Exhibit 2.1
PURCHASE AGREEMENT
BY AND AMONG
CENTERAMERICA PROPERTY TRUST, L.P.
CFP, INC.
CFP VENTURE I, L.P.
HHC FINANCE, INC.
HHC FINANCE, L.P.
CENTERAMERICA DEVELOPMENT COMPANY, INC.
AND
NEW PLAN EXCEL REALTY TRUST, INC.
Dated January 13, 2002
TABLE OF CONTENTS
PAGE
I. PURCHASE OF REAL ESTATE BUSINESS............................................................. 2
1.1. Sale and Transfer of Purchased Assets............................................... 2
1.2. Excluded Assets..................................................................... 5
1.3. No Assumption of Certain Liabilities................................................ 5
1.4. No Representations.................................................................. 7
1.5. Release of Seller................................................................... 9
1.6. Indivisible Economic Package........................................................ 10
1.7. Nonassignable Contracts and Permits................................................. 10
II. CONSIDERATION................................................................................ 11
2.1. Purchase Price...................................................................... 11
2.2. Assumption of Liabilities........................................................... 11
2.3. Xxxxxxx Money....................................................................... 12
2.4. Prorations.......................................................................... 13
2.5. Preparation of Final Statement...................................................... 21
2.6. Audit............................................................................... 22
2.7. Tenant Deposits..................................................................... 22
2.8. Certiorari.......................................................................... 23
2.9. Effect of Closing................................................................... 23
III. TITLE AND OTHER PROPERTY RELATED MATTERS..................................................... 23
3.1. Purchaser's Inspections and Due Diligence........................................... 23
3.2. Site Visits......................................................................... 24
3.3. Due Diligence Indemnity............................................................. 25
3.4. Title............................................................................... 25
IV. REPRESENTATIONS AND WARRANTIES OF SELLER..................................................... 28
4.1. Organization and Power of Seller.................................................... 28
4.2. Authority; Noncontravention; Consents............................................... 28
4.3. Litigation.......................................................................... 29
4.4. Partnership Interests............................................................... 29
4.5. Properties.......................................................................... 31
4.6. Environmental Matters............................................................... 33
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TABLE OF CONTENTS
(continued)
PAGE
4.7. Labor Matters....................................................................... 33
4.8. Taxes............................................................................... 33
4.9. Compliance with Laws................................................................ 34
4.10. Brokers............................................................................. 34
4.11. Assumed Indebtedness................................................................ 34
4.12. JV Indebtedness and PPM Indebtedness................................................ 35
4.13. Assumed Liabilities................................................................. 35
4.14. Contracts........................................................................... 36
4.15. Ground Leases....................................................................... 36
4.16. REAs................................................................................ 37
4.17. Loans to Employees.................................................................. 37
4.18. Purchased Assets.................................................................... 37
4.19. Intellectual Property............................................................... 37
4.20. Financial Statements................................................................ 37
4.21. Budgets............................................................................. 38
4.22. Insolvency.......................................................................... 38
4.23. United States Person................................................................ 38
4.24. ERISA............................................................................... 38
4.25. Definition of Knowledge of Seller................................................... 39
4.26. Schedule References................................................................. 39
4.27. Right to Amend Representations...................................................... 39
4.28. Seller's Representations Deemed Modified............................................ 39
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................................. 40
5.1. Organization, Standing and Power of Purchaser....................................... 40
5.2. Authority; Noncontravention; Consents............................................... 40
5.3. Brokers............................................................................. 41
5.4. Funding............................................................................. 41
5.5. Investment Representation........................................................... 41
5.6. Title Commitments................................................................... 41
5.7. Right to Amend Representations...................................................... 41
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TABLE OF CONTENTS
(continued)
PAGE
VI. COVENANTS.................................................................................... 41
6.1. Conduct of Seller's Business Pending Transfer....................................... 41
6.2. Leasing............................................................................. 45
6.3. Tenant Estoppels.................................................................... 45
6.4. Assumption of Obligations........................................................... 46
6.5. Other Actions....................................................................... 46
6.6. No Solicitation..................................................................... 47
6.7. Discharge of Indebtedness........................................................... 47
6.8. Tenant Litigation................................................................... 47
6.9. No Application to Excluded Properties or Assets..................................... 47
VII. ADDITIONAL AGREEMENTS........................................................................ 48
7.1. Access to Information; Confidentiality.............................................. 48
7.2. Reasonable Efforts.................................................................. 48
7.3. Public Announcements................................................................ 49
7.4. Conveyance Taxes.................................................................... 49
7.5. Excluded Properties................................................................. 49
7.6. Redevelopment Properties............................................................ 49
7.7. Allocation of Purchase Price........................................................ 50
7.8. Employee Matters.................................................................... 50
7.9. Release of Seller................................................................... 51
7.10. Transitional Services............................................................... 51
7.11. Litigation Support.................................................................. 52
7.12. Tax Matters......................................................................... 52
7.13. Post-Closing Access................................................................. 53
7.14. Matters Relating to Assumed Indebtedness, JV Properties and PPM Indebtedness........ 53
7.15. Violations.......................................................................... 55
7.16. Dropped Properties.................................................................. 55
7.17. Delivery of Financial Statements.................................................... 56
7.18. Insurance and Other Matters......................................................... 56
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TABLE OF CONTENTS
(continued)
PAGE
7.19. Xxxxxx'x and Inwood................................................................. 57
7.20. License............................................................................. 58
VIII. CASUALTY AND CONDEMNATION.................................................................... 58
8.1. In General.......................................................................... 58
8.2. Minor Loss.......................................................................... 58
8.3. Major Loss.......................................................................... 58
8.4. Additional Matters.................................................................. 59
IX. CLOSING...................................................................................... 60
9.1. Closing............................................................................. 60
9.2. Conditions To Each Party's Obligation To Effect the Transfer........................ 60
9.3. Conditions To Obligations of Seller................................................. 61
9.4. Conditions To Obligations of Purchaser.............................................. 62
X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER................................................... 66
10.1. Termination......................................................................... 66
10.2. Pre-Closing Breaches................................................................ 67
10.3. Defaults and Remedies............................................................... 68
10.4. Effect of Termination............................................................... 69
10.5. Amendment........................................................................... 70
10.6. Extension; Waiver................................................................... 70
XI. SURVIVAL; INDEMNIFICATION.................................................................... 70
11.1. Survival of Representations and Warranties.......................................... 70
11.2. Indemnification by Seller........................................................... 70
11.3. Indemnification by Purchaser........................................................ 71
11.4. Notice and Resolution of Claims..................................................... 72
11.5. Limitations on Liability............................................................ 72
11.6. Exclusive Remedy.................................................................... 73
11.7. Closing Escrow...................................................................... 73
XII. GENERAL PROVISIONS........................................................................... 74
12.1. Notices............................................................................. 74
12.2. Interpretation...................................................................... 75
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TABLE OF CONTENTS
(continued)
PAGE
12.3. Counterparts........................................................................ 75
12.4. Entire Agreement; No Third-Party Beneficiaries...................................... 75
12.5. Governing Law....................................................................... 75
12.6. Assignment.......................................................................... 76
12.7. Enforcement......................................................................... 76
12.8. Severability........................................................................ 76
12.9. Expenses............................................................................ 76
12.10. No Recordation...................................................................... 77
12.11. Limitation of Trust Liability....................................................... 77
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EXHIBITS AND SCHEDULES
Exhibit A-1 - Properties
Exhibit A-2 - Excluded Properties
Exhibit A-3 - Fee Properties
Exhibit A-4 - Properties Owned by the Partnerships (excluding
CenterAmerica Venture Properties)
Exhibit A-5 - JV Properties
Exhibit B - Definitions
Exhibit 6.1(p) - Title Affidavits
Exhibit 6.3-1 - Tenant Estoppel Certificates
Exhibit 6.3-2 - Seller Estoppel Certificates
Exhibit 6.4 - Guaranty Indemnity Agreement
Exhibit 7.3 - Press Release
Exhibit 7.5 - Property Management and Leasing Agreement
Exhibit 7.10 - Transitional Services Agreement
Exhibit 9.3(c)(iv) - Tenant Notice Letters
Exhibit 9.4(d)(i) - Deed
Exhibit 9.4(d)(ii) - Xxxx of Sale
Exhibit 9.4(d)(iii) - Lease Assignment
Exhibit 9.4(d)(iv) - Contract Assignment
Exhibit 9.4(d)(vi) - Foreign Person Certificate
Exhibit 9.4(d)(xii) - Partnership Interest Assignment
Exhibit 9.4(d)(xxii) - Tenant Loan Assignment
Exhibit 11.7-1 - Closing Escrow Agreement
Exhibit 11.7-2 - MSREF II Guaranty
Schedule 1.1(a)(i)(A) - Real Property
Schedule 1.1(a)(iii)(A) - Company Leases
Schedule 1.1(a)(iii)(D) - Trademarks
Schedule 1.1(a)(iii)(H) - Vehicles
Schedule 1.2 - Excluded Assets
Schedule 1.3 - Assumed Liabilities
Schedule 2.1 - Purchase Price Adjustment
Schedule 2.4(a)(i)(J) - Reserves Not Prorated
Schedule 2.4(e) - Purchaser Lease Expenses
Schedule 2.7 - Tenant Deposits in Form of Letters of Credit
Schedule 3.4(a)(i) - Title Matters Not Approved by Purchaser
Schedule 3.4(a)(ii) - Title Commitments
Schedule 3.4(a)(iii) - Surveys
Schedule 4.1 - CenterAmerica Entities
Schedule 4.2(a) - Exceptions to Authority
Schedule 4.2(b) - Exceptions to Noncontravention
Schedule 4.2(c) - Seller Consents
Schedule 4.3 - Litigation
Schedule 4.4(a) - Permitted Exceptions to Partnership Interests
Schedule 4.4(b) - Partnership Agreements
Schedule 4.4(c) - Outstanding Partnership Loans or Capital Contributions
Schedule 4.4(e) - Partnerships' Ownership Interest in Other Persons
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EXHIBITS AND SCHEDULES
(continued)
Schedule 4.4(f) - Outside Partners of Partnerships
Schedule 4.5(a) - Condemnation and Rezoning Proceedings
Schedule 4.5(b) - Defaults Under Leases
Schedule 4.5(c)-1 - Leases Not Included on Rent Roll
Schedule 4.5(c)-2 - Lease Terminations
Schedule 4.5(d) - Purchase Options and Rights of First Refusal
Schedule 4.5(e) - Tenant Loans
Schedule 4.5(f) - Insurance on Properties
Schedule 4.5(g) - Real Property of Partnerships Not Included in Properties
Schedule 4.6 - Environmental Studies
Schedule 4.8 - Taxes
Schedule 4.9 - Exceptions to Compliance with Laws
Schedule 4.11(a) - Assumed Indebtedness
Schedule 4.12(a) - JV Indebtedness and PPM Indebtedness
Schedule 4.12(b) - Loan Exceptions
Schedule 4.12(c) - Capital Contributions to CenterAmerica Venture
Schedule 4.14 - Material Contracts
Schedule 4.19 - Intellectual Property of Seller and the Subsidiaries
Schedule 4.25 - Inquiry Parties
Schedule 5.2(c) - Purchaser Consents
Schedule 6.1 - Purchaser Representative and Seller Representative
Schedule 6.1(b) - Prohibited Actions by CenterAmerica Venture REIT
Schedule 6.1(h) - Exceptions to Modifications of Existing Agreements
Schedule 6.1(bb) - Prohibited Actions by Xxxxxx'x and Inwood
Schedule 6.2 - Leasing Guidelines
Schedule 6.3 - Tenants Providing Estoppel Certificates
Schedule 6.4-1 - Proposed Debt Modifications
Schedule 6.4-2 - Guaranty Agreements
Schedule 7.5 - Substituted Properties
Schedule 7.6 - Redevelopment Plans and Budgets
Schedule 9.2(b) - Third Party Consents Required by Seller and Purchaser
Schedule 9.4(g) - Third Party Consents Required by Purchaser
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement"), dated as of January 13,
2002 by and among CenterAmerica Property Trust, L.P., a Delaware limited
partnership, CFP, Inc., a Delaware corporation, CFP Venture I, L.P., a Delaware
limited partnership, HHC Finance, Inc., a Delaware corporation, HHC Finance,
L.P., a Delaware limited partnership, and CenterAmerica Development Company,
Inc., a Delaware corporation (collectively, "Seller"), and New Plan Excel Realty
Trust, Inc., a Maryland corporation ("Purchaser").
RECITALS:
A. Seller is engaged in the business of owning, managing,
developing, marketing, leasing, financing and operating a portfolio of 114
shopping center properties and one office building described on Exhibit A-1 (the
"Properties") and certain associated ancillary businesses, directly or
indirectly through Subsidiaries (collectively, the "Real Estate Business").
B. Seller owns directly or indirectly through Subsidiaries a 100%
fee simple interest in 100 of the Properties, and owns through direct or
indirect Subsidiaries a partial interest in 15 of the Properties.
C. In addition to the Properties, Seller currently owns directly
or indirectly through Subsidiaries 10 shopping center properties to be excluded
from the transactions contemplated by this Agreement and which are described as
"Excluded Properties" on Exhibit A-2.
D. Seller desires to sell, transfer, assign, convey and deliver
to Purchaser, by selling, transferring, assigning and conveying to Purchaser or
causing the same to be done through its Subsidiaries and Affiliates (i) fee
simple title to the Properties described on Exhibit A-3 as the "Fee Properties,"
(ii) 100% of its general and limited partner interests as described in Section
1.1(a)(ii) in the limited partnerships owning the Properties described on
Exhibit A-4 as the "Partnership Properties" and 100% of its limited liability
company interests as described in Section 1.1(a)(ii) in the limited liability
company directly or indirectly owning the Properties described on Exhibit A-5 as
the "JV Properties" together with any new properties acquired by such limited
liability company or its subsidiaries (the partnership and limited liability
company interests, together with the partnership and limited liability company
interests described in Section 1.1(b) if Purchaser makes the election described
therein being collectively referred to as the "Partnership Interests" and the
underlying partnerships and limited liability companies are herein collectively
referred to as the "Partnerships"), and (iii) all other assets, rights,
business, goodwill and other properties comprising the Real Estate Business
other than the Excluded Assets set forth on Schedule 1.2 ((i), (ii) and (iii)
being collectively referred to as the "Purchased Assets"), and Purchaser desires
to purchase and acquire from Seller, the Real Estate Business as set forth
above.
E. The terms used in this Agreement with initial capital letters
are defined in Exhibit B.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained herein, the parties hereto
hereby agree as follows:
I. PURCHASE OF REAL ESTATE BUSINESS
1.1. Sale and Transfer of Purchased Assets. (a) Subject to and upon
the terms and conditions of this Agreement, at the Closing Seller will sell,
transfer, convey and assign, and will cause the Assigning Subsidiaries to sell,
transfer, convey and assign, to Purchaser, and Purchaser will purchase and
acquire from Seller or the applicable Assigning Subsidiary (the "Transfer") all
of their right, title and interest in the Purchased Assets, free and clear of
all liens, charges, claims, security interests, pledges, rights of first
refusal, restrictions and other encumbrances ("Liens"), other than the Permitted
Encumbrances. The Purchased Assets consist of the following:
(i) With respect to the Fee Properties, the following:
(A) the Real Property;
(B) the Improvements;
(C) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest in and to the Personal
Property related to each Fee Property; and
(D) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest as lessor in and to the
Leases and, subject to the terms of the Leases, the Tenant
Deposits, and guarantees and other documents and agreements
executed by a Tenant or guarantor related thereto.
(ii) With respect to the Partnership Interests, the
following:
(A) all of CenterAmerica Venture REIT's interest
in CenterAmerica Venture, including without limitation, its
10% membership interest in CenterAmerica Venture;
(B) all of Seller's and any applicable Assigning
Subsidiary's interest in and to the property management
agreement with CenterAmerica Venture and its subsidiaries, and
other ancillary agreements related to the CenterAmerica
Venture (including without limitation, the Capital Support
Agreement by and among Long-Term Investment Trust, Sunbelt
Retail LLC, Sunbelt Retail Group Trust, CenterAmerica Venture
REIT and CenterAmerica Property Trust, L.P. (the "Capital
Support Agreement"));
(C) all of CFP Venture's interest in CFP,
including without limitation, its 99.5% limited partner
interest in CFP;
(D) all of CFP, Inc.'s interest in CFP,
including without limitation, its 0.5% general partner
interest;
(E) all of HHC Finance's interest in
CenterAmerica Capital, including without limitation, its 99.5%
limited partner interest in CenterAmerica Capital;
2
(F) all of HHC Finance, Inc.'s interest in
CenterAmerica Capital, including without limitation, its 0.5%
general partner interest in CenterAmerica Capital;
(G) all of CA Inwood, L.P.'s interest in Inwood
or New Inwood, including without limitation, its 71.2% general
partner interest in Inwood or New Inwood; and
(H) all of CA Xxxxxx'x, X.X.'s interest in
Xxxxxx'x or New Xxxxxx'x, including without limitation, its
52.5252% general partner interest in Xxxxxx'x or New Xxxxxx'x.
(iii) To the extent that any of the following was not
otherwise covered in (i) and (ii) above, with respect to the Real
Estate Business:
(A) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest as lessee in and to the
Company Leases described in Schedule 1.1(a)(iii)(A);
(B) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest in and to the Personal
Property owned or used in connection with the Real Estate
Business;
(C) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest, if any, in, to and
under to the extent assignable or transferable, Licenses and
Permits and the Contracts and all rights (including rights of
refund and offset), privileges, deposits, claims, causes of
action and options relating or pertaining thereto;
(D) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest, to the extent
assignable or transferable, in and to the trademarks listed on
Schedule 1.1(a)(iii)(D) and all other Intellectual Property
owned or used by Seller or an Assigning Subsidiary in
connection with the Real Estate Business;
(E) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest, to the extent
assignable or transferable, in and to all warranties,
guaranties, other intangible rights, titles, interests,
privileges and appurtenances owned by Seller or an Assigning
Subsidiary and related to or used in connection with the
ownership, use or operation of the Real Property or
Improvements or the Real Estate Business;
(F) the Records and Plans, but only to the
extent the Records and Plans are in the possession or control
of Seller or an Assigning Subsidiary, provided that Seller at
its sole cost and expense will have the right at any time as
provided in Section 7.13 to make copies of the Records and
Plans which relate to the period prior to the Closing Date to
be used for reasonable purposes;
3
(G) the goodwill of the Real Estate Business
associated with the Intellectual Property or which is
connected with the use of and symbolized by any of the
Intellectual Property;
(H) all automobiles, trucks, trailers, vans and
other certificated vehicles of Seller and any applicable
Assigning Subsidiary whether owned or leased (the "Vehicles")
which are related to the Real Estate Business, including those
Vehicles set forth on Schedule 1.1(a)(iii)(H);
(I) to the extent transferable, all right, title
and interest of Seller and any applicable Assigning Subsidiary
in computer equipment, hardware and software used in
connection with the Real Estate Business, including, without
limitation, all central processing units, terminals, disk
drives, tape drives, electronic memory units, printers,
keyboards, screens, peripherals (and other input/output
devices), modems and other communication controllers, and any
and all parts and appurtenances thereto, together with all
Intellectual Property used in the operation of that computer
equipment and hardware, including, without limitation, all
software (including all information, documentation and other
communication whether in paper or electronic format relating
to any custom developed software), all file layouts, all data
files, all of Seller's and any applicable Assigning
Subsidiary's rights under any licenses related to Seller's and
any applicable Assigning Subsidiary's use, at any time, of
such computer equipment, hardware or software, and all of
Seller's and any applicable Assigning Subsidiary's right,
title and interest as lessee under all leases pursuant to
which Seller or an Assigning Subsidiary leases any computer
equipment, hardware or software;
(J) to the extent transferable, the benefit of
and the right to enforce the covenants and warranties, if any,
that Seller or any Assigning Subsidiary is entitled to enforce
with respect to the Purchased Assets or the Real Estate
Business;
(K) subject to Sections 6.8 and 7.18, all right,
title and interest of Seller or any Assigning Subsidiary in,
to and under all rights, privileges, claims, causes of action
and options relating or pertaining to the Real Estate Business
or the Purchased Assets;
(L) to the extent transferable, all right, title
and interest of Seller and any applicable Assigning Subsidiary
in and to any performance bonds or other bonds and security
provided to it by any contractor pursuant to any construction
or other contracts; and
(M) all other or additional privileges, rights,
interests or properties and assets of every kind and
description and wherever located, that are used or intended
for use in connection with or that are necessary to the
continued conduct of, the Real Estate Business.
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(b) At Purchaser's sole election made by notice to Seller on or
before 30 days prior to Closing, Purchaser may require Seller to contribute, and
to cause its Assigning Subsidiaries to contribute, some or all of the Fee
Properties (including without limitation the Purchased Assets and Assumed
Liabilities related to such Fee Properties but excluding any Fee Property
securing any Assumed Indebtedness and also excluding any Excluded Liability) to
new limited partnerships or limited liability companies which shall be formed in
a manner so as to be an entity disregarded (for federal income tax purposes)
from its federal income tax owner, and provided that such contributions (as
opposed to Transfer of fee title to Purchaser) do not result in additional Tax
liability to any Person holding a direct or indirect interest in Seller or any
Subsidiary unless Purchaser indemnifies each such Person for that Tax liability
in a manner satisfactory to Seller. In that event, (i) Seller will sell,
transfer, convey and assign to Purchaser, and Purchaser will purchase and accept
from Seller, at the Closing and subject to the terms and conditions of this
Agreement, all of the partnership interests or limited liability company
interests in those limited partnerships or limited liability companies and those
interests will be deemed Partnership Interests for purposes of Article IX and
(ii) Seller will represent and warrant to Purchaser at Closing and deliver a
certificate on which Purchaser may rely that it and any Assigning Subsidiary, if
applicable, owns 100% of the Partnership Interests in those entities and those
Partnership Interests are not encumbered by any Lien other than Permitted
Encumbrances.
1.2. Excluded Assets. In no event will the Purchased Assets include
any of the assets described on Schedule 1.2 ("Excluded Assets").
1.3. No Assumption of Certain Liabilities. Purchaser will purchase
the Purchased Assets free and clear of all Liens other than Permitted
Encumbrances and will assume no liabilities or obligations (direct or indirect)
of Seller or its Affiliates other than those liabilities Purchaser expressly
agrees in writing to assume at Closing, which are set forth on Schedule 1.3
attached hereto ("Assumed Liabilities"). Except (i) for the Assumed Liabilities,
(ii) that Purchaser is acquiring the Partnership Interests in CenterAmerica
Venture and Xxxxxx'x and Inwood (or in New Inwood and New Xxxxxx'x, if Seller
makes the election in Section 7.19(a)) subject to the JV Indebtedness and the
PPM Indebtedness, all Contracts of the CenterAmerica Venture Entities and any
other obligations or liabilities related to the CenterAmerica Venture Entities,
and (iii) as otherwise expressly provided herein, Purchaser will not assume or
agree to pay, perform or discharge or be responsible for any obligation or
liability (direct or indirect) related to or arising from the operation of the
Real Estate Business arising or accruing before the Closing or any other
liabilities, responsibilities or obligations of Seller and its Affiliates,
whether accrued, absolute, contingent or otherwise, including without limiting
the generality of the foregoing, liabilities or obligations based on, arising
out of or in connection with the following:
(a) defective performance or default of any Contract or any
express or implied warranty with respect to such performance prior to the
Closing;
(b) any Contract that is not an Assumed Liability or any agreement
or document evidencing or securing any Indebtedness of Seller or any Subsidiary
other than the Assumed Indebtedness (provided that this Section 1.3(b) shall not
include the obligation to pay the principal balance of the Assumed Indebtedness
and PPM Indebtedness as of Closing or any liability or obligation thereunder
arising or accruing after the Closing);
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(c) subject to Sections 7.12 and 12.9, any obligation or liability
of Seller or the Subsidiaries relating to Taxes, including, without limiting the
foregoing, any Tax liability or obligation with respect to the Real Estate
Business or otherwise that is attributable to any Pre-Closing Taxable Period, or
the Transfer from Seller and the Subsidiaries to Purchaser of the Purchased
Assets and the consummation of the transactions contemplated under this
Agreement (it being understood that, subject to Sections 7.12 and 12.9,
Purchaser will be liable for Taxes with respect to the Real Estate Business and
the Purchased Assets attributable to periods subsequent to Pre-Closing Taxable
Periods; provided, however, that notwithstanding anything contained in the
Agreement, Purchaser shall be liable for Taxes arising from events occurring
after the Closing that are outside of the normal course of business operations,
including any sales or dispositions by Purchaser or the Partnerships);
(d) any fees or other expenses of attorneys, accountants, brokers
or finders engaged by Seller or the Subsidiaries incurred in connection with
this Agreement;
(e) any liabilities or obligations resulting from or by reason of
any event or circumstance occurring prior to the Closing (including without
limitation, the improper application of Tenant Deposits), any lawsuit or other
proceeding or investigation relating to the Purchased Assets or the Real Estate
Business arising from events prior to the Closing, other than costs and expenses
incurred by Purchaser to pursue claims against tenants under the tenant
litigation assigned to Purchaser or retained by the Partnerships under Section
6.8 and litigation and claims by Xxxxxx Enterprises, Inc. against CenterAmerica
Trust relating to the Paseo del Norte Property, or arising out of or by reason
of any of the transactions contemplated by this Agreement other than as a result
of Purchaser's failure to comply with its obligations under this Agreement;
provided, however, this Section 1.3(e) will not include (i) the obligation to
pay the principal balance of the Assumed Indebtedness and PPM Indebtedness as of
the Closing and the obligations to be performed thereunder on or after the
Closing, (ii) liabilities or obligations arising from events after Closing and
(iii) liabilities or obligations resulting from the physical, structural and
environmental condition of any Property at or after the Closing (which
liabilities and obligations are Assumed Liabilities);
(f) any liabilities or obligations resulting from or by reason of
the employment of any employees or former employees of Seller or any Subsidiary
or any employee benefits plan or employment arrangement of Seller or the
Subsidiaries (including, but not limited to, 401(k), pension and deferred
compensation plans and medical/dental, disability, worker's compensation and
life insurance programs, whether or not self-insured and accrued vacation and
sick time other than accrued vacation and sick time for the calendar year in
which the Closing occurs in respect of Transferred Employees), termination or
severance pay due employees or independent contractors of Seller or any
Subsidiary or bonus or deferred compensation due employees or former employees
of Seller or any Subsidiary or any or all of Seller's or a Subsidiary's
obligations to any such employee or under any such plan or employment
arrangement;
(g) any reductions in workforce or other employment terminations,
including any "mass layoff" or "plant closing" as those terms are defined by the
WARN Act relating to the employees or former employees of Seller or any
Subsidiary occurring in connection with or on or before Closing;
6
(h) any Indebtedness, liabilities or obligations owed to any
Affiliate of Seller and not otherwise an Assumed Indebtedness or an Assumed
Liability;
(i) any collective bargaining agreements, programs and practices,
or other employment agreements, employment offer letters or similar agreements
with or relating to employees or former employees of Seller or any Subsidiary;
(j) any liability or obligation of Seller or any Subsidiary not
related to the Real Estate Business;
(k) any breach of any obligation of CenterAmerica Venture REIT
under the CenterAmerica Venture Partnership Agreement before the Closing; and
(l) any breach before the Closing of any obligation of (i) CA
Inwood, L.P. under the existing Partnership Agreement of Inwood or (ii) CA
Xxxxxx'x, X.X. under the existing Partnership Agreement of Xxxxxx'x, including
any claim that the drop downs described in Section 7.19(a) breach the existing
Xxxxxx'x and Inwood Partnership Agreements.
All such liabilities or obligations described above (other than the Assumed
Liabilities, the JV Indebtedness, the PPM Indebtedness, Contracts of the
CenterAmerica Venture Entities, and any other obligation or liability of the
CenterAmerica Venture Entities) are referred to as the "Excluded Liabilities."
The JV Indebtedness, the PPM Indebtedness, the Contracts of the CenterAmerica
Venture Entities, and any other obligation or liability of or to the
CenterAmerica Venture Entities are neither Assumed Liabilities nor Excluded
Liabilities under this Agreement.
1.4. No Representations. (a) PURCHASER SPECIFICALLY ACKNOWLEDGES
AND AGREES THAT (i) EXCEPT AS SET FORTH HEREIN OR ON ANY EXHIBIT OR SCHEDULE
ATTACHED HERETO (INCLUDING THE COVENANTS UNDER SECTION 6.1 AND SELLER'S
REPRESENTATIONS SET FORTH HEREIN), OR ANY OTHER CLOSING DOCUMENT REQUIRED
HEREIN, SELLER IS TRANSFERRING THE PURCHASED ASSETS "AS IS, WHERE IS AND WITH
ALL FAULTS" AND (ii) EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH HEREIN,
OR ON ANY EXHIBIT OR SCHEDULE ATTACHED HERETO, OR ANY OTHER CLOSING DOCUMENT
REQUIRED HEREIN, PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES
OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, FROM SELLER OR ANY OF ITS SUBSIDIARIES OR ANY PARTNER, MEMBER,
MANAGER, TRUSTEE, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AFFILIATE, OFFICER,
ATTORNEY, EMPLOYEE, AGENT OR BROKER OF ANY OF THEM, AS TO ANY MATTER, CONCERNING
THE PURCHASED ASSETS, OR SET FORTH, CONTAINED OR ADDRESSED IN ANY DUE DILIGENCE
(INCLUDING WITHOUT LIMITATION, THE COMPLETENESS THEREOF), INCLUDING WITHOUT
LIMITATION: (i) the quality, nature, habitability, merchantability, use,
operation, value, marketability, adequacy or physical condition of any Property
or any aspect or portion thereof, including, without limitation, structural
elements, foundation, roof, appurtenances, access, landscaping, parking
facilities, electrical, mechanical, HVAC, plumbing, sewage, water and utility
systems, facilities and appliances, soils, geology and groundwater, (ii) the
dimensions or lot size of any
7
Property or the square footage of any of the Improvements thereon or of any
tenant space therein, (iii) the development or income potential, or rights of or
relating to, any Property, or the fitness, suitability, value or adequacy of any
Property for any particular purpose, (iv) the zoning or other legal status of
any Property or the existence of any other public or private restrictions on the
use of any Property, (v) the compliance of any Property or its operation with
any applicable codes, laws, regulations, statutes, ordinances, covenants,
conditions and restrictions of any Governmental Entity or of any other Person
(including, without limitation, the Americans with Disabilities Act of 1990, as
amended), (vi) the ability of Purchaser or any Subsidiary to obtain any
necessary governmental approvals, licenses or permits for the use or development
of any Property, (vii) the presence, absence, condition or compliance of any
Hazardous Materials on, in, under, above or about any Property or any adjoining
or neighboring property, (viii) the quality of any labor and materials used in
any Improvements at any Property, (ix) the ownership of any Properties or
Partnership Interests or any portion thereof, (x) any leases, permits,
warranties, service contracts or any other agreements affecting any Property or
the intentions of any party with respect to the negotiation and/or execution of
any lease or contract with respect to any Property or (xi) the economics of, or
the income and expenses, revenue or expense projections or other financial
matters, relating to the operation of, any Property. Without limiting the
generality of the foregoing, Purchaser expressly acknowledges and agrees that,
except as set forth herein or on any Exhibit or Schedule hereto, or any other
closing document required herein, it is not relying on any representation or
warranty of Seller or any Subsidiary, or any partner, member, director, trustee,
officer, employee, affiliate, attorney, agent or broker of any of them, whether
implied, presumed or expressly provided, arising by virtue of any statute,
regulation or common law right or remedy in favor of any of them. Purchaser
further acknowledges and agrees that except as set forth in the definition of
Knowledge of Seller neither Seller nor any Subsidiary is under any duty to make
any inquiry regarding any matter that may or may not be known to any partner,
officer, employee, attorney, agent or broker of any of them. This Section 1.4
will survive the Closing, or, if the Closing does not occur, the termination of
this Agreement. In addition, Purchaser acknowledges and agrees that no property
(real, personal or otherwise) owned by any Tenant or any other Person is
intended to be conveyed hereunder unless that property is described and
purported to be conveyed under this Agreement.
(b) PURCHASER ACKNOWLEDGES AND AGREES THAT ANY REPORTS OBTAINED BY
IT OR ANY OF ITS AFFILIATES ARE THE SOLE RESPONSIBILITY OF PURCHASER SUBJECT TO
THE PROVISIONS OF THIS AGREEMENT, AND, EXCEPT TO THE EXTENT EXPRESSLY REQUIRED
PURSUANT TO THIS AGREEMENT, NONE OF SELLER OR ANY SUBSIDIARY HAS ANY OBLIGATION
TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR ANY PORTION
THEREOF OR EXCEPT TO THE EXTENT EXPRESSLY REQUIRED PURSUANT TO THIS AGREEMENT TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, PURCHASER IS SOLELY RESPONSIBLE FOR OBTAINING ANY APPROVAL OR
PERMIT NECESSARY FOR ACCEPTANCE BY IT OF ANY PARTNERSHIP INTEREST OR ANY
PROPERTY DIRECTLY OR INDIRECTLY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO
OBTAIN THE APPROVAL OR PERMIT, ALL AT PURCHASER'S SOLE COST AND EXPENSE.
8
1.5. Release of Seller. (a) Without limiting the provisions of
Section 1.4, Purchaser, for itself and any of its successors and assigns and
their Affiliates, hereby irrevocably and absolutely waives its right to recover
from, and forever releases and discharges, and covenants not to file or
otherwise pursue any legal action against, any of Seller or its Subsidiaries or
their respective Affiliates or any direct or indirect partner, member, manager,
trustee, director, shareholder, controlling person, Affiliate, officer,
attorney, employee, agent or broker of any of the foregoing, and any of their
respective heirs, successors, personal representatives and assigns (each, a
"Seller Party", and collectively, the "Seller Parties") with respect to any and
all suits, actions, proceedings, investigations, demands, claims, liabilities,
fines, penalties, liens, judgments, losses, injuries, damages, settlement
expenses or costs of whatever kind or nature, whether direct or indirect, known
or unknown, contingent or otherwise (including any action or proceeding brought
or threatened or ordered by any Governmental Entity), including, without
limitation, attorneys' and experts' fees and expenses, and investigation and
remediation costs that may arise on account of or in any way be connected with
the Real Estate Business, any Partnership Interest or any Property or any
portion thereof (collectively, "Claims"), including, without limitation, the
physical, environmental and structural condition of any Property or any law or
regulation applicable thereto, or any other matter relating to the use,
presence, discharge or release of Hazardous Materials on, under, in, above or
about any of the Properties; provided, however, the foregoing provision of this
Section 1.5 shall not apply with respect to any Claim by Purchaser against (i)
any Seller Party for any act of that Seller Party that constitutes fraud, (ii)
Seller or any of its Subsidiaries for any breach of the representations,
warranties or covenants set forth in this Agreement, subject to the limitations
and conditions provided in Sections 10.2, 11.5 and 11.6, if applicable, or (iii)
Seller for its obligations under this Agreement including, without limitation,
Sections 2.4 and 11.2. In addition, Purchaser covenants and agrees to, and where
applicable hereby does, release, defend, indemnify and hold harmless each of the
Seller Parties and their respective Affiliates from and against any Claims to
the extent relating to any Hazardous Materials that may be placed, located or
released on or at any Property after the Closing Date and during the period of
Purchaser's (or any of its Affiliates') ownership. Purchaser's indemnity
obligation set forth in the immediately preceding sentence shall be limited to
its interest in all of the Purchased Assets. None of Purchaser, its Affiliates
or their respective successors or assigns will be required to indemnify, defend
or hold harmless any Seller Party from any Claims threatened, asserted or
commenced against any Seller Party by any other Person (including, without
limitation, any Governmental Entity) to the extent, if any, that such Claim
seeks recovery for harm suffered due to Hazardous Materials placed, located or
released on or at any Property before the Closing or prior to, from or after the
Closing with respect to any "offsite" Hazardous Materials migrating to the
Property; provided, however, Purchaser (but not Seller or any Subsidiary) will
be responsible for remediating any such Hazardous Materials at the Property to
the extent that the owner or prior owner of the Property is responsible for such
remediation.
(b) In connection with this Section 1.5, Purchaser expressly
waives the benefits of any provision or principle of federal or state law or
regulation that may limit the scope or effect of the foregoing waiver and
release.
(c) This Section 1.5 shall survive the Closing indefinitely.
9
1.6. Indivisible Economic Package. Except as otherwise expressly
provided herein, Purchaser shall have no right to purchase, and Seller shall
have no right to sell, less than all of the Purchased Assets, it being the
express agreement and understanding of Purchaser and Seller that, as a material
inducement to Seller and Purchaser to enter into this Agreement, Purchaser has
agreed to purchase and Seller has agreed to sell all of the Purchased Assets,
subject to and in accordance with the terms and conditions hereof.
1.7. Nonassignable Contracts and Permits.
(a) Nonassignability. If any Contract, License and Permit, or any
other Purchased Asset described in Section 1.1(a)(iii)(C), (D), (E), (I)-(L) to
be Transferred is not capable of being assigned without the consent,
authorization, approval or waiver ("Consent") of a third person or entity
(including a Governmental Entity), or if such assignment or attempted assignment
would constitute a breach thereof or a violation of any Law (each, a
"Nonassignable Contract"), nothing in this Agreement shall constitute an
assignment or require the assignment or assumption thereof prior to the time at
which all Consents necessary for such assignment shall have been obtained and
same shall not be an "Assumed Liability". Seller shall not be obligated or
entitled to assign to Purchaser (and Purchaser shall not be obligated to
assume), or cause any Assigning Subsidiary to assign to Purchaser (and Purchaser
shall not be obligated to assume), any rights or obligations in, to or under any
Nonassignable Contract without first having obtained all Consents necessary for
such assignment.
(b) If Consents Cannot Be Obtained. To the extent and for so long
as all Consents required for the assignment of any Nonassignable Contract shall
not have been obtained by Seller after the Closing, at Purchaser's request in
respect of Material Contracts, and in respect of all other contracts, Seller
shall take such actions as directed by Purchaser to (i) provide to Purchaser the
financial and business benefits of such Nonassignable Contract and (ii) enforce,
at the request of Purchaser, for the account of Purchaser, any rights of Seller
or any Subsidiary arising from any such Nonassignable Contract (including the
right to elect to terminate in accordance with the terms thereof upon the advice
of Purchaser). Any contract for which Purchaser waives any required consent
under Section 9.4(g) will be deemed to be a contract for which Purchaser has
requested Seller to perform under the prior sentence. Notwithstanding the
foregoing, Seller will not be required to incur any liability or pay any
consideration in connection with the foregoing and Purchaser will promptly
reimburse Seller for any cost or expense incurred in performing the
Non-Assignable Contracts. If Purchaser does not so request Seller to take such
actions in respect of a Material Contract, Purchaser will have no responsibility
in respect of that Material Contract unless Seller obtains the requisite
consent, in which case the Material Contract will be assigned to and assumed by
Purchaser provided such contract is not modified. Following the Closing, Seller
shall not terminate, modify or amend any Nonassignable Contract for which
Purchaser is receiving the benefits under this Section 1.7 without Purchaser's
prior written consent but shall do so upon Purchaser's request. The provisions
of this Section shall survive Closing and do not affect the Excluded Liabilities
with respect to such Non-Assignable Contracts.
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II. CONSIDERATION
2.1. Purchase Price. The purchase price for the Real Estate
Business will be equal to $653,369,000, as may be adjusted in accordance with
this Section 2.1 and the other provisions of this Agreement, including without
limitation, Sections 2.4, 2.7, 7.6, 7.14, 7.15, 7.16, 7.19, 8.2 and 10.2
("Purchase Price"). The Purchase Price is payable at Closing by (i) Purchaser
paying in cash an amount equal to the Purchase Price, less 100% of the principal
amount outstanding of the Assumed Indebtedness and PPM Indebtedness as of the
Closing Date, and (ii) Purchaser assuming or taking the Purchased Assets subject
to the Assumed Indebtedness, the JV Indebtedness and the PPM Indebtedness. The
Purchase Price may be increased by up to $500,000 as set forth in Schedule 2.1.
The Purchase Price shall be decreased by all interest and attorney's fees
accrued on the Claim of Lien filed by Xxxxxx Enterprises, Inc. relating to the
Paseo del Norte Property to the Closing Date unless Seller is able to settle the
claims and litigation before Closing and cause the Claim of Lien to be removed
with respect to the Paseo del Norte Property in which case such reduction shall
not apply and the Purchase Price shall then increase by $431,000. The Deposit
plus any interest or other investment income earned thereon will be applied to
the Purchase Price in accordance with the Escrow Agreement. As additional
consideration, Purchaser shall assume or take the Purchased Assets subject to
the Assumed Liabilities. Purchaser shall pay to Seller the cash portion of the
Purchase Price in immediately available funds by wire transfer to an account
designated by Seller, which account must be designated at least 2 Business Days'
prior to the Closing Date.
2.2. Assumption of Liabilities. (a) At Closing Purchaser will
assume from and after the Closing Date and be bound by, and to accept and adopt
all the terms, provisions and conditions of each of the following (including all
amendments, supplements and modifications thereof and all assignments thereto,
collectively, the "Partnership Agreements"):
(i) the Limited Liability Company Agreement of
CenterAmerica Venture dated as of March 23, 2000 among CenterAmerica Venture
REIT, CenterAmerica Property Trust, L.P. and Sunbelt Retail, LLC and the related
Capital Support Agreement;
(ii) the Agreement of Limited Partnership of CFP dated as
of June 9, 2000 between CFP Venture and CFP, Inc.;
(iii) the Amended and Restated Agreement of Limited
Partnership of CenterAmerica Capital dated as of May 19, 1998 between HHC
Finance and HHC Finance, Inc.;
(iv) the Amended and Restated Agreement of Limited
Partnership of Inwood dated as of October 31, 1997 among CA Inwood, L.P.,
Xxxxxxxx Venture #2 and Xxxx X. Xxxxxxxx or the New Inwood Partnership Agreement
if Seller makes the election in Section 7.19(a);
(v) the Amended and Restated Agreement of Limited
Partnership of Xxxxxx'x dated as of March 31, 1998 among CA Xxxxxx'x, X.X., GKF,
Inc. and Xxxx X. Xxxxxxxx or the New Xxxxxx'x Partnership Agreement if Seller
makes the election in Section 7.19(a); and
(vi) the partnership agreements or operating agreements
for the entities formed to acquire Fee Properties pursuant to Section 1.1(b).
11
(b) To the extent Purchaser does not make the election set forth
in Section 1.1(b) and thereby elects to purchase a Fee Property, as additional
consideration for the purchase and sale of that Fee Property, at Closing
Purchaser will with respect to such Fee Property:
(i) assume and agree to discharge, perform and comply
with all of the covenants and obligations of Seller or the applicable Subsidiary
and Seller's or the applicable Subsidiary's predecessors in title pursuant to
the Assumed Indebtedness encumbering that Fee Property all subject to the
limitations of the terms and conditions therein and the Leases and Contracts (to
the extent assigned to Purchaser) (including, without limitation, those relating
to any Tenant Deposits delivered to Purchaser at the Closing), which are to be
performed on or after the Closing Date subject to Section 2.4, including all
obligations under the Leases and the Contracts relating to the physical,
environmental and structural condition of the Fee Property at or after the
Closing Date without limiting Seller's obligation under Section 4.6 and Article
XI with respect thereto; and
(ii) assume and agree to discharge, perform and comply
with each and every liability, duty, covenant, debt or obligation of Seller or
the applicable Assigning Subsidiary resulting from, arising out of, or in any
way related to the Licenses and Permits (to the extent assigned to Purchaser)
and arising after the Closing.
(c) At Closing Purchaser will with respect to the remaining
Purchased Assets:
(i) assume and agree to discharge, perform and comply
with all of the covenants and obligations of Seller and the Assigning
Subsidiaries pursuant to the Company Leases and the Contracts (to the extent
assigned to Purchaser) relating to the Real Estate Business which are to be
performed after the Closing subject to Section 2.4; and
(ii) assume and agree to discharge, perform and comply
with each and every liability, duty, covenant, debt or obligation of Seller
resulting from, arising out of, or in any way related to the Licenses and
Permits (to the extent assigned to Purchaser) which are to be performed after
the Closing.
(d) At Closing Purchaser will assume and agree to or will take the
Partnership Interests subject to and will cause the Partnerships to discharge,
perform and comply with the Assumed Liabilities all subject to the terms and
conditions thereof.
2.3. Xxxxxxx Money. (a) Within 24 hours of the execution of this
Agreement, Purchaser will deposit with the Escrow Holder in immediately
available funds by wire transfer $10,000,000 (the "Deposit"), which will be held
in escrow by the Escrow Holder pursuant to the terms of this Agreement, and in
accordance with the terms and provisions of the Escrow Agreement by and among
the Escrow Holder, CenterAmerica Trust and Purchaser dated of even date herewith
(the "Escrow Agreement").
(b) In order to assure compliance with the requirements of Section
6045 of the Internal Revenue Code of 1986, as amended (for purposes of this
Section 2.3, the "Code"), and any related reporting requirements of the Code,
the parties hereto agree as follows:
12
(i) Provided the Escrow Holder executes a statement in
writing (in form and substance reasonably acceptable to the parties hereunder)
pursuant to which it agrees to assume all responsibilities for information
reporting required under Section 6045(e) of the Code, Seller and Purchaser will
designate the Escrow Holder as the Person to be responsible for all information
reporting under Section 6045(e) of the Code (the "Reporting Person"). If the
Escrow Holder refuses to execute a statement pursuant to which it agrees to be
the Reporting Person, Seller and Purchaser agree to appoint another third party,
acceptable to Seller and Purchaser in their reasonable discretion, as the
Reporting Person.
(ii) Each of Seller and Purchaser will:
(A) provide to the Reporting Person all
information and certifications regarding the applicable party,
as reasonably requested by the Reporting Person or otherwise
required to be provided by a party to the transaction
described herein under Section 6045 of the Code; and
(B) provide to the Reporting Person the
applicable party's taxpayer identification number and a
statement (on Internal Revenue Service Form W-9 or an
acceptable substitute form, or on any other form the
applicable current or future Code sections and regulations
might require and/or any form requested by the Reporting
Person), signed under penalties of perjury, stating that the
taxpayer identification number supplied by the applicable
party to the Reporting Person is correct.
(iii) Each party will retain this Agreement for not less
than four years from the end of the calendar year in which Closing occurred, and
to produce it to the Internal Revenue Service upon a valid request for this
Agreement.
(iv) The addresses for Seller and Purchaser are as set
forth in Section 12.1, and the real estate subject to the transfer provided for
in this Agreement is described in Schedule 1.1(a)(i)(A).
(c) At the Closing, the Escrow Holder will deliver the Deposit,
and interest and other investment income earned thereon, to Seller as provided
in the Escrow Agreement and Section 2.1.
2.4. Prorations. Prorations will be made with respect to each Fee
Property, the Assumed Liabilities and the Real Estate Business as provided in
Sections 2.4(a)-(g), (i)(i), and (j)-(n) without duplication in each case.
Prorations as to the Partnerships will be made as provided in Section 2.4(h) and
(i)(ii) without duplication.
(a) (i) Seller and Purchaser agree to adjust, as of 11:59 p.m. on
the day immediately preceding the Closing Date (the "Proration Time"), the
following (collectively, the "Proration Items"):
(A) Real property taxes and assessments as
provided in Section 2.4(n);
13
(B) Water rates and charges paid or payable with
respect to the Fee Property, except those required to be paid
by Tenants directly to the entity imposing the rates or
charges;
(C) Sewer taxes and rents paid or payable with
respect to the Fee Property, except those required to be paid
directly by Tenants to the entity or authority imposing the
taxes and rents;
(D) Accrued interest payable under Assumed
Indebtedness and PPM Indebtedness as provided in Section
2.4(m) but not late fees and other costs, charges, and past
due interest owing to the lender before the Proration Time,
which will be Seller's sole expense;
(E) Amounts, if any, payable or cash received by
the owner of the Property under the REA Agreements, including
prepaid amounts and unpaid amounts;
(F) Annual permit, license and inspection fees,
if any, on the basis of the fiscal year for which levied;
(G) Charges for fuel oil and liquid propane gas,
if any, at the cost per gallon or cubic foot most recently
charged to the owner of the Property, based on the supplier's
measurements thereof, plus sales taxes thereon to the extent
applicable;
(H) Rentals as provided in Section 2.4(b) (other
than payments for Operating Expenses which shall be
apportioned as provided in Section 2.4(c)), including prepaid
Rentals;
(I) Amounts payable by or to Seller or the owner
of the Property under a management, development and/or other
Contract relating to the Property as provided in Section
2.4(i)(i) (other than a Contract providing for the payment of
leasing commissions or brokerage fees, which shall be prorated
as provided in Section 2.4(e));
(J) Cash reserves and escrow deposits for real
property taxes and assessments, insurance premiums and other
items, other than the reserves listed on Schedule 2.4(a)(i)(J)
for which Seller shall not receive a credit towards the
Purchase Price and Purchaser shall have no obligation to
refund said amounts, made with, or held by, the lender under
any of the Assumed Indebtedness and PPM Indebtedness, net, if
appropriate, of any allocation to the same party of the
underlying expense for which the reserve is held, together
with so much of any interest earned on the reserve or escrow
deposit as is properly attributable to the allocated amount
thereof, provided however, adjustments for casualty or
condemnation proceeds held by the lender under any of the
Assumed Indebtedness and PPM Indebtedness will be made in
accordance with Article VIII;
14
(K) Rentals and other amounts payable to third
parties by the owner of the Property under ground leases,
including contingent and/or participating rents;
(L) Prepaid expenses as provided in Section
2.4(k);
(M) Ground lease deposits as provided in Section
2.4(l);
(N) Tenant Deposits as provided in Section 2.7;
(O) Except as otherwise provided in Section
7.12, personal property taxes and assessments that have been
levied or assessed with respect to any Purchased Asset,
whether or not due and payable, and whether paid or unpaid;
(P) Amounts readily determinable that are
payable under the Assumed Liabilities and the Company Leases;
and
(Q) Except as set forth below, all other items
customarily apportioned in connection with the transfer of
similar properties similarly located.
(ii) Seller will be charged and credited for the amounts
of all of the Proration Items relating to the period up to and including the
Proration Time, and Purchaser will be charged and credited for all of the
Proration Items relating to the period after the Proration Time. Seller will
prepare in good faith and deliver a statement of estimated Proration Items and
other credits and adjustments to the Purchase Price hereunder (including the
principal amount outstanding of the Assumed Indebtedness as of the Closing Date)
to be submitted to Purchaser no less than 5 Business Days before the Closing
Date (the "Closing Statement"). Upon approval by Seller and Purchaser, the
preliminary Proration Items and other credits and adjustments reflected in the
Closing Statement will be paid at Closing by Purchaser to Seller (if the
preliminary Proration Items, credits and adjustments result in a net credit to
Seller) or by Seller to Purchaser (if the preliminary Proration Items, credits
and adjustments result in a net credit to Purchaser) by increasing or reducing
the cash to be delivered by Purchaser in payment of the Purchase Price at the
Closing. If the actual amounts of the Proration Items, credits and adjustments
are not known as of the Proration Time, the proration of the Proration Items,
credits and adjustments will be made at Closing on the basis of the best
evidence then available; thereafter, when actual amounts are determined,
re-prorations will be made as provided in Section 2.5 on the basis of the actual
amounts, and a final cash settlement will be made between Seller and Purchaser.
No prorations will be made in relation to insurance premiums, and Seller
insurance policies will not be assigned to Purchaser other than any assignment
of a claim or proceeds pursuant to Section 7.18 and Article VIII. Final readings
and final xxxxxxxx for utilities will be made if possible as of the Proration
Time, in which event no proration will be made at the Closing with respect to
utility bills. Seller will be entitled to all deposits presently in effect with
the utility providers, and Purchaser will be obligated to make its own
arrangements for deposits with the utility providers. The provisions of this
Section 2.4 will survive the Closing until the Final Closing Adjustment is
determined and duly paid and Seller and Purchaser shall cooperate to produce the
Final Closing Adjustment in accordance with Section 2.5.
(b) Rentals shall be prorated at the Closing in accordance with
the following provisions:
15
(i) Minimum rent and percentage only rent received for
the month in which the Closing Date occurs will be prorated between Seller and
Purchaser as of the Proration Time based on the actual number of days in the
month during which the Closing occurs. Seller will be entitled to all minimum
rent and percentage only rent which accrues before the Proration Time and
Purchaser will be entitled to all minimum rent and percentage only rent which
accrues on and after the Proration Time.
(ii) Monthly or other payments made by each Tenant based
upon projected or estimated additional rent received for the month or other
relevant period in which the Closing Date occurs will be prorated between Seller
and Purchaser as of the Proration Time based on the actual number of days in the
month or other relevant period during which the Closing occurs. Seller will be
entitled to all additional rent for the period before the Proration Time, and
Purchaser will be entitled to all additional rent for the period on and after
the Proration Time. This Section 2.4(b)(ii) will not include any Proration Item
set forth in Section 2.4(c).
(iii) Percentage rent (if any) payable by a Tenant under
its Lease will be prorated as of the Proration Time between Seller and Purchaser
on the basis of the fiscal year set forth in the applicable Lease for the
determination and payment of percentage rent. Such fiscal year for determination
and payment of percentage rent in which the Closing occurs is hereinafter
referred to as the "Applicable Percentage Rent Fiscal Year." Seller will receive
the entire amount of percentage rent with respect to any fiscal year ending
before Closing. Until the Final Closing Adjustment, (A) Seller will initially
retain all monthly or quarterly interim payments of percentage rent made by each
Tenant for its Applicable Percentage Rent Fiscal Year before the Closing until
the Final Closing Adjustment, and (B) Purchaser will initially retain all
monthly or quarterly interim payments of percentage rent made by each Tenant for
its Applicable Percentage Rent Fiscal Year on and after the Closing. Seller and
Purchaser will prorate the total percentage rent due from each Tenant for the
Tenant's Applicable Percentage Rent Fiscal Year as a part of the Final Closing
Adjustment pursuant to Section 2.5. Subject to Section 2.4(b)(v), any amounts
collected by the owner of a Property from a Tenant after Closing that relate to
percentage rents payable with respect to any fiscal year ending before the
Closing or any Lease that terminated before the Closing Date will be remitted to
Seller promptly upon receipt.
(iv) All other types of Rentals other than those listed in
Sections 2.4(b)(i)-(iii) and 2.4(c) ("Other Rent") received for the month in
which the Closing Date occurs will be prorated based on the actual number of
days in the month during which the Closing Date occurs and Seller will be
entitled to such Other Rent for the period before the Proration Time, and
Purchaser will be entitled to such Other Rent for the period on or after the
Proration Time. All Rentals payable by each Tenant whose Lease commences on or
after the Closing shall belong entirely to Purchaser.
(v) In determining the amounts under Sections
2.4(b)(i)-(iv) and 2.4(c), this Section will be applied. Rentals are
"Delinquent" if they were not paid when due. Delinquent Rentals will not be
prorated and neither Seller nor Purchaser will receive a credit at Closing for
Delinquent Rentals. Purchaser agrees to use good faith collection procedures
with respect to the collection of any Delinquent Rentals, but Purchaser will
have no liability for the failure to collect any such amounts and will not be
required to conduct lock-outs or take any other legal action to enforce
collection of any such amounts owed to Seller by Tenants of the Property. All
Rentals,
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payments for Operating Expenses and other amounts collected by Purchaser from
and after Closing from each Tenant that are not designated for a specific
purpose or period will be applied as of the date of receipt first to current
amounts owed by that Tenant to Purchaser, then to the amounts owed for the month
(or other relevant period) in which the Closing Date occurs, then to all other
delinquencies owed by that Tenant to Purchaser, and thereafter, to delinquencies
owed by that Tenant to Seller. Any Rentals, payments for Operating Expenses or
other amounts designated by the Tenant for a specific purpose or period will be
applied as directed. Any payment net of enforcement costs received by Purchaser
under a note assigned to Purchaser or held by a Partnership that was made by a
Tenant in respect of amounts owed under a Lease, excluding any amount
specifically allocated under the note to post-closing periods under such
obligations and any net recovery in respect of the litigation against Tenants
assigned to Purchaser or retained by the Partnership under Section 6.8,
excluding any claim for post-closing rents, will be treated as payment of
undesignated Delinquent Rentals for periods before the Closing, but subject to
the application of funds under this Section 2.4(b)(v). Notwithstanding the
foregoing, Purchaser will be entitled to retain all payments received on account
of the note payable by Houston Community College for the Pinemont Property.
Seller may not without Purchaser's prior written consent commence a lawsuit
against any Tenant after the date of this Agreement to collect Delinquent
Rentals and payments for Operating Expenses so long as Tenant occupies the space
that is the subject of the Delinquent Rentals and payments for Operating
Expenses. The obligations of Seller under the immediately prior sentence will
survive Closing indefinitely.
(c) Seller and Purchaser will prorate payments, including
estimated payments, if any, received from Tenants for common area maintenance,
real estate taxes, electricity redistribution and HVAC charges, and all other
operating expenses and tax escalations (collectively, "Operating Expenses"). For
purposes of the Closing Statement, Seller and Purchaser will prorate, as of the
Proration Time, Operating Expenses (other than payments for real estate taxes
and tax escalations), which Operating Expenses will be prorated on an accrual
basis between Seller and Purchaser. If more amounts have been expended for such
Operating Expenses through the Proration Time than have been collected from
Tenants for such Operating Expenses, Purchaser will pay such difference to
Seller. If more amounts have been collected from Tenants through the Proration
Time for such Operating Expenses than have been expended for such Operating
Expenses, Seller will pay to Purchaser such excess collected amount. Operating
Expenses (including payments for real estate taxes and tax escalations) will be
reprorated following annual reconciliation with Tenants as part of the Final
Statement under Section 2.5 based upon Operating Expenses and collections from
Tenants for the entire calendar year in which the Closing occurs with Seller and
Purchaser being credited and charged with a pro rata share thereof based upon
actual number of days in the year they were owners of the Properties.
(d) With respect to specific tenant xxxxxxxx for work orders,
special items performed or provided at the request of a given Tenant or other
specific services and which are collected by Purchaser after the Proration Time
but relate to the foregoing matters and which are identified on the Tenant's
payment as relating to such specific matters, Purchaser shall cause such
collected amounts to be promptly paid to Seller.
(e) Seller will receive a credit for any and all Lease Expenses to
the extent that they have been paid by Seller prior to Closing and relate to (x)
any new Lease executed by Seller or any Subsidiary on or after the date of this
Agreement in compliance with Section 6.2 for which
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Purchaser is responsible (except for any new Lease for space set forth on
Schedule 2.4(e)) or (y) any renewal and/or expansion of any Lease existing as of
the date of this Agreement which is exercised on or after the date of this
Agreement. Purchaser will receive a credit to the Purchase Price and at Closing
assume liability for any Lease Expenses which remain unpaid at Closing with
respect to (i) any Lease executed by Seller or any Subsidiary before the date of
this Agreement and (ii) any Lease for space set forth on Schedule 2.4(e)
executed on or before Closing (regardless of whether greater or lesser than the
amounts set forth on Schedule 2.4(e) for such space). To the extent that Seller
has not executed prior to Closing a Lease for any space set forth in Schedule
2.4(e), Purchaser will receive a credit to the Purchase Price for future Lease
Expenses to be incurred by Purchaser in the amount allocated to the unleased
space as set forth in Schedule 2.4(e) and Purchaser will assume at Closing
liability for all Lease Expenses related to such space regardless of the actual
amount thereof. Each party will make available to the other all records, bills,
vouchers and other data in such party's control verifying Lease Expenses and the
payment thereof.
(f) There will be no proration of any promotional or publicity
charges or other costs and expenses paid from any promotional fund or by any
merchants' association held by Seller or any Subsidiary or its managing agent on
the Closing, except that Seller or any Subsidiary shall be responsible for
funding, on or before the Closing, any amounts Seller or any Subsidiary is
obligated to fund prior to such date pursuant to any agreements by which Seller
or any Subsidiary is bound relating to the Properties. On the Closing Date,
Seller shall deliver to Purchaser the balance of any promotional fund and all
funds of any merchants' association then held by Seller or any Subsidiary or its
managing agent, including funds derived from payments made by Tenants and funds
derived from optional or mandatory contributions by Seller or any Subsidiary, or
at Seller's election, Seller shall give Purchaser a credit to the Purchase Price
therefor.
(g) Subject to the application of Rentals, payments for Operating
Expenses and other amounts under Section 2.4(b)(v), all Rentals and payments for
Operating Expenses in respect of the calendar year 2001 and any prior calendar
year, and minimum rent and percentage only rent in respect of the calendar year
2002 will be remitted by Purchaser to Seller within 30 days following the last
day of the month in which the Closing occurs and thereafter starting in the next
calendar quarter not less frequently than quarterly by the last day of each
calendar quarter. Any amount due to Seller under Section 2.4(i)(ii) will be
remitted by Purchaser to Seller promptly after Seller's receipt of the
applicable fee. All other amounts payable to or by Seller under Section 2.4
shall be paid, if applicable, at the Final Closing Adjustment.
(h) (i) The prorations in respect of the Partnership Properties
will be made in accordance with Section 2.4(a)-(g), (i)(i) and 2.4(j)-(n) as if
the Partnership Properties were Fee Properties. The prorations will also take
into account the cash and cash equivalent assets of the Partnerships (other than
arising from items being prorated under this Section 2.4) as of the Proration
Time. In the case of Partnership Properties other than the PPM Properties, if
such prorations and adjustments with respect to any such Partnership Property
result in a net credit to Seller, the amount to be paid by Purchaser on the
Closing Date shall be increased by the amount of that credit. If the aggregate
prorations and adjustments with respect to any such Partnership Property result
in a net credit to Purchaser, the amount to be paid by Purchaser on the Closing
Date shall be decreased by an amount equal to such credit. In the case of the
PPM Properties,
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Purchaser will receive a credit to the Purchase Price for the portion of the
cash and cash equivalent items held by Seller or any of its Subsidiaries and
attributable to the outside partners' share of any undistributed cash under the
Partnership Agreements for Xxxxxx'x and Inwood based on their relative share of
distributable cash flow under the Xxxxxx'x and Inwood Partnership Agreements. In
addition, if the proration and adjustments with respect to the PPM Properties
result in a net credit to Purchaser, an amount equal to such net credit
multiplied by the Assigning Subsidiary's share of distributable cash flow under
the Xxxxxx'x and Inwood Partnership Agreements shall be credited to Purchaser as
a reduction in the Purchase Price. If the prorations and adjustments result in a
net credit to Seller, an amount equal to such net credit multiplied by the
Assigning Subsidiary's share of distributable cash flow under the Xxxxxx'x and
Inwood Partnership Agreements shall be credited to Seller as an increase to the
Purchase Price. To the extent that apportionments would be revised or adjusted
in accordance with Section 2.5, Seller and Purchaser will cause their respective
representatives or accountants to prepare a Final Statement which includes a
recalculation of the foregoing apportionments. In making the apportionments for
the Partnership Properties, any reference in Section 2.4(a)-(g), (i)(i) and
(j)-(n) to the payment, receipt, expenditure or collection of any amount by
Seller or Purchaser shall include the payment, receipt, expenditure or
collection of such amount by a Partnership or its subsidiaries.
(ii) Except as set forth in this Section 2.4(h)(ii) and
Section 2.4(i)(ii), no prorations will be made in respect of CenterAmerica
Venture. Seller will receive a credit at Closing for any amounts contributed
from January 1, 2002 by CenterAmerica Venture REIT to CenterAmerica Venture for
development of Spring Valley, Windvale, and Wycliffe in excess of $322,000 and
Purchaser will receive a credit at Closing to the extent that CenterAmerica
Venture REIT contributes less than $322,000. Seller will also receive a credit
for any equity contributed by CenterAmerica Venture REIT to CenterAmerica
Venture in order to satisfy any covenant under any Indebtedness of CenterAmerica
Venture. If a distribution is made to members of CenterAmerica Venture out of
any capital transaction proceeds (including without limitation proceeds from the
sale or other disposition of any JV Property) or any financings or refinancings
of Indebtedness that increase the amount of CenterAmerica Venture's Indebtedness
above the amount at Closing which it otherwise would have been if the financing
or refinancing had not occurred, Purchaser will receive a credit for the amount
of any capital transaction proceeds or any financing proceeds so distributed to
CenterAmerica Venture REIT.
(i) (i) Except as provided below, amounts received or payable
under the Contracts will be prorated between Seller and Purchaser as of the
Proration Time based on the actual number of days in the month during which the
Closing occurs. All amounts received or payable under the Contracts accruing
prior to the Proration Time will be credited to or the obligation of Seller.
Purchaser shall be credited with or be responsible for all amounts received or
payable under the Contracts accruing on and after the applicable Proration Time.
(ii) Notwithstanding the foregoing, the fees payable to
Seller or its Subsidiaries by CenterAmerica Venture will be prorated as follows:
(A) Any property management fee received by
Seller prior to Closing and relating to periods prior to the
Proration Time will be retained by Seller. Any property
management fee relating to the month in which the Closing
occurs will
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be prorated upon receipt between Seller and Purchaser based on
the actual number of days in the month during which the
Closing occurs. Seller will be entitled to the property
management fee which accrues before the Proration Time and
Purchaser will be entitled to the property management fee
which accrues on and after the Proration Time.
(B) Any property acquisition fee or financing
fee payable by CenterAmerica Venture in respect of an
acquisition or financing currently contemplated in respect of
the Compass Bank line will be retained by Seller if paid
before Closing and will be promptly remitted to Seller by
Purchaser upon receipt if paid after Closing. Any other
property acquisition fee and any financing fee paid after the
date of this Agreement for any acquisition or financing that
is approved before Closing will be paid to Purchaser at
Closing by Seller net of any direct costs and expenses
incurred by Seller in connection with that acquisition or
financing if paid to Seller before Closing and if paid after
Closing will be retained by Purchaser but Purchaser will
promptly remit to Seller the amount of any direct costs and
expenses incurred by Seller in connection with that
acquisition or financing. Seller will provide to Purchaser at
Closing documentation in reasonable detail of its costs and
expenses to be reimbursed or retained. Purchaser will retain
any property acquisition fee or financing fee for any
acquisition or financing that is approved after Closing.
(C) Any leasing fees attributable to any lease
in respect of any JV Property executed before Closing will be
retained by Seller if paid prior to Closing. If such leasing
fees have not been paid before Closing, Seller will receive a
credit at Closing for the amount of those fees and Purchaser
will receive a credit for any related commissions to be paid
in respect of those leases. Seller will assign those leasing
fee receivables to Purchaser and Purchaser will assume
Seller's obligation for any related commissions. Any leasing
fees attributable to any lease in respect of any JV Property
executed after the Closing will be retained by Purchaser.
(D) Any development fee received by Seller prior
to Closing will be retained by Seller. A portion of any
development fee received by Purchaser after Closing and
attributable to any of the JV Properties or any new
development initiated before the Closing will be promptly paid
to Seller upon receipt in an amount equal to the portion of
the development fee represented by the percentage of the total
development budget expended prior to Closing; provided,
however, Seller will be entitled to the entire development fee
paid in respect of the JV Property known as Flamingo Falls and
such fee will be promptly remitted by Purchaser to Seller upon
receipt if paid after Closing.
(j) All amounts and benefits payable to Seller's and any
Affiliate's employees providing services to the Properties or Real Estate
Business will not be prorated between the parties and shall remain the sole
responsibility of Seller other than accrued and unused vacation and sick pay
benefits of the Transferred Employees for the calendar year in which the Closing
occurs, which will be assumed by Purchaser. All amounts and benefits (other than
such accrued
20
and unused vacation and sick pay benefits for the calendar year in which the
Closing occurs) payable to the Transferred Employees accruing prior to the
applicable Proration Time will be the obligation of Seller. Purchaser will be
responsible for all amounts and benefits payable to the Transferred Employees
accruing after the Proration Time under Purchaser's benefit plans, programs or
arrangements.
(k) Seller will be credited with an amount equal to all prepaid
costs, expenses, charges and fees paid by Seller with respect to any Property
and attributable to any period after the applicable Proration Time so long as
Purchaser is assigned the benefit of the prepayment.
(l) Seller will be credited with an amount equal to all security
deposits, prepaid rentals and other deposits paid or deposited with any ground
lessor of a Property under the applicable ground lease or to any other person on
the ground lessor's behalf, together with any interest that has accrued thereon.
(m) Accrued interest payable under the Assumed Indebtedness and
PPM Indebtedness (excluding unpaid late fees and other costs, charges, and past
due interest for which Purchaser will receive a credit) for the period in which
the Closing Date occurs will be prorated between Purchaser and Seller as of the
Proration Time.
(n) All taxes and assessments for the year in which the Closing
Date occurs that are paid prior to the Proration Time will be prorated based
upon the amounts actually paid. If taxes and assessments for the year in which
the Closing Date occurs or any prior year have not been paid before Closing,
Seller will be charged at Closing an amount equal to that portion of such taxes
and assessments which relate to the period before Closing and Purchaser will pay
the taxes and assessments prior to their becoming delinquent. Any such
apportionment made with respect to a tax year for which the tax rate or assessed
valuation, or both, have not yet been fixed shall be based upon the tax rate and
an assessed valuation last fixed. After taxes and assessments are known,
adjustments, if needed, will be made between the parties. Purchaser will be
responsible for all installments of special assessments due for any period after
the Closing.
2.5. Preparation of Final Statement. On or before 30 days following
the last day of the 15th full calendar month following the Closing Date or such
later date as is mutually agreed by the Seller and the Purchaser, the Purchaser
will prepare and deliver to the Seller a final unaudited statement of Proration
Items and other credits and adjustments to the Purchase Price as of the
Proration Time (the "Final Statement"), based on information available as of the
last day of the 15th full calendar month following the Closing Date or such
later date as is mutually agreed by the Seller and the Purchaser (the "Final
Adjustment Date"). Seller will afford Purchaser and its representatives and
auditors the opportunity at reasonable times and upon reasonable prior notice to
review with Purchaser all underlying financial records and work papers
pertaining to the preparation of the Final Statement within its control. Subject
to Section 2.6, any net adjustment in favor of Purchaser will be paid in cash by
Seller to Purchaser no later than 10 days after delivery of the Final Statement.
Subject to Section 2.6, any net adjustment in favor of Seller will be paid in
cash by Purchaser no later than 10 days after delivery of the Final Statement.
The Final Statement may be audited at either party's request as provided in
Section 2.6. The payments made under the Final Statement will be the "Final
Closing Adjustment."
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2.6. Audit. If Purchaser and Seller do not agree on the computation
of the Proration Items and other credits and adjustments to the Purchase Price
in the Final Statement, then each party will prepare its own calculation of the
Final Statement and such calculations will be submitted to a firm of independent
accountants of nationally recognized standing reasonably satisfactory to
Purchaser and Seller (who shall have no material relationship with Seller or
Purchaser or MSREF II) promptly to review this Agreement and the disputed items
or amounts for the purpose of calculating the Final Statement. In making that
calculation, the firm of independent accountants will include the non-disputed
items and amounts set forth in each parties' calculation of the Final Statement,
and shall consider affirming or adjusting only those items or amounts in the
calculation of the Final Statement as to which the parties have disagreed and
any items and amounts affected by those disputed items and amounts. The firm of
independent accountants will deliver to Purchaser and Seller, as promptly as
practicable, a report setting forth its calculation of the Final Statement. That
report will be final and binding upon Purchaser and Seller. The cost of the
independent accountants' review and report will be borne by (i) Purchaser if the
difference between the Final Statement and Purchaser's calculation of the Final
Statement delivered pursuant to this Section 2.6 is greater than the difference
between the Final Statement and the Seller's calculation of the Final Statement
delivered pursuant to Section 2.6, (ii) Seller if the first such difference is
less than the second such difference, and (iii) by Purchaser and Seller equally
if the first such difference is equal to the second such difference. Purchaser
will, and will cause Purchaser's independent accountants to, cooperate and
assist Seller in their calculation of the Final Statement and in the conduct of
the audits and reviews referred to in this Section 2.6, including without
limitation, making available to Seller to the extent necessary of books,
records, work papers and personnel. If the Final Statement reflects a net
adjustment in favor of Seller, Purchaser will pay to Seller the amount of that
adjustment in cash to Seller no later than 10 days after the determination of
the Final Statement. If the Final Statement reflects a net adjustment in favor
of Purchaser, Seller will pay to Purchaser the amount of that adjustment in cash
to Purchaser no later than 10 days after the determination of the Final
Statement.
2.7. Tenant Deposits. The unapplied portion of any Tenant Deposits
as of the date of the Rent Roll that have been paid to the owner of each
Property or are held by agents of the owner of each Property on its behalf (or
that were deposited with any predecessor in interest to the owner to the extent
the predecessor has turned over security deposits to the owner or given the
owner a credit therefor) by any Tenants or contractors are disclosed on the Rent
Roll and all such Tenant Deposits are in the form of cash, except for any
letters of credit or other similar instruments set forth in Schedule 2.7. To the
extent any Tenant Deposits are held by Seller or a Subsidiary other than a
Partnership or its subsidiaries or any security deposit has been applied in
violation of Section 6.1(u), Seller shall (a) pay to Purchaser, in cash, or
credit against the Purchase Price the aggregate amount of any such Tenant
Deposits and the amount applied in violation of Section 6.1(u), or (b) if
applicable, assign to Purchaser the bank accounts with respect to, or any
letters of credit or other similar instruments comprising, such Tenant Deposits
and the amount applied in violation of Section 6.1(u); and to the extent any
Tenant Deposits are held by a Partnership, they will be retained by the
Partnership. Purchaser hereby indemnifies and agrees to defend Seller and the
Seller Parties for, and agrees to defend and hold Seller and the Seller Parties
harmless from and against, any and all claims, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
imposed upon or incurred by Seller and Seller Parties with respect to the Tenant
Deposits actually paid over or
22
assigned to Purchaser pursuant to this Section, or with respect to the
application thereof by Purchaser subsequent to Closing. Seller will be entitled
to retain as its property its percentage of any interest accrued on any Tenant
Deposits prior to Closing except to the extent such interest is required to be
paid to any Tenants pursuant to their respective Leases or the depositing
contractor.
2.8. Certiorari. Purchaser acknowledges that proceedings for
certiorari or other proceedings to determine the assessed value of the
Properties or the real property taxes payable with respect to the Properties
have been or may be commenced prior to the date hereof and may be continuing as
of the Closing Date. Purchaser will be entitled to control the prosecution of
any proceeding or proceedings for the years prior to and including the year in
which the Closing occurs to completion and to settle or compromise any claim
therein. Purchaser will keep Seller informed on a timely basis on all matters
with respect to any proceedings and seek Seller's reasonable consent and
approval to the extent required in this Section 2.8. The parties hereto agree to
cooperate with each other and to execute any and all documents reasonably
requested by the other party in furtherance of the foregoing. With respect to
any awards for the years prior to the year of the Closing, Purchaser will be
entitled to first recover the reasonable costs it has expended in obtaining any
awards and thereafter, Seller will be entitled to the remainder of the awards,
subject to Seller's obligation to rebate any portion of those amounts to
Tenants. With respect to any awards for the year in which the Closing occurs,
Purchaser will be entitled to first recover the reasonable costs it has expended
in obtaining any awards and Seller shall then be entitled to recover the
reasonable costs it has expended in obtaining any awards, and thereafter, Seller
and Purchaser will apportion the remainder of any awards between the period
before the Closing and the period following the Closing, subject to their
obligation to rebate any portion of those amounts to Tenants. In connection with
the foregoing, Seller agrees to assign, subject to the provisions of this
Section 2.8, to Purchaser at the Closing all of Seller's right, title and
interest to the foregoing certiorari proceedings that are for the year in which
the Closing occurs and all refunds relating thereto and cooperate with Purchaser
with respect thereto. Purchaser will promptly remit to Seller any monies
received which are to be paid to and/or shared by Seller as provided herein.
Purchaser will not settle or compromise any proceeding that involves a tax year
prior to and including the year in which the Closing occurs, without the consent
of Seller, such consent not to be unreasonably withheld. The provisions of this
Section 2.8 will survive the Closing until all proceedings with respect to the
tax year of the Closing and prior years are resolved.
2.9. Effect of Closing. If the Closing occurs, for all legal,
accounting and tax purposes, the Closing will be deemed to be effective as of
the Proration Time.
III. TITLE AND OTHER PROPERTY RELATED MATTERS
3.1. Purchaser's Inspections and Due Diligence. (a) Prior to the
date hereof Purchaser has conducted and after the date hereof will continue to
conduct its title, survey, environmental, physical, and structural examinations,
inspections, testing, studies and investigations of the Properties
(collectively, the "Due Diligence"). Except for any limitations as may be
imposed by this Section 3.1 and Section 3.2 below, Purchaser may conduct such
Due Diligence as it deems necessary or appropriate, and examine and investigate
to its full satisfaction the facts, circumstances, and matters relating to the
title, survey, environmental, physical, and structural
23
condition of the Properties (including those matters that would be revealed by
an examination of the title and survey of the Properties, such as availability
and adequacy of utilities, access, and zoning). The Due Diligence will be at
Purchaser's sole cost and expense except as otherwise expressly provided in
Section 12.9.
(b) Purchaser acknowledges that on the date hereof, Purchaser has
completed its review, inspection, examination, analysis and verification of all
matters (including, without limitation, review of rent rolls, Leases and
Contracts, Licenses and Permits, financial condition and results of operations
of Sellers and the Real Estate Business, market conditions, pending litigation,
compliance with Laws, the Assumed Liabilities, the environmental condition of
the Properties, and the physical and structural condition of the Properties)
except new title and survey matters arising since the date of the Title
Commitments described in Section 3.4 below, and, that after the date hereof,
Purchaser shall have no right to terminate this Agreement except as provided in
Sections 3.4, 8.3, 10.1, 10.2(b) and 10.3.
3.2. Site Visits. (a) Purchaser and its authorized agents,
contractors, consultants and representatives (the "Consultants") will have
reasonable access to the Properties on at least 2 Business Days' prior notice to
Seller during reasonable times as mutually agreed upon by Seller and Purchaser
solely for the purpose of inspecting the physical and structural condition of
the Properties and conducting non-intrusive physical inspections and tests
(physically intrusive shall not mean activities that to a de minimus extent may
cause a restoration obligation under this Agreement or involve taking minor
sampling of building materials and the roofs and sampling for asbestos);
provided, however, that such inspections or tests will not unreasonably disrupt
or disturb (x) the ongoing operation of the Properties; (y) any services to the
Properties; or (z) the quiet possession of any Tenants under Leases. Such notice
shall describe the scope of the Due Diligence Purchaser intends to conduct
during Purchaser's access to the Properties. Seller will make reasonable efforts
to have an agent available to accompany Purchaser or any Consultants, and in all
events Seller shall have the right to have a representative present during any
visits to or inspections of any Properties. Purchaser may request any and all
publicly available information about the Properties from Governmental Entities
but will not disclose to any Governmental Entity the results of any inspection,
sampling or testing conducted at any Property without Seller's prior written
consent except to the extent required by Laws. If Purchaser desires to conduct
any physically intrusive Due Diligence, such as sampling of soils, other media,
building materials, or the like, Purchaser will identify in writing exactly what
procedures Purchaser desires to perform and request Seller's express written
consent. Seller may withhold or condition consent to any physically intrusive
Due Diligence in Seller's sole and absolute discretion (other than with respect
to roof samples and core samples of the asphalt on parking lots for which
Seller's approval shall not be unreasonably withheld or delayed), and in no
event will Purchaser be permitted to perform any Phase II environmental
inspection of any Property. If Seller objects to the procedures requested by
Purchaser, Seller will describe the basis for its objection to Purchaser and may
(but will not be obligated to) propose to Purchaser a reasonable alternative for
resolving the issue giving rise to the request for intrusive Due Diligence. Upon
receipt of Seller's written consent, if granted, Purchaser and all Consultants
shall, in performing the Due Diligence, comply with the agreed upon procedures
and with any and all Laws applicable to the Properties and will not engage in
any activities that would violate any Licenses and Permits or Laws in any
material respect. Purchaser and any Consultants will: (a) promptly pay when due
the costs of all entry and inspections and examinations done with regard to the
24
Properties and (b) restore the Properties to the condition in which the same
were found before any such entry upon the Properties and inspection or
examination was undertaken, but in no event later than 10 days after such damage
occurs.
(b) Purchaser may not communicate or conduct interviews with any
employee, lender, partner or joint venturer of Seller or the Subsidiaries or any
tenant of any of the Properties without the prior consent of Seller, which
consent will not be unreasonably withheld, delayed or conditioned.
Notwithstanding the foregoing, Purchaser may communicate with those certain
employees of Seller or the Subsidiaries that are designated by Seller, but such
communication shall be solely for the purpose of performing the due diligence
contemplated herein. If Seller does consent to any such interviews of its or the
Subsidiaries' employees, lenders, partners, or joint venturers or the tenants of
the Properties, such interviews shall not unreasonably disrupt or disturb (i)
the on-going operation of the Properties, Seller, or the Subsidiaries, (ii) any
services to the Properties, or (iii) the quiet possession of any Tenants under
the Leases. Seller will have the right to have a representative of Seller
present at all times during any interviews with any employee, lender, partner or
joint venturer or any tenant of any of the Properties.
3.3. Due Diligence Indemnity. PURCHASER SHALL KEEP THE PROPERTIES
FREE FROM ALL LIENS AND DEFEND, INDEMNIFY, AND HOLD HARMLESS SELLER AND THE
SELLER PARTIES FROM AND AGAINST ALL CLAIMS, ACTIONS, LOSSES, LIABILITIES,
DAMAGES, COSTS AND EXPENSES, WHETHER ARISING OUT OF INJURY OR DEATH TO PERSONS
OR DAMAGE TO ANY PROPERTY, INCLUDING ANY PROPERTY OF TENANTS UNDER LEASES OR
OTHERWISE AND INCLUDING BUT NOT LIMITED TO, REASONABLE ATTORNEYS' FEES AND COSTS
INCURRED, SUFFERED BY, OR CLAIMED AGAINST SELLER OR ANY SUBSIDIARY CAUSED BY (i)
PURCHASER'S OR ANY OF ITS CONSULTANTS ENTRY UPON THE PROPERTIES AND ANY DUE
DILIGENCE ACTIVITIES PURSUANT TO SECTION 3.2 INCLUDING BUT NOT LIMITED TO, THE
COSTS OF REMEDIATION, RESTORATION AND OTHER SIMILAR ACTIVITIES, MECHANIC'S AND
MATERIALMEN'S LIENS AND ATTORNEYS FEES, ARISING OUT OF OR IN CONNECTION WITH THE
EXERCISING OF PURCHASER'S RIGHTS UNDER SECTION 3.2; PROVIDED, HOWEVER, THAT
PURCHASER SHALL HAVE NO DUTY TO DEFEND OR INDEMNIFY SELLER OR ANY SUBSIDIARY FOR
ANY LOSSES ARISING OUT OF CONDITIONS MERELY DISCOVERED, BUT NOT CAUSED OR
CONTRIBUTED TO, BY PURCHASER OR ITS CONSULTANTS, AND (ii) ANY BREACH OF THIS
AGREEMENT BY PURCHASER OR ANY CONSULTANT OR ANY OF THEIR RESPECTIVE PARTNERS,
DIRECTORS, OFFICERS, AGENTS, MEMBERS, SHAREHOLDERS, ATTORNEYS OR
REPRESENTATIVES. THE PROVISIONS OF THIS SECTION 3.3 SHALL SURVIVE THE CLOSING
OR, IF THE TRANSFER IS NOT CONSUMMATED, ANY TERMINATION OF THIS AGREEMENT, AND
SHALL NOT BE SUBJECT TO ANY LIMITATION OF LIABILITY SET FORTH HEREIN.
3.4. Title. (a) Purchaser acknowledges that it has received and
approves of, except as set forth on Schedule 3.4(a)(i) and those Liens that
Seller is obligated to pay or discharge under Section 3.4(f), all of which will
not be Permitted Encumbrances, (i) all matters shown on the title commitments
(each a "Title Commitment," and collectively the "Title Commitments") listed on
25
Schedule 3.4(a)(ii) proposing to insure Purchaser (or the Partnerships) with
respect to each of the Properties, (ii) all documents referred to in the Title
Commitments, and (iii) all matters shown on the existing surveys (the "Surveys")
for the Properties made available to Purchaser and listed on Schedule
3.4(a)(iii).
(b) Prior to the Closing, Purchaser shall have the right to object
in writing to any Material Title Defects disclosed in any revision or update of
any Title Commitment or Survey or in any new survey for any Property for which a
survey was not provided to Purchaser. Purchaser shall endeavor to provide Seller
with notice thereof as soon as practicable. In addition, if Seller has delivered
written notice to Purchaser of any Material Title Defect and Purchaser fails to
object to that Material Title Defect on or before the 5th Business Day after
receipt of such notice from Seller, or at Closing, if less than 5 Business Days
remain from receipt of that notice to Closing, time being of the essence, then
that Material Title Defect will constitute a Permitted Encumbrance. Unless
Purchaser shall object to a Material Title Defect in accordance with this
Section 3.4(b), each such Material Title Defect not so objected to and all other
matters which affect the Seller's or applicable Subsidiary's title to the
Properties shall be deemed to constitute Permitted Encumbrances other than the
items set forth on Schedule 3.4(a)(i) and the Liens that Seller is obligated to
pay or discharge under Section 3.4(f). Any Material Title Defects that are
objected to by Purchaser in accordance with this Section 3.4(b) shall be herein
collectively called the "Title Objections."
(c) Notwithstanding anything in this Section 3.4(c) to the
contrary, prior to Closing, Seller will cure or otherwise satisfy the matters
set forth in the "Liens and Other Matters to be Cured at or Prior to Closing"
and the "Ownership Discrepancy" columns on Schedule 3.4(a)(i) and the
introductory paragraph of Schedule 3.4(a)(i) , and Purchaser reserves the right
to treat as a Title Objection under this Section 3.4 any matter set forth in the
"Missing Documents" column of Schedule 3.4(a)(i). With respect to any Title
Objections, Seller may elect (but shall not be obligated) by notice to Purchaser
within 10 days after receipt of Purchaser's notice of Title Objections any one
of the options described in the next sentence. In Seller's sole and absolute
discretion, Seller may (i) decrease the Purchase Price by the excess of the cost
to correct or satisfy any Title Objections over either or both, as applicable,
of $2,000,000 (if the Title Objections for all Properties in the aggregate
exceed $2,000,000) and $100,000 (if there are Title Objections that relate to
any individual Property that exceed with respect to such Property $100,000),
(ii) remove or correct certain Title Objections and/or decrease the Purchase
Price such that the sum of the cost to remove or correct the cured Title
Objections and such decrease in the amount of the Purchase Price is equal to the
excess of the cost to remove or correct any Title Objections over either or
both, as applicable, of $2,000,000 (if the Title Objections for all Properties
in the aggregate exceed $2,000,000) and $100,000 (if there are Title Objections
that relate to any individual Property that exceed with respect to such Property
$100,000), (iii) remove or correct certain Title Objections, drop one or more
Properties with Title Objections as provided in Section 7.16 and/or decrease the
amount of the Purchase Price by the cost to remove or correct such Title
Objections such that the sum of the cost to remove or correct the cured Title
Objections and the amount of such Purchase Price decrease and the amount of
Title Objections relating to the dropped Properties is equal to the excess of
the cost to remove or correct any Title Objections over either or both, as
applicable, $2,000,000 (if the Title Objections for all Properties in the
aggregate exceeds $2,000,000) and $100,000 (if there are Title Objections that
relate to any individual Property that exceed with respect to such Property
26
$100,000) or (iv) elect not to remove or correct one or more Title Objections
such that there are still Material Title Defects. If Seller fails to timely
deliver a notice regarding its method of cure, it will be deemed to have made
the election in clause (iv) for all Title Objections. If a Property is dropped
under this Section 3.4(c) or Section 3.4(e), the reduction in Title Objections
resulting therefrom will not decrease Title Objections that relate to another
individual Property's Title Objections in excess of $100,000, but will decrease
the amount of Title Objections that relate to all Properties.
(d) If there are still Material Title Defects that exceed
$2,000,000 for all Properties and Seller elects (or is deemed to elect) not to
remove or correct such Material Title Defects, Purchaser may elect, by delivery
of notice to Seller within 5 Business Days after receipt of Seller's notice or
deemed election, to either (i) terminate this Agreement under Section 10.1(d)
and thereafter, the parties shall have no further rights or obligations
hereunder except for those obligations which expressly survive the termination
of this Agreement, or (ii) waive such Title Objections, in which event such
Title Objections shall be deemed Permitted Encumbrances, and proceed to Closing
without any reduction of or credit against the Purchase Price. If Purchaser
fails to deliver notice of termination of this Agreement within 5 Business Days
of receipt of Seller's notice or deemed election to remove or correct the Title
Objections, Purchaser will be deemed to have made the election in clause (ii).
(e) If there are still Material Title Defects that exceed $100,000
for each of one or more Properties and Seller elects (or is deemed to elect) not
to remove or correct such Material Title Defects, Purchaser may elect, by
delivery of notice to Seller within 5 Business Days after receipt of Seller's
notice or deemed election, to (i) drop one or more of the Properties affected by
any Title Objections that exceed $100,000 as provided in Section 7.16 or (ii)
waive such Title Objections, in which event such Title Objections shall be
deemed Permitted Encumbrances and proceed to Closing without any reduction of or
credit against the Purchase Price. If Purchaser fails to deliver notice making
the election in clause (ii) within 5 Business Days of receipt of Seller's notice
or deemed election to remove or correct the Title Objections, Purchaser will be
deemed to have made the election in clause (i) with respect to all of those
Properties.
(f) Notwithstanding the foregoing and except for any Liens
affecting any JV Property, Seller will (i) at Closing cause the release of any
Liens securing Indebtedness for borrowed money which is not part of the Assumed
Liabilities or PPM Indebtedness, and any other consensual monetary Liens placed
upon any Property by Seller or any Partnership other than any JV Property and
(ii) at or before Closing cause the release of or bond off any mechanics' liens
placed upon the Properties (except for any JV Properties) by a third party in
connection with work performed on the applicable Property on behalf of Seller or
any Subsidiary (unless placed upon the Property on behalf of Purchaser or a
Tenant, including without limitation, the Claim of Lien made by Xxxxxx
Enterprises, Inc. against CenterAmerica Trust or CA New Mexico, L.L.C. relating
to the Paseo del Norte Property) and any judgment liens, and such Liens shall
not be Permitted Encumbrances. Seller may elect but shall not be obligated to
release any other monetary liens that are placed upon the Properties by third
parties.
(g) Seller agrees to deliver upon receipt the new surveys ordered
by Seller or a Subsidiary for the Rock Prairie and Flamingo Falls Properties.
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IV. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
4.1. Organization and Power of Seller. Each of the entities set
forth on Schedule 4.1 are corporations, limited partnerships, limited liability
companies or real estate investment trusts, as specified on Schedule 4.1, are
duly formed and validly existing under the Laws of the corresponding states
specified on Schedule 4.1, and each of them has the requisite limited
partnership, limited liability company, corporate or real estate investment
trust power and authority, as applicable, to carry on its business as now being
conducted. Seller and each Subsidiary is duly qualified or licensed to do
business as a foreign limited partnership, limited liability company,
corporation or real estate investment trust, as applicable, and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing or
good standing necessary.
4.2. Authority; Noncontravention; Consents. (a) Except as set forth
in Schedule 4.2(a), Seller and each Assigning Subsidiary, as applicable, has the
requisite power and authority (i) to enter into this Agreement and all documents
contemplated hereunder to be entered into by Seller and each Assigning
Subsidiary, as applicable, (ii) to perform its obligations hereunder and
thereunder and (iii) to consummate the Transfer and the other transactions
contemplated hereunder and thereunder. Except as set forth in Schedule 4.2(a),
the execution and delivery by Seller and each Assigning Subsidiary, as
applicable, of this Agreement and all documents contemplated hereunder to be
executed and delivered by Seller and each Assigning Subsidiary, as applicable,
and the consummation by it of the transactions contemplated hereunder and
thereunder have been duly authorized by all necessary company, entity or
partnership action, and no other company, entity or partnership proceedings on
the part of Seller or the applicable Assigning Subsidiary or their partners,
shareholders or members are necessary to authorize any of the foregoing. This
Agreement has been, and all documents contemplated hereunder to be executed by
Seller and each Assigning Subsidiary, as applicable, when executed and delivered
will have been, duly executed and delivered by Seller and each Assigning
Subsidiary, as applicable, and shall constitute the valid and binding obligation
of Seller and each Assigning Subsidiary, as applicable, enforceable against it
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws relating to the enforcement of creditors' rights and by general principles
of equity.
(b) Except as set forth in Schedule 4.2(b) and assuming receipt of
the consents described in Schedule 4.2(a) and Schedule 4.2(c), the execution and
delivery by Seller of this Agreement and all documents contemplated hereunder to
be executed and delivered by Seller and each Assigning Subsidiary, as
applicable, do not, and the consummation of the transactions contemplated
hereunder and thereunder and compliance by Seller with the provisions hereof and
thereof will not, conflict with, or result in any violation of, or default (with
or without notice or lapse of time, or both) under, or give rise to a penalty,
or a right of termination, cancellation or acceleration of any material
obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the Purchased Assets under (i) the constituent
organizational documents, as amended or supplemented, of Seller, any Assigning
Subsidiary or any Partnership, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, management or other
28
material agreement or instrument (excluding Licenses and Permits) applicable to
the Real Estate Business or the Purchased Assets and constituting Assumed
Liabilities but excluding any Liens under the Assumed Indebtedness, or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation
(collectively, "Laws") applicable to Seller or any Assigning Subsidiary with
respect to the Real Estate Business or the Purchased Assets, other than, in the
case of clause (ii) or (iii), any such conflicts, violations, defaults, rights,
loss or Liens that individually or in the aggregate, would not materially
adversely affect the Real Estate Business or impair or interfere in any material
respect with the consummation of the Transfer or any other transactions
contemplated by this Agreement or in the documents contemplated to be executed
hereunder or otherwise prevent Seller and the Assigning Subsidiaries from
performing their obligations hereunder in any material respect. Solely for
purposes of this Section 4.2(b), the definition of Purchased Assets will not
include any reference to the phrase "to the extent assignable or transferable".
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state or local government
or any court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a "Governmental Entity"),
is required by or with respect to the Real Estate Business or the Purchased
Assets in connection with the execution and delivery by Seller of this Agreement
and Seller and Assigning Subsidiaries of all documents contemplated hereunder or
the consummation by Seller of the transactions contemplated hereunder or
thereunder, except for (i) any filing required to effect the Transfer of the
Purchased Assets or the transactions described in Section 7.5, and (ii) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings (A) as are set forth in Schedule 4.2(c) or (B) which, if not
obtained or made, would not reasonably be expected to prevent or delay in any
material respect the consummation of the Transfer or any other transactions
contemplated by this Agreement or in the documents contemplated to be executed
hereunder or otherwise prevent Seller and the Assigning Subsidiaries from
performing their obligations hereunder in any material respect.
4.3. Litigation. Except as set forth in Schedule 4.3 and except for
routine personal injury litigation arising from the ordinary course of
operations of Seller and which are covered by adequate insurance, there is no
suit, action, proceeding or investigation pending or, to the Knowledge of
Seller, threatened against or affecting the Real Estate Business or the
Purchased Assets or that, individually or in the aggregate, if decided adversely
to the Real Estate Business, would reasonably be expected to prevent or delay in
any material respect the consummation of the Transfer and any other transactions
contemplated by this Agreement or otherwise prevent Seller or any Assigning
Subsidiary from performing its obligations hereunder in any material respect.
Except as set forth on Schedule 4.3, as of the date hereof there is no
litigation pending against Tenants commenced by Seller or any Subsidiary. Except
as set forth in Schedule 4.3, there is no judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against Seller or any
Subsidiary with respect to the Real Estate Business or Purchased Assets that
remain unsatisfied or uncured.
4.4. Partnership Interests. (a) The Partnership Interests have been
duly authorized and validly issued in accordance with the constituent
organizational documents of the Partnerships and applicable Law. The Assigning
Subsidiaries own 100% of the Partnership Interests to be Transferred to
Purchaser at Closing, free and clear of all Liens other than as set
29
forth on Schedule 4.4(a) (all of such Liens shall be released at or prior to the
Closing) and Permitted Encumbrances. Except with respect to that certain
mezzanine debt held by Xxxxxx Financial Corporation, or its successors and
assigns, which mezzanine debt shall be fully paid and otherwise satisfied at or
prior to Closing and as otherwise set forth on Schedule 4.4(a), no Assigning
Subsidiary nor any subsidiary of CenterAmerica Venture has pledged its
Partnership Interests or interests in any Person it owns or consented to the
pledge or encumbrance of any of the Partnership Interests or interests in any of
CenterAmerica Venture's subsidiaries other than to secure the Assumed
Indebtedness or JV Indebtedness. The interests of the subsidiaries of the
Partnerships have been duly authorized and validly issued in accordance with the
constituent organizational documents of such applicable subsidiary and
applicable Law. The Partnerships own directly or indirectly 100% of the
interests in the subsidiaries that own any of the Partnership Properties or JV
Properties, free and clear of all Liens other than as set forth on Schedule
4.4(a) (any of such Liens shall be released at or prior to the Closing) and
Liens arising pursuant to the Assumed Indebtedness, JV Indebtedness and PPM
Indebtedness and the organizational documents of the relevant subsidiary and
Permitted Encumbrances.
(b) All documents comprising the Partnership Agreements and
certificates of limited partnership or limited liability company and other
constituent organizational documents of CenterAmerica Capital, CFP,
CenterAmerica Venture Entities, Inwood and Xxxxxx'x are described on Schedule
4.4(b), and, prior to the date hereof, true, correct and complete copies of the
Partnership Agreements and the constituent organizational documents listed on
Schedule 4.4(b) have been delivered to Purchaser or its counsel. The Partnership
Agreements and constituent organizational documents of the CenterAmerica Venture
Entities are in full force and effect and, except as set forth on Schedule
4.4(b), no other documents, instruments, agreements or certificates are in
effect that govern the relative rights and obligations of the partners or
members in those capacities, as applicable, of any of the Partnerships or their
subsidiaries with respect to such Partnerships or subsidiaries. Neither Seller
nor any Subsidiary is in material breach of, or material default under, the
Partnership Agreements or the constituent organizational documents of the
subsidiaries of the Partnerships and no event has occurred that, with the giving
of notice or the passage of time, or both, would constitute a material default
by Seller or the Subsidiaries under the Partnership Agreements or the
constituent organizational documents of any of the subsidiaries of the
Partnerships, and neither Seller nor any Subsidiary has given written notice to,
or received any written notice that, any other partner or member of any
Partnership is in material breach of, or material default under, the Partnership
Agreement or the constituent organizational documents of the subsidiaries of the
Partnerships.
(c) Except as set forth on Schedule 4.4(c), as of the date hereof
none of Seller or any Subsidiary nor to the Knowledge of Seller any other
partner or member or other Affiliate of any of the Partnerships has made a loan
to such Partnership that is still outstanding and no partner or member has any
outstanding capital commitments to any of the Partnerships.
(d) Except for liabilities and obligations set forth in the
Financial Statements, related to a Permitted Encumbrance, or incurred in the
ordinary course of business, neither the Partnerships nor any subsidiary thereof
has any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by the accounting principles
utilized by the Partnerships in the preparation of their Financial Statements to
be set forth in the Financial Statements or in the notes thereto.
30
(e) All of the Partnerships and their subsidiaries are treated as
partnerships or as entities disregarded as separate from their owners for
federal income tax purposes. Except as disclosed on Schedule 4.4(e), none of the
Partnerships or its subsidiaries owns directly or indirectly, or by attribution
(in accordance with the attribution rules referred to in Code Section 856(d)(5))
any of the stock of any Person that is treated as a corporation or an
association taxed as a corporation for federal income tax purposes or to the
Knowledge of Seller of a lessee or sublessee of all or any part of the
Properties. The stock described on Schedule 4.4(e) owned by the Partnerships, if
any, does not represent more than 9.9% of the voting power or value of the
outstanding stock of any issuer of stock described on Schedule 4.4(e). The
parties agree that this representation shall not be treated as breached or
having been breached if any listing of additional stock is added to Schedule
4.4(e) after the date hereof, so long as the stock described in Schedule 4.4(e)
does not represent, at the time of Closing, more than 9.9% of the voting power
or value of the outstanding stock of any issuer of stock described in Schedule
4.4(e). In addition, at the Closing the Partnerships and their subsidiaries will
not own any securities or interest in any other Person, except as set forth in
Schedule 4.4(e) and for funds of the Partnership or its subsidiaries that may be
temporarily invested in:
(i) obligations of or guaranteed as to principal and
interest by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) federal funds, unsecured certificates of deposit,
time deposits and bankers' acceptances denominated in United States dollars of
any U.S. depository institution or trust company incorporated under the laws of
the United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company;
(iii) a bank account of any U.S. depository institution or
trust company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or trust
company; and
(iv) a money market fund or a qualified investment fund.
(f) The outside partners in CenterAmerica Venture, Xxxxxx'x and
Inwood are set forth on Schedule 4.4(f) and their percentage interests therein
are set forth on Schedule 4.4(f).
4.5. Properties. (a) Except as set forth in Schedule 4.5(a), none
of Seller and the Subsidiaries has received any written notice to the effect
that any condemnation or involuntary rezoning proceedings are pending or
threatened with respect to any of the Properties.
(b) The rent rolls delivered pursuant to a separate disclosure
statement (the "Rent Roll") list each Lease in effect as of the dates of the
Rent Roll. The Rent Roll is true, correct and complete as of the date thereof
except no representation or warranty is made with respect to the Start Dates and
the Commencement Dates set forth therein; provided, further, no representation
or warranty is made with respect to any matter on the Rent Roll that was
included in the Seller's rent rolls dated September 30, 2001 which were reviewed
and approved by Purchaser prior to the date of this Agreement. Except as entered
into by Seller pursuant to the express terms of Section 6.2 and except as set
forth on Schedule 4.5(c)-1 hereof, no Leases shall exist on the Closing Date
31
other than the Leases listed on the Rent Roll. "Lease" means each lease or other
right of occupancy affecting or relating to a Property in which Seller or any
Subsidiary that is an owner of a Property is the landlord, either pursuant to
the lease agreement or as successor to any prior landlord, but shall not include
subleases, franchise agreements, concession agreements or similar occupancy
agreements entered into by Tenants or subtenants which by their nature are
subject to Leases. Seller has made available to Purchaser true, correct and
complete copies of all Leases, including all amendments, modifications,
supplements, renewals, extensions and guarantees and supplements, and other
occupancy agreements and outstanding default notices sent during the prior 12
calendar months with respect to the Leases, in each case that Seller or its
Subsidiaries had in their possession or control related thereto, as of the date
hereof except for any temporary leases, month-to-month leases or leases of
storage space. To Seller's Knowledge, there are no such Leases that are not in
control of Seller or the Subsidiaries as of the date hereof. Each tenant under
the Leases is a bona fide tenant in possession or has a right to possession of
the premises demised thereunder. Each of the Leases is in full force and effect
and to Seller's Knowledge, except as disclosed on the Rent Roll or in the lease
files made available to Purchaser, none of the Leases has been modified, amended
or rescinded, the rights of each tenant thereunder are as tenants only, and none
of the Leases has been assigned by the tenant. The Rent Roll discloses all
security and other deposits made by each of the tenants under the Leases which
have not been applied as of the date of the Rent Roll. None of Seller and the
Subsidiaries has received any advance payment of rent (other than for the
current month) on account of any of the Leases except as shown on Schedule
4.5(b). All of the Leases are assignable by Seller or an Assigning Subsidiary as
contemplated by this Agreement after giving effect to the repayment of
Indebtedness contemplated under this Agreement without the consent of any other
party other than the lenders under the Assumed Indebtedness. Except as set forth
in Schedule 4.5(b), to the Knowledge of Seller, neither Seller nor any
Subsidiary that is an owner of a Property is in material breach or default under
(and to the Knowledge of Seller, there does not exist any condition which upon
the passage of time or the giving of notice or both would cause a violation or
default of any material term by Seller or the Subsidiaries under, other than
obtaining the consents contemplated hereunder) any Lease to which it is a party,
which breach or default remains uncured, and neither Seller nor any Subsidiary
has received written notice that it is in material breach or default under any
Lease to which it is a party, which breach remains uncured.
(c) Schedule 4.5(c)-1 sets forth a complete list, as of the date
of this Agreement, of all Leases of the Properties which have been executed, but
are either not yet included on the Rent Roll or not yet open for business.
Schedule 4.5(c)-2 sets forth a correct and complete list of Tenants of the
Properties for which any Seller or Subsidiary has received as of the date of
this Agreement written notice of any moveout, lease termination or lease
cancellation.
(d) Except as set forth on Schedule 4.5(d) or as approved by
Purchaser, no Tenants have been granted under their Leases options to purchase
the Property of which it is a Tenant or rights of first refusal to purchase the
Property of which it is a Tenant.
(e) Except as set forth on Schedule 4.5(e), as of the date of this
Agreement no Tenant has been promised or given a loan by Seller or any
Subsidiary which loan, if given, remains outstanding and the loan documents are
listed on Schedule 4.5(e).
32
(f) Schedule 4.5(f) contains a true, correct and complete list of
all casualty, commercial liability, employment, professional liability and crime
insurance policies maintained by Seller and its Subsidiaries with respect to the
Properties as of the date of this Agreement. To the Knowledge of Seller, these
policies are in full force and effect as of the date of this Agreement.
(g) Schedule 4.5(g) contains a true, correct and complete list as
of the date of this Agreement of all real properties that were owned at any time
by any Partnership, or subsidiary thereof, that are not Properties.
4.6. Environmental Matters. Seller, to its Knowledge, has made
available to Purchaser copies of all environmental studies, investigations,
reports, audits, assessments, Licenses and Permits and agreements relating to
any of the Properties' or Real Estate Business' compliance with Environmental
Laws within Seller's or any Subsidiary's possession or control, and all
environmental studies, investigations and reports within Seller's or any
Subsidiary's possession or control and made available to Purchaser are listed on
Schedule 4.6. To the Knowledge of Seller, the Real Estate Business complies in
all material respects with Environmental Laws except as may be disclosed in said
environmental studies, investigations, and reports, so made available to
Purchaser and those obtained by Purchaser as of the date of this Agreement.
4.7. Labor Matters. Seller is not a party to any collective
bargaining agreement or other labor union contract applicable to employees of
the Real Estate Business, nor does Seller know of any activities or proceedings
of any labor union to organize any such employees. To the Knowledge of Seller,
there are no strikes, slowdowns, work stoppages, lockouts or threats thereof, by
or with respect to any employees of the Real Estate Business which would
materially adversely affect the Real Estate Business. All employees of the Real
Estate Business are employees of CenterAmerica Property Trust, and none of the
Partnerships and the subsidiaries of CenterAmerica Venture has employed or
employs any employees other than one employee made available by Delaware
Management Services.
4.8. Taxes. (a) Except as set forth in Schedule 4.8 each of the
Partnerships and the subsidiaries of CenterAmerica Venture has timely filed all
Tax returns required to be filed by it (after giving effect to any filing
extension properly granted by a Governmental Entity having authority to do so)
and has paid (or Seller has caused to be paid on its behalf) all Taxes shown on
such Tax Returns as required to be paid by it and all such Tax Returns are
complete and accurate in all material respects. No deficiencies for any Taxes
have been proposed, asserted or assessed in writing against any of the
Partnerships or their subsidiaries and no requests for waivers of the time to
assess any such Taxes are pending. No Tax Returns of any of the Partnerships and
the subsidiaries of CenterAmerica Venture are currently being audited by any
applicable taxing authority. All payments for withholding Taxes, unemployment
insurance and other amounts required to be withheld and deposited or paid to all
taxing authorities have been so deposited or paid by Seller on or before the
applicable due date. No claim is pending or has been proposed in writing by any
Governmental Entity in any jurisdiction where any Partnership Subsidiary does
not file Tax Returns that any Partnership is or may be subject to taxation by
such jurisdiction.
(b) Seller and its Affiliates have timely paid all Taxes payable
by it for the Pre-Closing Taxable period which will have been required to be
paid on or prior to the Closing Date,
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the non-payment of which would result in a Lien on any Purchased Asset, would
otherwise materially adversely affect the Real Estate Business or would result
in Purchaser becoming liable or responsible therefor.
4.9. Compliance with Laws. Except as set forth in Schedule 4.9, (i)
Seller has not and the Subsidiaries have not received written notice of any
violation of Laws affecting any portion of the Properties or the Real Estate
Business issued by any Governmental Entity that remains uncured and (ii) to the
Knowledge of Seller, Seller has not and the Subsidiaries have not violated in
any material respect or failed to comply in any material respect with any Law or
License and Permit applicable to the Real Estate Business. To the Knowledge of
Seller, the Licenses and Permits constitute all material Licenses and Permits
that are required in order to carry on the Real Estate Business as it is
presently conducted. To the Knowledge of Seller, all such Licenses and Permits
are in full force and effect in all material respects. Notwithstanding the
foregoing, Seller makes no representation under this Section as to compliance
with the Americans with Disabilities Act of 1990, as amended, and any other
"access" Laws, and the representations and warranties in clause (i) above shall
apply to, but the representations and warranties in clause (ii) above shall not
apply to, any building, health, safety and fire codes, any zoning laws or any
other similar Laws.
4.10. Brokers. No broker, investment banker, financial advisor or
other Person, other than Xxxxxx Xxxxxxx Realty Incorporated, the fees and
expenses of which will be paid by Seller, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Seller.
4.11. Assumed Indebtedness. (a) Schedule 4.11(a) lists (i) the
Assumed Indebtedness, (ii) all of the Properties encumbered by the Assumed
Indebtedness before giving effect to the transactions contemplated by this
Agreement, (iii) the principal amount thereof outstanding as of December 31,
2001, (iv) all of the notes, agreements and instruments evidencing and securing
the Assumed Indebtedness, as the same may have been amended or supplemented from
time to time, including, without limitation, any guaranties and any ancillary
documents (collectively, the "Assumed Loan Documents"), and (v) the amount of
any escrows or deposits held or established in connection with the Assumed
Indebtedness as of December 31, 2001. The Assumed Indebtedness does not encumber
any other real property other than the Properties listed on Schedule 4.11(a).
Seller has delivered to Purchaser complete and correct copies of the Assumed
Loan Documents. Seller or the applicable Subsidiaries are current in all
payments of principal and interest due under each Assumed Loan Document through
the most recent scheduled payment date.
(b) Seller has not and the Subsidiaries have not received any
written notice that they are in violation of or in default under (and to the
Knowledge of Seller, there does not exist any condition which upon the passage
of time or the giving of notice or both would cause a violation or default of
any material term by Seller and the Subsidiaries under, other than obtaining the
consents contemplated hereunder) the Assumed Indebtedness that remains uncured,
nor to the Knowledge of Seller does a monetary or other material violation or
default by Seller or any Subsidiary exist.
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4.12. JV Indebtedness and PPM Indebtedness. (a) Schedule 4.12(a)
lists (i) the Indebtedness of CenterAmerica Venture and its subsidiaries (the
"JV Indebtedness") and the PPM Indebtedness, (ii) all of the JV Properties
encumbered by the JV Indebtedness and the PPM Properties encumbered by the PPM
Indebtedness, (iii) the principal amount outstanding of the JV Indebtedness and
PPM Indebtedness as of December 31, 2001, (iv) all of the notes, agreements, and
instruments evidencing and securing the JV Indebtedness, as the same may have
been amended or supplemented from time to time, including, without limitation,
any guaranties and any ancillary documents (collectively, the "JV Loan
Documents"), (v) all of the notes, agreements, and instruments evidencing and
securing the PPM Indebtedness, as the same may have been amended or supplemented
from time to time, including without limitation any guaranties and any ancillary
documents (collectively, the "PPM Loan Documents"), (vi) the amount of any
escrows or deposits held or established in connection with the JV Indebtedness
and the PPM Indebtedness as of December 31, 2001. The JV Indebtedness and the
PPM Indebtedness does not encumber any other real property other than the JV
Properties and PPM Properties listed on Schedule 4.12(a). Seller has delivered
or made available to Purchaser complete and correct copies of the JV Loan
Documents and PPM Loan Documents. CenterAmerica Venture and its subsidiaries and
Xxxxxx'x and Inwood are current in all payments of principal and interest due
under the JV Loan Documents and PPM Loan Documents through the most recent
scheduled payment date.
(b) Except as set forth on Schedule 4.12(b), none of the
CenterAmerica Venture Entities, Xxxxxx'x or Inwood have received any written
notice that any such entity is in violation of or in default under (and to the
Knowledge of Seller, there does not exist any condition which upon the passage
of time or the giving of notice or both would cause a violation or default of
any material term by the borrower under, other than obtaining the consents
contemplated hereunder) the JV Indebtedness and PPM Indebtedness that remains
uncured, nor to the Knowledge of Seller does a monetary or other material
violation or default by the CenterAmerica Venture Entities or Xxxxxx'x and
Inwood exist.
(c) Schedule 4.12(c) sets forth as of December 31, 2001 all
capital contributions made by CenterAmerica Venture REIT and all other members
of CenterAmerica Venture, and all capital contributions made by the partners of
Xxxxxx'x and Inwood.
4.13. Assumed Liabilities. (a) Seller has not and the Subsidiaries
have not received any written notice that they are in violation of or in default
under (and to the Knowledge of Seller, there does not exist any condition which
upon the passage of time or the giving of notice or both would cause a violation
or default of any material term by Seller and the Subsidiaries under, other than
obtaining the consents contemplated hereunder or other than in respect of
Contracts which may be terminated without penalty upon the sale of the Purchased
Assets or upon no more than 30 days' notice) the Assumed Liabilities that
remains uncured nor to the Knowledge of Seller does a material violation or
default by Seller or any Subsidiary exist.
(b) There are no contracts or agreements between any Partnership
and its subsidiaries on the one hand and Seller, the Subsidiaries (other than
the Partnerships and their subsidiaries) or their Affiliates (other than the
Partnerships and their subsidiaries) on the other, except for those that are
expressly set forth in this Agreement or any Schedule hereto or those that will
be
35
terminated without payment or penalty at the Closing, or those that are included
as Assumed Liabilities.
4.14. Contracts. Schedule 4.14 attached hereto lists the following
Contracts as of the date of this Agreement relating to the Real Estate Business
(collectively, the "Material Contracts"):
(a) any agreement (or group of related agreements) for the lease
of personal property or equipment to or from any Person providing for lease
payments in excess of $25,000 per annum or are not terminable by Seller or a
Subsidiary without penalty upon 30 days prior written notice or less;
(b) any agreement (or group of related agreements), including
without limitation, letters of intent) for (i) the purchase of or sale of real
property (other than those relating to the Excluded Properties), (ii) the
purchase or sale of supplies, products or other personal property that involves
consideration in excess of $50,000 (other than purchase orders relating to the
construction contracts described in subsection (c)), or (iii) the furnishing or
receipt of services, including, without limitation, management, operating,
listing, brokerage, supply and maintenance agreements, other than agreements
that are terminable by Seller or a Subsidiary without penalty upon the sale of
the Purchased Assets or upon 30 days prior written notice or less;
(c) any agreement (or group of related agreements) relating to the
development or construction of any Property providing for payment to any Person
in excess of $25,000, other than agreements that are terminable by Seller or a
Subsidiary without penalty upon 30 days prior written notice;
(d) any agreement constituting part of the Assumed Liabilities,
other than the Partnership Agreements, limiting the right of Seller to conduct
any line of business; or
(e) any agreement relating to a letter of credit issued upon the
request of Seller and the Subsidiaries of Seller.
Seller has made available to Purchaser for Purchaser's review a correct and
complete copy of each Material Contract (as amended). Neither Seller nor any
Subsidiary has received any written notice that it is in violation of or in
default under any of the Material Contracts, and to the Knowledge of Seller,
neither Seller nor any Subsidiary is in violation of or in default under any of
the Material Contracts, and neither Seller nor any Subsidiary have given any
written notice to any non-Seller-affiliated party informing it that such party
is, and to the Knowledge of Seller, no non-Seller-affiliated party is, in
violation of or in default of any material term under any of the Material
Contracts. Each Material Contract is in full force and effect.
4.15. Ground Leases. Neither Seller nor any Subsidiary has received
any written notice, and neither Seller nor any Subsidiary is in violation of or
in default under any ground lease (including all amendments and supplements
thereto) pursuant to which Seller or any Subsidiary leases as the lessee any
portion of the Properties (the "Ground Leases"), and as of the date hereof
neither Seller nor any Subsidiary have given any written notice to any
non-Seller-affiliated party informing it that such party is, and to the
Knowledge of Seller, no non-Seller-
36
affiliated party is, in violation of or in default under any of the Ground
Leases. Each Ground Lease is in full force and effect as of the date hereof.
4.16. REAs. Seller has not and the Subsidiaries have not received
written notice that they are in violation of or in default under (and to the
Knowledge of Seller, there does not exist any condition which upon the passage
of time or the giving of notice or both would cause a violation or default of
any material term by Seller and the Subsidiaries under, other than obtaining the
consents contemplated hereunder) any reciprocal easement agreements or other
operating easement agreements relating to the Properties (the "REAs") that
remains uncured, nor to the Knowledge of Seller does a material violation or
default by Seller or any Subsidiary exist. Neither Seller nor any Subsidiary
have given any written notice to any non-Seller-affiliated party informing it
that such party is, and to the Knowledge of Seller, no non-Seller-affiliated
party is in violation of or in default under any of the REAs.
4.17. Loans to Employees. There are no agreements in effect pursuant
to which any Partnership has advanced or loaned any amount to any of its
directors, officers or employees other than in connection with its travel and
entertainment and other business expense reimbursement policies.
4.18. Purchased Assets. The Purchased Assets and the assets to be
owned at Closing by the Partnerships and their subsidiaries are all of the
assets (other than the Excluded Assets and cash and investment securities)
necessary to conduct the Real Estate Business in the manner currently conducted.
4.19. Intellectual Property. Seller and the Subsidiaries (other than
the CenterAmerica Venture Entities) have no Intellectual Property as of the date
of this Agreement other than as listed on Schedule 4.19 which are used by Seller
or such Subsidiaries with respect to the Purchased Assets. Except as set forth
on Schedule 4.19, there is no claim pending or to the Knowledge of Seller,
threatened against Seller or such Subsidiaries with respect to any alleged
infringement of any patent, trademark or trade name owned by another.
4.20. Financial Statements. Seller has delivered or caused to be
delivered to Purchaser (i) the audited balance sheets at December 31, 2000 and
1999 and the audited schedule of revenues and certain expenses, as defined, of
properties for the years ended December 31, 2000 and 1999 of CenterAmerica
Capital, (ii) the audited balance sheet at December 31, 2000 and the schedule of
revenue and certain expenses, as defined, of properties contributed of CFP, and
(iii) the audited balance sheet at December 31, 2000 and the statement of
operations, statement of members' capital and statement of cash flows for the
period from inception (March 23, 2000) to December 31, 2000 of CenterAmerica
Venture (collectively, the "Audited Financial Statements"). In addition, Seller
has delivered or caused to be delivered to Purchaser, (a) the unaudited balance
sheet at December 31, 2000 and statement of operations for fiscal year 2000 of
Inwood, (b) the unaudited balance sheet at December 31, 2000 and statement of
operations for fiscal year 2000 of Xxxxxx'x, (c) the unaudited balance sheets at
September 30, 2001 and the unaudited schedules of revenues and certain expenses,
as defined, of properties for the nine-month period ending September 30, 2001 of
CenterAmerica Capital and CFP, (d) the unaudited balance sheet at September 30,
2001 and the statement of operations, statement of members' capital and
statement of cash flows for the nine-month period ending September 30, 2001 of
37
CenterAmerica Venture, (e) the unaudited balance sheet at September 30, 2001 and
statement of operations for the nine-month period ending September 30, 2001 of
Inwood, and (f) the unaudited balance sheet at September 30, 2001 and statement
of operations for the nine-month period ending September 30, 2001 of Xxxxxx'x
(collectively, the "Unaudited Financial Statements," and together with the
Audited Financial Statements referred to collectively as the "Financial
Statements" and the financial statements described in (c)-(f) above are
collectively referred to as the "Interim Financial Statements"). The Financial
Statements have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") consistently applied during the periods
involved (except as otherwise provided therein and except that the Unaudited
Financial Statements do not contain all of the footnotes required under GAAP),
and present fairly, in all material respects, the financial position of
CenterAmerica Capital, CFP, CenterAmerica Venture, Inwood and Xxxxxx'x as of the
dates thereof and the results of operations for the periods then ended (subject,
in the case of Interim Financial Statements, to normal and immaterial year-end
audit adjustments). Since September 30, 2001, there has not been a material
adverse change in the financial condition or results of operations of
CenterAmerica Capital, CFP, CenterAmerica Venture, Inwood or Xxxxxx'x.
4.21. Budgets. Seller has delivered or caused to be delivered to
Purchaser true, correct and complete copies of the budgets for each of the
Properties in effect as of this date for calendar year 2002 (the "Budgets").
Purchaser acknowledges the Seller's and each Subsidiary's actual results may
vary from the Budgets and no assurances can be given that Seller or any
Subsidiary will meet its Budget.
4.22. Insolvency. There are no voluntary or involuntary proceedings
in bankruptcy, or under any other debtor relief laws, pending or, to the
Knowledge of Seller, threatened against Seller or any Subsidiary.
4.23. United States Person. Seller, the Selling Subsidiaries and the
Assigning Subsidiaries are "United States Persons" within the meaning of
Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.
4.24. ERISA. (a) None of the Partnerships and their subsidiaries
sponsor, maintain, contribute to or have any obligation to contribute to any
"employee benefit plan," as defined in Section 3(3) of ERISA, or any other
employee benefit arrangement, policy or payroll practices, including, without
limitation, severance pay, sick leave, vacation pay, salary continuation for
disability, retirement, deferred compensation, bonus, stock purchase, stock
option, hospitalization, medical insurance, life insurance, tuition
reimbursement and scholarship programs.
(b) Neither Seller nor or any trade or business (whether or not
incorporated) which is or has ever been treated as a single employer with Seller
under Section 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate")
contributes to, or has any obligation to contribute to, a multiemployer plan, as
defined in Section 3(37) of ERISA ("Multiemployer Plan"). Neither Seller nor any
ERISA Affiliate has incurred any liability due to a complete or partial
withdrawal from a Multiemployer Plan, or due to the termination or
reorganization of a Multiemployer Plan, except for any such liability which has
been satisfied in full, and no events have occurred and no
38
circumstances exist that could reasonably be expected to result in any such
liability to Seller or any ERISA Affiliate.
(c) With respect to any single-employer plan, as defined in
Section 4001(a)(15) of ERISA, that is sponsored by, or to which contributions
are required of, Seller or any ERISA Affiliate, there does not exist any
accumulated funding deficiency within the meaning of Section 412 of the Code or
Section 302 of ERISA, whether or not waived. Neither Seller nor any ERISA
Affiliate has any outstanding liability under Section 4062 of ERISA to the PBGC
or to a trustee appointed under Section 4042 of ERISA, and no events have
occurred and no circumstances exist that could reasonably be expected to result
in any such liability to Seller or any ERISA Affiliate.
4.25. Definition of Knowledge of Seller. As used in this Agreement,
the phrase to the "Knowledge of Seller" (or words of similar import) means the
current, actual, conscious (and not constructive, imputed or implied) knowledge
of Xxxxx XxxXxxxxx, Xxxx Xxxxxxx, Xxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and
Xxxx Xxxx without having made a review of files or other independent inquiry
other than due inquiry of the knowledge of the persons listed on Schedule 4.25.
No such designee shall have any personal liability or obligation whatsoever with
respect to any of the matters set forth in this Agreement and any other
documents, agreements or instruments related thereto or any of the
representations made by Seller being or becoming untrue, inaccurate or
incomplete in any respect.
4.26. Schedule References. Any item disclosed in one Section or
Schedule shall be deemed to be disclosed in any other Section or Schedule where
such disclosure is relevant, even if there is no express cross-reference,
provided that the relevance of the disclosure is clearly apparent.
4.27. Right to Amend Representations. Seller shall have the right
from time to time prior to the Closing by notice to Purchaser to amend or
supplement its qualifications to the representations and warranties in this
Article IV, by amendment of the Schedules hereto or otherwise to reflect changes
in facts or conditions or to correct any immaterial factual inaccuracies;
provided, however, that no such amendment or supplement will be deemed to cure
any breach of any representation or warranty made in this Article IV or have any
effect on the conditions in Section 9.4(a) or remedies set forth in Section 11.2
with respect to any factual inaccuracy that existed when this Agreement was
entered into but will be deemed to cure any breach or inaccuracy for all
purposes under this Agreement arising from a change in facts or conditions after
this Agreement was entered into so long as the change was not caused by Seller's
breach of Articles VI and VII other than Section 6.5.
4.28. Seller's Representations Deemed Modified. To the extent that
Purchaser actually knows at or prior to the Closing that any of Seller's
representations and warranties that are required to be made on the Closing Date
are inaccurate, untrue or incorrect in any way and fails to notify Seller and
make a claim with respect thereto pursuant to Section 10.2(a), such
representations and warranties shall be deemed modified to reflect Purchaser's
knowledge. Seller shall not have any liability for a breach of representation or
warranty by reason of any inaccuracy of a representation or warranty if and to
the extent that such inaccuracy is actually known by Purchaser at the time of
the Closing and Purchaser nevertheless fails to notify Seller
39
and make a claim with respect thereto pursuant to Section 10.2(a) and proceeds
to consummate the Closing. For purposes of this Agreement, knowledge of
Purchaser means the current, actual, conscious (and not constructive, imputed or
implied) knowledge of Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxxx Xxxxxxxxx, and Xxxxxx
Xxxxxx.
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1. Organization, Standing and Power of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Maryland and has the requisite corporate power and
authority to carry on its business as now being conducted.
5.2. Authority; Noncontravention; Consents. (a) Purchaser has the
requisite corporate power and authority (i) to enter into this Agreement and all
documents contemplated hereunder to be entered into by Purchaser, (ii) to
perform its obligations hereunder and thereunder, and (iii) to consummate the
Transfer and the other transactions contemplated hereunder and thereunder. The
execution and delivery by Purchaser of this Agreement and all documents
contemplated hereunder to be entered into by Purchaser and the consummation by
it of the transactions contemplated hereunder and thereunder have been duly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of Purchaser or its stockholders is necessary to authorize any of
the foregoing. This Agreement has been, and all documents contemplated hereunder
to be executed by Purchaser when executed and delivered will have been, duly
executed and delivered by Purchaser and constitute the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws relating to the
enforcement of creditors' rights or articles of incorporation or by laws.
(b) The execution and delivery by Purchaser of this Agreement and
all documents contemplated hereunder to be entered into by Purchaser do not, and
the consummation of the transactions contemplated hereunder and thereunder and
compliance by Purchaser with the provisions hereof and thereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a penalty, or a right of
termination, cancellation or acceleration of any material obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Purchaser under (i) its certificate or articles of
incorporation or bylaws, each as amended or supplemented to the date of this
Agreement, (ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease, management or other agreement, instrument or Licenses and Permits
applicable to Purchaser or its respective properties or assets, or (iii) subject
to the governmental filings and other matters referred to in subsection (c)
below, any Laws applicable to Purchaser or its respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights, loss or Liens that, individually or in the aggregate, would
not reasonably be expected to impair or interfere in any material respect with
the consummation of the Transfer or any other transactions contemplated by this
Agreement or in the documents contemplated to be executed hereunder, or
otherwise prevent Purchaser from performing its obligations hereunder in any
material respect.
40
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Purchaser in connection with the execution and delivery by
Purchaser of this Agreement and all documents contemplated hereunder to be
entered into by Purchaser to which it is a party or the consummation by
Purchaser of any of the transactions contemplated hereunder or thereunder,
except for such consents, approvals, orders, authorizations, registrations,
declarations and filings as are set forth in Schedule 5.2(c) attached hereto.
5.3. Brokers. No broker, investment banker, financial advisor or
other Person, other than Xxxxxxx Xxxxx Barney, Inc., the fees and expenses of
which will be paid by Purchaser, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
5.4. Funding. At Closing Purchaser will have sufficient cash or
undrawn lines of credit to perform all of its obligations hereunder.
5.5. Investment Representation. Purchaser represents that it is
purchasing the Partnership Interests for its own account and not with a view to
the sale or distribution thereof (within the meaning of the securities laws).
5.6. Title Commitments. Each title commitment received by Purchaser
prior to the date of this Agreement in connection with this Agreement is set
forth on Schedule 3.4(a)(ii).
5.7. Right to Amend Representations. Purchaser shall have the right
from time to time prior to the Closing by notice to Seller to amend or
supplement its qualifications to the representations and warranties in this
Article V, by amendment of the Schedules hereto or otherwise, to reflect changes
in facts or conditions or to correct any immaterial factual inaccuracies;
provided, however, that no such amendment or supplement will be deemed to cure
any breach of any representation or warranty made in this Article V or have any
effect on the conditions in Section 9.3(a) or remedies set forth in Section 11.3
with respect to any factual inaccuracy that existed when this Agreement was
entered into but will be deemed to cure any breach or inaccuracy for all
purposes under this Agreement arising from a change in facts or conditions after
this Agreement was entered into so long as the change was not caused by
Purchaser's breach of Sections 3.3 and 6.4 and Article VII.
VI. COVENANTS
6.1. Conduct of Seller's Business Pending Transfer. Prior to the
Closing Date or the earlier termination of this Agreement, except as (i)
specifically contemplated by this Agreement, (ii) necessary to effectuate the
provisions of Section 7.5, (iii) necessary to comply with fiduciary or other
legal duties owed by CenterAmerica Venture REIT to CenterAmerica Venture or the
third party partner in CenterAmerica Venture under the CenterAmerica Venture
Partnership Agreement or at Law and owed by Seller's Subsidiaries to Xxxxxx'x
and Inwood or the third party partner in Xxxxxx'x and Inwood under the Xxxxxx'x
and Inwood Partnership Agreements or at Law, (iv) set forth in Section 6.9 or
(v) consented to in writing by one Purchaser
41
representative identified on Schedule 6.1 and one Seller representative
identified on Schedule 6.1, Seller will, and will cause each of the Subsidiaries
to:
(a) Conduct the Real Estate Business and continue to operate,
manage, lease and maintain the Properties in the usual, regular and ordinary
course and in substantially the same manner as heretofore and substantially
consistent with the "expense" portions of the Budgets, but with respect to the
Properties, subject to ordinary wear and tear;
(b) To the extent permitted under the CenterAmerica Venture
Partnership Agreement and CenterAmerica Venture management agreement, promptly
provide Purchaser with any notices received by Seller or CenterAmerica Venture
REIT pursuant to the Partnership Agreement or property management agreement for
CenterAmerica Venture, and provide Purchaser with all written notices and
reports that CenterAmerica Venture REIT provides to CenterAmerica Venture or the
third party partner in CenterAmerica Venture at the same time they are sent to
CenterAmerica Venture or the third party partner, and CenterAmerica Venture REIT
will not take or propose to be taken any action described in Schedule 6.1(b);
(c) Use reasonable efforts to preserve intact their business
organization and goodwill and keep available the services of their officers and
key employees;
(d) Confer on a regular basis with one or more representatives of
Purchaser to report operational matters of materiality and any proposals to
engage in material transactions, and promptly provide Purchaser with (i) all
material notices received and financial statements and operating reports
prepared in connection with any of the documents evidencing or securing any
loans encumbering the Properties and (ii) all financial statements and operating
reports routinely prepared by Seller relating to the Real Estate Business;
(e) Promptly notify Purchaser of any material emergency or other
material change at the Properties;
(f) Maintain its books and records in accordance with the
accounting principles currently utilized by it, consistently applied, and not
change in any material manner any of their methods, principles or practices of
accounting currently in effect, except as may be required by applicable Law or
GAAP;
(g) Duly and timely file all reports, Tax Returns and other
documents required to be filed with federal, state, local and other Governmental
Entities, subject to extensions permitted by Law;
(h) Not (i) acquire (other than as set forth on Schedule 6.1(h) or
by CenterAmerica Venture or its subsidiaries) or sell or ground lease, or enter
into any option or agreement to acquire (other than by CenterAmerica Venture or
its subsidiaries or as set forth on Schedule 6.1(h)) or sell or ground lease, or
exercise an option or contract to acquire (other than by CenterAmerica Venture
or its subsidiaries or as set forth on Schedule 6.1(h)), sell or ground lease
any of the Properties or any additional real property or any part thereof or
interest therein, other than the properties identified in Schedule 6.1(h) and
leasing in accordance with Section 6.2, (ii) make any loans or advances to any
other Person, except loans or advances to employees in the ordinary course of
business, (iii) encumber or subject to any Lien any of the
42
Fee Properties and Partnership Properties or Purchased Assets other than as
contemplated in Section 7.5 and 7.16(v) and other than Liens which are incurred
in the ordinary course and consistent in all material respects with the existing
Budgets with respect to the Redevelopment Properties and JV Properties, (iv)
enter into any new agreement or commitment, or amend any existing agreement or
commitment, to improve, develop or construct real estate projects or to make any
other capital expenditure except to the extent included in the Budgets or not in
excess of 10% of the capital expenditure line items therein after the date of
this Agreement other than pursuant to the Budgets with respect to the
Redevelopment Properties and the JV Properties and pursuant to any Lease or any
existing Contract, (v) except to effect the transactions contemplated under this
Agreement, modify, amend, supplement, terminate or assign the Assumed Loan
Documents, the JV Loan Documents, the documents evidencing the Assumed
Liabilities, the Property Management Agreements, the REAs, and the Ground
Leases, (vi) permit any of CFP, CenterAmerica Capital, Xxxxxx'x or Inwood to
incur any Indebtedness other than the Assumed Indebtedness and PPM Indebtedness,
(vii) transfer, sell or assign the Partnership Interests or any Material
Contracts, or (viii) enter into any management, operating, listing, brokerage,
supply and maintenance agreement that is not terminable by Seller or a
Subsidiary without penalty upon the sale of the Purchased Assets or upon 30 days
prior written notice or less;
(i) Not amend any of the Partnership Agreements or other
constituent organizational documents of the Partnerships or the Capital Support
Agreement without Purchaser's prior written consent except as otherwise provided
in Section 9.4(d)(xiii) or to effectuate the provisions of Section 7.19;
(j) Not amend any material terms of any Material Contract in a
manner adverse to the Purchaser without obtaining the prior written consent of
Purchaser;
(k) Keep in full force and effect with respect to the Properties
policies of insurance providing coverage at least as extensive as the policies
covering the Properties on the date hereof;
(l) If Purchaser has not made an election under Section 7.14(b) in
respect to the Assumed Indebtedness related to CFP, cause CFP to timely exercise
its first option to extend the maturity date under that certain Loan Agreement
dated as of June 20, 2000 between CFP and Xxxxxx Financial Corporation from July
1, 2002 to July 1, 2003 and will consult with Purchaser regarding the purchase
of an interest rate cap agreement (or extension of any existing interest rate
cap agreement) related thereto;
(m) Cause all officers, directors and/or managers of the
Partnerships designated by Purchaser to resign from such Partnerships effective
as of the Closing Date;
(n) Use commercially reasonable efforts to obtain the consents
required to consummate the Transfer and the other transactions contemplated by
this Agreement, including those described in Schedule 4.2(b) and Schedule
4.2(c);
(o) Use commercially reasonable efforts to cause the Assumed
Indebtedness to no longer encumber or be secured by the Excluded Properties at
the Closing, in accordance with and subject to the terms of the Assumed
Indebtedness;
43
(p) Provide to Purchaser's title insurance company the form of the
affidavits attached as Exhibit 6.1(p) and other customary and commercially
reasonable (as determined by Seller) affidavits, documents and information
necessary for such title insurance company to insure title to the Properties
subject only to the Permitted Encumbrances for the benefit of Purchaser;
(q) In the event Seller becomes aware that any of Seller's
representations and warranties made hereunder are inaccurate, untrue or
incorrect in any material respect, Seller shall promptly notify Purchaser with a
reasonably detailed description of the inaccuracy;
(r) Not settle any insurance claims or other litigation that would
materially and adversely affect the Properties or Partnerships after the Closing
without Purchaser's consent;
(s) Cooperate with Purchaser to have any letters of credit in
respect of any Tenant Deposits assigned to Purchaser or hold any letters of
credit of and draw on them at Purchaser's request until a new letter of credit
may be issued to Purchaser or its designee. This obligation of Seller will
survive Closing;
(t) Not cause distributions to be made by CenterAmerica Venture or
Xxxxxx'x and Inwood except if made consistent with past practice and in
accordance with the CenterAmerica Venture Partnership Agreement and Xxxxxx'x and
Inwood Partnership Agreements;
(u) Not apply any security deposits to delinquent Rentals or other
amounts owed by a Tenant while a Tenant is in possession of the space under its
Lease without Purchaser's consent;
(v) Cooperate with Purchaser to change any signatories requested
by Purchaser on all bank accounts held by the Partnerships and their
subsidiaries effective on the Closing Date (this obligation of Seller will
survive Closing);
(w) Comply in all material respects with the terms and conditions
of the Assumed Indebtedness, JV Indebtedness and PPM Indebtedness applicable to
Seller and its Subsidiaries;
(x) Request the holders of the mezzanine debt held by Xxxxxx
Financial Corporation or its successors and assigns to give notice on the
Closing Date to the holders of the Assumed Indebtedness and any Person under an
applicable cash management agreement that the mezzanine debt has been satisfied
in full on the Closing Date;
(y) Not increase the outstanding capital commitments of Seller or
any Assigning Subsidiary to any of the Partnerships;
(z) Not enter into a contract or agreement that would be a
Material Contract without Purchaser's consent unless the expenditures thereunder
are included in the Budgets or are capital expenditures not in excess of 10% of
the capital expenditure line items therein or the Material Contract relates to
tenant work to be performed under an existing Lease or a new Lease entered into
pursuant to Section 6.2;
(aa) At or prior to Closing deliver notice of termination of the
management agreement related to CenterAmerica Venture if Seller is unable to
obtain prior to Closing the required member consent to the Transfer of such
management agreement to Purchaser; and
44
(bb) To the extent permitted under the Xxxxxx'x and Inwood
partnership agreements and management agreements, promptly provide Purchaser
with any notices received by Seller or any Subsidiary pursuant to the
partnership agreements and management agreements, and provide Purchaser with all
written notices and reports that Seller or its Subsidiaries provide to Xxxxxx'x
and Inwood or the third party partners in such partnerships at the same time
they are sent to the partnerships or the third party partners. Xxxxxx'x and
Inwood will not take or propose to be taken any action described in Schedule
6.1(bb).
6.2. Leasing. Seller will, and will cause its applicable
Subsidiaries to, conduct their leasing activities consistent with past practices
subject to changes consistent with prevailing market practices. Seller or the
Subsidiaries may enter into any new lease, or amend, modify or terminate any
Lease that falls within the guidelines provided in Schedule 6.2 (the "Leasing
Guidelines"). Seller will apprise Purchaser of leasing activities with respect
to the Properties, including notice of any loans made by Seller or any
Subsidiary to any Tenant. Seller will not, and will cause its Subsidiaries not
to, enter into any new lease, or otherwise amend, modify or terminate any Lease,
that does not fall within the Leasing Guidelines without Purchaser's prior
written consent in each instance, which consent will not be unreasonably
withheld, delayed or conditioned and shall be subject to the deemed approval
provisions of the Leasing Guidelines. Any notice from Purchaser rejecting a
proposed new lease or amendment, modification or termination of any Lease that
does not fall within the Leasing Guidelines must include a description of the
reasons for Purchaser's rejection. Purchaser will be provided with monthly
leasing reports and permitted to attend all leasing meetings. Notwithstanding
anything herein to the contrary, Seller will not, and will cause its
Subsidiaries not to, enter into any new lease, or otherwise amend, modify or
terminate any Lease, that is over 20,000 square feet (taking into account all
expansion options), whether or not same falls within the Leasing Guidelines
without Purchaser's prior written consent in each instance, which consent will
not be unreasonably withheld, delayed or conditioned. If Purchaser fails to
object to such lease, amendment, modification or termination within 3 Business
Days, Purchaser will be deemed to have approved that lease, amendment,
modification or termination.
6.3. Tenant Estoppels. Seller will use commercially reasonable
efforts to obtain and deliver to Purchaser estoppel certificates from the
Tenants identified on Schedule 6.3 and at Seller's discretion Seller may obtain
other estoppel certificates. Each estoppel certificate will be in the form of
Exhibit 6.3-1 or in the form prescribed in the applicable Tenant's Lease. If any
Tenant identified on Schedule 6.3 fails to deliver an estoppel certificate
before Closing, Seller will deliver an estoppel certificate in the form of
Exhibit 6.3-2 in respect of that Tenant's Lease. If Seller obtains an estoppel
certificate from any Tenants, Seller's representations and warranties made in
Section 4.5(b) and (d) and (e) will terminate and be null and void with respect
to all matters represented that relate to the applicable Tenants if such
estoppel certificates contain no exceptions noted by the Tenant, and if such
estoppel certificate contains exceptions noted by the Tenant then such
representations and warranties will terminate and be null and void only with
respect to those matters represented that relate to the applicable Tenant and
that are confirmed without exception by such estoppel certificate, and if the
matter to which the Tenant takes exception in the estoppel certificate is not a
matter included in the Seller's rent rolls dated September 30, 2001 and is not a
matter relating to the physical (but not uninsured damages relating to the
Tenant's property) or environmental condition of the Property and is not already
covered by a Seller representation in Section 4.5(b), (d) and (e) and is a
matter included in the
45
form of Seller estoppel attached as Exhibit 6.3-2, then Seller may but shall not
be required to deliver a Seller estoppel with respect to such Tenant for the
excepted matter. If the Tenant estoppel includes exceptions and Seller elects
not to deliver a Seller estoppel with respect to such Tenant for the excepted
matter then such exception (including matters included in the Seller's rent
rolls dated September 30, 2001) shall be considered in determining the
occurrence of a Seller Material Adverse Effect pursuant to clause (iv) of the
definition thereof. If Seller provides an estoppel certificate in respect of any
Tenant's Lease and the Tenant delivers an estoppel certificate after Closing,
Seller's estoppel certificate in respect of that Lease will be null and void as
if the Seller estoppel certificate had not been delivered at Closing if the
estoppel certificate from the Tenant contains no exceptions noted by the Tenant,
or if such estoppel certificate contains exceptions noted by the Tenant, then
the Seller's estoppel certificate will be null and void only with respect to
those matters represented that are confirmed without exception by the Tenant's
estoppel certificate.
6.4. Assumption of Obligations. Seller will use its commercially
reasonable efforts and cooperate with Purchaser to cause the holders of the
Assumed Indebtedness, JV Indebtedness and PPM Indebtedness to permit the
assumption thereof by Purchaser as contemplated by this Agreement or consent to
the Transfers as applicable (including taking subject to such Indebtedness).
Seller will cooperate with Purchaser in requesting from the applicable lender of
any Assumed Indebtedness, JV Indebtedness and PPM Indebtedness the modifications
to the Assumed Indebtedness set forth on Schedule 6.4-1 but failure to obtain
such modifications shall not be a condition to Closing or to the assumption of
the Assumed Indebtedness by Purchaser. At the Closing, Purchaser agrees to
assume all obligations of Seller and each Subsidiary (other than the
Partnerships and their subsidiaries), and any partner of Seller or other Person
(each such Person, a "Guarantor") accruing from and after the Closing Date
pursuant to each guaranty and other indemnity agreement identified on Schedule
6.4-2 (each, a "Continuing Loan Guaranty") on such terms and pursuant to such
documentation as the lender or other beneficiary thereof may reasonably require.
Purchaser and Seller will use commercially reasonable efforts to cause the
lender under each Assumed Indebtedness, JV Indebtedness and PPM Indebtedness to
fully release and discharge each Guarantor other than CenterAmerica Venture and
the other members of CenterAmerica Venture or their direct and indirect owners
from all obligations under each Continuing Loan Guaranty to which it is a party
or by which it is bound, including Purchaser executing documents reasonably
requested by the lenders, and, if any lender is unwilling to release and
discharge any Guarantor from a Continuing Loan Guaranty, Purchaser will
indemnify the Guarantor against any liability accruing from and after the
Closing Date under the Continuing Loan Guaranty pursuant to an indemnity
agreement in the form of Exhibit 6.4. Purchaser will cooperate with Seller to
cause the lender of each Assumed Indebtedness to permit the assumption thereof
and Purchaser and Seller will each use commercially reasonable efforts to
satisfy the requirements applicable to it imposed by the lender for the
assumption thereof, and to cause the lenders under the JV Indebtedness and PPM
Indebtedness to consent to the Transfers.
6.5. Other Actions. Each of Seller and Purchaser will not, and will
use commercially reasonable efforts to cause its respective subsidiaries not to,
take any action that would result in (i) any of the representations and
warranties of such party set forth in this Agreement that are qualified as to
materiality becoming untrue as of the Closing Date, (ii) any of the
representations and warranties of such party that are not so qualified becoming
untrue in any material respect as
46
of the Closing Date, or (iii) any of the conditions to the Closing set forth in
Article IX not being satisfied.
6.6. No Solicitation. Seller agrees that it will not, directly or
indirectly, and it will not authorize or direct any of its representatives to,
solicit or negotiate to sell or otherwise dispose of, or deliver non-public
information designed to facilitate a potential bid to acquire, any Purchased
Assets or any direct or indirect interest in any Purchased Assets or the Real
Estate Business in any transaction except as contemplated in this Agreement
without Purchaser's prior written consent until such time as this Agreement has
been terminated. Seller agrees to notify Purchaser in writing promptly upon
receipt by Seller or Subsidiary of any offer or proposal to acquire any
Purchased Asset or any direct or indirect equity interest in any Purchased
Assets or the Real Estate Business (including the terms and conditions thereof
and the identity of the person making the offer or proposal).
6.7. Discharge of Indebtedness. At or prior to the Closing, Seller
shall repay or cancel or cause to be repaid or cancelled all Indebtedness
(including intercompany payables) of the Partnerships (excluding the
CenterAmerica Venture Entities and any of their intercompany payables) that is
not an Assumed Indebtedness or an Assumed Liability, including without
limitation any Indebtedness owing to Seller or any Subsidiary or any Affiliate.
In addition, at or prior Closing Seller will repay or cancel all other
liabilities or obligations (excluding the CenterAmerica Venture management
agreement and any items to be prorated hereunder) of the Partnerships (excluding
the CenterAmerica Venture Entities) owing to Seller or its Affiliates (other
than the Partnerships or CenterAmerica Venture Entities).
6.8. Tenant Litigation. (a) All litigation initiated by the Seller
and its Subsidiaries (other than the Partnerships and CenterAmerica Venture
Entities) against any Tenant shall be assigned to Purchaser as a Purchased Asset
except such litigation which Purchaser elects not to accept by notice to Seller
delivered no later than 5 Business Days prior to the Closing. In the case of
litigation initiated by any Partnership against any Tenant in possession on the
Closing Date, the Purchaser shall acquire the Partnership Interests in such
Partnerships subject to any such pending litigation. Any net recoveries related
to the foregoing shall be treated as collections of Delinquent Rentals and shall
be apportioned between Purchaser and Seller as provided in Section 2.4(b)(v). In
the event any counterclaims are asserted against Seller or any Subsidiary in
such litigation, Purchaser will not settle any such litigation without Seller's
prior written consent, which consent shall not be unreasonably withheld.
(b) All litigation initiated by the Seller and its Subsidiaries
(other than the Partnerships) against any Tenant which Purchaser elects not to
accept under Section 6.8(a) shall be retained by Seller as an Excluded Asset and
not assigned to Purchaser as a Purchased Asset. In the event of any such
litigation initiated by any Partnership, such litigation shall be assigned to
Seller immediately prior to the Closing. Any recoveries related to the foregoing
shall be retained by Seller and shall not be apportioned under Section 2.4.
6.9. No Application to Excluded Properties or Assets.
Notwithstanding anything to the contrary in Sections 6.1 through 6.8, no
provision of this Article VI will apply to the Excluded Properties or Excluded
Assets.
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VII. ADDITIONAL AGREEMENTS
7.1. Access to Information; Confidentiality. (a) Subject to the
Confidentiality Agreement dated as of April 3, 2001, as modified by Section
7.1(b) hereof, between Purchaser and Seller (as so modified, the
"Confidentiality Agreement"), and subject to the restrictions contained in
confidentiality agreements which Seller is subject, Seller will, and will cause
each of its Subsidiaries to, afford to Purchaser and to the officers, employees,
accountants, counsel, financial advisors and other representatives of Purchaser,
reasonable access during normal business hours prior to the Closing to all of
its properties, books, contracts, commitments, personnel and records related to
the Real Estate Business and, during such period, Seller will, and will cause
each of its Subsidiaries to, furnish promptly to Purchaser all other information
concerning the Real Estate Business as Purchaser may reasonably request.
Purchaser will, and will cause its Subsidiaries to, and will use commercially
reasonable efforts to cause its officers, employees, accountants, counsel,
financial advisors and other representatives and Affiliates to, hold any
nonpublic information in confidence to the extent required by, and in accordance
with, and will comply with the provisions of the Confidentiality Agreement.
(b) Notwithstanding anything in the Confidentiality Agreement to
the contrary, the obligations of Purchaser set forth in this Section 7.1 and in
the Confidentiality Agreement shall not apply to any information that is
required, or Purchaser determines based on advice of counsel (including in house
counsel) is advisable, to be disclosed by Purchaser (x) to comply with
applicable securities laws or regulations or under the rules or policies of the
New York Stock Exchange ("NYSE"), including in connection with the filing by
Purchaser of a registration statement under the Securities Act of 1933, as
amended, (y) in connection with an offering of its securities or (z) as
otherwise may be consistent with its past disclosure practices. Without limiting
but subject to the foregoing, Purchaser may disclose, (i) a summary description
of the material terms of this Agreement, (ii) a copy of this Agreement, (iii) to
the extent necessary to comply with applicable securities laws or the rules or
policies of the NYSE or as reasonably determined by Purchaser to be advisable in
connection with an offering of its securities, historical and pro forma
financial information with respect to the Real Estate Business, and (iv) such
aggregate portfolio information, including the location of the Properties, that
would typically be disclosed in any investor or analyst call or, to the extent
necessary to company with applicable securities laws or the rules or policies of
the NYSE or as reasonably determined by Purchaser to be advisable in connection
with an offering of its securities, in a registration statement or other public
filing made under applicable securities laws or otherwise consistent with its
past disclosure practices. Purchaser's description of Seller and of MSREF in any
press release, filing or other public statement must conform to the descriptions
in Exhibit 7.3 unless Seller or MSREF consents; provided, however if Purchaser
determines it must otherwise describe Seller or MSREF to comply with applicable
securities laws or rules or policies of the NYSE, Purchaser may do so but
Purchaser must, to the extent reasonably practicable, first consult with Seller
and MSREF in good faith concerning such description.
7.2. Reasonable Efforts. Subject to the terms and conditions set
forth in this Agreement, each of Seller and Purchaser will use commercially
reasonable efforts to promptly take, or cause to be taken, all actions, and to
promptly do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable under applicable
Laws to consummate and make effective the Transfer and the other transactions
48
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement, the Transfer or the consummation of
the other transactions contemplated by this Agreement and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. The
obligations in clause (iv) of this Section 7.2 will survive Closing.
7.3. Public Announcements. Purchaser and Seller, to the extent
reasonably practicable, will consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press release with
respect to the transactions contemplated by this Agreement, including the
Transfer, and, to the extent reasonably practicable, will not issue any press
release prior to consultation with the other party. The initial press release to
be issued jointly by Seller and Purchaser with respect to the transactions
contemplated by this Agreement is attached hereto as Exhibit 7.3.
7.4. Conveyance Taxes. Purchaser and Seller will cooperate in the
preparation, execution and filing of all Tax Returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added and stamp Taxes, any transfer, recording,
registration and other fees and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement.
7.5. Excluded Properties. At or before Closing, Seller will cause
the Properties identified in Schedule 7.5 to be subjected to the terms and Liens
of the Assumed Indebtedness in substitution for the Excluded Properties
identified in Schedule 4.12(a) so that those Excluded Properties will be
released from the Liens securing the Assumed Indebtedness and transferred to
Seller or a Subsidiary other than a Partnership or CenterAmerica Venture
Entities. If Seller elects in its sole discretion to do so, Seller and Purchaser
will enter into a definitive agreement relating to the management, sale and
administration of any Excluded Property in the form of the Property Management
and Leasing Agreement attached as Exhibit 7.5. If Seller has not effected these
substitutions before the scheduled Closing Date, Seller and Purchaser will in
good faith work towards a mutually acceptable alternative structure or
arrangement to accomplish the intent of the parties under this Agreement in
accordance with Section 9.3(d).
7.6. Redevelopment Properties. Seller will and will cause the
applicable Subsidiaries to continue to develop and/or renovate the Redevelopment
Properties consistent with redevelopment or renovation plans and budgets
described in Schedule 7.6 (which includes finishout of the exterior but excludes
Lease Expenses other than for the new Publix space at Coconut Creek). If the
applicable Subsidiaries do not complete and pay all amounts in respect of the
development, redevelopment and/or renovation of one or both of the Redevelopment
Properties prior to Closing (the "Incomplete Developments"), Seller will credit
to the Purchase Price payable at Closing an amount equal to the excess of the
budget amount for the Incomplete
49
Development over the amount expended by Seller in respect of that redevelopment
through the Closing Date (the "Redevelopment Payment").
7.7. Allocation of Purchase Price. The Purchase Price attributable
to the Purchased Assets shall be allocated among the Purchased Assets in
accordance with and as provided by Section 1060 of the Code as initially set
forth in a separate letter agreement of even date herewith executed by Seller
and Purchaser (the "Section 1060 Allocation") and as further supplemented by
agreement between Seller and Purchaser prior to Closing. Any Tax Returns shall
be prepared and filed consistently with such agreed upon Section 1060
Allocation. To the extent required, Seller and Purchaser will each properly
prepare and timely file Form 8594 in accordance with the agreed upon Section
1060 Allocation.
7.8. Employee Matters. (a) Pursuant to a separate disclosure
statement of even date herewith, Seller has furnished to Purchaser a true and
complete list and job title of each individual who is employed by Seller on the
date hereof in connection with the Real Estate Business (the "Employees"), along
with his or her date of hire, position, base salary or wage rate and most recent
annual bonus. Prior to February 4, 2002, Purchaser will make offers of
employment, to a majority of the Employees who are active employees of the Real
Estate Business on that date, such offers to be effective as of the Closing
Date. The Employees who accept such offers of employment from Purchaser will be
referred to herein as "Transferred Employees" and Seller will terminate its
employment relationship with each Transferred Employee as of the Closing Date.
Except as otherwise provided herein, the terms and conditions of the Transferred
Employees' employment with Purchaser will be determined at the sole discretion
of Purchaser; provided that the Transferred Employees will be provided with the
same (or substantially comparable) employee pension and benefit plans, programs
and arrangements that are available to similarly situated employees of Purchaser
on the Closing Date without regard to Seller's pension and benefit plans,
programs and arrangements. In determining a Transferred Employee's eligibility
to participate in and vesting under Purchaser's employee pension and benefit
plans, programs and arrangements, and the level of vacation and sick pay
benefits under Purchaser's policies, the Transferred Employees will receive full
credit for all service with Seller prior to the Closing but any vacation or sick
time taken for the year in which the Closing occurs while employed by Seller
will reduce the amount of vacation or sick time that will be available to the
Transferred Employee under Purchaser's vacation or sick policy during the year
in which the Closing occurs. Purchaser will cause its health care insurers to
provide group health insurance coverage to the Transferred Employees without
imposing any pre-existing condition exclusions, waiting periods or
actively-at-work requirements, except to the extent such requirements were
applicable to the Transferred Employee or dependent under Seller's applicable
group health plan immediately prior to the Closing Date. Any group health plan
made available by Purchaser will provide credit for any deductibles, co-payments
and out-of-pocket limits applied or made with respect to each Transferred
Employee in the calendar year of the Closing Date.
(b) On and after the Closing Date, Seller will honor and provide
for payment of all obligations and benefits, if any, of Transferred Employees
under Seller's employee benefit plans in accordance with the terms of such plans
(taking into account the Transferred Employees' termination of employment). To
the extent that any Transferred Employee is not fully vested in his or her
accrued benefit under any employee benefit plan maintained by Seller that is
intended
50
to be qualified under Section 401(a) of the Code (including any 401(k) plan),
Seller will cause such plan to be amended to provide for full and immediate
vesting of the Transferred Employee's accrued benefit.
(c) Seller will be responsible in accordance with its applicable
welfare plans in effect prior to the Closing for all medical and dental claims
for expenses incurred prior to the Closing Date by Transferred Employees and
other employees, former employees and their dependents, including claims which
are filed after the Closing Date. Reimbursement of employees and their
dependents for medical and dental expenses associated with such claims
(including claims submitted on behalf of disabled employees and their
dependents) shall be determined in accordance with the terms of Seller's medical
and dental programs. With respect to Employees who are not Transferred
Employees, Seller will be responsible for providing severance and termination
benefits, if any, to those Employees under the applicable plans and arrangements
of Seller consistent with past practice and the terms of such plans and
arrangements, including providing COBRA coverage under its medical and dental
plans to the extent required by Law.
(d) Other than as expressly provided in this Section 7.8, neither
Purchaser nor its Affiliates shall assume or have any direct or indirect
obligation or liability of any nature, whether matured or unmatured, accrued or
contingent, due or to become due or otherwise, to any Transferred Employee or
other present or former employee of Seller or its Affiliates, or to any
dependent, survivor or beneficiary thereof, arising out of or in relation to
such person's employment with Seller or its Affiliates or the termination of
such employment. Notwithstanding anything here in to the contrary, no provision
of this Section 7.8 will create any third party beneficiary or other rights in
any employee or former employee, including any dependent, survivor or
beneficiary thereof, of Seller or its Affiliates in respect of continued
employment (or resumed employment) with either Purchaser or its Affiliates and
no provision of this Section 7.8 shall create any such rights in any such
persons in respect of any benefits that may be provided, directly or indirectly,
under any employee benefit plan or arrangement which may be established or made
available by Purchaser or its Affiliates to the Transferred Employees. No
provision of this Agreement shall constitute a limitation on rights to amend,
modify or terminate after the Closing Date any employee benefit plan or
arrangement of Purchaser or its Affiliates.
(e) Purchaser will make offers of employment to at least 35
Employees in the Houston office of Seller.
7.9. Release of Seller. Purchaser agrees on behalf of itself and on
behalf of the Partnerships and their successors and assigns (the "Releasing
Parties") that from and after the Closing all Releasing Parties will not seek
recovery from Seller or any Subsidiary or their successors and assigns under any
covenants or warranties of title contained in any deeds or other instruments of
conveyance by Seller or any Subsidiary of any of the Properties to the
Partnerships and shall rely solely upon any title insurance policies obtained by
the Partnerships with respect to the condition of title of any Properties owned
by the Partnerships.
7.10. Transitional Services. Purchaser and Seller agree to execute
and deliver at Closing the Transitional Services Agreement attached hereto as
Exhibit 7.10.
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7.11. Litigation Support. In the event and for so long as Seller
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand involving any Person
(other than Purchaser or any permitted designee of Purchaser under Section 12.6
under this Agreement) in connection with any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction related to the period of Seller's and the
Subsidiaries' operation and ownership of any of the Real Estate Business, the
Purchased Assets or the Excluded Assets, Purchaser will cooperate with Seller
and its counsel in the contest or defense, make available Purchaser's personnel
(including former employees of Seller), and provide such testimony and access to
Purchaser's books and records as shall be reasonably necessary in connection
with the contest or defense. Seller will reimburse Purchaser for its direct
out-of-pocket expenses incurred in complying with this Section. In the event and
for so long as Purchaser actively is contesting or defending against any action,
suit, proceeding, hearing, investigation, charge, complaint, claim or demand
involving any Person (other than Seller under this Agreement) in connection with
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction related to
the period of Purchaser's operation and ownership of any of the Real Estate
Business, the Purchased Assets or the Excluded Assets, Seller will cooperate
with Purchaser and its counsel in the contest or defense, make available
Seller's personnel, and provide such testimony and access to Seller's books and
records as shall be reasonably necessary in connection with the contest or
defense. Purchaser will reimburse Seller for its direct out-of-pocket expenses
incurred in complying with this Section.
7.12. Tax Matters.
(a) Closing of the Books. For purposes of determining the
allocation of income and loss (and items thereof) that under relevant law are
made to the transferor and transferee with respect to Transfers of the
Partnership Interests, unless Section 708(b) of the Code (or an analogous
provision of state of local law) applies to close the books of the entity at the
time of Closing with respect to such allocation, the parties hereto will utilize
the "interim closing of the books" method (as described in Treasury Regulation
section 1.706-1(c)) which shall close the books of the Partnership for purposes
of determining the allocation of income and loss (and items thereof) as of the
time of Closing.
(b) Filing Tax Returns.
(i) Straddle Periods. With respect to Taxes for which a
Partnership (other than CenterAmerica Venture) is liable ("Entity Level Tax"),
if the Transfer does not end the taxable period with respect to that Entity
Level Tax, then that taxable period shall constitute a "Straddle Period." With
respect to each Straddle Period, Purchaser will prepare all returns relating to
Entity Level Tax for the Straddle Period in a manner consistent with past
practices of the Partnership and will submit a copy of the returns to Seller no
later than 30 days prior to filing for Seller's approval which will not be
unreasonably withheld. Seller will pay to Purchaser at least 5 Business Days
prior to the date on which Entity Level Taxes are paid with respect to such
periods an amount equal to the portion of the Entity Level Taxes required to be
paid by Seller pursuant to this Agreement which properly relate to the Straddle
Period . Any refunds of Taxes received that properly relate to portions of
taxable periods to which Seller is responsible for Taxes as provided in this
Section 7.12 will be promptly paid to Seller or its designee.
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(ii) Tax Periods Ending on or Before Closing Date. For any
entities or interests therein (other than the interest in the CenterAmerica
Venture) that have taxable periods relating to an Entity Level Tax that end on
or before the Closing Date but for which returns of Entity Level Taxes are not
due until after the Closing Date, Purchaser will prepare and timely file such
Tax returns in a manner consistent with past practices of the entity. The entity
will submit a copy of such returns to Seller no later than 30 days prior to
filing for Seller's approval which will not be unreasonably withheld and Seller
will pay to Purchaser, at least 5 Business Days prior to the date on which the
Entity Level Taxes are paid with respect to such taxable periods an amount equal
to the portion of the Entity Level Tax which properly relates to such periods
that are required to be paid by Seller pursuant to this Agreement. Any refunds
of Taxes received that properly relate to periods to which Seller is responsible
for Taxes as provided in this Section 7.12 will be promptly paid to Seller or
its designee.
(c) Cooperation. Each of the parties hereto agrees to fully
cooperate as and to the extent reasonably requested by the other party, in
connection with the filing of Tax returns and any audit, litigation or other
proceeding with respect to Taxes, including making available employees and such
information and records which are reasonably relevant to any such filing, audit,
litigation or other proceeding. In connection therewith, Purchaser shall provide
to Seller reasonable written notice prior to transferring, destroying or
discarding any books and records, and if requested by Seller or Seller's
transferee, shall transfer any such books and records to Sell or its transferee.
7.13. Post-Closing Access. After the Closing, Purchaser will from
time to time, upon reasonable notice and during normal business hours, afford
Seller access to all books and records of the Real Estate Business that relate
to the period of Seller's ownership, including without limitation all accounting
records and employment and compensation data relating to employees employed by
Seller, for tax, accounting or other legal purposes. Purchaser will afford
Seller reasonable access to former employees of Seller or other Persons to
assist Seller in its review of those records. Purchaser will maintain all
records relating to the Real Estate Business for the maximum time period
required to comply with all applicable federal and state audit periods.
7.14. Matters Relating to Assumed Indebtedness, JV Properties and
PPM Indebtedness.
(a) Xxxx Xxxxxxx Loans. If Seller is unable to obtain prior to the
Closing the consent of Xxxx Xxxxxxx Mutual Life Insurance Company with respect
to the Assumed Indebtedness relating to the Xxxxxxx Properties ("Xxxxxxx
Indebtedness"), Purchaser may elect, in its sole discretion and by written
notice to Purchaser, to either (i) delay the closing for the Xxxxxxx Properties
as described below or (ii) drop the Xxxxxxx Properties as provided in Section
7.16. If Purchaser elects to delay the closing of the Xxxxxxx Properties, the
sale and purchase of the Xxxxxxx Properties and the assumption of the
liabilities relating thereto will be delayed until the consent of Xxxx Xxxxxxx
Mutual Life Insurance Company can be obtained (but not later than April 30,
2002), and at the Closing the transactions contemplated hereby other than with
respect to the Xxxxxxx Properties shall be consummated and the Purchase Price
payable at Closing shall be reduced by the allocable purchase price of the
Xxxxxxx Properties as set forth on Schedule 7.7 and the Assumed Indebtedness at
Closing will not include the Xxxxxxx Indebtedness. Subject to the conditions set
forth in Sections 9.2, 9.3 and 9.4, as they relate to the Xxxxxxx Properties the
closing of the sale and purchase of the Xxxxxxx Properties and the assumption of
the liabilities
53
relating thereto will take place no later than 10 Business Days following the
date consent of Xxxx Xxxxxxx Mutual Life Insurance Company is obtained and the
purchase price to be paid by Purchaser for the Xxxxxxx Properties will be equal
to the allocable purchase price set forth in the letter agreement referred to in
Section 7.7. If the consent of Xxxx Xxxxxxx Mutual Life Insurance Company is not
obtained by April 30, 2002, then the Xxxxxxx Properties will be dropped
Properties as provided in Section 7.16. If Purchaser elects to drop the Xxxxxxx
Properties, upon Seller's notice to Purchaser of its election, this Agreement
will be deemed amended, without any further action on the part of any party, to
revise the definition of Assumed Indebtedness to exclude the Xxxxxxx
Indebtedness.
(b) Purchaser Election Not to Assume. Purchaser may elect by
written notice to Seller no later than 45 days before Closing to not assume
CFP's Assumed Indebtedness and to request Seller to prepay CFP's Assumed
Indebtedness so long as Seller has the right to make its notice of prepayment to
the lender conditioned upon the occurrence of the Closing or has the right to
withdraw such notice if the Closing fails to occur. Any fee, penalty, premium or
other amount owed in order to prepay CFP's Assumed Indebtedness will be at
Purchaser's expense. If Purchaser elects to require Seller to prepay CFP's
Assumed Indebtedness, this Agreement will be deemed amended, without any further
action on the part of any party, to revise the definition of Assumed
Indebtedness to exclude any such Assumed Indebtedness.
(c) CenterAmerica Venture and PPM. If for any reason Seller is
unable to obtain prior to Closing the required lender consents to transfer
CenterAmerica Venture REIT's interest in CenterAmerica Venture and CenterAmerica
Trust's interest in the management agreement related to CenterAmerica Venture
described on Schedule 4.2(b) or if for any reason Seller is unable to obtain
prior to the Closing the consent of Xxxxxxx National Life Insurance Company with
respect to the Indebtedness relating to the PPM Properties (the "PPM
Indebtedness"), this Agreement will be amended as follows effective immediately
prior to the Closing:
(i) to delete the items described in Sections
1.1(a)(ii)(A) and (B) and/or (G) and (H), as applicable, from the definition of
Purchased Assets, except to the extent that any provision that is stated to
survive the termination of this Agreement would be applicable thereto and with
respect to this Section 7.14(c) to the extent necessary to implement this
Section 7.14(c);
(ii) neither Seller nor any Subsidiary will have any
obligations with respect to those Purchased Assets, nor will any covenant,
representation or warranty be deemed made with respect to those Purchased
Assets, CenterAmerica Venture, the CenterAmerica Venture Entities, or the PPM
Properties, as applicable, except to the extent that any such covenant,
representation or warranty is stated to survive the termination of this
Agreement, and Purchaser will not have any rights or obligations under this
Agreement with respect to those Purchased Assets;
(iii) those Purchased Assets shall be deemed to be Excluded
Assets for purposes of this Agreement;
(iv) the Purchase Price will be reduced by the allocable
purchase price of those Purchased Assets as set forth in the letter agreement
referred to in Section 7.7; and
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(v) those Purchased Assets consisting of CenterAmerica
Venture REIT's interest in CenterAmerica Venture and CenterAmerica Trust's
interest in the management agreement related to CenterAmerica Venture will be
deemed to constitute one dropped Property for purposes of Section 10.1(e), and
those Purchased Assets consisting of the Partnership Interests in the PPM
Properties will be deemed to constitute one dropped Property for purposes of
Section 10.1(e).
7.15. Violations. Seller shall, subject to Seller's and any
applicable Subsidiary's right to contest by appropriate proceedings, be
responsible for and comply with or remedy all notices of violation of law or
municipal ordinances, orders or requirements that have been noted in or issued
by any federal, state or municipal department having jurisdiction over the Fee
Properties and Partnership Properties (excluding any JV Properties) prior to the
date of this Agreement and there shall be a credit against the Purchase Price
for the reasonable estimate of the cost to comply with or remedy the same to the
extent not cured prior to Closing. Purchaser shall be responsible for and shall
reimburse Seller for the costs to comply or remedy all notices of violation of
law or municipal ordinances, orders or requirements that have been noted in or
issued by any federal, state or municipal department having jurisdiction over
the Fee Properties and Partnership Properties on or after the date of this
Agreement.
7.16. Dropped Properties. If Seller elects to drop a Property or not
to sell a Property to Purchaser under Sections 3.4, 7.14(c), 8.3 or 10.2 or
Purchaser elects to drop a Property under Sections 3.4, 7.14(a) or 10.2, upon
Seller's notice to Purchaser of its election or Purchaser's notice to Seller of
its election, this Agreement will be deemed amended, without any further action
on the part of any party, with respect to each affected Property, as follows:
(i) the definition of Properties will not include that
Property, except to the extent that any provision that is stated to survive the
termination of this Agreement would be applicable to a Property, as applicable,
and with respect to this Section 7.16 to the extent necessary to implement this
Section 7.16;
(ii) neither Seller nor any Subsidiary will have any
obligations with respect to the affected Property, nor will any covenant,
representation or warranty be deemed made with respect to the affected Property
except to the extent that any such covenant, representation or warranty is
stated to survive the termination of this Agreement, and Purchaser will not have
any rights or obligations under this Agreement with respect to the affected
Property;
(iii) such affected Property shall be deemed to be an
Excluded Property for purposes of this Agreement and, if applicable, the
definition of Assumed Indebtedness will be deemed amended to exclude any
Indebtedness relating to such Property;
(iv) the Purchase Price will be reduced by the allocable
purchase price of the that Property, as applicable, as set forth in the letter
agreement described in Section 7.7; and
(v) if any dropped Property is a Partnership Property,
then in connection with the requirements of the Assumed Indebtedness of the
Partnership, Seller and Purchaser will promptly agree upon the identity of
another Property that is being sold pursuant to this Agreement to substitute
into the Partnership and Seller will use commercially reasonable efforts
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to replace the dropped Property with such substitute Property as soon as
reasonably practicable and if necessary the Closing shall be delayed until such
substitution can be implemented, but in no event more than 90 days from the date
the substitute Property is identified, to permit the substitution of the
substitute Property in lieu of the dropped Property under the Assumed
Indebtedness related to the Partnership Property and to transfer the dropped
property to Seller or another Subsidiary that is not a Partnership. If Seller
has not effected that substitution before the scheduled Closing Date, Seller and
Purchaser will in good faith work towards a mutually acceptable alternative
structure or arrangement to accomplish the intent of the parties under this
Agreement, including consideration of the procedures in Section 9.3(d).
7.17. Delivery of Financial Statements. Seller agrees that, provided
Purchaser has executed and delivered any engagement letter as may be required by
PricewaterhouseCoopers LLP ("PWC"), Seller will commission and cause PWC, its
independent accountants, to provide Purchaser, at Purchaser's expense, with (a)
a combined statement of operations for the Purchased Assets for the year ended
December 31, 2000, together with the related balance sheet as of December 31,
2000, audited by PWC, (b) a combined statement of operations for the Purchased
Assets for the nine month period ended September 30, 2001, together with the
related balance sheet as of September 30, 2001, reviewed by PWC, (c) if
requested by Purchaser, (i) a combined statement of operations for the Purchased
Assets for the year ended December 31, 1999, together with the related balance
sheet as of December 31, 1999, audited by PWC, (ii) a combined statement of
operations for the Purchased Assets for the year ended December 31, 2001,
together with the related balance sheet as of December 31, 2001, audited by PWC,
and (iii) a combined statement of operations for the Purchased Assets for the
period ending on the Closing Date (or March 31, 2002 if earlier), together with
the related balance sheet as of such date, reviewed by PWC, and (d) a
"management's discussion and analysis" section comparing and explaining specific
line items in the foregoing statements. Such financial statements and related
information may be included in public filings made by Purchaser, with the
requisite consent of PWC, at the times required by, and to the extent required
by, applicable securities laws or rules or policies of the NYSE or, as
reasonably determined by Purchaser to be advisable in connection with an
offering of its securities.
7.18. Insurance and Other Matters. (a) From and after the Closing,
Seller will cause its Affiliates to cooperate with Purchaser to permit CFP,
CenterAmerica Capital, the CenterAmerica Venture Entities, Inwood and Xxxxxx'x
to pursue any claim under the liability insurance policies for those entities
existing before the Closing in respect of matters covered by those policies that
were incurred before the Closing and Seller will execute such documents and
other instruments and take such other actions reasonably requested by Purchaser
in connection therewith. Seller will not be obligated to make any payment to
Purchaser under Section 11.2 in respect of any such incurred matter (other than
in respect of any deductible applicable to the relevant policy or losses
excluded from coverage under the relevant policy) until Purchaser has submitted
the claim under the relevant insurance policy and the insurer under that policy
has denied coverage for that matter. If the insurer denies coverage, Purchaser
will assign its coverage claim to Seller in connection with any claim under
Section 11.2. From and after Closing, Purchaser will cause each of CFP,
CenterAmerica Capital, Inwood and Xxxxxx'x to cooperate with Seller in
connection with any claim under any insurance policy related to any Excluded
Liability and will execute such documents, pleadings, affidavits and other
instruments reasonably requested by Seller in connection with defending against
any claim that is an Excluded Liability.
56
(b) To the extent Seller and any Subsidiary have made claims under
their property casualty insurance policies relating to casualties occurring
before the date of this Agreement that have not been restored fully or fully
paid for before Closing, Seller and the applicable Subsidiary will deliver to
Purchaser promptly after receipt of any insurance proceeds the amount of those
proceeds less any reasonable costs of collection and any amounts expended by
Seller or the Subsidiary to restore the casualty not previously reimbursed under
the relevant insurance policy and Purchaser will assume the obligations to
restore and pay for work not fully paid before Closing. To the extent Seller has
previously collected insurance proceeds in respect of a casualty but has not
expended same or all of these proceeds to restore the casualty before closing,
Seller will deliver the remaining unspent proceeds (net of any reasonable costs
to collect the proceeds) to Purchaser and Purchaser will be deemed to have
assumed any contracts or agreements relating to the restoration of that casualty
and will perform Seller's obligations thereunder from and after the Closing. The
provisions of Section 7.18 shall survive Closing.
7.19. Xxxxxx'x and Inwood. (a) At Seller's election made by notice
to Purchaser at any time prior to 10 Business Days before Closing, in lieu of a
Transfer of the Partnership Interests described in Section 1.1(a)(ii)(G) and (H)
Seller may elect to sell to Purchaser fee simple title to the PPM Properties, in
which event the PPM Properties will be deemed Fee Properties for all purposes of
this Agreement and the Purchase Price shall be increased by $2.5 million. In
addition, at Seller's election made by notice to Purchaser at any time prior to
5 Business Days before Closing, in lieu of a Transfer of the Partnership
Interests described in Section 1.1(a)(ii)(G) and (H) Seller may elect to cause
each of the PPM Properties (including without limitation the Purchased Assets
and Assumed Liabilities related thereto but excluding any Excluded Liabilities)
to be contributed by Xxxxxx'x and Inwood, subject to the PPM Indebtedness to new
subsidiary limited partnerships or limited liability companies ("New Inwood" and
"New Xxxxxx'x," as applicable) having terms which are the same as the existing
partnerships and the interests in which would be distributed to the current
partners of Xxxxxx'x and Inwood in accordance with their partnership agreements,
in which event the partnership interests or limited liability company interests
distributed to Seller or its Subsidiaries will be deemed a Partnership Interest
and a Purchased Asset for all purposes of this Agreement.
(b) Unless Seller elects to sell to Purchaser fee simple title to
the PPM Properties under Section 7.19(a), Seller will use commercially
reasonable efforts to obtain and deliver to Purchaser an estoppel from the
outside partner in Xxxxxx'x and Inwood confirming the correctness and
completeness of the constituent organizational documents of Xxxxxx'x and Inwood,
that no other documents, instruments, agreements or certificates are in effect
that govern the relative rights and obligations of the partners, that such
constituent organizational documents have not been amended or modified and are
in full force and effect, and that the applicable Assigning Subsidiary is not in
breach or default under the Xxxxxx'x and Inwood Partnership Agreement, as
applicable nor to such outside partner's knowledge has any event occurred that
with the giving of notice or the passage of time, or both, would constitute a
breach or default by the applicable Seller Subsidiary thereunder. If Seller
obtains an estoppel from the outside partner, Seller's representations and
warranties made in Section 4.4 will terminate and be null and void but solely
with respect to those matters represented that are confirmed without exception
by the outside partner's estoppel.
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7.20. License. At Closing, Purchaser will be deemed to have granted
under this Section 7.20 for a period of 24 months following the Closing a
non-exclusive license to Seller and the Subsidiaries to use "Center America" or
derivations thereof in each such entity's name and in connection with owning,
managing, developing, redeveloping or marketing the Excluded Properties.
VIII. CASUALTY AND CONDEMNATION
8.1. In General. If, prior to the Closing Date, a Property is
destroyed or damaged by fire or other casualty or Seller receives notice of
condemnation or sale in lieu of condemnation of a Property, Seller will notify
Purchaser of that event and provide Purchaser with details of the extent of the
damage or condemnation, which details shall include information as to the Leases
that are impacted and Seller's restoration plans.
8.2. Minor Loss. Purchaser shall be bound to purchase the Purchased
Assets for the full Purchase Price as required by the terms hereof without
regard to the occurrence or effect of any damage to Properties or destruction of
improvements thereon or condemnation of any portion of a Property except as set
forth below, provided that a Significant Portion of no more than an aggregate of
5 Fee Properties and Partnership Properties are (a) damaged or destroyed or (b)
condemned in whole or part. Seller will not be obligated to repair or restore
such damage or destruction or condemned Property, but Seller will either (i) if
all insurance or condemnation proceeds have been received, credit to Purchaser
at Closing an amount equal to the amount of casualty insurance proceeds and
condemnation proceeds collected by Seller as a result of such damage or
destruction or condemnation plus the amount of any deductible payable under
Seller's insurance policies (not to exceed the amount of loss not covered by
insurance) and the amount of insurance proceeds that would have been collected
by Seller but for the application of any "aggregate limits" under the insurance
policies less any sums expended by Seller toward the restoration or repair of
the Properties or in collecting insurance or condemnation proceeds, or (ii)
credit to Purchaser at Closing an amount equal to the amount of casualty
insurance proceeds and condemnation proceeds collected by Seller plus the amount
of any deductible payable under Seller's insurance policies (not to exceed the
amount of loss not covered by insurance) and the amount of insurance proceeds
that would have been collected by Seller but for the application of any
"aggregate limits" under the insurance policies less any sums expended by Seller
toward restoration or repair of the Properties or in collecting insurance or
condemnation proceeds and give Purchaser an assignment of Seller's right to
receive insurance or condemnation proceeds if any portion of the insurance or
condemnation proceeds are not collected before the Closing less, to the extent
not previously deducted from the proceeds credited to Purchaser at Closing, any
sums expended before the Closing to repair or restore the Properties or to
collect insurance or condemnation proceeds. The proceeds of any rent insurance
paid in respect of any casualty will be apportioned between Seller and Purchaser
as if the same were Rentals, as and when received.
8.3. Major Loss. If a Significant Portion of more than an aggregate
of 5 Fee Properties and Partnership Properties are damaged or destroyed or
condemned (a "Major Loss"), then within 20 days after receipt of notice of the
damage or destruction or condemnation of a Significant Portion of more than an
aggregate of 5 Fee Properties and Partnership Properties, Purchaser must give
notice to Seller of its intention to close the transaction in accordance with
Section 8.2 as if a Major Loss had not occurred and receive the benefits of
Section 8.2 or request
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Seller to drop one or more of the affected Properties as set forth below. In no
event will Seller be obligated to repair or restore such damage or destruction
or condemnation. If Purchaser requests Seller to drop one or more Properties,
Seller will give notice to Purchaser within 10 days of receipt of Purchaser's
request of Seller's intention to: (a) drop one or more Properties of which a
Significant Portion is damaged or destroyed or condemned as provided in Section
7.16 (and Seller shall be required to drop Properties that are not Partnership
Properties securing the Assumed Indebtedness before dropping Properties that are
Partnership Properties securing the Assumed Indebtedness, and subject to the
foregoing shall be required to drop the Properties based on the highest
percentage of gross leaseable area which is damaged, destroyed or condemned with
the Property having the highest percentage of damaged, destroyed or condemned
gross leaseable area being dropped first, the Property having the second highest
percentage of damaged, destroyed or condemned gross leaseable area being dropped
second, and so on) until there are no more than an aggregate of 5 Fee Properties
and Partnership Properties of which a Significant Portion is damaged or
destroyed or condemned and receive the benefits of Section 8.2 or (b) elect not
to drop any Properties as set forth above such that a Major Loss will still
exist. If Seller fails to provide notice to Purchaser within such 10-day period,
Seller will be deemed to have elected to proceed in accordance with (b) above.
Within 5 days of receipt of Seller's notice or deemed election, if Seller elects
(or is deemed to have elected) to proceed in accordance with (b) above,
Purchaser may elect, by written notice to Seller, to either (x) terminate this
Agreement in whole, whereupon Purchaser shall be entitled to receive the Deposit
together with any interest and investment income earned thereon and thereafter
neither Seller nor Purchaser will have any further rights or obligations to the
other hereunder except for such obligations that expressly survive the
termination hereunder or (y) drop one or more Properties of which a Significant
Portion is damaged or destroyed or condemned as provided in Section 7.16 (and
Purchaser shall be required to drop the Properties subject to the same
limitations and on the same basis as Seller is required to drop them as provided
in clause (a) above) until there are no more than an aggregate of 5 Fee
Properties and Partnership Properties of which a Significant Portion is damaged
or destroyed or condemned and receive the benefits of Section 8.2 or (z) elect
to close the transaction in accordance with Section 8.2 as if a Major Loss had
not occurred. If Seller does not receive Purchaser's election within 5 days of
Purchaser's receipt of Seller's notice (or within 5 days of Seller's deemed
election) then Purchaser will be deemed to have elected to close the transaction
under clause (z) above in accordance with Section 8.2 as if a Major Loss had not
occurred.
8.4. Additional Matters. With respect to any Fee Property and
Partnership Property that Purchaser will acquire subject to the benefits of
Section 8.2:
(a) Restoration Plans. Seller will obtain Purchaser's approval,
which will not be unreasonably withheld, delayed or conditioned, concerning any
restoration, repair or re-construction plans for the Property. Notwithstanding
the foregoing or Section 6.1(h), Seller will be permitted to incur or enter into
an agreement to incur any amount necessary to effect emergency or necessary
repairs related to preservation of the Property or health and safety matters or
which are required by the terms of any lease, REA, loan document, or other
agreement to which Seller or any Subsidiary is a party.
(b) Settlement of Claims. Seller will allow Purchaser to
participate in the negotiations regarding the settlement of any claim for
insurance and condemnation proceeds and
59
will not settle or compromise any claims related to the damage, destruction or
condemnation under the relevant insurance policies or against a Governmental
Entity effecting the condemnation without Purchaser's consent, which consent
will not be unreasonably withheld, delayed or conditioned. Seller will provide
to Purchaser copies of any correspondence relating to any such claims and will
advise Purchaser of all material developments concerning such claims.
(c) Cooperation. Seller will cooperate with Purchaser to effect
the assignment of the right to receive insurance or condemnation proceeds to
Purchaser and will execute and deliver all such instruments as are reasonably
necessary to complete that assignment. This obligation will survive the Closing.
IX. CLOSING
9.1. Closing. Subject to the satisfaction or waiver of all of the
conditions to closing contained in Article IX hereof, the closing of the
Transfer (the "Closing") will take place at a date and time to be specified by
the parties (the "Closing Date"), which will be no later than the later of March
7, 2002 or the fifth Business Day after satisfaction or waiver of the conditions
set forth in Article IX (other than those conditions that by their nature are to
be satisfied at the Closing, but subject to the fulfillment or waiver of those
conditions), at Seller's election either the Houston, Texas or New York City
office of Xxxxx, Day, Xxxxxx & Xxxxx, unless another time, date or place is
agreed to in writing by the parties.
9.2. Conditions To Each Party's Obligation To Effect the Transfer.
The respective obligations of each party to effect the Transfer will be subject
to the satisfaction or waiver by each of Purchaser and Seller at or prior to the
Closing Date of the following conditions:
(a) Governmental and Regulatory Approvals. All consents, approvals
and actions of, filings with, and notices to, any Governmental Entity required
by Purchaser, Seller or any of the Assigning Subsidiaries to consummate the
Transfer and the other transactions contemplated by this Agreement, shall have
been obtained or made.
(b) Third Party Consents. Seller and Purchaser have obtained the
consents of third parties set forth on Schedule 9.2(b).
(c) No Injunction or Restraint. No judgment, order, decree or Law
entered, enacted, promulgated, enforced or issued by any court or other
Governmental Entity of competent jurisdiction or other legal restraint or
prohibition (collectively, "Restraints") shall be in effect preventing the
consummation of the Transfer; provided, however, that the terminating party
shall have used its reasonable best efforts to prevent the entry of and to
remove any such Restraints.
(d) Substitution of Dropped Properties. Any Partnership Property
dropped under Section 7.16 will have been replaced under the Assumed
Indebtedness with another Property as set forth in Section 7.16.
(e) Assumed Indebtedness. Subject to the delayed closing mechanism
for the Xxxxxxx Properties under Section 7.14(a), all conditions required by the
holders of the Assumed Indebtedness for Purchaser to assume the Assumed
Indebtedness shall have been satisfied,
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including delivery of all legal opinions, rating agency confirmations,
subordination of management agreements, and other instruments required by the
holders of the Assumed Indebtedness to be delivered by Purchaser.
9.3. Conditions To Obligations of Seller. The obligation of Seller
to effect the Transfer is further subject to satisfaction or waiver by Seller of
the following conditions:
(a) Representations and Warranties of Purchaser. The
representations and warranties of Purchaser set forth in this Agreement shall be
true and correct at and as of the Closing Date, as if made at and as of that
time (except to the extent expressly made as of an earlier date, in which case
as of that date), in all material respects and Seller will have received a
certificate (which may be qualified by knowledge to the same extent as the
representations and warranties of Purchaser are so qualified) signed on behalf
of Purchaser by an authorized officer of Purchaser, in that capacity, to that
effect.
(b) Performance of Covenants of Purchaser. Purchaser shall have
performed in all material respects all covenants required to be performed by it
under Section 3.3 hereof prior to the Closing. Purchaser shall have executed and
delivered all documents and instruments required to be executed and delivered by
it under this Agreement at the Closing, Purchaser shall have delivered payment
of the Purchase Price, and Purchaser shall not have breached in any material
respect any covenant that prevents Seller from fulfilling its obligations under
this Agreement or otherwise frustrates the closing of the transactions
contemplated under this Agreement.
(c) Closing Deliveries of Purchaser. Seller will have received
from Purchaser the following items:
(i) the Purchase Price (after application of the Deposit
plus any interest and other investment income thereon as provided in Section
2.1), after all adjustments are made at the Closing in accordance with this
Agreement including without limitation Section 2.4;
(ii) a counterpart original of the Lease Assignment and
Tenant Loan Assignment, duly executed by Purchaser;
(iii) a counterpart original of the Contract Assignment,
duly executed by Purchaser;
(iv) a written notice, in the form attached hereto as
Exhibit 9.3(c)(iv), executed by Purchaser and to be addressed and delivered to
the Tenants of the Fee Properties (including the Properties transferred under
Section 1.1(b)) by Purchaser and Seller or the applicable Assigning Subsidiary,
(i) acknowledging the sale of the applicable Fee Property to Purchaser (or the
transferee of the Fee Property if Purchaser makes the election in Section
1.1(b)), (ii) acknowledging that Purchaser has received and that Purchaser is
responsible for the Tenant Deposits (specifying the exact amount of the Tenant
Deposits) and (iii) indicating that rent should thereafter be paid to Purchaser
and giving instructions therefor (the "Tenant Notice Letters");
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(v) a counterpart original of the Ground Lease
Assignment, if any, duly executed by Purchaser;
(vi) a counterpart original of the Partnership Interest
Assignment, duly executed by Purchaser;
(vii) a counterpart original of the Partnership Amendments,
duly executed by Purchaser;
(viii) if applicable, a counterpart original of the
Indemnity Agreement in the form of Exhibit 6.4, duly executed by Purchaser;
(ix) any certificates or similar documents, if any,
required by a Governmental Entity in connection with the sale of the Purchased
Assets;
(x) a counterpart original of the Closing Statement duly
executed by Purchaser;
(xi) a counterpart original of the Transitional Services
Agreement, duly executed by Purchaser;
(xii) a counterpart original of the Closing Escrow
Agreement, duly executed by Purchaser; and
(xiii) a counterpart original of the Property Management and
Leasing Agreement duly executed by Purchaser.
Any such closing deliveries will be made with respect to the Fee Properties and
the Partnerships, or both, as applicable, in order to effect the Transfer.
(d) Substitution of Excluded Properties. The Properties described
in Schedule 7.5 will have been substituted for the Excluded Properties under the
Assumed Indebtedness provided the foregoing shall not be a condition to the
obligations of Seller to effect the Transfer if Purchaser has entered into
agreements reasonably satisfactory to Seller and Purchaser providing Seller with
all of the rights and benefits and burdening Seller with the related obligations
relating to the Excluded Properties remaining in the Partnerships at Closing
until such time as such substitution can be implemented.
9.4. Conditions To Obligations of Purchaser. The obligations of
Purchaser to effect the Transfer is further subject to satisfaction or waiver by
Purchaser of the following conditions:
(a) Representations and Warranties of Seller. Subject to Section
9.4 (f), the representations and warranties of Seller set forth in this
Agreement shall be true and correct at and as of the Closing Date, as if made at
and as of that time (except to the extent expressly made as of an earlier date,
in which case as of that date), in all respects and Purchaser will have received
a certificate (which may be qualified by knowledge to the same extent as the
representations and warranties of Seller are so qualified) signed on behalf of
Seller by an
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authorized officer of Seller, in that capacity, to that effect which shall be
deemed a representation and warranty of Seller as of the Closing Date.
(b) Performance of Covenants of Seller. Subject to Section 9.4
(f), Seller shall have performed in all material respects all covenants required
to be performed by it under this Agreement at or prior to the Closing Date.
(c) Absence of Seller Material Adverse Effect. There shall not
have occurred a Seller Material Adverse Effect.
(d) Closing Deliveries of Seller. Purchaser will have received
from Seller the following items:
(i) one or more special warranty deeds, as applicable,
substantially in the form attached hereto as Exhibit 9.4(d)(i) (the "Deed"),
duly executed and acknowledged by the Seller or applicable Assigning Subsidiary
for all Purchased Assets that are appropriately the subject of sale by such
instrument;
(ii) one or more bills of sale in the form attached hereto
as Exhibit 9.4(d)(ii) (the "Xxxx of Sale"), duly executed by Seller or the
applicable Assigning Subsidiary for all Purchased Assets that are appropriately
the subject of sale by such instrument;
(iii) one or more assignments of Seller's or the applicable
Assigning Subsidiary's interest, as lessor, in the Leases and the Tenant
Deposits in the form attached hereto as Exhibit 9.4(d)(iii) (the "Lease
Assignment"), duly executed by Seller or the applicable Assigning Subsidiary for
all Purchased Assets that are appropriately the subject of assignment by such
instrument;
(iv) one or more assignments of Seller's or the applicable
Assigning Subsidiary's interest in the Contracts and the Licenses and Permits in
the form attached hereto as Exhibit 9.4(d)(iv) (the "Contract Assignment"), duly
executed by Seller or the applicable Assigning Subsidiary for all Purchased
Assets that are appropriately the subject of assignment by such instrument;
(v) the Tenant Notice Letters, duly executed by Seller or
the applicable Assigning Subsidiaries;
(vi) a certificate in the form attached hereto as Exhibit
9.4(d)(vi) certifying that Seller or the applicable Subsidiary is not a "foreign
person" as defined in Section 1445 of the Internal Revenue Code of 1986, as
amended, as well as any other document required under applicable laws to be
executed by Seller or the applicable Assigning Subsidiary in connection with any
recordation and/or transfer tax applicable to the transaction contemplated by
this Agreement, duly executed by Seller or the applicable Assigning Subsidiary;
(vii) a counterpart original of the Closing Statement, duly
executed by Seller;
(viii) the Tenant Deposits, either (x) as part of an
adjustment to the Purchase Price, or (y) in the form of letters of credit from
Tenants of which Purchaser is the beneficiary;
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(ix) a schedule showing any changes as of 5 Business Days
prior to the Closing Date, to the Rent Roll and Schedule 4.5(c)-1;
(x) an assignment, if necessary, in form and substance
reasonably satisfactory to Purchaser of all rights to condemnation awards or
insurance proceeds, if any, relating to any Property and of the right to
prosecute and adjust all proceedings and claims in connection therewith, duly
executed by Seller or the applicable Assigning Subsidiary in accordance with
Sections 7.18 and Article VIII;
(xi) the Transitional Services Agreement, duly executed by
Seller;
(xii) an assignment and assumption of Partnership Interests
(the "Partnership Interest Assignment") in the forms attached hereto as Exhibits
9.4(d)(xii)(1), 9.4(d)(xii)(2), and 9.4(d)(xii)(3), duly executed by Seller or
the applicable Assigning Subsidiary;
(xiii) unless included in the Partnership Interest
Assignment and except as otherwise provided in Schedule 9.2(b), amendments of
the Partnership Agreement of each Partnership in form and substance reasonably
acceptable to Purchaser reflecting the assignment by Seller or applicable
Assigning Subsidiary of its Partnership Interest, the withdrawal of Seller or
the applicable Assigning Subsidiary as a partner or member, and the substitution
of Purchaser as a partner or member in the place and stead of Seller or the
applicable Assigning Subsidiary (and with any other references to CenterAmerica
Trust being changed to Purchaser) (the "Partnership Amendments"), duly executed
by Seller or the applicable Assigning Subsidiary;
(xiv) if applicable, an assignment and assumption of any
Ground Lease in form and substance reasonably acceptable to Purchaser, duly
executed by Seller or the applicable Assigning Subsidiary;
(xv) IRS Form 1099 duly executed by Seller or the
applicable Assigning Subsidiary;
(xvi) corporate resolutions authorizing the transactions
contemplated hereunder and execution of the closing documents, and certificates
of incumbency certifying the titles and signatures of the corporate officers
authorized to consummate the sale on behalf of Seller and the Assigning
Subsidiaries, or such other reasonable evidence of Seller's or the Assigning
Subsidiaries' power and authority;
(xvii) all original Leases, Contracts, Property Management
Agreements, Assumed Loan Documents, Assumed Liability Documents, Ground Leases,
Partnership Agreements, Licenses and Permits, Records and Plans, and all other
documentation relating to the Purchased Assets or the Real Estate Business in
Seller's or any Assigning Subsidiary's possession (which shall be made available
to Purchaser at Seller's principal office);
(xviii) the title affidavits attached hereto as Exhibit
6.1(p) and the other affidavits, documents and information set forth in Section
6.1(p);
(xix) any transferable bonds, warranties or guaranties
which are in any way applicable to the Properties, and are in Seller's or its
Subsidiaries' possession or control, together
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with an assignment thereof duly executed by Seller or the applicable Assigning
Subsidiary in form and substance reasonably acceptable to Purchaser;
(xx) an assignment of lease or documents of title for all
Vehicles duly executed by Seller or the applicable Assigning Subsidiary;
(xxi) any certificates or similar documents, if any,
required by any Governmental Entity in connection with the sale of the Purchased
Assets;
(xxii) an assignment of Seller's or the applicable Assigning
Subsidiary's interest in any loans to tenants (including all loan documents
related thereto) in the form of Exhibit 9.4(d)(xxii) (the "Tenant Loan
Assignment") duly executed by Seller or the applicable Assigning Subsidiary for
all Purchased Assets that are appropriately the subject of assignment by such
instrument;
(xxiii) the Closing Escrow Agreement duly executed by Seller;
(xxiv) UCC termination statements and release of lien
documents related to the Pledge of Partnership Interests reasonably satisfactory
to Purchaser with respect to the mezzanine debt held by Xxxxxx Financial
Corporation or its successors and assigns;
(xxv) a copy of the notice from CFP and CenterAmerica
Capital, to the extent required, to the holders of their Assumed Indebtedness
and any Person under a related cash management agreement that the mezzanine debt
held by Xxxxxx Financial Corporation or its successors and assigns has been
satisfied in full;
(xxvi) the Tenant estoppel certificates and Seller estoppel
certificates provided for in Section 6.3;
(xxvii) a certificate of Seller stating the principal balance
of the Assumed Indebtedness as of the date of Closing;
(xxviii) a certificate of Seller identifying the documents
evidencing each Lease (and all amendments and modifications thereto) for each
Tenant identified on Schedule 6.3 that failed to deliver an estoppel certificate
pursuant to Section 6.3;
(xxix) an updated list of Material Contracts as of a date no
more than 3 Business Days before the Closing Date;
(xxx) a letter from Seller directing its attorneys and
accountants who are in possession of any Records and Plans and any partnership
agreements and loan documents relating to the Partnerships to deliver copies
thereof to Purchaser upon request of Purchaser and at Purchaser's expense;
(xxxi) the Property Management and Leasing Agreement duly
executed by Seller; and
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(xxxii) all other documents reasonably required by Purchaser
in order to perfect the conveyance, transfer and assignment of the Properties or
of the other Purchased Assets, including without limitation, any assignments of
tax certiorari claims that are required pursuant to this Agreement and any
notices to third parties under REAs and Material Contracts.
Any such closing deliveries shall be made with respect to the Fee Properties and
the Partnership Interests, or both, as applicable to effect the Transfer after
giving effect to Purchaser's election under Section 1.1(b).
(e) Exercise of Option. CFP shall have timely exercised its first
option to extend the maturity date under that certain Loan Agreement dated as of
June 20, 2000 between CFP and Xxxxxx Financial Corporation or its successors and
assigns from July 1, 2002 to July 1, 2003 unless Purchaser has elected not to
assume CFP's Assumed Indebtedness pursuant to Section 7.14(b);
(f) Pre-Closing Threshold. For purposes of Sections 9.4(a) and
(b), the representations and warranties of Seller (other than the
representations in Section 4.4(a) and 4.4(e) as to which this Section 9.4(f)
shall not apply) will be deemed true and correct in all respects and Seller will
be deemed to have performed in all material respects all covenants required to
be performed by it under this Agreement at or prior to the Closing Date unless
the dollar amount of the Losses resulting from the breaches of representations
and warranties (without giving effect to any materiality qualification but
excluding any Individual Item) and covenants is more than $5,000,000.
(g) Third Party Consents. Seller has obtained the consents of
third parties set forth on Schedule 9.4(g).
(h) Substitution of Excluded Properties. The Properties described
on Schedule 7.5 will have been substituted for the Excluded Properties under the
Assumed Indebtedness.
X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER
10.1. Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of the parties at any time prior to
Closing, whereupon Seller shall return the Deposit, including any interest and
other investment income earned thereon, to Purchaser;
(b) by either Purchaser or Seller, if any Restraint having the
effects set forth in Section 9.2(c) shall be in effect and shall have become
final and nonappealable whereupon Seller shall return the Deposit, including any
interest and other investment income earned thereon, to Purchaser, provided that
the party seeking to terminate this Agreement pursuant to this Section 10.1(b)
shall have used its reasonable best efforts to prevent entry of and to remove
such Restraint;
(c) by either Seller or Purchaser, if the Transfer is not
consummated by March 31, 2002 or such later date as extended under Section 7.16
or to which the parties may agree in their
66
respective sole discretion (the "Drop Dead Date") whereupon Seller shall return
the Deposit, including any interest and other investment income earned thereon,
to Purchaser; provided, in the case of termination pursuant to this Section
10.1(c), the terminating party shall not have breached in any material respect
its obligations under this Agreement in any manner that shall have proximately
contributed to the occurrence of the failure referred to in this Section;
(d) by Purchaser as provided in Sections 3.4, 8.3, 10.2(b) and
10.3, whereupon Seller shall return the Deposit, including any interest and
other investment income earned thereon, to Purchaser;
(e) by either Seller or Purchaser, if more than 10 Properties have
been dropped from the Transfer under Sections 3.4, 7.14, 7.16, 8.3 and 10.2,
whereupon Seller shall return the Deposit, including any interest and other
investment income earned thereon, to Purchaser; and
(f) by either Purchaser or Seller, if the number of Properties
that are dropped from the Transfer under Sections 3.4, 7.14, 7.16, 8.3 and 10.2
that are owned by CFP and CenterAmerica Capital, as applicable, exceed the
number of Properties that may be substituted under the Assumed Indebtedness of
CFP and CenterAmerica Capital, as applicable, whereupon Seller shall return the
Deposit, including any interest and other investment income earned thereon, to
Purchaser.
10.2. Pre-Closing Breaches. (a) Purchaser will promptly provide
written notice to Seller upon having knowledge of any breach by Seller prior to
Closing of its representations and warranties set forth in this Agreement
(without giving effect to any materiality qualification but excluding any
Individual Item) and any of its covenants, but excluding in each case matters
constituting Material Title Defects or otherwise the subject of Section 3.4, and
any matter related to the physical, structural and environmental condition
(except a breach of Section 4.6) of the Properties (collectively "Pre-Closing
Breaches"). If quantifiable, such notice shall state Purchaser's reasonable
estimate of the dollar amount of Losses to Purchaser resulting from Pre-Closing
Breaches. If the aggregate amount of any Losses attributable to Pre-Closing
Breaches is equal to or less than $5,000,000, then Purchaser shall be required
to proceed to Closing without any reduction in, abatement of or credit against
the Purchase Price on account of the Pre-Closing Breaches, but the Pre-Closing
Breaches shall be deemed to survive Closing and the Losses related thereto shall
be subject to indemnification by Seller subject to the provisions of Article XI.
If the aggregate amount of Losses resulting from Pre-Closing Breaches is greater
than $5,000,000, Seller may, in its sole discretion by notice to Purchaser,
elect any one of the following:
(i) drop one or more of the Properties which are affected
by the Pre-Closing Breaches such that after dropping such Properties the Losses
resulting from any remaining Pre-Closing Breaches is equal to or less than
$5,000,000;
(ii) reduce the Purchase Price by the excess of (x) the
aggregate amount of Losses resulting from Pre-Closing Breaches over (y)
$5,000,000, and proceed to the Closing;
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(iii) cure prior to Closing one or more Pre-Closing
Breaches such that the aggregate amount of Losses resulting from all remaining
uncured Pre-Closing Breaches is equal to or less than $5,000,000; or
(iv) cure prior to Closing certain of the Pre-Closing
Breaches and/or reduce the Purchase Price and/or drop one or more Properties
affected by the Pre-Closing Breaches such that the sum of the cost to cure such
Pre-Closing Breaches plus such decrease in the Purchase Price plus the Losses
resulting from Pre-Closing Breaches and which are attributable to such dropped
Properties equals the amount by which the Losses resulting from such Pre-Closing
Breaches exceeds $5,000,000.
(b) If the aggregate amount of Losses resulting from Pre-Closing
Breaches greater than $5,000,000 and Seller does not make any of the elections
described in Section 10.2(a)(i)-(iv) prior to Closing, Purchaser will have the
right to elect any one of the following: (i) drop one or more Properties which
are affected by the Pre-Closing Breaches such that after dropping such
Properties the Losses resulting from any remaining Pre-Closing Breaches is equal
to or less than $5,000,000 (in which event the remaining Pre-Closing Breaches
shall be deemed to survive the Closing and the Losses related thereto shall be
subject to indemnification by Seller subject to the provisions of Article XI),
(ii) terminate this Agreement pursuant to Section 10.1(d), or (iii) proceed to
Closing without any reduction in, abatement of or credit against the Purchase
Price on account of the Pre-Closing Breaches and Purchaser will be deemed to
have waived Pre-Closing Breaches if and only to the extent that such Pre-Closing
Breaches cause the aggregate amount of any Losses attributable to Pre-Closing
Breaches to exceed $5,000,000 and such Pre-Closing Breaches shall not survive
Closing and the Losses related thereto shall not be subject to indemnification
by Seller under Article XI.
(c) Notwithstanding Section 10.2(a), if Seller elects to drop a
Property pursuant to Section 10.2(a) then within 5 Business Days of receipt of
notice from Seller of such election Purchaser may elect by notice to Seller to
waive the dropping of such Property in which case such Property shall not be
dropped and any Pre-Closing Breaches relating to such Property will be deemed to
have been waived by Purchaser if and only to the extent that such Pre-Closing
Breaches when added to all other Pre-Closing Breaches cause the aggregate amount
of any Losses attributable to Pre-Closing Breaches to exceed $5,000,000. Any
such Pre-Closing Breaches that are waived by Purchaser shall not survive Closing
and the Losses related thereto shall not be subject to indemnification by Seller
under Article XI.
(d) In the event Seller or Purchaser has the right to drop more
than one Property under this Section, it shall be required to drop Properties
that are not Partnership Properties securing the Assumed Indebtedness before
dropping Properties that are Partnership Properties securing the Assumed
Indebtedness.
10.3. Defaults and Remedies. (a) Notwithstanding anything to the
contrary contained in this Agreement, if the Closing does not occur by reason of
any Seller default (other than Pre-Closing Breaches with are governed by Section
10.2), Purchaser as its sole remedy may elect any one of the following:
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(i) terminate this Agreement and receive the return of
the Deposit, including all interest and other investment income earned thereon,
at which time this Agreement will be null and void and neither party will have
any rights or obligations under this Agreement, except for the provisions that
are expressly stated to survive the termination of this Agreement; or
(ii) xxx for specific performance of Seller's obligations
under this Agreement.
Except as provided in this Section 10.3 and Section 11.2, Purchaser will have no
other remedy or right to seek any other damages at law or remedy in equity with
respect to such default. It is understood and agreed that Purchaser shall have
the right of injunctive relief under Section 12.7 to enforce Seller's or a
Subsidiaries' obligations hereunder.
(b) Notwithstanding anything to the contrary contained in this
Agreement, if (i) Purchaser shall have failed to pay the Purchase Price at the
Closing or if Purchaser has failed to satisfy Section 9.3(b) or (ii) if any of
Purchaser's representations or warranties set forth in this Agreement shall not
be true, correct and complete on the Closing Date as if made at and as of that
time (except to the extent expressly made as of an earlier date, in which case
as of that date), in all material respects, Seller's sole and exclusive remedy
will be to terminate this Agreement and to receive the Deposit, together with
all interest and other investment income earned thereon, as liquidated damages,
at which time this Agreement will be null and void and neither party shall have
any rights or obligations under this Agreement, except for such provisions that
are expressly stated to survive the termination of this Agreement. Seller and
Purchaser acknowledge and agree that (i) the Deposit and any interest and other
investment income earned thereon is a reasonable estimate of and bears a
reasonable relationship to the damages that would be suffered and costs incurred
by Seller as a result of having withdrawn the Real Estate Business and Purchased
Assets from sale and the failure of Closing to occur due to a default of
Purchaser under this Agreement; (ii) the actual damages suffered and costs
incurred by Seller as a result of such withdrawal and failure to close due to a
default of Purchaser under this Agreement would be extremely difficult and
impractical to determine; (iii) Purchaser seeks to limit its liability under
this Agreement to the amount of the Deposit and any interest and other
investment income earned thereon in the event this Agreement is terminated and
the transaction contemplated by this Agreement does not close due to a default
of Purchaser under this Agreement; and (iv) the Deposit and any interest and
other investment income earned thereon shall be and constitutes valid liquidated
damages; provided, however, Purchaser and Seller agree that the liquidated
damages do not apply to any indemnity obligation of Purchaser under this
Agreement that survives termination of this Agreement.
10.4. Effect of Termination. In the event of termination of this
Agreement by either Seller or Purchaser as provided in Section 10.1, 10.2(b) or
10.3, this Agreement will forthwith become void and have no further effect,
without any liability or obligation on the part of Purchaser or Seller (other
than Sections 3.2 and 3.3, the last sentence of Section 7.1, Sections 10.3,
11.2(b) and 11.3(b) and this Section 10.4 and Article XII (including without
limitation the obligation to pay for title insurance cancellation fees and the
premium for the Environmental Insurance Policy under Section 12.9), which
provisions survive such termination).
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10.5. Amendment. This Agreement may be amended by the parties in
writing by applicable corporate or partnership action at any time before the
Closing Date. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
10.6. Extension; Waiver. At any time prior to the Closing Date, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other party, (b) waive any inaccuracies in the representations
and warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions of the other party contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise will not constitute a waiver of those rights.
XI. SURVIVAL; INDEMNIFICATION
11.1. Survival of Representations and Warranties. The
representations and warranties of the parties to this Agreement shall survive
the Closing Date for a period of 365 days following the Closing Date except for
those in Sections 1.1(b), 4.4(a), 4.10 and 4.24, which shall survive
indefinitely.
11.2. Indemnification by Seller. (a) From and after the Closing
Date, Seller shall, subject to the provisions of this Article XI, indemnify,
defend and hold harmless Purchaser and its subsidiaries and their respective
officers, directors, employees, agents, representatives, successors and
permitted assigns (collectively, the "Purchaser Indemnitees"), from and against
any and all actions, proceedings, costs, damages (excluding consequential and
other indirect damages other than diminution in value of the Purchased Assets
resulting from an event subject to indemnification hereunder), claims, losses,
liabilities (absolute and contingent), fines, penalties, payments, costs and
expenses (including reasonable counsel fees, interest, penalties and
disbursements, but excluding any costs, damages, claims, liabilities, fines,
penalties, payments, costs and expenses to the extent that an indemnitee
recovers with respect thereto pursuant to any insurance policy) (collectively,
"Losses"), that may be asserted against or suffered or incurred by Purchaser
Indemnitees arising out of, or relating to, any breach of any representation or
warranty other than the representations and warranties in the last sentence of
Section 1.1(b) and in Sections 4.4(a), 4.10 and 4.24(without regard to any
materiality qualification but excluding any Individual Item), covenant or
agreement (excluding Seller's obligation to pay Entity Level Taxes under Section
7.12(b) and Seller's obligations under Section 6.7) by Seller made in this
Agreement or any document or instrument delivered pursuant hereto (including any
Seller estoppel delivered under Section 6.3) or any Excluded Liabilities
(excluding those described in Sections 1.3(f), (g), (i) and (l), and excluding
any other Excluded Liability related to Xxxxxx'x and Inwood). This Section 11.2
will include Pre-Closing Breaches that are not waived or cured and survive
Closing pursuant to this Agreement.
(b) Seller shall indemnify and hold harmless Purchaser Indemnitees
from and against any and all Losses that may be asserted against or suffered or
incurred by Purchaser Indemnitees arising out of, or relating to, all brokers
and finders (including Xxxxxx Xxxxxxx Realty Incorporated) claiming by, through
or under Seller and in any way relating to the sale and
70
purchase of the Purchased Assets pursuant to this Agreement, including, without
limitation, reasonable attorneys' fees and disbursements incurred by Purchaser
Indemnitees in connection with such Losses. The foregoing indemnification shall
not apply to Lease Expenses which shall be governed by Section 2.4.
(c) Seller shall indemnify and hold harmless the Partnerships
(excluding the CenterAmerica Venture Entities) and Purchaser Indemnitees from
and against any and all Losses that may be asserted against or suffered or
incurred by the Partnerships (excluding the CenterAmerica Venture Entities) and
Purchaser Indemnitees arising out of or resulting from all litigation pending
against Seller and its Subsidiaries and the Partnerships (but excluding the
CenterAmerica Venture Entities) at the Closing (including without limitation the
litigations identified on Schedule 4.3 but excluding any claims asserted by
Xxxxxx Enterprises, Inc. relating to the Paseo del Norte Property). Seller may
assume the defense of those claims pursuant to Section 11.4(b)
(d) Seller shall indemnify and hold harmless the Partnerships and
Purchaser Indemnitees from and against any and all Losses that may be asserted
against or suffered or incurred by the Partnerships or Purchaser Indemnitees
arising out of, or relating to, any breach of Seller's representations and
warranties in the last sentence of Section 1.1(b) and in Sections 4.4(a), 4.10
and 4.24, the Excluded Liabilities described in Sections 1.3(f), (g) and (i),
any Excluded Liability described in Section 1.3(l) and any other Excluded
Liability related to Xxxxxx'x and Inwood (unless (x) Seller Transfers fee simple
title to the PPM Properties to Purchaser under Section 7.19 or (y) Seller
contributed the PPM Properties to new limited partnerships or limited liability
companies (however if Seller is able to obtain the partner estoppel described in
Section 7.19 then the liability relating to Xxxxxx'x and Inwood to be subject to
indemnification hereunder shall only be the Excluded Liability described in
Section 1.3(l)), and Seller's obligations to pay Entity Level Taxes under
Section 7.12(b) and Seller's obligations under Section 6.7.
11.3. Indemnification by Purchaser. (a) From and after the Closing
Date, Purchaser, subject to the provisions of this Article XI, shall indemnify,
defend and hold harmless Seller and its Subsidiaries and their respective
members, partners, managers, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the "Seller
Indemnitees"), from and against any and all Losses that may be asserted against
or suffered or incurred by the Seller Indemnitees arising out of, or relating
to, any breach of any representation, warranty, covenant or agreement on the
part of Purchaser made in this Agreement or any document or instrument delivered
pursuant hereto, any Assumed Liabilities, or any action or omission Seller or
Subsidiary has taken or omitted at Purchaser's direction under Section 1.7, or
any violation or alleged violation of federal or state securities laws resulting
from the disclosure of or omission of information in any securities filing or
offering document of Purchaser concerning Seller, the Subsidiaries or MSREF.
(b) Purchaser shall indemnify and hold harmless Seller Indemnitees
from and against any and all Losses that may be asserted against or suffered or
incurred by Seller Indemnitees arising out of, or relating to, all brokers and
finders (including Xxxxxxx Xxxxx Xxxxxx, Inc.) claiming by, through or under
Purchaser and in any way relating to the sale and purchase of the Purchased
Assets pursuant to this Agreement, including, without limitation, reasonable
71
attorneys' fees and disbursements incurred by Seller Indemnitees in connection
with such Losses. The foregoing indemnification shall not apply to Lease
Expenses which shall be governed by Section 2.4.
11.4. Notice and Resolution of Claims.
(a) Notice. Each Person entitled to indemnification pursuant to
Section 11.2 or 11.3 (an "Indemnitee") shall give written notice to the
indemnifying party or parties from whom indemnity is sought (the "Indemnifying
Party"), promptly after obtaining knowledge of any claim that it may have under
Section 11.2 or 11.3, as applicable. The notice shall set forth in reasonable
detail the claim and the basis for indemnification. Failure to give the notice
in a timely manner shall not release the Indemnifying Party from its obligations
under Section 11.2 or 11.3, as applicable, except to the extent that the failure
materially prejudices the ability of the Indemnifying Party to contest that
claim.
(b) Defense of Third Party Claims. If a claim for indemnification
pursuant to Section 11.2 or 11.3 shall arise from any action that would
reasonably be expected to result in an indemnifiable claim from a third party (a
"Third Party Claim"), the Indemnifying Party may assume the defense of the Third
Party Claim, provided the Indemnifying Party proceeds with diligence and in good
faith with respect thereto. If the Indemnifying Party assumes the defense of the
Third Party Claim, the defense shall be conducted by counsel chosen by the
Indemnifying Party, which shall be reasonably acceptable to Indemnitee, provided
that the Indemnitee shall retain the right to employ its own counsel and
participate in the defense of the Third Party Claim which shall be at its own
expense unless (i) the Indemnitee is advised by counsel reasonably satisfactory
to the Indemnifying Party, that use of counsel of the Indemnifying Party's
choice would be expected to give rise to a conflict of interest, (ii) the
Indemnifying Party shall not have employed counsel to represent the Indemnitee
within a reasonable time after notice of the assertion of any such claim or
institution of any such action or proceeding, or (iii) the Indemnifying Party
shall authorize the Indemnitee in writing to employ separate counsel at the
expense of the Indemnifying Party. In no event shall the Indemnifying Party be
obligated to pay the fees and expenses of more than one counsel (other than
local counsel) for all Indemnified Parties with respect to any claim indemnified
under this Article XI. Notwithstanding the foregoing provisions of this Section
11.4(b) but subject to Section 11.2(c), (i) no Indemnifying Party shall be
entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnitee's prior written consent unless
as part of the settlement the Indemnitee is released from all liability with
respect to the Third Party Claim and the settlement does not impose any
equitable remedy on the Indemnitee, adversely affect the Indemnitee's business
or require the Indemnitee to admit any wrongdoing, and (ii) no Indemnitee shall
be entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnifying Party's prior written
consent unless as part of the settlement the Indemnifying Party is released from
all liability with respect to the Third Party Claim and the settlement does not
impose any equitable remedy on the Indemnifying Party, adversely affect the
Indemnifying Party's business or require the Indemnifying Party to admit any
wrongdoing.
11.5. Limitations on Liability. (a) Seller's obligations to
indemnify the Purchaser Indemnitees for any Losses pursuant to Section 11.2(a)
(i) shall not be effective unless the
72
aggregate amount of all Losses (including Losses related to Pre-Closing
Breaches, but excluding any Losses related to Pre-Closing Breaches that are
cured by Seller prior to Closing or which are cured by a reduction in the
Purchase Price or Losses relating to Material Title Defects and the physical and
structural condition of the Properties) exceeds $5,000,000 and then only to the
extent of such excess (the "Deductible") and (ii) in no event shall Seller's
liability, in the aggregate, under Section 11.2(a) exceed in the aggregate
$10,000,000 less the sum of the amount of any reduction in the Purchase Price
under Section 10.2(a) to cure Pre-Closing Breaches and any amount expended by
Seller to cure prior to Closing any Pre-Closing Breaches (the "Cap"). The
provisions of this Section 11.5(a) and Section 11.5(b) below shall not apply to
Sections 11.2(b), (c) or (d).
(b) No party shall be entitled to indemnification under Section
11.2(a) unless the indemnification notice is delivered to the Indemnifying Party
on or before the date that is 365 days following the Closing Date. Accordingly,
on the 366th day following the Closing, Seller and its Subsidiaries on the one
hand, and Purchaser on the other hand, shall be fully discharged and released
(without the need for any separate release or other documentation) from any and
all liability or obligation to the other party or any successor or assign with
respect to indemnification under Section 11.2(a), except solely for those
matters that are then the subject of a pending notice of claim delivered on or
prior to such date.
(c) Notwithstanding anything in this Agreement to the contrary,
Purchaser agrees that it will not make any claim for indemnification hereunder
by reason of any breach of the representations and warranties of Seller in
Section 4.6 unless and until (i) Purchaser has timely presented a claim to the
insurer under the Environmental Insurance Policy in accordance with the terms
and conditions thereof and (ii) if the insurer has rejected such claim, either
Purchaser has obtained a judgment against the insurer on such claim in a court
of competent jurisdiction and such judgment has not been satisfied by the
insurer within 60 days after the entry thereof or there has been a judicial
determination that the insurer has no liability for such claim under the
Environmental Insurance Policy. If Purchaser recovers any amounts from Seller
and thereafter obtains any recovery from the insurer it shall refund such
recovery to Seller (in an amount up to, but not in excess of, the amounts paid
by Seller if same constituted payment in full of Purchaser's claim).
11.6. Exclusive Remedy. The provisions of this Article XI shall
constitute the sole and exclusive remedy of Purchaser, on the one hand, and
Seller, on the other, for any Losses suffered by either of them from and after
the Closing on account of any breach by the other of any representations,
warranties, covenants or agreements contained in this Agreement or any document
or instrument delivered pursuant hereto (including any Seller estoppel delivered
under Section 6.3), except with respect to payment obligations under Article II
and the indemnity obligations under Sections 1.5, 2.7, 3.3 and 6.4.
Notwithstanding the foregoing, the remedy of specific performance will be
available in respect of the following covenants that survive Closing: the last
sentence of Section 2.4(b)(v) and Sections 1.7, 6.1(s), 6.1(v), 6.7, 7.2(iv),
7.18 and 8.4(c).
11.7. Closing Escrow. On the Closing Date, as collateral security
for the performance of Seller's indemnification obligations under this Article
XI, Seller shall deposit into escrow with Escrow Holder cash or a letter of
credit in form and substance acceptable to Purchaser in the
73
amount of the Cap to be held in escrow for the period of time beginning on the
Closing Date through the period ending on the later of (a) 365 days after the
Closing Date or (b) the date on which all claims timely made pursuant to this
Agreement have been resolved or otherwise disposed. Seller may substitute a
letter of credit in form and substance acceptable to Purchaser for any cash held
by the Escrow Holder at any time. The amount held in escrow shall not be reduced
by any insurance proceeds received by Seller or any Subsidiary. In connection
therewith, Seller and Purchaser will execute an escrow agreement (the "Closing
Escrow Agreement") with Escrow Holder, in the form attached as Exhibit 11.7-1.
In addition, on the Closing Date to secure the performance of Seller's
indemnification obligations under Sections 11.2(c) and (d), Seller or any
Subsidiary shall cause MSREF II to deliver to Purchaser a guaranty of MSREF II
in the form of Exhibit 11.7-2.
XII. GENERAL PROVISIONS
12.1. Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be delivered
personally, sent by overnight courier (providing proof of delivery) to the
parties or sent by fax (providing confirmation of transmission) at the following
addresses or fax numbers (or at such other address or fax number for a party as
will be specified by like notice):
if to Seller, to:
CenterAmerica Property Trust, L.P.
0000 Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
The Xxxxxx Xxxxxxx Real Estate Fund II, L.P.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Telecopy: (000) 000-0000
and
Xxxxx, Day, Xxxxxx & Xxxxx
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
74
if to Purchaser to:
New Plan Excel Realty Trust, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
All notices will be deemed given only when actually received.
12.2. Interpretation. When a reference is made in this Agreement to
a Section, Exhibit or Schedule such reference will be to a Section, Exhibit or
Schedule of or to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they will be deemed to be followed by the words "without
limitation." No provision of this Agreement will be interpreted in favor of, or
against, any of the parties to this Agreement by reason of the extent to which
such party or its counsel participated in the drafting thereof or by any reason
of the extent to which such provision is consistent with any prior draft hereof.
12.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. This Agreement may be executed by
facsimile signature.
12.4. Entire Agreement; No Third-Party Beneficiaries. This Agreement
and the Schedules and Exhibits attached hereto and the documents and instruments
delivered and to be delivered hereunder constitute the entire agreement of the
parties and supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter of this Agreement,
including the letter of intent dated November 6, 2001 from Purchaser and
accepted by the general partner of MSREF II. Notwithstanding the foregoing, the
Confidentiality Agreement and Access Agreement will continue in all respects.
This Agreement shall not confer any rights or remedies upon any Person other
than the parties hereto, the Persons entitled to indemnification hereunder, and
in each case their respective successors, heirs, legal representatives and
permitted assigns.
12.5. Governing Law. This Agreement will be governed by, and
construed in accordance with, the Laws of the State of New York, regardless of
the Laws that might otherwise govern under applicable conflicts of law
principles thereof.
75
12.6. Assignment. Neither this Agreement, nor any of the rights,
interests or obligations under this Agreement, may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other party. Notwithstanding the foregoing,
Purchaser shall have the right to designate any Affiliate to take title to any
or all of the Purchased Assets by notice to Seller given at least 20 days prior
to Closing (45 days if Purchaser intends to designate an Affiliate other than a
wholly owned Affiliate to take title to the Partnership Interest in
CenterAmerica Venture or Xxxxxx'x and Inwood or any Purchased Assets subject to
any Assumed Indebtedness or any other Purchased Asset requiring Seller to obtain
a third party consent to the transfer thereof) provided there is no increase in
the costs borne by Seller under Section 12.9, and provided further Purchaser
will remain liable to Seller with respect to all liabilities and obligations to
be assumed by the transferee with respect to such Purchased Assets and Purchaser
will guarantee the obligations of those Affiliates to the other parties to the
Assumed Liabilities and Assumed Indebtedness if so requested if and to the
extent Purchaser would have been liable to such other party for the Assumed
Indebtedness and Assumed Liabilities had Purchaser not designated an Affiliate
to take title to the Purchased Asset under this Section 12.6. Subject to the
foregoing, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
12.7. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or in any New York state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself (without
making such submission exclusive) to the personal jurisdiction of any federal or
state court sitting in Manhattan, New York in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement and
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court.
12.8. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
12.9. Expenses. Except as provided in this Section 12.9, each party
will bear its own costs and expenses related to negotiation and execution of
this Agreement, and obtaining third party consents to the performance of that
party's obligations under this Agreement. Purchaser will be responsible for all
fees and costs of Xxxxxxx Xxxxx Barney and any other financial advisor to
Purchaser, and Seller will be responsible for the fees and costs of Xxxxxx
Xxxxxxx Realty Incorporated and any other financial advisor to Seller. Purchaser
will be responsible for all diligence costs and inspection fees, including
without limitation the costs of environmental
76
and engineering reviews and audits, appraisals, accounting and other financial
reviews. Purchaser will be responsible for any reasonable fees, costs and
expenses paid to lenders and their counsel in obtaining consents for any debt
assumptions, modifications or waiver related to the Assumed Indebtedness and any
required ratings confirmations and the cost of obtaining or extending any
interest rate cap agreement related to the Xxxxxx Financial Corporation (or its
successors and assigns) loan to CFP. Purchaser will be responsible for
prepayment penalties, bank fees and other associated costs to prepay CFP's
Assumed Indebtedness if Purchaser elects to require Seller to prepay CFP's
Assumed Indebtedness under Section 7.14(b). Seller will be responsible for all
costs and expenses related to (i) prepayment penalties, bank fees and other
associated costs to remove and discharge liens which Seller is obligated to
discharge hereunder, (ii) the release of the Excluded Properties from the lien
securing the Assumed Indebtedness and the substitution under that financing of
the Properties described on Schedule 7.5 for the Excluded Properties and (iii)
the receipt of any necessary lender consent relating to the JV Indebtedness and
PPM Indebtedness. Seller and Purchaser will each pay one-half of (x) any
transfer taxes and recording fees and (y) any premiums and other charges and
fees including for endorsements for non-imputation and to remove the survey
exception or, if applicable, any cancellation fees for the Title Policies.
Purchaser will pay the cost for any Lender's policy of title insurance and
Seller will have no responsibility for obtaining or paying for same. Seller will
have no responsibility for obtaining or paying for any surveys. Seller will pay
or reimburse Purchaser $375,000 towards the cost of the Environmental Insurance
Policy. Purchaser will use reasonable efforts to have the Environmental
Insurance Policy provide for payment of all or substantially all of the premium
for the Environmental Insurance Policy at Closing.
12.10. No Recordation. Seller and Purchaser agree that neither this
Agreement nor any memorandum or notice thereof shall be recorded and Purchaser
agrees (a) not to file any notice of pendency or other instrument (other than a
judgment or lis pendens filed by Purchaser in connection with its enforcement of
its rights hereunder) against any of the Properties or any portion thereof in
connection herewith, and (b) to indemnify Seller and the Seller Subsidiaries
against all costs, expenses and damages, including without limitation,
reasonable attorneys' fees and disbursements incurred by the Seller and Seller
Subsidiaries by reason of the filing by Purchaser of such notice of pendency or
other instrument.
12.11. Limitation of Trust Liability. Seller is a Delaware limited
partnership whose sole general partner is a Texas real estate investment trust
and, in accordance with such general partner's declaration of trust, notice is
hereby given that neither the trustees, officers, employees nor shareholders of
the general partner of Seller assume any personal liability for obligations
entered into by or on behalf of Seller.
[REMAINDER OF PAGE LEFT BLANK]
77
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized all as of the date first
written above.
CENTERAMERICA PROPERTY TRUST, L.P.
By: HHC Holdings REIT, its general partner
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Trust Manager
-----------------------------------
CENTERAMERICA DEVELOPMENT COMPANY, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Authorized Representative
-----------------------------------
CFP, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Authorized Representative
-----------------------------------
HHC FINANCE, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Authorized Representative
-----------------------------------
HHC FINANCE, L.P.
By: Center Finance SPC, Inc., its general
partner
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Authorized Representative
-----------------------------------
78
CFP VENTURE I, L.P.
By: CFP Venture, Inc., its general partner
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
-----------------------------------
Title: Authorized Representative
-----------------------------------
NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
-----------------------------------
79
EXHIBIT A-1
PROPERTIES
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
XX0 Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
JV1 Atlantic Plaza Satellite Beach Florida
XX0 Xxx Xxxxxx - Xxxxx Xxxx Xxxxxxx Xxxxx
CP3 Beltway South Houston Texas
XX00 Xxxxx Xxxxxxx Xxxxxxx Xxxxx
CP4 Braes Link Houston Texas
CP5 Braes Oaks Houston Texas
CP6 Braesgate Houston Texas
XX0 Xxxxxxx Xxxx Xxxxxxx Xxxxxxx Xxxxx
CP8 Broadway Houston Texas
CP9 Xxxxx Square Bryan Texas
CP10 Carmel Village Corpus Christi Texas
CP11 Cedar Bellaire Bellaire Texas
XX00 Xxxxxxxxx Xxxxxxx (x/x/x Xxxxxxxx Xxxxxxx) Dallas Texas
XX00 Xxxxx Xxxx Xxxxxx Xxxxx Xxxxxxx Texas
CP92 Coconut Creek Coconut Creek Florida
XX00 Xxxxxxxxxx Xxxxxxxx Xxxxx
CP16 Xxxxxxxxx Plaza Annex College Station Texas
CP17 Xxxxxxxxx Plaza I College Station Texas
CP18 Xxxxxxxxx Plaza II College Station Texas
CP19 Downtown Publix Stuart Florida
XX00 Xxxxxx Xxxx Xx. Xxxxxxxxxx Xxxxxxx
XX00 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xx Xxxxxx Xxxxxxxx Xxxxx
CP22A El Camino II Bellaire Texas
CP23 Five Points Corpus Christi Texas
i
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
JV2 Flamingo Falls Pembroke Pines Florida
CP24 Fondren Houston Texas
XX00 Xxxxxx Xxxxx Xxxx Xxxxx Xxxxx
CP26 Friendswood Square Friendswood Texas
JV3 Xxxxxxx Central Village Bedford Texas
CP27 Hearthstone Corners Houston Texas
CP28 Xxxxxxxx Xxxxxxx Xxxx Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx
CP29 Huntington Village Houston Texas
CP30 Iberia Plaza New Iberia Louisiana
CP67 Inwood Forest Houston Texas
CP31 Jacksonian Plaza Jackson Mississippi
CP32 Xxxx Xxxxx Dallas Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxxx Xxxxx
XX00 Xxxxxx Xxxxxxx Xxxxxxx Xxxxx
XX00 Xxxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xxxxx Xxxxxx Xxxxxxx Xxxxx
CP37 Xxxxxx'x Meadow Stafford Texas
CP94 Xxxxxxxxx Crossing El Paso Texas
XX00 Xxxxx Xxxxxx Xxxxxx Xxxxx
JV4 Ladera Albuquerque New Mexico
XX00 Xxxxx Xxxxx Xxxxxxxxx Xxxxx
CP39A Xxxxx Plaza II Rosenberg Texas
CP40 Lazybrook Houston Texas
XX00 Xxxxxx Xxxx Xxxxxx Xxxx Texas
XX00 Xxxx Xxxxx Xxxxxx Xxxxxxx Xxxxx
JV5 Mableton Walk Mableton Georgia
XX00 Xxxxxxxxx Xxxx Xxxxxxx Xxxxx
JV6 Marketplace at Wycliffe Lake Worth Florida
XX00 Xxxxxxxxxxx Xxxx Xxxxx Texas
ii
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
CP44 Merchants Park Houston Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxx Texas
JV7 Mint Hill Festival Charlotte North Carolina
CP46 Xxxxx Shores Fort Xxxxx Florida
XX00 Xxxxx Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
XX00 Xxxxx 00 Xxxxx (x/x/x Xxxxx Xxxxxx) Houston Texas
XX00 Xxxxx Xxxxx Xxxxxxx Xxxxxx Xxxx Xxxxx
CP50 Northgate Houston Texas
XX00 Xxxxxxxxxx Xxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxxx Xxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx
CP54 Northwood Houston Texas
JV13 Odessa - Winwood Odessa Texas
CP93 Old Egypt Conroe Texas
CP55 Orange Grove Houston Texas
XX00 Xxxx Xxxxx Xxxxxxx Xxxx Xxxxx
XX00 Xxxxxxxx Xxxxxx Xxxx Xxxx Xxxxx
CP58 Parktown East Deer Park Texas
CP59 Parkview East Pasadena Texas
XX00 Xxxxxxxx Xxxx Xxxxxxxx Xxxxx
XX00 Xxxxxxxx Xxxx Xxxxxxxx Xxxxx
CP96 Paseo del Norte Albuquerque New Mexico
XX00 Xxxxxxxx Xxxxx Xxxxxxxx Xxxxx
CP63 Pinemont Houston Texas
XX00 Xxxxxxxxxx Xxxxx Xxxxx Xxxxx
CP66 Xxxxxxx'x Center - Baytown Baytown Texas
JV8 Xxxxxxx Road I & II Jackson Mississippi
CP68 Rice Bellaire Bellaire Texas
CP97 Rock Prairie Crossing College Station Texas
iii
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
JV9 Sarasota Village Sarasota Florida
XX00 Xxxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx
CP70 Silver Hills Orlando Florida
CP71 Xxxxxxx Xxxxxxx New Mexico
XX00 Xxxxxxx Xxxxxx Xxxxxxxx Xxxxx
CP73 Xxxxxxx Square II Pasadena Texas
JV10 Spring Valley Crossing Dallas Texas
CP74 Stella Link Houston Texas
XX00 Xxxxxxx Xxxx Xxxxxxx Xxxxxx Xxxxx
CP76 Tanglewilde Houston Texas
XX00 Xxxxx Xxxx Xxx Xxxxx Xxxx Xxxxx
CP14 The Crossing at Fry Road Katy Texas
CP64 The Pines Pineville Louisiana
XX00 Xxxxxxx Xxxxx Xxxxxxx Xxxxx
CP79 Tomball Parkway Plaza Tomball Texas
CP98 Townshire Bryan Texas
XX00X Xxxxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxx
JV11 Xxxxxxx Xxxxx Kissimmee Florida
XX00 Xxxxxxxx Xxxxxxxx Xxxxxxxx Texas
XX00 Xxxxxxx Xxxxx Xxxxxxx Xxxxx
CP80 Village Professional Building Victoria Texas
XX00 Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxx
CP83 Xxxx Royal Dallas Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxx Xxxxx
CP86 Westheimer Commons Houston Texas
XX00 Xxxxxxxxxxxx Xxxxxxx Xxxxxx Xxxxx
XX00 Xxxxxxx Xxxxxxx Xxxxxx Xxxxx
JV12 Windvale The Woodlands Texas
iv
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
CP89 Wynnewood Village (incl. Professional and Dallas Texas
Annex)
CP90 Xxxxxxxxx El Paso Texas
v
EXHIBIT A-2
EXCLUDED PROPERTIES
--------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------
SP1 1960 / Kuykendahl Houston Texas
SP3 Gessner Houston Texas
SP2 Gessner I Houston Texas
SP4 Long Point Plaza Houston Texas
SP5 Park Plaza I Houston Texas
SP6 Park Plaza II Houston Texas
XX0 Xxx Xxxxx Xxxx Xxxxxxxx Xxxxx
XX0 Xxxxxxxxx Xxxxx Xxxxxxxxxx Xxxxx
SP9 Telephone Road Houston Texas
XX00 Xxxxxxxxx Xxxxx Xxxxxxxxxxx Xxxxx
i
EXHIBIT A-3
FEE PROPERTIES
----------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
----------------------------------------------------------------------------------------------
XX0 Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
CP3 Beltway South Houston Texas
CP92 Coconut Creek Coconut Creek Florida
CP19 Downtown Publix Stuart Florida
XX00 Xxxxxx Xxxx Xx. Xxxxxxxxxx Xxxxxxx
XX00 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx
CP22A El Camino II Bellaire Texas
CP26 Friendswood Square Friendswood Texas
CP31 Jacksonian Plaza Jackson Mississippi
CP94 Xxxxxxxxx Crossing El Paso Texas
XX00X Xxxxx Xxxxx XX Xxxxxxxxx Xxxxx
XX00 Xxxx Xxxxx Xxxxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxx Xxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxx Texas
CP51 Northshore East Houston Texas
XX00 Xxxxxxxxx Xxxxxxx Xxxxx
XX00 Xxx Xxxxx Conroe Texas
CP55 Orange Grove Houston Texas
XX00 Xxxxxxxx Xxxx Xxxxxxxx Xxxxx
CP96 Paseo del Norte Albuquerque New Mexico
CP63 Pinemont Houston Texas
XX00 Xxxxxxx'x Xxxxxx - Xxxxxxx Xxxxxxx Texas
CP68 Rice Bellaire Bellaire Texas
CP97 Rock Prairie Crossing College Station Texas
XX00 Xxxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx
XX00 Xxxxxxx Xxxxxx Xxxxxxxx Xxxxx
CP73 Xxxxxxx Square II Pasadena Texas
CP14 The Crossing at Fry Road Katy Texas
i
----------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
----------------------------------------------------------------------------------------------
CP98 Townshire Bryan Texas
XX00X Xxxxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxx
XX00 Xxxxxxxx Xxxxxxxx Xxxxxxxx Texas
XX00 Xxxxxxx Xxxxxx/Xxxx Xxxxxxxx Xxxxx
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xxxxxxx Xxxxxxx Xxxxxx Xxxxx
ii
EXHIBIT A-4
PROPERTIES OWNED BY THE PARTNERSHIPS (EXCLUDING RODEO VENTURE PROPERTIES)
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
CP2 Bay Forest - Clear Lake Houston Texas
XX00 Xxxxx Xxxxxxx Xxxxxxx Xxxxx
CP4 Braes Link Houston Texas
CP5 Braes Oaks Houston Texas
CP6 Braesgate Houston Texas
XX0 Xxxxxxx Xxxx Xxxxxxx Xxxxxxx Xxxxx
CP8 Broadway Houston Texas
CP9 Bryan Square Bryan Texas
CP10 Carmel Village Corpus Christi Texas
CP11 Cedar Bellaire Bellaire Texas
XX00 Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxx
XX00 Xxxxx Xxxx Xxxxxx Xxxxx Xxxxxxx Texas
XX00 Xxxxxxxxxx Xxxxxxxx Xxxxx
CP16 Xxxxxxxxx Plaza Annex College Station Texas
CP17 Xxxxxxxxx Plaza I College Station Texas
CP18 Xxxxxxxxx Plaza II College Station Texas
CP22 El Camino Bellaire Texas
CP23 Five Points Corpus Christi Texas
CP24 Fondren Houston Texas
XX00 Xxxxxx Xxxxx Xxxx Xxxxx Xxxxx
CP27 Hearthstone Corners Houston Texas
CP28 Xxxxxxxx Xxxxxxx Xxxx Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx
CP29 Huntington Village Houston Texas
CP30 Iberia Plaza New Iberia Louisiana
CP32 Xxxx Xxxxx Dallas Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Xxxxxxxx Xxxxx
XX00 Xxxxxx Xxxxxxx Xxxxxxx Xxxxx
XX00 Xxxxx Xxxxx Xxxxxxx Xxxxx
i
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
XX00 Xxxxx Xxxxxx Xxxxxxx Texas
XX00 Xxxxx Xxxxxx Xxxxxx Xxxxx
CP39 Xxxxx Plaza Rosenberg Texas
CP40 Lazybrook Houston Texas
CP41 League City League City Texas
XX00 Xxxxxxxxx Xxxx Xxxxxxx Xxxxx
CP43 Meadowbrook Fort Worth Texas
CP46 Xxxxx Shores Fort Xxxxx Florida
XX00 Xxxxx Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
CP48 North 00 Xxxxx Xxxxxxx Xxxxx
XX00 Xxxxx Xxxxx Xxxxxxx Xxxxxx Xxxx Xxxxx
CP50 Northgate Houston Texas
XX00 Xxxxxxxxxx Xxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xxxx Xxxxx Xxxxxxx Xxxx Xxxxx
XX00 Xxxxxxxx Xxxxxx Xxxx Xxxx Xxxxx
CP58 Parktown East Deer Park Texas
CP59 Parkview East Pasadena Texas
XX00 Xxxxxxxx Xxxx Xxxxxxxx Xxxxx
XX00 Xxxxxxxx Xxxxx Xxxxxxxx Xxxxx
XX00 Xxxxxxxxxx Xxxxx Xxxxx Xxxxx
CP70 Silver Hills Orlando Florida
CP71 Xxxxxxx Xxxxxxx New Mexico
CP74 Stella Link Houston Texas
XX00 Xxxxxxx Xxxx Xxxxxxx Xxxxxx Xxxxx
CP76 Tanglewilde Houston Texas
XX00 Xxxxx Xxxx Xxx Xxxxx Xxxx Xxxxx
CP64 The Pines Pineville Louisiana
XX00 Xxxxxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xxxxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxx
ii
--------------------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------------------
XX00 Xxxxxxx Xxxxx Xxxxxxx Xxxxx
XX00 Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxx
CP83 Xxxx Royal Dallas Texas
XX00 Xxxxxxxxx Xxxx Xxxxx Texas
CP86 Westheimer Commons Houston Texas
XX00 Xxxxxxxxxxxx Xxxxxxx Xxxxxx Xxxxx
CP89 Wynnewood Village (incl. Professional and Dallas Texas
Annex)
CP90 Xxxxxxxxx El aso New Mexico
CP67 Inwood Forest Houston Texas
CP37 Xxxxxx'x Meadow Stafford Texas
iii
EXHIBIT A-5
JV PROPERTIES
--------------------------------------------------------------------------------------------
PROPERTY NUMBER SHOPPING CENTER CITY STATE
--------------------------------------------------------------------------------------------
JV1 Atlantic Plaza Satellite Beach Florida
JV2 Flamingo Falls Pembroke Pines Florida
JV3 Xxxxxxx Central Village Bedford Texas
JV4 Ladera Albuquerque New Mexico
JV5 Mableton Walk Mableton Georgia
JV6 Marketplace at Wycliffe Lake Worth Florida
JV7 Mint Hill Festival Charlotte North Carolina
JV13 Odessa - Winwood Odessa Texas
JV8 Xxxxxxx Road I & II Jackson Mississippi
JV9 Sarasota Village Sarasota Florida
JV10 Spring Valley Crossing Dallas Texas
JV11 Xxxxxxx Xxxxx Kissimmee Florida
JV12 Windvale The Woodlands Texas
i
EXHIBIT B
DEFINITIONS
Certain Definitions. As used in this Agreement, the following terms
have the following meanings when used herein with initial capital letters:
"Access Agreement" means that certain Access Agreement by and between
Purchaser and Seller dated as of December 17, 2001.
"Affiliate" (or words of similar import) has the same meaning as such
term is defined in Rule 405 promulgated under the Securities Act of 1933, as
amended.
"Agreement" means this Purchase Agreement by and among Purchaser and
Seller.
"Applicable Percentage Rent Fiscal Year" shall have the meaning set
forth in Section 2.4(b)(iii).
"Assigning Subsidiary" means any Subsidiary that has a direct ownership
interest in any of the Purchased Assets.
"Assumed Indebtedness" means the Indebtedness described on Schedule
4.11(a).
"Assumed Liabilities" shall have the meaning set forth in Section 1.3.
"Assumed Loan Documents" shall have the meaning set forth in Section
4.11(a).
"Audited Financial Statements" shall have the meaning set forth in
Section 4.20.
"Bankruptcy" means the commencement of any proceeding under any
applicable bankruptcy, reorganization, liquidation, insolvency, creditor's
rights, or similar law now or hereafter in effect or commencement of a
proceeding in which a receiver, liquidator or trustee is sought to be appointed.
"Xxxx of Sale" shall have the meaning set forth in Section 9.4(d)(ii).
"Budgets" shall have the meaning set forth in Section 4.21.
"Business Day" means a day other than Saturday, Sunday or any day on
which commercial banks in New York, New York or Houston, Texas are authorized or
obligated to close.
"Cap" shall have the meaning set forth in Section 11.5(a).
"Capital Support Agreement" shall have the meaning set forth in Section
1.1(a)(ii)(B).
"CenterAmerica Capital" means CenterAmerica Capital Partnership, L.P.,
a Delaware limited partnership.
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"CenterAmerica Trust" means CenterAmerica Property Trust, L.P.
"CenterAmerica Venture" means CenterAmerica Venture Fund, LLC, a
Delaware limited liability company.
"CenterAmerica Venture Entities" means CenterAmerica Venture and its
subsidiaries.
"CenterAmerica Venture REIT" means CenterAmerica Venture REIT, a Texas
real estate investment trust.
"CFP" means CFP I, L.P., a Delaware limited partnership.
"CFP Venture" means CFP Venture I, L.P., a Delaware limited
partnership.
"CFP, Inc." means CFP, Inc., a Delaware corporation.
"Claims" shall have the meaning set forth in Section 1.5(a).
"Closing" shall have the meaning set forth in Section 9.1.
"Closing Date" shall have the meaning set forth in Section 9.1.
"Closing Escrow Agreement" shall have the meaning set forth in Section
11.7.
"Closing Statement" shall have the meaning set forth in Section
2.4(a)(ii).
"Code" shall have the meaning set forth in Section 2.3(b).
"Company Leases" means those certain leases described in Schedule
1.1(a)(iii)(A).
"Confidentiality Agreement" shall have the meaning set forth in Section
7.1.
"Consents" shall have the meaning set forth in Section 1.7.
"Consultants" shall have the meaning set forth in Section 3.2.
"Continuing Loan Guaranty" shall have the meaning set forth in Section
6.4.
"Contract Assignment" shall have the meaning set forth in Section
9.4(d)(iv).
"Contracts" means all agreements, contracts, management agreements,
leasing agreements, maintenance contracts, equipment leasing agreements, open
purchase orders and other contracts for the provision of labor, services,
materials or supplies relating to the Real Estate Business or any Property,
Improvements or Personal Property and under which Seller or any Subsidiary is
currently paying or receiving compensation for services rendered in connection
with the Real Estate Business or any Property, together with all renewals,
supplements, amendments and modifications thereof, and any new such agreements
entered into after the date hereof.
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"Deductible" shall have the meaning set forth in Section 11.5(a).
"Deed" shall have the meaning set forth in Section 9.4(d)(i).
"Delinquent" shall have the meaning set forth in Section 2.4(b)(v).
"Deposit" shall have the meaning set forth in Section 2.3.
"Drop Dead Date" shall have the meaning set forth in Section 10.1(c).
"Due Diligence" shall have the meaning set forth in Section 3.1(a).
"Employees" shall have the meaning set forth in Section 7.8(a).
"Entity Level Tax" shall have the meaning set forth in Section
7.12(b)(i).
"Environmental Law" means any Law or order of any Governmental Entity
relating to the regulation or protection of human health, safety or the
environment or to emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment (including without limitation, ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.
"Environmental Insurance Policy" means an environmental hazard
insurance policy obtained by Purchaser on or after the date of this Agreement
and on or before the Closing Date to cover environmental matters affecting the
Properties, which policy shall provide coverage for a period of 10 years,
include Seller and its Subsidiaries as an additional insured, contain a
deductible of no more than $50,000 unless otherwise agreed by Purchaser, and
otherwise in form and substance to Purchaser's satisfaction.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 4.24(b).
"Escrow Agreement" shall have the meaning set forth in Section 2.3(a).
"Escrow Holder" means Fidelity National Title Insurance Company, 0000
X. Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000.
"Excluded Assets" shall have the meaning set forth in Section 1.2.
"Excluded Liabilities" shall have the meaning set forth in Section 1.3.
"Excluded Properties" shall mean the Properties identified on Exhibit
A-2 and any dropped Property under Section 7.16.
"Fee Properties" shall mean the Properties identified on Exhibit A-3.
"Final Adjustment Date" shall have the meaning set forth in Section
2.5.
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"Final Closing Adjustment" shall have the meaning set forth in Section
2.5.
"Final Statement" shall have the meaning set forth in Section 2.5.
"Financial Statements" shall have the meaning set forth in Section
4.20.
"GAAP" shall have the meaning set forth in Section 4.20.
"Governmental Entity" shall have the meaning set forth in Section
4.2(c).
"Ground Leases" shall have the meaning set forth in Section 4.15.
"Guarantor" shall have the meaning set forth in Section 6.4.
"Xxxxxxx Indebtedness" shall have the meaning set forth in Section
7.14(a).
"Xxxxxxx Properties" means the Properties located in Houston, Texas and
Katy, Texas, Xxxxxx County, and associated with the shopping centers commonly
known as Merchants Park, Merchants Park North and The Crossing at Fry Road.
"Hazardous Materials" means (i) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs), (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants" or words of similar import under any Environmental Law, and
(iii) any other chemical or other material or substance, exposure to which is
now or hereafter prohibited, limited or regulated by any Governmental Entity
under any Environmental Law.
"HHC Finance" means HHC Finance, L.P., a Delaware limited partnership.
"HHC Finance, Inc." means the HHC Finance, Inc., a Delaware
corporation.
"Improvements" means all of the buildings, structures, fixtures,
facilities, installations and other improvements, of every kind and description
now or hereafter located on the Properties, including, without limitation, any
and all plumbing, air conditioning, heating, ventilating, mechanical, electrical
and other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, security devices, signs and light fixtures.
"Incomplete Developments" shall have the meaning set forth in Section
7.6.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money, whether secured or
unsecured, (ii) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (iii)
all capitalized lease obligations of such Person, (iv) all obligations of such
Person under interest rate cap, swap, collar or similar transaction or currency
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hedging transactions (valued at the termination value thereof), and (v) all
guarantees of such Person of any such indebtedness of any other Person.
"Indemnifying Party" shall have the meaning set forth in Section
11.4(a).
"Indemnitee" shall have the meaning set forth in Section 11.4(a).
"Individual Item" means any item or series of items relating to a
single event or arising out of the same breach for which the Loss does not
exceed $5,000.
"Intellectual Property" means the name "CenterAmerica," and all other
copyrights, trademarks, brand names, service marks, the XxxxxxXxxxxxx.xxx and
XxxxxxXxxxxxx.xxx domain names and rights, if any, to any related website and
the business related thereto, trade names, data, telephone numbers, licenses,
labels, logos, marketing materials, designs, covenants by others not to compete,
rights, privileges and any registrations or applications for registrations of
the foregoing used in the conduct of the Real Estate Business, and any right to
recovery for infringement thereof (including past infringement) and any and all
goodwill associated therewith or connected with the use thereof and symbolized
thereby, including, without limitation, all of the items set forth on Schedule
1.1(a)(iii)(D) attached hereto.
"Interim Financial Statements" shall have the meaning set forth in
Section 3.4.
"Inwood" means Inwood Shopping Center Limited Partnership-I, a Texas
limited partnership.
"JV Indebtedness" means the Indebtedness described on Schedule 4.12(a).
"JV Loan Documents" shall have the meaning set forth in Section
4.12(a).
"JV Properties" means the Properties identified on Exhibit A-5 and any
new properties acquired by CenterAmerica Venture after the date of this
Agreement.
"Xxxxxx'x" means Xxxxxx'x Meadow Shopping Center Limited Partnership-I,
a Texas limited partnership.
"Knowledge of Seller" shall have the meaning set forth in Section 4.25.
"Laws" shall have the meaning set forth in Section 4.2(b).
"Lease Assignment" shall have the meaning set forth in Section
9.4(d)(iii).
"Lease Expenses" means, collectively, any and all leasing commissions,
tenant improvements, allowances, and lease buyout costs and expenses actually
paid or incurred by Seller or the Assigning Subsidiaries prior to Closing or to
be incurred by Purchaser for any space set forth in Schedule 2.4(e) arising out
of or in connection with any Leases for space at the Fee Properties and
Partnership Properties (excluding the JV Properties). Lease Expenses shall
include, without limitation, (a) brokerage commissions and fees payable pursuant
to a commission agreement or Lease to effect any such leasing transaction
(including, without
B-5
limitation, any fees owed to an affiliated or third-party property manager or
leasing agent), (b) expenses incurred for repairs, improvements, equipment,
painting, decorating, partitioning and other items to satisfy the tenant's
requirements with regard to such leasing transaction, and (c) expenses incurred
for the purpose of satisfying or terminating the obligations of a Tenant under a
new Lease to the landlord under another lease (whether or not such other lease
covers space in any Property).
"Leases" shall have the meaning set forth in Section 4.5(b).
"Leasing Guidelines" shall have the meaning set forth in Section 6.2.
"Licenses and Permits" shall mean, collectively, all licenses,
registrations, franchises, permits, concessions, orders, approvals, certificates
of occupancy, dedications, subdivision maps and entitlements now or hereafter
issued, approved or granted by any Governmental Entity in connection with the
Properties or the Real Estate Business, together with all renewals and
modifications thereof.
"Liens" shall have the meaning set forth in Section 1.1(a).
"Losses" shall have the meaning set forth in Section 11.2(a).
"Major Loss" shall have the meaning set forth in Section 8.3.
"Material Contracts" shall have the meaning set forth in Section 4.14.
"Material Title Defects" means title matters (other than zoning
compliance) relating to any Property other than a JV Property that are disclosed
in new title commitments or surveys obtained by Purchaser or in judgment and
lien searches, if any, conducted by Purchaser after the date of this Agreement,
which matters are not Permitted Encumbrances or Liens securing Indebtedness to
be and is paid or discharged prior to or at Closing in accordance with this
Agreement, and that individually or in the aggregate have a cost of removal or
correction in excess of $100,000 with respect to any individual Property or in
the aggregate have a cost of removal or correction in excess of $2,000,000 for
all such Properties.
"MSREF II" means The Xxxxxx Xxxxxxx Real Estate Fund II, L.P., a
Delaware limited partnership.
"Multiemployer Plan" shall have the meaning set forth in Section
4.25(b).
"New Inwood" shall have the meaning set forth in Section 7.19.
"New Xxxxxx'x" shall have the meaning set forth in Section 7.19.
"Non-Assignable Contracts" shall have the meaning set forth in Section
1.7.
"NYSE" shall have the meaning set forth in Section 7.1(b).
"Operating Expenses" shall have the meaning set forth in Section
2.4(c).
B-6
"Other Rent" shall have the meaning set forth in Section 2.4(b)(iv).
"Partnerships" shall have the meaning set forth in Recital D.
"Partnership Agreements" shall have the meaning set forth in Section
2.2(a).
"Partnership Amendments" shall have the meaning set forth in Section
9.4(d)(xiii).
"Partnership Interest Assignment" shall have the meaning set forth in
Section 9.4(d)(xii).
"Partnership Interests" shall have the meaning set forth in Recital D.
"Partnership Properties" means the Partnership Properties identified on
Exhibit A-4.
"Permitted Encumbrances" means and includes all of the following:
applicable zoning and building ordinances and land use regulations that do not
materially adversely affect the current use of the property; tax liens,
mechanics', materialmen's and artisan's liens, special assessment liens and
other similar liens, in each case not yet delinquent and are subject to
proration under Section 2.4(n) or being contested in good faith in appropriate
proceedings (provided that Seller will bond over same at Closing or provide
Purchaser with security with respect to same reasonably acceptable to Purchaser)
(it being agreed by Purchaser and Seller that if any tax or assessment is levied
or assessed with respect to the Properties after the date hereof and the owner
of the Properties has the election to pay such tax or assessment either
immediately or under a payment plan with interest, Seller may elect to pay under
a payment plan, which election shall be binding on Purchaser); any encumbrances
caused by Purchaser, its Consultants or its agents, representatives or
employees; the rights of the Tenants under the Leases; any rights of first
refusal, restrictions and other encumbrances set forth in the Partnership
Agreements and restrictions on transfer under the Partnership Agreements and
under federal and state securities Laws; all matters disclosed in the Title
Commitments and Surveys; Liens securing the Assumed Indebtedness; and any
matters deemed to constitute Permitted Encumbrances under Section 3.4 hereof;
provided, however, Liens securing Excluded Liabilities and other Liens that
Seller has expressly agreed to remove or discharge under this Agreement and
those set forth in Schedule 3.4(a)(i) shall not be Permitted Encumbrances.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Personal Property" means all tangible personal property, which is
located at and used in connection with any of the Properties or the Real Estate
Business as of the Closing Date, but specifically excluding (a) any personal
property owned, financed or leased by the Tenants (other than any Tenant that is
a Seller or Subsidiary) under Leases, (b) any computer software which either is
licensed to Seller, or Seller deems proprietary, (c) any tangible personal
property owned by any unaffiliated on-site property manager, (d) except for the
Partnership Interests, any warrants, stock options or other equity securities
related to the Assigning Subsidiaries or any direct or indirect partner of the
Partnerships, or (e) any Excluded Assets. Personal Property shall not include
any attorney work product or any attorney-client privileged documents.
"PPM Indebtedness" shall have the meaning set forth in Section 7.14(c).
B-7
"PPM Loan Documents" shall have the meaning set forth in Section
4.12(a).
"PPM Properties" means the Properties located in Houston, Texas and
Stafford, Texas, Xxxxxx County, and associated with the shopping centers
commonly known as Inwood Forest and Xxxxxx'x Meadow.
"Pre-Closing Breaches" shall have the meaning set forth in Section
10.2(a).
"Pre-Closing Taxable Period" means with respect to any tax, any
applicable taxable period ending on or prior to consummation of the transactions
contemplated hereby on the Closing Date or the allocable portion of any
applicable taxable period that includes but does not end on the Closing Date.
"Properties" shall have the meaning set forth in Recital A.
"Proration Items" shall have the meaning set forth in Section 2.4(a).
"Proration Time" shall have the meaning set forth in Section 2.4(a).
"Purchased Assets" shall have the meaning set forth in Recital D.
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Purchaser" means New Plan Excel Realty Trust, Inc., a Maryland
corporation.
"Purchaser Indemnitees" shall have the meaning set forth in Section
11.2(a).
"PWC" shall have the meaning set forth in Section 7.17.
"REAs" shall have the meaning set forth in Section 4.16.
"Real Estate Business" shall have the meaning set forth in Recital A.
"Real Property" means those certain parcel(s) of real property
comprising the Property described in Schedule 1.1(a)(i)(A), together with the
applicable owner's right, title and interest, if any, in and to the
appurtenances pertaining thereto, including, but not limited to, the applicable
owner's right, title and interest in and to the adjacent streets, alleys and
right-of-ways, and any easement rights, air rights, subsurface rights,
development rights and water rights.
"Records and Plans" means, collectively: (i) all books and records,
including, but not limited to, property operating statements, specifically
relating to the Properties and the Real Estate Business; (ii) all structural
reviews, architectural drawings and environmental, engineering, soils, seismic,
geologic and architectural reports, studies and certificates pertaining to the
Real Property or the Improvements; (iii) all preliminary, final and proposed
plans, specifications and drawings of the Improvements or the Real Property or
the Properties or any portion thereof; and (iv) with respect to the Properties
and the Real Estate Business, the accounting, billing and financial records,
personnel records, blueprints, specifications, warranties, plats, maps, surveys,
building and machinery diagrams, maintenance and production
B-8
records, environmental records and reports, sales and property Tax records and
Tax Returns for the Partnerships and sales records. The terms "Records and
Plans" shall not include (v) any document or correspondence which would be
subject to the attorney-client privilege; (w) any document or item which Seller
is contractually or otherwise bound to keep confidential; (x) any documents
pertaining to the marketing of the Property for sale to prospective purchasers;
(y) any internal memoranda, reports or assessments of Seller, Affiliates or the
Subsidiaries relating to Seller's valuation of the Properties; and (z)
appraisals of the Properties whether prepared internally by Seller or Seller's
Affiliates or Subsidiaries or externally.
"Redevelopment Payment" shall have the meaning set forth in Section
7.6.
"Redevelopment Properties" means those certain properties commonly
known as Coconut Creek Plaza located in Coconut Creek, Florida and Townshire,
located in College Station, Texas.
"Releasing Parties" shall have the meaning set forth in Section 7.9
"Rentals" shall mean fixed monthly rentals, additional rentals,
percentage rentals, escalation rentals (which include each Tenant's proration
share of building operation and maintenance costs and expenses as provided for
under the applicable Lease, to the extent the same exceeds any expense stop
specified in such Lease), retroactive rentals, all administrative charges,
utility charges, tenant or real property association dues, storage rentals,
special event proceeds, temporary rents, telephone receipts, locker rentals,
vending machine receipts and other sums and charges payable by Tenants under the
Leases or from other occupants or users of the Property.
"Rent Roll" shall have the meaning set forth in Section 4.5(b).
"Reporting Person" shall have the meaning set forth in Section
2.3(b)(i).
"Restraints" shall have the meaning set forth in Section 9.2(c).
"Section 1060 Allocation" shall have the meaning set forth in Section
7.7.
"Seller" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Seller Indemnitees" shall have the meaning set forth in Section
11.3(a).
"Seller Material Adverse Effect" means the occurrence of any of the
following after the date of this Agreement and prior to the Closing: (i)
Bankruptcy of any of the Kroger Co., Xxxxxxx'x Food Markets, Inc., Walgreen,
Co., Eckerd Corporation or KMart; (ii) Bankruptcy of any two of Minyards,
Publix, Consolidated (Big Lots), Blockbuster and HEB; (iii) 10 or more stores at
the Properties containing 50,000 or more square feet of gross leasable area
close or cease to operate (regardless of whether or not the Tenant is paying
rent), or (iv) there are any exceptions in the Tenant estoppels obtained under
Section 6.3 for which Seller elects not to deliver a Seller estoppel under
Section 6.3 and the dollar amount of any reduction in value of the Purchased
Assets resulting therefrom plus the Losses from Pre-Closing Breaches under
Section 10.2 exceeds $5,000,000.
B-9
"Seller Party" and "Seller Parties" shall have the meanings set forth
in Section 1.5.
"Selling Subsidiaries" means those Subsidiaries that own the Fee
Properties.
"Significant Portion" with respect to a Property means any taking by
condemnation or destruction or damage by fire or other casualty in excess of 50%
of the gross leaseable area of a Property or that deprives the affected Property
of any major access to public roads.
"Straddle Period" shall have the meaning set forth in Section
7.12(b)(i).
"Subsidiary" means any entity in which Seller has an interest whether
directly or indirectly, including without limitation, the Partnerships and their
subsidiaries.
"Surveys" shall have the meaning set forth in Section 3.4(a).
"Tax Return" or "Tax Returns" means any report, return, or other
information required to be supplied to any taxing authority in connection with
Taxes.
"Tax" or "Taxes" means all taxes, fees, levies, or other assessments,
imposed by the United States or any state, country, local, or foreign government
or subdivision or agency thereof including, without limitation, income, gross
receipts, excise, real and personal property, premiums, municipal, capital,
value-added, goods and services, consumption, sales, transfer, license, payroll,
and franchise taxes, and such term shall include any interest, penalties, or
additions to tax attributable to such taxes, fees, levies, or other assessments.
"Tenant Deposits" means all advance rents and security deposits
(whether cash or non-cash) paid or deposited by a Tenant to Seller or any owner
of a Property, as landlord, or to any other person on Seller's or such owner's
behalf pursuant to a Lease (together with any interest which has accrued thereon
as required by the terms of such Lease, but only to the extent such interest has
accrued for the account of the respective Tenant or as required by law.)
"Tenant Notice Letters" shall have the meaning set forth in Section
9.4(c)(iv).
"Tenants" means all persons or entities occupying or entitled to
possession of any portion of any Property pursuant to a Lease.
"Third Party Claim" shall have the meaning set forth in Section
11.4(b).
"Title Commitments" shall have the meaning set forth in Section 3.4(a).
"Title Objections" shall have the meaning set forth in Section 3.4(b).
"Title Policies" means the ALTA or TLTA owner's or leasehold form title
policies, which title policies insure the fee simple or leasehold interests, as
applicable, of the Purchaser or the Partnerships in the applicable Properties.
"Transfer" shall have the meaning set forth in Section 1.1(a).
"Transferred Employees" shall have the meaning set forth in Section
7.8(a).
B-10
"Transitional Services Agreement" means the Transitional Services
Agreement substantially in the form of Exhibit 7.10.
"Unaudited Financial Statements" shall have the meaning set forth in
Section 4.20.
"Vehicles" shall have the meaning set forth in Section 1.1(iii)(H).
"WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. Sections 2101, et. seq., and any similar provision of any
applicable State Law.
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