable
Securities or Municipal Bonds therein described in accordance with the
provisions of this Section 2.2.2, (ii) "Net Sales Proceeds" means the gross
proceeds from the sale of any Marketable Securities or Municipal Bonds pursuant
to this Section less reasonable expenses of sale, and (iii) "Trading Day" is
any day on which securities are traded on the New York Stock Exchange. On the
first Trading Day after Purchaser delivers a Disposition Notice to Seller
(except as hereafter provided for the Masco Stock), Seller shall dispose of any
of the Marketable Securities or Municipal Bonds designated in the Disposition
Notice. Provided, however, with respect to a Disposition Notice for the Masco
Stock, Seller shall have ten (10) Trading Days thereafter to complete its
disposition of the Masco Stock. In the event any Marketable Securities or
Municipal Bonds are disposed of pursuant to this Section, the Marketable
Securities or Municipal Bonds so disposed of shall be excluded from the
purchase and sale of the Assets, and the Purchase Price shall be reduced by an
amount equal to the Net Sales Proceeds.
2.2.3 Redemption Pursuant to Any Municipal Bonds. There will be a
reduction to the Purchase Price in the aggregate amount of principal payments
or redemptions of principal pursuant to the Municipal Bonds during the period
from the Effective Date through the Closing Date.
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2.2.4 The Addison. If prior to Closing Seller sells The Addison to
Comp USA in accordance with the provisions of Section 8.2.16, the Purchase
Price shall be reduced by the amount of the Purchase Price allocated to The
Addison on Exhibit 2.3 less reasonable expenses of sale incurred by Seller in
connection with said transaction, including any brokerage commissions which
Seller is currently legally obligated to pay to third parties.
2.2.5 Flower Mound And Other Undeveloped Land. If prior to Closing
Seller closes the sale of Flower Mound or any other undeveloped Land in
accordance with the provisions of Section 8.2.17, the Purchase Price shall be
reduced by the proceeds from the sale less the reasonable expenses of sale
incurred by Seller in connection with said transaction.
2.2.6 Radovir Obligation. As used herein the term "Radovir
Obligation" means the remaining unpaid purchase price obligation of HCC owing
pursuant to that certain letter agreement dated June 25, 1996, addressed to HCC
from Radovir Pharmaceutical Incorporated, a copy of which has been delivered to
Purchaser prior to the execution of this Agreement. Provided this transaction
closes in accordance with its terms, as an addition to the Purchase Price,
Purchaser agrees to pay HCC a sum ("Radovir Payment") not to exceed
$3,313,409.19. The Radovir Payment shall be made in installments ("Radovir
Installments") as requested by HCC by delivering a written notice ("Radovir
Installment Request") to Purchaser. The Radovir Installment Request shall
contain HCC's certification that the amount requested has been paid pursuant to
the Radovir Obligation. Provided the Radovir Installment Request is proper,
subject to the provisions of the last sentence of this Section 2.2.6, Purchaser
shall pay to Seller the amount set forth in the Radovir Installment Request
within fifteen (15) days following Purchaser's receipt of the respective
Radovir Installment Request. Purchaser acknowledges that the first Radovir
Installment Request will include all Radovir Obligations paid by Seller after
January 1, 1997 and will be paid at Closing. Provided however, Purchaser shall
not be required to pay more than one (1) Radovir Installment during any
calendar month and shall not be required to pay any amount of a Radovir
Installment which would cause the total amount paid pursuant to this Section to
exceed the Radovir Payment.
2.2.7 Promissory Note Payments. The Purchase Price shall be reduced
by any payments of principal received by Seller subsequent to January 1, 1997
with respect to any of the Promissory Notes.
2.3 Allocation of Purchase Price. Seller and Purchaser agree that the
Purchase Price is allocated among certain of the Assets as set forth on Exhibit
2.3. Exhibit 2.3 is sometimes called "Asset Allocation." If pursuant to the
further provisions of this Agreement there is a reference to the amount of the
Purchase Price allocated to an Asset and there is no allocation set forth on
Exhibit 2.3 the appropriate allocation shall be agreed to by the parties (each
acting reasonably) and if they fail to agree, resolved in accordance with the
resolution procedures set forth in Sections 20.3 and 20.4 (but disagreement as
to the Purchase Price allocated to an Asset is not an Adjustment Event).
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2.4 Adjustment Based On DBL Partnership Interest Simultaneously with the
execution of this Agreement Purchaser and DMI have entered into a certain
agreement ("DMI Agreement") regarding the purchase and sale of the DBL
Partnership Interests (as defined in the DMI Agreement) in Dallas Basketball
Limited ("DBL"), among other assets. Seller and Purchaser acknowledge that the
Partnership Agreement (as defined in the DMI Agreement and herein called the
"DBL Partnership Agreement") (a) requires that the general partner ("DBL GP")
approve the assignment of the DBL Partnership Interests in accordance with the
DMI Agreement ("DMI Assignment") and (b) grants to the other partners ("Other
Partners") of DBL a right of first refusal to purchase the DBL Partnership
Interests. The Purchase Price shall be increased by Two Million and No/100
Dollars ($2,000,000.00) ("DBL Adjustment") if on or before the Closing Date (i)
DBL GP disapproves the assignment of the DBL Partnership Interests in
accordance with the provisions of the DMI Agreement and (ii) none of the Other
Partners purchases the DBL Partnership Interests. Provided however, if during
the period ("Restricted Period") ending one (1) year after the Closing Date the
DBL Partnership Interests are sold by DMI or any Affiliate of DMI any time
during the Restricted Period, Seller shall pay Purchaser within three (3)
business days following the funding of such sale the lesser of an amount per
each one percent (1%) of DBL Partnership Interests sold equal to (1)
$161,550.00 or (2) the amount of the proceeds from said sale (less reasonable
expenses of sale) in excess of $1,100,000.00.
ARTICLE III
XXXXXXX MONEY
3.1 Xxxxxxx Money. On the day of execution of this Agreement by all
parties hereto (or if such execution occurs after 12:00 p.m., Dallas, Texas
time on the subject day, then on the first business day following such
execution), Purchaser shall deliver Four Million One Hundred Twenty-Five
Thousand and No/100 Dollars ($4,125,000.00) (the "Xxxxxxx Money") by wire
transfer to Republic Title of Texas, Inc., 000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000, Attn: Xxxxxx Xxxxxxx (the "Title Company"). The Title
Company shall immediately deposit the Xxxxxxx Money in an interest bearing
account, the earnings from which shall accrue to the benefit of Purchaser. In
the event that this Agreement is closed, all Xxxxxxx Money shall be applied to
the Purchase Price. In the event that this Agreement is not closed for any
reason whatsoever, then the Xxxxxxx Money shall be disbursed to Seller except
as otherwise specifically provided herein.
ARTICLE IV
DUE DILIGENCE AGREEMENTS
4.1 Due Diligence Deliveries. On and after the Effective Date, Seller
shall make those items described in Article IV ("Due Diligence Items")
available to Purchaser and its representatives at the offices of Seller set
forth in Article XIX or at the current location of such items. Additionally,
Seller will cooperate with Purchaser and its representatives in making
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copies of said items, at the expense of Purchaser, including but not limited to
allowing said items to be temporarily removed from Seller's offices for
copying, making space available for Purchaser and its representatives to review
and copy said items and providing electrical power and space for copying on
site. Notwithstanding the generality of the provisions of this Article IV,
Seller shall not be obligated to provide to Purchaser or its representatives
any information of or related to any pending or threatened litigation if
providing such information would jeopardize the attorney/client privilege.
4.2 Real Property Deliveries.
4.2.1 Miscellaneous Agreements. Copies of all warranties,
management, employment, or other similar type agreements affecting the
Properties, if any.
4.2.2 Operating Agreements. Copies of all Operating Agreements
including: (i) the name of the parties to each Operating Agreement, (ii) the
service rendered or to be rendered or the goods supplied or to be supplied
under such Operating Agreement, and (iii) notations as to which Operating
Agreements are oral.
4.2.3 Licenses and Permits. Copies of all licenses, permits,
applications, authorizations, certificates of occupancy, governmental approvals
and other entitlements relating to the Properties and the operation thereof in
the possession of Seller, if any.
4.2.4 Plans and Specifications. All site plans, drawings,
environmental, mechanical, electrical, structural, soils and similar reports
and/or audits and plans and specifications relative to the Properties in the
possession of Seller, if any.
4.2.5 Tax Statements. Copies of the tax statements covering any
Real Property Assets or any part thereof for each of 1995 and 1996 and, if
available, for 1997.
4.2.6 Contracts. Copies of any existing option contracts,
construction contracts and architectural contracts relating to all or any
portion of the Real Property Assets.
4.2.7 Litigation. A schedule of all current or pending litigation
with respect to any of the Properties or any part thereof, if any, together
with a brief description of each such proceeding.
4.2.8 Financial Statements. The financial statements and the
unaudited operating statements (including capital expenditures) prepared by
Seller for any of the Real Property Assets for the years ended December 31,
1993 (or from the date of acquisition of any specific Real Property Asset, if
later than December 31, 1993) through 1996.
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4.2.9 Leases. Copies of all Leases, rental applications, occupancy
inspections, rental deposit agreements, lease guaranties, estoppels, and
subordination, nondisturbance and attornment agreements, and all amendments and
correspondence with respect thereto, relating to the Properties, including any
reports and information in Seller's possession reflecting the total rentable
area of the Properties.
4.2.10 Ground Leases. Copies of all Ground Leases, and all
amendments and correspondence with respect thereto relating to the Properties.
4.2.11 Inventory. A complete, itemized and detailed inventory of the
Personal Property indicating the location of each item.
4.2.12 Operational Documents. Such other items relating to
construction, ownership, management and operation of the Properties as
reasonably requested by Purchaser.
4.2.13 Authorization for Interviews. Written authorization from
Seller to Purchaser allowing Purchaser to interview the tenants of each of the
Office Buildings; provided, however, said authorization may be subject to
attendance at such interview by a representative of Seller.
4.2.14 Maintenance Records. Copies of all maintenance records for
each of the Properties.
4.2.15 Projected Expenditures. All information relating to 1997
projected expenditures for each of the Properties.
4.2.16 Insurance Policies. Copies of all existing liability,
property, rental value and other insurance policies pertaining to the
Properties.
4.2.17 Utility Bills. Copies of all utility bills received during
Seller's ownership of the Properties.
4.2.18 Disputes; Major Repairs. Copies of any and all written
claims, demands or notices from any third party which concern or otherwise
affect the Properties received by Seller during its ownership of the Properties
and which relate to disputes about one or more Properties which have not been
resolved at the date hereof, including, without limitation, written notice of
potential litigation, written notices from any governmental or quasi-
governmental body, copies of any reports issued by the local fire xxxxxxxx
regarding inspection of the Improvements during Seller's ownership of the
Properties and a list of major repairs (excluding tenant improvements) and
major casualties occurring during Seller's ownership of the Properties.
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4.2.19 Employees. Copies of all employee benefit and/or pension
plans, any actuarial evaluations thereof, and a list of all employees covered
by such plans and their interests therein.
4.2.20 Confidential Information Concerning Value. Notwithstanding
any other provision of this Section 4.2, Seller shall not make available to
Purchaser, and Purchaser shall not be entitled to review or copy any appraisals
or other materials specifically addressing valuation (prepared by Seller or
third parties, for example, internal memoranda relating to value estimates) of
any Real Property Assets (other than ad valorem tax statements). The foregoing
does not prevent Purchaser obtaining information relating to the income and
expenses of any the Assets or reports (other than appraisals) reflecting the
physical condition of any of the Assets.
4.3 Partnership Interests.
4.3.1 Number not used.
4.3.2 Rising Star Partnership Interests.
4.3.2.1 Rising Star Partnership Agreements. Copies of the
documents and agreements listed in Exhibit 1.3.2, together with any and all
amendments thereto and restatements thereof (the "Rising Star Partnership
Agreements").
4.3.2.2 Investments. A list (described in Exhibit 4.3.2.2)
of all investments, properties and interests (the "Rising Star Oil and Gas
Interests") held by each of the Rising Star Partnerships, which shall indicate
whether Seller has elected to participate in each such investment. Seller
shall provide Purchaser with access to the following:
4.3.2.2.1 Division Orders; Title Information.
Division orders and title opinions relating to each of the Rising Star Oil and
Gas Interests.
4.3.2.2.2 Operating Agreements. Copies of all
operating agreements to which the Rising Star Oil and Gas Interests are
subject.
4.3.2.2.3 Transfer Orders; Purchase/Sale
Agreements. Copies of all division or transfer orders and hydrocarbon
sale/purchase agreements with purchasers of hydrocarbons or other production
from the Rising Star Oil and Gas Interests which are in the possession of the
Rising Star Partnerships or Seller.
4.3.2.2.4 Oil and Gas Leases; Assignment. Copies
of all oil and gas leases, prior assignments of the Rising Star Oil and Gas
Interests and other agreements which are in the possession of the Rising Star
Partnerships or Seller which are a source of a Rising Star Partnership's title
to the Rising Star Oil and Gas Interests.
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4.3.2.2.5 Pooling and Unitization Documents.
Copies of all instruments, pooling, unitization or other agreements or orders
which are in the possession of the Rising Star Partnerships or Seller to which
the Rising Star Oil and Gas Interests are subject or which affect title to or
the value of the Rising Star Oil and Gas Interests.
4.3.2.2.6 Well Files. Copies of the well files of
the Rising Star Partnerships (or the general partner thereof) and/or records
for each of the xxxxx included in the Rising Star Oil and Gas Interests,
including, but not limited to, copies of all xxxxxxxx and correspondence
received from each operator of such xxxxx, any correspondence with state or
federal, oil and gas, environmental or other regulatory authorities, and, to
the extent Seller may do so without violating any obligation of confidence or
contractual commitment to a third party, production reports, well logs, core
analyses, drilling records and all other material in possession of Rising Star
Partnerships related to such xxxxx.
4.3.2.2.7 Engineering and Environmental Reports.
Copies of all oil and gas engineering or environmental reports or studies
covering the Rising Star Oil and Gas Interests and all other estimates of the
environmental condition of the Rising Star Oil and Gas Interests which are in
the possession of the Rising Star Partnerships or Seller.
4.3.2.2.8 Ad Valorem Tax Information. All
documents relating to the payment of ad valorem, property, and similar taxes
and assessments based on or measured by the ownership of property or the
production of hydrocarbons or the receipt of proceeds therefrom on the Rising
Star Oil and Gas Interests which are in the possession of the Rising Star
Partnerships or Seller.
4.3.2.2.9 Maps and Surveys. Ownership maps and
land surveys relating to the Rising Star Oil and Gas Interests which are in the
possession of the Rising Star Partnerships or Seller.
4.3.2.2.10 Lease Records. All lease records and
data sheets relating to the Rising Star Oil and Gas Interests which are in the
possession of the Rising Star Partnerships or Seller.
4.3.2.2.11 Other Oil and Gas Information. Such
other documents, records and information which are in the possession of the
Rising Star Partnerships or Seller as Purchaser may reasonably request in order
to verify the accuracy of the Seller Representations with respect to the Rising
Star Partnership Interests and the Rising Star Oil and Gas Interests.
4.3.2.3 Capital Contributions. A schedule of the total
capital contributions and distributions relating to each of the Rising Star
Partnership Interests from inception through the Effective Date.
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4.3.2.4 Unfunded Commitments. A schedule of any unfunded
capital commitment obligations of Seller to each of the Rising Star
Partnerships, specifically identifying the dates and manner on or in which the
funding obligations arose.
4.3.2.5 Rising Star Financial Information. The financial
statements, reports, budgets and other financial information regarding each
Rising Star Partnership or the Rising Star Partnership Interests which have
been provided to Seller by or on behalf of the Rising Star Partnership or which
have been prepared by or at the direction or request of Seller in connection
with the ownership of the Rising Star Partnership Interests.
4.3.2.6 Other Information. Copies of all notices received by
Seller pursuant to a Rising Star Partnership Agreement, together with
reasonable access to the records in Seller's possession relating to the Rising
Star Partnership Interests including, but not limited to, correspondence,
memoranda and other information.
4.3.2.7 Tax Records. Copies of all federal income tax
returns filed by or on behalf of the Rising Star Partnership including Schedule
K-1 thereto provided to Seller, together with such information as is reasonably
available to Seller regarding the federal income tax attributes of Seller's
interest in the Rising Star Partnerships.
4.3.3 Xxxxx Muse Partnership Interests.
4.3.3.1 Xxxxx Muse Partnership Agreements. Copies of the
documents and agreements listed on Exhibit 1.3.3, together with any and all
amendments thereto and restatements thereof (the "Xxxxx Muse Partnership
Agreements").
4.3.3.2 Capital Contributions. Schedules of the total
capital contributions made or agreed to be made by Seller to the Xxxxx Muse
Partnerships (including the dates thereof), the total distributions made to
Seller from the Xxxxx Muse Partnerships (including the dates thereof), the
investments in which Seller has opted to participate or is participating in the
Xxxxx Muse Partnerships and the relative percentage of its participation in the
specific investments of the Xxxxx Muse Partnership in which Seller has opted to
participate or is participating, evidence of Seller's election to withdraw from
any of the potential investments and the amount of management fees paid by or
charged to Seller in connection with the Xxxxx Muse Partnership Interests.
4.3.3.3 Xxxxx Muse Financial Information. The financial
statements, reports, budgets and other financial information regarding the
Xxxxx Muse Partnerships or the Xxxxx Muse Partnership Interests which have been
provided to Seller by or on behalf of the Xxxxx Muse Partnerships or which have
been prepared by or at the direction or request of Seller in connection with
its ownership of the Xxxxx Muse Partnership Interests.
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4.3.3.4 Other Information. Copies of all notices given or
received by Seller pursuant to a Xxxxx Muse Partnership Agreement, together
with reasonable access to the records in Seller's possession relating to the
Xxxxx Muse Partnership Interests including, but not limited to, correspondence,
memoranda and other information.
4.3.3.5 Tax Information. Copies of all federal income tax
returns filed for taxable years after January 1, 1995 by or on behalf of the
Xxxxx Muse Partnerships to which Seller has access, including all Schedules K-1
regarding Seller, together with such information as is reasonably available to
Seller regarding the federal income tax attributes of Seller's interest in the
Xxxxx Muse Partnerships.
4.4 Xxxxx-Day Stock Deliveries.
4.4.1 Organizational Documents; Books and Records. Copies of Xxxxx-
Day's Articles of Incorporation, Bylaws, other organizational or governing
documents or instruments, and all amendments thereto ("Xxxxx-Day Governing
Documents"), books of account, minute books, stock record books and other
records of Xxxxx-Day.
4.4.2 Xxxxx-Day Financial Statements. Copies of the following
audited financial statements of Xxxxx-Day ("Xxxxx-Day Audited Financial
Statements"): (i) balance sheet as of December 31, 1995 and 1994; and (ii)
statements of income, changes in shareholder's equity and cash flow for the
years then ended. Copies of the following unaudited financial statements of
Xxxxx-Day ("Xxxxx-Day Interim Financial Statements"): (i) balance sheet as of
December 31, 1996; and (ii) statements of income, changes in shareholder's
equity and cash flow for the year then ended. Copies of unaudited balance
sheets for Xxxxx-Day as of the end of each month subsequent to December 31,
1996 and prior to Closing and the related unaudited statements of income for
the periods then ended ("Xxxxx-Day 1997 Financial Statements"). The Xxxxx-Day
Audited Financial Statements, Xxxxx-Day Interim Financial Statements and the
Xxxxx-Day 1997 Financial Statements are collectively referred to as the "Xxxxx-
Day Financial Statements." As soon as the Xxxxx-Day Interim Financial
Statements have been audited, Seller will deliver to Purchaser an audit report
with respect to, and the audited version of, the Xxxxx-Day Interim Financial
Statements; at and after such audit report has been delivered to Purchaser (if
prior to the Closing Date), the Xxxxx-Day Interim Financial Statements as
presented with the audit report thereon shall be included in the definition of
Xxxxx-Day Audited Financial Statements.
4.4.3 Receivables and Payables. Aged listing as of December 31,
1996 of all accounts receivable, and copies of all notes receivable by Xxxxx-
Day and notes payable by Xxxxx-Day, and renewals, extension or modifications
thereof.
4.4.4 Tax Returns. Any return (including information return),
report, statement, declaration, schedule, notice, notification, form,
certificate or other document or information
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filed with or submitted to any Governmental Authority by Xxxxx-Day after
December 31, 1992 regarding Taxes.
4.4.5 Agreements, Contracts and Commitments. Copies of all
contracts, agreements or commitments (whether written or oral, and whether or
not legally binding or enforceable) described in Section 7.4.9 relating to
Xxxxx-Day.
4.4.6 Descriptions of Property. Copies of all agreements,
contracts, mortgages, concessions, leases and commitments relating to or
affecting any real property, leaseholds or other interests in real property,
including improvements thereon, owned or operated by Xxxxx-Day. Copies of all
contracts, agreements, mortgages, leases and commitments or forms thereof
relating to or affecting any interest in such tangible personal property to
which Xxxxx-Day is a party or by which such property is in any way bound or
affected, together with all amendments and supplements thereto and
modifications thereof.
4.4.7 Benefit Plans. Copies of any deferred compensation plan,
bonus and incentive arrangement, stock option plan, restricted stock
arrangement and any other "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) and any "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) maintained or required to be maintained by Xxxxx-Day or
to which it contributes or is required to contribute, or for which it has any
existing obligation or liability, financial or otherwise (the "Xxxxx-Day
Benefits Plans").
4.4.8 Insurance. Copies of all policies of property, fire and
casualty, product liability, worker's compensation, liability and other forms
of insurance owned or held by Xxxxx-Day ("Xxxxx-Day Insurance Policies").
4.4.9 Litigation. Listing of each and every Proceeding to which
Xxxxx-Day is a party in any capacity whatsoever, or to which any of its assets
are subject ("Xxxxx-Day Litigation").
4.5 Oil and Gas Interests.
4.5.1 Division Orders and Title Opinions. Division orders and other
title opinions relating to each of the producing oil and gas xxxxx described in
Exhibit 1.5.
4.5.2 Operating Agreements. Copies of all operating agreements in
Seller's possession to which Seller's interest in the Oil and Gas Interests is
subject.
4.5.3 Production Agreements. Copies of all division or transfer
orders and hydrocarbon sale/purchase agreements with purchasers of hydrocarbons
or other production from the Oil and Gas Interests in Seller's possession.
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4.5.4 Service Documents. Copies of all oil and gas leases, prior
assignments of the Oil and Gas Interests and other agreements which are a
source of Seller's title to the Oil and Gas Interests in Seller's possession.
4.5.5 Documents Affecting Title or Value. Copies of all
instruments, pooling, unitization or other agreements or orders to which the
Oil and Gas Interests are subject or which affect title to or the value of the
Oil and Gas Interests in Seller's possession.
4.5.6 Well Files. Copies of Seller's well files and/or records for
each of the xxxxx included in the Oil and Gas Interests, including, but not
limited to, copies of all xxxxxxxx and correspondence received from each
operator of such xxxxx, any correspondence with state or federal, oil and gas,
environmental or other regulatory authorities, and, to the extent Seller may do
so without violating any obligation of confidentiality or contractual
commitment to a third party, production reports, well logs, core analyses,
drilling records and all other material in possession of Seller related to such
xxxxx.
4.5.7 Reports, Studies. Copies of all oil and gas engineering or
environmental reports or studies covering the Oil and Gas Interests and all
other estimates of the environmental condition of the Oil and Gas Interests, to
the extent Seller may do so without violating any obligation of confidentiality
or contractual commitment to a third party.
4.5.8 Taxes and Documents. All documents relating to the payment of
ad valorem, property, and similar taxes and assessments based on or measured by
the ownership of property or the production of hydrocarbons or the receipt of
proceeds therefrom on the Oil and Gas Interests in Seller's possession.
4.5.9 Maps. Ownership maps and surveys in Seller's possession,
relating to the Oil and Gas Interests in Seller's possession.
4.5.10 Records and Data. All lease records and data sheets relating
to the Oil and Gas Interests in Seller's possession.
4.6 Marketable Securities. Copies of any instruments or certificates
evidencing the Marketable Securities and any and all agreements or other
documentation relating to them and statements or other confirmation of
ownership of uncertificated securities or brokerage accounts.
4.7 Municipal Bonds. Copies of any instruments or certificates evidencing
the Municipal Bonds, any and all agreements or other documentation relating to
them and statements or other confirmation of ownership of uncertificated
securities or brokerage accounts.
4.8 Promissory Notes.
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4.8.1 Notes and Security Documents. Copies of the Promissory Notes,
Security Documents and UCC filings.
4.8.2 Payments Received. Copies of all documents showing payments
of principal and interest received on the Promissory Notes, together with
summary schedules thereof for each Promissory Note.
4.8.3 Documents. Copies of all documents of every kind and nature
related to the Promissory Notes and the Security Documents including all
correspondence received from the makers of the Promissory Notes, all
correspondence to the makers of the Promissory Notes, Mortgagee Title Policy
and the survey covering the Allied Tract to the extent available, stock
Certificate No. 002 evidencing the ownership of 10,000 shares of Kosmeo
Cosmetics, Inc. by Xxxxx and Xxxxxx Xxxxxx, and all files related to the
Promissory Notes and Security Documents.
4.9 Citation Interest.
4.9.1 Lease and Purchase Agreements. Copies of the Citation Lease
Agreement, the Citation Purchase Agreement, the Citation V Ultra Xxxx of Sale
and Assignment, the Citation V Ultra Master Interchange Agreement, the Citation
V Ultra Management Agreement, the Citation V Ultra Owners Agreement, and all
amendments to the foregoing agreements.
4.9.2 Documents. Copies of all documents of every kind and nature
related to the Citation Agreements including all correspondence to and received
from Executive Jet Sales, Inc., Executive Jet Aviation, Inc., all
correspondence to and received from the FAA and all files related to the
Citation Agreements.
4.10 Other Documents. Such other documents, records and information as
Purchaser shall reasonably request and are reasonably accessible to Seller in
order to verify the accuracy of the Seller Representations.
4.11 Records in Possession of Seller. Purchaser acknowledges that Seller
may not have some of the items described in Article IV as regards the
Partnership Interests and Oil and Gas Interests and agrees that, to the extent
Seller does not have said items, Seller shall only be required to use
commercially reasonable efforts to cause the persons who have said items to
make them available to Purchaser and its representatives.
ARTICLE V
TITLE REVIEW PERIOD
5.1 Real Property Assets Title Review. Seller acknowledges that Purchaser
intends to obtain: (a) three (3) title commitments (each a "Pre-Closing Title
Commitment") each issued by Title Company as agent for one or more title
underwriters acceptable to Purchaser pursuant
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to which Title Company agrees to issue an owner's policy of title insurance in
the amounts set forth in Section 10.2.1, one insuring title to the Properties,
a second insuring title to the Xxxxx-Day Tracts, and the third insuring the
lien created by the Allied Deed of Trust as a first and superior lien against
the Allied Tract, each commitment to insure subject to only those schedule "B"
exceptions listed in the Pre-Closing Title Commitment, (b) surveys (each a
"Survey" and collectively "Surveys") of each Parcel, the Xxxxx-Day Tracts and
the Allied Tract, and (c) a search of the Uniform Commercial Code Records of
the appropriate counties in Texas and the Secretary of State of Texas under the
name of each Seller, Xxxxx-Day, RSE I and RSE-II and any predecessor in
interest to the Properties ("UCC Searches"). The Schedule B exceptions listed
in each Pre-Closing Title Commitment are hereafter called "Exceptions." If any
of the Exceptions are objectionable to Purchaser (an "Objectionable
Exception"), Purchaser may deliver written notice ("Objection Notice") to
Seller listing each Objectionable Exception. Objectionable Exceptions shall be
limited to (i) liens or other monetary Encumbrances other than those for ad
valorem taxes for 1997 and subsequent years and subsequent assessments for
prior years due to changes in land usage or ownership, (ii) encroachments of
improvements situated on other property upon any of the Parcels or by
Improvements over boundaries, set back lines, easements or right-of-ways, (iii)
restrictions or covenants (collectively "Restrictions") only if (A) the current
or Purchaser's anticipated use of the Improvements violate or would violate the
Restrictions or (B) compliance with the Restrictions cannot be confirmed, or
the economic obligations of Purchaser thereunder cannot be determined, (iv)
oil, gas or other mineral interests (other than royalty or other non-executory
interests) unless the Title Company provides affirmative coverage to the effect
that said owner cannot disturb the surface to exploit said minerals, (v)
easements if the use of the easement might endanger or damage any Parcel or
persons entering upon that parcel or if the same restricts the use of the
parcel in a manner which is not acceptable to Purchaser (which acceptance shall
not be unreasonably withheld), (vi) flood plain/flood prone area conditions, or
(vii) any other matter to which a reasonably prudent and experienced purchaser
of the respective Parcel with adequate legal counsel would object. Promptly
following the delivery of the Objection Notice, Seller shall use commercially
reasonable efforts to cause the Title Company to remove the Objectionable
Exception. Additionally, Seller shall cause any Encumbrances (other than tax
liens for 1997 and subsequent years and subsequent assessments for prior years
due to change in land usage or ownership) affecting any of the Properties to be
fully discharged on or before the Closing Date. If Seller is unable despite
its commercially reasonable efforts to cause any Objectionable Exception to be
removed prior to the Closing Date, it shall be an Adjustment Event and the
rights and obligations of the parties shall be governed by the provisions of
Section 20.3.
5.2 Real Property Assets Permitted Exceptions. Except as provided in the
next sentence, the term "Permitted Exceptions" for each Property shall include
and be specifically limited to: (i) all applicable Exceptions not objected to
by Purchaser in accordance with Section 5.1; (ii) the printed Schedule B
exceptions modified in the manner allowed by applicable regulations; (iii)
exceptions relating to rights of tenants, as tenants only under the Leases; and
(iv) any Objectionable Exceptions which are waived pursuant to Section 5.1.
Provided,
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however, the term "Permitted Exceptions" when used in connection with the Deeds
shall not include paragraphs 2 through 8 of the standard pre-printed Schedule B
exceptions in the form of commitment for title insurance promulgated by the
Texas Board of Insurance.
5.3 Oil and Gas Interests Title Review. Purchaser shall have a period
ending upon expiration of the Inspection Period (the "Oil and Gas Title Review
Period") in which to review and approve each such item. If the information or
any other information or data shall reflect the existence of any encumbrance,
encroachment, defect in or objection to title which shall render title to the
Oil and Gas Interests, or any portion thereof, inferior to Defensible Title,
and which Purchaser does not waive (all of which are herein called the "Oil and
Gas Title Defects"), written notice of the Oil and Gas Title Defects shall be
given to Seller not later than the end of the Oil and Gas Title Review Period.
Such notice shall include a description of the Oil and Gas Title Defect and the
basis for the defect that Purchaser believes causes such Oil and Gas Interest
not to have Defensible Title. For purposes of this Agreement, the term
"Defensible Title" shall mean that Seller owns such Oil and Gas Interest free
and clear of all claims, liens and encumbrances, except statutory liens for
taxes not yet delinquent, mechanics' and materialmen's liens with respect to
expenses which have not yet become delinquent, operators' liens under operating
agreements with respect to expenses which have not yet become delinquent,
consents and preferential rights to purchase with respect to which waivers have
been obtained or as to which the consent is not necessary for valid assignment
or the applicable time periods have expired, rights of consent by or filings
with Governmental Authorities in connection with the conveyance of any Oil and
Gas Interest customarily obtained after a sale, right of re-assignment in the
event of a release or surrender of an Oil and Gas Interest, routine operational
agreements which do not provide for material future commitments and which are
the type customarily accepted in oil and gas property purchase transactions and
minor irregularities or imperfections in title and other minor matters which do
not (a) materially interfere with the occupation, use and enjoyment of the Oil
and Gas Interests in the normal course of the oil and gas business, (b)
materially impair the value thereof for such business, with due regard being
given such factors as the potential economic loss created by the irregularity
or imperfection, the cost of obtaining curative materials to correct the
irregularity or imperfection and the acceptability of such irregularities and
imperfections in oil and gas property purchase transactions, (c) reduce
Seller's net revenue interest to less than that shown on Exhibit 1.5, and/or
(d) obligate Seller to bear more than the working interest shown on Exhibit
1.5, except for an increase that also results in a proportionate increase in
Seller's net revenue interest. An Oil and Gas Title Defect shall be an
Adjustment Event and the rights and obligations of the parties shall be
governed by the provisions of Section 20.3.
ARTICLE VI
INSPECTION PERIOD
6.1 Inspection Period. Purchaser, at Purchaser's sole expense, shall have
the right to conduct a feasibility, environmental, engineering and physical
study of the Assets for a period
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of time commencing on the Effective Date and expiring on the date which is
sixty (60) days after the Effective Date (the "Inspection Period"). Purchaser
and Purchaser's duly authorized agents or representatives shall be permitted to
enter upon the Properties and, subject to Section 6.3, the location
constituting the principal place of business of each Seller, Xxxxx-Day and to
the extent Seller is able to obtain such access for Purchaser, the Allied Tract
and the offices of the Partnerships, at all reasonable times during the
Inspection Period in order to conduct engineering studies, soil tests and any
other inspections, reviews and/or tests that Purchaser may deem reasonably
necessary or advisable. In the event that the review and/or inspection
conducted by this Section shows any fact, matter or condition to exist with
respect to the Assets that is unacceptable to Purchaser, in Purchaser's sole
discretion, or if for any reason Purchaser determines that purchase of the
Assets is not feasible, then Purchaser shall be entitled, as Purchaser's sole
remedy, to cancel this Agreement by providing written notice of cancellation to
Seller prior to the expiration of the Inspection Period. If Purchaser shall
provide written notice of cancellation prior to the expiration of the
Inspection Period, then this Agreement shall be canceled, all Xxxxxxx Money
shall be immediately paid to Seller by the Title Company, Purchaser shall
return to Seller all of the Due Diligence Items, and thereafter neither Seller
nor Purchaser shall have any continuing obligations one unto the other except
as provided in Section 21.10. Purchaser shall indemnify and hold Seller
harmless from and against any and all claims, causes of action or expenses
asserted against or incurred by Seller and arising out of the acts or failures
to act of Purchaser or its representatives in connection with their inspections
of any of the Assets. Notwithstanding any provision of this Agreement to the
contrary, the foregoing indemnity shall survive any termination of this
Agreement.
6.2 Purchaser's Right to Review Books. Following the Effective Date,
Seller, at Purchaser's sole cost and expense, shall furnish to Purchaser and
Purchaser's accountants and other representatives full and reasonable access to
the books and records of Seller relating to the Assets and to all financial
information or other information known or possessed by each Seller with respect
to the Assets which Purchaser or Purchaser's accountants or other
representatives may reasonably request in connection with any financial audits
Purchaser elects to conduct with respect to the Assets, and, at Purchaser's
sole cost and expense, shall cooperate fully, and shall instruct their
accountants, attorneys and other representatives to cooperate fully with
Purchaser and Purchaser's accountants and other representatives in obtaining
all financial or other information which Purchaser or its accountants or other
representatives may reasonably request in connection with any financial audits
conducted with respect to the Assets, including without limitation providing to
Purchaser's accountants such management representation letters or legal
representation letters which Purchaser's accountants are required to obtain in
order to issue financial audits. Notwithstanding anything herein, nothing in
this Agreement shall require Seller to disclose any information regarding cash
of Seller (other than cash owned by Xxxxx-Day) or other assets of Seller not
being acquired by Purchaser hereunder. The obligations of this Section 6.2
shall survive Closing and continue until Purchaser and/or Purchaser's
accountants have completed any and all audits of or with respect to the Assets,
which Purchaser, in its sole discretion, determines are reasonably needed.
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6.3 Sellers' Cooperation Regarding Partnerships and Xxxxx-Day. Seller, at
Purchaser's sole cost and expense, agrees to cooperate with Purchaser in
obtaining information from the Partnerships and Xxxxx-Day. Seller and
Purchaser shall endeavor to meet with representatives of such entities and
shall seek to allow Purchaser and Purchaser's agents and representatives such
access to information regarding the entities which Purchaser deems reasonably
necessary or appropriate and which is available to Seller. Purchaser agrees to
review and, where appropriate, execute and deliver to such entity or entities
such confidentiality or non-disclosure agreements as may be reasonably
necessary to allow Purchaser access to the records or information sought.
Seller, at Purchaser's sole cost and expense, shall cooperate with Purchaser in
obtaining consents from each entity or participant therein which is required to
give its consent including arranging meeting(s) with representatives of such
entities or participants therein and providing, prior to any such meetings,
reasonable background information and support to Purchaser which Seller
reasonably believes may be important in obtaining the required consent.
6.4 Continuing Access Prior to Closing. If this Agreement is not
terminated on or before the end of the Inspection Period, Seller and Purchaser
contemplate that Purchaser will have continuing access to the Properties and
Assets after the termination of the Inspection Period but prior to Closing.
Seller, at Purchaser's sole cost and expense, will cooperate with Purchaser and
Purchaser's agents and representatives to allow such access and to provide
continuing updates to information regarding the Assets as may be reasonable to
assure that Purchaser has all of the material information regarding the Assets
that Seller has been given from and after the Effective Date but prior to
Closing.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of Seller. Seller represents and
warrants that the statements set forth in Sections 7.1 through 7.9 are true
and correct in all material respects as of the Effective Date. Said statements
are herein called "Seller Representations." When used in this Agreement: (i)
"knowledge" or "actual knowledge" means the current actual knowledge of any of
the Principal Officers or the existence of any information in the records or
files of the Seller at the time the respective Seller Representation was made,
and (ii) "Principal Officers" means Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxx,
X.X. Xxxxx, Xxxxx Xxxx and Xxxxxxxx Xxxxxx. Notwithstanding the foregoing, or
any other provision of this Agreement to the contrary (other than this Section
7.1), Seller shall have no liability whatsoever to Purchaser or any Affiliate
of Purchaser for any breach of any Seller Representation, except that such a
breach may constitute an Adjustment Event and thus serve as the basis for
adjustment to the Purchase Price in accordance with Section 20.3. Purchaser
acknowledges that (i) the Seller Representations, are in many cases, made
without current actual knowledge of any of the Principal Officers as to whether
they are true or false, (ii) that, due to lack of current actual knowledge of
any of the Principal Officers, some Seller Representations may be false when
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made, and (iii) Seller Representations are made by Seller solely to allocate
the risk between the parties of certain matters prior to Closing and to serve
as the basis for determining the existence of an Adjustment Event. Purchaser
(for itself and its Affiliates) agrees that it shall have no basis for any
claim of fraud in the inducement or otherwise relating to any of the Seller
Representations set forth herein being false when made; however, Purchaser may
seek actual damages suffered by it as a result of any Seller Representation
herein having been false when made if Purchaser establishes that such Seller
Representation was known by one or more of the Principal Officers of Seller to
be false when made and was made by Seller with intent to mislead Purchaser.
None of the Seller Representations shall survive Closing.
7.1.1 Organization, Existence and Good Standing. Each entity
included as a Seller is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite
corporate power and authority to carry on its business as now being conducted,
to own or lease and operate its Assets as now owned, leased or operated, and to
perform all its obligations under the agreements and instruments to which it is
a party or by which it is bound.
7.1.2 Authorization; Enforceability. This Agreement, and each other
agreement to which Seller is to become a party pursuant to the provisions
hereof, when executed and delivered by Seller, and, if applicable, approved by
the shareholders of Seller, shall constitute the legal, valid and binding
obligations of Seller, enforceable against it in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization
and other moratorium laws generally affecting the rights of creditors and the
availability of equitable remedies. All actions contemplated by this Section
have been or after necessary shareholder approval will have been duly and
validly authorized by all necessary proceedings by Seller.
7.1.3 No Violation of Laws or Agreements. Neither the execution and
delivery of this Agreement or any other agreement to which Seller is or is to
become a party pursuant to the provisions hereof, the consummation of the
transactions contemplated hereby or thereby nor the compliance with or
fulfillment of the terms, conditions or provisions hereof or thereof by Seller
will except for the need to obtain the consents contemplated by this Agreement:
(i) conflict with, result in a breach of, constitute a default (or an event
that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under any Asset or any
contract, agreement or instrument to which Seller is a party or by which any of
the Assets may be bound or affected, or (ii) violate any Legal Requirement to
which Seller is subject or by which any of the Assets may be bound or affected.
7.1.4 No Proceedings. Except as set forth on Part A of Exhibit
7.1.4, no Proceeding is pending or, to the knowledge of Seller, threatened
against or affecting Seller, any of the Assets, the ability of Seller to
perform its obligations under this Agreement or any of the
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transactions contemplated hereby. Except as set forth on Part B of Exhibit
7.1.4, Seller has not received any notice of any violation of any Legal
Requirement pertaining to any of the Assets.
7.1.5 No Rights of First Refusal. Except as set forth on Exhibit
7.1.5 or disclosed in other provisions of this Agreement, and except for
preferential purchase rights in favor of joint lease owners pursuant to
operating agreements related to Oil and Gas Interests, there are no existing
options, rights, warrants, commitments, agreements or instruments of any type
to which Seller is bound, or to which any Asset is subject, under or pursuant
to which any Person shall be given, provided or otherwise afforded the right,
option, occasion, possibility or opportunity to purchase any Asset.
7.1.6 Accuracy of Documents. All documents, records, listings and
schedules delivered to Seller pursuant to Article IV are in all material
respects true, correct and complete copies of all the documents and records
delivered or to be delivered.
7.1.7 Disclosure. No Seller Representation or statement in the
Exhibits or in any items delivered pursuant to Article IV contains any untrue
statement of a material fact.
7.1.8 Shareholder Consent. CCP represents and warrants to Purchaser
that the undersigned Consenting Shareholders collectively hold and have
authority to exercise voting rights for at least a majority of the votes
represented by the outstanding voting securities of CCP.
7.2 Real Property Assets.
7.2.1 Title. Seller owns good and indefeasible fee simple title to
the Real Property Assets, except the Airport Ground Lease and Stemmons
Leasehold free and clear of any Encumbrances that would have a material adverse
effect on the value of the Asset. Seller owns all of the rights of the tenant
pursuant to the Airport Ground Lease and Stemmons Leasehold, free and clear of
any Encumbrances which would have a material adverse effect on the value of the
Asset.
7.2.2 Rent Roll. The rent roll ("First Rent Roll") which is
attached and marked as Exhibit 7.2.2 is true and correct in all material
respects as of February 4, 1997.
7.2.3 Defects. Except as set forth on Exhibit 7.2.3, there are no
material structural, physical, mechanical or other defects, faults or
inadequacies in, affecting or relating to the Real Property Assets or any part
thereof (including, without limitation, the heating, air conditioning,
ventilating, plumbing, life safety and electrical systems of the Improvements,
all of which are in good operating condition and repair) which would materially
adversely affect the condition of the Real Property Assets or the insurability
of the Real Property Assets or the premiums for the insurance therefor.
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7.2.4 Leases. There are no leases (or any other oral or written
agreements pursuant to which any portion of the Properties is used or occupied
by anyone other than Seller), other than the Leases described on the First Rent
Roll, in effect as of the date of the First Rent Roll with respect to the
Properties. Purchaser acknowledges that there are temporary storage agreements
(terminable on thirty (30) days' notice or less) at various Office Buildings
which are contained in the lease files, but may not be reflected in the First
Rent Roll.
7.2.5 No Rent Prepayments. No Existing Tenant has prepaid rent
under any Lease by more than thirty (30) days.
7.2.6 Environmental Matters. Except as set forth on Exhibit 7.2.6,
there are no set of circumstances or conditions resulting from or arising out
of the introduction, spillage, discharge, disposal or release (including any
"release" as defined in CERCLA), or threat thereof, of any Hazardous Substance
into or onto the surface water, ground water, soil, surface or subsurface of
any of the Properties or, to Seller's knowledge, land adjacent to any of the
Properties and by reason of which might or could result in any Proceeding based
on any Environmental Law.
7.2.7 RSF. The total rentable square feet of each Office Building
currently utilized by Seller, including adjustments for shortfalls, is
reflected on the First Rent Roll.
7.2.8 Condemnation. Except as set forth on Exhibit 7.2.8, no
condemnation, eminent domain or similar proceedings have been instituted or, to
Seller's knowledge, threatened against the Properties.
7.2.9 Operating Agreements. Except as set forth on Exhibit 7.2.9,
all Operating Agreements are cancelable without cause upon not more than thirty
(30) days' notice.
7.2.10 Bankruptcy. Seller does not have knowledge of any
attachments, executions, assignments for the benefit of creditors, or voluntary
or involuntary bankruptcy proceedings, or proceedings under any debtor relief
laws, contemplated by or pending or threatened against Seller or the
Properties.
7.2.11 Effective Contracts. Except for the Operating Agreements and
any continuing guaranties and warranties benefitting the owner of any of the
Properties in connection with the Personal Property and Improvements, there are
no contracts of construction, employment, management, service, or supply which
will affect the Properties or operations of the Properties after Closing,
except for contracts related to repairs or restoration of damage as
contemplated by this Agreement and contracts relating to tenant improvements
and architectural and engineering services.
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7.2.12 Compliance with Laws. Except as set forth on Part B of
Exhibit 7.1.4, the Improvements and Personal Property and the current operation
thereof comply in all material respects with all Legal Requirements of all
Governmental Authorities having jurisdiction over the Properties or affecting
all or any part thereof or bearing on their construction or operation, and with
all private covenants or restrictions.
7.2.13 Licenses and Permits. Seller has acquired all licenses,
permits, easements, rights-of-way, including, without limitation, all building
and occupancy permits from all governmental authorities having jurisdiction
over each Property or from private parties for the normal use, maintenance,
occupancy, and operation of each Property and to ensure unimpeded access,
ingress and egress to and from each Property as required to permit normal usage
of the respective Improvements, except where the failure to do so would not
have a material adverse effect on such Property.
7.2.14 Insurance Compliance. Seller currently has in place the
public, liability, casualty and other insurance coverage with respect to the
Properties in the amounts reflected on Exhibit 7.2.14. Each of such policies
is in full force and effect, and all premiums due and payable thereunder have
been, and on the Closing Date will be, fully paid when due. No notice of
cancellation has been received or, to Seller's knowledge, threatened with
respect thereto. No insurance company insuring either the Improvements or the
Personal Property or Board of Fire Underwriters has delivered to Seller oral or
written notice (i) that any insurance policy now in effect would not be
renewed, or (ii) that Seller or a tenant under the Leases has failed to comply
with insurance requirements or (iii) that defects or inadequacies exist in the
Properties, or in any part thereof, which could adversely affect the
insurability thereof or the cost of such insurance.
7.2.15 Zoning. Except as set forth in Exhibit 7.2.15, present zoning
regulations permit the use of the Properties for the uses to which each is
presently used, each Property complies in all material respects with all
applicable parking regulations, and there are no legal requirements or private
regulations, orders, agreements or instruments restricting in any material
respect the current use and operation of the Properties other than those to be
reflected in the Pre-Closing Title Commitments all of which are being fully
complied with in all material respects.
7.2.16 Agreements Affecting Properties. There are no contracts or
other material obligations, other than the Operating Agreements and Leases, and
other than those to be reflected in the Pre-Closing Title Commitments
outstanding (i) for the sale, exchange or transfer of the Properties or any
portion thereof or the business operated thereon by Seller except for an
Approved Sale Contract or the CompUSA Agreement, or (ii) creating or imposing
any material burdens, obligations or restrictions on the use or operation of
the Properties and the business conducted thereon.
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7.2.17 Status of Leases. Neither the Leases nor any other contract
or agreement delivered by Seller to Purchaser has been amended, modified or
supplemented in any way that will not be disclosed to Purchaser in writing at
the time of delivery to Purchaser pursuant to Article IV. There are no written
or oral agreements of any kind that could constitute a lease or contract
relating to the Properties (including any agreements for free rent, rent
reduction or abatement, expense reimbursement, construction or remodeling
allowance, lease takeover or rent reimbursement, or other agreements of a
tenant inducement nature). There exists no circumstance or state of facts that
constitutes a default by Seller or, to Seller's knowledge, any tenant under the
Leases, or that would, with the passage of time or the giving of notice, or
both, constitute a default on the part of Seller or, to Seller's knowledge, by
any tenant under any of the Leases, or that entitles any tenant under the
Leases defenses against the prompt, current payment and performance of rent
and/or other payments and obligations thereunder. Except as shown on Part A of
Exhibit 7.1.4, Seller has no knowledge of any pending or threatened litigation
by any tenant against Seller with regard to any Lease. Except for lease
commissions that will be paid by Seller in accordance with the terms of this
Agreement, or as shown on Exhibit 7.2.17, there do not exist any unpaid leasing
commissions due with regard to any of the Leases. Seller is the owner of the
entire lessor's interest in and to each of the Leases. Seller has performed,
in all material respects, all of the duties, liabilities and obligations
imposed upon Seller by the terms, provisions and conditions contained in the
Leases and accruing on or prior to the date hereof.
7.2.18 Assessments. There are no unpaid assessments for public
improvements against any Properties. The Properties are not subject to
assessments for any street paving or curbing heretofore laid. All sewer,
water, gas, electric, telephone and drainage lines and facilities required by
law and for the normal operation of the Properties are fully installed,
function properly and are adequate to service the Properties and there are no
unpaid assessments or charges for the installation of such utilities or for
making connection thereto.
7.2.19 Books and Records; Financial Information. All books and
records relating to operating income and expenses of the Properties furnished
or made available to Purchaser by Seller have been maintained by Seller in
regard to the Properties in the normal course of business. The operating
statements covering the Properties furnished by Seller to Purchaser are, in all
material respects, accurate, complete and have been prepared in accordance with
the books and records of Seller and present fairly the financial position of
the operations of the Properties for the periods then ended. Without limiting
the generality of the foregoing, all of the financial statements referred to
above fully reflect all material costs of operations of the Properties. Since
December 31, 1996, there has been no material adverse change in the Properties.
7.2.20 Number not used.
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7.2.21 Employees. None of the employees of the Properties is covered
by a union contract or collective bargaining agreement or is represented by a
union.
7.2.22 Undeveloped Land. Each Parcel of Undeveloped Land is zoned to
allow the uses set forth on Exhibit 7.2.22 and no Undeveloped Land is subject
to any governmental or regulatory restrictions or encumbrances which would
restrict the development or use other than (a) those restrictions and
encumbrances which are typical in the zoning class applicable to the respective
Parcel, and (b) the requirement that any unsubdivided Parcel must be legally
subdivided.
7.2.23 Tenants. Seller makes no representation or warranty
whatsoever regarding the financial condition of any tenant of any of the Real
Property Assets.
7.2.24 Soil Conditions. The soil conditions of each Parcel of
Undeveloped Land is not materiality less suitable for construction of
commercial, retail or multi-family facilities than the soil conditions of
substantially all other properties situated within a five (5) mile radius of
the respective Parcel.
7.3 Partnership Interests.
7.3.1 General Representations and Warranties as to Partnership
Interests.
7.3.1.1 Ownership. Seller is the record and beneficial owner
of the Partnership Interests and has good, valid and indefeasible record and
beneficial title to the Partnership Interests free and clear of any adverse
claim of any Person, including any Encumbrances (except as set forth in the
Partnership Agreements). The transfer and assignment documents to be delivered
to Purchaser on the Closing Date will transfer to and vest in Purchaser good,
valid and indefeasible title to the Partnership Interests, free and clear of
any adverse claims of any Person, including any Encumbrance (except as set
forth in the Partnership Agreements).
7.3.1.2 Organization, Existence and Good Standing. Each
Partnership is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and is, to the extent necessary,
qualified to do business in each jurisdiction in which it operates, it has all
requisite partnership power and authority to carry on its business as now being
conducted, to own or lease and operate its properties and assets as now owned,
leased or operated, and to perform all of its obligations under the agreements
and instruments to which it is a party or by which it is bound.
7.3.1.3 Partnership Agreements; Amendments. Seller has
delivered to Purchaser true and correct copies of all of the Partnership
Agreements which are listed on Exhibits 1.3.2 and 1.3.3, and such Partnership
Agreements have not been amended or modified
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in any way, except for amendments copies of which have been delivered to Seller
prior to the Effective Date.
7.3.1.4 No Default; No Litigation. There has been no default
by Seller or, to Seller's knowledge, no default by any other partner, under or
pursuant to the Partnership Agreements. To Seller's knowledge, no Partnership
is a party to any material litigation not fully covered by insurance, and there
is no litigation affecting the rights of a Partnership in any of its assets or
business that would, if determined adversely to the Partnership, have a
material adverse affect on the value of those assets or that business. There
is no litigation involving Seller's interest in a Partnership or any of the
rights related thereto.
7.3.1.5 No Obligations. Except as provided in the
Partnership Agreements or schedules delivered to Purchaser pursuant to Section
4.3, Seller is not and, upon acquisition of the Partnership Interests,
Purchaser will not be, obligated to make any capital contributions or return
any capital or otherwise pay any amounts with regard to the Partnership
Interests. This Section 7.3.1.5 does not relate to capital contribution
obligations arising after the Closing pursuant to the terms of the respective
Partnership Agreements.
7.3.1.6 Right to Transfer; Right to Become Substitute Limited
Partner. Except as specifically set forth in the Partnership Agreements,
Seller has the full power and authority to transfer and assign the Partnership
Interests to Purchaser or Purchaser's assignee (as permitted hereunder) and,
upon such transfer, Purchaser (or Purchaser's permitted assignee) shall have
the right to become a substitute limited partner in the applicable Partnership,
subject only to the specific conditions set forth in the Partnership
Agreements.
7.3.2 Number not used.
7.3.3 Rising Star Partnership Interests.
7.3.3.1 Related Agreements and Rights. The only rights and
agreements related to or associated with the rights of Seller in or to the
Rising Star Partnerships are contained in the documents set forth in Exhibit
1.3.2.
7.3.3.2 Approvals; Consents. The only consents and/or
approvals required to be obtained in connection with the transfer of the Rising
Star Partnership Interests to Purchaser or to Purchaser or Purchaser's
permitted assignee (and the admission of such Person to the Rising Star
Partnerships as a substitute limited partner) are parties to the Rising Star
Partnership Agreements.
7.3.3.3 Partners. The only partners in the Rising Star
Partnership are those listed in the Rising Star Partnership Agreements.
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7.3.4 Xxxxx Muse Partnership Interests.
7.3.4.1 Related Agreements and Rights. The only rights and
agreements related to or associated with the rights of Seller in or to the
Xxxxx Muse Partnerships are contained in the documents set forth in Exhibit
1.3.3.
7.3.4.2 Approvals; Consents. The only consents and/or
approvals required to be obtained in connection with the transfer of the Xxxxx
Muse Partnership Interests to Purchaser or Purchaser's permitted assignee (and
the admission of such Person to the Xxxxx Muse Partnerships as a substitute
limited partner) is that of HM2/GP.
7.4 Xxxxx-Day Stock.
7.4.1 Shares of Xxxxx-Day Stock. The Xxxxx-Day Stock consists of
12,500 shares, no par value per share, of issued and outstanding common stock
of Xxxxx-Day, and no shares are held in treasury. Seller is and will be on the
Closing Date the record and beneficial owner and holder of, and has, and on the
Closing Date will have, good, valid and indefeasible record and beneficial
title to, the Xxxxx-Day Stock, free and clear of any adverse claim of any
Person, including any Encumbrance. All of the shares of the Xxxxx-Day Stock
have been duly authorized and are validly issued, fully paid and nonassessable.
The Xxxxx-Day Stock represents and will represent as of the Closing Date all
outstanding capital stock or other equity interest of any nature of Xxxxx-Day.
All dividends and other distributions declared with respect to the issued and
outstanding shares of capital stock of Xxxxx-Day have been paid or distributed.
There are no existing subscriptions, rights, warrants, calls, options,
irrevocable proxies, commitments or agreements of any character relating to the
capital stock of Xxxxx-Day which is authorized but unissued or held in the
treasury or related to the purchase or redemption of Xxxxx-Day's capital stock,
and there are no outstanding securities or other instruments convertible into
or exchangeable for shares of such capital stock and no commitments to issue
such securities or instruments. The stock certificates, endorsements, stock
powers and other documents to be delivered to Purchaser on the Closing Date
will transfer to and vest in the Purchaser good, valid and indefeasible title
to the Xxxxx-Day Stock, free and clear of any adverse claims of any other
Person or any Encumbrance. No stock transfer taxes are or will be required to
be paid by Purchaser or Seller with respect to the transfer of the Xxxxx-Day
Stock as provided herein.
7.4.2 Consents and Approvals; No Violation. Except as set forth on
Exhibit 7.4.2, no filing or registration with, no notice to and no Governmental
Authorization, consent, or approval of any Governmental Authority, creditor or
other Person in a contractual relationship with Xxxxx-Day is necessary in
connection with Seller's execution and delivery of this Agreement, the
performance of its obligations hereunder, or the consummation of the transfer
of the Xxxxx-Day Stock hereunder. Except as set forth on Exhibit 7.4.2,
neither the execution and delivery of this Agreement nor the transfer of the
Xxxxx-Day Stock will, as of the Closing
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Date: (i) conflict with or violate any provision of the Xxxxx-Day Governing
Documents, (ii) be in conflict with, result in a violation, breach or
termination of, or constitute a default under any of the material terms,
conditions or provisions of any note, contract, agreement, commitment, bond,
mortgage, license, lease, pledge agreement or other instrument or obligation to
which Xxxxx-Day is a party or by which it or any of its properties or assets
may be bound; (iii) violate (with or without due notice or lapse of time or
both) or conflict with any material provision of any Legal Requirement binding
on Xxxxx-Day; or (iv) result in or require the creation or imposition of any
Encumbrance upon or with respect to any of the properties or assets owned or
used by Xxxxx-Day.
7.4.3 Xxxxx-Day Financial Statements. The Xxxxx-Day Financial
Statements fairly present, and will fairly present on the Closing Date, the
financial condition and results of operations of Xxxxx-Day as of the respective
dates thereof and for the periods therein referred to, all in accordance with
GAAP, subject, in the case of the Xxxxx-Day Interim Financial Statements and
Xxxxx-Day 1997 Financial Statements, to normal recurring year-end adjustments
(the effect of which will not, individually or in the aggregate, be a material
adverse change) and the absence of notes (which, if presented, would not differ
materially from those included in the Xxxxx-Day Audited Financial Statements).
The Xxxxx-Day Financial Statements reflect the consistent application of such
accounting principles throughout the period involved, except as disclosed in
the notes to such Xxxxx-Day Financial Statements and except as set forth in
Exhibit 7.4.8. To the extent that any representations and warranties or
assurances contained herein either specify or could be considered to specify a
method of accounting for any item which is not consistent with the presentation
in the Xxxxx-Day Financial Statements (e.g., accounts receivable, inventory,
liabilities), Seller shall identify the inconsistency to Purchaser on or before
twenty (20) days from the Effective Date and will deliver to Purchaser a
summary of changes to the Xxxxx-Day Financial Statements that would result from
utilizing such different methods).
7.4.4 Books and Records. The books of account, minute books, stock
record books and other records of Xxxxx-Day are complete and correct in all
material respects and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal
controls. The minute books of Xxxxx-Day contain accurate and complete records
of all meetings held, and corporate action taken by, the shareholders and board
of directors of Xxxxx-Day and no meeting of such shareholders or board of
directors has been held for which minutes or other appropriate documentation
has not been prepared and placed in such minute book. At Closing, all of those
books and records will be delivered to Purchaser.
7.4.5 Absence of Undisclosed Liabilities. Except as and to the
extent (i) fully reflected or reserved against on the balance sheet of the
Xxxxx-Day Interim Financial Statements, including the subsequent audited
version thereof ("Xxxxx-Day Balance Sheet"), or (ii) disclosed on Exhibit
7.4.5, as of December 31, 1996, Xxxxx-Day did not have any
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liabilities including, without limitation, any liabilities arising out of any
transaction entered into or any state of facts existing, on or before December
31, 1996. With respect to Xxxxx-Day, "liabilities" includes all debts,
liabilities and obligations of Xxxxx-Day of any nature or kind whatsoever,
whether or not due or to become due, accrued, fixed, absolute, matured,
determined, determinable or contingent and whether or not incurred directly by
Xxxxx-Day or by a predecessor of Xxxxx-Day, and whether or not arising out of
any act, omission, transaction, circumstance, sale or lease of goods or service
or otherwise. Except as specifically referenced on Exhibit 7.4.5 or reflected
in or reserved against the Xxxxx-Day Balance Sheet, as of December 31, 1996,
there was no transaction previously entered into or any state of facts or
circumstances existing which might reasonably be expected to give rise to,
cause or result in any liability of Xxxxx-Day. Except as specifically
referenced on Exhibit 7.4.5, there is no basis for any assertion against Xxxxx-
Day, as of December 31, 1996, of any liabilities of any nature or in any amount
not fully reflected or reserved against on the Xxxxx-Day Balance Sheet or
specifically referred to in the notes thereto. As of the Closing Date, there
will be no basis for any assertion against Xxxxx-Day of any liability of any
nature or in any amount not fully reflected or reserved against on, or referred
to in the notes to, any balance sheet of Xxxxx-Day delivered to Purchaser
pursuant to this Agreement or specifically referenced in Exhibit 7.4.5. Since
December 31, 1996, Xxxxx-Day has not incurred any liabilities except in the
ordinary course of business consistent with past practice.
7.4.6 Receivables. All accounts and notes receivable of Xxxxx-Day
that are reflected in the Xxxxx-Day Balance Sheet or on the accounting records
of Xxxxx-Day as of the Closing Date represent or will represent valid
obligations arising from sales actually made in the ordinary course of
business.
7.4.7 Customers. Except as set forth on Exhibit 7.4.7, no customer
accounted for more than 10% of Xxxxx-Day's gross sales for the twelve month
period ended December 31, 1996. Since December 31, 1996, no material customer
has stopped or materially decreased, or has given notice to Xxxxx-Day that it
will stop or materially decrease, the rate of business done with Xxxxx-Day.
7.4.8 Absence of Changes. Except as disclosed on Exhibit 7.4.8,
since December 31, 1996, there has not been (i) any material adverse change of
the business or financial condition of Xxxxx-Day or any event, condition or
contingency that is likely to result in such a material adverse change; (ii)
any damage, destruction or loss, whether covered by insurance or not,
materially and adversely affecting the properties or business of Xxxxx-Day;
(iii) except for those in the ordinary course of business, any increase in or
creation of compensation payable or to become payable by Xxxxx-Day to any of
its directors, officers, employees or agents or in any stock option, bonus
payment, service award, pension, retirement, severance, savings, insurance,
expense allowance or other plan or arrangement made to or with any of them;
(iv) any sale, assignment, lease, transfer, license, abandonment or other
disposition by Xxxxx-Day of any interest in its assets, except in the ordinary
course of business; (v) any
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declaration, setting aside or payment of any dividend or other distribution on
or in respect of shares of the capital stock of Xxxxx-Day, or any direct or
indirect redemption, retirement, purchase or other acquisition by Xxxxx-Day of
any such shares; (vi) any stock dividend, stock split, reorganization,
recapitalization or other change of any type whatsoever in the outstanding
capital stock of Xxxxx-Day; (vii) any amendment to the Xxxxx-Day Governing
Documents; (viii) any change in the accounting methods followed by Xxxxx-Day;
(ix) any entry into, termination or receipt of notice of termination of any
material agreement or commitment; or (x) any commitment, obligation or
agreement to do any of the foregoing.
7.4.9 Agreements, Contracts and Commitments. Seller has previously
provided Purchaser with copies of all contracts, agreements, mortgages,
concessions, leases and commitments relating to or affecting any business
facilities, real property or personal property or interests therein of Xxxxx-
Day, including leasehold interests, to which Xxxxx-Day is a party or by which
Xxxxx-Day or any property of Xxxxx-Day is in any way bound or affected,
together with all amendments and supplements thereto and modifications thereof
("Xxxxx-Day Contracts"). Except as set forth on Exhibit 7.4.9, all Xxxxx-Day
Contracts are legally valid and binding and in full force and effect, except to
the extent limited by bankruptcy, reorganization and other moratorium laws
generally affecting the rights of creditors and the availability of equitable
remedies and Seller has no knowledge of defaults thereunder. Other than
contracts, agreements or commitments previously provided to Purchaser, there
are no contracts, agreements or commitments which would materially and
adversely affect the financial condition, business, assets or liabilities of
Xxxxx-Day. Except as set forth on Exhibit 7.4.9, there are no defaults under
or breaches of Xxxxx-Day Contracts by Xxxxx-Day or defaults or breaches thereof
known to exist on the part of the other party, and neither Seller nor Xxxxx-Day
knows of any condition that exists or event that has occurred which, with
notice or lapse of time or both, would constitute a default or a basis for
force majeure or other claim of excusable delay or non-performance thereunder.
Except as set forth on Exhibit 7.4.9, the terms and conditions of all Xxxxx-Day
Contracts are reasonable and customary in the business in which Xxxxx-Day
operates, and there are no extraordinary terms contained therein.
7.4.10 Tax Matters. "Tax" means any tax (including any income,
franchise, capital gains, gross receipts, value-added, excise, ad valorem,
transfer, stamp, sales, use, property, inventory, occupancy, withholding,
payroll, gift, estate or inheritance tax), levy, assessment, tariff, impost,
imposition, toll, duty, deficiency or fee, and any related charge or amount
(including any fine, penalty or interest) imposed assessed or collected by or
under the authority of any Governmental Authority or payable pursuant to any
tax-sharing agreement or pursuant to any other contract relating to the sharing
or payment of any such tax, levy, assessment, tariff, impost, imposition, toll,
duty, deficiency or fee. Xxxxx-Day has filed or caused to be filed on a timely
basis each and every return (including any information return), report,
statement, declaration, schedule, notice, notification, form, certificate or
other document or information in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance
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with any Legal Requirement relating to any Tax ("Tax Return") that is or was
required to be filed by or with respect to it, either separately or as a member
of a group of corporations, pursuant to the Legal Requirements of each
Governmental Authority with taxing power over it or its assets. Xxxxx-Day has
paid, or made provision for the payment of, all Taxes that have or may have
become due pursuant to those Tax Returns, or otherwise, or pursuant to any
assessment received by Xxxxx-Day, except such Taxes, if any, as are set forth
on Exhibit 7.4.10 and are being contested in good faith and as to which
adequate reserves (determined in accordance with GAAP) have been provided in
the Xxxxx-Day Financial Statements. Except as set forth on Exhibit 7.4.10,
Xxxxx-Day has not given or been requested to give waivers or extensions (or is
or would be subject to a waiver or extension given by any other entity) of any
statute of limitations relating to the payment of Taxes of Xxxxx-Day or for
which Xxxxx-Day may be liable. The charges, accruals and reserves with respect
to Taxes on the books of Xxxxx-Day are adequate (determined in accordance with
GAAP) and are at least equal to its liability for Taxes. There exists no
proposed Tax assessment against Xxxxx-Day except as disclosed in the Xxxxx-Day
Financial Statements. All Taxes that Xxxxx-Day is or was required by any Legal
Requirement to withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the proper Governmental Authority or
other Person. All Tax Returns filed by Xxxxx-Day are true, correct and complete
in all material respects. Xxxxx-Day's tax benefit is limited as described on
Exhibit 7.4.10. There is no tax sharing agreement that will require any
payment by Xxxxx-Day after the date of this Agreement.
7.4.11 Title to Properties and Related Matters. Except as set forth
on the Pre-Closing Title Commitments or the Xxxxx-Day Financial Statements,
Xxxxx-Day has good title to, or valid, binding and enforceable leasehold
interests in, and the right of possession to, all properties (whether real,
personal, mixed, tangible or intangible) reflected in the Xxxxx-Day Balance
Sheet or purported to have been acquired or leased by it since the date thereof
(except property sold or otherwise disposed of since December 31, 1996 in the
ordinary course of business), free and clear of all Encumbrances, except for
statutory liens for Taxes not delinquent and such other Encumbrances as are not
individually or in the aggregate materially adverse to the business, results of
operations, financial condition, assets or liabilities of Xxxxx-Day and which
do not materially interfere with or impair the present and continued use of
such property by Xxxxx-Day.
7.4.12 Condition and Sufficiency of Assets. The equipment of Xxxxx-
Day is in good operating condition and repair and is adequate for the uses to
which it is being put, and none of such equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost.
7.4.13 Leasehold Interests. Xxxxx-Day does not purport to have any
leasehold interests in real property except as described on Exhibit 7.4.13.
None of the rights of Xxxxx-Day under any such leasehold in real property will
be impaired by the consummation of the transactions contemplated this
Agreement, and all of such rights will be enforceable by Xxxxx-
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Day after Closing without the consent or agreement of any other party, except
for consents and agreements specifically described on Exhibit 7.4.2.
7.4.14 Personal Property. The inventory of personal property
previously delivered to Purchaser is complete in all material respects, except
for dispositions in the ordinary course of business. No leasehold or other
interest of Xxxxx-Day in tangible personal property is subject or subordinate
to any Encumbrance, whether or not the same constitutes a lien or renders the
title to such tangible personal property unmarketable, except as described on
Exhibit 7.4.5 and 7.4.14. None of the rights of Xxxxx-Day under any such
leasehold or other interest in tangible personal property will be impaired by
the consummation of the transactions contemplated by this Agreement, and all of
such rights will be enforceable by Xxxxx-Day after Closing without the consent
or agreement of any other party, except for consents and agreements
specifically described on Exhibit 7.4.2.
7.4.15 Compensation and Benefit Plans. Xxxxx-Day has no liability
or, except for its 401(k) plan, any other obligation (financial or otherwise)
whatsoever under any Xxxxx-Day Benefit Plans, the last of such Xxxxx-Day
Benefits Plans (except for its 401(k) plan) having been completely terminated
effective December 31, 1995.
7.4.16 Labor Matters. There has not been, and there is not presently
pending or, to Seller's knowledge, threatened, any Proceeding against Xxxxx-Day
under the Fair Labor Standards Act, the Occupational Safety and Health Act, or
any other Legal Requirement governing the conditions of Xxxxx-Day's employment,
or, to Seller's knowledge, any basis or ground for any such claim. Xxxxx-Day
has not been nor is a party to any collective bargaining agreement or other
labor contract. Except as set forth on Exhibit 7.4.16, Xxxxx-Day has complied
in all material respects with all Legal Requirements relating to employment,
equal employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security and similar
Taxes, occupational safety and health and plant closings ("Employment Laws").
Xxxxx-Day is not liable for the payment of taxes, fines, penalties, damages or
other amounts, however designated, for failure to comply with any Employment
Laws.
7.4.17 Insurance. Set forth on Exhibit 7.4.17 is a list of all
Xxxxx-Day Insurance Policies. Such description provides reasonably complete
details concerning such policies, identifying among other things: (i) the
issuer of each such policy, (ii) the amount of coverage still available and
outstanding under each such policy, (iii) whether each such policy is a "claims
made" or an "occurrences" policy, and (iv) any retrospective premium
adjustments of which Seller or Xxxxx-Day has knowledge. Except as set forth on
Exhibit 7.4.17, neither Seller nor Xxxxx-Day has received: (x) any notice of
cancellation of any policy described in Exhibit 7.4.17 or refusal of coverage
thereunder, (y) any notice that any issuer of such policy has filed for
protection under applicable bankruptcy or other insolvency laws or is otherwise
in the process of liquidating or has been liquidated, or (z) to Seller's
knowledge, any other
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indication that such policies are no longer in full force or effect or that the
issuer of any such policy is no longer willing or able to perform its
obligations thereunder.
7.4.18 Environmental Matters. Except as set forth in Exhibit
7.4.18, there are no set of circumstances or conditions resulting from or
arising out of the introduction, spillage, discharge, disposal or release
(including any "release" as defined in CERCLA), or threat thereof, of any
Hazardous Substance into or onto the surface water, ground water, soil, surface
or subsurface of any property owned, leased or operated by Xxxxx-Day, or, to
Seller's knowledge, any property adjacent thereto, and by reason of which might
or could result in any Proceeding based on any Environmental Law.
7.4.19 Intellectual Property. The term "Intellectual Property
Assets" shall include Xxxxx-Day's names, all fictitious business names, trade
names, brand names, registered and unregistered trademarks, service marks,
applications, all patents and patent applications, all copyrights in both
published works and unpublished works, and all inventions, processes, formulas,
patterns, designs, know-how, trade secrets, confidential information, software,
technical information, process technology, plans, drawings and blue prints
owned, used or licensed by Xxxxx-Day as licensee or licensor. The Intellectual
Property Assets are all those necessary for the operation of Xxxxx-Day's
business as it is currently conducted. Xxxxx-Day is the owner of all right,
title and interest in and to each of the Intellectual Property Assets free and
clear of all Encumbrances and has the right to use without payment to a third
party all the Intellectual Property Assets.
7.4.20 Bank Accounts; Powers of Attorney. Set forth on Exhibit
7.4.20 is: (i) the name of each bank, savings and loan or other financial
institution in which Xxxxx-Day has any account or safe deposit box, the style
and number of each such account or safe deposit box and the names of all
persons authorized to draw thereon or have access thereto, and (ii) the name of
each Person holding a general or special power of attorney from Xxxxx-Day and a
summary of the terms thereof.
7.5 Oil and Gas Interests.
7.5.1 Defensible Title. Seller owns Defensible Title to the Oil and
Gas Interests free and clear of all Encumbrances.
7.5.2 Seller's Interest in Production and Expenses. Seller's
interest in net production from and obligation to bear expenses as to the Oil
and Gas Interests is as described in Exhibit 1.5.
7.5.3 Compliance with Legal Requirements. The Oil and Gas Interests
have been operated in compliance, in all material respects, with all Legal
Requirements.
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7.5.4 Ad Valorem Taxes. All ad valorem, property and similar taxes
and assessments based on or measured by the ownership of property or the
production of hydrocarbons or the receipt of proceeds therefrom on the Oil and
Gas Interests for all years prior to 1997 have been properly paid.
7.5.5 No Excess Production; Volume Imbalance. The Oil and Gas
Interests have not been produced in excess of regulatory allowables and are not
subject to penalty or adjustment. There do not exist any volume imbalances for
gas production which would limit Seller's ability in the future to sell gas
attributable to Seller's interest in the Oil and Gas Properties.
7.5.6 No Hazardous Substances. There are no set of circumstances or
conditions resulting from or arising out of the introduction, spillage,
discharge, disposal or release (including any "release" as defined in CERCLA),
or threat thereof, of any Hazardous Substance into or onto the surface water,
ground water, soil, surface or subsurface of any Oil and Gas Interest, or any
property adjacent thereto, and by reason of which might or could result in any
Proceeding based on any Environmental Law.
7.5.7 Rights to Dispose of Interest. Seller's right to dispose of
its interest in production from the Oil and Gas Interests is not subject to any
limitation, restriction or dedication (whether by contract, governmental
regulation or otherwise), except as provided in the agreements described in
Exhibit 1.5 or as otherwise disclosed in Exhibit 1.5.
7.5.8 Petroleum Engineering Report. The petroleum engineering
reports provided to Purchaser pursuant to Section 4.5.7, if any, and all other
estimates of reserves, future net revenues and present value of future revenues
of the Oil and Gas Interests which have been provided to Purchaser (i) are
accurate and complete as to the Oil and Gas Interests covered thereby in all
material respects, (ii) have been prepared in accordance with all professional
standards applicable to such reports, and (iii) utilize assumptions which are
reasonable.
7.5.9 Sales Proceeds. The proceeds of the sale of Seller's interest
in production from the Oil and Gas Interests is currently being paid to Seller
at prices called for in the applicable sales contracts.
7.5.10 Consents and Approvals. Except as described in Exhibit 1.5
and except for preferential rights in favor of joint lease owners pursuant to
operating agreements related to Oil and Gas Interests, (i) there exists no
preferential rights to purchase any of the Oil and Gas Interests, and (ii) no
consent or approval is required to be obtained from any Person in order for
Seller to transfer the Oil and Gas Interests to Purchaser.
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7.5.11 Agreements Valid and Enforceable. All oil and gas leases,
contracts, licenses, easements, permits and other rights and interests
comprising any portion of the Oil and Gas Interests are in full force and
effect according to their respective terms and provisions and all rights
granted thereby are valid and subsisting except to the extent limited by
bankruptcy, reorganization and other moratorium laws generally affecting the
rights of creditors and the availability of equitable remedies; Seller is not
subject to express requirements for the drilling of additional xxxxx or other
material development operations in respect to the Oil and Gas Interests; Seller
has received no notices or demands affecting or relating to such rights, except
those described in Exhibit 1.5.
7.5.12 Payment of Rentals and Royalties. All payment of rentals,
royalties and other charges, if any, required by the terms and provisions of
the oil, gas and mineral leases, contracts, licenses, permits and easements
comprising any portion of the Oil and Gas Interests required to be made to
prevent forfeiture or termination have been fully and finally paid.
7.5.13 No Commitments. Except as described in Exhibit 1.5, the Oil
and Gas Interests are not subject to any commitments or requests to make any
expenditures other than (i) normal operating expenses and (ii) expenditures
which would not result in a reduction in the Oil and Gas Interest if not paid
by the owner of such interest.
7.5.14 Equipment. The equipment and other personal property included
in the Oil and Gas Interests are in good working order and suitable and
adequate for the purposes for which they are utilized.
7.5.15 Use of Oil and Gas Interests. Seller has (i) used the Oil and
Gas Interests solely for oil and gas and related operations and not as a
landfill or waste disposal site, other than the disposal of ordinary drilling
and production wastes; and (ii) has not stored or disposed of Hazardous
Substances on the Oil and Gas Interests in violation of Environmental Laws.
There are no underground storage tanks on the Oil and Gas Interests and no
lease equipment or improvements contain any asbestos or contain any
polychlorinated biphenyls.
7.5.16 No Encumbrances. The Oil and Gas Interests are not subject to
any liabilities which would become an Encumbrance on the Oil and Gas Interests
or become a liability of Purchaser other than those disclosed in Exhibit 1.5
and other than those arising by operation of law or under guaranty agreements
relating to obligations or payments for which Seller is not in default.
7.6 Marketable Securities. The Marketable Securities constitute less than
a five percent (5%) interest of the respective issues, and Seller has no
knowledge of any material adverse change regarding any issue or issuer of the
Marketable Securities not generally known by or reported to financial markets.
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7.7 Municipal Bonds. Seller has no knowledge of any material adverse
changes regarding any issue or issuer of the Municipal Bonds not generally
known by or reported to financial markets.
7.8 Promissory Notes.
7.8.1 Ownership. Seller is the legal and beneficial owner of the
Promissory Notes, the Security Documents, Guaranty Agreements and all liens and
security interests securing payment of the Promissory Notes and the obligations
under the Security Documents free and clear of all Encumbrances, except as
contemplated by Section 7.8.3.
7.8.2 No Additional Agreements. Seller is not a party to any
contract, agreement, instrument, document or written or oral understanding
which amends, modifies or rearranges the Promissory Notes, the Security
Documents or the Guaranty Agreements.
7.8.3 Consents and Approvals. Seller has the authority to convey
the Promissory Notes, the liens and security interests securing their payment,
the Security Documents and Guaranty Agreements without the joinder of, or
consent or approval from, any other Person.
7.8.4 No Default. Seller has no knowledge that any event has
occurred or with the passage of time or the giving of notice will occur which
is or would be an event of default under the Promissory Notes, the Security
Documents or the Guaranty Agreements. During its ownership thereof, Seller has
not modified the Promissory Notes.
7.8.5 No Advances. There are no further obligations to make any
advances under the Promissory Notes or the Security Documents.
7.8.6 Principal Balances. The outstanding principal balances due
under the Promissory Notes as of December 31,1996 are as set out on Exhibit
1.8.
7.8.7 Valid Liens. The Security Documents create valid and
enforceable first liens and first security interests in the property described
therein, and upon consummation of the transaction contemplated hereby,
Purchaser will be the owner and holder of such liens and security interests.
7.8.8 No Defenses, Setoffs, Counterclaims. To Seller's knowledge,
no defenses, setoffs or counterclaims exist with respect to the Promissory
Notes, the Security Documents or Guaranty Agreements.
7.9 Citation Interest/Texas Stadium License.
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7.9.1 Ownership. Seller is the legal and beneficial owner of its
interest in the Citation Agreements, the Stadium Bonds and the Stadium License
Agreement as described therein free and clear of any Encumbrances.
7.9.2 No Modification. Seller is not a party to any contract,
agreement, instrument, document or written or oral understanding which amends,
modifies or rearranges the Citation Agreements, the Stadium Bonds or the
Stadium License Agreement.
7.9.3 Consents and Approvals. Seller has the authority to convey
its interest in the Citation Agreements without the joinder of, or consent or
approval from, any other Person, other that Executive Jet Sales, Inc. and
Executive Jet Aviation, Inc., with respect to the Citation Agreements, which
consent shall be obtained ("Citation Consents").
7.9.4 No Default. Seller has no knowledge that any event has
occurred or with the passage of time or giving of notice will occur which is or
would be an event of default under the Citation Agreements, the Stadium Bonds
or the Stadium License Agreement.
7.9.5 No Defenses, Setoffs, Counterclaims. To Seller's knowledge,
no defenses, setoffs or counterclaims exist with respect to the Citation
Agreements.
7.10 Representations and Warranties of Purchaser. Purchaser represents and
warrants that the statements set forth in this Section 7.10 are true and
correct in all material respects as of the Effective Date.
7.10.1 Organization, Existence and Good Standing. Each entity
included as a Purchaser is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite corporate power and authority to carry on its business as now being
conducted, to own or lease and operate its properties and assets as now owned,
leased or operated, and to perform all its obligations under the agreements and
instruments to which it is a party or by which it is bound.
7.10.2 Authorization; Enforceability. This Agreement, and each other
agreement to which Purchaser is to become a party pursuant to the provisions
hereof, when executed and delivered by Purchaser shall constitute the legal,
valid and binding obligations of Purchaser, enforceable against it in
accordance with their respective terms. All actions contemplated by this
Section have been duly and validly authorized by all necessary proceedings by
Purchaser.
7.10.3 No Violation of Laws or Agreements. Neither the execution and
delivery of this Agreement or any other agreement to which Purchaser is or is
to become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Purchaser will: (i) conflict
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with, result in a breach of, constitute a default (or an event that might, with
the passage of time or the giving of notice or both, constitute a default or
event of default) under any of the terms of, result in termination of, result
in the loss of any right under, or give to any other Person the right to cause
such a termination of or loss under, any contract, agreement or instrument to
which Purchaser is a party, or (ii) violate any Legal Requirement to which
Purchaser is subject.
7.10.4 No Proceedings. Except as set forth on Exhibit 7.10.4, no
Proceeding is pending or, to the knowledge of Purchaser, threatened against or
affecting the ability of Purchaser to perform its obligations under this
Agreement or any of the transactions contemplated hereby; and there is no basis
for any such Proceeding.
7.10.5 Investment. Purchaser is acquiring the Partnership Interests,
Stadium Bonds, Arena Bonds and Xxxxx-Day Stock for business and investment
purposes and not with a view toward the distribution thereof (other than a
possible sale of all or substantially all of the Xxxxx-Day Stock to one buyer
who is an accredited investor).
ARTICLE VIII
SELLER'S AGREEMENTS PRIOR TO CLOSING
8.1 Seller's Agreements prior to Closing. Seller agrees to perform those
agreements set forth in this Sections 8.1 through 8.9 during the period
commencing on the Effective Date and ending on the Closing Date.
8.1.1 Untrue Representations. Seller will notify Purchaser promptly
in writing if it becomes aware of any fact or condition which makes untrue, or
shows to have been untrue, in any material respect, any Exhibit, schedule or
listing furnished to Purchaser pursuant to the terms of this Agreement or any
Seller Representation. Seller will notify Purchaser within a reasonable period
of time in writing if it becomes aware of any fact or condition which makes
untrue, or shows to have been untrue, in any material respect, any
representation or warranty made herein by Purchaser.
8.1.2 Notice of Proceedings. If Seller obtains knowledge of (i) any
investigation or inquiry being made or commenced by any Governmental Authority
in connection with this Agreement or the transactions contemplated hereby, or
(ii) the institution of any Proceeding against Seller or that could any way
have a material adverse affect on any of the Assets, Seller shall promptly
notify Purchaser.
8.1.3 Commercially Reasonable Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, Seller agrees to use its
commercially reasonable efforts to take or cause to be taken all actions, and
to do, or cause to be done, and to assist and cooperate with Purchaser and any
third parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the purchase of
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the Assets by Purchaser and all other transactions contemplated by this
Agreement and not to take, commit, or agree in writing or otherwise to take,
any action which would make any Seller Representation untrue or incorrect in
any material respect as of the date when made or as of the Closing Date.
8.1.4 Notification of Certain Matters. Seller shall give Purchaser
prompt notice of: (i) any notice of, or other communication relating to, a
default or event that, with notice or lapse of time or both, would become a
default, received subsequent to the date of this Agreement and prior to the
Closing Date, under any note, license, agreement or other instrument or
obligation, (ii) any material adverse change or the occurrence of any event
which, so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a material adverse change on Seller or any of
the Assets, or (iii) any written notice or other written communication from any
third party received by Seller alleging that the consent of such third party is
or may be required in connection with transactions contemplated by this
Agreement.
8.1.5 Operation Prior to the Closing Date. Seller shall not engage
in any practice, take any action or enter into any transaction, with regard to
the Assets and the operation of any business related thereto, other than in the
customary and ordinary course of business without the consent of Purchaser, and
Seller shall use its commercially reasonable efforts to keep its business,
properties and business relationships relating to the Assets substantially
intact.
8.1.6 Performance of Obligations. Seller shall pay or cause to be
paid, and perform or cause to be performed, all debts, liabilities and
obligations relating to the Assets as and when due, except to the extent being
contested in good faith.
8.1.7 No Transfer or Encumbrances. Seller shall not: (i) solicit
any offers to purchase any of the Assets, or (ii) sell, lease, transfer or
otherwise dispose of, or cause the sale, lease, transfer or other disposal of,
any of the Assets, or allow any Encumbrance to be placed on any of the Assets,
except as provided in Sections 8.2.16 or 8.2.17.
8.1.8 No Breach. Seller agrees that (i) Seller will not take any
action and will endeavor in good faith not to permit any event to occur, which
would cause or constitute a material breach of this Agreement; (ii) Seller
will, in the event, and promptly after the occurrence of, or promptly after
becoming aware of the occurrence of or the impending or threatened occurrence
of, any event which would cause or constitute a material breach or would, if it
had occurred immediately prior to the date hereof, have caused or constituted a
material breach of any of the Seller Representations, give notice thereof to
Purchaser; and (iii) Seller shall use its commercially reasonable efforts to
prevent or promptly to remedy such breach.
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8.1.9 Compliance with Legal Requirements. Seller shall comply, or
cause compliance, in all material respects with all Legal Requirements
applicable to Seller and its businesses with respect to the Assets subject to
Seller's right to contest the same in good faith.
8.1.10 Affiliate Indebtedness. Any indebtedness (other than Xxxxx-
Day Equipment Debt) of a Partnership or Xxxxx-Day to Seller or any Affiliate of
Seller will, at Closing, be transferred to Purchaser or, at the option of
Purchaser, be forgiven by Seller (with such transfer or forgiveness to include
a transfer or release, as applicable, of all Encumbrances securing same).
"Xxxxx-Day Equipment Debt" means indebtedness of Xxxxx-Day owed to Seller which
results from Xxxxx-Day's purchase or commitment to purchase the equipment set
forth on Exhibit 8.4.2. Purchaser will pay the Xxxxx-Day Equipment Debt at
Closing.
8.2 Real Property Assets.
8.2.1 Further Conveyances. Seller shall not sell, assign, or convey
any right, title, or interest whatsoever in or to the Properties, except for
The Addison, the land under contract to Studio Plus Hotels, Flower Mound and
any other tract of Undeveloped Land pursuant to an Approved Sale Contract in
accordance with Sections 8.2.16 and 8.2.17, respectively, or create or permit
to exist any Encumbrance affecting the Properties (other than Encumbrances
allowed by Section 7.2.1) without promptly discharging the same prior to
Closing.
8.2.2 Operation. Seller shall continue to maintain the Properties
in their present condition, subject to ordinary wear and tear hereof, and shall
continue to manage the Properties in the same manner as it is currently being
managed; Seller shall not remove any fixtures, equipment, furnishings or other
personal property from the Properties unless replaced with items of equal or
greater quality and quantity, nor shall Seller in any manner neglect the
Properties.
8.2.3 Insurance. Seller shall cause to be maintained in force fire
and extended coverage insurance upon the Properties and public liability
insurance with respect to damage or injury to person or property occurring on
the Properties in at least such amounts as are set forth on Exhibit 7.2.14.
8.2.4 Leases. Except as provided in the next sentence, Seller will
not enter into any new lease of any portion of the Properties or modify any
Lease covering space in any of the Properties without first obtaining the
written consent of Xxxxx X. Xxxxxx, Xx. on behalf of Purchaser, which consent
shall not be unreasonably withheld or delayed. Such consent shall be requested
on the form attached hereto as Exhibit 8.2.4-A. Without limiting the
foregoing, Purchaser hereby approves of Seller entering into the Leases
described on Exhibit 8.2.4-B provided the economic terms of such Leases are no
less favorable than those described in such Exhibit.
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8.2.5 New Contracts. Except for tenant finish and architectural and
engineering service contracts necessary to permit Seller to perform its
obligations under approved Leases, Seller will not enter into any additional
contracts, warranties or agreements which would be binding on Purchaser and
which cannot be canceled by Purchaser upon thirty (30) days written notice
without cost, penalty, or obligation unless such service contracts or other
agreements are approved in writing by Purchaser.
8.2.6 Capital Expenditures. Seller will not make any capital
expenditures in regard to any of the Properties except in the case of an
emergency whereby Seller will notify Purchaser of such expenditure by telephone
within 24 hours after such emergency and by written notice within two (2)
business days after such emergency. At Closing, Purchaser shall reimburse
Seller for any capital expenditures made in connection with the Office
Buildings, Apartments or the Hangars subsequent to January 1, 1997, provided
the capital expenditures (if made after the Effective Date) were approved in
writing by Purchaser or were made on an emergency basis in accordance with the
preceding sentence.
8.2.7 Sale of Personal Property. Seller will not transfer or
dispose of, or permit to be sold, transferred or otherwise disposed of, any
item or group of items constituting Personal Property, except for the use and
consumption of inventory, office and other supplies and spare parts, and the
replacement of worn out, obsolete and defective tools, equipment and
appliances, in the ordinary course of business.
8.2.8 Trade Accounts. Subject to proration in accordance with
Section 14.2.2, Seller will cause to be paid in the normal course of business
all normal trade accounts and costs and expenses of operation and maintenance
of the Properties incurred or attributable to the period prior to Closing.
8.2.9 Performance Under Leases. Seller will perform all obligations
of landlord or lessor under the Leases, including any condition for a tenant's
or lessee's occupancy of the Property (which shall include entering into tenant
finish contracts and engaging architectural and engineering services), except
that Seller will not take any action against any of the tenants under the
Leases after routine delivery of default letters, without Purchaser's consent,
which consent will not be unreasonably withheld or delayed.
8.2.10 Consents. Seller will promptly file or submit and diligently
prosecute any and all applications or notices with Governmental Authorities and
all other requests with Persons for consents, approvals, authorizations and
permissions which are reasonably considered necessary or appropriate for
consummation of this transaction by Seller or to prevent the termination of any
Lease, Operating Agreement or Permit.
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8.2.11 Defects Repair. On or before Closing Seller shall take all
actions and pay all sums necessary to complete the work necessary to correct
those conditions described in paragraphs 2, 4 (excluding garage structural
repairs), and 12 on page 1 of Exhibit 7.2.3. If Seller fails to complete same
before Closing, at the option of Purchaser, Purchaser shall be entitled to a
credit in the amount necessary to complete same and Seller shall assign to
Purchaser all contracts and agreements relating to said work. Notwithstanding
any provision of Section 8.2.6 to the contrary, Purchaser shall not be required
to reimburse Seller for expenditures made to pay the cost of the repairs
described pursuant to this Section 8.2.11.
8.2.12 Number not used.
8.2.13 Ground Leases. Seller will (i) not modify, amend or terminate
the Ground Leases, (ii) perform all obligations of lessee under the Ground
Leases and (iii) promptly following its receipt, deliver to Purchaser copies of
all notices or other communications relating to the Ground Leases.
8.2.14 Litigation. Seller will not commence or prosecute any
judicial or non-judicial action against any tenant of any of the Properties
without the consent of Purchaser, which consent will not be unreasonably
withheld or delayed.
8.2.15 Seller's Lease at Meridian. At Closing, Seller and Purchaser
shall enter into a lease ("Seller's Lease") to be dated the Closing Date
pursuant to which Purchaser will lease to Seller Suite 426, consisting of
approximately 4,000 rentable square feet in the Meridian (commonly called Mr.
Xxx Xxxxxx'x office) for a term of six (6) months following the Closing Date.
The Seller's Lease shall (i) be on the form currently used by Seller for
leases of approximately 4,000 rentable square feet, (ii) provide for the
payment of base rent (and no additional rent related to the expenses of the
building) monthly calculated on the basis of an annual rental of $6.00 per
rentable square foot within the premises and (iii) include provisions allowing
Seller to terminate Seller's Lease by delivering written notice of termination
at least thirty (30) days prior to the effective date of termination.
8.2.16 CompUSA Right of First Refusal. Seller and Purchaser
acknowledge that Seller's ability to sell The Addison is subject to a right of
first refusal in favor of CompUSA, Inc. ("CompUSA") to purchase The Addison
created pursuant to that certain Office Lease Agreement ("CompUSA Lease") dated
September 1,1992 between Seller and CompUSA. Upon execution of this Agreement,
Seller shall deliver written notice ("Offer Letter") to CompUSA of its intent
to sell The Addison in the form attached as Exhibit 8.2.16. If CompUSA timely
exercises its right of first refusal under the CompUSA Lease, Seller shall not
enter into an agreement ("CompUSA Agreement") to sell The Addison to CompUSA,
except upon the terms as set forth in the Offer Letter. If CompUSA purchases
The Addison pursuant to the CompUSA Agreement, The Addison and the related Real
Property Assets shall not to be conveyed pursuant to this Agreement and the
Purchase Price shall be adjusted in accordance with
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Section 2.2.4; otherwise The Addison and the related Real Property Assets shall
remain a part of the Assets subject to the terms of this Agreement for all
purposes. If CompUSA enters into a CompUSA Agreement but does not acquire the
Addison within thirty (30) days following the Closing Date, Seller agrees to
sell and Purchaser agrees to buy the Assets related to the Addison in
accordance with the terms of this Agreement with the following provisions: (i)
the Closing Date shall be seventy (70) days after the date Seller delivers a
written notice ("Addison Notice") to Purchaser advising it of the failure of
CompUSA to acquire the Addison; (ii) the Inspection Period shall be sixty (60)
days from the date of the delivery of the Addison Notice and (iii) the Purchase
Price shall be the amount allocated to the Addison set forth on Exhibit 2.3.
8.2.17 Approved Sale Contracts. As used herein the term "Approved
Sale Contract" shall be a contract which has terms and provisions proposed by
Seller and approved by Purchaser in its sole discretion. Notwithstanding any
provision of this Agreement to the contrary, Seller may sell either Flower
Mound or any other parcel of Undeveloped Land (each an "Exempt Tract") pursuant
to an Approved Sale Contract. Purchaser shall not unreasonably withhold or
delay its consent to any sale of Flower Mound. If prior to Closing, Seller
enters into an Approved Sale Contract to sell an Exempt Tract which (i) closes
prior to the Closing Date, the respective Exempt Tract shall not be a part of
the Real Property Assets subject to the terms of this Agreement and the
Purchase Price shall be adjusted in accordance with the terms of Section 2.2.5,
or (ii) does not close prior to the Closing Date, Seller shall assign its
rights thereto, Purchaser shall reimburse Seller for all reasonable costs paid
by Seller in connection therewith, and Purchaser shall perform the obligations
of Seller pursuant to the respective Approved Sale Contract and be entitled to
all proceeds from the sale of the Exempt Tract.
8.2.18 Ohio Drive I. As used herein the term "Ohio Drive I
Reclamation Project" means the work and materials needed to satisfy Federal
Emergency Management Agency ("FEMA") to amend the flood plain map which
includes Ohio at Plano Parkway Parcel in accordance with the flood control
plans submitted to and approved by the City of Plano and FEMA. On or before
March 30, 1997, Seller shall commence and thereafter diligently pursue the
completion of the Ohio Drive I Reclamation Project and shall pay all of the
costs and expenses incurred in connection therewith. If the provisions of this
Section are not fully performed prior thereto this Section shall survive
Closing.
8.3 Partnership Interests.
8.3.1 General.
8.3.1.1 Notices; Participation. Seller shall promptly give
Purchaser notice of any notices or other communication received by Seller from
any Partnership and, in any event, within three (3) days of the date on which
any such notice is received, will give Purchaser prior written notice of
Seller's intent to send any notices to a Partnership or another partner of a
Partnership as soon as reasonably possible and, in any event, within such time
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period as will allow Purchaser to consult with Seller regarding the contents of
the notice and any response to a notice received by Seller. Purchaser will
respond within the time period required for Seller to act or respond. Seller
shall promptly give Purchaser such other information as Seller receives in
connection with a Partnership and allow Purchaser to participate with Seller in
connection with Seller's responsibilities to the Partnerships. Seller will not
take any action or fail to take any action that could have a material adverse
change on Seller's interest in a Partnership during the pendency of this
Agreement; provided, Seller will not participate in any meetings with partners
of the Partnerships (whether called or informal) regarding Partnership Matters
or consent or object to any action by a Partnership unless Seller has given
Purchaser notice of the meetings, consent or objection together with all
material information concerning the matter being considered, and afforded
Purchaser an opportunity to participate in the meeting and/or decision if
permitted by the other partners.
8.3.1.2 Contributions and Distributions. Seller shall not
make any capital contributions to a Partnership other than those scheduled in
the documents delivered to Purchaser pursuant to Section 4.3 without obtaining
the prior written consent of Purchaser unless the failure to make such
contribution would adversely affect Seller's interest in the Partnership and
Seller has complied with Section 8.3.1.1 regarding any notices Seller has
received with regard to such contribution. Seller shall promptly give
Purchaser notice of the amount and timing of any distributions from a
Partnership together with any supporting documentation therefor which has been
delivered or made available by the Partnership to Seller.
8.3.1.3 Consents from Partners and Third Parties. Seller and
Purchaser will cooperate in obtaining the consent and/or approval to the
transfer of each Partnership Interest and admission of the transferee as a
substitute limited partner and in obtaining any other consent deemed reasonably
necessary or appropriate by Purchaser including, without limitation, filing
applications therefor, with Purchaser paying reasonable or generally applicable
fees and expenses (up to a maximum of $10,000.00 including, for this purpose,
any fees and expenses paid in connection with the DMI Agreement, the "DMI
Agreement Expenses") in connection therewith which are customary for such
purpose, providing information regarding Seller and/or Purchaser that may be
required to be provided in connection with the transfer and otherwise using
their reasonable good faith effort to obtain any consents and/or approvals
required in connection with the transfers contemplated hereby. Any expenses
incurred by Purchaser under this Section in excess of $10,000.00 (including the
DMI Agreement Expenses) shall be an Adjustment Event and the rights and
obligations of the parties relating thereto shall be governed by the provisions
of Section 20.3. Any consents or approvals shall be in such form as Purchaser
may reasonably require.
8.3.2 Number not used.
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8.3.3 Rising Star Partnership Interests. Seller shall keep
Purchaser informed regarding the progress of any proposed merger of RSE-I and
RSE-II (the "Rising Star Merger") including, without limitation, the substance
of the material terms of such merger and any proposed closing date and
documentation thereof. Seller shall give Purchaser an opportunity to review
and comment on any Rising Star Merger and agrees not to consent thereto without
first obtaining the written consent of Purchaser which consent may be withheld
by Purchaser only in the event Purchaser determines, in its reasonable
discretion, that the Rising Star Merger would have a material adverse effect on
the Rising Star Partnership Interests. In the event there is a dispute as to
whether or not the Rising Star Merger would have such an effect, such dispute
shall be an Arbitration Event. Seller and Purchaser agree to use commercially
reasonable efforts to cause the partners of RSE-I and RSE-II to amend the
respective partnerships agreements (or, if applicable the partnership agreement
of the Rising Star Merger) in a manner reasonably acceptable to Seller,
Purchaser and the other partners to prohibit the use of funds generated from
existing activities (other than Azelea or El Gato Grande) to fund new
activities..
8.3.4 Xxxxx Muse Partnership Interests. Seller will consult with
Purchaser prior to opting in or out of any investment in the Xxxxx Muse
Partnerships which Seller is permitted to opt out of. In the event of a
disagreement between Seller and Purchaser regarding whether or not to opt in or
out of an investment, such disagreement shall be an Arbitration Event;
provided, however, that in the event the parties do not have sufficient time to
arbitrate the dispute in the reasonable discretion of Seller, Seller may make
the decision to opt in or out and Purchaser shall then have the right, at its
election, to propose an adjustment to the Purchase Price attributable to the
action of Seller. The failure to agree on an adjustment to the Purchase Price
shall be an Arbitration Event.
8.4 Xxxxx-Day Stock.
8.4.1 Affirmative Covenants. Seller shall cause Xxxxx-Day to: (i)
operate, conduct its business and maintain its books of account in a manner
consistent with past practice in its usual manner; (ii) preserve intact Xxxxx-
Day's existence, business organization, assets and business opportunities;
(iii) properly perform all of its contractual obligations in accordance with
the terms thereof; (iv) give prompt written notice to the Purchaser of any
written notice received by Seller of any material default or breach or alleged
material default or breach under any instrument or agreement to which Xxxxx-Day
is a party or by which it is bound and take all reasonable steps to cure any
such default or breach; (v) use commercially reasonable efforts to preserve the
goodwill of, and its relationships with, its suppliers, customers, landlords
and others having business relations with it; (vi) maintain and keep all its
assets, properties and facilities in good condition and working order, except
for ordinary wear and tear; (vii) use commercially reasonable efforts to retain
the services of its present officers, employees and agents which Xxxxx-Day
believes is necessary or desirable to retain; and (viii) maintain in full force
and effect the Xxxxx-Day Insurance Policies.
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8.4.2 Restricted Activities. Seller shall take actions as are
necessary to prevent Xxxxx-Day from doing the following: (i) enter into any
employment agreement or increase the rate of compensation or benefits payable
or to become payable by Xxxxx-Day to any of its directors, officers, employees
or agents (other than in the ordinary course of business); (ii) enter into any
contract for capital expenditures aggregating in excess of $10,000.00 (except
as allowed by Clause (viii)); (iii) incur or become liable for, any
indebtedness for money borrowed other than purchases of Xxxxxxxxx-Xxxx
equipment on its floor plan at no interest; (iv) loan or advance any funds to,
or borrow or take down any funds from, any Person, whether under an existing
agreement or not, except for extensions of credit in the usual and ordinary
course of business for merchandise purchases, customary advances to salesmen
against commissions and receipt of advances from Seller to fund the purchases
allowed by clause (viii); (v) incur any commitment, obligation or liability,
absolute or contingent, other than in the usual and ordinary course of
business; (vi) except in the usual and ordinary course of business, enter into,
become a party to, waive any material right under or cancel any contract,
lease, commitment, option or agreement, or make or permit to be made any
amendment or termination of any contract, lease, commitment, option or
agreement; (vii) make or permit any material change in its assets, liabilities
or financial condition; (viii) with the exception of the purchase and
acquisition of equipment set forth on Exhibit 8.4.2 dispose of or acquire
assets with an aggregate book value or purchase price, respectively, exceeding
$10,000.00; (ix) enter into or assume any mortgage, pledge, conditional sale or
other title retention agreement, or cause or permit any Encumbrance upon any of
its assets, whether now owned or hereafter acquired, except for capital leases
and liens for taxes which are not delinquent; (x) amend its articles of
incorporation or bylaws or other charter documents; (xi) issue, sell, transfer
or otherwise dispose of any shares of capital stock of Xxxxx-Day (xii) declare,
set aside, pay or make any distribution in respect of, or purchase, cancel,
retire, redeem or otherwise acquire, any capital stock or other securities of
Xxxxx-Day; (xiii) declare or effect any stock dividend or stock split,
dissolve, liquidate, reorganize or otherwise make any change in its capital
stock, capital structure, corporate structure or existence; (xiv) except as
provided for herein, enter into any business dealing or transaction, directly
or indirectly, with Seller or any other Affiliate of Seller or Xxxxx-Day, make
any payments to Seller (other than payments made to Seller in repayment of
inter-company indebtedness, to the extent consistent with past practice) or any
Affiliate of Seller or Xxxxx-Day or conduct or account for any existing
transaction with Seller or any Affiliate of Seller or Xxxxx-Day on other than
an arms-length basis (Purchaser agrees that Xxxxx-Day may continue to pay its
debt service to Seller in the ordinary course of business and in accordance
with the terms of the inter-company debt); (xv) except for renewals of leases
of premises now occupied and used by Xxxxx-Day, enter into any lease of real
property; (xvi) use any of its assets for other than proper corporate purposes
and in the usual and ordinary course of business; (xvii) change the banking
arrangements and signature authorities currently in effect or grant any general
or special power of attorney; (xviii) waive any material right without
receiving fair consideration; or (xix) agree, commit or create any obligation
to do any of the foregoing of this Section 8.4.2.
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8.4.3 Xxxxx-Day Corporate Matters. Seller shall maintain Xxxxx-
Day's corporate existence and good standing, and shall maintain its
qualification to do business in its state of incorporation and each other
jurisdiction in which Xxxxx-Day owns or leases property or conducts business.
Minutes of all annual and special meetings and proceedings of the directors and
shareholders of Xxxxx-Day held on or after the date hereof and prior to the
Closing Date will be delivered to Purchaser within three (3) days after such
meetings or proceedings are held, but in no event later than the day prior to
the Closing Date.
8.5 Oil and Gas Interests.
8.5.1 Insurance. Seller shall maintain the insurance now in effect,
if any, with respect to the Oil and Gas Interests with such insurers in such
amounts, and covering such risks as shall be customary in the industry,
including, but not limited to, worker's compensation insurance, and insurance
against loss or damage by fire, lightning, hail windstorm, explosion, hazards,
casualties and other contingencies.
8.5.2 Performance; No Violations. Seller shall timely perform all
obligations under, and not violate any material term or provision of, the
leases, the contracts, easements or other agreements included in or affecting
the Oil and Gas Interests.
8.5.3 Number not used.
8.5.4 Additional Information. From time to time, upon request of
Purchaser, Seller shall promptly furnish to Purchaser such additional
information and reports relating to the Oil and Gas Interests in Seller's
possession or which Seller can obtain as Purchaser may request.
8.5.5 Number not used.
8.5.6 Number not used.
8.5.7 Number not used.
8.5.8 Consents and Approvals. Seller shall use commercially
reasonable efforts to obtain all necessary consents, approvals or waivers in
order to convey to Purchaser at Closing title to the Oil and Gas Interests free
of any Title Defects and satisfy all other conditions of Closing with respect
to the Oil and Gas Interests.
8.5.9 No New Commitments; Modification. Without the prior written
consent of Purchaser, Seller will not (i) enter into any new agreements or
commitments with respect to the Oil and Gas Interests which extend beyond the
Closing, (ii) make any expenditures other than operating expenses incurred in
the normal course of business on any Oil and Gas Interests
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or expenditures which Seller is currently obligated to pay, or (iii) make a
material modification of or terminate any of the existing agreements relating
to the Oil and Gas Interests.
8.5.10 Confidentiality. Seller shall exercise due diligence in
safeguarding and maintaining secure all engineering, geological and geophysical
data, reports and maps, and all other confidential data in the possession of
Seller relating to the Oil and Gas Interests.
8.5.11 No Additional Undertakings. Anything in this Section 8.5 to
the contrary notwithstanding, with respect to those Oil and Gas Interests which
are operated by operators other than Seller, Seller shall not itself be or
become obligated to perform undertakings performable only by such operators and
which are beyond the control of Seller. In each such case, however, Seller
will promptly take all actions available to it, under applicable operating
arrangements or otherwise, to bring about the performance of any such
undertakings required to be performed under this Section 8.5.
8.5.12 Environmental Assessment. Seller shall permit Purchaser to
make any environmental assessment of the Oil and Gas Interests during the
Inspection Period. Subject to the approval rights, if any, of the applicable
operator, Purchaser and its agents shall have the right to enter upon the Oil
and Gas Interests and all buildings and improvements thereon, inspect the same,
conduct soil and water tests and borings, and generally conduct such tests,
examinations, investigations and studies as may be necessary or appropriate for
the preparation of appropriate engineering and other reports and judgments
relating to the Oil and Gas Interests, their condition, and the presence of
waste or contaminants. If during the Inspection Period Purchaser discovers a
Hazardous Substance located on the Oil and Gas Interests in violation of any
Environmental Law, then Purchaser shall so notify Seller in writing and the Oil
and Gas Interests affected shall be treated in the same manner as an Oil and
Gas Title Defect is treated under Section 5.3 with the environmental defect
either being cured by Seller or the Purchase Price for the affected Oil and Gas
Interests being reduced in accordance with Section 5.3 and Section 20.3.
8.6 Marketable Securities. All cash dividends or interest, as the case
may be, paid by the issuer of any of the Marketable Securities or Bonds prior
to the Closing Date shall be paid to Seller, and there shall be no adjustment
to the Purchase Price relating thereto.
8.7 Number not used.
8.8 Promissory Notes.
8.8.1 Notice of Proceedings. Seller will advise Purchaser promptly
of any Proceeding concerning or affecting the Promissory Notes, the Security
Documents, the Guaranty Agreements or any of the collateral described in the
Security Documents.
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8.8.2 No Encumbrances. Seller will not by act or omission, without
the prior written consent of Purchaser, create or place, permit to be created
or placed, acquiesce in the placing of or allow to remain, any Encumbrance or
conditional sale or other title retention encumbrance on the Promissory Notes,
the Guaranty Agreements or the Security Documents. Should any of the foregoing
become attached in any manner to any of the Promissory Notes, the Guaranty
Agreements or the Security Documents without the prior written consent of
Purchaser, Seller will cause the same to be discharged promptly and released at
its cost prior to Closing.
8.8.3 Number not used.
8.8.4 No Amendments or Modifications. Seller will not amend, modify
or rearrange any of the Promissory Notes, Guaranty Agreements or Security
Documents without the prior written consent of Purchaser.
8.8.5 Prepayments. Seller will not accept a prepayment of principal
or interest due under any of the Promissory Notes unless required by the terms
of a Promissory Note, and in the event Seller is required to and does accept a
prepayment, Seller will immediately notify Purchaser in writing of the identity
of the Promissory Note, of the amount of the prepayment, of the application of
the prepayment to interest and principal and of the amount of unpaid principal
and accrued interest due after application of the prepayment.
8.8.6 No Releases. Seller will not release any lien, security
interest or guaranty securing payment of any of the Promissory Notes.
8.8.7 Collateral for Allied Note. In the event Purchaser reasonably
determines that there may be Hazardous Substances situated on or under the
Allied Tract or there is a structural or mechanical problem with any of the
improvements situated on the Allied Tract and Purchaser in good faith believes
that such determination impairs the value of the Allied Note, the same shall be
an Adjustment Event and the rights and obligations of the parties shall be
governed by the provisions of Section 20.3.
8.9 Citation Interest.
8.9.1 No Encumbrances. Seller will not by act or omission, without
the prior written consent of Purchaser, create or place, permit to be created
or placed, acquiesce in the placing of, or allow to remain, any Encumbrance or
conditional sale or other title retention encumbrance on Seller's interest in
the Citation Agreements. Should any of the foregoing become attached in any
manner to any of the Citation Agreements without the prior written consent of
Purchaser, Seller will cause the same to be discharged promptly and released at
its cost.
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8.9.2 No Transfers. Seller will not sell, exchange, assign,
transfer, convey or otherwise dispose of its interest in the Citation
Agreements.
8.9.3 No Amendments or Modifications. Seller will not amend or
modify any of the Citation Agreements without the prior written consent of
Purchaser.
8.10 Purchaser's General Agreements Prior to Closing. Purchaser agrees to
perform those agreements set forth in this Section 8.10 during the period
commencing on the Effective Date and ending on the Closing Date.
8.10.1 Untrue Representations. Purchaser will notify Seller promptly
in writing if it becomes aware of any fact or condition which makes untrue, or
shows to have been untrue, in any material respect, any representation or
warranty made by Purchaser in this Agreement. Purchaser will notify Seller
within a reasonable period of time in writing if it becomes aware of any fact
or condition which makes untrue, or shows to have been untrue, in any material
respect, any Seller Representation.
8.10.2 Notice of Proceedings. If Purchaser obtains knowledge of (i)
any investigation or inquiry being made or commenced by any Governmental
Authority in connection with this Agreement or the transactions contemplated
hereby, or (ii) the institution of any Proceeding against Purchaser or that
could any way have a material adverse effect on Purchaser's ability to
consummate the transactions contemplated by this Agreement, Purchaser shall
promptly notify Seller.
8.10.3 Commercially Reasonable Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, Purchaser agrees to use its
commercially reasonable efforts to take or cause to be taken all actions, and
to do, or cause to be done, and to assist and cooperate with Seller and any
third parties in doing all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the purchase of
the Assets by Purchaser and all other transactions contemplated by this
Agreement, and not to take, commit, or agree in writing or otherwise to take,
any action which would make any representation or warranty of Purchaser
contained in this Agreement untrue or incorrect in any material respect as of
the date when made or as of the Closing Date.
8.10.4 No Breach. Purchaser agrees that (i) Purchaser will not take
any action and will endeavor in good faith not to permit any event to occur,
which would cause or constitute a material breach of this Agreement; (ii)
Purchaser will, in the event, and promptly after the occurrence of, or promptly
after becoming aware of the occurrence of or the impending or threatened
occurrence of, any event which would cause or constitute a material breach or
would, if it had occurred immediately prior to the date hereof, have caused or
constituted a material breach of any of the representations and warranties made
by Purchaser in this
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Agreement, give notice thereof to Seller; and (iii) Purchaser shall use its
best efforts to prevent or promptly to remedy such breach.
ARTICLE IX
DELIVERY OF CONSENTS AND ESTOPPELS
9.1 Consents and Estoppels. Seller shall use commercially reasonable
efforts to cause the indicated party to execute and deliver the consents or
estoppels described in Section 9.2 through 9.8 and to deliver each consent or
estoppel to Purchaser.
9.2 Real Property Assets.
9.2.1 Tenant Estoppels. On or before ten (10) days prior to the
Closing Date ("Tenant Estoppel Deadline") Seller shall deliver (at its expense)
to Purchaser estoppels in the form attached as Exhibit 9.2.1-A ("Tenant
Estoppels") executed by each Existing Tenant of any of the Office Buildings,
except as hereafter provided. Provided however, (i) Seller shall use
commercially reasonable efforts to obtain a Tenant Estoppel executed by
Publicis Bloom, Inc. ("Bloom") which currently occupies space at Reverchon
Plaza pursuant to a lease dated August 17, 1989, as amended ("Bloom Lease"),
but if Seller is unable to obtain a Tenant Estoppel from Bloom, Seller shall
not be in default pursuant to this Section; (ii) in calculating the percentage
of rentable square feet in Reverchon Plaza represented by executed Tenant
Estoppels, the number of rentable square feet leased pursuant to the Bloom
Lease shall be excluded, unless Seller is able to secure the execution of a
Tenant Estoppel by Bloom; (iii) Seller shall not be in default pursuant to this
Section if it delivers on or before the Closing Date Tenant Estoppels and
Substitute Certificates representing at least an aggregate of eighty-five
percent (85%) of the rentable square feet leased by Existing Tenants as of the
Tenant Estoppel Deadline in each Office Building (the "85% Requirement"); and
(iv) in the event Seller does not satisfy the 85% Requirement, Purchaser's sole
remedy shall be to waive the requirement and close the transactions hereunder
or terminate this Agreement in which event the Xxxxxxx Money shall be returned
to Purchaser and thereafter neither party shall have any further rights or
obligations pursuant to this Agreement except pursuant to Section 21.10.
"Substitute Certificate Condition" means that Seller executes and delivers to
Purchaser on or prior to the Closing Date a written certificate (a "Substitute
Certificate"), dated as of Closing in substantially the form of Exhibit 9.2.1-B
setting forth the information called for in the form of Tenant Estoppel, with
respect to any Lease for which Seller has not obtained a Tenant Estoppel as
shall be required to provide to Purchaser a combination of Tenant Estoppels and
Substitute Certificates with respect to Existing Leases covering not less than
eighty-five percent (85%) of the total rentable square feet of each Office
Building covered by Existing Leases (hereafter defined) as of the date of this
Agreement and including each Existing Lease listed on the First Rent Roll.
Notwithstanding any provision hereof to the contrary, the Substitute
Certificate shall survive Closing for a period of six (6) months and then lapse
except to the extent Purchaser has notified Seller in writing of any claim
related thereto. If at any time prior to or after the Closing Date Seller
obtains a Tenant
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Estoppel from any Existing Tenant (hereafter defined) with respect to an
Existing Lease as to which Seller has provided a Substitute Certificate to
Purchaser, Seller shall provide such Tenant Estoppel to Purchaser and the
corresponding Substitute Certificate shall be returned to Seller and shall be
of no force or effect whatsoever. As used herein the term: (i) "Existing
Tenant" means any tenant listed on the First Rent Roll, and (ii) "Existing
Lease" is any Lease listed on the First Rent Roll. The statements set forth in
each Tenant Estoppel or Substitute Certificate shall be as of a date no earlier
than forty (40) days prior to the Closing Date.
9.2.2 Ground Lessor Estoppels. Estoppels ("Ground Lessor
Estoppels") in the forms attached hereto and collectively identified as Exhibit
9.2.2 executed by the landlords/lessors under the Ground Leases no later than
ten (10) days prior to the Closing Date. In the event Seller is unable to
obtain a Ground Lessor Estoppel ("Stemmons Estoppel") executed by the lessor
("Stemmons Lessor") pursuant to the Stemmons Ground Lease, Seller shall
execute a substitute estoppel ("Stemmons Substitute Estoppel") having
substantially the same terms as Exhibit 9.2.2 modified to reflect that the same
is executed by Seller and to the extent the costs of this transaction to
Purchaser (including but not limited to financing costs) are increased as a
result of the failure of the Stemmons Lessor to execute a Stemmons Estoppel
shall be an Adjustment Event and the rights and obligations of the parties, the
same shall be governed by the provisions of Section 20.3. The Stemmons
Substitute Estoppel shall survive for a period of six (6) months following the
Closing Date. If Seller is unable to obtain the Ground Lessor Estoppel
("Airport Estoppel") executed by the lessor ("Airport Lessor") pursuant to the
Airport Ground Lease on or before Closing, the closing of the sale of the
Airport Ground Lease and the related Assets shall be postponed until the date
("Extended Closing Date") which is the earlier of (i) ten (10) days after the
delivery of the Airport Estoppel or (ii) thirty (30) days after the Closing
Date. If there is an extension of the Closing Date, the amount of the Purchase
Price allocated to the Airport Ground Lease (as set forth on Exhibit 2.3) shall
not be paid until the Extended Closing Date and the conveyance of the Airport
Ground Lease. If Seller is unable to deliver the Airport Estoppel executed by
the Airport Lessor on or before five (5) days prior to the Extended Closing
Date , the rights and obligations (including but not limited to Purchaser's
obligation to pay the portion of the Purchase Price allocated to the Airport
Ground Lease) of the parties with regard to the Airport Ground Lease shall
terminate and neither party shall have any further rights or obligations with
regard to the Airport Ground Lease, except as set forth in Section 21.10.
9.3 Partnership Interests. The consents required in connection with the
transfers of the Partnership Interests including, without limitation, the
consent of the partners of each of the Partnerships (the "Partnership
Consents").
9.4 Xxxxx-Day Stock. The consents set forth on Exhibit 7.4.2. Failure to
obtain such consents shall constitute an Adjustment Event under Section 20.3.
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9.5 Oil and Gas Interests. Consents ("O&G Consents") in the form of
Exhibit 9.5 from each of the Persons who have a right to consent to the
assignment of (or a preferential right to purchase) the Oil and Gas Interests.
9.6 Promissory Notes. Estoppel Certificates executed by each maker and
guarantor (other than Lone Star Water Proofing) in the forms attached hereto
and collectively identified as Exhibit 9.6-A. Provided, however, in the event
Seller is unable, using commercially reasonable efforts, to obtain an Estoppel
Certificate for any Promissory Note, in lieu thereof, Seller shall execute and
deliver to Purchaser a Substitute Estoppel which shall survive Closing and
continue until the later of: (i) six (6) months following Closing, or (ii) the
date of the first payment after Closing due under the Promissory Note to which
the subject Substitute Estoppel applies. "Substitute Estoppel" shall mean a
written certificate dated as of Closing in substantially the form of Exhibit
9.6-B setting forth the information called for in the form of Estoppel
Certificates, with respect to any Promissory Note for which Seller is unable to
obtain an Estoppel Certificate.
ARTICLE X
CONDITIONS
10.1 Purchaser's Conditions. The conditions described in Sections 10.1
through 10.12 are referred to herein as the "Purchaser's Conditions." If any
of the Purchaser's Conditions (other than the Consent Conditions, as defined in
Section 10.11) is not fully satisfied by Closing, the failed condition shall be
an Adjustment Event and the rights and obligations of the parties shall be
governed by the provisions of Section 20.3.
10.1.1 Representations, Warranties and Covenants. The Seller
Representations shall be true and correct in all material respects as of the
Effective Date and as of the Closing Date as though made on and as of the
Closing Date, except (i) to the extent another date is contemplated by this
Agreement, (ii) any changes permitted by this Agreement, and (iii) changes in
the ordinary course of business, such Seller Representations, as modified,
shall be true and correct as of the Closing Date; and Seller shall have
performed and complied in all material respects with all of the agreements,
obligations and covenants required to be performed hereunder by Seller prior to
or at the Closing.
10.1.2 No Material Adverse Change. There shall have been no material
adverse change in the Assets (excluding fluctuations in market value of the
Marketable Securities and Municipal Bonds) since the Effective Date, and there
shall not exist any material liability or obligation of Seller, with respect to
the Assets, whether accrued or unaccrued, direct or indirect, absolute or
contingent, asserted or unasserted except (i) as reflected in this Agreement or
the Exhibits hereto, or (ii) liabilities incurred in the ordinary course of
business and consistent with past practice since the Effective Date.
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10.1.3 No Pending Litigation. No Proceeding will be pending or
threatened before any court or governmental agency seeking to restrain,
prohibit or obtain damages or other relief as a result of or in connection with
this Agreement or the consummation of the transactions contemplated hereby.
10.1.4 Closing Documents. Purchaser shall have received each of the
documents referred to in Sections 12.1.1 through 12.10.2. All agreements,
certificates, opinions and other documents delivered by Seller to Purchaser
hereunder shall be in form and substance reasonably satisfactory to Purchaser.
10.1.5 Authorization. All corporate action necessary to authorize
the execution, delivery and performance of this Agreement by each respective
Seller and the consummation by each respective Seller of the transactions
contemplated by this Agreement shall have been duly and validly taken and each
respective Seller shall have full right and power to sell the Assets upon the
terms provided in this Agreement (collectively, "Seller's Corporate
Approvals"). Purchaser shall have received copies, certified by the
appropriate officer of each respective Seller, of (i) resolutions duly adopted
by the Board of Directors of Seller approving this Agreement and the
transactions contemplated hereby and directing the submission thereof to a vote
of Seller's shareholders, if necessary, and (ii) if applicable, resolutions
duly adopted by the holders of the necessary vote of the outstanding shares of
Seller's securities approving and adopting this Agreement and the transactions
contemplated hereby.
10.1.6 No Prohibition of Transaction. No Proceeding, regulation or
legislation shall have been instituted, threatened in writing or proposed in
writing (other than caused by the act or failure to act of Purchaser or Persons
acting on behalf of Purchaser) before, nor any order issued by, any
Governmental Authority to enjoin, restrain, prohibit or obtain substantial
damages in respect of, which is related to, or which arises out of, this
Agreement.
10.1.7 Documentation. Seller shall have delivered all assignments,
other documents, certificates and instruments in its possession or control as
required hereunder.
10.1.8 Affiliate Indebtedness. Seller shall have caused any
indebtedness owed by a Partnership or Xxxxx-Day to Seller or any Affiliate of
Seller (other than Xxxxx-Day Equipment Debt) to be transferred to Purchaser or,
at the option of Purchaser, forgiven by Seller (with such transfer or
forgiveness to include a transfer or release, as applicable, of all
Encumbrances securing same).
10.2 Real Property Assets. In regard to the Real Property Assets, the
obligation of Purchaser to close this Agreement shall, at the option of
Purchaser, be subject to the following conditions precedent:
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10.2.1 Closing Title Commitments. Provided Purchaser has ordered the
Pre-Closing Title Commitments from Title Company on or before ten (10) days
following the Effective Date, the Title Company shall have issued its
irrevocable commitments ("Closing Title Commitments") to issue the Title
Policies (hereafter defined) only subject to Purchaser's payment of the premium
therefor. "Title Policies" mean the following title policies issued on the
form for same promulgated by the State Board of Insurance of Texas: (i) an
owner's policy insuring title to the Properties, to be vested in Purchaser in
the amount reasonably designated by Purchaser, (ii) an owner's policy insuring
title to the Xxxxx-Day Tracts is vested in Xxxxx-Day in an amount up to
$731,453.00 and (iii) a mortgagee's policy in the amount of the principal
balance owing pursuant to the Allied Note as of the Closing Date, naming
Purchaser (or Purchaser's designee) as the insured and insuring the liens
encumbering the Allied Tract and securing the Allied Note as valid and superior
liens. Each Title Policy shall be issued by such companies and with such
reinsurance or co-insurance agreements as Purchaser may require and may
contain as exceptions only the Permitted Exceptions and the standard printed
exceptions except that: (a) the exception relating to restrictions against the
Properties shall be deleted, except for such restrictions as may be included in
the Permitted Exceptions; (b) the exception relating to discrepancies,
conflicts or shortages in area or boundary lines, or any encroachment or
overlapping of improvements which a survey might show shall be deleted except
for shortages in area; (c) the exception relating to standby fees and ad
valorem taxes shall except only taxes owing for the current year and subsequent
assessments for prior years due to change in land usage or ownership; and (iv)
the exception for the rights of parties in possession shall be limited to the
rights of lessees or tenants, as tenants only, under the Leases.
10.2.2 Rent Roll. There is no material adverse change in the
aggregate between the First Rent Roll and Closing Rent Roll (hereafter defined)
other than leases approved pursuant to Section 8.2.4.
10.2.3 Material Change. There is no material adverse difference
between the First Rent Roll and the Tenant Estoppels and Substitute
Certificates delivered pursuant to Section 9.2.1 other than leases approved
pursuant to Section 8.2.4.
10.3 Partnership Interests. Purchaser shall have received the Partnership
Consents each executed by the appropriate party or parties and acknowledged,
where required.
10.4 Xxxxx-Day Stock. During the period from the date of the Xxxxx-Day
Balance Sheet through the Closing Date, there shall not have been any material
adverse change in the financial condition or business of Xxxxx-Day, and there
shall not have been any material loss or damage to the assets of Xxxxx-Day,
whether or not insured, which materially affects the ability of Xxxxx-Day to
conduct its business. Xxxxx-Day shall have no liabilities as of the Closing
Date that are not reflected on the Xxxxx-Day Balance Sheet, other than those
incurred since the date of the Xxxxx-Day Balance Sheet in the ordinary course
of business and consistent with past practice or otherwise approved by
Purchaser.
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10.5 Oil and Gas Interests.
10.5.1 Consents and Approvals. Seller shall have received all
necessary consents, approvals and waivers (including the O&G Consents) in order
to convey to Purchaser the Oil and Gas Interests required to be conveyed at
Closing.
10.5.2 Number not used.
10.5.3 No Adverse Change. Purchaser shall not have received any
written reports indicating that any document has been filed of record in any of
the counties in which the Oil and Gas Interests are located since the date of
the latest title information provided to Purchaser which would adversely affect
Seller's title to the Oil and Gas Interests.
10.6 Number not used.
10.7 Number not used.
10.8 Promissory Notes.
10.8.1 No Default. No event has occurred or with the passage of
time or the giving of notice will occur which is or would be an event of
default under the Promissory Notes or the Security Documents.
10.8.2 Principal Balance. The outstanding principal balances due
under the Promissory Notes are as set out on Exhibit 1.8, except to the extent
there has been a payment of principal prior to Closing.
10.9 Citation Interest.
10.9.1 No Default. No event has occurred or with the passage of
time or the giving of notice will occur which is or would be an event of
default under any of the Citation Agreements.
10.9.2 Consent. Seller shall have delivered to Purchaser all
consents ("Citation Consents") from third parties as are required by the terms
of the Citation Agreements to allow the assignment of the Citation Agreements
in accordance with this Agreement.
10.10 Texas Stadium Suite. Seller shall have delivered to Purchaser all
consents ("Suite Consents") from third parties as are required by the terms of
the documents relating to the Texas Stadium Suite to allow the assignment of
the Texas Stadium Suite in accordance with this Agreement.
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10.11 Failure of Consent Conditions. The term "Consent Conditions" means
obtaining the Partnership Consents, the O&G Consents, Citation Consents and the
Suite Consents. If any Consent Condition is not satisfied as of the Closing,
Purchaser may either: (i) waive the receipt of the respective consent and
close, or (ii) terminate this Agreement as to the affected Asset only. If this
Agreement is terminated as to only the affected Asset pursuant to this Section
10.11, this Agreement shall be deemed to be amended to exclude the affected
Asset and all representations, warranties and covenants relating to the
excluded Asset and to reduce the Purchase Price by the amount of the Purchase
Price allocated to said Asset on the Exhibit 2.3. Provided however, if any
condition is not satisfied as the result of the act or failure to act by Seller
which constitutes Seller's failure to perform its obligations pursuant to this
Agreement and Seller fails to cure same within a reasonable period of time,
Purchaser shall be entitled to the remedies set forth in Article XX.
10.12 Seller's Conditions to Closing. Seller's obligation to perform its
agreements pursuant to this Agreement are subject to the conditions described
in this Section 10.12 being satisfied or waived by Seller as of the Closing
Date ("Seller's Conditions").
10.12.1 Representations, Warranties and Covenants. The
representations and warranties of Purchaser set forth in this Agreement shall
be true and correct in all material respects as of the Effective Date and as of
the Closing Date as though made on and as of the Closing Date, except (i) to
the extent another date is contemplated by this Agreement, (ii) for any changes
permitted by this Agreement, and (iii) for changes in the ordinary course of
business, such warranties and representations, as modified, shall be true and
correct as of the Closing Date; and Purchaser shall have performed and complied
in all material respects with all of the agreements, obligations and covenants
required to be performed hereunder by Purchaser prior to or at the Closing.
10.12.2 No Pending Litigation. No Proceeding (other than one
caused by the act or failure to act of Seller or Persons acting on behalf of
Sellers) will be pending or threatened before any court or governmental agency
seeking to restrain, prohibit or obtain damages or other relief as a result of
or in connection with this Agreement or the consummation of the transactions
contemplated hereby.
10.12.3 Authorization. All action necessary to authorize the
execution, delivery and performance of (or regarding) this Agreement by
Purchaser and the consummation of the transactions contemplated hereby shall
have been duly and validly taken by Purchaser's General Partner and Purchaser
shall have full power and right to consummate the transactions contemplated
hereby on the terms provided herein.
10.12.4 No Prohibition of Transaction. No Proceeding or Legal
Requirement shall have been instituted, threatened or proposed (other than
caused by the act or failure to act of Seller or Persons acting on behalf of
Seller) before, nor any order issued by, any
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Governmental Authority (other than one caused by the act or failure to act of
Seller or Persons acting on behalf of Seller) to enjoin, restrain, prohibit or
obtain substantial damages in respect of, which is related to, or which arises
out of, this Agreement.
10.13 Failure of Seller's Conditions to Closing. If any of Seller's
Conditions is not fully satisfied by Closing, Seller may terminate this
Agreement by written notice to Purchaser whereupon this Agreement shall be
canceled, all Xxxxxxx Money shall be paid to Seller by the Title Company,
Purchaser shall return to Seller all of the Due Diligence Items requested by
Seller, and thereafter neither Seller nor Purchaser shall have any continuing
obligations one unto the other except as provided in Section 21.10.
10.14 Evaluation of Liabilities Associated with Oil and Gas Interests.
Without limitation of Purchaser's general inspection rights, Purchaser and its
representatives shall be entitled to review such information and make such
inspections as Purchaser determines are reasonably necessary for it to
determine: (i) the value of the Oil and Gas Interests and Rising Star
Partnership Interests (said interests hereafter called "Combined Oil and Gas
Interests"), and (ii) whether ownership of the Combined Oil and Gas Interests
imposes any actual or potential liability which exceeds the value of the
Combined Oil and Gas Interests. In the event Purchaser reasonably determines
that the liabilities associated with the ownership of the Combined Oil and Gas
Interests exceed the value of the Combined Oil and Gas Interests, Purchaser may
elect to exclude all of the Combined Oil and Gas Interests from the Assets
without any adjustment in the Purchase Price. If any dispute arises with
respect to the provisions of this Section 10.14, the same shall be an
Arbitration Event.
10.15 Fairness Opinion Condition. Notwithstanding any provision of this
Agreement to the contrary, Seller's obligations hereunder are subject to its
receipt of an opinion from Bear, Xxxxxxx & Co., Inc. ("Fairness Opinion") on or
before March 7, 1997 ("Fairness Opinion Deadline"), satisfactory to Seller,
that the transactions contemplated by this Agreement and the DMI Agreement,
collectively, are fair to the shareholders of Seller from a financial point of
view. If the Fairness Opinion is not received and approved by Seller on or
before the Fairness Opinion Deadline, Seller may deliver written notice
("Fairness Opinion Termination Notice") to Purchaser on or before 5:00 p.m. on
the second business day after the Fairness Opinion Deadline ("Fairness Opinion
Deadline"). If Seller has not delivered a Fairness Opinion Notice on or before
the Fairness Opinion Termination Deadline, Seller shall be deemed to have
waived the provisions of this Section 10.15, and, thereafter, the provisions of
this Section shall be null and void. In the event Seller timely delivers a
Fairness Opinion Termination Notice, the Xxxxxxx Money (and all interest
accrued thereon) shall be delivered to Purchaser and Purchaser shall return to
Seller all Due Diligence Items; and, thereafter, neither party shall have any
further rights or obligations hereunder except as provided in Section 21.10.
Seller agrees to use its commercially reasonable efforts to obtain the Fairness
Opinion on or before the Fairness Opinion Deadline.
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ARTICLE XI
CLOSING
The closing ("Closing") hereunder shall take place at the offices of Xxxxx
XxXxxxxxx & Oaks Xxxxxxxx, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000.
The Closing shall occur on or before the date ("Closing Date") which is the
earlier of (i) the tenth (10th) day after the expiration of the Inspection
Period or (ii) May 1, 1997. Purchaser shall notify Seller at least five (5)
days in advance of the exact time and date of Closing.
ARTICLE XII
SELLER'S OBLIGATIONS AT CLOSING
12.1 Seller's Obligations at Closing. At the Closing, Seller shall
execute, deliver and if required acknowledge or cause the appropriate party to
execute, deliver and if required acknowledge the documents described in
Sections 12.2 through 12.10 and shall perform those obligations described
therein.
12.1.1 General Closing Obligations of Seller. In addition to the
other documents to be delivered by Seller to Purchaser at Closing pursuant to
the terms of this Agreement, Seller shall deliver the following to Purchaser at
Closing: (i) a certificate signed by a senior executive officer of Seller dated
as of the Closing Date stating that each of Seller's Representations are true
and correct at Closing and that each obligation of Purchaser, which is a
condition to Closing, has been satisfied by Purchaser or waived by Seller, (ii)
an opinion of Seller's counsel, Gardere & Xxxxx, L.L.P., dated as of the
Closing Date, addressed to Purchaser, in a form reasonably satisfactory to
Purchaser, (iii) certificates of the appropriate public officials to the
effect that each Seller is a validly existing corporation in good standing in
Texas as of a date not more than ten (10) days of the Closing Date, (iv)
certificates of the secretary of Seller setting forth all resolutions of the
Board of Directors and the shareholders of Seller authorizing the execution and
delivery of this Agreement and the performance by Seller of the transactions
contemplated hereby, and (v) incumbency and specimen signature certificates
dated the Closing Date signed by the officers of Seller certified by its
Secretary.
12.1.2 Affiliate Indebtedness. Assignment of notes and liens
representing any indebtedness (or security therefor) owed by a Partnership or
Xxxxx-Day to Seller or any Affiliate of Seller other than Xxxxx-Day Equipment
Debt (or, if applicable, documentation reflecting forgiveness of such
indebtedness and release of all Encumbrances securing same).
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12.2 Real Property Assets.
12.2.1 Special warranty deeds ("Deeds") in the form of Exhibit
12.2.1 covering each of the Properties, duly signed and acknowledged by the
appropriate Seller, which deeds shall convey to Purchaser good and indefeasible
fee simple title to each Property, free and clear of all liens, rights-of-way,
easements, and other matters affecting title to the Property, except for the
applicable Permitted Exceptions.
12.2.2 Xxxx of Sale and Assignment in the form of Exhibit 12.2.2,
duly executed and acknowledged by Seller, conveying and/or assigning to
Purchaser the Personal Property, the Leases, the Ground Leases (together with
Seller's option to purchase the Stemmons Leasehold as described on Exhibit
1.2.1(ii)), the Security Deposits, the Operating Agreements, the Intangibles
and the Permits.
12.2.3 Rent roll ("Closing Rent Roll") in the same form as the
First Rent Roll dated as of the Closing Date.
12.2.4 A non-withholding statement that will satisfy the
requirements of Section 1445 of the Code so that Purchaser is not required to
withhold any portion of the Purchase Price for payment to the IRS.
12.2.5 Originals of all Leases (and all files relating to each
Lease), Ground Leases and Operating Agreements affecting the Properties.
12.2.6 Number not used.
12.2.7 Number not used.
12.2.8 Deliver such evidence or other documents that may be
reasonably required by the Title Company evidencing the status and capacity of
Seller and the authority of the Person or Persons who are executing the various
documents on behalf of Seller in connection with the sale of the Assets.
12.2.9 Deliver to Purchaser all keys to all buildings and other
improvements located on the Properties, combinations to any safes thereon and
security devices therein in Seller's possession.
12.2.10 Execute and deliver a Special District Disclosure Notice
as required by Section 49.452 of the Texas Water Code.
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12.3 Partnership Interests. Execute and deliver to Buyer an assignment
of partnership interest ("Partnership Assignment") for each Partnership
Interest, which shall be in the form of Exhibit 12.3, together with such other
documents as may be necessary to cause the admission of Purchaser as a
substitute limited partner of each Partnership.
12.4 Xxxxx-Day Stock. Certificates representing the Xxxxx-Day Stock,
duly endorsed to Purchaser, which shall transfer to Purchaser good title to the
Xxxxx-Day Stock, free and clear of all Encumbrances.
12.5 Oil and Gas Interests.
12.5.1 Assignments in substantially the form of Exhibit 12.5.1
covering the Oil and Gas Interests containing special warranties of title.
12.5.2 Transfer Orders or letters in lieu thereof for each of the
xxxxx included in the Oil and Gas Interests.
12.5.3 Such other documents of conveyance or assignments as
Purchaser may reasonably request with respect to the Oil and Gas Interests.
12.6 Marketable Securities. Certificated securities representing the
Marketable Securities endorsed for transfer with signature guarantees or, with
respect to uncertificated book entry securities, evidence of transfers (or
orders therefor) on the books of the issuer.
12.7 Bonds. Certificated securities representing the Municipal Bonds and
Arena Bonds endorsed for transfer with signature guarantees or, with respect to
uncertificated book entry securities, evidence of transfers (or orders
therefor) on the books of the issuer.
12.8 Promissory Notes.
12.8.1 The original Promissory Notes, endorsed by Seller "Pay to
the Order of (Name of Purchaser or Partial Designee) without recourse," the
originals of all Security Documents, the originals of all Guaranty Agreements,
the originals of all UCC-1 Financing Statements, the original of the Mortgagee
Title Policy and original stock certificates for the shares of Kosmeo
Cosmetics, Inc. (issued to Xxxxx and/or Xxxxxx Xxxxxx and held by Seller to
secure the Promissory Note executed by Kosmeo Cosmetics, Inc. as described in
Exhibit 1.8).
12.8.2 An Assignment of Notes and Liens in the form attached as
Exhibit 12.8.2 transferring and assigning all of Seller's rights, title and
interest in and to the Promissory Notes, the Security Documents, the Guaranty
Agreements and all liens and security interests securing their payment.
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12.8.3 UCC-3 Forms as promulgated by the Texas and Florida
Secretaries of State assigning to Purchaser all of Seller's rights under any
security interests held by Seller securing the Promissory Notes and/or any
related UCC filings.
12.8.4 An executed letter addressed to each maker of a Promissory
Note in the form of Exhibit 12.8.4.
12.8.5 Number not used.
12.8.6 Number not used.
12.8.7 An endorsement to the Mortgagee Policy of Title Insurance
covering the Allied Deed of Trust in the form promulgated by the State Board of
Insurance naming the Purchaser as the "insured" under the Mortgagee Policy.
12.8.8 Number not used.
12.9 Citation Interest.
12.9.1 The originals of the Citation Agreements and all documents
and files related thereto.
12.9.2 An executed Assignment of Contract Rights in the form of
Exhibit 12.9.2 transferring and assigning all of Seller's right, title and
interest in and to the Citation Agreements.
12.10 Texas Stadium Suite.
12.10.1 Execute and deliver an Assignment and Assumption of
Stadium License Agreement (herein so called) in substantially the same form of
Exhibit 12.10.1.
12.10.2 Deliver original counterparts of the Texas Stadium
Documents.
ARTICLE XIII
PURCHASER'S OBLIGATIONS AT CLOSING
13.1 Purchaser's Obligations at Closing. At Closing, Purchaser shall
deliver to Seller the Purchase Price in cash and execute, deliver and if
required acknowledge the documents described in Sections 13.2 through 13.6 and
perform those obligations described therein.
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13.1.1 General Closing Obligations of Purchaser. In addition to
the other documents to be delivered by Purchaser to Seller at Closing pursuant
to the terms of this Agreement, Purchaser shall deliver to the Seller at
Closing: (i) a certificate signed by a senior executive officer of Purchaser
dated as of the Closing Date stating that each of the representations and
warranties made herein by Purchaser are true and correct at Closing and that
each obligation of Seller, which is a condition to Closing, has been satisfied
by Seller or waived by Purchaser, (ii) an Opinion of Purchaser's counsel, Xxxxx
XxXxxxxxx & Oaks Xxxxxxxx, dated as of the Closing Date, addressed to Seller,
in a form reasonably satisfactory to Seller, (iii) certificates of the
appropriate public officials to the effect that Purchaser is a validly existing
Delaware limited partnership and is authorized to do business in and in good
standing in Texas as of a date not more than ten (10) days of the Closing Date,
(iv) certificates of the General Partner of Purchaser setting forth that all
necessary actions have been taken by Purchaser's partners authorizing the
execution and delivery of this Agreement and the performance by Purchaser of
the transactions contemplated hereby, and (v) incumbency and specimen signature
certificates dated the Closing Date signed by the General Partner of Purchaser.
13.2 Real Property Assets.
13.2.1 Xxxx of Sale and Assignment in the form of Exhibit 12.2.2
whereby Purchaser accepts the assignment of and accepts all obligations under
the Personal Property, the Leases, the Ground Leases, the Security Deposits,
the Operating Agreements, the Intangibles and the Permits.
13.2.2 Deliver such evidence or other documents that may be
reasonably required by the Title Company evidencing the status and capacity of
Purchaser and the authority of the Person or Persons who are executing the
various documents on behalf of Purchaser in connection with the sale of the
Properties.
13.3 Partnership Interests. Execute and deliver such documents as may be
reasonably required in order for Purchaser to become a substitute limited
partner in the Partnerships and assume the obligations of Sellers accruing on
and after the Closing Date.
13.4 Texas Stadium Suite. Execute and deliver the Assignment and
Assumption of Stadium License Agreement.
13.5 Other Obligations. Execute and deliver agreements to be bound by
and assume and perform the obligations accruing on or after the Closing Date
under or relating to the Oil and Gas Interests and in the agreements relating
to the Citation Interests listed on Exhibit 1.9.
13.6 Additional Agreements. Provided the rights of Seller thereunder are
assigned to Purchaser and Seller has fully performed its obligations pursuant
to same accruing prior to
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Closing, at Closing, Purchaser agrees to assume the obligations of Seller
accruing subsequent to Closing pursuant to those agreements listed on Exhibit
13.6.
ARTICLE XIV
COSTS AND ADJUSTMENTS
14.1 The parties shall make the adjustments and pay the costs in
accordance with the provisions of Sections 14.2 through 14.13. The provisions
of this Article XIV shall survive the Closing.
14.2 Real Property Assets.
14.2.1 Rents and Expenses. All prepaid rents, prepaid expenses
and obligations under the Operating Agreements or agreements set forth on
Exhibit 13.6, accrued expenses, and ad valorem taxes (real and personal) for
the Properties for the current calendar year shall be prorated as of the date
of Closing, and Seller or Purchaser, as the case may be, shall pay to the other
party hereto in cash at Closing Seller's or Purchaser's, as the case may be,
prorata portion of such prorations. Tax prorations shall be based upon taxes
actually assessed for the current calendar year or, if for any reason such
taxes for the Properties have not been actually assessed, such proration shall
be based upon the tax rates established for 1996 applied to 1997 assessed
values, and adjusted by cash settlement when exact amounts are available. The
provisions of this Section 14.2.1 shall survive the Closing. If subsequent to
Closing Purchaser receives any refund of ad valorem taxes assessed against any
of the Properties paid by Seller and attributable to the period prior to the
Closing (said refund hereafter called "Eligible Refund"), Purchaser shall
promptly pay any tenant any sum to which said tenant is entitled and pay the
balance of the Eligible Refund to Seller. Nothing in the preceding sentence
shall be construed as obligating Purchaser to pursue the determination or
collection of any refund on behalf of Seller.
14.2.2 Ordinary Expenses. All other income and ordinary
operating expenses for or pertaining to the Properties including, but not
limited to, public utility charges, maintenance, service charges, and all other
normal operating charges of the Properties shall be prorated as of the Closing
Date. Seller shall receive a credit for all utility deposits assigned to
Purchaser. The settlement of the proration of the operating expenses of the
Properties shall occur within sixty (60) days after the Closing Date in
accordance with the following provisions of this Section 14.2.2. On or before
forty-five (45) days after the Closing Date, Purchaser shall deliver to Seller
a summary of the operating expenses to be prorated and Purchaser's suggested
proration. Thereafter, Purchaser shall provide Seller such information as
Seller may reasonably require to determine the accuracy of the suggested
proration. The parties shall each act reasonably and in good faith to agree
upon the proration. If the parties cannot agree upon the proration, it shall
be an Arbitration Event and resolved in accordance with the provisions of
Section 20.4. The party owing the other shall pay the amount owed within ten
(10) days after agreement or the decision of the Arbitrators.
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14.2.3 Lease Payments. Except as provided in Section 14.2.7, all
rents, additional rents and other sums actually paid under the Leases for the
month of Closing shall be prorated between Seller and Purchaser as of the
Closing Date, provided that delinquent amounts of base rent which are more than
thirty (30) days past due and delinquent amounts of other kinds which are more
than sixty (60) days past due will not be considered in such calculation. All
rents, percentage rents, common area charges, real estate taxes and other costs
or charges paid by tenants under the Leases after the Closing will first be
applied to such charges as are then due and then applied in their reverse order
of accrual until applied in full. Any amounts that are attributable to periods
prior to Closing will be delivered by Purchaser to Seller within thirty (30)
days after receipt. Purchaser will have no obligation to incur any cost or
expense or institute any litigation to collect delinquent rents, percentage
rents, or other costs or charges owed to Seller, and Seller will not exercise
any right to collect such amounts. In any event, Seller will not institute
suit against any tenant under the Leases. The provisions of this Section
14.2.3 will survive the Closing.
14.2.4 Security Deposits. Seller shall retain the Security
Deposits and the amount thereof shall be credited to the Purchase Price. At
Closing, Seller shall assign to Purchaser any letter of credit ("Letter of
Credit") held by Seller as a security deposit. Seller shall use commercially
reasonable efforts to cause the issuer of any Letter of Credit to either
approve the assignment of same to Purchaser (with appropriate modifications to
allow Purchaser to draft upon same) or issue a new letter of credit naming
Purchaser as the beneficiary with terms reasonably satisfactory to Purchaser.
It shall be an Adjustment Event should Seller be unable to perform the
provisions of the preceding sentence as to any Letter of Credit that is not
clearly assignable.
14.2.5 Operating Expense Rent. (i) "Appropriate Expense
Information" shall mean the actual operating expenses (other than ad valorem
taxes) of the applicable Office Building for the period October 1, 1996
through September 30, 1997 and the actual ad valorem taxes which are assessed
against said Office Building for 1997; (ii) "Operating Expense Rent" means
sums paid by a tenant based upon its share of the operating expenses of a
Property or the estimated share of operating expenses (including taxes); and
(iii) "Seller's Share" shall be a fraction, the numerator of which shall be
number of days from and after January 1, 1997 through the Closing Date and the
denominator of which shall be 365. If based upon the Appropriate Expense
Information, Purchaser reasonably determines that the Operating Expense Rent
paid by any tenants of an Office Building will exceed the operating expenses to
be passed through to the tenants of that Office Building (as of the Closing
Date, hereafter called "Affected Tenants") for the calendar year 1997 and will
require a refund or credit to the Affected Tenants of the excess Operating
Expense Rent, Purchaser shall deliver written notice ("Adjustment Notice") to
Seller on or before October 31, 1997 ("Operating Expense Adjustment Deadline")
together with such information as may be reasonably required to substantiate
Purchaser's position. Unless Seller delivers written notice ("Operating
Expense Objection") to Purchaser within ten (10) days after delivery of the
Adjustment Notice, Seller shall promptly pay
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Purchaser Seller's Share of the excess Operating Expense Rent which Purchaser
reasonably thinks will have to be refunded or credited to Affected Tenants. If
Seller timely delivers an Operating Expense Objection and the parties cannot
resolve the objection, the same shall be an Arbitration Event. If based upon
the Appropriate Expense Information Purchaser reasonably determines that any of
the Existing Tenants of any Office Building will owe any Additional Operating
Expense Rent for 1997 (hereafter defined), on or before October 20, 1997,
Purchaser will pay Seller the amount of the Additional Operating Expense Rent
attributable to the period from January 1, 1997 to the Closing Date discounted
to account for the period between October 20, 1997 and the date said additional
Operating Expense Rent is to be paid by the Existing Tenant and the risk of
collection thereof. As used herein the term "Additional Operating Expense
Rent" means the additional Operating Expense Rent which Purchaser determines
any Existing Tenant owes following the end of 1997 pursuant to the relevant
Existing Leases as of result of the Existing Tenant's share of the Operating
Expenses being greater than the periodic payment of the Operating Expense Rent
during 1997. This Section shall survive Closing.
14.2.6 Recording Costs. Seller shall pay up to $10,000.00 of the
recording cost of the Deeds, the recording cost relating to the transfer of the
Promissory Notes, Security Documents and Guaranty Agreements, and any escrow
fee (such fees in excess of $10,000.00 shall be paid by Purchaser). Seller and
Purchaser shall each be responsible for the fees and expenses of their
respective attorneys.
14.2.7 Tenant Improvements; Commissions. With respect to all
Leases entered into with tenants of the Office Buildings after the Effective
Date or which constitute approved leases hereunder, Seller will receive a
credit in an amount equal to (a) all tenant improvement costs, architectural
costs and leasing commissions paid by Seller minus (b) all rent received by
Seller relating to such Leases. With respect to Leases executed prior to the
Effective Date which are not Approved Leases ("Pre-Execution Leases") , Seller
shall perform all obligations relating to the completion of tenant improvements
and payment of leasing commissions ("Pre-Execution Lease Obligations") and pay
all sums related thereto (collectively "Pre-Execution Lease Expenses") incurred
in connection with or arising out of any Pre-Execution Leases (except as
hereafter provided) when due. However, if at Closing (i) there are any unpaid
Pre-Execution Lease Expenses (whether or not accrued or owing), Purchaser shall
receive a credit ("Lease Obligation Credit") to the Purchase Price in the
amount of the unpaid Pre-Execution Lease Expenses (including but not limited to
any additional sums Purchaser reasonably determines will be incurred in order
to perform the Pre-Execution Lease Obligations on or prior to any Lease
Deadline) and (ii) if any part of the Pre-Execution Lease Obligations are not
fully performed, provided the Assumption Conditions are satisfied, Purchaser
will execute an agreement by which it assumes and agrees to perform the
unperformed Pre-Execution Lease Obligations. "Assumption Conditions" means
that Seller has delivered to Purchaser such evidence and assurances Purchaser
reasonably requests to confirm and assure Purchaser (i) that Seller has not
defaulted in the performance of the Pre-Execution Lease Obligations and (ii)
that the amount of the unpaid Pre-Execution Lease Expenses will not exceed the
Lease Obligation Credit.
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"Lease Deadline" means any date by which any Pre-Execution Lease Obligations
must be performed in accordance with a Pre-Execution Lease or if by which a
Pre-Execution Lease Obligation is not performed, the revenue from the
applicable lease will be reduced or delayed. At Closing Purchaser shall assume
the obligation pursuant to any Existing Lease to provide a refurbishment
allowance or to pay a leasing commission based upon a renewal or expansion of
an Existing Lease. Nothing in the preceding sentence shall be construed to
limit the rights of Purchaser arising out of a breach of the Seller's
Representations, including but not limited to, the Seller's Representation set
forth in Section 7.2.17.
14.3 Number not used.
14.4 Xxxxx-Day. Purchaser shall reimburse Seller for any cash
contributions made by Seller to the stockholder's equity of Xxxxx-Day to the
extent such contributions were utilized by Seller to fund the acquisition of
equipment set forth on Exhibit 8.4.2.
14.5 Oil and Gas Interests. Purchaser shall reimburse Seller for any
cash calls paid by Seller from the Effective Date to the extent such payments
were consented to by Purchaser, in it sole discretion. If such consent is
denied and Seller's interest in a well is forfeited as a result of failure to
pay a cash call, there will be no adjustment to the Purchase Price as a result
of such forfeiture.
14.6 Number not used.
14.7 Number not used.
14.8 Number not used.
14.9 Citation Agreements. All payments due under the Citation Agreements
for the month of Closing shall be prorated between Seller and Purchaser as of
the Closing Date.
14.10 Texas Stadium Suite. All payments due under the agreements relating
to the Texas Stadium Suite for the month of Closing shall be prorated between
Seller and Purchaser as of the Closing Date. If, prior to Closing, Seller pays
for any admission tickets (to which the Texas Stadium Suite holder is
entitled), Purchaser shall reimburse Seller for the amount so paid by Seller.
14.11 Recording of Documents. The Deeds shall be recorded by Purchaser in
each county in which the Properties are located. The Assignments of the Oil
and Gas Interests shall be recorded by Purchaser in each county in which the
Oil and Gas Interests are located. Transfer Orders or letters in lieu thereof
for the xxxxx included in the Oil and Gas Interests shall be delivered by
Seller to Purchaser and Purchaser shall deliver same to the purchasers of
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production from such xxxxx. The Assignment of Notes and Liens shall be
recorded by Purchaser in Dallas County, Texas and with the Office of the
Secretary of State of Texas.
14.12 Transfer Taxes. Purchaser shall pay at Closing all sales, transfer
and any other similar Taxes payable as a result of the purchase of the Assets
by Purchaser.
ARTICLE XV
AS IS PROVISION
PROPERTY CONVEYED "AS IS". PURCHASER AGREES THAT, EXCEPT FOR SELLER'S
REPRESENTATIONS SET FORTH IN THIS AGREEMENT, SELLER IS NOT MAKING AND
SPECIFICALLY DISCLAIMS ANY ADDITIONAL WARRANTIES OR REPRESENTATIONS OF ANY KIND
OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE ASSETS, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO MATTERS OF TITLE (OTHER
THAN SELLER'S WARRANTY OF TITLE SET FORTH IN THE ASSIGNMENT OR CONVEYANCE
DOCUMENTS TO BE DELIVERED AT CLOSING), ZONING, TAX CONSEQUENCES, PHYSICAL OR
ENVIRONMENTAL CONDITIONS, AVAILABILITY OF ACCESS, INGRESS OR EGRESS, OPERATING
HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL
REGULATIONS OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE ASSETS
INCLUDING, WITHOUT LIMITATION: (i) THE VALUE, CONDITION, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE OF THE ASSETS, (ii) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS INCORPORATED INTO ANY OF THE ASSETS, AND (iii) THE MANNER, QUALITY,
STATE OF REPAIR OR LACK OF REPAIR OF ANY OF THE ASSETS. PURCHASER AGREES THAT
WITH RESPECT TO THE ASSETS, PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY
UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER
OR ANY AGENT OF SELLER OTHER THAN THOSE SET FORTH IN THIS AGREEMENT. PURCHASER
REPRESENTS THAT IT IS A KNOWLEDGEABLE PURCHASER OF REAL ESTATE AND OTHER
PROPERTY OF THE KINDS INCLUDED IN THE ASSETS AND THAT IT IS RELYING SOLELY ON
ITS OWN EXPERTISE AND THAT OF PURCHASER'S CONSULTANTS, AND PURCHASER AGREES
THAT UPON CLOSING, SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER
SHALL ACCEPT THE ASSETS "AS IS, WHERE IS," WITH ALL FAULTS, AND PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES
OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER, ANY
AGENT OF SELLER OR ANY THIRD PARTY, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT. THE TERMS AND CONDITIONS OF THIS ARTICLE SHALL EXPRESSLY
SURVIVE THE
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CLOSING AND NOT MERGE THEREIN AND SHALL BE INCORPORATED INTO THE CONVEYANCE
DOCUMENTS RELATING TO THE ASSETS.
ARTICLE XVI
INDEMNITY OBLIGATIONS
16.1 Indemnification by Seller. Subject to the provisions of Section
16.7, Seller shall indemnify, defend, save and hold Purchaser and its partners,
employees, agents and Affiliates (collectively, "Purchaser Indemnitees")
harmless from and against all demands, claims, allegations, assertions, actions
or causes of action, assessments, losses, damages, deficiencies, liabilities,
costs and expenses (including reasonable legal fees, interest, penalties and
all reasonable amounts paid in investigation, defense or settlement of any of
the foregoing and whether or not any such demands, claims, allegations, etc.,
of third parties are meritorious) asserted against, imposed upon, resulting to,
required to be paid by, or incurred by any Purchaser Indemnitees, directly or
indirectly, in connection with or arising out of an event occurring on or
before the Closing Date and in any way related to the ownership, maintenance or
operation of the Assets.
16.2 Indemnification by Purchaser. Purchaser shall indemnify, defend,
save and hold Seller and its partners, employees, agents and Affiliates
(collectively, "Seller Indemnitees") harmless from and against all demands,
claims, allegations, assertions, actions or causes of action, assessments,
losses, damages, deficiencies, liabilities, costs and expenses (including
reasonable legal fees, interest, penalties and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing and whether or not
any such demands, claims, allegations, etc., of third parties are meritorious)
asserted against, imposed upon, resulting to, required to be paid by, or
incurred by any Seller Indemnitees, directly or indirectly, in connection with
or arising out of an event occurring after the Closing Date and in any way
related to the ownership, maintenance or operation of the Assets.
16.3 Notice of Claims. If any Purchaser Indemnitee or Seller Indemnitee
(an "Indemnified Party") believes that it is or will be entitled to
indemnification pursuant to the terms of this Article XVI, such Indemnified
Party shall so notify the party or parties from whom indemnification is being
claimed (the "Indemnifying Party") with reasonable promptness and reasonable
particularity in light of the circumstances then existing. If any action at
law or suit in equity is instituted by or against a third party with respect to
which any Indemnified Party intends to claim the right to indemnification, such
Indemnified Party shall promptly notify the Indemnifying Party of such action
or suit. The failure of an Indemnified Party to give any notice required by
this Section shall not affect any of such party's rights under this Agreement
except and to the extent that such failure is actually prejudicial to the
rights or obligations of the Indemnifying Party.
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16.4 Third Party Claims. If permitted by the insurer the Indemnified
Party shall have the right to conduct and control, through counsel of its
choosing, the defense of any third party claim, action or suit, and the
Indemnified Party may compromise or settle the same, provided that the
Indemnified Party shall give the Indemnifying Party advance notice of any
proposed compromise or settlement. The Indemnified Party shall permit the
Indemnifying Party to participate in the defense of any such action or suit
through counsel chosen by the Indemnifying Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnifying Party. If the
Indemnified Party permits the Indemnifying Party to undertake, conduct and
control the conduct and settlement of such action or suit, (i) the Indemnifying
Party shall not thereby permit to exist any Encumbrance upon any asset of the
Indemnified Party; (ii) the Indemnifying Party shall not consent to any
settlement that does not include as an unconditional term thereof the giving of
a complete release from liability with respect to such action or suit to the
Indemnified Party; and (iii) the Indemnifying Party shall agree promptly to
reimburse the Indemnified Party for the full amount of any damages including
fees and expenses of counsel for the Indemnified Party incurred after giving
the foregoing notice to the Indemnifying Party and prior to the assumption of
the conduct and control of such action or suit by the Indemnifying Party.
16.5 Good Faith Efforts to Settle Disputes. Purchaser and Seller agree
that, prior to commencing any litigation against the other concerning any
matter with respect to which such party intends to claim a right of
indemnification in such proceeding, the respective chief executive officers (or
officers or agents holding such authority) of such parties shall meet in a
timely manner and attempt in good faith to negotiate a settlement of such
dispute during which time such officers shall disclose to the others all
relevant information relating to such dispute.
16.6 Payment. All indemnification payments pursuant to this Agreement
shall be made promptly in cash.
16.7 Survival and Limitation of Indemnities. The provisions of Section
16.1 through this Section 16.7 shall survive Closing but the liability of each
indemnitor shall not exceed each indemnitor's Insurance Coverage. As used
herein "Insurance Coverage" shall be the indemnity provided to the respective
party by the insurance policies described on Exhibit 16.7 as to Purchaser and
those described on Exhibit 7.2.14 as to Seller. Provided, however, the
limitation of liability provided for in this Section 16.7 as it applies to
Purchaser shall not apply to Contractual Liabilities. "Contractual
Liabilities" includes any liability arising out of, or in connection with, the
Operating Agreements or the agreements set forth on Exhibit 13.6 to the extent
such liability arises out of, or in connection with, an event subsequent to the
Closing. Purchaser agrees to look solely to Seller's Insurance Coverage and
agrees that Seller has no personal liability under this Article XVI.
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ARTICLE XVII
CONDEMNATION, DAMAGE OR DESTRUCTION PRIOR TO CLOSING
17.1 Condemnation. As used herein (a) a "Taking" is the commencement of
a proceeding by any Governmental Authority or other entity having condemnation
authority exercising powers of eminent domain or the taking of any steps
preliminary thereto (including the giving of any direct or indirect notice of
intent to institute such proceedings) with regard to any of the Properties,
which is not dismissed on or before ten (10) days prior to the Closing Date,
and (b) a "Major Taking" is a Taking involving so much of a Property that after
the Taking the potential occupancy of any Improvements situated thereon in
accordance with applicable Legal Requirements is reduced by more than fifteen
percent (15%) of such potential occupancy prior to the commencement of the
Taking or in case of Undeveloped Land is involved it renders more than fifteen
percent (15%) of the applicable Parcel of Undeveloped Land commercially
unusable. If there is a Major Taking, the same shall be an Adjustment Event
and the parties rights and obligations shall be governed by the provisions of
Section 20.3. In the event of a Taking or, if as a result of the process set
forth in Section 20.3 relating to a Major Taking, Purchaser is entitled to the
condemnation proceeds, Seller will: (i) execute such documents as Purchaser may
reasonably request to evidence the assignment of condemnation proceeds to
Purchaser, (ii) cooperate with Purchaser in any proceeding relating to the
Taking or Major Taking, and (iii) notify Purchaser of all actions relating to
the Taking promptly following its receipt of information regarding same, and
(iv) upon and following Closing, deliver to Purchaser any proceeds received by
Seller (whether before or after Closing). If the parties cannot agree upon
whether a Taking is a Major Taking, the disagreement shall be an Arbitration
Event and shall be resolved in accordance with the provisions of Section 20.4.
17.2 Risk of Loss.
17.2.1 Certain Definitions. As used in this Section 17.2,
"Restoration Costs" means the reasonable costs (including but not limited to
costs of funds pending receipt of insurance proceeds) of restoring the damaged
Improvements to their condition immediately prior to the damage in compliance
with all applicable building and zoning laws, ordinances and regulations.
17.2.2 Loss and Restoration Estimates. Until Closing, Seller
alone shall bear the risk of loss should there be damage to any of the
Improvements by fire or other casualty ("Casualty"). If prior to Closing any
of the Improvements shall be damaged by fire or other Casualty, (i) Seller
shall take all action necessary to preserve and protect the affected
Improvements from further loss or damage, and (ii) within ten (10) business
days after such loss deliver to Purchaser a detailed written description of the
damages incurred and a statement ("Seller's Estimate") of Seller's reasonable
and good faith estimate of the Restoration Costs (collectively "Casualty Loss
Information"). Within a reasonable period following its receipt of the Seller's
Estimate and Casualty Loss Information relating to the damage, Purchaser shall
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deliver to Seller its reasonable and good faith estimate of Restoration Costs
("Purchaser's Estimate"). If the amount of Purchaser's Estimate is not greater
than 110% of the amount of the Seller's opinion ("Seller's Estimate") regarding
the amount of the Restoration Costs, the Restoration Costs shall be the average
of the Seller's Estimate and the Purchaser's Estimate. If the amount of the
Restoration Costs cannot be determined in accordance with the foregoing
provisions, its resolution shall be determined in accordance with the
provisions of Section 20.3 and, if necessary, Section 20.4 (but such
disagreement shall not by itself constitute an Adjustment Event). Within a
reasonable period following the damage, Seller shall commence and thereafter
prior to Closing diligently prosecute the restoration of the damaged
Improvements in accordance with plans and specifications ("Restoration Plans")
and pursuant to construction and other agreements and governmental permits (
collectively "Restoration Documents"), all of which are approved by Purchaser,
which approval will not be unreasonably withheld or delayed. The Closing Date
shall not be delayed as a result of a casualty or other damage to any
Improvements. To the extent applicable, Sections 20.3 and 20.4 shall survive
Closing until all issues arising out a casualty or other damage to any
Improvements are resolved and the parties have performed their respective
obligations.
17.2.3 Restoration Not Completed by Closing Date. If any
damaged Improvements are not fully restored to Purchaser's reasonable
satisfaction prior to Closing, at Closing (i) Seller shall deliver to Purchaser
all insurance proceeds [other than those related to rental or business
interruption ("Loss Rents Proceeds")] received by Seller and not previously
applied to the payment of Restoration Costs (collectively "Purchaser's
Insurance Proceeds"), (ii) Seller shall deliver to Purchaser Loss Rents
Proceeds attributable to the period from and after Closing, and (iii) Seller
and Purchaser shall execute an agreement (in a form reasonably satisfactory to
the parties) by which (A) Seller agrees to deliver to Purchaser all Purchaser's
Insurance Proceeds promptly following Seller's receipt thereof, (B) Seller
assigns to Purchaser all of Seller's right to the Purchaser's Insurance
Proceeds, any Restoration Plans and any Restoration Documents and Purchaser
assumes the obligations under the Restoration Documents and indemnifies Seller
for any claims or liabilities arising thereunder, (C) Seller agrees to
cooperate with Purchaser in collecting Purchaser's Insurance Proceeds,
including but not limited to, executing such authorizations, proofs of loss and
other documents required by the insurer, endorsing drafts or checks, notifying
the insurer of the interest of Purchaser, providing information or documents
required by the insurer (and Purchaser will reimburse Seller for its
out-of-pocket expenses incurred therein) and (D) Seller agrees to otherwise
cooperate and assist Purchaser in connection with the restoration of the
damaged improvements following the Closing Date (it being understood that
Purchaser shall be solely responsible for the management of the restoration
following the Closing Date). Any damage to any of the Improvements shall be an
Adjustment Event and the rights and obligations of the parties shall be
governed by Section 20.3.
17.2.4 Maintenance of Insurance Prior to Closing. From and after
the Effective Date through and including the Closing Date, Seller shall keep
all of the insurance ("Property and Liability Insurance") described on
Exhibits 7.2.14 and 7.4.17 in full force and effect, including
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but not limited to, the payment of all premiums therefor on or before the same
are due. On or before the first business day after the Effective Date, Seller
shall deliver to Purchaser evidence reasonably satisfactory to Purchaser that
Purchaser is named as an "insured" pursuant to the Property and Liability
Insurance and the insurer or insurers issuing the Property and Liability
policies agree not to cancel or modify the coverages without delivering
Purchaser written notice at least thirty (30) days prior to the effective date
of the cancellation or modification.
ARTICLE XVIII
POSSESSION OF ASSETS FOLLOWING CLOSING
Possession of the Assets shall be delivered to Purchaser at Closing in
accordance with the provisions of this Agreement.
ARTICLE XIX
NOTICES
All notices, demands, or other communications of any type given by Seller
to Purchaser, or by Purchaser to Seller, whether required by this Agreement or
in any way related to the transaction contracted for herein, shall be void and
of no effect unless given in accordance with the provisions of this Article.
All notices shall be in writing and delivered to the Person to whom the notice
is directed, either in person, by facsimile transmission or by United States
Mail, as a registered or certified item, return receipt requested. Notices
delivered in person shall be deemed delivered upon receipt, notices delivered
by facsimile transmission shall be deemed delivered the same day as sent with
confirmation received by the senders's facsimile equipment and notices
delivered by mail shall be deemed given three (3) days after being deposited in
a post office or other depository under the care or custody of the United
States Postal Service, enclosed in a wrapper with proper postage affixed,
addressed as follows:
Seller: Xxxxxx-Xxxxxxx Properties, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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With Required Gardere & Xxxxx, L.L.P.
Copy (which 0000 Xxx Xxxxxx, Xxxxx 0000
does not consti- Xxxxxx, Xxxxx 00000
tute notice) to: Attn: Xxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Purchaser: Crescent Real Estate Equities Limited Partnership
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With Required Crescent Real Estate Equities Limited Partnership
Copy (which 000 Xxxx Xxxxxx, Xxxxx 0000
does not consti- Xxxx Xxxxx, Xxxxx 00000
tute notice) to: Attn: Xxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
ARTICLE XX
REMEDIES
20.1 Default by Seller. If Seller fails or refuses to consummate this
Agreement, or if Seller fails to perform any of Seller's other obligations
hereunder either prior to or at the Closing and Seller fails to cure same
within seven (7) days and such failure or refusal results from any reason other
than the termination of this Agreement by Purchaser pursuant to a right to
terminate expressly set forth in this Agreement or Purchaser's failure to
perform any of Purchaser's obligations under this Agreement, then Purchaser may
(i) enforce specific performance of Seller's duties and obligations under this
Agreement, or (ii) terminate this
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Agreement by giving written notice thereof to Seller prior to or at the
Closing, in which event Purchaser shall also be entitled, subject to Section
20.5, to a return of the Xxxxxxx Money (and interest thereon) and to seek its
actual damages against Seller for such default as well as such other relief as
may be available at law or in equity.
20.2 Default by Purchaser. If Purchaser fails or refuses to consummate
the purchase of the Assets pursuant to this Agreement, and such failure or
refusal results from any reason other than termination of this Agreement by
Purchaser pursuant to a right to terminate expressly set forth in this
Agreement, then Seller may as its sole remedy terminate this Agreement by
giving written notice thereof to Purchaser at the Closing, and the Title
Company shall deliver the Xxxxxxx Money to Seller as liquidated damages. The
Xxxxxxx Money is agreed upon by and between Seller and Purchaser as liquidated
damages, and not as a penalty, due to the difficulty and inconvenience of
ascertaining and measuring actual damages, and the uncertainty thereof, and no
other damages, rights, or remedies shall in any case be collectible,
enforceable, or available to Seller, and Seller shall accept the Xxxxxxx Money
as Seller's total damages and relief. Earnings on the Xxxxxxx Money shall be
returned to Purchaser.
20.3 Adjustment Events.
20.3.1 Definitions. "Adjustment Event" means those events
specified as an Adjustment Event in this Agreement. "Adjustment Floor" means
that the cost of curing all Adjustment Events exceeds $1,900,000.00. As used
in this Section 20.3, "cost of curing" means the reasonable cost to cure the
matter constituting the Adjustment Event or, if the Adjustment Event is either
not curable or the cure does not fully restore the value of the affected Asset
to its pre-Adjustment Event value, the reduction in the value of the affected
Asset. Without limitation of the foregoing, "costs of curing" include, to the
extent applicable (i) Restoration Costs and loss of rental income caused by a
casualty to the extent not paid from insurance proceeds and (ii) condemnation
damages to the extent not paid by the condemning authority.
20.3.2 Adjustment Floor Not Exceeded. If as of the Closing Date,
the aggregate cost of curing all then existing Adjustment Events does not
exceed the Adjustment Floor: (i) Purchaser shall not have any remedy and shall
proceed to close this transaction in accordance with the further terms of this
Agreement (except as provided in this Section 20.3.2), and (ii) Seller shall
not have any liability or obligation with regard to any Adjustment Event.
Provided however the preceding sentence shall not reduce the obligations of
Seller or impair the rights of Purchaser regarding a Taking or Casualty Loss
pursuant to Sections 17.1 or 17.2.
20.3.3 Adjustment Floor Exceeded. From and after the occurrence
of an Adjustment Event which results in the Adjustment Floor being exceeded,
Seller shall cure (or agree to an adjustment in the Purchase Price relating to
the affected Asset) all Adjustment Events, each of which shall be resolved in
accordance with the further provisions of this Section 20.3.3. Purchaser shall
deliver written notice of the Adjustment Event which results in the
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Adjustment Floor being exceeded ("First Adjustment Notice") and a proposal
("Purchaser's Adjustment Proposal") for resolving same. Within five (5)
business days after delivery of the First Adjustment Notice, Seller shall
either deliver written notice ("Second Adjustment Notice") to Purchaser
agreeing to Purchaser's Adjustment Proposal or Seller shall deliver an
alternative proposal in writing ("Seller's Adjustment Proposal"). If Seller
fails to deliver timely a Second Adjustment Notice or agrees to Purchaser's
Adjustment Proposal in its Second Adjustment Notice, Purchaser's Adjustment
Proposal shall be binding on the parties. If Seller delivers a Seller's
Adjustment Proposal, the parties shall promptly engage in good faith
negotiations to resolve the differences between the proposals. To the extent
either of the parties determines the same might facilitate resolution, each
will cause their senior officers to participate in such negotiations. If the
parties have not resolved the differences within ten (10) days after the
delivery of the Seller's Adjustment Proposal, the parties agree to promptly
engage in non-binding mediation with a mediator mutually acceptable to both
parties (both parties agree to not unreasonably withhold or delay their consent
to selection of a mediator) in order to resolve the differences. If after ten
(10) hours of mediation the parties are unable to resolve the differences,
either party may deliver an Arbitration Notice in accordance with Section 20.4
and the dispute shall be an Arbitration Event to be resolved in accordance with
the provisions of Section 20.4. Notwithstanding any provision of this Section
20.3.3 to the contrary, if the amount Purchaser asserts is necessary to cure an
Adjustment Event exceeds the amount of the Purchase Price allocated to the
affected Asset (in accordance with the Asset Allocation), Seller may (but is
not obligated to) cure the Adjustment Event by delivering written notice
("Withdrawal Notice") to Purchaser notifying Purchaser that Seller is
withdrawing the affected Asset from this Agreement. If Seller withdraws an
Asset from this Agreement in accordance with this Section 20.3.3, this
Agreement shall be deemed to be amended to exclude the affected Asset and all
representations, warranties and covenants (other than set forth in Section
21.10) relating to the withdrawn Asset, and to reduce the Purchase Price by the
amount of the Purchase Price allocated to said Asset on Exhibit 2.3 or
otherwise determined by the parties in accordance with Section 20.3 or 20.4.
20.3.4 Termination. In the event the cost of curing all
Adjustment Events exceeds $38,000,000.00, Purchaser may: (i) close in
accordance with the provisions of this Agreement or (ii) subject to the last
sentence of Section 20.3.5, terminate the entire Agreement. If Purchaser
terminates this Agreement pursuant to this Section 20.3.4, all Xxxxxxx Money
(and interest earned thereon) shall be immediately returned to Purchaser by the
Title Company, Purchaser shall return to Seller all of the Due Diligence Items
requested by Seller, and thereafter neither Seller nor Purchaser shall have any
continuing obligations one unto the other except pursuant to Section 21.10
hereof.
20.3.5 Effect of Closing. Except as otherwise provided in this
Section 20.3.5, unresolved Adjustment Events shall not delay Closing nor shall
Closing alter the rights or obligations of the parties regarding the unresolved
Adjustment Events. The parties shall continue the resolution process following
Closing (including but not limited to arbitration pursuant to Section 20.4) and
the rights and obligations of the parties with respect to the
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unresolved Adjustment Events shall be the same as if the Closing had not
occurred. Provided however, if the aggregate amount in dispute regarding any
unresolved Adjustment Events exceeds $38,000,000.00 either party may extend the
Closing Date until not later than the first business day following the
expiration of ten (10) calendar days after the originally scheduled Closing
Date, but in no event later than May 12, 1997.
20.3.6 Sole Remedies. Purchaser's only remedies arising out of
the occurrence of an Adjustment Event shall be (i) termination pursuant to
Section 20.3.4 and (ii) an adjustment of the Purchase Price to reflect the
reasonable cost to cure or Purchaser's actual (not incidental and
consequential) damages arising out of the Adjustment Event (regardless of
whether determined before or after Closing), the amount of which shall be
agreed to by the parties in accordance with the provisions of Section 20.3 or
awarded by arbitration in accordance with the provisions of Section 20.4. NO
SELLER REPRESENTATION SHALL SURVIVE CLOSING.
20.4 Arbitration. As used in this Agreement an "Arbitration Event"
means any dispute which pursuant to the further provisions of this Agreement is
designated as an Arbitration Event. In those instances in which there is a
dispute which is an Arbitration Event (other than those governed by Section
20.3.3), Seller and Purchaser shall attempt to resolve the dispute for a
period of five (5) business days following either party's delivery of a notice
("Preliminary Notice") (said period called "Settlement Period") of its intent
to submit the dispute to arbitration if not resolved prior to the expiration of
the Settlement Period. If the dispute is not resolved at the end of the
Settlement Period or, in the case of a dispute under Section 20.3.3, after the
prescribed mediation, either party may thereafter deliver a written notice
("Arbitration Notice") to the other party and the American Arbitration
Association ("AAA") (Dallas Office) notifying both of its intent to resolve the
dispute in accordance with the further provisions of this Section and the
Commercial Arbitration Rules of the AAA then in effect ("AAA Rules"). However,
the provisions of this Section shall control over any contrary provisions in
the AAA Rules. Within five (5) days after the delivery of an Arbitration
Notice, each party shall deliver a written statement of a resolution of the
dispute acceptable to it to the other party (each an "Original Resolution")
(and, if more than one Asset is the subject of an Arbitration Notice, each
Asset shall be the subject of a separate Resolution). Seller's statement is
hereafter called "Seller's Resolution" and Purchaser's statement is hereafter
called "Purchaser's Resolution." If either party fails to timely deliver its
Original Resolution, the Original Resolution of the other party shall be
binding on the parties and no further action shall be taken to resolve the
dispute. The resolution of the dispute shall be either the Seller's Resolution
or the Purchaser's Resolution based upon the determination of a panel of three
arbitrators ("Arbitrators") selected in accordance with the further provisions
of this Section. All of the Arbitrators shall be selected from the panel of
arbitrators submitted by AAA. Within ten (10) days after either party delivers
an Arbitration Notice to the other party and the AAA requesting arbitration in
accordance with the provisions of this subsection, AAA shall deliver a list
("Panel List") of qualified arbitrators to Seller and Purchaser. Within ten
(10) days after the delivery of the Panel List, each party
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shall send written notice ("Party Selection Notice") to the other party and the
AAA indicating its choice of one arbitrator and indicating up to two persons on
the Panel List to which it objects ("Objectionable Persons"). Within ten (10)
days after its receipt of both Party Selection Notices, the AAA shall select a
third arbitrator from the Panel List by delivering written notice ("AAA
Selection Notice") of its selection to both parties. The third arbitrator
shall not be an Objectionable Person. The Arbitrators shall be one person
selected by each party and one person selected by the AAA. Within five (5)
days after the date of the delivery of the AAA Selection Notice, Seller and
Purchaser shall submit their respective Resolution in writing (which may not be
different from their respective original Resolutions), together with the
supporting data and facts used to determine their Resolution, to the
Arbitrators. Within twenty (20) days after the Resolutions are submitted, the
Arbitrators shall hold a hearing during which Seller and Purchaser may present
evidence in support of their respective resolutions. Within fifteen (15) days
after the date on which the hearing is completed, the Arbitrators will
determine a resolution ("Final Resolution") based upon the parties' submissions
and evidence presented. The Final Resolution shall be either the Seller's
Resolution or the Purchaser's Resolution. The Arbitrator's determination shall
be binding on Seller and Purchaser and may be enforced by a court of competent
jurisdiction. The cost of such arbitration shall be paid by the party whose
Resolution was not selected.
20.5 Incidental and Consequential Damages. NOTWITHSTANDING ANY LEGAL
REQUIREMENT OR PROVISION HEREIN TO THE CONTRARY, NO PARTY SHALL BE ENTITLED TO
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING UNDER OR AS A RESULT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREUNDER.
20.6 Survival of Sections 17.1, 17.2, 20.3 and 20.4 If matters and
issues described in or being resolved pursuant to Sections 17.1, 17.2, 20.3 or
20.4 are not resolved (said matters and issues hereafter called "Open Issues")
prior to the Closing Date the provisions of said Sections shall survive
Closing and shall continue to govern the rights and obligations of the parties
until the Open Issues are fully resolved and all sums owing are paid and the
occurrence of Closing shall not accelerate or otherwise affect the rights or
obligations of the parties. To the extent there are Open Issues, any
adjustments to the Purchase Price determined subsequent to the Closing shall
be paid by Seller when determined in accordance with said Sections.
20.7 Termination of DMI Agreement. In the event this Agreement is
terminated either (a) by Purchaser pursuant to a right to terminate expressly
set forth in this Agreement or (b) by Seller pursuant to a right to terminate
expressly set forth in this Agreement, then (i) the rights and obligations of
Purchaser and Seller pursuant to the DMI Agreement shall terminate (except as
provided in Section 17.9 thereof), (ii) Purchaser shall be entitled to and
shall immediately receive the Xxxxxxx Money held by the Title Company pursuant
to the DMI Agreement (together with any interest earned thereon) unless Seller
is entitled, upon termination of this Agreement, to retain the Xxxxxxx Money
held by Title Company hereunder, in which event Seller shall receive the
Xxxxxxx
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Money in the manner provided in Section 16.2 of the DMI Agreement and, (iii)
Purchaser shall return to Seller all of the Due Diligence Items requested by
Seller.
ARTICLE XXI
MISCELLANEOUS
21.1 Assignment. Provided Purchaser agrees to remain primarily liable
for performance of Purchaser's obligation hereunder, Purchaser may: (i) assign
this Agreement to any Affiliate of Purchaser, and/or (ii) deliver a written
notice (each a "Closing Direction") to Seller directing Seller to convey,
transfer or assign (as appropriate) one or more of the Assets to any Partial
Designee described in the Closing Direction. Seller agrees to comply with any
Closing Direction. "Partial Designee" means (i) an Affiliate of Purchaser,
(ii) any corporation, more than 50% of the total number of shares of stock of
which are owned by Purchaser and (iii) the Spinoff Affiliate. "Spinoff
Affiliate" means that certain corporation (and its direct or indirect
partnership or corporate subsidiaries) described, in that certain press release
issued by Purchaser on January 30, 1997, as a newly formed corporation that
will be spun off to shareholders of Crescent Real Estate Equities Trust and
whose stock will be listed separately on a national exchange. In the event
that Purchaser assigns this Agreement to an Affiliate of Purchaser or Purchaser
delivers a Closing Direction to Seller with respect to one or more of the
Assets, all references in this Agreement to Purchaser shall be considered to
also constitute references to the Affiliate or Partial Designee to the extent
of the Assets affected by such assignment or Closing Direction.
21.2 Interpretation and Applicable Law. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Texas.
As used herein, unless the context otherwise requires: (i) references to
"Article" or "Section" are to an article or section hereof; (ii) all "Exhibits"
referred to herein are to Exhibits included in three (3) volumes of Exhibits
labeled Exhibits to the Acquisition Agreement and are incorporated herein by
reference and made a part hereof; and (iii) except where specifically qualified
by limiting language relating thereto, "include", "includes" and "including"
are deemed to be followed by "without limitation" whether or not they are in
fact followed by such words or words of like import. Where required for proper
interpretation, words in the singular shall include the plural; the masculine
gender shall include the neuter and the feminine, and vice versa. The terms
"successors and assigns" shall include the heirs, administrators, executors,
successors and permitted assigns, as applicable, of any party hereto.
21.3 Amendment. This Agreement may not be modified or amended, except
by an agreement in writing signed by Seller and Purchaser. The parties may
waive any of the conditions contained herein or any of the obligations of the
other party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and obligations.
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21.4 Attorneys' Fees. In the event it becomes necessary for either
party to file a suit to enforce this Agreement or any provisions contained
herein, the prevailing party shall be entitled to recover, in addition to all
other remedies or damages, reasonable attorneys' fees and costs of court
incurred in such suit.
21.5 Descriptive Headings. The descriptive headings of the several
sections or paragraphs contained in this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
21.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith. No representation, warranty, covenant, agreement or
condition not expressed in this Agreement shall be binding upon the parties
hereto or shall affect or be effective to interpret, change or restrict the
provisions of this Agreement.
21.7 Counterparts. Numerous copies of this Agreement may be executed
by the parties hereto. Each such executed copy shall have the full force and
effect of an original executed instrument.
21.8 Time. Time is of the essence of this Agreement. The date of
execution of this Agreement by Seller shall be the date of execution of this
Agreement. If the final date of any period falls upon a Saturday, Sunday or
legal holiday under the laws of the State of Texas, then in such event the
expiration date of such period shall be extended to the next day which is not a
Saturday, Sunday or legal holiday under the laws of the State of Texas.
21.9 Commissions and Finders Fees. Except for Bear, Xxxxxxx & Co.,
Inc., Seller represents and warrants to Purchaser that Seller has not contacted
or entered into any agreement with any broker, investment banker, agent, finder
or any other party in connection with this transaction, and that Seller has not
taken any action which would result in any broker's, investment bank's,
finder's or other fees or commissions being due and payable to any other party
with respect to the transaction contemplated hereby or the transaction
contemplated by the DMI Agreement. Seller shall be solely responsible for all
amounts owed to Bear, Xxxxxxx & Co., Inc. resulting from or in connection with
this Agreement or DMI Agreement. Purchaser hereby represents and warrants to
Seller that Purchaser has not contracted or entered into any agreement with any
broker, investment banker, agent, finder or any other party in connection with
this transaction, and that Purchaser has not taken any action which would
result in any broker's, investment bank's, finder's or other fees or
commissions being due or payable to any other party with respect to the
transaction contemplated hereby or the transaction contemplated by the DMI
Agreement. Each party hereby indemnifies and agrees to hold the other party
harmless from any loss, liability, damage, cost or expense (including
reasonable attorneys' fees) resulting to the other party by reason of a breach
of the representation and warranty made by
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such party herein. Notwithstanding anything to the contrary contained herein,
the indemnities set forth in this Section 21.9 shall survive Closing.
21.10 Confidentiality. Purchaser agrees that, from the Effective Date
through Closing or, if this Agreement is terminated, through the date which is
six (6) months after the date of termination or, as to any Asset not purchased
by Purchaser at Closing, through the date which is six (6) months after the
Closing Date (the "Confidentiality Period"), all Asset Information shall be
kept confidential and shall not be used except as provided in this Section
21.10. Without the prior written consent of Seller, during the Confidentiality
Period the Asset Information shall not be disclosed by Purchaser or Purchaser's
Representatives, in any manner whatsoever, in whole or in part, except (i) to
Purchaser's Representatives who need to know the Asset Information for the
purpose of evaluating the Assets and who are informed by the Purchaser of the
confidential nature of the Asset Information; (ii) as may be necessary for
Purchaser or Purchaser's Representatives to comply with applicable laws,
including, without limitation, governmental regulatory, disclosure, tax and
reporting requirements; to comply with other requirements and requests of
regulatory and supervisory authorities and self-regulatory organizations having
jurisdiction over Purchaser or Purchaser's Representatives; to comply with
regulatory or judicial processes; or to satisfy reporting procedures and
inquiries of credit rating agencies in accordance with customary practices of
Purchaser or its Affiliates; provided that Seller shall give prompt notice of
any such requirement to Seller; and (iii) as otherwise permitted by this
Section 21.10. If this Agreement is terminated, Purchaser and Purchaser's
Affiliates shall not during the remainder of the Confidentiality Period use for
any purpose or for the benefit of any Person any of the Asset Information.
Except as provided otherwise in this Section 21.10, Purchaser and Seller,
for the benefit of each other, hereby agree that prior to Closing neither of
them will release or cause or permit to be released to the public any press
notices, publicity (oral or written) or advertising promotion relating to, or
otherwise publicly announce or disclose or cause or permit to be publicly
announced or disclosed, in any manner whatsoever, the terms, conditions or
substance of this Agreement or the transactions contemplated herein, without
first obtaining the consent of the other party hereto (which shall not be
unreasonably withheld or delayed). Seller, being aware of Purchaser's
affiliation with a publicly-held corporation, the securities of which are
traded on a national securities exchange, acknowledges that Purchaser and its
Affiliates may be compelled by considerations of legal obligation, fiduciary
and public responsibility, commercial pragmatism and established corporate
policy, to issue a public press release announcing that it has entered into
this Agreement and stating the material terms hereof; Purchaser will not issue
or disclose any press release without first obtaining the consent of Seller as
to the content of such press release (which acceptance shall not be
unreasonably withheld or delayed); Seller consents to all such additional
statements and disclosures Purchaser may reasonably make in responding to
inquiries arising as a result of any such press release. Purchaser agrees to
send a copy of any final press release directly to Seller not later than the
time when Purchaser issues such press release to the public.
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Purchaser acknowledges that Seller, as part of an internal restructuring,
will be required to disclose the existence and terms of this Agreement in an
Information Statement to be sent to the shareholders of CCP, and Purchaser
consents to such disclosure.
Purchaser shall indemnify and hold Seller and the Affiliates of Seller
harmless, and Seller shall indemnify and hold Purchaser and the Affiliates of
Purchaser harmless, from and against any and all actual direct claims, demands,
causes of action, losses, damages, liabilities, costs and expenses (including,
without limitation, attorneys' fees and disbursements) suffered or incurred by
the other party and proximately caused by a breach by Purchaser or Purchaser's
Representatives or Seller, as the case may be, of the provisions of this
Section 21.10; BUT THIS SECTION 21.10 WILL NOT ENTITLE EITHER PURCHASER,
SELLER, PURCHASER'S AFFILIATES OR SELLER'S AFFILIATES TO RECOVER INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
As used in this Agreement, the term "Asset Information" shall mean (i) all
information and documents in any way relating to the Assets, the operation
thereof or the sale thereof (including, without limitation, leases, contracts,
licenses and any environmental reports) furnished to, or otherwise made
available for review by, Purchaser or its directors, officers, employees,
Affiliates, partners, brokers, agents or other representatives, including,
without limitation, attorneys, accountants, contractors, consultants, engineers
and financial advisors (collectively, "Purchaser's Representatives"), under or
in connection with this Agreement by Seller or any Affiliate of Seller, or
their agents or representatives, including, without limitation, their
contractors, engineers, attorneys, accountants, consultants, brokers or
advisors, and (ii) all analyses, compilations, data, studies, reports or other
information or documents prepared or obtained by Purchaser or Purchaser's
Representatives to the extent such information or documents contain or are
based on the information or documents described in the preceding clause (i), or
otherwise reflecting their review or investigation of the Assets undertaken
with Seller's required approval; but notwithstanding the foregoing, the term
"Asset Information" shall not be deemed to include any information or document
which (1) is or becomes generally available to the public other than as a
result of a disclosure by Purchaser or Purchaser's Representatives in violation
of this Agreement, (2) is in the possession of Purchaser or Purchaser's
Representatives prior to its disclosure to Purchaser by Seller or any
Affiliates of Seller or their agents or representatives, (3) becomes available
to Purchaser from a source other than Seller or any Affiliates of Seller or
their agents or representatives without a violation of any confidentiality
obligation, or (4) is developed by Purchaser or Purchaser's Representatives
without reliance upon and independently of otherwise confidential Asset
Information.
In addition to any other remedies available to Seller and Purchaser, Seller
and Purchaser shall each have the right to seek equitable relief, including,
without limitation, injunctive relief or specific performance, against the
other party or their representatives in order to enforce the provisions of this
Section 21.10.
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The provisions of this Section 21.10 shall survive the termination of this
Agreement prior to Closing for six months following the termination date.
It is understood that the foregoing shall not preclude either party from
discussing the substance or any relevant details of the transactions
contemplated in this Agreement on a confidential basis with any of its
attorneys, accountants, professional consultants, financial advisors, rating
agencies, or potential lenders, as the case may be, or prevent either party
hereto from complying with applicable laws, including, without limitation,
governmental regulatory, disclosure, tax and reporting requirements.
21.11 Rule of Construction. The parties hereto acknowledge that they
each enter into this Agreement after having had an opportunity for thorough
review by, and on advice of, their respective legal counsel. The parties agree
that the judicial rule of construction requiring or allowing an instrument to
be construed to the detriment of or against the interest of the maker thereof
shall not apply to this Agreement.
21.12 Number not used.
21.13 Employees. At Closing, Purchaser shall employ the persons (each
an "Employee") listed on Exhibit 21.13 who elect to be employed by Purchaser
for a term ("Employment Term") ending no sooner than the earlier of: (i) the
date Purchaser terminates an Employee for cause, (ii) the date Employee
voluntarily terminates employment or (iii) six (6) months after the Closing
Date. As an employee of Purchaser, each Employee shall be paid the same level
of compensation paid to each Employee by Seller immediately prior to Closing,
and each Employee's health insurance benefits shall not be interrupted or
reduced by the change of employer resulting from this Agreement. Purchaser
shall not be responsible or liable for any Employee's pay, privileges or
benefits accrued as of the Closing Date while an employee of Seller. At
Closing, Purchaser shall cause Xxxxx-Day to employ its employees on the same
terms prior to Closing for the Employment Term. This Section shall survive
Closing.
21.14 Notice of Intent to Sell Xxxxx-Day. In the event Purchaser makes
a determination that it intends to sell or otherwise dispose of the Xxxxx-Day
Stock, or substantially all of the assets of Xxxxx-Day, within three (3) months
after the Closing Date, Purchaser shall: (i) provide written notice of such
intent to Seller, and (ii) not enter into a definitive agreement for such a
sale or disposition for a period of ten (10) days after the date of the notice
provided to Seller pursuant to this Section 21.14.
21.15 Access to Records after Closing. Following the Closing, Purchaser
shall give to Seller an unrestricted access during normal business hours with
reasonable prior notice to (and the right to make copies at the expense of
Seller) the books, files, records and Tax Returns and supporting schedules and
work papers relating to the Assets and business, operations, income, and
expenses of Purchaser relating thereto which exist on, accrue or arise after or
occur after
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the Closing. Any access pursuant to this Section 21.15 shall be conducted in
such manner as not to interfere unreasonably with the operations of the
business of Purchaser following the Closing.
21.16 SPECIAL NON-DISCLOSURE AGREEMENT. IN ADDITION TO THE AGREEMENTS
SET FORTH IN SECTION 21.10, PURCHASER UNCONDITIONALLY AGREES THAT NEITHER
PURCHASER NOR PURCHASER'S REPRESENTATIVES OR AFFILIATES WILL DISCLOSE THE TERMS
OR EXISTENCE OF THIS AGREEMENT OR THE DMI AGREEMENT PRIOR TO THE EARLIER OF:
(I) THE DATE WHICH IS SEVEN (7) DAYS AFTER THE EFFECTIVE DATE OR (II) THE DATE
("TRIGGER DATE") WHICH IS THE LATER OF (A) THE DAY AFTER THE DATE ON WHICH
XXXXXX X. XXXXXX DISCLOSES THE EXISTENCE OF THIS AGREEMENT TO XXXX XXXXX, XX.
AND (B) THE DATE ON WHICH SELLER DISCLOSES THE EXISTENCE OF THE DMI AGREEMENT
TO SELLER'S EMPLOYEES AND OTHER PERSONS SELLER WISHES TO TELL BEFORE THE
EXISTENCE OF THIS AGREEMENT IS KNOWN GENERALLY. SELLER AGREES TO NOTIFY
PURCHASER OF THE TRIGGER DATE WITHIN A REASONABLE PERIOD FOLLOWING ITS
OCCURRENCE.
21.17 Retention by CCP. Until such time as all obligations of Seller to
Purchaser hereunder shall have expired, CCP or any Seller, shall retain or
place into its liquidating trust, as a reserve for contingent liabilities under
this Agreement and the DMI Agreement, an aggregate amount not to exceed
$5,000,000.00 plus one hundred twenty-five percent (125%) of the total of: (i)
all unpaid sums to which Purchaser is entitled pursuant to Section 20.3 or 20.4
of this Agreement or Sections 16.3 or 16.4 of the DMI Agreement, plus (ii) the
amount asserted by Purchaser in connection with any unresolved Adjustment Event
amount and any amount subject to arbitration in accordance with the provisions
of Section 20.4.
ARTICLE XXII
DEFINITIONS
The following terms used in this Agreement have the respective meanings
specified or referred to in this Article XXII. The "Defined Term Index"
attached hereto sets forth the Sections in this Agreement in which other terms
are defined.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Person. For purposes of
this definition, "control" (including "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
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"Encumbrance" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, burden or charge of any kind or nature whatsoever or any item
similar or related to the foregoing.
"Environmental Laws" means all Legal Requirements relating to injury to, or
the protection of, real or personal property or human health or the
environment, including, without limitation, all Legal Requirements pertaining
to reporting, licensing, permitting, investigation, remediation and renewal of
emissions, discharges, releases or threatened releases of Hazardous Substances,
chemical substances, pesticides, petroleum or petroleum products, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, and including electro-magnetic fields or
discharges into the Environment, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature,
which are now or may hereafter be applicable to Seller or any of the Assets.
As used herein, the term "Environment" means the soil, surface waters, ground
waters, land, stream, sediments, surface or subsurface strata and ambient air.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law, and all rules,
regulations, rulings and interpretations adopted by the Internal Revenue
Service or the Department of Labor thereunder.
"GAAP" means generally accepted accounting principles, in effect from time
to time in the United States (i) which are consistent with the principles
promulgated and adopted by the Financial Accounting Standards Board and it
predecessors as generally accepted accounting principles, (ii) which are
applied for all periods in a manner consistent with the manner in which such
principles and practices were applied to the most recent financial statements
furnished by Seller to Purchaser pursuant to this Agreement.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental private body exercising,
or purporting to exercise, any executive, legislative, judicial,
administrative, police, regulatory or taxing authority or power of any nature.
"Governmental Authorization" means any permit, license, franchise,
approval, certificate, consent, ratification, permission, confirmation,
endorsement, waiver, certification, registration, qualification or other
authorization issued, granted, given or otherwise made available by or under
the authority of any Governmental Authority or pursuant to any Legal
Requirement.
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"Hazardous Substances" means any substance: (a) the presence of which
requires or may hereafter require notification, investigation or remediation
under any Environmental Law; (b) which is defined as a "Hazardous Waste",
"Hazardous Material" or "Hazardous Substance" or "Pollutant" or "Contaminant"
under any applicable Environmental Law or amendments thereto, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the Resource
Conservation and Recovery Act ("RCRA") (42 U.S.C. Section 6901 et seq.), the
Clean Air Act, (42 U.S.C. Section 7401 et seq.) and any Environmental Law
applicable to any jurisdiction in which any of the Assets are located; (c)
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is regulated by any
Governmental Authority; (d) without limitation, which contains gasoline, diesel
fuel or other petroleum hydrocarbons or volatile organic compounds; (e) without
limitation, which contains polychlorinated byphenyls ("PCBs") or asbestos or
urea formaldehyde foam insulation; or (f) without limitation, which contains or
emits radioactive particles, waves or materials, including radon gas and
electro-magnetic fields.
"IRS" means the United States Internal Revenue Service.
"Legal Requirement" means any federal, state, municipal, local or foreign
statute, law, ordinance, decree, requirement, judgment, order, treaty,
proclamation, convention, rule or regulation (or interpretation of any of the
foregoing) of any Governmental Authority or any principle, ruling or finding of
common law, including any Environmental Laws.
As used in this Agreement, "material" means a fact (e.g., an adverse
change) which it is reasonably likely that a prudent and knowledgeable
purchaser would attach importance in making a decision regarding the specific
item, in the context in which it is used. For example, in some contexts the
materiality issue relates to the entire transaction described in this Agreement
(e.g., Section 8.10.2) and in other cases it relates to a specific Asset or
group of Assets (e.g., Section 7.2.19, Section 7.4.3).
"Person" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, joint venture, joint
stock association, estate, trust, cooperative, foundation, union, syndicate,
league, consortium, coalition, committee, society, firm, company or other
enterprise, association, organization or entity of any nature, other than a
Governmental Authority.
"Proceeding" means any action, suit, litigation, arbitration, lawsuit,
claim, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination, investigation, challenge,
controversy or dispute commenced, brought, conducted or heard by or before, or
otherwise involving any Governmental Authority or arbitrator.
-88-
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EXECUTED on this the _________ day of __________, 1997.
SELLER:
XXXXXX-XXXXXXX PROPERTIES, INC.,
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
HI CAPITAL CORP.,
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
METROPORT REALTY CORPORATION
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
HI PRODUCTION COMPANY, INC.
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
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104
EXECUTED on this the _____ day of ___________, 1997.
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
RECEIPT OF XXXXXXX MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS Agreement IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
REPUBLIC TITLE OF TEXAS, INC.
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
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105
AUTHORIZATION OF CONSENTING SHAREHOLDER
The undersigned shareholder of CCP hereby (i) approves and authorizes CCP
to execute this Agreement, and (ii) if the condition set forth in Section 10.15
is satisfied, agrees to exercise the undersigned shareholder's rights to vote
in favor of consummation of the Agreement and all transactions contemplated
hereunder.
XXXXXXXX FAMILY PARTNERSHIP, LTD.
By:
-----------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
General Partner/Managing Partner
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106
AUTHORIZATION OF CONSENTING SHAREHOLDER
The undersigned shareholder of CCP hereby (i) approves and authorizes CCP
to execute this Agreement, and (ii) if the condition set forth in Section 10.15
is satisfied, agrees to exercise the undersigned shareholder's rights to vote
in favor of consummation of the Agreement and all transactions contemplated
hereunder.
-----------------------------------
Xxxxxx X. Xxxxxx
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AUTHORIZATION OF CONSENTING SHAREHOLDER
The undersigned shareholder of CCP hereby (i) approves and authorizes CCP
to execute this Agreement, and (ii) if the condition set forth in Section 10.15
is satisfied, agrees to exercise the undersigned shareholder's rights to vote
in favor of consummation of the Agreement and all transactions contemplated
hereunder.
XXXXXX X. AND XXXXX X. XXXXXX
FAMILY PARTNERSHIP, LTD.
By:
-----------------------------------
Xxxxxx X. Xxxxxx
General Partner
By:
-----------------------------------
Xxxxx X. Xxxxxx
General Partner
By: Xxxxxx X. and Xxxxx X. Xxxxxx
Family Corporation
By:
-------------------------------
Xxxxxx X. Xxxxxx
President
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108
AUTHORIZATION OF CONSENTING SHAREHOLDER
The undersigned shareholder of CCP hereby (i) approves and authorizes CCP
to execute this Agreement, and (ii) if the condition set forth in Section 10.15
is satisfied, agrees to exercise the undersigned shareholder's rights to vote
in favor of consummation of the Agreement and all transactions contemplated
hereunder.
-----------------------------------
Xxxxx X. Xxxxxx
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109
AUTHORIZATION OF CONSENTING SHAREHOLDER
The undersigned shareholder of CCP hereby (i) approves and authorizes CCP
to execute this Agreement, and (ii) if the condition set forth in Section 10.15
is satisfied, agrees to exercise the undersigned shareholder's rights to vote
in favor of consummation of the Agreement and all transactions contemplated
hereunder.
-----------------------------------
Xxxxxx X. Xxxxxx
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110
ACQUISITION AGREEMENT
DEFINED TERM INDEX
The following terms are defined in the respective Section of the Agreement
indicated below.
DEFINED TERM DEFINITION LOCATION
------------ -------------------
AAA 20.4
AAA Rules 20.4
AAA Selection Notice 20.4
actual knowledge 7.1
Addison Air Terminal Exhibit 1.2.1(i)
Addison Hangars Exhibit 1.2.1(i)
Addison Notice 8.2.16
Additional Operating Expense Rent 14.2.5
Adjustment Event 20.3.1
Adjustment Floor 20.3.1
Adjustment Notice 14.2.5
Affected Tenants 14.2.5
Affiliate Article XXII
Agreement Introductory Paragraph
Airport Estoppel 9.2.2
Airport Leasehold 1.2.1
Airport Lessor 9.2.2
Allied Deed of Trust 1.8
Allied Note Exhibit 1.8
Allied Tract 1.8
Apartments 1.11
Appropriate Expense Information 14.2.5
Approved Sale Contract 8.2.17
Arbitration Event 20.4
Arbitration Notice 20.4
Arbitrators 20.4
Arena Bonds 1.7
Asset Allocation 2.3
Assets 1.1
Asset Information 21.10
Assumption Conditions 14.2.7
Banc One Stock 1.6
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Bloom 9.2.1
Bloom Lease 9.2.1
Breckenridge Apartments Exhibit 1.2
Casualty 17.2.2
Casualty Loss Information 17.2.2
CCP Introductory paragraph
Cessna Citation Lease 1.9
Cessna V Ultra PA 1.9
Citation Agreements Exhibit 1.9
Citation Consents 10.9.2
Citation Interest 1.9
Closing Article XI
Closing Date Article XI
Closing Direction 21.1
Closing Rent Roll 12.2.3
Closing Title Commitments 10.2.1
Code Article XXII
Combined Oil and Gas Interests 10.14
CompUSA 8.2.16
CompUSA Agreement 8.2.16
CompUSA Lease 8.2.16
Confidentiality Period 21.10
Consent Conditions 10.11
Contractual Liabilities 16.7
costs of curing 20.3.1
DBL 2.4
DBL Adjustment 2.4
DBL GP 2.4
DBL Partnership Agreement 2.4
Deeds 12.2
Defensible Title 5.3
Disposition Notice 2.2.2
DMI Introductory paragraph
DMI Agreement 2.4
DMI Assignment 2.4
DMI Agreement Expenses 8.3.1.3
Due Diligence Items 4.1
Xxxxxxx Money 3.1
Effective Date Introductory paragraph
Eligible Refund 14.2.1
Employee 21.13
Employment Laws 7.4.16
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112
Employment Term 21.13
Encumbrance Article XXII
Environmental Laws Article XXII
ERISA Article XXII
Exceptions 5.1
Exempt Tract 8.2.17
Existing Lease 9.2.1
Existing Tenant 9.2.1
Extended Closing Date 9.2.2
Fairness Opinion 10.15
Fairness Opinion Termination Deadline 10.15
Fairness Opinion Notice 10.15
FEMA 8.2.18
Final Resolution 20.4
First Adjustment Notice 20.3.3
First Rent Roll 7.2.2
GAAP Article XXII
Governmental Authority Article XXII
Governmental Authorization Article XXII
Ground Leases 1.2.5
Ground Lessor Estoppels 9.2.2
Guaranty Agreements 1.8
Hangars 1.2.2
Hazardous Substances Article XXII
HCC Introductory paragraph
Xxxxx Muse Equity Fund II 1.3.3
Xxxxx Muse Partnership Agreements 4.3.3.1
Xxxxx Muse Partnership Interests 1.3.3
HM2/GP 1.3.3
HPC Introductory paragraph
Improvements 1.2.2
Indemnified Party 16.3
Indemnifying Party 16.3
Inspection Period 6.1
Insurance Coverage 16.7
Intangibles 1.2.7
Intellectual Property Assets 7.4.19
IRS Article XXII
knowledge 7.1
Kosmeo Note Exhibit 1.8
Land 1.2.1
Leases 1.2.4
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113
Lease Deadline 14.2.7
Lease Obligation Credit 14.2.7
Legal Requirement Article XXII
liabilities 7.4.5
Loss Rents Proceeds 17.2.3
Major Taking 17.1
Marketable Securities 1.6
Masco Stock 1.6
material Article XXII
Xxxxx-Day 1.4
Xxxxx-Day Audited Financial Statements 4.4.2
Xxxxx-Day Balance Sheet 7.4.5
Xxxxx-Day Benefits Plans 4.4.7
Xxxxx-Day Contracts 7.4.9
Xxxxx-Day Equipment Debt 8.1.10
Xxxxx-Day Financial Statements 4.4.2
Xxxxx-Day Governing Document 4.4.1
Xxxxx-Day Insurance Policies 4.4.8
Xxxxx-Day Interim Financial Statements 4.4.2
Xxxxx-Day 1997 Financial Statements 4.4.2
Xxxxx-Day Stock 1.4
Xxxxx-Day Tracts 1.4
MRC Introductory paragraph
Municipal Bonds 1.7
Net Sales Proceeds 2.2.2
Objection Notice 5.1
Objectionable Exception 5.1
Objectionable Persons 20.4
Offer Letter 8.2.16
Office Buildings 1.11
Office Properties 1.11
Ohio Drive 1 Reclamation Project 8.2.18
O&G Consents 9.5
Oil and Gas Interests 1.5
Oil and Gas Title Defects 5.3
Oil and Gas Title Review Period 5.3
Open Issues 20.6
Operating Agreements 1.2.6
Operating Expense Adjustment Deadline 14.2.5
Operating Expense Objection 14.2.5
Operating Expense Rent 14.2.5
Original Resolution 20.4
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Other Partners 2.4
Panel List 20.4
Parcel 1.11
Partial Designee 21.1
Partnership 1.3.3
Partnership Agreements 1.3.3
Partnership Assignment 12.3
Partnership Consents 9.3
Partnership Interests 1.3
Party Selection Notice 20.4
Permits 1.2.8
Permitted Exceptions 5.2
Person Article XXII
Personal Property 1.2.3
Pre-Closing Title Commitment 5.1
Pre-Execution Leases 14.2.7
Pre-Execution Lease Expenses 14.2.7
Pre-Execution Lease Obligations 14.2.7
Preliminary Notice 20.4
Principal Officers 7.1
Proceeding Article XXII
Promissory Notes 1.8
Property 1.2.8
Property and Liability Insurance 17.2.4
Purchaser Introductory paragraph
Purchaser Indemnitees 16.1
Purchase Price 2.1
Purchaser's Adjustment Proposal 20.3.3
Purchaser's Conditions 10.1
Purchaser's Estimate 17.2.2
Purchaser's Insurance Proceeds 17.2.3
Purchaser's Representatives 21.10
Purchaser's Resolution 20.4
Radovir Installment Request 2.2.6
Radovir Installments 2.2.6
Radovir Obligation 2.2.6
Radovir Payment 2.2.6
Real Property Assets 1.2
Restoration Costs 17.2.1
Restoration Documents 17.2.2
Restoration Plans 17.2.2
Restricted Period 2.4
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115
Restrictions 5.1
Rising Star Merger 8.3.3
Rising Star Oil and Gas Interests 4.3.2.2
Rising Star Partnership Agreements 4.3.2.1
Rising Star Partnership Interests 1.3.2
RSE-I 1.3.2
RSE-II 1.3.2
Second Adjustment Notice 20.3.3
Security Deposits 1.2.4
Security Documents 1.8
Seller 1.12
Seller Indemnitees 16.2
Seller Representations 7.1
Seller's Adjustment Proposal 20.3.3
Seller's Conditions 10.12
Seller's Corporate Approvals 10.1.5
Seller's Estimate 17.2.2
Seller's Lease 8.2.15
Seller's Resolution 20.4
Seller's Share 14.2.5
Settlement Period 20.4
Spinoff Affiliate 21.1
Stadium Bonds 1.10
Stadium Improvements 1.10
Stadium License Agreement 1.10
Stadium Suite 1.10
Stemmons Estoppel 9.2.2
Stemmons Ground Lease 1.2.1
Stemmons Leasehold 1.2.1
Stemmons Lessor 9.2.2
Stemmons Substitute Estoppel 9.2.2
Substitute Certificate 9.2.1
Substitute Certificate Condition 9.2.1
Substitute Estoppel 9.6
Suite Consents 10.10
Survey 5.1
Taking 17.1
Tax 7.4.10
Tax Return 7.4.10
Tenant Estoppel Deadline 9.2.1
Tenant Estoppels 9.2.1
Texas Stadium Suite 1.10
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116
The Addison Exhibit 1.2
The Meridian Exhibit 1.2
Ticket Options 1.10
Title Company 3.1
Title Policies 10.2.1
Trading Day 2.2.2
Trigger Date 21.16
UCC Searches 5.1
Undeveloped Land 1.11
Xxxxxxxx Note Exhibit 1.8
Withdrawal Notice 20.3.3
Woodwind Apartments Exhibit 1.2
85% Requirement 9.2.1
--------------------
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ACQUISITION AGREEMENT
(MAVERICKS AGREEMENT)
BY AND AMONG
DALLAS MAVERICKS, INC.
("SELLER")
AND
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP
("PURCHASER")
118
TABLE OF CONTENTS
ARTICLE I
ASSETS.................................. 1
1.1 Assets................................................................. 1
1.2 Partnership Interests.................................................. 1
1.3 Promissory Notes....................................................... 1
1.4 Assets................................................................. 1
ARTICLE II
PURCHASE PRICE............................ 1
2.1 Purchase Price......................................................... 1
2.2 Adjustments to Purchase Price.......................................... 2
2.2.1 Partnership Interests........................................... 2
2.2.2 Promissory Note Payments........................................ 2
2.3 Allocation of Purchase Price........................................... 2
ARTICLE III
XXXXXXX MONEY.............................. 2
3.1 Xxxxxxx Money.......................................................... 2
ARTICLE IV
DUE DILIGENCE AGREEMENTS........................ 2
4.1 Due Diligence Deliveries............................................... 2
4.2 Partnership Interests.................................................. 3
4.2.1 DBL Partnershp Agreement........................................ 3
4.2.2 Capital Contributions........................................... 3
4.2.3 Unfunded Commitments............................................ 3
4.2.4 DBL Financial Information....................................... 3
4.2.5 Other Information............................................... 3
4.2.6 Tax Records..................................................... 3
4.3 Promissory Notes....................................................... 3
4.3.1 Notes and Security Documents.................................... 3
4.3.2 Payments Received............................................... 3
4.3.3 Documents....................................................... 3
4.4 Other Documents........................................................ 4
4.5 Records in Possession of Seller........................................ 4
ARTICLE V
INSPECTION PERIOD............................ 4
5.1 Inspection Period...................................................... 4
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119
5.2 Purchaser's Right to Review Books...................................... 5
5.3 Sellers' Cooperation Regarding DBL Limited............................. 5
5.4 Continuing Access Prior to Closing..................................... 5
ARTICLE VI
REPRESENTATIONS AND WARRANTIES................... 6
6.1 Representations and Warranties of Seller............................... 6
6.1.1 Organization, Existence and Good Standing....................... 6
6.1.2 Authorization; Enforceability................................... 6
6.1.3 No Violation of Laws or Agreements.............................. 7
6.1.4 No Proceedings.................................................. 7
6.1.5 No Rights of First Refusal...................................... 7
6.1.6 Accuracy of Documents........................................... 7
6.1.7 Disclosure...................................................... 7
6.2 Partnership Interest................................................... 7
6.2.1 General......................................................... 7
6.2.1.1 Ownership.............................................. 8
6.2.1.2 Organization, Existence and Good Standing.............. 8
6.2.1.3 Partnership Agreements; Amendments..................... 8
6.2.1.4 No Default; No Litigation.............................. 8
6.2.1.5 No Obligations......................................... 8
6.2.1.6 Right to Transfer; Right to Become Substitute
Limited Partner...................................... 8
6.2.2 Related Agreements and Rights................................... 8
6.2.3 Approvals; Consents............................................. 9
6.2.4 Partners; Majority Interest..................................... 9
6.3 Promissory Notes....................................................... 9
6.3.1 Ownership....................................................... 9
6.3.2 No Additional Agreements........................................ 9
6.3.3 Consents and Approvals.......................................... 9
6.3.4 No Default...................................................... 9
6.3.5 No Advances..................................................... 10
6.3.6 Principal Balances.............................................. 10
6.3.7 Valid Liens..................................................... 10
6.3.8 No Defenses, Setoffs, Counterclaims............................. 10
6.4 Representations and Warranties of Purchaser............................ 10
6.4.1 Organization, Existence and Good Standing....................... 10
6.4.2 Authorization; Enforceability................................... 10
6.4.3 No Violation of Laws or Agreements.............................. 10
6.4.4 No Proceedings.................................................. 11
6.5.5 Investment...................................................... 11
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120
ARTICLE VII
SELLER'S AGREEMENTS PRIOR TO CLOSING................. 11
7.1 Seller's Agreements prior to Closing................................... 11
7.1.1 Untrue Representations.......................................... 11
7.1.2 Notice of Proceedings........................................... 11
7.1.3 Commercially Reasonable Efforts................................. 11
7.1.4 Notification of Certain Matters................................. 11
7.1.5 Operation Prior to the Closing Date............................. 12
7.1.6 Performance of Obligations...................................... 12
7.1.7 No Transfer or Encumbrances..................................... 12
7.1.8 No Breach....................................................... 12
7.1.9 Compliance with Legal Requirements.............................. 12
7.1.10 Affiliate Indebtedness.......................................... 12
7.2 DBL Partnership Interests.............................................. 13
7.2.1 Notices; Participation.......................................... 13
7.2.2 Contributions and Distributions................................. 13
7.2.3 Consents from Partners and Third Parties........................ 13
7.2.4 Xxxxxx Agreement................................................ 14
7.2.5 Subordination Agreements........................................ 14
7.2.6 Rights of First Refusal......................................... 14
7.3 Promissory Notes....................................................... 14
7.3.1 Notice of Proceedings........................................... 14
7.3.2 No Encumbrances................................................. 14
7.3.3 Hillwood Consent................................................ 14
7.3.4 No Amendments or Modifications.................................. 14
7.3.5 Prepayments..................................................... 15
7.3.6 No Releases..................................................... 15
7.4 Purchaser's General Agreements Prior to Closing........................ 15
7.4.1 Untrue Representations.......................................... 15
7.4.2 Notice of Proceedings........................................... 15
7.4.3 Commercially Reasonable Efforts................................. 15
7.4.4 No Breach....................................................... 15
7.4.5 Untrue Representations.......................................... 16
ARTICLE VIII
DELIVERY OF CONSENTS AND ESTOPPELS................. 16
8.1 Consents and Estoppels................................................. 16
8.2 Partnership Interests.................................................. 16
8.3 Promissory Notes....................................................... 16
ARTICLE XI
CONDITIONS............................... 16
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121
9.1 Purchaser's Conditions................................................. 16
9.1.1 Representations, Warranties and Covenants....................... 16
9.1.2 No Material Adverse Change...................................... 17
9.1.3 No Pending Litigation........................................... 17
9.1.4 Closing Documents............................................... 17
9.1.5 Authorization................................................... 17
9.1.6 No Prohibition of Transaction................................... 17
9.1.7 Documentation................................................... 18
9.1.8 Affiliate Indebtedness.......................................... 18
9.2 DBL Partnership Interests.............................................. 18
9.3 Promissory Notes....................................................... 18
9.3.1 No Default...................................................... 18
9.3.2 Principal Balance............................................... 18
9.3.3 Hillwood Consent................................................ 18
9.4 Failure of Consent Conditions.......................................... 18
9.5 Seller's Conditions to Closing......................................... 18
9.5.1 Representations, Warranties and Covenants....................... 19
9.5.2 No Pending Litigation........................................... 19
9.5.3 Authorization................................................... 19
9.5.4 No Prohibition of Transaction................................... 19
9.6 Failure of Seller's Conditions to Closing.............................. 19
9.7 Fairness Opinion....................................................... 19
ARTICLE X
CLOSING................................. 20
ARTICLE XI
SELLER'S OBLIGATIONS AT CLOSING................... 20
11.1 Seller's Obligations at Closing........................................ 20
11.1.1 General Closing Obligations of Seller........................... 20
11.1.2 Affiliate Indebtedness.......................................... 21
11.2 DBL Partnership Interests.............................................. 21
11.3 Promissory Notes....................................................... 21
11.3.1 ................................................................ 21
11.3.2 ................................................................ 21
11.3.3 ................................................................ 21
11.3.4 ................................................................ 21
11.3.5 ................................................................ 21
11.3.6 ................................................................ 21
11.3.7 ................................................................ 21
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122
ARTICLE XII
PURCHASER'S OBLIGATIONS AT CLOSING................... 22
12.1 Purchaser's Obligations at Closing.................................... 22
12.1.1 General Closing Obligations of Purchaser....................... 22
12.2 DBL Partnership Interests............................................. 22
ARTICLE XIII
COSTS AND ADJUSTMENTS.......................... 22
ARTICLE XIV
AS IS PROVISION............................. 22
ARTICLE XV
NOTICES................................ 23
ARTICLE XVI
REMEDIES................................ 25
16.1 Default by Seller..................................................... 25
16.2 Default by Purchaser.................................................. 25
16.3 Adjustment Events..................................................... 25
16.3.1 Definitions.................................................... 25
16.3.2 Adjustment Procedure. ........................................ 25
16.3.3 Effect of Closing.............................................. 26
16.3.4 Sole Remedy.................................................... 27
16.4 Arbitration........................................................... 27
16.5 Incidental and Consequential Damages.................................. 28
16.6 Survival of Sections 16.3 and 16.4.................................... 28
ARTICLE XVII
MISCELLANEOUS............................. 29
17.1 Assignment............................................................ 29
17.2 Interpretation and Applicable Law..................................... 29
17.3 Amendment............................................................. 29
17.4 Attorneys' Fees....................................................... 30
17.5 Descriptive Headings.................................................. 30
17.6 Entire Agreement...................................................... 30
17.7 Counterparts.......................................................... 30
17.8 Time.................................................................. 30
17.9 Commissions and Finders Fee........................................... 30
17.10 Confidentiality....................................................... 31
17.11 Rule of Construction.................................................. 33
17.12 Shareholder Consent................................................... 33
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123
17.13 Access to Records after Closing....................................... 33
17.14 Special Non-Disturbance Agreement..................................... 33
17.15 Retention by DMI or CCP............................................... 34
17.16 Joinder by CCP........................................................ 34
ARTICLE XVIII
DEFINITIONS............................... 34
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124
ACQUISITION AGREEMENT
(MAVERICKS AGREEMENT)
This Acquisition Agreement ("Agreement") is entered into by and
between DALLAS MAVERICKS, INC., a Texas corporation ("DMI" or "Seller") and
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited
partnership ("Purchaser"), as of the 10th day of February, 1997 (the "Effective
Date").
R E C I T A L S :
FOR AND IN CONSIDERATION of the promises, undertakings, and mutual
covenants of the parties herein set forth, Seller hereby agrees to sell and
Purchaser hereby agrees to purchase and pay for all that certain property
hereinafter described in accordance with the following terms and conditions.
ARTICLE I
ASSETS
1.1 Assets. Seller agrees to sell and Purchaser agrees to purchase in
accordance with the terms of this Agreement the assets described in Sections
1.2 and 1.3.
1.2 Partnership Interests. The interests of Seller in Dallas
Basketball Limited, a Texas limited partnership ("DBL Limited"), and in those
certain agreements and rights related to or associated with Seller's interest
in DBL Limited, as more particularly described in Exhibit 1.2 (collectively,
the "DBL Partnership Interests"). DBL Limited is sometimes referred to herein
as the "Partnership" and the agreements described in Exhibit 1.2 describing and
evidencing the DBL Partnership Interests, including all amendments thereto, are
referred to herein collectively as the "DBL Partnership Agreements".
1.3 Promissory Notes. The promissory notes (the "Promissory Notes"),
and all documents securing their payment (the "Security Documents"), described
on Exhibit 1.3.
1.4 Assets. The DBL Partnership Interests and Promissory Notes are
hereinafter sometimes referred to individually as an "Asset" or collectively as
the "Assets."
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price ("Purchase Price") to be paid
by Purchaser to Seller for the Assets shall be the sum of Sixty-Six Million
Four Hundred Seventy-five Thousand and No/100 Dollars ($66,475,000.00). The
Purchase Price shall be paid all in cash at the Closing.
125
2.2 Adjustments to Purchase Price. The Purchase Price may be adjusted
in accordance with the provisions of this Section 2.2.
2.2.1 Partnership Interests. The Purchase Price shall be
increased by an amount equal to any capital contributions made by Seller with
respect to the DBL Partnership Interests from and after January 1, 1997 through
the Closing Date, and reduced by an amount equal to any distributions made to
Seller from the DBL Partnership from and after January 1, 1997 through Closing.
2.2.2 Promissory Note Payments. The Purchase Price shall be
reduced by any payments of principal received by Seller subsequent to January
1, 1997 with respect to any of the Promissory Notes.
2.3 Allocation of Purchase Price. Seller and Purchaser agree that the
Purchase Price is allocated among the Assets as set forth on Exhibit 2.3.
Exhibit 2.3 is sometimes called "Asset Allocation."
ARTICLE III
XXXXXXX MONEY
3.1 Xxxxxxx Money. On the day of execution of this Agreement by all
parties hereto (or if such execution occurs after 12:00 p.m., Dallas, Texas
time on the subject day, then on the first business day following such
execution), Purchaser shall deliver Eight Hundred Seventy- five Thousand and
No/100 Dollars ($875,000.00) (the "Xxxxxxx Money") by wire transfer to Republic
Title of Texas, Inc., 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attn:
Xxxxxx Xxxxxxx (the "Title Company"). The Title Company shall immediately
deposit the Xxxxxxx Money in an interest bearing account, the earnings from
which shall accrue to the benefit of Purchaser. In the event that this
Agreement is closed, all Xxxxxxx Money shall be applied to the Purchase Price.
In the event that this Agreement is not closed for any reason whatsoever, then
the Xxxxxxx Money shall be disbursed to Seller except as otherwise specifically
provided herein.
ARTICLE IV
DUE DILIGENCE AGREEMENTS
4.1 Due Diligence Deliveries. On and after the Effective Date, Seller
shall make those items described in Article IV ("Due Diligence Items")
available to Purchaser and its representatives at the offices of Seller set
forth in Article XV or at the current location of such items. Additionally,
Seller will cooperate with Purchaser and its representatives in making copies
of said items, at the expense of Purchaser, including but not limited to
allowing said items to be temporarily removed from Seller's offices for
copying, making space available for Purchaser and its representatives to review
and copy said items and providing electrical power
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126
and space for copying on site. Notwithstanding the generality of the provisions
of this Article IV, Seller shall not be obligated to provide to Purchaser or
its representatives any information of or related to any pending or threatened
litigation if providing such information would jeopardize the attorney/client
privilege.
4.2 Partnership Interests.
4.2.1 DBL Partnership Agreement. Copies of the documents and
agreements listed on Exhibit 1.2, together with any and all amendments thereto
and restatements thereof (the "DBL Partnership Agreements").
4.2.2 Capital Contributions. A schedule of the total capital
contributions and distributions of the DBL Partnership from July 1, 1996
through the Effective Date.
4.2.3 Unfunded Commitments. A schedule of any unfunded capital
commitment obligations of Seller to the DBL Partnership, specifically
identifying the dates and manner on or in which the funding obligations arose.
4.2.4 DBL Financial Information. The financial statements,
reports, budgets and other financial information regarding DBL Limited or the
DBL Partnership Interests which have been provided to Seller by or on behalf of
DBL Limited or which have been prepared or obtained by or at the direction or
request of Seller in connection with its ownership of the DBL Partnership
Interests.
4.2.5 Other Information. Copies of all notices given or received
by Seller pursuant to the DBL Partnership Agreement, together with reasonable
access to the records in Seller's possession relating to the DBL Partnership
Interests for the period after July 1, 1996 including, but not limited to,
correspondence, memoranda, and other information.
4.2.6 Tax Records. Such information as is reasonably available to
Seller regarding the federal income tax attributes of Seller's interest in the
Partnership.
4.3 Promissory Notes.
4.3.1 Notes and Security Documents. Copies of the Promissory
Notes, Security Documents and UCC filings relating thereto.
4.3.2 Payments Received. Copies of all documents showing payments
of principal and interest received on the Promissory Notes, together with
summary schedules thereof for each Promissory Note.
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4.3.3 Documents. Copies of all documents of every kind and nature
created by or addressed to Seller, related to the Promissory Notes and the
Security Documents and dated after July 1, 1996 (together with documents prior
to such date that are reasonably determined to be relevant to Purchaser's
review, if any) including all correspondence received from the makers of the
Promissory Notes, all correspondence to the makers of the Promissory Notes, all
correspondence to and received from the Federal Aviation Administration
("FAA"), the documents listed on Exhibit 1.2, correspondence from the NBA (as
hereafter defined) consenting to the transaction(s) which culminated with the
delivery of such documents, and all files related to the Promissory Notes and
Security Documents.
4.4 Other Documents. Such other documents, records and information as
Purchaser shall reasonably request and are reasonably accessible to Seller in
order to verify the accuracy of the Seller Representations.
4.5 Records in Possession of Seller. Purchaser acknowledges that
Seller may not have some of the items described in Article IV as regards the
Partnership Interests and agrees that, to the extent Seller does not have said
items, Seller shall only be required to use commercially reasonable efforts to
cause the persons who have said items to make them available to Purchaser and
its representatives.
ARTICLE V
INSPECTION PERIOD
5.1 Inspection Period. Purchaser, at Purchaser's sole expense, shall
have the right to conduct a study of the Assets for a period of time commencing
on the Effective Date and expiring on the date which is sixty (60) days after
the Effective Date (the "Inspection Period"). Purchaser and Purchaser's duly
authorized agents or representatives shall be permitted to enter upon the
location constituting the principal place of business of Seller, and to the
extent Seller is able to obtain such access for Purchaser, the offices of the
Partnership, at all reasonable times during the Inspection Period in order to
conduct studies and any other inspections, reviews and/or tests that Purchaser
may deem reasonably necessary or advisable. In the event that the review and/or
inspection conducted by this Section shows any fact, matter or condition to
exist with respect to the Assets that is unacceptable to Purchaser, in
Purchaser's sole discretion, or if for any reason Purchaser determines that
purchase of the Assets is not feasible, then Purchaser shall be entitled, as
Purchaser's sole remedy, to cancel this Agreement by providing written notice
of cancellation to Seller prior to the expiration of the Inspection Period. If
Purchaser shall provide written notice of cancellation prior to the expiration
of the Inspection Period, then this Agreement shall be canceled, all Xxxxxxx
Money shall be immediately paid to Seller by the Title Company, Purchaser shall
return to Seller all of the Due Diligence Items, and thereafter neither Seller
nor Purchaser shall have any continuing obligations one unto the other except
as provided in Section 17.9. Purchaser shall indemnify and hold Seller harmless
from and against any and all claims, causes of action or expenses asserted
against or incurred by Seller and
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arising out of the acts or failures to act of Purchaser or its representatives
in connection with their inspections of any of the Assets. Notwithstanding any
provision of this Agreement to the contrary, the foregoing indemnity shall
survive any termination of this Agreement.
5.2 Purchaser's Right to Review Books. Following the Effective Date,
Seller, at Purchaser's sole cost and expense, shall furnish to Purchaser and
Purchaser's accountants and other representatives full and reasonable access to
the books and records of Seller relating to the Assets and to all financial
information or other information known or possessed by each Seller with respect
to the Assets which Purchaser or Purchaser's accountants or other
representatives may reasonably request in connection with any financial audits
Purchaser elects to conduct with respect to the Assets, and, at Purchaser's
sole cost and expense, shall cooperate fully, and shall instruct their
accountants, attorneys and other representatives to cooperate fully with
Purchaser and Purchaser's accountants and other representatives in obtaining
all financial or other information which Purchaser or its accountants or other
representatives may reasonably request in connection with any financial audits
conducted with respect to the Assets, including without limitation providing to
Purchaser's accountants such management representation letters or legal
representation letters which Purchaser's accountants are required to obtain in
order to issue financial audits. Notwithstanding anything herein, nothing in
this Agreement shall require Seller to disclose any information regarding cash
of Seller or other assets of Seller not being acquired by Purchaser hereunder.
The obligations of this Section 5.2 shall survive Closing and continue until
Purchaser and/or Purchaser's accountants have completed any and all audits of
or with respect to the Assets, which Purchaser, in its sole discretion,
determines are reasonably needed.
5.3 Sellers' Cooperation Regarding DBL Limited. Seller, at Purchaser's
sole cost and expense, agrees to cooperate with Purchaser in obtaining
information from the Partnership. Seller and Purchaser shall endeavor to meet
with representatives of DBL Limited and shall seek to allow Purchaser and
Purchaser's agents and representatives such access to information regarding DBL
Limited which Purchaser deems reasonably necessary or appropriate and which is
available to Seller. Purchaser agrees to review and, where appropriate, execute
and deliver to such entity or entities such confidentiality or non-disclosure
agreements as may be reasonably necessary to allow Purchaser access to the
records or information sought. Seller, at Purchaser's sole cost and expense,
shall cooperate with Purchaser in obtaining consents from each entity or
participant therein which is required to give its consent including arranging
meeting(s) with representatives of DBL Limited or other entities or
participants therein and providing, prior to any such meetings, reasonable
background information and support to Purchaser which Seller reasonably
believes may be important in obtaining the required consent.
5.4 Continuing Access Prior to Closing. If this Agreement is not
terminated on or before the end of the Inspection Period, Seller and Purchaser
contemplate that Purchaser will have continuing access to information regarding
the Assets after the termination of the Inspection Period but prior to Closing.
Seller, at Purchaser's sole cost and expense, will cooperate with Purchaser and
Purchaser's agents and representatives to allow such access and
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to provide continuing updates to information regarding the Assets as may be
reasonable to assure that Purchaser has all of the material information
regarding the Assets that Seller has been given from and after the Effective
Date but prior to Closing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of Seller. Seller represents and
warrants that the statements set forth in Sections 6.1 through 6.3 are true and
correct in all material respects as of the Effective Date. Said statements are
herein called "Seller Representations." When used in this Agreement: (i)
"knowledge" or "actual knowledge" means the current actual knowledge of any of
the Principal Officers or the existence of any information in the records or
files of the Seller at the time the respective Seller Representation was made,
and (ii) "Principal Officers" means Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxx
and X.X. Xxxxx. Notwithstanding the foregoing, or any other provision of this
Agreement to the contrary (other than this Section 6.1), Seller shall have no
liability whatsoever to Purchaser or any Affiliate of Purchaser for any breach
of any Seller Representation, except that such a breach may constitute an
Adjustment Event and thus serve as the basis for adjustment to the Purchase
Price in accordance with Section 16.3. Purchaser acknowledges that (i) the
Seller Representations are, in many cases, made without current actual
knowledge of any of the Principal Officers as to whether they are true or
false, (ii) that, due to lack of current actual knowledge of any of the
Principal Officers, some Seller Representations may be false when made, and
(iii) the Seller Representations are made by Seller solely to allocate the risk
between the parties of certain matters prior to Closing and to serve as the
basis for determining the existence of an Adjustment Event. Purchaser (for
itself and its Affiliates) agrees that it shall have no basis for any claim of
fraud in the inducement or otherwise relating to any of the Seller
Representations set forth herein being false when made; however, Purchaser may
seek actual damages suffered by it as a result of any Seller Representation
herein having been false when made if Purchaser establishes that such Seller
Representation was known by one or more of the Principal Officers of Seller to
be false when made and was made by Seller with intent to mislead Purchaser.
None of the Seller Representations shall survive Closing.
6.1.1 Organization, Existence and Good Standing. Seller is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate power and
authority to carry on its business as now being conducted, to own or lease and
operate its Assets as now owned, leased or operated, and to perform all its
obligations under the agreements and instruments to which it is a party or by
which it is bound.
6.1.2 Authorization; Enforceability. This Agreement, and each
other agreement to which Seller is to become a party pursuant to the provisions
hereof, when executed and delivered by Seller and, if applicable, approved by
the shareholder of Seller, shall constitute the legal, valid and binding
obligations of Seller, enforceable against it in accordance with their
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respective terms, except to the extent limited by bankruptcy, reorganization
and other moratorium laws generally affecting the rights of creditors and the
availability of equitable remedies. All actions contemplated by this Section
have been or after necessary shareholder approval will have been duly and
validly authorized by all necessary proceedings by Seller.
6.1.3 No Violation of Laws or Agreements. Neither the execution
and delivery of this Agreement or any other agreement to which Seller is or is
to become a party pursuant to the provisions hereof, the consummation of the
transactions contemplated hereby or thereby nor the compliance with or
fulfillment of the terms, conditions or provisions hereof or thereof by Seller
will, except for the need to obtain the Consents contemplated by this
Agreement: (i) conflict with, result in a breach of, constitute a default (or
an event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under any Asset or any
contract, agreement or instrument to which Seller is a party or by which any of
the Assets may be bound or affected, or (ii) violate any Legal Requirement to
which Seller is subject or by which any of the Assets may be bound or affected.
6.1.4 No Proceedings. No Proceeding is pending or, to the
knowledge of Seller, threatened against or affecting Seller, any of the Assets,
the ability of Seller to perform its obligations under this Agreement or any of
the transactions contemplated hereby. Seller has not received any notice of any
violation of any Legal Requirement pertaining to any of the Assets.
6.1.5 No Rights of First Refusal. Except as disclosed in other
provisions of this Agreement or contained in the DBL Partnership Agreements,
there are no existing options, rights, warrants, commitments, agreements or
instruments of any type to which Seller is bound, or to which any Asset is
subject, under or pursuant to which any Person shall be given, provided or
otherwise afforded the right, option, occasion, possibility or opportunity to
purchase any Asset.
6.1.6 Accuracy of Documents. All documents, records, listings and
schedules delivered to Seller pursuant to Article IV are in all material
respects true, correct and complete copies of all the documents and records
delivered or to be delivered.
6.1.7 Disclosure. No Seller Representation or statement in the
Exhibits or in any items delivered pursuant to Article IV contains any untrue
statement of a material fact.
6.2 Partnership Interest.
6.2.1 General
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6.2.1.1 Ownership. Seller is the record and beneficial owner
of the DBL Partnership Interests and has good, valid and indefeasible record
and beneficial title to the DBL Partnership Interests free and clear of any
adverse claim of any Person, including any Encumbrances (except as set forth in
the Partnership Agreements). The transfer and assignment documents to be
delivered to Purchaser on the Closing Date will transfer to and vest in
Purchaser good, valid and indefeasible title to the DBL Partnership Interests,
free and clear of any adverse claims of any Person, including any Encumbrance
(except as set forth in the Partnership Agreements).
6.2.1.2 Organization, Existence and Good Standing. DBL
Limited is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and is, to the extent necessary, qualified
to do business in each jurisdiction in which it operates, it has all requisite
partnership power and authority to carry on its business as now being
conducted, to own or lease and operate its properties and assets as now owned,
leased or operated, and to perform all of its obligations under the agreements
and instruments to which it is a party or by which it is bound.
6.2.1.3 Partnership Agreements; Amendments. Seller has
delivered to Purchaser true and correct copies of all of the DBL Partnership
Agreements which are listed on Exhibit 1.2 and such DBL Partnership Agreements
have not been amended or modified in any way, except for amendments copies of
which have been delivered to Seller prior to the Effective Date.
6.2.1.4 No Default; No Litigation. There has been no default
by Seller or, to Seller's knowledge, no default by any other partner, under or
pursuant to the DBL Partnership Agreements. To Seller's knowledge, DBL Limited
is not a party to any material litigation not fully covered by insurance, and
there is no litigation affecting the rights of DBL Limited in any of its assets
or business that would, if determined adversely to DBL Limited, have a material
adverse affect on the value of those assets or that business. There is no
litigation involving Seller's interest in DBL Limited or the rights related
thereto.
6.2.1.5 No Obligations. Except as provided in the DBL
Partnership Agreements or materials delivered to Purchaser pursuant to Section
4.2, Seller is not and, upon acquisition of the DBL Partnership Interests,
Purchaser will not be, obligated to make any capital contributions or return
any capital or otherwise pay any amounts with regard to the DBL Partnership
Interests. This Section 6.2.1.5 does not relate to capital contribution
obligations arising after the Closing pursuant to the terms of the respective
DBL Partnership Agreements.
6.2.1.6 Right to Transfer; Right to Become Substitute
Limited Partner. Except as specifically set forth in the DBL Partnership
Agreements, Seller has the full power and authority to transfer and assign the
DBL Partnership Interests to Purchaser or Purchaser's assignee (as permitted
hereunder) and, upon such transfer, Purchaser (or Purchaser's permitted
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assignee) shall have the right to become a substitute limited partner in the
applicable Partnership, subject only to the specific conditions set forth in
the DBL Partnership Agreements and the consent of the NBA.
6.2.2 Related Agreements and Rights. The only rights and
agreements related to or associated with the rights of DMI in or to DBL Limited
are contained in the documents set forth in Exhibit 1.2, the Promissory Notes
and related Security Documents described in Exhibit 1.3 and that certain
Amended and Restated Xxxxx Xxxxxx Agreement Regarding Arena Suite (the "Xxxxx
Xxxxxx Suite Agreement") dated July 1, 1996, among Hillwood Basketball
Partners, Ltd., a Texas limited partnership ("Hillwood"), Hillwood DBL, Ltd., a
Texas limited partnership ("GP"), and DMI.
6.2.3 Approvals; Consents. The only consents or approvals required
to be obtained in connection with the transfer of the DBL Partnership Interests
to Purchaser or Purchaser's permitted assignee (and the admission of such
Person to the Partnership as a substitute limited partner) are from parties to
the DBL Partnership Agreements and the National Basketball Association ("NBA").
6.2.4 Partners; Majority Interest. To Seller's knowledge, the only
partners in the Partnership are those listed in the DBL Partnership Agreements
and Xxxxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx. DMI and Xxxxxx X. Xxxxxx
collectively constitute a "Majority Interest" as such term is defined in the
DBL Partnership Agreement.
6.3 Promissory Notes.
6.3.1 Ownership. Seller is the legal and beneficial owner of the
Promissory Notes, the Security Documents and all liens and security interests
securing payment of the Promissory Notes and the obligations under the Security
Documents free and clear of all Encumbrances (except as contemplated by Section
6.3.3).
6.3.2 No Additional Agreements. Seller is not a party to any
contract, agreement, instrument, document or written or oral understanding
which amends, modifies or rearranges the Promissory Notes or the Security
Documents.
6.3.3 Consents and Approvals. Seller has the authority to convey
the Promissory Notes, the liens and security interests securing their payment
and the Security Documents without the joinder of, or consent or approval from,
any other Person other than: (i) Xxxxxx X. Xxxxxx; (ii) Hillwood DBL, Ltd. and
Hillwood Basketball Partners, Ltd., with respect to the Performance Note and
the General Partner Promissory Note; (iii) Hillwood Basketball Partners, Ltd.,
with respect to the Limited Partner Promissory Note; and (iv) Eagle Airlines,
Inc., with respect to the Aircraft Note.
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6.3.4 No Default. Seller has no knowledge that any event has
occurred or with the passage of time or the giving of notice will occur which
is or would be an event of default under the Promissory Notes or the Security
Documents. During its ownership thereof, Seller has not modified the Promissory
Notes.
6.3.5 No Advances. There are no further obligations to make any
advances under the Promissory Notes or the Security Documents.
6.3.6 Principal Balances. The outstanding principal balances due
under the Promissory Notes as of December 31, 1996 are as set out on Exhibit
1.3.
6.3.7 Valid Liens. The Security Documents create valid and
enforceable first liens and first security interests in the property described
therein, and upon consummation of the transaction contemplated hereby,
Purchaser will be the owner and holder of such liens and security interests.
6.3.8 No Defenses, Setoffs, Counterclaims. To Seller's knowledge,
no defenses, setoffs or counterclaims exist with respect to the Promissory
Notes or the Security Documents.
6.4 Representations and Warranties of Purchaser. Purchaser represents
and warrants that the statements set forth in this Section 6.4 are true and
correct in all material respects as of the Effective Date.
6.4.1 Organization, Existence and Good Standing. Purchaser is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate power and
authority to carry on its business as now being conducted, to own or lease and
operate its properties and assets as now owned, leased or operated, and to
perform all its obligations under the agreements and instruments to which it is
a party or by which it is bound.
6.4.2 Authorization; Enforceability. This Agreement, and each
other agreement to which Purchaser is to become a party pursuant to the
provisions hereof, when executed and delivered by Purchaser shall constitute
the legal, valid and binding obligations of Purchaser, enforceable against it
in accordance with their respective terms. All actions contemplated by this
Section have been duly and validly authorized by all necessary proceedings by
Purchaser.
6.4.3 No Violation of Laws or Agreements. Neither the execution
and delivery of this Agreement or any other agreement to which Purchaser is or
is to become a party, the consummation of the transactions contemplated hereby
or thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Purchaser will: (i) conflict with, result in a
breach of, constitute a default (or an event that might, with the passage of
time or the giving of notice or both, constitute a default or event of default)
under any of the terms
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of, result in termination of, result in the loss of any right under, or give to
any other Person the right to cause such a termination of or loss under, any
contract, agreement or instrument to which Purchaser is a party, or (ii)
violate any Legal Requirement to which Purchaser is subject.
6.4.4 No Proceedings. Except as set forth on Exhibit 6.4.4, no
Proceeding is pending or, to the knowledge of Purchaser, threatened against or
affecting the ability of Purchaser to perform its obligations under this
Agreement or any of the transactions contemplated hereby; and there is no basis
for any such Proceeding.
6.5.5 Investment. Purchaser is acquiring the DBL Partnership
Interests for business and investment purposes and not with a view toward the
distribution thereof.
ARTICLE VII
SELLER'S AGREEMENTS PRIOR TO CLOSING
7.1 Seller's Agreements prior to Closing. Seller agrees to perform
those agreements set forth in this Sections 7.1 through 7.3 during the period
commencing on the Effective Date and ending on the Closing Date.
7.1.1 Untrue Representations. Seller will notify Purchaser
promptly in writing if it becomes aware of any fact or condition which makes
untrue, or shows to have been untrue, in any material respect, any Exhibit,
schedule or listing furnished to Purchaser or any Seller Representation. Seller
will notify Purchaser within a reasonable period of time in writing if it
becomes aware of any fact or condition which makes untrue, or shows to have
been untrue, in any material respect, any representation or warranty made
herein by Purchaser.
7.1.2 Notice of Proceedings. If Seller obtains knowledge of (i)
any investigation or inquiry being made or commenced by any Governmental
Authority in connection with this Agreement or the transactions contemplated
hereby, or (ii) the institution of any Proceeding against Seller or that could
any way have a material adverse affect on any of the Assets, Seller shall
promptly notify Purchaser.
7.1.3 Commercially Reasonable Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, Seller agrees to use its
commercially reasonable efforts to take or cause to be taken all actions, and
to do, or cause to be done, and to assist and cooperate with Purchaser and any
third parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the purchase of
the Assets by Purchaser and all other transactions contemplated by this
Agreement and not to take, commit, or agree in writing or otherwise to take,
any action which would make any Seller Representation untrue or incorrect in
any material respect as of the date when made or as of the Closing Date.
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7.1.4 Notification of Certain Matters. Seller shall give Purchaser
prompt notice of: (i) any notice of, or other communication relating to, a
default or event that, with notice or lapse of time or both, would become a
default, received subsequent to the Effective Date and prior to the Closing
Date, under the DBL Partnership Agreements, the Promissory Notes and/or
Security Documents, (ii) any material adverse change or the occurrence of any
event which, so far as reasonably can be foreseen at the time of its
occurrence, is reasonably likely to result in a material adverse change on
Seller or any of the Assets, or (iii) any written notice or other written
communication from any third party received by Seller alleging that the consent
of such third party is or may be required in connection with transactions
contemplated by this Agreement.
7.1.5 Operation Prior to the Closing Date. Seller shall not engage
in any practice, take any action or enter into any transaction, with regard to
the Assets and the operation of its business related thereto, other than in the
customary and ordinary course of business without the consent of Purchaser, and
Seller shall use its commercially reasonable efforts to keep its business,
properties and business relationships relating to the Assets substantially
intact.
7.1.6 Performance of Obligations. Seller shall pay or cause to be
paid, and perform or cause to be performed, all debts, liabilities and
obligations relating to the Assets as and when due, except to the extent being
contested in good faith.
7.1.7 No Transfer or Encumbrances. Seller shall not: (i) solicit
any offers to purchase any of the Assets, or (ii) sell, transfer or otherwise
dispose of, or cause the sale, transfer or other disposal of, any of the
Assets, or allow any Encumbrance to be placed on any of the Assets.
7.1.8 No Breach. Seller agrees that (i) Seller will not take any
action and will endeavor in good faith not to permit any event to occur, which
would cause or constitute a material breach of this Agreement; (ii) Seller
will, in the event, and promptly after the occurrence of, or promptly after
becoming aware of the occurrence of or the impending or threatened occurrence
of, any event which would cause or constitute a material breach or would, if it
had occurred immediately prior to the date hereof, have caused or constituted a
material breach of any of the Seller Representations, give notice thereof to
Purchaser; and (iii) Seller shall use its commercially reasonable efforts to
prevent or promptly to remedy such breach.
7.1.9 Compliance with Legal Requirements. Seller shall comply, or
cause compliance, in all material respects with all Legal Requirements
applicable to Seller and its businesses with respect to the Assets subject to
Seller's right to contest the same in good faith.
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7.1.10 Affiliate Indebtedness. Any indebtedness of the Partnership
to Seller or any Affiliate of Seller will, at Closing, be transferred to
Purchaser (with such transfer to include a transfer of all Encumbrances
securing same). Purchaser consents to the receipt and retention, before or
after Closing, by Home Interiors and Gifts, Inc. of any proceeds of any tax
refund or adjustment attributable to the 1994 tax year of DBL Limited and
acknowledges that such will not violate the requirements of Sections 7.1.10 or
9.1.8.
7.2 DBL Partnership Interests.
7.2.1 Notices; Participation. Seller shall promptly give Purchaser
notice of any notices or other communication received by Seller from the
Partnership and, in any event, within three (3) days of the date on which any
such notice is received, will give Purchaser prior written notice of Seller's
intent to send any notices to the Partnership or another partner of the
Partnership as soon as reasonably possible and, in any event, within such time
period as will allow Purchaser to consult with Seller regarding the contents of
the notice and any response to a notice received by Seller. Purchaser will
respond within the time period required for Seller to act or respond. Seller
shall promptly give Purchaser such other information as Seller receives in
connection with the Partnership and allow Purchaser to participate with Seller
in connection with Seller's responsibilities to the Partnership. Seller will
not take any action or fail to take any action that could have a material
adverse change on Seller's interest in the Partnership during the pendency of
this Agreement; provided, Seller will not participate in any meetings with
partners of the Partnership (whether called or informal) regarding Partnership
Matters or consent or object to any action by the Partnership unless Seller has
given Purchaser notice of the meetings, consent or objection together with all
material information concerning the matter being considered, and afforded
Purchaser an opportunity to participate in the meeting and/or decision if
permitted by the other partners.
7.2.2 Contributions and Distributions. Seller shall not make any
capital contributions to the Partnership other than those scheduled in the
documents delivered to Purchaser pursuant to Section 4.2 without obtaining the
prior written consent of Purchaser unless the failure to make such contribution
would adversely affect Seller's interest in the Partnership and Seller has
complied with Section 7.2.1 regarding any notices Seller has received with
regard to such contribution. Seller shall promptly give Purchaser notice of the
amount and timing of any distributions from the Partnership together with any
supporting documentation therefor which has been delivered or made available by
the Partnership to Seller.
7.2.3 Consents from Partners and Third Parties. Seller and
Purchaser will cooperate in obtaining the consent and/or approval to the
transfer of the DBL Partnership Interests and admission of the transferee as a
substitute limited partner and in obtaining any other consent deemed reasonably
necessary or appropriate by Purchaser including, without limitation, filing
applications therefor (with the NBA or any other Person), providing information
regarding Seller and/or Purchaser that may be required to be provided in
connection with the transfer and
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otherwise using their reasonable good faith effort to obtain any consents
and/or approvals required in connection with the transfers contemplated hereby.
Any consents or approvals shall be in such form as Purchaser may reasonably
require.
7.2.4 Xxxxxx Agreement. Seller shall cause an agreement (the
"Xxxxxx Agreement") to be executed and delivered at Closing pursuant to which
Xxxxxx X. Xxxxxx agrees (for himself and his heirs and assigns) to vote his
interest in DBL Limited as directed by Purchaser in instances in which a
"Majority Interest" (as defined in the DBL Partnership Agreements) is required
or permitted.
7.2.5 Subordination Agreements. Seller shall cause the holder ("XX
Xxxxxx") of the rights originally owned by DMI pursuant to the Xxxxx Xxxxxx
Suite Agreement to enter into an agreement (the "Subordination Agreement") to
subordinate any security interests held to secure any obligations in favor of
the XX Xxxxxx under the Xxxxx Xxxxxx Suite Agreement to any security interests
securing the payment of the Hillwood Notes. The form of the Subordination
Agreement shall be approved by Seller and Purchaser, which approval shall not
be unreasonably withheld or delayed. The Subordination Agreement executed by
the XX Xxxxxx shall be delivered at Closing.
7.2.6 Right of First Refusal. Seller and Purchaser shall cooperate
in connection with compliance with the procedures set forth in the DBL
Partnership Agreement regarding any rights of first refusal the other partners
of DBL Limited may have with regard to a purchase of the DBL Partnership
Interests.
7.3 Promissory Notes.
7.3.1 Notice of Proceedings. Seller will advise Purchaser promptly
of any Proceeding concerning or affecting the Promissory Notes, the Security
Documents or any of the collateral described in the Security Documents.
7.3.2 No Encumbrances. Seller will not by act or omission, without
the prior written consent of Purchaser, create or place, permit to be created
or placed, acquiesce in the placing of or allow to remain, any Encumbrance or
conditional sale or other title retention encumbrance on the Promissory Notes
or the Security Documents. Should any of the foregoing become attached in any
manner to any of the Promissory Notes or the Security Documents without the
prior written consent of Purchaser, Seller will cause the same to be discharged
promptly and released at its cost prior to Closing.
7.3.3 Hillwood Consent. Seller shall use commercially reasonable
efforts to obtain the unconditional execution and delivery of the Amendment of
Pledge Agreements ("Hillwood Consent"), in a form reasonably acceptable to
Purchaser and Seller, by Hillwood, GP, Eagle Airlines, Inc., DMI and Xxxxxx X.
Xxxxxx and to deliver same to Purchaser (so as to
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delete the prohibition on assignment of such Security Documents while Xxxxxx X.
Xxxxxx [or certain relatives] remains a limited partner in DBL Limited) on or
before the Closing Date.
7.3.4 No Amendments or Modifications. Seller will not amend,
modify or rearrange any of the Promissory Notes or Security Documents without
the prior written consent of Purchaser.
7.3.5 Prepayments. Seller will not accept a prepayment of
principal or interest due under any of the Promissory Notes unless required by
the terms of a Promissory Note, and in the event Seller is required to and does
accept a prepayment, Seller will immediately notify Purchaser in writing of the
identity of the Promissory Note, of the amount of the prepayment, of the
application of the prepayment to interest and principal and of the amount of
unpaid principal and accrued interest due after application of the prepayment.
7.3.6 No Releases. Seller will not release any lien, security
interest or guaranty securing payment of any of the Promissory Notes.
7.4 Purchaser's General Agreements Prior to Closing. Purchaser agrees
to perform those agreements set forth in this Section 7.4 during the period
commencing on the Effective Date and ending on the Closing Date.
7.4.1 Untrue Representations. Purchaser will notify Seller
promptly in writing if it becomes aware of any fact or condition which makes
untrue, or shows to have been untrue, in any material respect, any
representation or warranty made by Purchaser in this Agreement.
7.4.2 Notice of Proceedings. If Purchaser obtains knowledge of (i)
any investigation or inquiry being made or commenced by any Governmental
Authority in connection with this Agreement or the transactions contemplated
hereby, or (ii) the institution of any Proceeding against Purchaser or that
could any way have a material adverse effect on Purchaser's ability to
consummate the transactions contemplated by this Agreement, Purchaser shall
promptly notify Seller.
7.4.3 Commercially Reasonable Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, Purchaser agrees to use its
commercially reasonable efforts to take or cause to be taken all actions, and
to do, or cause to be done, and to assist and cooperate with Seller and any
third parties in doing all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the purchase of
the Assets by Purchaser and all other transactions contemplated by this
Agreement, and not to take, commit, or agree in writing or otherwise to take,
any action which would make any representation or warranty of Purchaser
contained in this Agreement untrue or incorrect in any material respect as of
the date when made or as of the Closing Date.
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7.4.4 No Breach. Purchaser agrees that (i) Purchaser will not take
any action and will endeavor in good faith not to permit any event to occur,
which would cause or constitute a material breach of this Agreement; (ii)
Purchaser will, in the event, and promptly after the occurrence of, or promptly
after becoming aware of the occurrence of or the impending or threatened
occurrence of, any event which would cause or constitute a material breach or
would, if it had occurred immediately prior to the date hereof, have caused or
constituted a material breach of any of the representations and warranties made
by Purchaser in this Agreement, give notice thereof to Seller; and (iii)
Purchaser shall use its best efforts to prevent or promptly to remedy such
breach.
7.4.5 Untrue Representations. Purchaser will notify Seller within
a reasonable period of time in writing if it becomes aware of any fact or
condition which makes untrue, or shows to have been untrue, in any material
respect, any Seller Representation.
ARTICLE VIII
DELIVERY OF CONSENTS AND ESTOPPELS
8.1 Consents and Estoppels. Seller shall use commercially reasonable
efforts to cause the indicated party to execute and deliver the consents or
estoppels described in Sections 8.2 and 8.3 and to deliver each consent or
estoppel to Purchaser.
8.2 Partnership Interests. The consents required in connection with
the transfers of the Partnership Interests including, without limitation, the
consent of the NBA to the transfers of the DBL Partnership Interests and the
Promissory Notes (the "NBA Consent") and the consent of the partners of DBL
Limited who are required to consent (the "Partnership Consents"), and the
execution and delivery of the Subordination Agreement required pursuant to
Section 7.2.5.
8.3 Promissory Notes. Estoppel Certificates executed by each maker in
the form reasonably acceptable to the parties (Purchaser agreeing that the
forms of Estoppel Certificates attached hereto and collectively identified as
Exhibit 8.3-A is acceptable). Provided, however, in the event Seller is unable,
using commercially reasonable efforts, to obtain an Estoppel Certificate for
any Promissory Note, in lieu thereof, Seller shall execute and deliver to
Purchaser a Substitute Estoppel which shall survive Closing and continue until
six (6) months following Closing. "Substitute Estoppel" shall mean a written
certificate dated as of Closing in substantially the form of Exhibit 8.3-B
setting forth the information called for in the form of Estoppel Certificates,
with respect to any Promissory Note for which Seller is unable to obtain an
Estoppel Certificate.
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ARTICLE IX
CONDITIONS
9.1 Purchaser's Conditions. The conditions described in Sections 9.1
through 9.3 are referred to herein as the "Purchaser's Conditions." If any of
the Purchaser's Conditions (other than the Consent Conditions, as defined in
Section 9.4) is not fully satisfied by Closing, the failed condition shall be
an Adjustment Event and the rights and obligations of the parties shall be
governed by the provisions of Section 16.3.
9.1.1 Representations, Warranties and Covenants. The Seller
Representations shall be true and correct in all material respects as of the
Effective Date and as of the Closing Date as though made on and as of the
Closing Date, except (i) to the extent another date is contemplated by this
Agreement, (ii) any changes permitted by this Agreement, and (iii) changes in
the ordinary course of business, such Seller Representations, as modified,
shall be true and correct as of the Closing Date; and Seller shall have
performed and complied in all material respects with all of the agreements,
obligations and covenants required to be performed hereunder by Seller prior to
or at the Closing.
9.1.2 No Material Adverse Change. There shall have been no
material adverse change in the Assets since the Effective Date, and there shall
not exist any material liability or obligation of Seller, with respect to the
Assets, whether accrued or unaccrued, direct or indirect, absolute or
contingent, asserted or unasserted except (i) as reflected in this Agreement or
the Exhibits hereto, or (ii) liabilities incurred in the ordinary course of
business and consistent with past practice since the Effective Date.
9.1.3 No Pending Litigation. No Proceeding will be pending or
threatened before any court or governmental agency seeking to restrain,
prohibit or obtain damages or other relief as a result of or in connection with
this Agreement or the consummation of the transactions contemplated hereby.
9.1.4 Closing Documents. Purchaser shall have received each of the
documents referred to in Article XI. All agreements, certificates, opinions and
other documents delivered by Seller to Purchaser hereunder shall be in form and
substance reasonably satisfactory to Purchaser.
9.1.5 Authorization. All corporate action necessary to authorize
the execution, delivery and performance of this Agreement by Seller and the
consummation by Seller of the transactions contemplated by this Agreement shall
have been duly and validly taken and Seller shall have full right and power to
sell the Assets upon the terms provided in this Agreement (collectively,
"Seller's Corporate Approvals"). Purchaser shall have received copies,
certified by the appropriate officer of Seller, of (i) resolutions duly adopted
by the Board of Directors of Seller approving this Agreement and the
transactions contemplated hereby and directing the
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submission thereof to a vote of Seller's shareholder, if necessary, and (ii) if
applicable, resolutions duly adopted by the holders of the necessary vote of
the outstanding shares of Seller's securities approving and adopting this
Agreement and the transactions contemplated hereby.
9.1.6 No Prohibition of Transaction. No Proceeding, regulation or
legislation shall have been instituted, threatened in writing or proposed in
writing (other than caused by the act or failure to act of Purchaser or Persons
acting on behalf of Purchaser) before, nor any order issued by, any
Governmental Authority to enjoin, restrain, prohibit or obtain substantial
damages in respect of, which is related to, or which arises out of, this
Agreement.
9.1.7 Documentation. Seller shall have delivered all assignments,
other documents, certificates and instruments in its possession or control as
required hereunder.
9.1.8 Affiliate Indebtedness. Seller shall have caused any
indebtedness owed by DBL Partnership to Seller or any Affiliate of Seller to be
transferred to Purchaser (with such transfer to include a transfer of all
Encumbrances securing same).
9.2 DBL Partnership Interests. Purchaser shall have received the NBA
Consent, the Xxxxxx Agreement, the Partnership Consents and the Subordination
Agreement, all executed by the appropriate party or parties and acknowledged,
where required.
9.3 Promissory Notes.
9.3.1 No Default. No event has occurred or with the passage of
time or the giving of notice will occur which is or would be an event of
default under the Promissory Notes or the Security Documents.
9.3.2 Principal Balance. The outstanding principal balances due
under the Promissory Notes are as set out on Exhibit 1.3, except to the extent
there has been a payment of principal prior to Closing.
9.3.3 Hillwood Consent. The execution and delivery of the Hillwood
Consent in accordance with the provisions of Section 7.3.3.
9.4 Failure of Consent Conditions. The term "Consent Conditions" means
obtaining the NBA Consent, the Partnership Consent and the Hillwood Consent. If
any Consent Condition is not satisfied as of the Closing, Purchaser may either:
(i) waive the receipt of the respective consent and close, or (ii) terminate
this Agreement with respect to the DBL Partnership Interests or the Promissory
Notes, as the case may be. If this Agreement is terminated as to only the DBL
Partnership Interests or the Promissory Notes pursuant to this Section 9.4,
this Agreement shall be deemed to be amended to exclude the DBL Partnership
Interests or the Promissory
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Notes, as the case may be, and all representations, warranties and covenants
relating to the excluded Asset and to reduce the Purchase Price by the amount
of the Purchase Price allocated to said Asset on the Exhibit 2.3. Provided
however, if any condition is not satisfied as the result of the act or failure
to act by Seller which constitutes Seller's failure to perform its obligations
pursuant to this Agreement and Seller fails to cure same within a reasonable
period of time, Purchaser shall be entitled to the remedies set forth in
Article XVI.
9.5 Seller's Conditions to Closing. Seller's obligation to perform its
agreements pursuant to this Agreement are subject to the conditions described
in this Section 9.5 being satisfied or waived by Seller as of the Closing Date
("Seller's Conditions").
9.5.1 Representations, Warranties and Covenants. The
representations and warranties of Purchaser set forth in this Agreement shall
be true and correct in all material respects as of the Effective Date and as of
the Closing Date as though made on and as of the Closing Date, except (i) to
the extent another date is contemplated by this Agreement, (ii) for any changes
permitted by this Agreement, and (iii) for changes in the ordinary course of
business, such warranties and representations, as modified, shall be true and
correct as of the Closing Date; and Purchaser shall have performed and complied
in all material respects with all of the agreements, obligations and covenants
required to be performed hereunder by Purchaser prior to or at the Closing.
9.5.2 No Pending Litigation. No Proceeding (other than one caused
by the act or failure to act of Seller or Persons acting on behalf of Sellers)
will be pending or threatened before any court or governmental agency seeking
to restrain, prohibit or obtain damages or other relief as a result of or in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
9.5.3 Authorization. All action necessary to authorize the
execution, delivery and performance of (or regarding) this Agreement by
Purchaser and the consummation of the transactions contemplated hereby shall
have been duly and validly taken by Purchaser and Purchaser shall have full
power and right to consummate the transactions contemplated hereby on the terms
provided herein.
9.5.4 No Prohibition of Transaction. No Proceeding or Legal
Requirement shall have been instituted, threatened or proposed (other than
caused by the act or failure to act of Seller or Persons acting on behalf of
Seller) before, nor any order issued by, any Governmental Authority (other than
one caused by the act or failure to act of Seller or Persons acting on behalf
of Seller) to enjoin, restrain, prohibit or obtain substantial damages in
respect of, which is related to, or which arises out of, this Agreement.
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9.6 Failure of Seller's Conditions to Closing. If any of Seller's
Conditions is not fully satisfied by Closing, Seller may terminate this
Agreement by written notice to Purchaser whereupon this Agreement shall be
canceled, all Xxxxxxx Money shall be paid to Seller by the Title Company,
Purchaser shall return to Seller all of the Due Diligence Items requested by
Seller, and thereafter neither Seller nor Purchaser shall have any continuing
obligations one unto the other except as provided in Section 17.9.
ARTICLE X
CLOSING
The closing ("Closing") hereunder shall take place at the offices of
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000. The Closing shall occur on or before the date ("Closing Date") which is
the earlier of (i) the tenth (10th) day after the expiration of the Inspection
Period or (ii) May 1, 1997. Purchaser shall notify Seller at least five (5)
days in advance of the exact time and date of Closing.
ARTICLE XI
SELLER'S OBLIGATIONS AT CLOSING
11.1 Seller's Obligations at Closing. At the Closing, Seller shall
execute, deliver and if required acknowledge or cause the appropriate party to
execute, deliver and if required acknowledge the documents described in
Sections 11.2 and 11.3 and shall perform those obligations described therein.
11.1.1 General Closing Obligations of Seller. In addition to the
other documents to be delivered by Seller to Purchaser at Closing pursuant to
the terms of this Agreement, Seller shall deliver the following to Purchaser at
Closing: (i) a certificate signed by a senior executive officer of Seller dated
as of the Closing Date stating that each of Seller's Representations are true
and correct at Closing and that each obligation of Purchaser, which is a
condition to Closing, has been satisfied by Purchaser or waived by Seller, (ii)
an opinion of Seller's counsel, Gardere & Xxxxx, L.L.P., dated as of the
Closing Date, addressed to Purchaser, in a form reasonably satisfactory to
Purchaser, (iii) certificates of the appropriate public officials to the effect
that each Seller is a validly existing corporation in good standing in Texas as
of a date not more than ten (10) days of the Closing Date, (iv) certificates of
the secretary of Seller setting forth all resolutions of the Board of Directors
and the shareholder of Seller authorizing the execution and delivery of this
Agreement and the performance by Seller of the transactions contemplated
hereby, and (v) incumbency and specimen signature certificates dated the
Closing Date signed by the officers of Seller certified by its Secretary.
11.1.2 Affiliate Indebtedness. Assignment of notes and liens
representing any indebtedness (or security therefor) owed by DBL Limited to
Seller or any Affiliate of Seller.
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11.2 DBL Partnership Interests. Execute and deliver to Buyer an
assignment of partnership interest ("Partnership Assignment") for the DBL
Partnership Interests, which shall be in the form of Exhibit 11.2, together
with such other documents as may be necessary to cause the admission of
Purchaser as a substitute limited partner of DBL Limited.
11.3 Promissory Notes.
11.3.1 The original Promissory Notes, endorsed by Seller "Pay to
the Order of [NAME OF PURCHASER OR PARTIAL DESIGNEE] without recourse," the
originals of all Security Documents, the originals of all UCC-1 Financing
Statements, and the originals of all filings with the FAA.
11.3.2 An Assignment of Notes and Liens in the form attached as
Exhibit 11.3.2 transferring and assigning all of Seller's rights, title and
interest in and to the Promissory Notes, the Security Documents, and all liens
and security interests securing their payment.
11.3.3 UCC-3 Forms as promulgated by the Texas Secretary of State
assigning to Purchaser all of Seller's rights under any security interests held
by Seller securing the Promissory Notes and/or any related UCC filings.
11.3.4 An executed letter addressed to each maker of a Promissory
Note in the form of Exhibit 11.3.4.
11.3.5 An Assignment of Aircraft Security Agreement in the form
of Exhibit 11.3.5.
11.3.6 A consent in a form reasonably acceptable to Purchaser and
Seller executed by Xxxxxx X. Xxxxxx consenting to the amendment of the Amended
and Restated General Partner Pledge Agreement, the Amended and Restated Limited
Partner Pledge Agreement and the Amended and Restated Aircraft Security
Agreement to delete the prohibition on assignment of the Performance Note, the
General Partner Promissory Note, the Limited Partner Promissory Note and the
Aircraft Note.
11.3.7 The Hillwood Consent by GP, Hillwood and Eagle Airlines,
Inc.
ARTICLE XII
PURCHASER'S OBLIGATIONS AT CLOSING
12.1 Purchaser's Obligations at Closing. At Closing, Purchaser shall
deliver to Seller the Purchase Price in cash and execute, deliver and if
required acknowledge the documents described in Section 12.2 and perform the
obligations described therein.
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12.1.1 General Closing Obligations of Purchaser. In addition to
the other documents to be delivered by Purchaser to Seller at Closing pursuant
to the terms of this Agreement, Purchaser shall deliver to the Seller at
Closing: (i) a certificate signed by a senior executive officer of Purchaser
dated as of the Closing Date stating that each of the representations and
warranties made herein by Purchaser are true and correct at Closing and that
each obligation of Seller, which is a condition to Closing, has been satisfied
by Seller or waived by Purchaser, (ii) an Opinion of Purchaser's counsel, Xxxxx
XxXxxxxxx & Oaks Xxxxxxxx, dated as of the Closing Date, addressed to Seller,
in a form reasonably satisfactory to Seller, (iii) certificates of the
appropriate public officials to the effect that Purchaser is a validly existing
Delaware limited partnership and is authorized to do business in and in good
standing in Texas as of a date not more than ten (10) days of the Closing Date,
(iv) certificates of Purchaser setting forth that all necessary actions have
been taken by Purchaser's partners authorizing the execution and delivery of
this Agreement and the performance by Purchaser of the transactions
contemplated hereby, and (v) incumbency and specimen signature certificates
dated the Closing Date signed by the General Partner of Purchaser.
12.2 DBL Partnership Interests. Execute and deliver such documents as
may be reasonably required in order for Purchaser to become a substitute
limited partner in DBL Limited and assume the obligations of Seller pursuant to
the Partnership Agreement upon such substitution.
ARTICLE XIII
COSTS AND ADJUSTMENTS
At or about Closing, the Assignment of Aircraft Security Agreement
shall be registered by Purchaser with the FAA. The Assignment of Notes and
Liens shall be recorded by Purchaser in Dallas County, Texas and with the
Office of the Secretary of State of Texas. Purchaser shall pay at Closing all
sales, transfer and any other similar Taxes payable as a result of the purchase
of the Assets by Purchaser.
ARTICLE XIV
AS IS PROVISION
PROPERTY CONVEYED "AS IS". PURCHASER AGREES THAT, EXCEPT FOR SELLER'S
REPRESENTATIONS SET FORTH IN THIS AGREEMENT, SELLER IS NOT MAKING AND
SPECIFICALLY DISCLAIMS ANY ADDITIONAL WARRANTIES OR REPRESENTATIONS OF ANY KIND
OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE ASSETS, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO MATTERS OF TITLE (OTHER
THAN SELLER'S WARRANTY OF TITLE SET FORTH IN THE ASSIGNMENT OR CONVEYANCE
DOCUMENTS TO BE DELIVERED AT CLOSING), TAX CONSEQUENCES, OPERATING HISTORY OR
PROJECTIONS, VALUATION,
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GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS OR ANY OTHER MATTER OR THING
RELATING TO OR AFFECTING THE ASSETS. PURCHASER AGREES THAT WITH RESPECT TO THE
ASSETS, PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY
OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY AGENT OF SELLER
OTHER THAN THOSE SET FORTH IN THIS AGREEMENT. PURCHASER REPRESENTS THAT IT IS A
KNOWLEDGEABLE PURCHASER OF OTHER PROPERTY OF THE KINDS INCLUDED IN THE ASSETS
AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF PURCHASER'S
CONSULTANTS, AND PURCHASER AGREES THAT UPON CLOSING, SELLER SHALL SELL AND
CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE ASSETS "AS IS, WHERE IS,"
WITH ALL FAULTS, AND PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE
NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING
THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT. THE TERMS AND CONDITIONS OF
THIS ARTICLE SHALL EXPRESSLY SURVIVE THE CLOSING AND NOT MERGE THEREIN AND
SHALL BE INCORPORATED INTO THE CONVEYANCE DOCUMENTS RELATING TO THE ASSETS.
ARTICLE XV
NOTICES
All notices, demands, or other communications of any type given by
Seller to Purchaser, or by Purchaser to Seller, whether required by this
Agreement or in any way related to the transaction contracted for herein, shall
be void and of no effect unless given in accordance with the provisions of this
Article. All notices shall be in writing and delivered to the Person to whom
the notice is directed, either in person, by facsimile transmission or by
United States Mail, as a registered or certified item, return receipt
requested. Notices delivered in person shall be deemed delivered upon receipt,
notices delivered by facsimile transmission shall be deemed delivered the same
day as sent with confirmation received by the senders's facsimile equipment and
notices delivered by mail shall be deemed given three (3) days after being
deposited in a post office or other depository under the care or custody of the
United States Postal Service, enclosed in a wrapper with proper postage
affixed, addressed as follows:
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Seller: Xxxxxx-Xxxxxxx Properties, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With Required Gardere & Xxxxx, L.L.P.
Copy (which 0000 Xxx Xxxxxx, Xxxxx 0000
does not consti- Xxxxxx, Xxxxx 00000
tute notice) to: Attn: Xxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Purchaser: Crescent Real Estate Equities Limited Partnership
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With Required Crescent Real Estate Equities Limited Partnership
Copy (which 000 Xxxx Xxxxxx, Xxxxx 0000
does not consti- Xxxx Xxxxx, Xxxxx 00000
tute notice) to: Attn: Xxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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ARTICLE XVI
REMEDIES
16.1 Default by Seller. If Seller fails or refuses to consummate this
Agreement, or if Seller fails to perform any of Seller's other obligations
hereunder either prior to or at the Closing and Seller fails to cure the same
within seven (7) days, and such failure or refusal results from any reason
other than the termination of this Agreement by Purchaser pursuant to a right
to terminate expressly set forth in this Agreement or Purchaser's failure to
perform any of Purchaser's obligations under this Agreement, then Purchaser may
(i) enforce specific performance of Seller's duties and obligations under this
Agreement, or (ii) terminate this Agreement by giving written notice thereof to
Seller prior to or at the Closing, in which event Purchaser shall also be
entitled, subject to Section 16.5, to a return of the Xxxxxxx Money (and
interest thereon) and to seek its actual damages against Seller for such
default as well as such other relief as may be available at law or in equity.
16.2 Default by Purchaser. If the Purchaser fails or refuses to
consummate the purchase of the Assets pursuant to this Agreement, and such
failure or refusal results from any reason other than termination of this
Agreement by Purchaser pursuant to a right to terminate expressly set forth in
this Agreement, then the Seller may as its sole remedy terminate this Agreement
by giving written notice thereof to Purchaser at the Closing, and the Title
Company shall deliver the Xxxxxxx Money to Seller as liquidated damages. The
Xxxxxxx Money is agreed upon by and between Seller and Purchaser as liquidated
damages, and not as a penalty, due to the difficulty and inconvenience of
ascertaining and measuring actual damages, and the uncertainty thereof, and no
other damages, rights, or remedies shall in any case be collectible,
enforceable, or available to Seller, and Seller shall accept the Xxxxxxx Money
as Seller's total damages and relief. Earnings on the Xxxxxxx Money shall be
returned to Purchaser.
16.3 Adjustment Events.
16.3.1 Definitions. "Adjustment Event" means any of the
following: (i) the breach of a Seller Representation or (ii) any of the
Purchaser's Conditions (other than any of the Consent Conditions) is not
satisfied. As used in this Section 16.3, "cost of curing" means the reasonable
cost to cure the matter constituting the Adjustment Event or, if the Adjustment
Event is either not curable or the cure does not fully restore the value of the
affected Asset to its preAdjustment Event value, the reduction in the value of
the affected Asset.
16.3.2 Adjustment Procedure. From and after the occurrence of an
Adjustment Event, Seller shall cure (or agree to an adjustment in the Purchase
Price relating to the affected Asset) all Adjustment Events, each of which
shall be resolved in accordance with the further provisions of this Section
16.3.2. Purchaser shall deliver written notice of the Adjustment Event ("First
Adjustment Notice") and a proposal ("Purchaser's Adjustment Proposal") for
resolving same. Within five (5) business days after delivery of the First
Adjustment Notice, Seller shall
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either deliver written notice ("Second Adjustment Notice") to Purchaser
agreeing to Purchaser's Adjustment Proposal or Seller shall deliver an
alternative proposal in writing ("Seller's Adjustment Proposal"). If Seller
fails to deliver timely a Second Adjustment Notice or agrees to Purchaser's
Adjustment Proposal in its Second Adjustment Notice, Purchaser's Adjustment
Proposal shall be binding on the parties. If Seller delivers a Seller's
Adjustment Proposal, the parties shall promptly engage in good faith
negotiations to resolve the differences between the proposals. To the extent
either of the parties determines the same might facilitate resolution, each
will cause their senior officers to participate in such negotiations. If the
parties have not resolved the differences within ten (10) days after the
delivery of the Seller's Adjustment Proposal, the parties agree to promptly
engage in non-binding mediation with a mediator mutually acceptable to both
parties (both parties agree to not unreasonably withhold or delay their consent
to selection of a mediator) in order to resolve the differences. If after ten
(10) hours of mediation the parties are unable to resolve the differences,
either party may deliver an Arbitration Notice in accordance with Section 16.4
and the dispute shall be an Arbitration Event to be resolved in accordance with
the provisions of Section 16.4. Notwithstanding any provision of this Section
16.3.2 to the contrary, if the amount Purchaser asserts is necessary to cure an
Adjustment Event exceeds the value of such Affected Asset as reasonably
determined by Purchaser (which determination will be subject to Section 16.4),
Seller may (but is not obligated to) cure the Adjustment Event by delivering
written notice ("Withdrawal Notice") to Purchaser notifying Purchaser that
Seller is withdrawing the affected Asset from this Agreement. If Seller
withdraws an Asset from this Agreement in accordance with this Section 16.3.2,
this Agreement shall be deemed to be amended to exclude the affected Asset and
all representations, warranties and covenants (other than set forth in Section
17.9) relating to the withdrawn Asset, and to reduce the Purchase Price by the
value of the Affected Asset as specified by Purchaser or as determined pursuant
to Section 16.4.
16.3.3 Effect of Closing. Except as otherwise provided in this
Section 16.3, unresolved Adjustment Events shall not delay Closing nor shall
Closing alter the rights or obligations of the parties regarding the unresolved
Adjustment Events. The parties shall continue the resolution process following
Closing (including but not limited to arbitration pursuant to Section 16.4) and
the rights and obligations of the parties with respect to the unresolved
Adjustment Event shall be the same as if the Closing had not occurred. Provided
however, if the aggregate amount in dispute regarding any unresolved Adjustment
Events exceeds $1,000,000.00 either party may extend the Closing Date until not
later than the first business day following the expiration of ten (10) calendar
days after the originally scheduled Closing Date, but in no event later than
May 12, 1997.
16.3.4 Sole Remedy. Purchaser's only remedy arising out of the
occurrence of an Adjustment Event shall be an adjustment of the Purchase Price
to reflect the reasonable cost to cure or Purchaser's actual (not incidental
and consequential) damages arising out of the Adjustment Event (regardless of
whether determined before or after Closing), the amount of which shall be
agreed to by the parties in accordance with the provisions of Section 16.3 or
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awarded by arbitration in accordance with the provisions of Section 16.4. NO
SELLER REPRESENTATION SHALL SURVIVE CLOSING.
16.4 Arbitration. As used in this Agreement an "Arbitration Event"
means any dispute which pursuant to the further provisions of this Agreement is
designated as an Arbitration Event. In those instances in which there is a
dispute other than an Arbitration Event governed by Section 16.3.2, Seller and
Purchaser shall attempt to resolve the dispute for a period of five (5)
business days following either party's delivery of a notice ("Preliminary
Notice") (said period called "Settlement Period") of its intent to submit the
dispute to arbitration if not resolved prior to the expiration of the
Settlement Period. If the dispute is not resolved at the end of the Settlement
Period or, in the case of a dispute under Section 16.3.2, after the prescribed
mediation, either party may thereafter deliver a written notice ("Arbitration
Notice") to the other party and the American Arbitration Association ("AAA")
(Dallas Office) notifying both of its intent to resolve the dispute in
accordance with the further provisions of this Section and the Commercial
Arbitration Rules of the AAA then in effect ("AAA Rules"). However, the
provisions of this Section shall control over any contrary provisions in the
AAA Rules. Within five (5) days after the delivery of an Arbitration Notice,
each party shall deliver a written statement of a resolution of the dispute
acceptable to it to the other party (each an "Original Resolution") (and if
more than one Asset is the subject of an Arbitration Notice, each Asset shall
be the subject of a separate Resolution). Seller's statement is hereafter
called "Seller's Resolution" and Purchaser's statement is hereafter called
"Purchaser's Resolution." If either party fails to timely deliver its Original
Resolution, the Original Resolution of the other party shall be binding on the
parties and no further action shall be taken to resolve the dispute. The
resolution of the dispute shall be either the Seller's Resolution or the
Purchaser's Resolution based upon the determination of a panel of three
arbitrators ("Arbitrators") selected in accordance with the further provisions
of this Section. All of the Arbitrators shall be selected from the panel of
arbitrators submitted by AAA. Within ten (10) days after either party delivers
an Arbitration Notice to the other party and the AAA requesting arbitration in
accordance with the provisions of this subsection, AAA shall deliver a list
("Panel List") of qualified arbitrators to Seller and Purchaser. Within ten
(10) days after the delivery of the Panel List, each party shall send written
notice ("Party Selection Notice") to the other party and the AAA indicating its
choice of one arbitrator and indicating up to two persons on the Panel List to
which it objects ("Objectionable Persons"). Within ten (10) days after its
receipt of both Party Selection Notices, the AAA shall select a third
arbitrator from the Panel List by delivering written notice ("AAA Selection
Notice") of its selection to both parties. The third arbitrator shall not be an
Objectionable Person. The Arbitrators shall be one person selected by each
party and one person selected by the AAA. Within five (5) days after the date
of the delivery of the AAA Selection Notice, Seller and Purchaser shall submit
their respective Resolution in writing (which may not be different from their
respective original Resolutions), together with the supporting data and facts
used to determine their Resolution, to the Arbitrators. Within twenty (20) days
after the Resolutions are submitted, the Arbitrators shall hold a hearing
during which Seller and Purchaser may present evidence in support of their
respective resolutions. Within fifteen (15)
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days after the date on which the hearing is completed, the Arbitrators will
determine a resolution ("Final Resolution") based upon the parties' submissions
and evidence presented. The Final Resolution shall be either the Seller's
Resolution or the Purchaser's Resolution. The Arbitrator's determination shall
be binding on Seller and Purchaser and may be enforced by a court of competent
jurisdiction. The cost of such arbitration shall be paid by the party whose
Resolution was not selected.
16.5 Incidental and Consequential Damages. NOTWITHSTANDING ANY LEGAL
REQUIREMENT OR PROVISION HEREIN TO THE CONTRARY, NO PARTY SHALL BE ENTITLED TO
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING UNDER OR AS A RESULT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREUNDER.
16.6 Survival of Sections 16.3 and 16.4. If matters and issues
described in or being resolved pursuant to Sections 16.3 or 16.4 are not
resolved (said matters and issues hereafter called "Open Issues") prior to the
Closing Date, the provisions of said Sections shall survive Closing and shall
continue to govern the rights and obligations of the parties until the Open
Issues are fully resolved and all sums owing are paid and the occurrence of
Closing shall not accelerate or otherwise affect the rights or obligations of
the parties. To the extent there are Open Issues, any adjustments to the
Purchase Price determined subsequent to the Closing shall be paid by Seller
when determined in accordance with said Sections.
ARTICLE XVII
MISCELLANEOUS
17.1 Assignment. Provided Purchaser agrees to remain primarily liable
for performance of Purchaser's obligation hereunder, Purchaser may: (i) assign
this Agreement to any Affiliate of Purchaser, and/or (ii) deliver a written
notice (each a "Closing Direction") to Seller directing Seller to convey,
transfer or assign (as appropriate) one or more of the Assets to any Partial
Designee described in the Closing Direction. Seller agrees to comply with any
Closing Direction. "Partial Designee" means (i) an Affiliate of Purchaser, (ii)
any corporation, more than 50% of the total number of shares of stock of which
are owned by Purchaser and (iii) the Spinoff Affiliate. "Spinoff Affiliate"
means that certain corporation (and its direct or indirect partnership or
corporate subsidiaries) described, in that certain press release issued by
Purchaser on January 30, 1997, as a newly formed corporation that will be spun
off to shareholders of Crescent Real Estate Equities Trust and whose stock will
be listed separately on a national exchange. In the event that Purchaser
assigns this Agreement to an Affiliate of Purchaser or Purchaser delivers a
Closing Direction to Seller with respect to one or more of the Assets, all
references in this Agreement to Purchaser shall be considered to also
constitute references to the Affiliate or Partial Designee to the extent of the
Assets affected by such assignment or Closing Direction.
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17.2 Interpretation and Applicable Law. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Texas. As
used herein, unless the context otherwise requires: (i) references to "Article"
or "Section" are to an article or section hereof; (ii) all "Exhibits" referred
to herein are to Exhibits attached hereto and are incorporated herein by
reference and made a part hereof; and (iii) except where specifically qualified
by limiting language relating thereto, "include", "includes" and "including"
are deemed to be followed by "without limitation" whether or not they are in
fact followed by such words or words of like import. Where required for proper
interpretation, words in the singular shall include the plural; the masculine
gender shall include the neuter and the feminine, and vice versa. The terms
"successors and assigns" shall include the heirs, administrators, executors,
successors and permitted assigns, as applicable, of any party hereto.
17.3 Amendment. This Agreement may not be modified or amended, except
by an agreement in writing signed by Seller and Purchaser. The parties may
waive any of the conditions contained herein or any of the obligations of the
other party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and obligations.
17.4 Attorneys' Fees. In the event it becomes necessary for either
party to file a suit to enforce this Agreement or any provisions contained
herein, the prevailing party shall be entitled to recover, in addition to all
other remedies or damages, reasonable attorneys' fees and costs of court
incurred in such suit.
17.5 Descriptive Headings. The descriptive headings of the several
sections or paragraphs contained in this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
17.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith. No representation, warranty, covenant, agreement or
condition not expressed in this Agreement shall be binding upon the parties
hereto or shall affect or be effective to interpret, change or restrict the
provisions of this Agreement.
17.7 Counterparts. Numerous copies of this Agreement may be executed
by the parties hereto. Each such executed copy shall have the full force and
effect of an original executed instrument.
17.8 Time. Time is of the essence of this Agreement. The date of
execution of this Agreement by Seller shall be the date of execution of this
Agreement. If the final date of any period falls upon a Saturday, Sunday or
legal holiday under the laws of the State of Texas, then
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in such event the expiration date of such period shall be extended to the next
day which is not a Saturday, Sunday or legal holiday under the laws of the
State of Texas.
17.9 Confidentiality. Purchaser agrees that, from the Effective Date
through Closing or, if this Agreement is terminated, through the date which is
six (6) months after the date of termination or, as to any Asset not purchased
by Purchaser at Closing, through the date which is six (6) months after the
Closing Date (the "Confidentiality Period"), all Asset Information shall be
kept confidential and shall not be used except as provided in this Section
17.9. Without the prior written consent of Seller, during the Confidentiality
Period the Asset Information shall not be disclosed by Purchaser or Purchaser's
Representatives, in any manner whatsoever, in whole or in part, except (i) to
Purchaser's Representatives who need to know the Asset Information for the
purpose of evaluating the Assets and who are informed by the Purchaser of the
confidential nature of the Asset Information; (ii) as may be necessary for
Purchaser or Purchaser's Representatives to comply with applicable laws,
including, without limitation, governmental regulatory, disclosure, tax and
reporting requirements; to comply with other requirements and requests of
regulatory and supervisory authorities and self-regulatory organizations having
jurisdiction over Purchaser or Purchaser's Representatives; to comply with
regulatory or judicial processes; or to satisfy reporting procedures and
inquiries of credit rating agencies in accordance with customary practices of
Purchaser or its Affiliates provided that Purchaser shall give prompt notice of
any such requirement to Seller; and (iii) as otherwise permitted by this
Section 17.9. If this Agreement is terminated, Purchaser and Purchaser's
Affiliates shall not during the remainder of the Confidentiality Period use for
any purpose or for the benefit of any Person any of the Asset Information.
Except as provided otherwise in this Section 17.9, Purchaser and
Seller, for the benefit of each other, hereby agree that prior to Closing
neither of them will release or cause or permit to be released to the public
any press notices, publicity (oral or written) or advertising promotion
relating to, or otherwise publicly announce or disclose or cause or permit to
be publicly announced or disclosed, in any manner whatsoever, the terms,
conditions or substance of this Agreement or the transactions contemplated
herein, without first obtaining the consent of the other party hereto (which
shall not be unreasonably withheld or delayed). Seller, being aware of
Purchaser's affiliation with a publicly-held corporation, the securities of
which are traded on a national securities exchange, acknowledges that Purchaser
and its Affiliates may be compelled by considerations of legal obligation,
fiduciary and public responsibility, commercial pragmatism and established
corporate policy, to issue a public press release announcing that it has
entered into this Agreement and stating the material terms hereof; Purchaser
will not issue or disclose any press release without first obtaining the
consent of Seller as to the content of such press release (which acceptance
shall not be unreasonably withheld or delayed); Seller consents to all such
additional statements and disclosures Purchaser may reasonably make in
responding to inquiries arising as a result of any such press release.
Purchaser agrees to send a copy of any final press release directly to Seller
not later than the time when Purchaser issues such press release to the public.
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Purchaser acknowledges that Seller, as part of an internal
restructuring, will be required to disclose the existence and terms of this
Agreement in an Information Statement to be sent to the shareholder of DMI and,
if necessary, the shareholders of the parent company thereof (CCP) and
Purchaser consents to such disclosure.
Purchaser shall indemnify and hold Seller and the Affiliates of Seller
harmless, and Seller shall indemnify and hold Purchaser and the Affiliates of
Purchaser harmless, from and against any and all actual direct claims, demands,
causes of action, losses, damages, liabilities, costs and expenses (including,
without limitation, attorneys' fees and disbursements) suffered or incurred by
the other party and proximately caused by a breach by Purchaser or Purchaser's
Representatives or Seller, as the case may be, of the provisions of this
Section 17.9; BUT THIS SECTION 17.9 WILL NOT ENTITLE EITHER PURCHASER, SELLER,
PURCHASER'S AFFILIATES OR SELLER'S AFFILIATES TO RECOVER INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
As used in this Agreement, the term "Asset Information" shall mean (i)
all information and documents in any way relating to the Assets, the operation
thereof or the sale thereof furnished to, or otherwise made available for
review by, Purchaser or its directors, officers, employees, Affiliates,
partners, brokers, agents or other representatives, including, without
limitation, attorneys, accountants, contractors, consultants, engineers and
financial advisors (collectively, "Purchaser's Representatives"), under or in
connection with this Agreement by Seller or any Affiliate of Seller, or their
agents or representatives, including, without limitation, their contractors,
engineers, attorneys, accountants, consultants, brokers or advisors, and (ii)
all analyses, compilations, data, studies, reports or other information or
documents prepared or obtained by Purchaser or Purchaser's Representatives to
the extent such information or documents contain or are based on the
information or documents described in the preceding clause (i), or otherwise
reflecting their review or investigation of the Assets undertaken with Seller's
required approval; but notwithstanding the foregoing, the term "Asset
Information" shall not be deemed to include any information or document which
(1) is or becomes generally available to the public other than as a result of a
disclosure by Purchaser or Purchaser's Representatives in violation of this
Agreement, (2) is in the possession of Purchaser or Purchaser's Representatives
prior to its disclosure to Purchaser by Seller or any Affiliates of Seller or
their agents or representatives, (3) becomes available to Purchaser from a
source other than Seller or any Affiliates of Seller or their agents or
representatives without a violation of any confidentiality obligation, or (4)
is developed by Purchaser or Purchaser's Representatives without reliance upon
and independently of otherwise confidential Asset Information.
In addition to any other remedies available to Seller and Purchaser,
Seller and Purchaser shall each have the right to seek equitable relief,
including, without limitation, injunctive relief or specific performance,
against the other party or their representatives in order to enforce the
provisions of this Section 17.9.
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The provisions of this Section 17.9 shall survive the termination of
this Agreement prior to Closing for six months following the termination date.
It is understood that the foregoing shall not preclude either party
from discussing the substance or any relevant details of the transactions
contemplated in this Agreement on a confidential basis with any of its
attorneys, accountants, professional consultants, financial advisors, rating
agencies, or potential lenders, as the case may be, or prevent either party
hereto from complying with applicable laws, including, without limitation,
governmental regulatory, disclosure, tax and reporting requirements.
17.10 Rule of Construction. The parties hereto acknowledge that they
each enter into this Agreement after having had an opportunity for thorough
review by, and on advice of, their respective legal counsel. The parties agree
that the judicial rule of construction requiring or allowing an instrument to
be construed to the detriment of or against the interest of the maker thereof
shall not apply to this Agreement.
17.11 Shareholder Consent. DMI represents and warrants to Purchaser
that the parent company of DMI, Xxxxxx-Xxxxxxx Properties, Inc., a Texas
corporation ("CCP"), has authorized the execution, delivery and performance
hereof.
17.12 Access to Records after Closing. Following the Closing,
Purchaser shall give to Seller an unrestricted access during normal business
hours with reasonable prior notice to (and the right to make copies at the
expense of Seller) the books, files, records and Tax Returns and supporting
schedules and work papers relating to the Assets and business, operations,
income, and expenses of Purchaser relating thereto which exist on, accrue or
arise after or occur after the Closing. Any access pursuant to this Section
17.12 shall be conducted in such manner as not to interfere unreasonably with
the operations of the business of Purchaser following the Closing.
17.13 SPECIAL NON-DISCLOSURE AGREEMENT. IN ADDITION TO THE AGREEMENTS
SET FORTH IN SECTION 17.9, PURCHASER UNCONDITIONALLY AGREES THAT NEITHER
PURCHASER NOR PURCHASER'S REPRESENTATIVES OF AFFILIATES WILL DISCLOSE THE TERMS
OR EXISTENCE OF THIS AGREEMENT PRIOR TO THE EARLIER OF: (I) THE DATE WHICH IS
SEVEN (7) DAYS AFTER THE EFFECTIVE DATE OR (II) THE DATE ("TRIGGER DATE") WHICH
IS THE LATER OF (A) THE DAY AFTER THE DATE ON WHICH XXXXXX X. XXXXXX DISCLOSES
THE EXISTENCE OF THIS AGREEMENT TO XXXX XXXXX, XX. AND (B) THE DATE ON WHICH
SELLER DISCLOSES THE EXISTENCE OF THIS AGREEMENT TO SELLER'S EMPLOYEES AND
OTHER PERSONS SELLER WISHES TO TELL BEFORE THE EXISTENCE OF THIS AGREEMENT IS
KNOWN GENERALLY. SELLER AGREES TO NOTIFY PURCHASER OF THE TRIGGER DATE WITHIN A
REASONABLE PERIOD FOLLOWING ITS OCCURRENCE.
17.14 Retention by DMI or CCP. Until such time as all obligations of
Seller to Purchaser hereunder shall have expired, DMI or CCP shall retain (or
place into its liquidating trust), as a reserve for contingent liabilities
under this Agreement, an amount equal to one
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hundred twenty-five percent (125%) of the total of: (i) all unpaid sums to
which Purchaser is entitled pursuant to Sections 16.3 or 16.4, plus (ii) the
amount asserted by Purchaser in connection with any unresolved Adjustment Event
amount and any amount subject to arbitration in accordance with the provisions
of Section 16.4.
17.15 Joinder by CCP. CCP joins in the execution of this Agreement for
purposes of acknowledging obligations pursuant to Sections 17.11 and 17.14.
ARTICLE XVIII
DEFINITIONS
The following terms used in this Agreement have the respective
meanings specified or referred to in this Article XVIII. The "Defined Term
Index" attached hereto sets forth the Sections in this Agreement in which other
terms are defined.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Person. For purposes of this
definition, "control" (including "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and the applicable rulings and regulations thereunder.
"Encumbrance" means any liability, debt, mortgage, deed of trust,
pledge, security interest, encumbrance, option, right of first refusal,
agreement of sale, adverse claim, easement, lien, assessment, restrictive
covenant, encroachment, burden or charge of any kind or nature whatsoever or
any item similar or related to the foregoing.
"GAAP" means generally accepted accounting principles, in effect from
time to time in the United States (i) which are consistent with the principles
promulgated and adopted by the Financial Accounting Standards Board and it
predecessors as generally accepted accounting principles, (ii) which are
applied for all periods in a manner consistent with the manner in which such
principles and practices were applied to the most recent financial statements
furnished by Seller to Purchaser pursuant to this Agreement.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental private
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157
body exercising, or purporting to exercise, any executive, legislative,
judicial, administrative, police, regulatory or taxing authority or power of
any nature.
"Governmental Authorization" means any permit, license, franchise,
approval, certificate, consent, ratification, permission, confirmation,
endorsement, waiver, certification, registration, qualification or other
authorization issued, granted, given or otherwise made available by or under
the authority of any Governmental Authority or pursuant to any Legal
Requirement.
"IRS" means the United States Internal Revenue Service.
"Legal Requirement" means any federal, state, municipal, local or
foreign statute, law, ordinance, decree, requirement, judgment, order, treaty,
proclamation, convention, rule or regulation (or interpretation of any of the
foregoing) of any Governmental Authority or any principle, ruling or finding of
common law, including any Environmental Laws.
As used herein, the term "material" means a fact (e.g., an adverse
change) which it is reasonably likely that a prudent and knowledgeable
purchaser would attach importance in making a decision regarding the specific
item, in the context in which it is used.
"Person" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, joint venture, joint
stock association, estate, trust, cooperative, foundation, union, syndicate,
league, consortium, coalition, committee, society, firm, company or other
enterprise, association, organization or entity of any nature, other than a
Governmental Authority.
"Proceeding" means any action, suit, litigation, arbitration, lawsuit,
claim, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination, investigation, challenge,
controversy or dispute commenced, brought, conducted or heard by or before, or
otherwise involving any Governmental Authority or arbitrator.
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EXECUTED on this the _________ day of February, 1997.
SELLER:
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
EXECUTED for the purposes set forth in Section 17.15 of the Agreement
this the 10th day of February, 1997.
XXXXXX-XXXXXXX PROPERTIES, INC.,
a Texas corporation
By:
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
EXECUTED on this the 10th day of February, 1997.
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation, General
Partner
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
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RECEIPT OF XXXXXXX MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS Agreement IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
REPUBLIC TITLE OF TEXAS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
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ACQUISITION AGREEMENT
DEFINED TERM INDEX
The following terms are defined in the respective Section of the
Agreement indicated below.
DEFINED TERM DEFINITION LOCATION
------------ -------------------
AAA 16.4
AAA Rules 16.4
AAA Selection Notice 16.4
Actual knowledge 6.1
Adjustment Event 16.3.1
Affiliate Article XVIII
Agreement Introductory Paragraph
Aircraft Note Exhibit 1.3
Aircraft Security Agreement Exhibit 1.3
Arbitration Event 16.4
Arbitration Notice 16.4
Arbitrators 16.4
Asset Allocation 2.3
Assets 1.1
Asset Information 17.9
Xxxxxx Agreement 7.2.4
CCP 17.12
CERCLA Article XVIII
Closing Article X
Closing Date Article X
Closing Direction 17.1
Code Article XVIII
Confidentiality Period 17.9
Consent Conditions 9.4
Contaminant Article XVIII
Cost of Curing 16.3.1
DBL Limited 1.2
DBL Partnership Agreements 4.2.1
DBL Partnership Interests 1.2
DMI Introductory paragraph
Due Diligence Items 4.1
Xxxxxxx Money 3.1
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Effective Date Introductory paragraph
Encumbrance Article XVIII
FAA 4.3.3
Fairness Opinion 9.7
Fairness Deadline 9.7
Fairness Notice 9.7
Fairness Opinion Termination Deadline 9.7
Final Resolution 16.4
First Adjustment Notice 16.3.2
GAAP Article XVIII
General Partner Promissory Note Exhibit 1.3
Governmental Authorities Article XVIII
Governmental Authorization Article XVIII
GP 6.2.2
Hillwood 6.2.2
Hillwood Consent 7.3.3
Inspection Period 5.1
IRS Article XVIII
Knowledge 6.1
XX Xxxxxx 7.2.5
Legal Requirement Article XVIII
Limited Partner Promissory Note Exhibit 1.3
Xxxxx Xxxxxx Suite Agreement 6.2.2
Majority Interest 6.2.4
Material Article XVIII
NBA 6.2.3
NBA Consent 8.2
Objectionable Persons 16.4
Original Resolution 16.4
Panel List 16.4
Partial Designee 17.1
Partnership 1.2
Partnership Agreements 1.2
Partnership Assignment 11.2
Partnership Consents 8.2
Partnership Interests 1.2
Party Selection Notice 16.4
Performance Note Exhibit 1.13
Person Article XVIII
Pledgors Exhibit 1.3
Preliminary Notice 16.4
Principal Officers 6.1
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Proceeding Article X
Promissory Notes 1.3
Purchaser Introductory paragraph
Purchase Price 2.1
Purchaser's Adjustment Proposal 16.3.2
Purchaser's Conditions 9.1
Purchaser's Representatives 17.9
Purchaser's Resolution 16.4
Second Adjustment Notice 16.3.2
Security Documents 1.3
Seller Introductory paragraph
Seller Representations 6.1
Seller's Adjustment Proposal 16.3.2
Seller's Conditions 9.5
Seller's Corporate Approvals 9.1.5
Seller's Resolution 16.4
Settlement Period 16.4
Subordination Agreement 7.2.5
Substitute Estoppel 8.3
Title Company 3.1
Trigger Date 17.14
Withdrawal Notice 16.3.2
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FIRST AMENDMENT TO ACQUISITION AGREEMENT
This First Amendment to Acquisition Agreement ("Amendment") is entered
into by and among XXXXXX-XXXXXXX PROPERTIES, INC., a Texas corporation ("CCP"),
HI CAPITAL CORP., a Texas corporation ("HCC"), METROPORT REALTY CORPORATION, a
Texas corporation ("MRC"), HI PRODUCTION COMPANY, INC., a Texas corporation
("HPC"), DALLAS MAVERICKS, INC., a Texas corporation ("DMI") (CCP, HCC, MRC,
HPC, and DMI are collectively referred to as "Seller") and CRESCENT REAL ESTATE
EQUITIES LIMITED PARTNERSHIP, a Delaware limited partnership ("Purchaser"), as
of the _____ day of March, 1997 in light of the following recitals.
R E C I T A L S :
Heretofore, CCP, HCC, MRC, HPC, DMI and Purchaser entered into a
certain Acquisition Agreement with an effective date of February 10, 1997 (the
"Acquisition Agreement"). Unless defined herein, all capitalized terms shall
have the meaning provided in the Acquisition Agreement. One of the Assets
described in the Acquisition Agreement is the Airport Leasehold. CCP subleases
the Airport Leasehold to RR Investments, Inc., d/b/a Million Air ("Million
Air") pursuant to a certain sublease ("Million Air Sublease") dated May 1,
1992. Some of the provisions of the Million Air Sublease grant Million Air the
right of first refusal ("First Refusal Right") to purchase the Airport
Leasehold and the improvements situated thereon. In accordance with the terms
of the Million Air Sublease, CCP gave Million Air notice of its intention to
sell the Airport Leasehold pursuant to the Acquisition Agreement and Million
Air timely exercised the First Refusal Right. However, Million Air requested an
amendment to the First Refusal Right provisions. The Acquisition Agreement did
not contemplate the sale of the Airport Leasehold to Million Air on any terms
other than those set forth in the Million Air Sublease. CCP has requested
Purchaser to amend the Acquisition Agreement to allow CCP to sell the Airport
Leasehold in accordance with the terms of the letter agreement set forth on
Exhibit "A" to this Amendment ("Million Air Agreement"). Purchaser has
consented to the sale of the Airport Leasehold and the related Real Property
Assets to Million Air in accordance with the Million Air Agreement subject to
the further terms of this Amendment. Therefore, Seller and Purchaser have
agreed to amend the Acquisition Agreement in accordance with the further terms
of this Amendment.
Therefore, in consideration of the foregoing and other good and
valuable consideration, Seller and Purchaser agree as follows:
1. Seller shall not sell or agree to sell the Airport Leasehold except
to Million Air in accordance with the provisions of the Million Air Agreement.
2. Upon the execution of the Million Air Agreement by Million Air and
CCP, the Airport Leasehold and the related Real Property Assets (i) shall be
conveyed by CCP to Million Air pursuant to the terms of the Million Air
Agreement, and (ii) shall not be conveyed pursuant
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to the Acquisition Agreement and the Purchase Price shall be reduced by
$1,500,000.00; otherwise, the Airport Leasehold and the related Real Property
Assets shall remain a part of the Assets subject to the terms of the
Acquisition Agreement for all purposes. However, the provisions of this
paragraph 2 are subject to the provisions of paragraph 3 below.
3. If Million Air executes the Million Air Agreement but does not
acquire the Airport Leasehold within thirty (30) days following the Closing
Date, Seller agrees to sell and Purchaser agrees to buy the assets related to
the Airport Leasehold in accordance with the terms of the Acquisition Agreement
with the following provisions: (i) the "Closing Date" shall be seventy (70)
days after the date Seller delivers a written notice ("Airport Leasehold
Notice") to Purchaser advising it of the failure of Million Air to acquire the
Airport Leasehold; (ii) the "Inspection Period" shall be sixty (60) days from
the date of the delivery of the Airport Leasehold Notice; (iii) the Purchase
Price shall be $1,500,000.00; and (iv) the Xxxxxxx Money shall be $19,750.00.
4. Seller and Purchaser ratify and confirm the Acquisition Agreement
as amended by this Amendment.
EXECUTED on this the ____ day of ___________, 1997.
SELLER:
XXXXXX-XXXXXXX PROPERTIES, INC.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
HI CAPITAL CORP.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
METROPORT REALTY CORPORATION
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
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165
HI PRODUCTION COMPANY, INC.
a Texas corporation
By:
--------------------------------------
Xxxxxx X. Xxxxxx, President
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
--------------------------------------
Xxxxxx X. Xxxxxx, President
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
----------------------------------
Xxxxx X. Xxxxxx, Xx.
Sr. Vice President, Acquisitions
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SECOND AMENDMENT TO ACQUISITION AGREEMENT
This Second Amendment to Acquisition Agreement ("Amendment") is
entered into by and among XXXXXX-XXXXXXX PROPERTIES, INC., a Texas corporation
("CCP"), HI CAPITAL CORP., a Texas corporation ("HCC"), METROPORT REALTY
CORPORATION, a Texas corporation ("MRC"), HI PRODUCTION COMPANY, INC., a Texas
corporation ("HPC"), DALLAS MAVERICKS, INC., a Texas corporation ("DMI") (CCP,
HCC, MRC, HPC, and DMI are collectively referred to as "Seller") and CRESCENT
REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited partnership
("Purchaser"), as of the _____ day of April, 1997 in light of the following
recitals.
R E C I T A L S :
Heretofore, Seller and Purchaser entered into a certain Acquisition
Agreement with an effective date of February 10, 1997 (the "Initial
Agreement"). Effective as of March 27, 1997, Seller and Purchaser entered into
that certain First Amendment to Acquisition Agreement (the"First Amendment,"
together with the Initial Agreement, referred to herein as the "Acquisition
Agreement"). Unless defined herein, all capitalized terms shall have the
meaning provided in the Acquisition Agreement.
Seller has proposed that in lieu of selling certain of the assets
directly to Purchaser, Seller will (a) contribute the Real Property Assets to
CCP Partners, Ltd., a Texas limited partnership ("CCP-LP") whose sole general
partner is CCP and whose limited partners are CCP and MRC, (b) sell the general
partnership interest in CCP-LP to Purchaser in exchange for either a cash
payment or a demand promissory note and (c) sell the limited partnership
interest in CCP-LP to Crescent Real Estate Equities, Ltd., a Delaware
corporation and the general partner of Purchaser ("Crescent GP") in exchange
for a demand promissory note. Immediately thereafter, Crescent GP will transfer
the limited partnership interests in CCP-LP to Purchaser and Purchaser will
assume the demand promissory note of Crescent GP. Immediately thereafter,
Purchaser will pay the demand promissory note(s). The transaction described in
this paragraph and in Paragraph 3(a) below is hereafter called the "Real Estate
Restructured Transaction."
Seller has proposed that in lieu of selling certain of the Assets
directly to Purchaser, Seller will sell the Promissory Notes to Crescent GP in
exchange for a demand promissory note. Immediately thereafter, Crescent GP will
transfer the Promissory Notes to Purchaser and Purchaser will assume the demand
promissory note. Immediately thereafter, Purchaser will pay the demand
promissory note. The transaction described in this paragraph and in paragraph
3(b) below is hereafter called the "Intangibles Restructured Transaction." The
"Real Estate Restructured Transaction" and the "Intangibles Restructured
Transaction" are sometimes collectively referred to as the "Restructured
Transaction."
167
Seller and Purchaser have agreed to amend the Acquisition Agreement to
(a) provide for the Restructured Transaction, (b) change the Closing Date in
accordance with the terms of this Amendment, but provide that the closing
documents shall be effective as if Closing occurred as of the opening of
business on April 21, 1997 ("Effective Conveyance Date") (c) prorate all items
in accordance with the terms of the Acquisition Agreement as if Closing had
occurred on the Effective Conveyance Date, (d) delete the Rising Star
Partnership Interests and the Oil and Gas Interests from the Assets to be
purchased and sold subject to the further terms of this Amendment, (e) adjust
the Purchase Price to compensate Seller for the extension of the Closing Date
and to reflect the deletion of the Rising Star Partnership Interest and the Oil
and Gas Interests from the Assets, and (f) incorporate the other provisions of
this Amendment.
Now therefore, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
Seller and Purchaser agree as follows:
1. Closing Date. Article XI of the Acquisition Agreement is amended to
provide that the Closing Date shall be May 9, 1997. However all assignment,
conveyance or assumption documents shall be stated as effective as of the
Effective Conveyance Date. The Acquisition Agreement is further amended to
provide that all prorations, adjustments and payments contemplated by Article
XIV of the Acquisition Agreement shall be calculated as if the Closing occurred
at the opening of business on the Effective Conveyance Date. The foregoing
sentence does not affect the provisions of Section 2.2 of the Acquisition
Agreement. The reference to "Closing Date" in the definition of "Seller's
Share" in Section 14.2.5 is changed to April 21, 1997. The reference to
"Closing" in subpart (ii) of the first sentence of Section 17.2.3 is changed to
April 21, 1997. Section 17.2 is further amended to provide that Purchaser shall
bear the risk of loss from and after April 21, 1997 and if there is a Casualty
on or after April 21, 1997, Purchaser shall be entitled to recover all
insurance proceeds and Purchaser shall look to the insurers (and not Seller)
for the payment of any loss; provided however if there is a Casualty on or
after the Effective Conveyance Date, Seller and Purchaser shall cooperate in
taking the actions necessary to preserve the affected Improvements and collect
the insurance proceeds in the manner contemplated by Section 17.2. Without
limitation of the foregoing sentence, Seller agrees to execute such documents
as Purchaser may reasonably request in order to obtain the use of any insurance
proceeds. If Purchaser, acting in its sole discretion, determines that any
Property and Liability Insurance provided by Seller is not adequate, Purchaser
may replace said insurance at its expense and the cost of the replaced
insurance attributable to the period following the expiration of three (3)
business days after Purchaser delivers written notice of the replacement to
Seller (which notice includes an authorization to cancel the replaced
insurance) shall not be charged to Purchaser for the purpose of prorating
expenses in accordance with the Acquisition Agreement and this Amendment. For
the purpose of the proration of income and expenses, all income and expenses
attributable to the period from and after the Effective Conveyance Date shall
be for the account of Purchaser.
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2. Payment of Purchase Price. The following provisions shall be in
lieu of the provisions of Section 13.1 of the Acquisition Agreement:
As used herein the term: (i) "Adjustment Interest" means the interest
which would accrue on the Adjusted Purchase Price at the simple
interest rate of 6.5% per annum from Effective Conveyance Date to the
Closing Date; (ii) "Adjusted Purchase Price"means the Purchase Price
as adjusted by (A) any adjustments or reductions provided by the terms
of the Acquisition Agreement and (B) any credits to the Purchase Price
to which Purchaser is entitled pursuant to the further terms of the
Acquisition Agreement; and (iii) "Final Purchase Price" means the
Adjusted Purchase Price plus the Adjustment Interest. On the Closing
Date Purchaser shall pay the Final Purchase Price [including that part
represented by the Restructure Notes (hereafter defined)] by wire
transfer to a financial institution ("Wire Transferee") domiciled in
the United States in accordance with Seller's written instructions
(delivered to Purchaser at least two business days prior to the
Closing Date) by no later than 12:00 o'clock P.M. (Central Daylight
Time) ("Wire Transfer Deadline"). If the Wire Transferee does not
receive electronic notice of the wire transfer by the Wire Transfer
Deadline, Purchaser shall not be in default provided by no later than
12:00 o'clock P.M. (Central Daylight Time) on the first business day
following the Closing Date, the Wire Transferee receives electronic
notice of the wire transfer of the Final Purchase Price plus interest
calculated on the Adjusted Purchase Price at the rate of 6.5% per
annum from the Closing Date until Wire Transferee's receipt of
electronic notice of such wire transfer. At Closing Purchaser shall
also execute, deliver and, if required, acknowledge the documents
described in Section 13.2 through 13.6 of the Acquisition Agreement
and perform the obligations described therein as modified by the
provisions of paragraph 3 of this Amendment.
Any Radovir Payment which Purchaser would have been obligated to pay if the
Closing had occurred on April 21, 1997 shall be included in determining the
Adjusted Purchase Price. None of the remaining Radovir Payment shall be
included in determining the Adjusted Purchase Price.
3. Restructured Transaction. Seller and Purchaser agree that the
closing of the purchase and sale of the Assets described in this Paragraph 3
will be restructured as follows:
(a) Real Property Assets. As used in this Amendment the term
"Restructure Note" means a demand promissory note the terms of which are
approved by Seller and Purchaser which approval shall not be unreasonably
withheld or delayed. Subject to the conditions and covenants contained herein,
on May 8, 1997 (effective as of April 20, 1997) Seller will convey the Real
Property Assets to CCP-LP, which conveyance will be accomplished by execution
and delivery of the same form of documents and otherwise in the same manner as
the Real Property Assets were to be conveyed to Purchaser at Closing pursuant
to the provisions of the Acquisition Agreement prior to the effectiveness of
this Amendment (the "Original
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169
Closing Obligations"). At Closing, Purchaser will (i) cause Crescent GP to
purchase the limited partnership interest in CCP-LP held by CCP and MRC in
consideration of the execution and delivery of a Restructure Note in the amount
of 99% of the amount of the Final Purchase Price allocated to the Real Property
Assets on the Allocation Schedule (hereafter defined) , payable to the order of
CCP and MRC, and (ii) purchase the general partnership interest in CCP-LP held
by CCP in consideration of either (at the option of Purchaser) payment of cash
or the execution and delivery of a Restructure Note in the amount of 1% of the
amount of the Final Purchase Price allocated to the Real Property Assets on the
Allocation Schedule , payable to the order of CCP. Immediately thereafter,
Crescent GP will transfer the limited partnership interest in CCP-LP to
Purchaser (resulting in the dissolution and termination of CCP-LP) and
Purchaser will assume the Restructure Note executed by Crescent GP. Immediately
thereafter, Purchaser will pay the Restructure Note[s]. The Original Closing
Obligations will be accomplished by Seller on the date of Closing. The
conveyance of the partnership interests in CCP-LP will be by such transfers and
assignments as contemplated by the Acquisition Agreement for the conveyance of
the Partnership Interests. The terms of the partnership agreement of CCP-LP
shall be subject to Purchaser's approval, which approval shall not be
unreasonably withheld or delayed. Without limitation of the preceding sentence,
Purchaser may condition its approval upon the inclusion in the partnership
agreement of a provision requiring the general partner of CCP-LP to make an
election pursuant to Section 754 of the Internal Revenue Code of 1986, as
amended, if requested by Purchaser.
(b) Promissory Notes. The Promissory Notes will be conveyed by
Seller to Crescent GP in accordance with the Original Closing Obligations
applicable thereto; however, Crescent GP will deliver to Seller at Closing a
Restructure Note in the amount of the Final Purchase Price allocated to the
Promissory Notes on the Allocation Schedule, payable to the order of Seller.
Immediately thereafter, Crescent GP will transfer the Promissory Notes to
Purchaser and Purchaser will assume the Restructure Note described in this
paragraph (b). Immediately thereafter, Purchaser will pay said Restructure
Note.
(c) Xxxxx Muse Partnership Interests and Xxxxx-Day Stock. Purchaser
agrees that Crescent Operating, Inc., a Delaware corporation, will be the
purchaser of the Xxxxx Muse Partnership Interests and Xxxxx-Day Stock for the
amount of Final Purchase Price allocated to said Assets on the Allocation
Schedule, which Assets will be transferred by Seller to Crescent Operating,
Inc. in accordance with the Original Closing Obligations applicable to such
Assets. Pursuant to Section 21.1 of the Acquisition Agreement, Purchaser and
Seller agree that this Amendment shall constitute a Closing Direction (as such
term is defined in Section 21.1 of the Acquisition Agreement) by Purchaser to
Seller directing Seller to sell the Xxxxx Muse Partnership Interests and the
Xxxxx-Day Stock to Crescent Operating, Inc.
(d) Covenants and Indemnification. Seller further agrees as
follows:
(i) Seller will not permit any debt or other liabilities,
claims, causes of action or liens to attach to CCP-LP or the assets thereof
except (A) as the same may be
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contemplated and allowed by the Acquisition Agreement with regard to the Real
Property Assets, (B) the liabilities and/or agreements Purchaser agreed to
assume or take subject to pursuant thereto, in accordance with the Original
Closing Obligations and (C) those obligations, liens or other liabilities which
arise in the ordinary operation of the Real Property Assets during the period
following the Effective Conveyance Date (other than those arising out of
Seller's acts or failures to act in violation of the terms of the Acquisition
Agreement as amended hereby) ;
(ii) Seller will not transfer or encumber any partnership
interest in CCP-LP or any assets owned by CCP-LP and agrees that CCP-LP will
conduct no business and take no action from and after its formation except to
hold title to the Real Property Assets and observe all of the covenants and
obligations of Seller pursuant to the Acquisition Agreement;
(iii) Seller will pay all of Purchaser's reasonable costs and
expenses incurred in connection with the Restructured Transaction including,
without limitation, reasonable attorneys fees and expenses in connection with
the negotiation and review of this Amendment (with regard to the Restructured
Transaction) and any tax analysis thereof; and
(iv) Seller will indemnify, defend, save and hold Purchaser
Indemnitees harmless from and against all demands, claims, allegations,
assertions, action or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious) asserted against,
imposed upon, resulting to, required to be paid by, or incurred by any
Purchaser Indemnitees, directly or indirectly caused by the formation,
ownership or operation thereof by Seller or the change from the Original
Closing Obligations to the Restructured Transaction. This indemnity is not
intended to nor does it include (a) claims, causes of action or expenses
asserted against or incurred by Purchaser as the result of the acts or failures
to act of Purchaser other than its agreement to and participation in the
Restructured Transaction or (b) assessment of taxes as a result of Purchaser's
activities not related to the Restructured Transaction. The indemnity contained
herein shall not be subject to the limitations contained in Section 16.7 of the
Acquisition Agreement and shall survive Closing.
(e) Payment of Restructure Notes. At Closing, Purchaser shall pay
the Restructure Notes in full.
(f) No Effect on Purchase Price. The Restructured Transaction shall
not affect the amount of the Purchase Price or the Final Purchase Price and the
execution and delivery of the Restructure Notes shall not increase the Purchase
Price but shall be a form of payment of the Purchase Price. The allocations set
forth on Exhibit "A" include an allocation of the Radovir Payment. The
Restructure Notes shall be reduced by the amount of the Radovir Payment not
paid at the Closing. The amount of the reduction shall be applied to the
Restructure Notes in accordance with the direction of Purchaser. Nothing in the
foregoing two
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(2) sentences shall be construed to reduce the obligation of Purchaser pursuant
to Section 2.2.6 of the Acquisition Agreement.
4. Excluded Assets. Seller and Purchaser acknowledge and agree that
the Municipal Bonds described on the attached Exhibit "B" are excluded from the
Assets since each had been redeemed prior to the Effective Date of the
Acquisition Agreement and the Purchase Price shall be reduced by $225,000.
Seller and Purchaser also acknowledge that Seller has agreed to sell the Oil
and Gas Interests and the RSE Partnership Interests to a third party for a
purchase price of $3,000,000.00 ("RSE/O&G Price"). Provided said transaction is
closed prior to the Closing Date, the Oil and Gas Interests and the RSE
Partnership Interests shall not be an Asset subject to the Acquisition
Agreement and the Purchase Price shall be reduced by the RSE/O&G Price less
Seller's reasonable out of pocket expenses incurred in connection with said
sale.
5. Allocation of Final Purchase Price.
(a) Seller and Purchaser agree that the Purchase Price is allocated
to the Assets in accordance with attached Exhibit "A". Seller and Purchaser
acknowledge that (i) the allocations set forth on Exhibit "A" were made taking
into account the adjustments to the Purchase Price arising out of the sale of
the Marketable Securities, the Municipal Bonds and the Airport Leasehold and
the exclusion of the Municipal Bonds described in Paragraph 4 of this Amendment
and assuming the exclusion of the RSE Partnership Interests and the Oil and Gas
Interests; but (ii) the allocations do not reflect adjustments or credits to
the Purchase Price as the result of subsequent events and the application of
the provisions of the Acquisition Agreement. To the extent that there are
adjustments or credits to the Purchase Price, such adjustments or credits shall
be reflected as adjustments to the allocations on Exhibit "A" as determined by
Purchaser. The allocations contained in Exhibit "A," as adjusted pursuant to
the preceding sentence, shall be binding on Seller and Purchaser. As used in
this Amendment "Allocation Schedule" means the allocation of the Final Purchase
Price as determined in accordance with the provisions of this paragraph 5.
(b) Purchaser will indemnify, defend, save and hold Seller
Indemnitees harmless from and against all demands, claims, allegations,
assertions, action or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious) asserted against,
imposed upon, resulting to, required to be paid by, or incurred by any Seller
Indemnitees, directly or indirectly caused by the allocation of the Purchase
Price set forth on Exhibit "A" or determined in accordance with the provisions
of paragraph 5(a) of this Amendment. This indemnity is not intended to nor does
it include (a) state, local or federal taxes for which Seller may be liable as
a result of the transaction contemplated by the Acquisition Agreement as
amended by this Amendment, or (b) claims, causes of action or expenses asserted
against or incurred by Seller Indemnitees as the result of the acts or failures
of act of Seller Indemnitees other than its agreement to said allocation. The
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indemnity contained herein shall not be subject to the limitations contained in
Section 16.7 of the Acquisition Agreement and shall survive Closing.
6. Adjustment Events. Seller and Purchaser acknowledge that Purchaser
delivered a First Adjustment Notice on April 14, 1997. Purchaser agrees to
extend the deadline for Seller's delivery of a Second Adjustment Notice or a
Seller's Adjustment Proposal until not later than May 5, 1997. Nothing in this
paragraph shall be construed as amending any other provisions of the
Acquisition Agreement relating to Adjustment Events. Except as provided in the
next sentence, the parties' execution of this Amendment shall not be construed
as a waiver or release of any right, claim or defense arising out of an
Adjustment Event. Notwithstanding any provision of the Acquisition Agreement to
the contrary, except as provided in the next sentence Purchaser shall not be
entitled to claim any Adjustment Event unless Purchaser has delivered written
notice to Seller generally describing the occurrence or condition which is the
basis of Purchaser's claim of an Adjustment Event on or before 1:00 o'clock
P.M. (Central Daylight Savings Time) on the Effective Conveyance Date
("Adjustment Event Deadline"). Provided however, (a) the limitation set forth
in the preceding sentence shall not apply to any Adjustment Event based upon
Seller's breach of its obligations set forth in Article VIII of the Acquisition
Agreement, and (b) the Adjustment Event Deadline applicable to claims arising
out of differences between the First Rent Roll and the Closing Rent Roll shall
be 5:00 o'clock P.M. (Central Daylight Savings Time) on the earlier of the
Closing Date or the third business day after Seller delivers the Closing Rent
Roll to Purchaser. If Purchaser fails to deliver a general description of the
basis for its claim of an Adjustment Event relating to the situation described
in part (b) of the preceding sentence on or before the Adjustment Event
Deadline, Purchaser shall be barred from thereafter claiming an Adjustment
Event based on the Closing Rent Roll.
7. Revised Exhibits and Descriptions. The documents attached as
Exhibits 1.3.3 and 1.9 of the Acquisition Agreement are hereby superseded in
their entirety by the Amended and Restated Exhibits 1.3.3 and 1.9 attached to
this Amendment. In addition, the description in the first paragraph of Section
1.3.3 of the Acquisition Agreement is revised to replace the reference to
HM2/GP Partners, L.P. to HM2/Management Partners, L. P.
8. Cooperation Pending Closing. Seller and Purchaser agree to
cooperate in the management of the Real Property Assets and the other Assets
during the period commencing on April 21, 1997 and continuing through the
Closing Date. Without limitation of the foregoing Seller will: (a) negotiate
amendments to Leases requested by Purchaser; (b) execute amendments to Leases
requested by Purchaser; (c) allow Purchaser to contract (at its expense) with
persons and companies ("Third Party Providers") selected by Purchaser to
provide services to the Real Property Assets currently provided by Seller,
including, but not limited to, janitorial and parking services (the services
provided by Third Party Providers are hereafter called "Third Party Services");
(d) allow the Third Party Providers providing the Third Party Services to enter
upon the appropriate Properties to perform the Third Party Services, (e) use
commercially reasonable efforts not to provide the Third Party Services with
its employees, (f) deliver to tenants such notices as Purchaser may reasonably
request, including, but not limited to notices
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regarding the payment of parking fees, (g) not contract with any of Sterling
Protective Services, Constructors & Associates or BL&P to provide any services,
and (h) use commercially reasonable efforts not to provide any services to
tenants of any of the Properties other than those customarily provided to
tenants in connection with the rental of real property in Dallas, Addison,
Xxxxxxxxxx or Farmers Branch, Texas.
9. Other Changes to Acquisition Agreement. Seller and Purchaser agree
to the following additional changes to the Acquisition Agreement (all section
references are to sections of the Acquisition Agreement):
(a) All expenses related to the Assets incurred after the Effective
Conveyance Date shall be the responsibility of Purchaser (including costs of
salary, employment taxes and benefits of those employees of Seller who will
become employees of Purchaser pursuant to Section 21.13) and at the Closing
Purchaser shall reimburse Seller for any such expenses paid by Seller.
(b) The reference to "Closing" in the last sentence of Section
7.3.1.5 is changed to "Effective Conveyance Date".
(c) The forgiveness or transfer of debt or conversion to capital
described in Sections 8.1.10 and 10.1.8 shall be effective the day before the
Effective Conveyance Date.
(d) The reference to "Closing Date" in the last sentence of Section
9.2.1 shall be changed to "Effective Conveyance Date".
(e) The references to "Closing Date" or "Closing" in Section 10.1.1
(except the last reference to "Closing" in the Section) shall be changed to
"Effective Conveyance Date".
(f) The period contemplated by Section 10.1.2 shall end on the
opening of business on the Effective Conveyance Date except for any change
caused by Seller's breach of its obligations pursuant to the Acquisition
Agreement.
(g) The references to "Closing Date" in Section 10.4 shall be
changed to "Effective Conveyance Date".
(h) The assumptions contemplated by Sections 13.3,13.4,13.5 and
13.6 shall be effective as of the Effective Conveyance Date except for any
liabilities which are incurred as a result of Seller's acts or failures to act
which are breaches of Seller's agreement pursuant to the Acquisition Agreement.
(i) Strike the word "Closing" at the end of the next to the last
sentence of Section 16.7 and add the following prior to the period: "Effective
Conveyance Date except to extent liability arises out of Seller's breach of any
of said agreements or this Agreement".
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(j) The reference to "Closing Date" in Section 21.13 shall be
changed to "Effective Conveyance Date".
(k) Interest (but not principal) actually paid pursuant to any of
the Promissory Notes which is attributable to periods before and after the
Effective Conveyance Date shall be prorated on a per diem basis as of the
Effective Conveyance Date. The provisions of the Acquisition Agreement relating
to the treatment of principal payments shall not be changed and all principal
payments received subsequent to the Effective Date shall be credited to or
retained by Purchaser.
(l) The deadline for the delivery of any consents or estoppels
established in the Acquisition Agreement as the Closing Date shall be May 9,
1997.
10. Tax Treatment. Purchaser and Seller agree that (a) Seller shall
report for federal, state and local purposes all income and expenses
attributable to the Assets through the Closing Date of May 9, 1997 as Seller's
income and expenses, and Seller shall be entitled to receive the net cash flow
generated by such Assets through the Closing Date of May 9, 1997, (b) the
income of Xxxxx-Day for the period through April 30, 1997 shall be included in
the consolidated income tax return of the affiliated group of which CCP is the
common parent, and (c) the provisions of this paragraph 10 shall not affect nor
modify the provisions of this Amendment or of the Acquisition Agreement
regarding proration of income and expenses.
11. Ratification. Seller and Purchaser ratify and confirm the
Acquisition Agreement as amended by this Amendment.
12. Execution. This Amendment may be executed in counterparts.
[SIGNATURE PAGES FOLLOW]
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EXECUTED on this the ____ day of April, 1997.
SELLER:
XXXXXX-XXXXXXX PROPERTIES, INC.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
HI CAPITAL CORP.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
METROPORT REALTY CORPORATION,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
HI PRODUCTION COMPANY, INC.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
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EXECUTED on this the ____ day of April, 1997.
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
-----------------------------------
Xxxxx X. Xxxxxx, Xx.
Sr. Vice President, Acquisitions
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AMENDED AND RESTATED
FIRST AMENDMENT TO MAVERICKS AGREEMENT
This Amended and Restated First Amendment to Mavericks Agreement
("Amendment") is entered into by and between DALLAS MAVERICKS, INC., a Texas
corporation ("DMI" or "Seller"), and CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership ("Purchaser"), to be effective as
of the 18th day of April, 1997 (the "Effective Date") in light of the following
recitals.
R E C I T A L S :
Heretofore, Seller and Purchaser entered into a certain Acquisition
Agreement (Mavericks Agreement) with an effective date of February 10, 1997
(the "Acquisition Agreement"). On April 18, 1997, Seller and Purchaser entered
into a certain First Amendment to Mavericks Agreement (the "First Amendment").
Seller and Purchaser desire to amend and restate the First Amendment by the
execution and delivery of this Amendment, with the First Amendment having no
effect whatsoever from and after the execution hereof. Unless defined herein,
all capitalized terms shall have the meaning provided in the Acquisition
Agreement.
Seller and Purchaser have agreed that in lieu of selling certain of
the assets directly to Purchaser, Seller will (a) sell the Promissory Notes and
the "Arena Rights" (as hereafter defined) to Crescent Real Estate Equities,
Ltd., a Delaware corporation, general partner of Purchaser ("Crescent GP"), and
(b) sell the DBL Partnership Interests except the Arena Rights to Crescent
Operating, Inc., a Delaware corporation ("Crescent Operating"). The transaction
described in this paragraph and paragraph 3 herein is hereafter called the
"Restructured Transaction". As used herein, the term "Arena Rights" shall mean
the rights described in paragraph 3 of that certain Amended and Restated Right
of First Refusal Agreement dated July 1, 1996, among Hillwood DBL, Ltd., a
Texas limited partnership, Hillwood Basketball Partners, Ltd., a Texas limited
partnership, DMI and Dallas Basketball Limited, a Texas limited partnership.
Seller and Purchaser have agreed to amend the Acquisition Agreement to
(a) provide for the Restructured Transaction, (b) change the Closing Date in
accordance with the terms of this Amendment, (c) adjust the Purchase Price to
compensate Seller for the extension of the Closing Date, and (d) incorporate
the other provisions of this Amendment.
Now, therefore, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
Seller and Purchaser agree as follows:
1. Closing Date. Article X of the Acquisition Agreement is amended to
provide that the Closing Date shall be May 9, 1997 but that the closing
documents shall be effective as if Closing occurred as of the opening of
business on April 21, 1997 (the "Effective Conveyance Date").
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2. Payment of Purchase Price. The following provisions shall be in
lieu of the provisions of Section 12.1 of the Acquisition Agreement:
As used herein the term: (i) "Adjustment Interest" means the interest
which would accrue on the Adjusted Purchase Price at the simple
interest rate of 6.5% per annum from April 21, 1997 to the Closing
Date; (ii) "Adjusted Purchase Price"means the Purchase Price adjusted
by (A) any adjustments or reductions provided by the terms of the
Acquisition Agreement and (B) any credits to the Purchase Price to
which Purchaser is entitled pursuant to the further terms of the
Acquisition Agreement; (ii) "Final Purchase Price" shall mean the
Adjusted Purchase Price plus the Adjustment Interest. On the Closing
Date Purchaser shall pay the Final Purchase Price [including that part
represented by the Restructure Note (hereafter defined)] by wire
transfer to a financial institution ("Wire Transferee") domiciled in
the United States in accordance with Seller's written instructions
(delivered to Purchaser at least two business days prior to the
Closing Date) by no later than 12:00 o'clock P.M. (Central Daylight
Time) ("Wire Transfer Deadline"). If the Wire Transferee does not
receive electronic notice of the wire transfer by the Wire Transfer
Deadline, Purchaser shall not be in default provided by no later than
12:00 o'clock P.M. (Central Daylight Time) on the first business day
following the Closing Date, the Wire Transferee receives electronic
notice of such wire transfer of the Final Purchase Price plus interest
calculated on the Adjusted Purchase Price at the rate of 6.5% per
annum from the Closing Date until Wire Transferee's receipt of
electronic notice of such wire transfer. At Closing Purchaser shall
also execute, deliver and if required acknowledge the documents
described in Section 12.1.1 and 12.2 and perform the obligations
described therein as modified by the provisions of paragraph 3 of this
Amendment.
3. Restructured Transaction. Seller and Purchaser agree that the
closing of the purchase and sale of the assets described in this Paragraph 3
will be restructured as follows:
(a) Promissory Notes and Arena Rights. The Promissory Notes and
Arena Rights will be conveyed by Seller to Crescent GP; however, Crescent GP
will deliver to Seller at Closing a demand promissory note (the "Restructure
Note") in an amount agreed to by Seller and Purchaser on or before Closing,
payable to the order of Seller, in the form reasonably agreed upon by the
parties hereto. Immediately thereafter, Crescent GP will transfer the
Promissory Notes and Arena Rights to Purchaser and Purchaser will assume the
Restructure Note. Immediately thereafter, Purchaser will pay the Restructure
Note.
(b) Partnership Interests (Without the Arena Rights). Purchaser
agrees that Crescent Operating, Inc., a Delaware corporation, will be the
purchaser of the DBL Partnership Interests (without the Arena Rights) for an
amount agreed to by Seller and Purchaser on or before Closing, which assets
will be transferred by Seller to Crescent Operating, Inc. in accordance with
the provisions of the Acquisition Agreement. Pursuant to Section 17.1 of the
Acquisition Agreement, Purchaser and Seller agree that this Amendment shall
constitute a Closing Direction (as such term is defined in Section 17.1 of the
Acquisition Agreement) by
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179
Purchaser to Seller directing Seller to sell the DBL Partnership Interests
(without the Arena Rights) to Crescent Operating, Inc.
(c) Payment of Fees and Expenses. Seller will pay all of
Purchaser's reasonable costs and expenses incurred in connection with the
Restructured Transaction including, without limitation, reasonable attorneys
fees and expenses in connection with the negotiation and review of this
Amendment (with regard to the Restructured Transaction) and any tax analysis
thereof.
(d) Payment of Restructure Note. At Closing, Purchaser shall pay
the Restructure Note in full.
(e) No Effect on Purchase Price. The Restructured Transaction shall
not affect the amount of the Purchase Price or the Final Purchase Price and the
execution and delivery of the Restructure Note shall not increase the Purchase
Price but shall be a form of payment of the Purchase Price.
4. Allocation of Purchase Price. On or before Closing, Seller and
Purchaser will agree to an allocation of the Purchase Price and the amounts to
be paid pursuant to Paragraphs 3(a) and 3(b), above. To the extent that there
are adjustments or credits to the Purchase Price, such adjustments or credits
shall be reflected as adjustments to the agreed upon allocations, as determined
by Purchaser.
5. Other Changes to Acquisition Agreement. Seller and Purchaser agree
to the following additional changes to the Acquisition Agreement (all section
references are to sections of the Acquisition Agreement).
(a) The reference to "Closing" in the last sentence of Section
6.2.1.5 shall be changed to "Effective Conveyance Date."
(b) The references to "Closing Date" or "Closing" in Section 9.1.1
(except the last reference to "Closing" in the Section) shall be changed to
"Effective Conveyance Date."
(c) The period contemplated by Section 9.1.2 shall end on the
opening of business on the Effective Conveyance Date except for any changes
caused by Seller's breach of its agreements pursuant to the Acquisition
Agreement.
6. Deadline for Delivery of Consents. Notwithstanding any provision of
this Amendment or the Acquisition Agreement to the contrary, the date by which
the NBA Consent, the Partnership Consents and the Estoppel Certificates must be
delivered in accordance with the terms of the Acquisition Agreement shall be
the Closing Date as extended by this Amendment.
7. Ratification. Seller and Purchaser ratify and confirm the
Acquisition Agreement as amended by this Amendment.
8. Counterparts. This Amendment may be executed in counterparts.
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180
EXECUTED on this the ____ day of May, 1997, to be effective on the
Effective Date.
SELLER:
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
----------------------------------------
Name:
--------------------------------------
Its:
---------------------------------------
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
------------------------------------
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181
POST-CLOSING ADJUSTMENT AMENDMENT
TO MAVERICKS AGREEMENT
This Post-Closing Adjustment Amendment to Mavericks Agreement
("Amendment") is entered into by and between DALLAS MAVERICKS, INC., a Texas
corporation ("DMI" or "Seller"), and CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership ("Purchaser"), on the 8th day of
May (the "Effective Date") in light of the following recitals.
R E C I T A L S :
Heretofore, Seller and Purchaser entered into a certain Acquisition
Agreement (Mavericks Agreement) with an effective date of February 10, 1997
(the "Acquisition Agreement"). On May 8, 1997, effective as of April 18, 1997,
Seller and Purchaser entered into a certain Amended and Restated First
Amendment to Mavericks Agreement (the "First Amendment") and on May 8, 1997,
Seller and Purchaser entered into a certain Allocation Amendment to Mavericks
Agreement ("Allocation Amendment"). The Acquisition Agreement as amended by the
First Amendment is referred to herein as the "Agreement." Seller and Purchaser
desire to further amend the Agreement by the execution and delivery of this
Amendment. Unless defined herein, all capitalized terms shall have the meaning
provided in the Agreement.
Seller and Purchaser have agreed to share certain specific costs
incurred in connection with the transaction described in the Agreement in the
manner set forth herein.
Now, therefore, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
Seller and Purchaser agree as follows:
1. DMI Agreement Expenses. Seller and Purchaser agree that any and all
fees and expenses incurred in connection with obtaining the consent of the
National Basketball Association or Dallas Basketball Limited (or the general
partner thereof) in connection with the transfers contemplated by the Agreement
and payable to or at the direction of either the National Basketball
Association or Dallas Basketball Limited (or the general partner thereof)
(collectively, the "DMI Agreement Expenses") will be paid by Purchaser up to
$10,000.00, with any DMI Agreement Expenses in excess of $10,000.00 being paid
by Seller. Seller and Purchaser agree that at such time as either of them or an
affiliate receives an invoice or other evidence that any DMI Agreement Expense
is due, it will give the other party notice and they will cooperate in the
prompt payment of such invoice or fee prior to delinquency in accordance with
the agreement contained herein. The obligations set forth in this Amendment
will survive the closing of the transaction described in the Agreement.
182
2. No Further Adjustments in Connection with DMI Agreement Expenses.
Notwithstanding any agreement or provision to the contrary of the Agreement or
any related agreement by or among the parties hereto or any affiliate thereof,
the post-closing adjustments set forth in Paragraph 1, above, will be the sole
adjustments regarding the DMI Agreement Expenses.
3. Ratification. Seller and Purchaser ratify and confirm the Agreement
as amended by this Amendment.
4. Counterparts. This Amendment may be executed in counterparts.
EXECUTED on the date first above written.
SELLER:
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
----------------------------------------
Name:
--------------------------------------
Its:
---------------------------------------
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
------------------------------------
183
ALLOCATION AMENDMENT TO MAVERICKS AGREEMENT
This Allocation Amendment to Mavericks Agreement ("Amendment") is
entered into by and between DALLAS MAVERICKS, INC., a Texas corporation ("DMI"
or "Seller"), and CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware
limited partnership ("Purchaser"), on the ___ day of May (the "Effective Date")
in light of the following recitals.
R E C I T A L S :
Heretofore, Seller and Purchaser entered into a certain Acquisition
Agreement (Mavericks Agreement) with an effective date of February 10, 1997
(the "Acquisition Agreement"). On May ___, 1997, effective as of April 18,
1997, Seller and Purchaser entered into a certain Amended and Restated First
Amendment to Mavericks Agreement (the "First Amendment"). The Acquisition
Agreement as amended by the First Amendment is referred to herein as the
"Agreement." Seller and Purchaser desire to further amend the Agreement by the
execution and delivery of this Amendment. Unless defined herein, all
capitalized terms shall have the meaning provided in the Agreement.
Seller and Purchaser have agreed to the allocations set forth herein
as contemplated by Paragraph 4 of the First Amendment.
Now, therefore, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
Seller and Purchaser agree as follows:
1. Allocation of Purchase Price. Seller and Purchaser agree that the
Purchase Price is allocated in accordance with the Attached Exhibit "A." The
allocations contained in Exhibit "A", as adjusted pursuant to Paragraph 4 of
the First Amendment, shall be binding on Seller and Purchaser and that
allocation is referred to as the "Allocation Schedule."
2. Amount of Restructure Note. The amount of the Restructure Note is
the amount allocated to the Promissory Notes and Arena Rights shown on the
Allocation Schedule. Such amount is the amount referred to in Paragraph 3(a) of
the First Amendment. The amount referred to in Paragraph 3(b) of the First
Amendment is the amount allocated to the DBL Partnership Interests (without
Arena Rights) set forth on the Allocation Schedule.
3. Ratification. Seller and Purchaser ratify and confirm the Agreement
as amended by this Amendment.
4. Counterparts. This Amendment may be executed in counterparts.
184
EXECUTED on the date first above written.
SELLER:
DALLAS MAVERICKS, INC.,
a Texas corporation
By:
----------------------------------------
Name:
--------------------------------------
Its:
---------------------------------------
PURCHASER:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
BY: CRESCENT REAL ESTATE EQUITIES,
LTD., a Delaware corporation,
General Partner
By:
------------------------------------
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