EXHIBIT 2.7
PURCHASE AGREEMENT
BY AND AMONG
EIG OPERATING PARTNERSHIP, L.P.
AND
NEW PLAN EXCEL REALTY TRUST, INC.
Dated as of October 17, 2002
TABLE OF CONTENTS
Page
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I. PURCHASE OF PURCHASED ASSETS............................................................................1
1.1 Sale and Transfer of Purchased Assets............................................................1
1.2 Excluded Assets..................................................................................3
1.3 No Assumption of Certain Liabilities.............................................................3
1.4 No Representations...............................................................................4
1.5 Release of Seller................................................................................5
1.6 Indivisible Economic Package.....................................................................6
1.7 Withdrawn and Additional Properties..............................................................6
II. CONSIDERATION...........................................................................................8
2.1 Purchase Price...................................................................................8
2.2 Alternate Payment of Purchase Price..............................................................8
2.3 Xxxxxxx Money....................................................................................8
2.4 Prorations.......................................................................................9
2.5 Preparation of Final Statement..................................................................16
2.6 Audit...........................................................................................17
2.7 Tenant Deposits.................................................................................17
2.8 Certiorari......................................................................................18
2.9 Effect of Closing...............................................................................18
III. DUE DILIGENCE, TITLE AND OTHER PROPERTY RELATED MATTERS................................................18
3.1 Purchaser's Inspections and Due Diligence.......................................................18
3.2 Site Visits.....................................................................................20
3.3 Due Diligence Indemnity.........................................................................21
3.4 Title...........................................................................................22
IV. REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................24
4.1 Organization and Power of Seller................................................................24
4.2 Authority; Noncontravention; Consents...........................................................25
4.3 Litigation......................................................................................26
4.4 Key Credit Facility.............................................................................26
4.5 Properties......................................................................................26
4.6 Environmental Matters...........................................................................28
4.7 Labor Matters...................................................................................28
4.8 Taxes...........................................................................................29
4.9 Compliance with Laws............................................................................29
4.10 Brokers.........................................................................................29
4.11 Assumed Indebtedness............................................................................29
4.12 Intentionally Omitted...........................................................................30
4.13 Assumed Liabilities.............................................................................30
4.14 Contracts.......................................................................................30
4.15 Ground Leases...................................................................................31
4.16 REAs............................................................................................31
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TABLE OF CONTENTS
(continued)
4.17 Intentionally Omitted...........................................................................31
4.18 Purchased Assets................................................................................31
4.19 Intellectual Property...........................................................................31
4.20 Financial Statements............................................................................32
4.21 Budgets.........................................................................................32
4.22 Insolvency......................................................................................32
0.00 Xxxxxx Xxxxxx Person............................................................................32
4.24 Definition of Knowledge of Seller...............................................................32
4.25 Schedule References.............................................................................33
4.26 Right to Amend Representations..................................................................33
4.27 Seller's Representations Deemed Modified........................................................33
4.28 Redemption Agreement............................................................................33
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................33
5.1 Organization, Standing and Power of Purchaser...................................................34
5.2 Authority; Noncontravention; Consents...........................................................34
5.3 Brokers.........................................................................................35
5.4 Funding.........................................................................................35
5.5 Intentionally Omitted...........................................................................35
5.6 Purchaser's Representations Deemed Modified.....................................................35
5.7 Intentionally Omitted...........................................................................35
5.8 Right to Amend Representations..................................................................35
VI. COVENANTS..............................................................................................35
6.1 Conduct of Seller's Business Pending Transfer...................................................35
6.2 Leasing.........................................................................................38
6.3 Tenant Estoppels................................................................................38
6.4 Assumption of Obligations.......................................................................39
6.5 Other Actions...................................................................................40
6.6 No Solicitation.................................................................................40
6.7 Intentionally Omitted...........................................................................40
6.8 Tenant Litigation...............................................................................40
6.9 Lender Estoppels................................................................................40
6.10 Ground Lease Estoppels..........................................................................40
6.11 REA Estoppels...................................................................................40
VII. ADDITIONAL AGREEMENTS..................................................................................41
7.1 Access to Information; Confidentiality..........................................................41
7.2 Reasonable Efforts..............................................................................42
7.3 Public Announcements............................................................................43
7.4 Conveyance Taxes................................................................................43
7.5 Intentionally Omitted...........................................................................43
7.6 Capital Improvements and Redevelopment Properties...............................................43
7.7 Allocation of Purchase Price....................................................................45
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TABLE OF CONTENTS
(continued)
7.8 Employee Matters................................................................................46
7.9 Indemnitor's Acknowledgement and Environmental Insurance........................................47
7.10 Appointment of Agent............................................................................47
7.11 Company Leases..................................................................................47
7.12 Options.........................................................................................47
7.13 Transitional Services...........................................................................48
7.14 Matters Relating to Assumed Indebtedness........................................................48
7.15 Violations......................................................................................50
7.16 Dropped Properties..............................................................................50
7.17 Delivery of Financial Statements................................................................51
7.18 Insurance and Other Matters.....................................................................51
7.19 Post-Closing Access.............................................................................52
7.20 KeyBank.........................................................................................52
7.21 Purchaser's Board Approval......................................................................52
VIII. CASUALTY AND CONDEMNATION..............................................................................52
8.1 In General......................................................................................52
8.2 Minor Loss......................................................................................53
8.3 Major Loss......................................................................................53
8.4 Additional Matters..............................................................................54
8.5 Arvada Plaza....................................................................................54
IX. CLOSING................................................................................................56
9.1 Closing.........................................................................................56
9.2 Conditions To Each Party's Obligation To Effect the Transfer....................................56
9.3 Conditions To Obligations of Seller.............................................................57
9.4 Conditions To Obligations of Purchaser..........................................................58
X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER.............................................................64
10.1 Termination.....................................................................................64
10.2 Pre-Closing Breaches............................................................................65
10.3 Defaults and Remedies...........................................................................67
10.4 Effect of Termination...........................................................................68
10.5 Amendment.......................................................................................68
10.6 Extension; Waiver...............................................................................68
10.7 Waiver of Pre-Closing Breaches..................................................................68
XI. SURVIVAL; INDEMNIFICATION..............................................................................68
11.1 Survival of Representations and Warranties......................................................68
11.2 Indemnification by Seller.......................................................................68
11.3 Indemnification by Purchaser....................................................................69
11.4 Notice and Resolution of Claims.................................................................70
11.5 Limitations on Liability........................................................................70
11.6 Exclusive Remedy................................................................................71
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TABLE OF CONTENTS
(continued)
11.7 Security for Post-Closing Obligations of Seller.................................................71
XII. GENERAL PROVISIONS.....................................................................................72
12.1 Notices.........................................................................................72
12.2 Interpretation..................................................................................73
12.3 Counterparts....................................................................................73
12.4 Entire Agreement; Binding Effect; No Third-Party Beneficiaries..................................73
12.5 Governing Law...................................................................................73
12.6 Assignment......................................................................................73
12.7 Enforcement.....................................................................................74
12.8 Severability....................................................................................74
12.9 Expenses........................................................................................74
12.10 No Recordation..................................................................................74
12.11 1031 Transaction................................................................................75
12.12 Release.........................................................................................75
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EXHIBITS AND SCHEDULES
Exhibit A-1 - Properties
Exhibit B - Definitions
Exhibit 6.1(n) - Title Affidavits
Exhibit 6.3-1 - Tenant Estoppel Certificates
Exhibit 6.3-2 - Seller Estoppel Certificates
Exhibit 6.4 - Guaranty Indemnity Agreement
Exhibit 6.9 - Lender Estoppel Form
Exhibit 6.10 - Ground Lessor Estoppel Form
Exhibit 7.13 - Form of Transitional Services Agreement
Exhibit 9.3(c)(iv) - Tenant Notice Letters
Exhibit 9.4(d)(i) - Deed
Exhibit 9.4(d)(ii) - Xxxx of Sale
Exhibit 9.4(d)(iii) - Lease Assignment
Exhibit 9.4(d)(iv) - Contract Assignment
Exhibit 9.4(d)(vi) - Foreign Person Certificate
Exhibit 9.4(d)(xiv) - Ground Lease Assignment
Exhibit 9.4(d)(xxi) - Tenant Loan Assignment
Exhibit 9.4(h) - Form of Purchase Option with REA Terms
Exhibit 11.7-1 - Closing Escrow Agreement
Exhibit X - 5 Year Capital Budget
Exhibit Y - Assignment Agreement
Schedule 1.1(a)(i)(A) - Real Property
Schedule 1.1(a)(iii)(D) - Trademarks
Schedule 1.1(a)(iii)(H) - Vehicles
Schedule 1.2 - Excluded Assets
Schedule 2.4(e) - Purchaser Lease Expenses
Schedule 2.7 - Tenant Deposits
Schedule 2.8 Certiorari
Schedule 4.1 - Entities
Schedule 4.2(a) - Exceptions to Authority
Schedule 4.2(b) - Exceptions to Noncontravention
Schedule 4.3 - Litigation
Schedule 4.5(a) - Condemnation and Rezoning Proceedings
Schedule 4.5(b) - List of Lease Documents and Defaults Under
Leases
Schedule 4.5(c)-1 - Leases Not Included on Rent Roll
Schedule 4.5(c)-2 - Lease Terminations
Schedule 4.5(d) - Purchase Options and Rights of First Refusal
Schedule 4.5(e) - Tenant Loans
Schedule 4.5(f) - Insurance on Properties
Schedule 4.5(h) - Affiliate Properties (Outparcels)
Schedule 4.6 - Environmental Studies
Schedule 4.9 - Exceptions to Compliance with Laws
Schedule 4.11(a) - Assumed Indebtedness
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EXHIBITS AND SCHEDULES
(continued)
Schedule 4.14 - Material Contracts
Schedule 4.15 - Ground Leases
Schedule 4.19 - Intellectual Property of Seller and the
Subsidiaries
Schedule 4.24 - Inquiry Parties Division Managers
Schedule 5.2(c) - Purchaser Consents
Schedule 6.1 - Purchaser Representative and Seller
Representative
Schedule 6.2-1 - Leasing Guidelines
Schedule 6.2-2 - New Leases and Amendments
Schedule 6.3 - Tenants Providing Estoppel Certificates
Schedule 6.4-1 - Proposed Debt Modifications
Schedule 6.4-2 - Required Debt Modifications
Schedule 6.8(b) - Litigation Against Former Tenants
Schedule 7.6-A - Redevelopment Plans and Budgets
Schedule 7.6-B - Capital Improvement Plans and Budgets
Schedule 7.6-C - Soil Remediation
Schedule 7.6-1 - Redevelopment Agreements
Schedule 7.14(d) - Indebtedness Subject to Purchaser's Election
to Treat as Assumed Indebtedness
Schedule 9.4(g) - Required Leases
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PURCHASE AGREEMENT
This
PURCHASE AGREEMENT (this "Agreement"), dated as of October 17, 2002 by
and among EIG Operating Partnership, L.P., a Delaware limited partnership
("Seller") and New Plan Excel Realty Trust, Inc., a Maryland corporation
("Purchaser").
RECITALS:
A. Seller indirectly through Subsidiaries owns 100% fee simple (or is the
sole beneficiary under a land trust) or ground lease interest in the 17 shopping
centers described on Exhibit A-1 of the Disclosure Schedule as amended from time
to time, as expressly provided in Sections 1.7 and 7.16, to reflect dropped or
withdrawn shopping centers (each a "Property" and collectively the "Properties")
which Seller desires to sell.
B. In accordance with the terms and conditions hereof, Seller desires to
sell, transfer, assign, convey and deliver to Purchaser, or cause the same to be
done through its Subsidiaries and Affiliates, (i) fee simple title and/or
leasehold title to the Properties together with all other assets, rights,
business, goodwill and other properties with respect to the Properties and
Purchaser desires to purchase and acquire the same from Seller, as set forth
herein.
C. Simultaneously with the execution of this Agreement, Seller has
entered into a Contribution Agreement with Excel Realty Partners, L.P., a
Delaware limited partnership (the "Contribution Agreement") and EIG Realty, Inc.
("EIG Realty") has entered into a
Purchase Agreement with Purchaser ("EIG Realty
Purchase Agreement" and, together with the Contribution Agreement and this
Agreement, the "Sale Agreements"). Seller, together with EIG Realty and their
respective Affiliates, shall be sometimes referred to as the "Non-Panther
Parties".
D. The terms used in this Agreement with initial capital letters are
defined in Exhibit B of the Disclosure Schedule.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties and covenants contained herein, the parties hereto hereby agree as
follows:
I. PURCHASE OF PURCHASED ASSETS
1.1 SALE AND TRANSFER OF PURCHASED ASSETS. (a) Subject to and upon the
terms and conditions of this Agreement, at the Closing, Seller will sell,
transfer, convey and assign, and will cause the Assigning Subsidiaries to sell,
transfer, convey and assign, to Purchaser (or its designees), and Purchaser (or
its designees) will purchase and acquire from Seller or the applicable Assigning
Subsidiary (all such transactions, collectively, the "Transfer") all of their
right, title and interest in the Purchased Assets as hereinafter defined, free
and clear of all liens, charges, claims, security interests, pledges, rights of
first refusal, restrictions and other encumbrances ("Liens"), other than the
Permitted Encumbrances. The assets to be acquired (the "Purchased Assets")
consist of the following:
(i) With respect to the Properties, the following:
(A) the Real Property;
(B) the Improvements;
(C) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest in and to the Personal Property
related to each Property;
(D) all of Seller's and any applicable Assigning
Subsidiary's right, title and interest in and to the Ground Leases
with respect to the Properties; and
(E) 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) Intentionally Omitted
(iii) To the extent that any of the following was not otherwise
covered in (i) above, with respect to the Properties and the Purchased Assets:
(A) Certain rights of Seller in and to the Redemption
Agreement (defined below);
(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 Properties or the Purchased
Assets;
(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 (including without limitation, any environmental indemnity
agreement that Seller or any Assigning Subsidiary is a beneficiary
under) with and all rights (including rights of refund and offset),
privileges, deposits, claims, causes of action and options relating or
pertaining thereto;
(D) all of Seller's 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) of the Disclosure Schedule and all other Intellectual
Property owned or used by Seller or an Assigning Subsidiary in
connection with the Properties or the Purchased Assets;
(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
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with the ownership, construction, use or operation of the Properties,
the Purchased Assets or Improvements;
(F) the Records and Plans, but only to the extent the
Records and Plans are in the possession or control of Seller or an
Assigning Subsidiary, provided that Seller at its sole cost and
expense will have the right at any time as provided in Section 7.19 to
make copies of the Records and Plans which relate to the period prior
to the Closing Date to be used for reasonable purposes;
(G) the goodwill of Seller or an Assigning Subsidiary
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 set
forth on Schedule 1.1(a)(iii)(H) of the Disclosure Schedule;
(I) 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;
(J) 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 Properties or the Purchased Assets;
(K) 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, guaranties and security provided
to it by any contractor pursuant to any construction or other
contracts (including without limitation, any of same with respect to
the Redevelopment Properties); and
(L) all other or additional privileges, rights, interests or
properties and assets of every kind and description and wherever
located, that are used or intended for use in connection with or that
are necessary to the continued conduct of the Properties in the manner
that they are being operated.
1.2 EXCLUDED ASSETS. In no event will the Purchased Assets include any of
the assets described in Schedule 1.2 of the Disclosure Schedule ("Excluded
Assets").
1.3 NO ASSUMPTION OF CERTAIN LIABILITIES. Purchaser will purchase the
Purchased Assets free and clear of all Liens other than the Permitted
Encumbrances and will assume no liabilities or obligations (direct or indirect)
of Seller or its Affiliates other than (i) the Assumed Indebtedness, (ii) all
liabilities and obligations of Seller or any Assigning Subsidiary arising from
and after the Closing relating to (x) the Leases (including without limitation,
those relating to any Tenant Deposits delivered to Purchaser or credited against
the Purchase Price), (y) Contracts, and (z) Licenses and Permits, all of (x),
(y) and (z) only to the extent assigned at Closing, and
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(iii) all liabilities of Seller or any Assigning Subsidiary solely to the extent
that Purchaser received a credit therefore against the Purchase Price pursuant
to Section 2.4 or otherwise in the Agreement (collectively, the "Assumed
Liabilities"). Except for the Assumed Liabilities, Purchaser will not assume or
agree to pay, perform or discharge or be responsible for any obligation or
liability (direct or indirect) related to or arising from the operation of the
Purchased Assets or Properties arising or accruing before the Closing or any
other liabilities, responsibilities or obligations of Seller and its Affiliates,
whether accrued, absolute, contingent or otherwise, including without limiting
the generality of the foregoing, any liabilities or obligations resulting from
or by reason of any event or circumstance occurring prior to the Closing
(including without limitation, the improper application of Tenant Deposits), any
lawsuit or other proceeding or investigation relating to the Purchased Assets or
the Properties arising from events or circumstances prior to the Closing (other
than costs and expenses incurred by Purchaser to pursue claims against tenants
under the tenant litigation assigned to Purchaser under Section 6.8), or arising
out of or by reason of any of the transactions contemplated by this Agreement
other than as a result of Purchaser's failure to comply with its obligations
under this Agreement; such obligations and liabilities, together with any
liability or obligation relating to an Excluded Asset and Employee Related
Liabilities are referred to as the "Pre-Closing Property Liabilities." Provided,
however, Pre-Closing Property Liabilities will not include any Assumed
Liabilities.
1.4 NO REPRESENTATIONS. (a) PURCHASER SPECIFICALLY ACKNOWLEDGES AND AGREES
THAT (i) EXCEPT AS SET FORTH HEREIN OR ON ANY EXHIBIT OR SCHEDULE ATTACHED
HERETO OR THE DISCLOSURE SCHEDULE (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 THE DISCLOSURE
SCHEDULE, OR ANY OTHER CLOSING DOCUMENT REQUIRED HEREIN, PURCHASER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER OR ANY
OF ITS SUBSIDIARIES OR ANY PARTNER, MEMBER, MANAGER, TRUSTEE, DIRECTOR,
SHAREHOLDER, CONTROLLING PERSON, AFFILIATE, OFFICER, ATTORNEY, EMPLOYEE, AGENT
OR BROKER OF ANY OF THEM, AS TO ANY MATTER, CONCERNING THE PURCHASED ASSETS, OR
SET FORTH, CONTAINED OR ADDRESSED IN ANY DUE DILIGENCE (INCLUDING WITHOUT
LIMITATION, THE COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION: (i) the
quality, nature, habitability, merchantability, use, operation, value,
marketability, adequacy or physical condition of any Property or any aspect or
portion thereof, including, without limitation, structural elements, foundation,
roof, appurtenances, access, landscaping, parking facilities, electrical,
mechanical, HVAC, plumbing, sewage, water and utility systems, facilities and
appliances, soils, geology and groundwater, (ii) the dimensions or lot size of
any Property or the square footage of any of the Improvements thereon or of any
tenant space therein, (iii) the development or income potential, or rights of or
relating to, any Property, or the fitness, suitability, value or adequacy of any
Property for any particular purpose, (iv) the zoning or other legal status of
any Property or the existence of any other public or private restrictions on the
use
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of any Property, (v) the compliance of any Property or its operation with any
applicable codes, laws, regulations, statutes, ordinances, covenants, conditions
and restrictions of any Governmental Entity or of any other Person (including,
without limitation, the Americans with Disabilities Act of 1990, as amended),
(vi) the ability of Purchaser or any Subsidiary to obtain any necessary
governmental approvals, licenses or permits for the use or development of any
Property, (vii) the presence, absence, condition or compliance of any Hazardous
Materials on, in, under, above or about any Property or any adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
Improvements at any Property, (ix) the ownership of any Properties or any
portion thereof, (x) any leases, permits, warranties, service contracts or any
other agreements affecting any Property or the intentions of any party with
respect to the negotiation and/or execution of any lease or contract with
respect to any Property or (xi) the economics of, or the income and expenses,
revenue or expense projections or other financial matters, relating to the
operation of, any Property. Without limiting the generality of the foregoing,
Purchaser expressly acknowledges and agrees that, except as set forth herein or
on any Exhibit or Schedule hereto or in the Disclosure Schedule, 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.
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,
-5-
whether direct or indirect, known or unknown, contingent or otherwise (including
any action or proceeding brought or threatened or ordered by any Governmental
Entity), including, without limitation, attorneys' and experts' fees and
expenses, and investigation and remediation costs that may arise on account of
or in any way be connected with the Purchased Assets, or any Property or any
portion thereof (collectively, "Claims"), including, without limitation, the
physical, environmental and structural condition of any Property or any law or
regulation applicable thereto, or any other matter relating to the use,
presence, discharge or release of Hazardous Materials on, under, in, above or
about any of the Properties; provided, however, the foregoing provision of this
Section 1.5 shall not apply with respect to any Claim by Purchaser against (i)
any Seller Party for any act of that Seller Party that constitutes fraud, (ii)
Seller or any of its Subsidiaries for any breach of the representations,
warranties or covenants set forth in this Agreement, subject to the limitations
and conditions provided in Sections 10.2, and Article 11, if applicable, (iii)
Seller for its obligations under this Agreement including, without limitation,
Sections 2.4 and 11.2, (iv) any Seller Party in any action brought against
Purchaser by any third party or (v) any Seller Party for any Pre-Closing
Property Liabilities. In addition, Purchaser covenants and agrees to, and where
applicable hereby does, release, defend, indemnify and hold harmless each of the
Seller Parties and their respective Affiliates from and against any Claims to
the extent relating to any Hazardous Materials that may be placed, located or
released on or at any Property after the Closing Date and during the period of
Purchaser's (or any of its Affiliates') ownership. Purchaser's indemnity
obligation set forth in the immediately preceding sentence shall be limited to
its interest in all of the Purchased Assets. None of Purchaser, its Affiliates
or their respective successors or assigns will be required to indemnify, defend
or hold harmless any Seller Party from any Claims threatened, asserted or
commenced against any Seller Party by any other Person (including, without
limitation, any Governmental Entity) to the extent, if any, that such Claim
seeks recovery for harm suffered due to Hazardous Materials placed, located or
released on or at any Property before the Closing or prior to, from or after the
Closing with respect to any "offsite" Hazardous Materials migrating to the
Property; provided, however, Purchaser (but not Seller or any Subsidiary) will
be responsible for remediating any such Hazardous Materials at the Property to
the extent that Purchaser is required by Law to perform such remediation.
(b) In connection with this Section 1.5, Purchaser expressly waives the
benefits of any provision or principle of federal or state law or regulation
that may limit the scope or effect of the foregoing waiver and release.
(c) This Section 1.5 shall survive the Closing indefinitely.
1.6 INDIVISIBLE ECONOMIC PACKAGE. Except as otherwise expressly provided
herein (including the withdrawal provisions of Section 1.7 and the property
dropping provisions of Section 7.16 and those referred to therein), 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, all subject to and in
accordance with the terms and conditions hereof.
1.7 WITHDRAWN AND ADDITIONAL PROPERTIES. The parties hereto acknowledge
that the Properties are subject to the right and option of the Unit Holder (as
defined in the Redemption
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Agreement) to cause any or all of the Partnerships (as defined in the Redemption
Agreement) owning the Properties under this Agreement to become subject to the
Redemption Agreement, accordingly if the Unit Holder exercises its option and
any Partnership owning a Property becomes subject to the Redemption Agreement,
subject to the terms of this Section 1.7, Seller shall be entitled, from time to
time up to the Closing Date upon prior written notice to the Purchaser, to
withdraw a Property from the Properties to be sold, transferred and/or assigned
hereunder. Any Property withdrawn under this Section 1.7 shall not for any
purpose count as a dropped Property hereunder or under any Sale Agreement, but
this Agreement shall otherwise be deemed amended as if such Property were
dropped.
(a) Subject to the terms of this Section 1.7, Seller shall be entitled,
from time to time up to the Closing Date, to add a property from that was
subject to the Contribution Agreement to the Properties to be sold, transferred
and/or assigned hereunder solely to prevent a Significant Adjustment. Seller and
Purchaser shall have the same rights and obligations with respect to any
Property added hereunder as they have with respect to all other Properties being
sold, transferred and/or assigned hereunder; provided, however, that if another
Sale Agreement had provisions specifically addressing such added Property, such
provisions shall be incorporated into this Agreement by reference including,
without limitation, any item on any Exhibit or Schedule to the Disclosure
Schedule and the Assumed Indebtedness with respect to such property, if any;
provided further, that Purchaser and Seller shall have the same rights and
obligations with respect to such added Property as the Non-Hickory Parties and
the Non-Panther Parties had under the Sale Agreement from which such Property
was withdrawn, subject to the automatic addition provisions of this section.
In addition, if a Property is added under this Section 1.7, then the amount
to be adjusted pursuant to Section 2.1 to determine the Purchase Price shall be
increased to take into account the allocated Purchase Price for the added
Property as set forth in the side letter referred to in Section 7.7, but all
still subject to all adjustments as set forth in Section 2.1 including, without
limitation, a credit for related Assumed Indebtedness, if applicable.
(b) If any Property under any Sale Agreement is withdrawn from any other
Sale Agreement and is not subject to the Redemption Agreement (such withdrawal
is hereinafter referred to as the "Withdrawal" and such withdrawn property is
hereinafter referred to as a "Withdrawn Property"), and Seller has not exercised
its right to subject the Withdrawn Property to this Agreement (subject to all of
terms and conditions of this Agreement), within one (1) Business Day after the
Withdrawal, Purchaser shall have the right and option to elect, by written
notice to Seller, to subject the Withdrawn Property to this Agreement (subject
to all of terms and conditions of this Agreement), within two (2) Business Days
after the Withdrawal, provided failure to deliver such notice shall be deemed an
election to subject the Withdrawn Property to this Agreement (subject to all of
the terms and conditions of this Agreement). Subject to the rights of the
parties to the Redemption Agreement to subject a Withdrawn Property to the
Redemption Agreement, Seller shall and shall cause its Subsidiaries, (i) to take
all actions necessary to preserve Purchaser's rights under this Section and (ii)
not take any or fail to take any action that would impair Purchaser's rights
under this Section. Notwithstanding anything herein to the contrary, the parties
hereto agree that the provisions of this Section are enforceable by specific
performance.
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II. CONSIDERATION
2.1 PURCHASE PRICE. The purchase price for the Purchased Assets will be
equal to $99,263,484, as may be adjusted in accordance with this Section 2.1 and
the other provisions of this Agreement, including without limitation, Sections
2.4, 2.7, 3.4 (including Section 3.4(g) with respect to Purchaser taking subject
to, and paying off any, Indebtedness that is not Assumed Indebtedness), 7.6,
7.14, 7.15, 7.16, 7.20, 7.21, 8.2, 8.3 and 10.2 (the "Purchase Price"). The
Purchase Price is payable at Closing by (i) Purchaser paying in cash an amount
equal to the cash portion of the Purchase Price, less 100% of the principal
amount outstanding of the Assumed Indebtedness as of the Closing Date, and (ii)
Purchaser assuming or taking the Purchased Assets subject to the Assumed
Indebtedness. The Deposit plus any interest or other investment income earned
thereon will be applied to the Purchase Price in accordance with the Escrow
Agreement. As additional consideration, Purchaser shall assume or take the
Purchased Assets subject to the Assumed Liabilities. Purchaser shall pay to
Seller the 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 ALTERNATE PAYMENT OF PURCHASE PRICE. At Seller's election, instead of
paying cash at the Closing, Purchaser agrees to provide a promissory note in an
amount reasonably agreed to by Purchaser and Seller, for a portion of the cash
portion of the Purchase Price, as adjusted pursuant to the terms hereof. Such
promissory note shall be secured by a letter of credit (which letter of credit
shall be secured by cash (the "Cash Collateral") of the Purchaser held by the
issuing bank). The interest on the promissory note shall be equal to the
investment income on the Cash Collateral from the issuing bank and the note
shall be due on demand at any time in the calendar year 2003. If Purchaser does
not pay off the promissory note within five (5) Business Days of Seller's
written demand, Seller shall be entitled to draw on the letter of credit to pay
off the amount due on the promissory note. Purchaser and Seller shall cooperate
to effect such transaction on terms and conditions reasonably acceptable to both
parties; provided, however, that (A) in no event shall the rights of Purchaser
under this Agreement, including, without limitation, Purchaser's right to
acquire all of Seller's and the Assigning Subsidiaries' right, title and
interest in and to the Purchased Assets free and clear of all Liens other than
the Permitted Encumbrances, be affected by this arrangement and this arrangement
shall not violate any of the Assumed Loan Documents; and (B) Purchaser's
compliance with the provisions of this Section 2.2 shall be at Seller's sole
cost and expense including, without limitation, any letter of credit costs,
lender's fees and expenses (including their attorneys' fees), mortgage recording
taxes, any imputed interest income taxes and any other transaction costs
incurred in connection therewith, except with respect to Seller's enforcement of
the promissory note after Purchaser fails to repay same within the five (5)
Business Day period. Seller hereby agrees that if Purchaser delivers the
promissory note in accordance with the provisions this Section 2.2, Purchaser's
obligation to deliver the amount of the cash portion of the Purchase Price equal
to the amount of the promissory note under other Sections of this Agreement
shall be deemed to have been satisfied.
2.3 XXXXXXX MONEY. (a) At such time as the Deposit (as defined under the
EIG Realty
Purchase Agreement) is due under the EIG Realty
Purchase Agreement,
Purchaser will deposit with the Escrow Holder in immediately available funds by
wire transfer $50,000 (the "Deposit"), which will be held in escrow by the
Escrow Holder pursuant to the terms of this Agreement, and
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in accordance with the terms and provisions of the Escrow Agreement by and among
the Escrow Holder, Seller and Purchaser dated of even date herewith (the "Escrow
Agreement").
(b) In order to assure compliance with the requirements of Section 6045 of
the Internal Revenue Code of 1986, as amended (the "Code"), and any related
reporting requirements of the Code, the parties hereto agree as follows:
(i) Provided the Escrow Holder executes a statement in writing
(in form and substance reasonably acceptable to the parties hereunder) pursuant
to which it agrees to assume all responsibilities for information reporting
required under Section 6045(e) of the Code, Seller and Purchaser will designate
the Escrow Holder as the Person to be responsible for all information reporting
under Section 6045(e) of the Code (the "Reporting Person"). If the Escrow Holder
refuses to execute a statement pursuant to which it agrees to be the Reporting
Person, Seller and Purchaser agree to appoint another third party, acceptable to
Seller and Purchaser in their reasonable discretion, as the Reporting Person.
(ii) Each of Seller and Purchaser will:
(A) provide to the Reporting Person all information and
certifications regarding the applicable party, as reasonably requested
by the Reporting Person or otherwise required to be provided by a
party to the transaction described herein under Section 6045 of the
Code; and
(B) provide to the Reporting Person the applicable party's
taxpayer identification number and a statement (on Internal Revenue
Service Form W-9 or an acceptable substitute form, or on any other
form the applicable current or future Code sections and regulations
might require and/or any form requested by the Reporting Person),
signed under penalties of perjury, stating that the taxpayer
identification number supplied by the applicable party to the
Reporting Person is correct.
(iii) Each party will retain this Agreement for not less than four
years from the end of the calendar year in which Closing occurs, and will
produce it to the Internal Revenue Service upon a valid request for this
Agreement.
(iv) The addresses for Seller and Purchaser are as set forth in
Section 12.1, and the real estate subject to the transfer provided for in this
Agreement is described in Schedule 1.1(a)(i)(A) of the Disclosure Schedule.
(c) At the Closing, the Escrow Holder will deliver the Deposit, and
interest and other investment income earned thereon, to Seller as provided in
the Escrow Agreement and Section 2.1.
2.4 PRORATIONS. Prorations will be made with respect to the Assumed
Liabilities and the Purchased Assets as provided in this Section 2.4 without
duplication in each case.
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(a) (i) Seller and Purchaser agree to adjust, as of 11:59 p.m. on the day
immediately preceding the Closing Date (the "Proration Time"), the following
(collectively, the "Proration Items"):
(A) Real property taxes and assessments as provided in
Section 2.4(d);
(B) Water rates and charges paid or payable with respect to
the Property, except those required to be paid by Tenants directly to
the entity imposing the rates or charges;
(C) Sewer taxes and rents paid or payable with respect to
the Property, except those required to be paid directly by Tenants to
the entity or authority imposing the taxes and rents;
(D) Accrued interest payable under the Assumed Indebtedness
as provided in Section 2.4(g) but not late fees and other costs,
charges, and past due interest owing to the lender before the
Proration Time, which will be Seller's sole expense;
(E) Amounts, if any, payable or cash received by the owner
of the Property under the REA Agreements, including prepaid amounts
and unpaid amounts;
(F) Annual permit, license and inspection fees, if any, on
the basis of the fiscal year for which levied;
(G) Charges for fuel oil and liquid propane gas, if any, at
the cost per gallon or cubic foot most recently charged to the owner
of the Property, based on the supplier's measurements thereof, plus
sales taxes thereon to the extent applicable;
(H) Rentals as provided in Section 2.4(b) (other than
payments for Operating Expenses which shall be apportioned as provided
in Section 2.4(c)), including prepaid Rentals;
(I) Amounts payable by or to Seller or the owner of the
Property under a management, development and/or other Contract
relating to the Property as provided in Section 2.4(i) (other than for
the payment of leasing commissions or brokerage fees, which shall be
prorated as provided in Section 2.4(e));
(J) Cash reserves and escrow deposits under any of the
Assumed Indebtedness that are for a specific repair or remediation
that has not been completed at Closing shall be credited against the
Purchase Price (provided, however, Purchaser shall return to Seller
any amounts in excess of the actual amount spent by Purchaser to
remediate or repair such matter), all other cash reserves and escrow
deposits for real property taxes and assessments, insurance premiums
and other items, made with, or held by, the lender under any of the
Assumed Indebtedness, net, if appropriate, of any allocation to the
same party of
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the underlying expense for which the reserve is held, together with so
much of any interest earned on the reserve or escrow deposit as is
properly attributable to the allocated amount thereof, PROVIDED
HOWEVER, adjustments for casualty or condemnation proceeds held by the
lender under any of the Assumed Indebtedness will be made in
accordance with Article VIII;
(K) Rentals and other amounts payable to third parties by
the Seller or its Subsidiaries under ground leases, including
contingent and/or participating rents (which such contingent and/or
participating rents, if based upon income of the Property or ground
lessee, shall be based upon the aggregate amount for such period as
required under such ground lease (including any percentage rent or
other amounts paid in the following period that relate to the such
period) and pro-rated for the actual number of days prior to Closing
for such period);
(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) Personal property taxes and assessments that have been
levied or assessed with respect to any Purchased Asset, whether or not
due and payable, and whether paid or unpaid;
(P) Amounts readily determinable that are payable under the
Assumed Liabilities; and
(Q) Except as set forth below, all other items customarily
apportioned in connection with the transfer of similar properties
similarly located.
(ii) Seller will be charged and credited for the amounts of all of
the Proration Items relating to the period up to and including the Proration
Time, and Purchaser will be charged and credited for all of the Proration Items
relating to the period after the Proration Time. Seller will prepare in good
faith and deliver a statement of estimated Proration Items and other credits and
adjustments to the Purchase Price hereunder (including the principal amount
outstanding of the Assumed Indebtedness as of the Closing Date) to be submitted
to Purchaser no less than 5 Business Days before the Closing Date (the "Closing
Statement"). Upon approval by Seller and Purchaser, the preliminary Proration
Items and other credits and adjustments reflected in the Closing Statement will
be paid at Closing by Purchaser to Seller (if the preliminary Proration Items,
credits and adjustments result in a net credit to Seller) or by Seller to
Purchaser (if the preliminary Proration Items, credits and adjustments result in
a net credit to Purchaser) by increasing or reducing the cash to be delivered by
Purchaser in payment of the Purchase Price at the Closing. If the actual amounts
of the Proration Items, credits and adjustments are not known as of the
Proration Time, the proration of the Proration Items, credits and adjustments
will be made at Closing on the basis of the best evidence then available;
thereafter, when actual amounts are determined, re-prorations will be made as
provided in Section 2.5 on the basis of the actual amounts, and a final cash
settlement will be made between Seller and Purchaser. No prorations will be made
in relation to insurance premiums, and Seller's
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insurance policies will not be assigned to Purchaser other than any assignment
of a claim or proceeds pursuant to Section 7.18 and Article VIII. Final readings
and final xxxxxxxx for utilities will be made if possible as of the Proration
Time, in which event no proration will be made at the Closing with respect to
utility bills. Seller will be entitled to all deposits presently in effect with
the utility providers, and Purchaser will be obligated to make its own
arrangements for deposits with the utility providers, alternatively at
Purchaser's election, Seller shall receive a credit for such deposits and assign
the same to Purchaser. The provisions of this Section 2.4 will survive the
Closing until the Final Closing Adjustment is determined and duly paid and
Seller and Purchaser shall cooperate to produce the Final Closing Adjustment in
accordance with Section 2.5.
(b) Rentals shall be prorated at the Closing in accordance with the
following provisions:
(i) Minimum rent and percentage only rent actually received for
the month in which the Closing Date occurs will be prorated between Seller and
Purchaser as of the Proration Time based on the actual number of days in the
month during which the Closing occurs. Seller will be entitled to all minimum
rent and percentage only rent for the period before the Proration Time and
Purchaser will be entitled to all minimum rent and percentage only rent for the
period from and after the Proration Time.
(ii) Monthly or other payments made by each Tenant based upon
projected or estimated additional rent actually received for the month or other
relevant period in which the Closing Date occurs will be prorated between Seller
and Purchaser as of the Proration Time based on the actual number of days in the
month or other relevant period during which the Closing occurs. Seller will be
entitled to all additional rent for the period before the Proration Time, and
Purchaser will be entitled to all additional rent for the period on and after
the Proration Time. This Section 2.4(b)(ii) will not include any Proration Item
set forth in Section 2.4(c).
(iii) Percentage rent (if any) payable by a Tenant under its Lease
will be prorated as of the Proration Time between Seller and Purchaser on the
basis of the fiscal year set forth in the applicable Lease for the determination
and payment of percentage rent. Such fiscal year for determination and payment
of percentage rent in which the Closing occurs is hereinafter referred to as the
"Applicable Percentage Rent Fiscal Year." Seller will receive the entire amount
of percentage rent with respect to any Applicable Percentage Rent Fiscal Year
ending prior to the Closing or with respect to any Lease that terminated before
the Closing Date, subject to the application of Delinquent Rentals, as set forth
in Section 2.4(b)(v), subject to Section 2.4(m). Any amounts collected from a
Tenant after Closing that relate to percentage rents shall be prorated at the
end of the Applicable Percentage Rent Fiscal Year and then quarterly thereafter
until the Final Closing Adjustment, all subject to the application of Delinquent
Rentals, as set forth in Section 2.4(b)(v), subject to Section 2.4(m), and any
amount of percentage rent that Seller is entitled to shall be remitted to Seller
at such time. Purchaser shall, at the reasonable request (based upon a
legitimate concern about the amount of the percentage rent) of Seller and at
Seller's sole cost and expense, conduct an audit of any Tenant for purposes of
determining the amount of percentage rent due for the Applicable Percentage Rent
Fiscal Year, subject however, to a maximum number of 10 such audits. The
prorations shall be based upon the percentage rent collections from Tenants for
the Applicable Percentage Rent Fiscal
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Year with Seller and Purchaser being credited and charged with a pro rata share
thereof based upon actual number of days in the Applicable Percentage Rent
Fiscal Year before and after the Proration Time.
(iv) All other types of Rentals other than those listed in
Sections 2.4(b)(i), (ii) and (iii) and 2.4(c) (including, specific tenant
xxxxxxxx for work orders, special items performed or provided at the request of
a given Tenant or other specific services) ("Other Rent") received for the month
in which the Closing Date occurs will be prorated based on the actual number of
days in the month during which the Closing Date occurs and Seller will be
entitled to such Other Rent for the period before the Proration Time, and
Purchaser will be entitled to such Other Rent for the period on or after the
Proration Time. All Rentals payable by each Tenant whose Lease commences on or
after the Closing shall belong entirely to Purchaser.
(v) In determining the amounts under Sections 2.4(b)(i)-(iv) and
2.4(c), this Section will be applied. Rentals are "Delinquent" if they were not
paid when due. Delinquent Rentals will not be prorated and neither Seller nor
Purchaser will receive a credit at Closing for Delinquent Rentals. Purchaser
agrees to use good faith collection procedures with respect to the collection of
any Delinquent Rentals using its normal and customary collection efforts during
the period prior to the Final Closing Adjustment. Delinquent Rental amounts
collected net of enforcement costs that Seller is entitled to under this
Agreement, if any, shall be remitted to Seller quarterly after Closing, subject
to the application of Delinquent Rentals as set forth in this Section 2.4(b)(v),
subject to Sections 2.4(m), (n) and (o). Purchaser will have no liability for
the failure to collect any such amounts and will not be required to conduct
lock-outs or take any other legal action to enforce collection of any such
amounts owed to Seller or any Assigning Subsidiaries by Tenants of the Property.
All Rentals and other amounts collected by Seller or Purchaser from and after
Closing from each Tenant, will be applied as of the date of receipt first to
current amounts owed by that Tenant to Purchaser, then to the amounts owed for
the month (or other relevant period) in which the Closing Date occurs, then to
all other delinquencies owed by that Tenant to Purchaser, and thereafter, to
delinquencies or other amounts owed by that Tenant to Seller. Any payment net of
enforcement costs received by Purchaser under a note assigned to Purchaser that
was made by a Tenant in respect of amounts owed under a Lease, excluding any
amount specifically allocated under the note to post-closing periods under such
obligations and any net recovery in respect of the litigation against Tenants
assigned to Purchaser under Section 6.8, excluding any claim for post-closing
rents, will be treated as payment of undesignated Delinquent Rentals for periods
before the Closing, but subject to the application of funds under this Section
2.4(b)(v), subject to Sections 2.4(m), (n) and (o). Seller may not (and shall
not permit its Affiliates) without Purchaser's prior written consent commence a
lawsuit against any Tenant after the date of this Agreement to collect
Delinquent Rentals and payments for Operating Expenses so long as Tenant
occupies the space that is the subject of the Delinquent Rentals and payments
for Operating Expenses. The obligations of Seller under the immediately prior
sentence will survive Closing indefinitely.
(vi) Any Rentals or other payments by Tenants delivered to Seller
or its Affiliates after closing with respect to the Properties shall be promptly
remitted to Purchaser to be held by Purchaser for application in accordance with
this Agreement, other than amounts for which Seller is entitled to after the
application of Sections 2.4 (m), (n) and (o), after providing
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Purchaser with a specific accounting and reasonable backup for Seller's
application of such payments.
(vii) In connection with the Mars Music store Lease in the Property
commonly known as Northeast Plaza in Atlanta, Georgia, a special post Closing
adjustment shall be made by Seller by a payment to Purchaser each and every
month until December 31, 2003 in the amount by which the Rent paid by Mars Music
or any assignee under the Lease at Northeast Plaza (and if such lease is
rejected under the U.S. Bankruptcy Code, such amount shall be deemed to be $0)
is less than the amount required to be paid under the Mars Music Lease as it
exists on the date hereof.
(c) Seller and Purchaser will prorate payments, including estimated
payments, if any, received from Tenants for and expenses related to common area
maintenance, real estate taxes, electricity redistribution and HVAC charges, and
all other operating expenses and tax escalations (collectively, "Operating
Expenses") on the basis of the fiscal year set forth in the applicable Lease for
such items. Such fiscal year for determination of Operating Expenses and
Tenant's obligation to reimburse is hereinafter referred to as the "Applicable
Operating Expense Fiscal Year." Seller will receive all payments of Operating
Expenses with respect to any Applicable Operating Expense Fiscal Year ending
prior to the Closing or with respect to any Lease that terminated before the
Closing Date, subject to the application of Delinquent Rentals as set forth in
this Section 2.4(b)(v), subject to Section 2.4(n). Operating Expense payments
received from a Tenant after Closing that relate to Operating Expenses shall be
prorated at the end of the Applicable Operating Expense Fiscal Year following
the annual reconciliation with Tenants and then quarterly there after until the
Final Closing Adjustment, all subject to the application of Delinquent Rentals,
as set forth in Section 2.4(b)(v), subject to Section 2.4(n), and any amount of
payments for Operating Expenses that Seller is entitled to shall be remitted to
Seller at such time and any amount of Operating Expenses that Purchaser is
entitled to shall be remitted to Purchaser at such time. The prorations shall be
based upon Operating Expenses and collections from Tenants for the Applicable
Operating Expense Fiscal Year with Seller and Purchaser being credited and
charged with a pro rata share thereof based upon actual number of days in the
Applicable Operating Expense Fiscal Year before and after the Proration Time. If
Seller provides Purchaser with all documentation, bills, and backup necessary or
requested by Purchaser, Purchaser agrees to xxxx Tenants monthly after the end
of the Applicable Operating Expense Fiscal Year for 2002 Operating Expenses
reconciliations due for the Applicable Operating Expense Fiscal Year for 2002.
(d) All real estate taxes and assessments applicable to the year in which
the Closing Date occurs that are paid prior to the Proration Time will be
prorated based upon the amounts actually paid. If taxes and assessments for the
year in which the Closing Date occurs or any prior year have not been paid
before Closing, Seller will be charged at Closing an amount equal to that
portion of such taxes and assessments which relate to the period before Closing,
assuming for this purpose that payment would be made so as to secure all
available discounts (if available after Closing), and Purchaser will pay the
taxes and assessments prior to their becoming delinquent. Any such apportionment
made with respect to a tax year for which the tax rate or assessed valuation, or
both, have not yet been fixed shall be based upon the tax rate and an assessed
valuation last fixed. After taxes and assessments are known, adjustments, if
needed,
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will be made between the parties. Purchaser will be responsible for all
installments of special assessments due for any period after the Closing.
(e) Purchaser shall receive a credit for any and all Lease Expenses to the
extent that they have been incurred (or will be incurred under any signed Lease)
but not paid by Seller or the owner of the Property prior to Closing and to the
extent that Seller has not executed prior to Closing a Lease for any space set
forth in Schedule 2.4(e) of the Disclosure Schedule, Purchaser will receive a
credit against the Purchase Price for future Lease Expenses to be incurred by
Purchaser in the amount allocated to the unleased space as set forth in Schedule
2.4(e) of the Disclosure Schedule and Purchaser will assume at Closing liability
for all Lease Expenses related to such space regardless of the actual amount
thereof. Each party will make available to the other all records, bills,
vouchers and other data in such party's control verifying Lease Expenses and the
payment thereof.
(f) There will be no proration of any promotional or publicity charges or
other costs and expenses paid from any promotional fund or by any merchants'
association held by Seller or any Subsidiary or its managing agent on the
Closing Date, except that Seller or any Subsidiary shall be responsible for
funding, on or before the Closing Date, any amounts Seller or any Subsidiary is
obligated to fund prior to such date pursuant to any agreements by which Seller
or any Subsidiary is bound relating to the Properties. On the Closing Date,
Seller shall deliver to Purchaser the balance of any promotional fund and all
funds of any merchants' association then held by Seller or any Subsidiary or its
managing agent, including funds derived from payments made by Tenants and funds
derived from optional or mandatory contributions by Seller or any Subsidiary, or
at Seller's election, Seller shall give Purchaser a credit against the Purchase
Price therefor.
(g) Accrued interest payable under the Assumed Indebtedness (excluding
unpaid late fees and other costs, charges, and past due interest for which
Purchaser will receive a credit) for the period in which the Closing Date occurs
will be prorated between Purchaser and Seller as of the Proration Time.
(h) Intentionally Omitted.
(i) Amounts received or payable under the Contracts will be prorated
between Seller and Purchaser as of the Proration Time based on the actual number
of days in the month (or other applicable period under such Contract) during
which the Closing occurs. All amounts received or payable under the Contracts
accruing prior to the Proration Time will be credited to or the obligation of
Seller. Purchaser shall be credited with or be responsible for all amounts
received or payable under the Contracts accruing on and after the applicable
Proration Time.
(j) Intentionally Omitted.
(k) Seller will be credited with an amount equal to all prepaid costs,
expenses, charges and fees paid by Seller with respect to any Property and
attributable to any period after the applicable Proration Time so long as
Purchaser is assigned the benefit of the prepayment (excluding any insurance
premiums, for which there will be no pro-ration).
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(l) Seller will be credited with an amount equal to all security deposits,
prepaid rentals and other deposits paid or deposited with any ground lessor of a
Property under the applicable ground lease or to any other person on the ground
lessor's behalf, together with any interest that has accrued thereon.
(m) For a period of 90 days following the later of the date when (x) such
percentage rent is due under any Lease for the Applicable Percentage Rent Fiscal
Year or (y) if applicable, such tenant reports its sales with respect to the
Applicable Percentage Rent Fiscal Year, any percentage rent payments for such
period, that are made after Closing and are specifically identified as same by
the Tenant or are readily identifiable for same, such amounts will not be
treated as part of the application of Rentals to Delinquent Rentals under
Section 2.4(b)(v), but prorated under Section 2.4(b)(iii) and remitted to the
party that is entitled to same without regard to the application of Rentals to
Delinquent Rentals.
(n) For a period of 90 days following the date when Purchaser sends a
Tenant a xxxx for Operating Expenses reconciliations under any Lease for the
Applicable Operating Expense Fiscal Year, any Operating Expenses payments for
such period that are made after Closing and are specifically identified as same
by the Tenant or are readily identifiable for same, such amounts will not be
treated as part of the application of Rentals to Delinquent Rentals under
Section 2.4(b)(v), but prorated under Section 2.4(c) and remitted to the party
that is entitled to same without regard to the application of Rentals to
Delinquent Rentals. Such 90 day period shall be tolled during any Tenant dispute
of such amount billed for Operating Expenses until such dispute is settled.
(o) For a period of 60 days following the Closing, any base monthly
Rentals that are made after Closing and are specifically identified as relating
to a period prior to the Closing by the Tenant, such amounts will not be treated
as part of the application of Rentals to Delinquent Rentals under Section
2.4(b)(v), but remitted to the Seller without regard to the application of
Rentals to Delinquent Rentals.
2.5 PREPARATION OF FINAL STATEMENT. On or before 30 days following the
last day of the 12th full calendar month following the Closing Date (or the 15th
full calendar month following the Closing Date if the Closing Date is in 2003)
or such later date as is mutually agreed by the Seller and the Purchaser, the
Purchaser will prepare and deliver to the Seller a final unaudited statement of
Proration Items and other credits and adjustments to the Purchase Price as of
the Proration Time (the "Final Statement"), based on information available as of
the last day of the 12th full calendar month following the Closing Date (or the
15th full calendar month following the Closing Date if the Closing Date is in
2003) or such later date as is mutually agreed by the Seller and the Purchaser
(the "Final Adjustment Date"). Seller will afford Purchaser and its
representatives and auditors the opportunity at reasonable times and upon
reasonable prior notice to review with Purchaser all underlying financial
records and work papers pertaining to the preparation of the Final Statement
within its control. Subject to Section 2.6, any net adjustment in favor of
Purchaser will be paid in cash by Seller to Purchaser no later than 10 days
after delivery of the Final Statement. Subject to Section 2.6, any net
adjustment in favor of Seller will be paid in cash by Purchaser no later than 10
days after delivery of the Final Statement. The Final Statement may be audited
at either party's request as provided in Section 2.6. The payments made under
the Final Statement will be the "Final Closing Adjustment."
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2.6 AUDIT. If Purchaser and Seller do not agree on the computation of the
Proration Items and other credits and adjustments to the Purchase Price in the
Final Statement, then each party will prepare its own calculation of the Final
Statement and such calculations will be submitted to a firm of independent
accountants of nationally recognized standing reasonably satisfactory to
Purchaser and Seller (who shall have no material relationship with Seller or
Purchaser) promptly to review this Agreement and the disputed items or amounts
for the purpose of calculating the Final Statement. In making that calculation,
the firm of independent accountants will include the non-disputed items and
amounts set forth in each parties' calculation of the Final Statement, and shall
consider affirming or adjusting only those items or amounts in the calculation
of the Final Statement as to which the parties have disagreed and any items and
amounts affected by those disputed items and amounts. The firm of independent
accountants will deliver to Purchaser and Seller, as promptly as practicable, a
report setting forth its calculation of the Final Statement. That report will be
final and binding upon Purchaser and Seller. The cost of the independent
accountants' review and report will be borne by (i) Purchaser if the difference
between the Final Statement (prepared by the independent accountants) and
Purchaser's calculation of the Final Statement delivered pursuant to this
Section 2.6 is greater than the difference between the Final Statement (prepared
by the independent accountants) and the Seller's calculation of the Final
Statement delivered pursuant to Section 2.6, (ii) Seller if the first such
difference is less than the second such difference, and (iii) by Purchaser and
Seller equally if the first such difference is equal to the second such
difference. Purchaser will, and will cause Purchaser's independent accountants
to, cooperate and assist Seller in their calculation of the Final Statement and
in the conduct of the audits and reviews referred to in this Section 2.6,
including without limitation, making available to Seller to the extent necessary
of books, records, work papers and personnel. If the Final Statement reflects a
net adjustment in favor of Seller, Purchaser will pay to Seller the amount of
that adjustment in cash to Seller no later than 10 days after the determination
of the Final Statement. If the Final Statement reflects a net adjustment in
favor of Purchaser, Seller will pay to Purchaser the amount of that adjustment
in cash to Purchaser no later than 10 days after the determination of the Final
Statement.
2.7 TENANT DEPOSITS. The unapplied portion of any Tenant Deposits as of
the date of the Rent Roll that have been paid to the owner of each Property or
are held by agents of the owner of each Property on its behalf (or that were
deposited with any predecessor in interest to the owner to the extent the
predecessor has turned over security deposits to the owner or given the owner a
credit therefor) by any Tenants or contractors are in the form of cash, except
for any letters of credit or other similar instruments set forth in Schedule 2.7
of the Disclosure Schedule. To the extent any Tenant Deposits are held by Seller
or a Subsidiary or any security deposit has been applied in violation of Section
6.1(r), Seller shall, as applicable, pay to Purchaser, in cash, or credit
against the Purchase Price the aggregate amount of any such Tenant Deposits (or
transfer any letters of credit or other non-cash Tenant Deposits) and the amount
applied in violation of Section 6.1(r). Purchaser hereby indemnifies and agrees
to defend Seller and the Seller Parties for, and agrees to defend and hold
Seller and the Seller Parties harmless from and against, any and all claims,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements) imposed upon or incurred by Seller and Seller
Parties with respect to the Tenant Deposits actually paid over or assigned to
Purchaser pursuant to this Section, or with respect to the application thereof
by Purchaser subsequent to Closing. Seller will be entitled to retain as its
property its percentage of any interest accrued on any Tenant Deposits prior to
Closing except to the extent such interest is required to be paid to any
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Tenants pursuant to their respective Leases or the depositing contractor. Seller
will use its reasonable efforts to cause all letters of credit to be assigned or
re-issued to Purchaser at the Closing and will continue to assist Purchaser
after the closing to cause such letters of credit to be re-issued if they are
not assignable.
2.8 CERTIORARI. Schedule 2.8 of the Disclosure Schedule identifies all
proceedings for certiorari or other proceedings to determine the assessed value
of the Properties or the real property taxes payable with respect to the
Properties which have been or may be commenced prior to the Closing Date hereof
and may be continuing as of the Closing Date. Purchaser will be entitled to
control the prosecution of any proceeding or proceedings for the years prior to
and including the year in which the Closing occurs to completion and to settle
or compromise any claim therein. Purchaser will keep Seller informed on a timely
basis on all matters with respect to any proceedings and seek Seller's
reasonable consent and approval to the extent required in this Section 2.8. The
parties hereto agree to cooperate with each other and to execute any and all
documents reasonably requested by the other party in furtherance of the
foregoing. With respect to any awards for the years prior to the year of the
Closing, Purchaser will be entitled to first recover the reasonable costs it has
expended in obtaining any awards and thereafter, Seller will be entitled to the
remainder of the awards, subject to Seller's obligation to rebate any portion of
those amounts to Tenants. With respect to any awards for the year in which the
Closing occurs, Purchaser will be entitled to first recover the reasonable costs
it has expended in obtaining any awards and Seller shall then be entitled to
recover the reasonable costs it has expended in obtaining any awards, and
thereafter, Seller and Purchaser will apportion the remainder of any awards
between the period before the Closing and the period following the Closing,
subject to their obligation to rebate any portion of those amounts to Tenants.
In connection with the foregoing, Seller agrees to assign, subject to the
provisions of this Section 2.8, to Purchaser at the Closing all of Seller's
right, title and interest to the foregoing certiorari proceedings that are for
the year in which the Closing occurs and all refunds relating thereto and
cooperate with Purchaser with respect thereto. Purchaser will promptly remit to
Seller any monies received which are to be paid to and/or shared by Seller as
provided herein. Purchaser will not settle or compromise any proceeding that
involves a tax year prior to and including the year in which the Closing occurs,
without the consent of Seller, such consent not to be unreasonably withheld,
delayed or conditioned. The provisions of this Section 2.8 will survive the
Closing until all proceedings with respect to the tax year of the Closing and
prior years are resolved.
2.9 EFFECT OF CLOSING. If the Closing occurs, for all legal, accounting
and tax purposes (to the extent permitted under the applicable tax Laws), the
Closing will be deemed to be effective as of the Proration Time.
III. DUE DILIGENCE, TITLE AND OTHER PROPERTY RELATED MATTERS
3.1 PURCHASER'S INSPECTIONS AND DUE DILIGENCE. (a) Prior to the date
hereof Purchaser has conducted and after the date hereof will continue to
conduct its economic, title, survey, environmental, legal, physical, and
structural examinations, inspections, testing, studies and investigations of the
Properties (collectively, the "Due Diligence"). Except for any limitations as
may be imposed by this Section 3.1 and Section 3.2 below, Purchaser may conduct
such Due Diligence as it deems necessary or appropriate, and examine and
investigate to its full satisfaction the facts, circumstances, and matters
relating to the Due Diligence. The Due
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Diligence will be at Purchaser's sole cost and expense, except as otherwise
expressly provided in Section 12.9.
(b) Notwithstanding anything herein to the contrary, if Purchaser, in
Purchaser's sole discretion, shall determine for any reason that Purchaser is
not entirely satisfied with the results of Purchaser's Due Diligence, Purchaser
shall have the right to elect either or both of the following (i) implement the
provisions and procedures set forth in Section 3.1(c) with respect to any
individual Property if the matter in question is an Objectionable Due Diligence
Item or (ii) terminate this Agreement by giving written notice to Seller and
Escrow Agent hereunder prior to 5:00 P.M. (EST) on, or prior to, the last day of
the Contract Due Diligence Period, in which case, Purchaser will be entitled to
the return of the Deposit plus any interest or other investment income earned
thereon and Seller shall deliver and/or cause the Escrow Holder to deliver the
same to Purchaser. Upon the expiration of the Contract Due Diligence Period
without Purchaser having terminated this Agreement as provided above, the
Deposit shall, subject to the provisions of this Agreement, be at risk and shall
not be refundable to Purchaser except as expressly set forth in this Agreement.
Notwithstanding anything herein to the contrary, if Purchaser fails to timely
deliver the Additional Deposit, Purchaser shall be deemed to have elected to
terminate this Agreement as set forth above.
(c) If Purchaser elects to use the provisions of this Section 3.1(c),
prior to 5:00 P.M. (EST) on, or prior to, the last day of the Contract Due
Diligence Period, Purchaser shall give written notice to Seller of its
Objectionable Due Diligence Item with respect to a Property that it discovered
during its Due Diligence in sufficient detail for Seller to understand such
Objectionable Due Diligence Item, together with the Purchaser's Cure Value for
such objection ("Due Diligence Objection Notice"). Seller shall have two (2)
Business Days after receipt of the Due Diligence Objection Notice to provide
Purchaser with its election by written notice (the "Due Diligence Response
Notice") to (with respect to each such objection) either (i) drop such Property,
(ii) cure such Objectionable Due Diligence Item to the reasonable satisfaction
of Purchaser, or (iii) give Purchaser a credit against the Purchase Price in the
amount of the Purchaser's Cure Value for such Objectionable Due Diligence Item.
Failure of Seller to deliver its Due Diligence Response Notice shall be deemed
an election by Seller to drop such Property. If Seller elects option (ii) above,
the Due Diligence Response Notice shall state in specificity what Seller intends
to undertake to cure the Objectionable Due Diligence Item set forth in the Due
Diligence Objection Notice. If Purchaser and Seller can not reasonably agree on
the actions to be taken to cure such Objectionable Due Diligence Item, then
Purchaser shall have the right by written notice to drop the Property affected
by the Objectionable Due Diligence Item.
(A) Notwithstanding anything herein to the contrary, if Seller
elects to (or is deemed to have elected to) drop a Property under this
Section 3.1(c), Purchaser shall have the right within five (5)
Business Days of Seller's election (or deemed election) to waive the
Objectionable Due Diligence Item in the Due Diligence Objection Notice
with respect to such Property and nullify Seller's election (or deemed
election) to drop such Property without an adjustment to the Purchase
Price with respect to such matter that was waived.
(B) Notwithstanding anything herein to the contrary, if Seller
duly elects its option under Section 3.1(c)(ii), and such cure is not
completed at
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Closing as agreed to above in Section 3.1(c), and if Purchaser and
Seller have not otherwise agreed to a credit against the Purchase
Price at Closing, Purchaser shall have the right to drop such
Property, provided, however, such dropped Property shall not count as
a dropped Property for purposes of Seller's or a Non-Panther Party's
right to terminate this Agreement or a Sale Agreement for exceeding
the maximum number of dropped Properties.
(d) Prior to 5:00 P.M. (EST) on, or prior to, the last day of the Contract
Due Diligence Period, if more than three (3) Properties are dropped in the
aggregate pursuant to Section 3.1 of each of the Sale Agreements (other than
pursuant to Section 3.1(c)(B) in any Sale Agreement), within 10 Business Days
after the fourth (4th) Property is dropped, either Purchaser or Seller shall
have the right to terminate this Agreement by written notice to the other party,
in which case, Purchaser will be entitled to the return of the Deposit plus any
interest or other investment income earned thereon and Seller shall deliver
and/or cause the Escrow Holder to deliver the same to Purchaser. Provided,
however, Purchaser shall have the right within five (5) Business Days of receipt
of Seller's election to terminate this Agreement because more than three (3)
Properties in the aggregate under all Sale Agreements pursuant to Section 3.1 of
each Sale Agreement (other than pursuant to Section 3.1(c)(B) in any Sale
Agreement) were dropped, to waive the objections in the Due Diligence Objection
Notice with respect to any Properties, nullify any election to drop such
Properties, such that there is not more than three (3) dropped Properties in the
aggregate under all Sale Agreements pursuant to Section 3.1 of each Sale
Agreement (other than pursuant to Section 3.1(c)(B) in any Sale Agreement), and
close the Sale Agreements without an adjustment to the Purchase Price with
respect to such matter that was waived.
3.2 SITE VISITS. (a) Purchaser and its authorized agents, contractors,
consultants and representatives (the "Consultants") will have reasonable access
to the Properties on at least 2 Business Days' prior notice to Seller during
reasonable times as mutually agreed upon by Seller and Purchaser solely for the
purpose of performing its Due Diligence, including, inspecting the physical,
environmental and structural condition of the Properties and conducting
non-intrusive physical inspections and tests (physically intrusive shall not
mean activities that to a DE MINIMIS extent may cause a restoration obligation
under this Agreement or involve taking minor sampling of building materials and
the roofs and sampling for asbestos); provided, however, that such inspections
or tests will not unreasonably disrupt or disturb (x) the ongoing operation of
the Properties; (y) any services to the Properties; or (z) the quiet possession
of any Tenants under Leases. Such notice shall describe the scope of the Due
Diligence Purchaser intends to conduct during Purchaser's access to the
Properties. Seller will make reasonable efforts to have an agent available to
accompany Purchaser or any Consultants, and in all events Seller shall have the
right to have a representative present during any visits to or inspections of
any Properties. Purchaser may request any and all publicly available information
about the Properties from Governmental Entities but will not disclose to any
Governmental Entity the results of any inspection, sampling or testing conducted
at any Property without Seller's prior written consent except to the extent
required by Laws. If Purchaser desires to conduct any physically intrusive Due
Diligence, such as sampling of soils, other media, building materials, or the
like, Purchaser will identify in writing exactly what procedures Purchaser
desires to perform and request Seller's express written consent. Seller may
withhold or condition consent to any physically intrusive Due Diligence in
Seller's sole and absolute discretion (other than with respect to roof samples
and
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core samples of the asphalt on parking lots for which Seller's approval shall
not be unreasonably withheld or delayed), and in no event will Purchaser be
permitted to perform any Phase II environmental inspection of any Property
without Seller's consent which can be withheld in its sole discretion. If Seller
objects to the procedures requested by Purchaser, Seller will describe the basis
for its objection to Purchaser and may (but will not be obligated to) propose to
Purchaser a reasonable alternative for resolving the issue giving rise to the
request for intrusive Due Diligence. Upon receipt of Seller's written consent,
if granted, Purchaser and all Consultants shall, in performing the Due
Diligence, comply with the agreed upon procedures and with any and all Laws
applicable to the Properties and will not engage in any activities that would
violate any Licenses and Permits or Laws in any material respect. Purchaser and
any Consultants will: (a) promptly pay when due the costs of all entry and
inspections and examinations done with regard to the Properties and (b) restore
the Properties to the condition in 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 SELLER PARTY
FOR ANY LOSSES EXCEPT TO THE EXTENT CAUSED OR CONTRIBUTED TO, BY PURCHASER OR
ITS CONSULTANTS, AND (ii) ANY BREACH OF SECTION 3.2 BY PURCHASER OR ANY
CONSULTANT OR ANY OF THEIR
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RESPECTIVE, AGENTS OR REPRESENTATIVES. THE PROVISIONS OF THIS SECTION 3.3 SHALL
SURVIVE THE CLOSING OR, IF THE TRANSFER IS NOT CONSUMMATED, ANY TERMINATION OF
THIS AGREEMENT, AND SHALL NOT BE SUBJECT TO ANY LIMITATION OF LIABILITY SET
FORTH HEREIN.
3.4 TITLE. (a) Prior to the expiration of the Contract Due Diligence
Period, Purchaser shall obtain new title commitments (each a "Title Commitment,"
and collectively the "Title Commitments") proposing to insure Purchaser (or its
permitted designee) with respect to each of the Properties, and updated or new
surveys (the "Surveys") for the Properties. Purchaser shall have until the
expiration of the Contract Due Diligence Period to examine the Surveys and the
Title Commitments and to deliver written notice to Seller of any title or survey
objection that it has (each a "Due Diligence Title Objection"). Seller shall
provide Purchaser with written notice within five (5) Business Days of receipt
of each Due Diligence Title Objection, stating which matters Seller will cure
and which matters Seller will not cure, subject to Section 3.4(f), failure to
deliver such notice shall be deemed an election by Seller not to cure any Due
Diligence Title Objection. At Seller's request, Purchaser shall promptly provide
to Seller written notice of Purchaser's Cure Value for such Due Diligence Title
Objections. Any Due Diligence Title Objection that Seller elects not to cure
shall be deemed a "Rejected Due Diligence Title Objection" and any Due Diligence
Title Objection that Seller elects to cure shall be deemed an "Accepted Due
Diligence Title Objection."
(b) After the expiration of the Contract Due Diligence Period and prior to
the Closing, Purchaser shall have the right to object in writing to any Material
Title Defects, which objection shall include the Purchaser's Cure Value for the
same. All Material Title Defects (that are objected to by Purchaser in
accordance with this Section 3.4 (b)), together with any Rejected Due Diligence
Title Objection which is or is part of a Material Title Defect, shall be herein
collectively called the "Title Objections" and individually a "Title Objection."
At Closing, all matters which affect the Seller's or applicable Subsidiary's
title to the Properties that are not the subject of a Title Objection shall be
deemed to constitute Permitted Encumbrances, other than the Liens that Seller is
obligated to pay or discharge under Section 3.4(f) and Accepted Due Diligence
Title Objections. In addition, if Seller has delivered written notice to
Purchaser of any Material Title Defect (clearly stating that same is a "Material
Title Defect") and Purchaser fails to object to that Material Title Defect on or
before the 5th Business Day after receipt of such notice from Seller, then that
Material Title Defect will constitute a Permitted Encumbrance, provided,
however, matters covered by Section 3.4(f) and Accepted Due Diligence Title
Objections shall not be subject to the foregoing.
(c) With respect to any Title Objection, Seller may elect (subject to
Section 3.4(f)), by written notice to Purchaser within 10 days after receipt of
Purchaser's Title Objection (or notice of Purchaser's Cure Value for same,
whichever is later), any one of the options described in the next sentence with
respect to each such Title Objection. In Seller's sole and absolute discretion,
Seller may elect any combination of the following after taking into account
similar actions taken under any Sale Agreement (i) decrease the Purchase Price
by the excess of the Purchaser's Cure Value with respect to such Material Title
Defects over either or both, as applicable, of $1,250,000 (if the Material Title
Defects for all Properties under all Sale Agreements in the aggregate exceed
$1,250,000) and $100,000 (if there are Material Title Defects that relate to any
individual Property that exceed with respect to such Property
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$100,000), (ii) cure certain Title Objections, (iii) drop one or more Properties
with Material Title Defects or (iv) elect not to cure one or more Material Title
Defects such that there are still Material Title Defects. If Seller fails to
timely deliver a notice regarding its method of cure, it will be deemed to have
made the election in clause (iv) for all Material Title Defects. If a Property
is dropped under this Section 3.4(c) or Section 3.4(d), the Material Title
Defects relating to such Property will not apply or count for any purpose under
this Agreement or any Sale Agreement.
(d) If Seller elects or is deemed to have elected option (iv) under
Section 3.4(c) not to cure any Material Title Defects and there are Material
Title Defects, or Seller elected to cure such Material Title Defects, but has
failed to cure same at or prior to the Closing Date, Purchaser may elect, by
delivery of notice to Seller within 5 Business Days after receipt of Seller's
notice or deemed election (or on the Closing Date, if applicable), any
combination of the following options (if Purchaser fails to deliver notice of
its election hereunder, Purchaser will be deemed to have made the election in
clause (ii) below with respect to a reduction in the Purchase Price):
(i) drop one or more Properties (subject to the maximum number of
dropped Properties in section 10.1(e), provided, however, if Seller elected to
cure such Material Title Defect and did not do so by Closing, such dropped
Property shall not count as a dropped Property for purposes of Seller's right to
terminate this Agreement under Section 10.1(e)) that are so affected by a
Material Title Defect (either individually or in the aggregate) such that after
dropping such Property or Properties there will no longer be any Material Title
Defects;
(ii) after taking into account similar actions taken under any
Sale Agreement, decrease the Purchase Price by an amount of the Purchaser's Cure
Value exceeds either or both as applicable, $1,250,000 (if the Material Title
Defects for all Properties under all Sale Agreements in the aggregate exceeds
$1,250,000) and $100,000 (if there are Material Title Defects that relate to any
individual Property that exceed with respect to such Property $100,000) and
proceed toward Closing with such decreased Purchase Price; or
(iii) waive such Material Title Defects, in which event such
Material Title Defects shall be deemed Permitted Encumbrances, and proceed to
Closing without any reduction of or credit against the Purchase Price with
respect to the matters that were waived.
Provided, however, if Purchaser elects option (i) or (ii) above, Seller shall
have the right to nullify Purchaser's election by written notice within two (2)
Business Days and deem that Purchaser elect the other of option (i) or (ii) that
Purchaser did not originally elect.
(e) To the extent that Seller elects to drop a Property under this Section
3.4, Purchaser shall have the right to nullify such election to drop a Property
and waive such Material Title Defects, in which event such Material Title
Defects shall be deemed Permitted Encumbrances, and proceed to Closing without
any reduction of or credit against the Purchase Price for such Material Title
Defect.
(f) Notwithstanding anything in this Section 3.4 to the contrary, Seller
shall (i) at Closing cause the release of all Liens securing Indebtedness for
borrowed money which is not part of the Assumed Liabilities, and any and all
other consensual monetary Liens upon any
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Property by Seller or its Affiliates, (ii) at or before Closing cause the
release of or bond off all, mechanic's, materialmen's and artisan's liens placed
upon the Properties by a third party in connection with work performed on the
applicable Property on behalf of Seller or any Subsidiary (unless placed upon
the Property on behalf of Purchaser or a Tenant who is in good standing and the
Lien only affects the Tenant's property) and any and all judgment liens (other
than lis pendens), and such liens shall not be Permitted Encumbrances and (iii)
at Closing cause the release of all voluntary encumbrances placed upon the
Properties by Seller or its Affiliates after the date hereof.
(g) Notwithstanding anything herein to the contrary, if on the Closing
Date, there still exists a Title Objection that Seller has agreed to cure or
remove (including an Accepted Due Diligence Title Objection) or any matter under
Section 3.4(f) is not satisfied, Purchaser, shall have the right to use a
portion of the Purchase Price to satisfy such matter, if such matter is in a
liquidated amount, and the amount paid to cure such matter shall be credited
against the Purchase Price, including, without limitation, for any loans which
are not Assumed Indebtedness. In addition, if at Closing, there still exists an
Accepted Due Diligence Title Objection or a voluntary lien under Section
3.4(d)(iii), in either case that is not in a liquidated amount, then Purchaser
shall have the right to drop such Property at the Closing (and such dropped
Property shall not count as a dropped Property for purposes of Seller's and/or a
Non-Panther Party's right to terminate this Agreement under Section 10.1(e) or a
Sale Agreement) unless Purchaser and Seller otherwise agree to a credit against
the Purchase Price.
(h) For purposes of Section 3.4, Seller can cure any objectionable matter
or defect by satisfying, otherwise correcting or causing a title company to
reasonably insure over the objectionable matter or defect (collectively referred
to in this Section 3.4 as "curing" or to "cure").
(i) To the extent any time period permitted pursuant to Sections 3.4(b),
(c), (d) and (g) would extend beyond the then scheduled Closing Date, the
Closing Date shall be extended to allow for the proper delivery of notices and
election of procedures under the time frames set forth in Sections 3.4(b), (c),
(d) and (g) , subject to a maximum extension of 30 days (together with all other
extensions under Sections 10.2).
IV. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
4.1 ORGANIZATION AND POWER OF SELLER. Each of the entities set forth on
Schedule 4.1 of the Disclosure Schedule are corporations, limited partnerships,
limited liability companies, trusts or real estate investment trusts, as
specified on Schedule 4.1 of the Disclosure Schedule, are duly formed and
validly existing under the Laws of the corresponding states specified on
Schedule 4.1 of the Disclosure Schedule, and each of them has the requisite
limited partnership, limited liability company, corporate, trust or real estate
investment trust power and authority, as applicable, to carry on its business as
now being conducted. Seller and each Subsidiary is duly qualified or licensed to
do business as a foreign limited partnership, limited liability company,
corporation, trust or real estate investment trust, as applicable, and is in
good standing in each
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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) of the Disclosure Schedule, 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) of the Disclosure Schedule, 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. Seller has the power and
authority to cause each Assigning Subsidiary and Subsidiary to consummate the
transactions contemplated under this Agreement.
(b) Except as set forth in Schedule 4.2(b) of the Disclosure Schedule and
assuming receipt of the consents described in Schedule 4.2(a) of the Disclosure
Schedule, 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, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, management or other material agreement or instrument
applicable to the Properties or the Purchased Assets and constituting Assumed
Liabilities but excluding any Liens under the Assumed Indebtedness, or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation
(collectively, "Laws") applicable to Seller or any Assigning Subsidiary with
respect to the Properties or the Purchased Assets, other than, in the case of
clause (ii) or (iii), any such conflicts, violations, defaults, rights, loss or
Liens that individually or in the aggregate, would not materially adversely
affect the Properties or the Purchased Assets or impair or interfere in any
material respect with the consummation of the Transfer or any other transactions
contemplated by this Agreement or in the documents contemplated to be executed
hereunder or otherwise prevent Seller and the Assigning Subsidiaries from
performing their obligations
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hereunder in any material respect. Solely for purposes of this Section 4.2(b),
the definition of Purchased Assets will not include any reference to the phrase
"to the extent assignable or transferable".
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
by or with respect to the Properties or the Purchased Assets in connection with
the execution and delivery by Seller of this Agreement and Seller and Assigning
Subsidiaries of all documents contemplated hereunder or the consummation by
Seller of the transactions contemplated hereunder or thereunder, except for such
consents, approvals, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not reasonably be expected to
prevent or delay in any material respect the consummation of the Transfer or any
other transactions contemplated by this Agreement or in the documents
contemplated to be executed hereunder or otherwise prevent 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 of the Disclosure
Schedule 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 Properties or the
Purchased Assets or that, individually or in the aggregate, if decided adversely
to the Properties or the Purchased Assets, would reasonably be expected to
prevent or delay in any material respect the consummation of the Transfer and
any other transactions contemplated by this Agreement or otherwise prevent
Seller or any Assigning Subsidiary from performing its obligations hereunder in
any material respect or would result in a Loss exceeding the Pre-Closing
Thresholds. Except as set forth on Schedule 4.3 of the Disclosure Schedule, 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 of the Disclosure
Schedule, there is no judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator or settlement agreement outstanding against
Seller or any Subsidiary with respect to the Properties or the Purchased Assets
that remain unsatisfied or uncured.
4.4 KEY CREDIT FACILITY. As of September 30, 2002 the current outstanding
principal balance due under the Key Credit Agreement was $45,441,955.
4.5 PROPERTIES. (a) Except as set forth in Schedule 4.5(a), and except for
a condemnation proceeding with respect to Arvada Plaza (which is described on
Schedule 4.5(a)), none of Seller and the Subsidiaries has Knowledge of or
received any written notice to the effect that any condemnation or involuntary
rezoning proceedings are pending or threatened with respect to any of the
Properties.
(b) The rent rolls delivered pursuant to a separate disclosure statement
(the "Rent Roll") list each Lease in effect as of the dates of the Rent Roll. To
the Knowledge of Seller, the Rent Roll is true, correct and complete as of the
date thereof except no representation or warranty is made with respect to the
commencement or expirations dates set forth therein or the legal names of any
Tenant set forth therein. Except as entered into by Seller pursuant to the
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express terms of Section 6.2 and except as set forth on Schedule 4.5(c)-1 of the
Disclosure Schedule, no Leases shall exist on the Closing Date other than the
Leases listed on the Rent Roll. "Lease" means each lease or other right of
occupancy affecting or relating to a Property in which Seller 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 in its or its Affiliates possession, including all
amendments, modifications, renewals, extensions and guarantees and supplements,
and other occupancy agreements and outstanding default notices sent during the
prior 12 calendar months with respect to the Leases. With respect to all Leases
with a gross leasable area of 10,000 square feet or more, and to Seller's
Knowledge with respect to all other Leases, Seller has made available to
Purchaser true, correct and complete copies of all Leases, including all
amendments, modifications, renewals, extensions and guarantees and supplements,
and other occupancy agreements and outstanding default notices sent during the
prior 12 calendar months with respect to the Leases, in each case as set forth
on Schedule 4.5(b) of the Disclosure Schedule (subject to the missing documents
as set forth on Schedule 4.5(b) of the Disclosure Schedule). Each tenant under
the Leases is a bona fide tenant in possession or has a right to possession of
the premises demised thereunder. Each of the Leases is in full force and effect
and, except as disclosed on the Rent Roll, or on Schedule 4.5(b) of the
Disclosure Schedule, to Seller's Knowledge none of the Leases has been modified,
amended or rescinded, the rights of each tenant thereunder are as tenants only,
and none of the Leases has been assigned or sublet by the tenant. Schedule 2.7
of the Disclosure Schedule 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) of the Disclosure Schedule. 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)
of the Disclosure Schedule, 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. Notwithstanding the
foregoing representations, Purchaser acknowledges that Seller shall have 10
Business Days from the date hereof to supplement Schedule 4.5(b) of the
Disclosure Schedule as to the list of Leases and all amendments and
modifications thereto for Leases with a gross leasable area of less than 7,000
square feet.
(c) Schedule 4.5(c)-1 of the Disclosure Schedule 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 of the Disclosure Schedule sets forth a
correct and complete list of Tenants of the Properties for which
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any Seller or Subsidiary has received as of the date of this Agreement written
notice of any move out, lease termination or lease cancellation.
(d) Except as set forth on Schedule 4.5(d) of the Disclosure Schedule or
as approved by Purchaser, no Tenants have been granted under their Leases
options to purchase the Property of which it is a Tenant or rights of first
refusal or first offer to purchase the Property of which it is a Tenant.
(e) Except as set forth on Schedule 4.5(e) of the Disclosure Schedule, 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) of the Disclosure Schedule.
(f) Schedule 4.5(f) of the Disclosure Schedule contains a true, correct
and complete list of all casualty, rental loss, commercial liability, terrorism,
employment, environmental, professional liability and crime insurance policies
maintained by Seller and its Subsidiaries with respect to the Properties as of
the date of this Agreement and all outstanding claims of which Seller has
Knowledge under such policies with respect to the Purchased Assets or
Properties. These policies are in full force and effect as of the date of this
Agreement.
(g) Intentionally Omitted.
(h) Other than as set forth on Schedule 4.5(h) of the Disclosure Schedule,
neither the Seller, any Subsidiary nor any Affiliate thereof owns, ground
leases, or has any options to purchase, rights of first refusal or rights of
first offer with respect to any real property adjacent to the Properties and
Schedule 1.1(a)(i)(A) of the Disclosure Schedule contains the legal description
of the Real Property including all out parcels.
(i) No Property has any promotional fund or any merchants' association to
which the owner of such Property is obligated to contribute any funds.
4.6 ENVIRONMENTAL MATTERS. Seller, to its Knowledge, has made available to
Purchaser copies of all environmental studies, investigations, reports, audits,
assessments, Licenses and Permits and agreements relating in any way to any
environmental matters with respect to any and all of the Properties or the
Purchased Assets which (i) are within Seller's or any Affiliates' possession or
control and (ii) were commissioned by Seller or its Affiliates during Seller's
or its Affiliate's acquisition or ownership of the applicable Property, all of
which are listed on Schedule 4.6 of the Disclosure Schedule. To the Knowledge of
Seller, the Properties and the Purchased Assets comply in all material respects
with all applicable Environmental Laws and there are no Hazardous Materials
present, at, under, on, in or around the Properties, except as may be disclosed
in said environmental studies, investigations, reports, audits or assessments,
so made available to Purchaser.
4.7 LABOR MATTERS. Seller, its Affiliates and its Subsidiaries are not a
party to any collective bargaining agreement or other labor union contract
applicable to employees of Seller or its Subsidiaries or Affiliates, nor does
Seller know of any activities or proceedings of any labor union to organize any
such employees. To the Knowledge of Seller, there are no strikes, slowdowns,
work stoppages, lockouts or threats thereof, by or with respect to any employees
of
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the Seller or its Affiliates which would materially adversely affect Purchased
Assets. None of the Seller's Subsidiaries or Assigning Subsidiaries has employed
or employs any employees.
4.8 TAXES. (a) Intentionally Omitted.
(b) Seller and its Affiliates have timely paid all Taxes payable by them
for the Pre-Closing Taxable Period which will have been required to be paid on
or prior to the Closing Date, the non-payment of which would result in a Lien on
any Purchased Asset, would otherwise materially adversely affect the Purchased
Assets or the Properties or would result in Purchaser becoming liable or
responsible therefor.
4.9 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.9 of the
Disclosure Schedule, (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 Purchased Assets issued by any Governmental Entity that remains uncured
and (ii) to the Knowledge of Seller, Seller has not and the Subsidiaries have
not violated or failed to comply in any material respect with any Law or License
and Permit applicable to the Properties or the Purchased Assets. To the
Knowledge of Seller, the Licenses and Permits constitute all material Licenses
and Permits that are required in order to continue to operate the Properties in
the manner that they are presently being operated. To the Knowledge of Seller,
all such Licenses and Permits are in full force and effect in all material
respects. Notwithstanding the foregoing, Seller makes no representation under
this Section as to compliance with the Americans with Disabilities Act of 1990,
as amended, and any other "access" Laws and the representation in clause (ii)
above shall not apply to any building, health, safety and fire codes, any zoning
laws or any other similar laws.
4.10 BROKERS. No broker, investment banker, financial advisor or other
Person, other than X.X. Xxxxxx Securities Inc., the fees and expenses of which
will be paid by Seller, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Seller.
4.11 ASSUMED INDEBTEDNESS. (a) Schedule 4.11(a) of the Disclosure Schedule
lists (i) the Assumed Indebtedness, (ii) all of the Properties that have ever
been encumbered by the Assumed Indebtedness, (iii) the principal amount thereof
outstanding as of the date set forth thereon, (iv) all of the notes, agreements
and instruments evidencing and securing the Assumed Indebtedness, as the same
may have been amended or supplemented from time to time, including, without
limitation, any guaranties and any ancillary documents (collectively, the
"Assumed Loan Documents"), and (v) the amount of any escrows or deposits held or
established in connection with the Assumed Indebtedness as of as September 30,
2002. Seller has delivered to Purchaser complete and correct copies of the
Assumed Loan Documents. Seller or the applicable Subsidiaries are current in all
payments of principal and interest due under each Assumed Loan Document through
the most recent scheduled payment date.
(b) Seller has not 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
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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.
4.12 INTENTIONALLY OMITTED.
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) Intentionally Omitted.
4.14 CONTRACTS. Schedule 4.14 of the Disclosure Schedule lists the
following Contracts as of the date of this Agreement relating to the Purchased
Assets and the Properties (collectively, the "Material Contracts"):
(a) any agreement (or group of related agreements) for the lease of
personal property or equipment to or from any Person providing for lease
payments in excess of $25,000 per annum or which are not terminable by Seller 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
(including purchase options), (ii) the purchase or sale of supplies, products or
other personal property that involves consideration in excess of $50,000 (other
than purchase orders relating to the construction contracts described in
subsection (c)), or (iii) the furnishing or receipt of services, including,
without limitation, management, operating, listing, brokerage, supply and
maintenance agreements, other than agreements that are terminable by Seller 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 and all development
and construction agreements relating to the Redevelopment Properties;
(d) any agreement constituting part of the Assumed Liabilities, limiting
the right of Seller to conduct any line of business; and
(e) any environmental indemnity agreement benefiting Seller or any
Subsidiary of Seller.
(f) Intentionally Omitted.
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Seller has made available to Purchaser for Purchaser's review a correct and
complete copy of each Material Contract. 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. Schedule 4.15 of the Disclosure Schedule is a correct
and complete list of any and all 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"). Seller has provided
Purchaser with true, correct and complete copies of the 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, and
as of the date hereof neither Seller nor any Subsidiary have given any written
notice to any ground lessor informing it that such party is, and to the
Knowledge of Seller, no ground lessor 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. Seller shall provide to
Purchaser, within 10 Business Days of receipt of the Title Commitment for each
Property, a list of each REA and every amendment and modification thereto that
is not shown on the Title Commitments with respect to the applicable Property,
and same shall be deemed a representation made under this Section that to the
Knowledge of Seller there are no other such REAs or amendments thereto.
4.17 INTENTIONALLY OMITTED.
4.18 PURCHASED ASSETS. The Purchased Assets are all of the assets necessary
to conduct the operation of the Properties in the manner currently conducted.
4.19 INTELLECTUAL PROPERTY. Seller and the Subsidiaries have no
Intellectual Property as of the date of this Agreement other than as listed on
Schedule 4.19 of the Disclosure Schedule which are used by Seller or such
Subsidiaries with respect to the Purchased Assets. Except as set forth on
Schedule 4.19 of the Disclosure Schedule, 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.
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4.20 FINANCIAL STATEMENTS. Seller has delivered or caused to be delivered
to Purchaser the audited balance sheets at December 31, 2001, 2000 and 1999 and
the audited schedule of revenues and certain expenses, as defined, of EIG Realty
for the years ended December 31, 2001 and 2000, (collectively, the "Audited
Financial Statements"). In addition, Seller has delivered or caused to be
delivered to Purchaser, (a) the unaudited balance sheet at June 30, 2002 and
statement of operations for the six (6) month period ended June 30, 2002 of EIG
Realty (collectively, the "Unaudited Financial Statements," and together with
the Audited Financial Statements referred to collectively as the "Financial
Statements"). The Financial Statements have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") consistently
applied during the periods involved (except as otherwise provided therein and
except that the Unaudited Financial Statements do not contain all of the
footnotes required under GAAP), and present fairly, in all material respects,
the financial position of EIG Realty as of the dates thereof and the results of
operations for the periods then ended subject, in the case of the Unaudited
Financial Statements, to normal and immaterial year-end audit adjustments. Since
June 30, 2002, there has not been a material adverse change in the financial
condition or results of operations of EIG Realty.
4.21 BUDGETS. Seller has delivered or caused to be delivered to Purchaser
true, correct and complete copies of the budgets for each of the Properties in
effect as of this date for calendar year 2002 (in the form delivered to
Purchaser, the "Budgets"). Purchaser acknowledges 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, except to the extent
set forth in Section 7.6.
4.22 INSOLVENCY. There are no voluntary or involuntary proceedings in
Bankruptcy, or under any other debtor relief laws, pending or, to the Knowledge
of Seller, threatened against Seller or any Subsidiary.
4.23 UNITED STATES PERSON. Seller 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 DEFINITION OF KNOWLEDGE OF SELLER. As used in this Agreement, the
phrase to the "Knowledge of Seller" (or words of similar import) means the
current, actual, conscious (and not constructive, imputed or implied) knowledge
of Xxxxxx Xxxxx, Xxx D'Arcy, Xxxx X. Xxxxxx, Xxxx Xxxxxxx and Xxx Xxxxxx without
having made a review of files or other independent inquiry other than due
inquiry of the knowledge of the persons listed on Schedule 4.24 of the
Disclosure Schedule. No such designee shall have any personal liability or
obligation whatsoever with respect to any of the matters set forth in this
Agreement and any other documents, agreements or instruments related thereto or
any of the representations made by Seller being or becoming untrue, inaccurate
or incomplete in any respect. In addition, Purchaser shall have the right to add
additional persons to the definition of Seller's Knowledge, if during the four
weeks following the date hereof, it becomes apparent that there are other
persons with high level managerial level responsibilities who have material
knowledge of the operations of the Properties similar to what a Chief Operating
Officer would typically be charged with knowing, by giving written notice to
Seller of such person[s] prior to the expiration of such four week period.
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4.25 SCHEDULE REFERENCES. Any item disclosed in one Section or Schedule in
the Disclosure Schedule shall be deemed to be disclosed in any other Section or
Schedule in the Disclosure Schedule where such disclosure is relevant, even if
there is no express cross-reference, provided that the relevance of the
disclosure is clearly apparent (except for Assumed Indebtedness and Assumed
Liabilities, which must appear on its own schedule (except that the Assumed
Liabilities schedule may cross reference the Assumed Indebtedness schedule).
4.26 RIGHT TO AMEND REPRESENTATIONS. Seller shall have the right from time
to time prior to the Closing by notice to Purchaser to amend or supplement its
qualifications to the representations and warranties in this Article IV, by
amendment of the Schedules in the Disclosure Schedule or otherwise to reflect
changes in facts or conditions or to correct any immaterial factual
inaccuracies; provided, however, that no such amendment or supplement will be
deemed to cure any breach of any representation or warranty made in this Article
IV or have any effect on the conditions in Section 9.4(a) or remedies set forth
in Section 11.2 with respect to any factual inaccuracy that existed when this
Agreement was entered into but will be deemed to cure any breach or inaccuracy
for all purposes under this Agreement arising from a change in facts or
conditions after this Agreement was entered into so long as the change was not
caused by Seller's breach of Articles VI and VII other than Section 6.5.
4.27 SELLER'S REPRESENTATIONS DEEMED MODIFIED. To the extent that Purchaser
actually knows at or prior to the Closing that any of Seller's representations
and warranties that are required to be made on the Closing Date are inaccurate,
untrue or incorrect in any way and fails to notify Seller and make a claim with
respect thereto pursuant to Section 10.2, such representations and warranties
shall be deemed modified to reflect Purchaser's knowledge. Seller shall not have
any liability for a breach of representation or warranty by reason of any
inaccuracy of a representation or warranty if and to the extent that such
inaccuracy is actually known by Purchaser at the time of the Closing and
Purchaser nevertheless fails to notify Seller and make a claim with respect
thereto pursuant to Section 10.2 and proceeds to consummate the Closing. For
purposes of this Agreement, knowledge of Purchaser means the current, actual,
conscious (and not constructive, imputed or implied) knowledge of Xxxxx Xxxxxxx,
Xxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxx XxXxxxxx, Xxxx Xxxxxxxxxx, Xxxxxx Xxxx, Xxxxxx
Xxxxxxx (head of leasing) and Xxxxxx Xxxxxx.
4.28 REDEMPTION AGREEMENT. Seller has delivered to Purchaser on or before
the date hereof a true, correct and complete copy of the Unit Redemption
Agreement (the "Redemption Agreement") among the Non-Panther Parties. Seller
hereby represents to Purchaser that the Redemption Agreement, and all documents
contemplated thereunder to be executed by Seller and EIG Realty, as applicable,
when executed and delivered, will constitute the valid and binding obligation of
the Seller and EIG Realty, as applicable, enforceable against such parties, as
applicable, in accordance with their respective terms.
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
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5.1 ORGANIZATION, STANDING AND POWER OF PURCHASER. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Maryland and has the requisite corporate power and
authority to carry on its business as now being conducted.
5.2 AUTHORITY; NONCONTRAVENTION; CONSENTS. (a) Subject to obtaining the
approval of the Board of Directors of the Purchaser, Purchaser has the requisite
corporate power and authority (i) to enter into this Agreement and all documents
contemplated hereunder to be entered into by Purchaser, (ii) to perform its
obligations hereunder and thereunder, and (iii) to consummate the Transfer and
the other transactions contemplated hereunder and thereunder. The execution and
delivery by Purchaser of this Agreement and all documents contemplated hereunder
to be entered into by Purchaser and the consummation by it of the transactions
contemplated hereunder and thereunder have been duly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Purchaser or
its stockholders is necessary to authorize any of the foregoing, except for
obtaining the approval of the Purchaser's board of directors. Subject to
obtaining the approval of the Board of Directors of the Purchaser, this
Agreement has been, and all documents contemplated hereunder to be executed by
Purchaser when executed and delivered will have been, duly executed and
delivered by Purchaser and constitute the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to the enforcement of
creditors' rights, general principles of equity or articles of incorporation or
by laws.
(b) The execution and delivery by Purchaser of this Agreement and all
documents contemplated hereunder to be entered into by Purchaser do not, and the
consummation of the transactions contemplated hereunder and thereunder and
compliance by Purchaser with the provisions hereof and thereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a penalty, or a right of
termination, cancellation or acceleration of any material obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Purchaser under (i) its certificate or articles of
incorporation or bylaws, each as amended or supplemented to the date of this
Agreement, (ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease, management or other agreement, instrument or Licenses and Permits
applicable to Purchaser or its respective properties or assets, or (iii) subject
to the governmental filings and other matters referred to in subsection (c)
below, any Laws applicable to Purchaser or its respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights, loss or Liens that, individually or in the aggregate, would
not reasonably be expected to impair or interfere in any material respect with
the consummation of the Transfer or any other transactions contemplated by this
Agreement or in the documents contemplated to be executed hereunder, or
otherwise prevent Purchaser from performing its obligations hereunder in any
material respect.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Purchaser in connection with the execution and delivery by Purchaser
of this Agreement and all documents contemplated hereunder to be entered into by
Purchaser to which it is a party or the consummation by Purchaser of any of the
transactions contemplated hereunder or thereunder, except for such
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consents, approvals, orders, authorizations, registrations, declarations and
filings as are set forth in Schedule 5.2(c) of the Disclosure Schedule.
5.3 BROKERS. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser.
5.4 FUNDING. At Closing, Purchaser will have sufficient cash or undrawn
lines of credit to perform all of its obligations hereunder.
5.5 INTENTIONALLY OMITTED.
5.6 PURCHASER'S REPRESENTATIONS DEEMED MODIFIED. To the extent that Seller
has knowledge at or prior to the Closing that any of Purchaser's representations
and warranties that are required to be made on the Closing Date are inaccurate,
untrue or incorrect in any way and fails to notify Purchaser and make a claim
with respect thereto pursuant to Section 10.3(b), such representations and
warranties shall be deemed modified to reflect Seller's knowledge. Purchaser
shall not have any liability for a breach of representation or warranty by
reason of any inaccuracy of a representation or warranty if and to the extent
that such inaccuracy is actually known by Seller at the time of the Closing and
Seller nevertheless fails to notify Purchaser and make a claim with respect
thereto pursuant to Section 10.3(b) and proceeds to consummate the Closing.
5.7 INTENTIONALLY OMITTED.
5.8 RIGHT TO AMEND REPRESENTATIONS. Purchaser shall have the right from
time to time prior to the Closing by notice to Seller to amend or supplement its
qualifications to the representations and warranties in this Article V, by
amendment of the Schedules of the Disclosure Schedule or otherwise, to reflect
changes in facts or conditions or to correct any immaterial factual
inaccuracies; provided, however, that no such amendment or supplement will be
deemed to cure any breach of any representation or warranty made in this Article
V or have any effect on the conditions in Section 9.3(a) or remedies set forth
in Section 11.2 with respect to any factual inaccuracy that existed when this
Agreement was entered into but will be deemed to cure any breach or inaccuracy
for all purposes under this Agreement arising from a change in facts or
conditions after this Agreement was entered into so long as the change was not
caused by Purchaser's breach of Sections 3.2 and 6.4 and Article VII.
VI. COVENANTS
6.1 CONDUCT OF SELLER'S BUSINESS PENDING TRANSFER. Prior to the Closing
Date or the earlier termination of this Agreement, except as (i) specifically
contemplated by this Agreement, or (ii) consented to in writing by one Purchaser
representative identified on Schedule 6.1 of the Disclosure Schedule Seller
will, and will cause each of the Subsidiaries to:
(a) Continue to operate, manage, lease and maintain the Properties in the
usual, regular and ordinary course and in compliance with all applicable Laws
and in substantially the
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same manner as heretofore and substantially consistent with the "expense"
portions of the Budgets, but with respect to the Properties, subject to ordinary
wear and tear;
(b) Use reasonable efforts to keep available the services of their
officers and key employees;
(c) Confer on a regular basis with one or more representatives of
Purchaser to report operational matters of materiality and any proposals to
engage in material transactions, and promptly provide Purchaser with (i) all
material notices received and financial statements and operating reports
prepared in connection with any of the documents evidencing or securing any
loans encumbering the Properties and (ii) all financial statements and operating
reports routinely prepared by Seller relating to the Properties or the Purchased
Assets;
(d) Promptly notify Purchaser of any material emergency or other material
change at the Properties;
(e) Maintain its books and records in accordance with the accounting
principles currently utilized by it, consistently applied, and not change in any
material manner any of their methods, principles or practices of accounting
currently in effect, except as may be required by applicable Law or GAAP;
(f) Duly and timely file all reports, Tax Returns and other documents
required to be filed with federal, state, local and other Governmental Entities,
subject to extensions permitted by Law;
(g) Not (i) acquire or sell or ground lease, or enter into any option or
agreement to acquire or sell or ground lease, or exercise an option or contract
to acquire, sell or ground lease any of the Properties or, other than the
parcels described in Schedule 4.5(h) of the Disclosure Schedule, any part
thereof or direct or indirect interest therein, other than leasing in accordance
with Section 6.2, (ii) encumber or subject to any Lien any of the Properties or
Purchased Assets, (iii) modify, amend, supplement, terminate or assign the
Assumed Loan Documents, the documents evidencing the Assumed Liabilities, the
REAs, and the Ground Leases, (iv) (Intentionally Omitted), (v) transfer, sell or
assign any Material Contracts, or (vi) enter into or modify, amend, supplement,
or assign any management, operating, listing, brokerage, supply and maintenance
agreement that is not terminable by Seller or a Subsidiary without penalty upon
the sale of the Purchased Assets or upon 30 days prior written notice or less;
(h) Not permit the outstanding principal balance due under the Key Credit
Agreement to exceed $47,000,000;
(i) Not modify, amend, supplement, terminate or assign any material terms
of any Material Contract in a manner adverse to the Purchaser without obtaining
the prior written consent of Purchaser;
(j) Keep in full force and effect with respect to the Properties policies
of insurance providing coverage at least as extensive as the policies covering
the Properties on the date hereof;
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(k) From and after the expiration of the Contract Due Diligence Period,
provide Purchaser with (i) access to the computers, including the YARDI system,
with respect to the Properties and the Purchased Assets and (ii) appropriate
personnel to assist with same so that Purchaser can start to transition the
management and ownership of the Properties;
(l) Intentionally Omitted;
(m) Use commercially reasonable efforts to obtain the consents required to
consummate the Transfer and the other transactions contemplated by this
Agreement, including those described in Schedule 4.2(b) of the Disclosure
Schedule and the consents of the holders of the Assumed Indebtedness and the
ground lessors under the Ground Leases;
(n) Provide to Purchaser's title insurance company the form of the
affidavits attached as Exhibit 6.1(n) of the Disclosure Schedule and other
customary and commercially reasonable (as determined by Seller) affidavits (but
not a non-imputation affidavit), documents and information necessary for such
title insurance company to insure title to the Properties subject only to the
Permitted Encumbrances for the benefit of Purchaser;
(o) In the event Seller becomes aware that any of Seller's representations
and warranties made hereunder are inaccurate, untrue or incorrect in any
material respect, Seller shall promptly notify Purchaser with a reasonably
detailed description of the inaccuracy;
(p) Not settle any insurance claims or other litigation that would
materially and adversely affect the Properties after the Closing without
Purchaser's consent;
(q) Cooperate with Purchaser to have any letters of credit in respect of
any Tenant Deposits assigned to Purchaser or hold any letters of credit of and
draw on them at Purchaser's request until a new letter of credit may be issued
to Purchaser or its designee. This obligation of Seller will survive Closing;
(r) Not apply any Tenant Deposits to delinquent Rentals or other amounts
owed by a Tenant while a Tenant is in possession of the space under its Lease
without Purchaser's consent;
(s) Intentionally Omitted;
(t) Comply in all material respects with the terms and conditions of the
Assumed Indebtedness applicable to the Properties, Seller and its Subsidiaries;
(u) Except with respect to the Redevelopment Properties, not enter into a
contract or agreement that would be a Material Contract without Purchaser's
consent unless the expenditures thereunder are included in the Budgets or are
capital expenditures not in excess of 10% of the aggregate of the capital
expenditures in the Budget or the Material Contract relates to tenant work to be
performed under an existing Lease or a new Lease entered into pursuant to
Section 6.2;
(v) At or prior to Closing terminate all property management agreements
and leasing agreements with respect to the Properties, including without
limitation, the agreement with Divaris Real Estate, Inc., all at Seller's sole
cost and expense; and
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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 6.2-1 of the Disclosure Schedule (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. Any notice from Purchaser rejecting a proposed
new lease or amendment, modification or termination of any Lease that does not
fall within the Leasing Guidelines must include a description of the reasons for
Purchaser's rejection. Purchaser will be provided with monthly leasing reports
and permitted to attend all leasing meetings. Notwithstanding anything herein to
the contrary, except as set forth on Schedule 6.2-2 of the Disclosure Schedule,
Seller will not, and will cause its Subsidiaries not to, enter into any new
lease, or otherwise amend, modify or terminate any Lease, that is over 10,000
square feet (taking into account all expansion options), or enter into any
Required Lease that are not on the same terms and conditions set forth on
Schedule 9.4(g) of the Disclosure Schedule, whether or not same falls within the
Leasing Guidelines without Purchaser's prior written consent in each instance,
which consent will not be unreasonably withheld, delayed or conditioned. If
Purchaser fails to object to such lease, amendment, modification or termination
within 5 Business Days, Purchaser will be deemed to have approved that lease,
amendment, modification or termination.
6.3 TENANT ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the Tenants
identified on Schedule 6.3 of the Disclosure Schedule and at Seller's discretion
Seller may obtain other estoppel certificates. Each estoppel certificate will be
in the form of Exhibit 6.3-1 of the Disclosure Schedule or in the form
prescribed in the applicable Tenant's Lease. If any Tenant identified on
Schedule 6.3 of the Disclosure Schedule fails to deliver an estoppel certificate
before Closing, Seller will deliver an estoppel certificate in the form of
Exhibit 6.3-2 of the Disclosure Schedule in respect of that Tenant's Lease at
Closing. If Seller obtains an estoppel certificate from any Tenants, Seller's
representations and warranties made in Sections 4.5(b), (d) and (e) will
terminate and be null and void with respect to all matters represented by such
Tenant in such estoppel certificate that relate to the applicable Tenants if
such certificates contain no exceptions noted by the Tenant, and if such
estoppel certificate contains exceptions noted by the Tenant then such
representations and warranties will terminate and be null and void only with
respect to those matters represented that relate to the applicable Tenant and
that are confirmed without exception by such estoppel certificate, and if the
matter to which the Tenant takes exception in the estoppel certificate is not a
matter already covered by a Seller representation in Sections 4.5(b), (d) and
(e) and is a matter included in the form of Seller estoppel attached as Exhibit
6.3-2 of the Disclosure Schedule, then Seller may but shall not be required to
deliver a Seller estoppel with respect to such Tenant for the excepted matter.
If the Tenant estoppel includes exceptions and Seller elects not to deliver a
Seller estoppel with respect to such Tenant for the excepted matter then such
exception shall be considered in determining the occurrence of a Seller Material
Adverse Event pursuant to clause (iv) of the definition thereof. If Seller
provides an estoppel certificate in respect of any Tenant's Lease and the Tenant
delivers an estoppel certificate after Closing, Seller's estoppel certificate in
respect of that Lease will be null and void as if the Seller estoppel
certificate had not been
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delivered at Closing if the estoppel certificate from the Tenant contains no
exceptions noted by the Tenant, or if such estoppel certificate contains
exceptions noted by the Tenant, then the Seller's estoppel certificate will be
null and void only with respect to those matters represented that are confirmed
without exception by the Tenant's estoppel certificate.
6.4 ASSUMPTION OF OBLIGATIONS. Seller will use its commercially reasonable
efforts and cooperate with Purchaser to cause the holders of the Assumed
Indebtedness to permit the assumption thereof by Purchaser as contemplated by
this Agreement or consent to the Transfers (the subject of which permission or
consent shall include the transactions contemplated under the Redemption
Agreement), as applicable (including taking subject to such Indebtedness).
Seller will cooperate with Purchaser in requesting from the applicable holder of
any Assumed Indebtedness the modifications to the Assumed Indebtedness set forth
on Schedule 6.4-1 of the Disclosure Schedule but failure to obtain such
modifications shall not be deemed a failure of a condition to Closing or to the
assumption of the Assumed Indebtedness by Purchaser. Seller will cooperate with
Purchaser in requesting from the applicable holder of any Assumed Indebtedness
the modifications to the Assumed Indebtedness set forth on Schedule 6.4-2 of the
Disclosure Schedule and failure to obtain such modifications shall be deemed a
failure to obtain the respective holder's consent to the assumption of the
respective Assumed Indebtedness for purposes of this Agreement. At the Closing,
Purchaser agrees to assume all obligations of Seller and each Subsidiary (other
than the borrowers and their subsidiaries under the Assumed Indebtedness to the
extent that Purchaser's designee assumes all obligations of such borrower or its
Subsidiary), and any partner of Seller or other Person (each such Person, a
"Guarantor") accruing from and after the Closing Date pursuant to each guaranty
and other indemnity agreement set forth in the Assumed Loan Documents (each, a
"Continuing Loan Guaranty") on such terms and pursuant to such documentation as
the lender or other beneficiary thereof may reasonably require. Purchaser and
Seller will use commercially reasonable efforts to cause the holder of each
Assumed Indebtedness to fully release and discharge each Guarantor from all
obligations under each Continuing Loan Guaranty to which it is a party or by
which it is bound, including Purchaser executing documents reasonably requested
by the holders, and, if any holder is unwilling to release and discharge any
Guarantor from a Continuing Loan Guaranty, Purchaser will indemnify the
Guarantor against any liability accruing from and after the Closing Date under
the Continuing Loan Guaranty pursuant to an indemnity agreement in the form of
Exhibit 6.4 of the Disclosure Schedule (the "Indemnity Agreement"). Purchaser
will cooperate with Seller to cause the holder of each Assumed Indebtedness to
permit the assumption thereof and/or the Transfers (including the transactions
contemplated under the Redemption Agreement) and Purchaser and Seller will each
use commercially reasonable efforts to satisfy the requirements applicable to it
imposed by the holder for the assumption thereof and/or the Transfers (including
the transactions contemplated under the Redemption Agreement).
In addition, Purchaser and Seller will use their good faith efforts to
reallocate existing Indebtedness held by Protective Life Insurance Company to
any Property and therefore increasing such Property's Assumed Indebtedness and
eliminating or reducing other Assumed Indebtedness to modify the loan to value
ratios on certain Properties (on the same terms and conditions as the existing
Assumed Indebtedness), but failure to make such modification shall not be a
failure of a condition to Close or assume the Assumed Indebtedness.
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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 of the Closing Date, or (iii) any of the
conditions to the Closing set forth in Article IX not being satisfied.
6.6 NO SOLICITATION. Seller agrees that it will not, directly or
indirectly, and it will not authorize or direct any of its representatives to,
solicit or negotiate to sell or otherwise dispose of, or deliver non-public
information designed to facilitate a potential bid to acquire, any Purchased
Assets or any direct or indirect interest in any Purchased Assets or the
Properties in any transaction except as contemplated in this Agreement without
Purchaser's prior written consent until such time as this Agreement has been
terminated.
6.7 INTENTIONALLY OMITTED.
6.8 TENANT LITIGATION. (a) All litigation initiated by the Seller and its
Subsidiaries against any Tenant shall be assigned to Purchaser as a Purchased
Asset except such litigation which Purchaser elects not to accept by notice to
Seller delivered no later than 5 Business Days prior to the Closing. Any net
recoveries related to the foregoing shall be treated as collections of
Delinquent Rentals and shall be apportioned between Purchaser and Seller as
provided in Section 2.4(b)(v). In the event any counterclaims are asserted
against Seller 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, delayed or conditioned.
(b) All litigation initiated by the Seller and its Subsidiaries against
any Tenant which Purchaser elects not to accept under Section 6.8(a), or former
tenants, as identified in Schedule 6.8(b) of the Disclosure Schedule shall be
retained by Seller (or the applicable Assigning Subsidiary) and not assigned to
Purchaser as a Purchased Asset. Any recoveries related to the foregoing shall be
retained by Seller and shall not be apportioned under Section 2.4.
6.9 LENDER ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the holders under the
Assumed Indebtedness. Each estoppel certificate will be in the form of Exhibit
6.9 of the Disclosure Schedule or in the form used by such holder and reasonably
acceptable to Purchaser.
6.10 GROUND LEASE ESTOPPELS. Seller will use commercially reasonable
efforts to obtain and deliver to Purchaser estoppel certificates from the
landlords under the Ground Leases. Each estoppel certificate will be in the form
of Exhibit 6.10 of the Disclosure Schedule or in the form required under the
Ground Lease and sufficient for Purchaser to obtain leasehold title insurance
coverage with respect to such Ground Lease.
6.11 REA ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the parties to the
REAs that Purchaser requests. Failure to obtain such shall not be a default or a
failure of a condition under this Agreement.
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Purchaser will prepare each estoppel certificate that it requests Seller obtain
under this Section (and Seller will provide Purchaser any contact information
that it may have with respect to such parties to the REAs).
VII. ADDITIONAL AGREEMENTS
7.1 ACCESS TO INFORMATION; CONFIDENTIALITY. Notwithstanding the execution
of this Agreement that certain letter agreement dated November 16, 2001 by and
between EIG Realty and Purchaser shall remain in effect, subject to its terms,
except that the same shall be deemed modified and amended by this Section 7.1
(hereinafter, as modified and amended, the "Confidentiality Agreement"). If
there is any inconsistency between this Agreement and the Confidentiality
Agreement, this Agreement shall govern.
(a) Certain information (whether written or oral) relating to the
transactions contemplated hereunder, the Purchased Assets, Seller and its
Affiliates, Purchaser and its Affiliates and their properties, some of which is
non-public, confidential and proprietary in nature, such information, in whole
or in part, together with analyses, computations, studies or other documents
prepared by Purchaser or Seller or their Representatives (as hereinafter
defined) which contains, any such information, is hereinafter referred to as the
"Information". Purchaser and Seller agree that:
(i) The Information will be kept confidential by them and they
shall use their reasonable efforts to ensure that the Information is kept
confidential by their affiliates, representatives, agents, advisors or employees
(collectively, as applicable, their "Representatives"), and they shall not and
they shall use their reasonable efforts to ensure that their Representatives
shall not, other than as provided in this Agreement, without the prior written
consent of the other party, disclose the Information of the other party in any
manner whatsoever, in whole or in part, and the Information shall be used by
such party and their Representatives solely for the purpose of the transactions
contemplated hereunder. Moreover, the Information will only be transmitted to
their Representatives who need to know the Information for purposes of providing
assistance in connection with the transactions and who are informed of the
confidential nature of the Information. Each party agrees to take reasonably
effective precautions, contractual or otherwise, calculated to prevent
unauthorized use or disclosure of the Information.
(ii) In the event that this Agreement is terminated by either
party, then upon written request of a party, the Information, and all copies
thereof, will be returned to the other party promptly without such party or its
Representatives retaining any copies thereof. Any oral Information will continue
to be subject to the terms of this Agreement. The term "Information" does not
include information that:
(A) becomes generally available to the public other than as
a result of a disclosure by the party charged with keeping it
confidential or anyone to whom such party transmitted the information;
or
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(B) was available to such party on a non-confidential basis
prior to its disclosure to such party by the other party through no
violation or breach of any prior confidentiality obligation of any
other person.
(iii) Notwithstanding anything herein to the contrary, in the event
that any party or its Representatives are requested or required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose any of the Information, such party shall (a)
promptly provide the other party with written notice of such requirement, (b)
furnish only that portion of the Information that such party is advised by
opinion of counsel is legally required, and (c) use its reasonable efforts to
obtain assurance that confidential treatment will be accorded such Information.
In the event any such disclosure is so required, such party shall use its
reasonable efforts to assist such party or its Representatives in any efforts it
undertakes to seek a protective order or other appropriate remedy.
(iv) The parties hereby confirm that any Information that may have
been disclosed prior to the date hereof was disclosed on the basis set forth
herein and shall be subject to the provisions of this Agreement.
(b) Notwithstanding anything herein to the contrary, the obligations of
Purchaser set forth in this Section 7.1 shall not apply to any Information that
is required, or Purchaser determines based on advice of counsel (including in
house counsel) is advisable, to be disclosed by Purchaser (x) to comply with
applicable securities laws or regulations or under the rules or policies of the
New York Stock Exchange ("NYSE"), including in connection with the filing by
Purchaser of a registration statement under the Securities Act, (y) in
connection with an offering of its securities or (z) as otherwise may be
consistent with its past disclosure practices. Without limiting but subject to
the foregoing, Purchaser may disclose, (i) a summary description of the material
terms of this Agreement, (ii) a copy of this Agreement, (iii) to the extent
necessary to comply with applicable securities laws or the rules or policies of
the NYSE or as reasonably determined by Purchaser to be advisable in connection
with an offering of its securities, historical and pro forma financial
information with respect to the Purchased Assets or the Properties, and (iv)
such aggregate portfolio information, including the location of the Properties,
that would typically be disclosed in any investor or analyst call or, to the
extent necessary to comply with applicable securities laws or the rules or
policies of the NYSE or as reasonably determined by Purchaser to be advisable in
connection with an offering of its securities, in a registration statement or
other public filing made under applicable securities laws or otherwise
consistent with its past disclosure practices.
(c) From and after the Closing, Purchaser shall have the right to disclose
any Information about the Purchased Assets and to use the Information in
connection with the employment of the Transferred Employees. Notwithstanding the
Closing, Seller shall still be required to keep any and all Information about
Purchaser confidential, subject to the provisions of this Section 7.1.
7.2 REASONABLE EFFORTS. Subject to the terms and conditions set forth in
this Agreement, each of Seller and Purchaser will use commercially reasonable
efforts to promptly take, or cause to be taken, all actions, and to promptly do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable under
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applicable Laws to consummate and make effective the Transfer and the other
transactions contemplated by this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
and the taking of all steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement, the Transfer or the consummation
of the other transactions contemplated by this Agreement and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. The obligations in clause (iv) of this Section 7.2 will survive
Closing.
7.3 PUBLIC ANNOUNCEMENTS. Seller shall not issue any press releases or
make any public statements relating to this Agreement without the prior consent
of Purchaser, which consent may be granted or denied in Purchaser's sole
discretion. Purchaser may issue any press release or otherwise make public
disclosures that it deems desirable or necessary with respect to this Agreement
or the transactions contemplated hereby without the consent of Seller, however,
Purchaser shall consult with Seller (which shall not be deemed to require the
Seller's consent therefor) prior to the issuance of any press releases relating
to this Agreement or the transactions contemplated hereby provided, however,
that any such press release or public disclosure which identifies any of
Seller's Affiliates other than any Assigning Subsidiary or any Subsidiary shall
require the prior written consent of such Affiliates, which consent may be
granted or denied in such Affiliate's sole discretion.
7.4 CONVEYANCE TAXES. Purchaser and Seller will cooperate in the
preparation, execution and filing of all Tax Returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added and stamp Taxes, any transfer, recording,
registration and other fees and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement.
7.5 INTENTIONALLY OMITTED.
7.6 CAPITAL IMPROVEMENTS AND REDEVELOPMENT PROPERTIES.
(a) 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-A of the
Disclosure Schedule. Prior to Closing, Purchaser and Seller may agree to expand
the scope of the work required under the redevelopment plans on Schedule 7.6-A
of the Disclosure Schedule to the extent any Tenant pursuant to its Lease or any
Governmental Entity requires that additional redevelopment activities occur at
the Redevelopment Properties. In the event the scope of the work required under
the redevelopment plans on Schedule 7.6-A of the Disclosure Schedule is expanded
as described above, Purchaser and Seller agree to increase the amount of the
redevelopment budget on Schedule 7.6-A of the Disclosure Schedule by an amount
reasonably estimated to cover the additional expense created by the expansion of
the scope of the work under the redevelopment plans on Schedule 7.6-A of the
Disclosure Schedule (provided, that Seller shall not be responsible under this
Section 7.6 for
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any additional amounts that are incurred as required by a Tenant, but that such
Tenant is obligated to pay under its Lease). If Seller or 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 give Purchaser a
credit against the Purchase Price payable at Closing in an amount equal to the
unexpended portion of the Redevelopment budget described in Schedule 7.6-A of
the Disclosure Schedule. True correct and complete copies of all Contracts
entered into as of the date hereof related to the development and/or renovation
of the Redevelopment Properties have been delivered to Purchaser and are set
forth on Schedule 7.6-1 of the Disclosure Schedule, and Seller shall not amend,
modify (including change orders), or terminate any such Contract or new Contract
that was duly entered into after the date hereof with respect to such
development and/or renovation of the Redevelopment Properties without the prior
consent of Purchaser. Purchaser shall have the right to approve all new
Contracts with respect to such development and/or renovation of the
Redevelopment Properties which approval shall not be unreasonably withheld,
delayed or conditioned. Purchaser shall have the right to approve all
modifications to plans and specifications with respect to such development
and/or renovation of the Redevelopment Properties which approval shall not be
unreasonably withheld, delayed or conditioned. Seller will keep Purchaser
constantly informed on the progress of development and/or renovation of the
Redevelopment Properties and will consult with Purchaser on same.
(b) Seller will and will cause the applicable Subsidiaries to continue to
perform the capital improvements consistent with redevelopment or renovation
plans and budgets described in Schedule 7.6-B of the Disclosure Schedule,
provided however that nothing herein shall be deemed to require Seller to have
completed any specific item of redevelopment or renovation with respect to the
Properties. Seller will give Purchaser a credit against the Purchase Price
payable at Closing an amount equal to the unexpended portion of the capital
improvements budget described in Schedule 7.6-B of the Disclosure Schedule,
based upon reasonable evidence of the expenditures.
(c) Seller will and will cause the applicable Subsidiaries to remedy the
soil and fill condition at the Property commonly known as North Shore Plaza in
Portland Texas in the manner set forth in "Option 2" and described in the scope
of work set forth on Schedule 7.6-C (the "Soil Problem"). If the Soil Problem is
not cured to the reasonable satisfaction of Purchaser at Closing, then Seller
will give Purchaser a credit against the Purchase Price payable at Closing in an
amount equal to the reasonable estimate as agreed to by Seller and Purchaser
(using bids for the work that Purchaser and Seller have reviewed and reasonably
approve) of the costs remaining to cure the Soil Problem.
(d) In connection with the Mars Music store Lease in the Property commonly
known as Northeast Plaza in Atlanta, Georgia, $2,000,000 of the Purchase Price
shall be delivered to Escrow Holder and held in Escrow (plus all interest earned
thereon and less any amounts paid out pursuant to this provision, the "Mars
Deposit") pursuant to an escrow agreement reasonably agreed to by Purchaser and
Seller. The Mars Deposit will be released and paid to Purchaser or Seller as
follows: (i) to Purchaser upon an entry of an order (a) rejecting the Lease
(which order may be part of a Chapter 11 confirmation order) or (b) converting
Mars Music's case under Chapter 11 of the U.S. Bankruptcy Code to one under
Chapter 7 of the U.S. Bankruptcy Code or (ii) to Seller upon confirmation and
implementation of Mars Music's plan of reorganization
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under Chapter 11 of the U.S. Bankruptcy Code with respect to the Lease if Mars
Music assumed its Lease under the U.S. Bankruptcy Code on terms and conditions
that, when compared with the terms and conditions as the Lease exists on the
date hereof, are not materially adverse to Purchaser, (iii) to Seller upon an
assignment of Mars Music's Lease to another Person if Mars Music assumes its
Lease under Chapter 11 of the U.S. Bankruptcy Code on terms and conditions that,
when compared with the terms and conditions as the Lease exists on the date
hereof are not materially adverse to Purchaser, (iv) if Mars Music assumes its
Lease under Chapter 11 of the U.S. Bankruptcy Code but the Lease is modified to
reduce the yearly rent paid thereunder then the following amount will be paid to
Purchaser out of the Mars Deposit upon such assumption and incurrence of any
such costs: (x) the costs incurred by Purchaser to implement the Lease
modifications (including, without limitation, the cost to subdivide the space)
plus (y) $4 million less (the new yearly rental divided by 0.105) not to exceed
the amount of the Mars Deposit, and upon confirmation and implementation of its
plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code with respect
to the Lease the remaining amount of the Mars Deposit shall be paid to Seller,
but upon an order (a) rejecting the Lease (which order may be part of a Chapter
11 confirmation order) or (b) converting Mars Music's case under Chapter 11 of
the U.S. Bankruptcy Code to one under Chapter 7 of the U.S. Bankruptcy Code, the
remaining amount of the Mars Deposit shall be paid to Purchaser, (v) if Mars
Music assumes and assigns its Lease to another Person under the U.S. Bankruptcy
Code but the Lease is modified to reduce the yearly rent paid thereunder then
the following amount will be paid to Purchaser upon such assignment: (x) the
costs to implement the Lease modifications (including, without limitation, the
cost to subdivide the space) plus (y) $4 million less (the new yearly rental
divided by 0.105) not to exceed the amount of the Mars Deposit, and the
remaining amount of the Mars Deposit shall be paid to Seller, if any. The
provisions of this subsection shall survive Closing.
Prior to Closing, Seller shall not make any modifications to the Mars Music
Lease without the prior consent of Purchaser, provided, such consent shall not
be unreasonably withheld or delayed. Prior to Closing, Seller shall consult with
and take any reasonable actions requested by Purchaser in connection with the
Mars Music bankruptcy proceedings. Purchaser shall have the sole and exclusive
right to modify (or not modify) the Mars Music Lease at Northeast Plaza from and
after the Closing; provided, however, Purchaser shall keep Seller apprised of
all discussions and negotiations between Purchaser and Mars Music and in good
faith consult with Seller and review, consider and discuss all recommendations
and suggestions of Seller before making (or not making) any modification to the
Mars Music Lease in connection with the Mars Music bankruptcy proceedings. The
provisions of this subsection shall survive Closing. Seller shall assign at
Closing any rights it may have to any rejection claims against Mars Music in
connection with its rejection of its Lease under the U.S. Bankruptcy Code.
7.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price attributable to the
Purchased Assets shall be allocated among the Purchased Assets in accordance
with and as provided by Section 1060 of the Code, as initially set forth in a
separate letter agreement of even date herewith executed by Seller and Purchaser
(the "Section 1060 Allocation") and as further supplemented by written agreement
between Seller and Purchaser prior to Closing. Any Tax Returns shall be prepared
and filed consistently with such agreed upon Section 1060 Allocation. To the
extent required, Seller and Purchaser will each properly prepare and timely file
IRS Form 8594 in accordance with the agreed upon Section 1060 Allocation.
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7.8 EMPLOYEE MATTERS.
(a) Purchaser may, in its sole discretion, offer employment to employees
of the Seller who are actively engaged with the Properties or Purchased Assets
immediately prior to the Closing (the "Employees") and may hire one or more
Employees on such terms and conditions as shall be mutually agreeable to
Purchaser and such Employees; provided, that, Purchaser shall be under no
obligation to hire any Employees. Employees who accept employment with Purchaser
are hereinafter referred to exclusively as the "Transferred Employees." Seller
agrees to comply with the WARN Act relative to any terminations or reductions in
work force that occur in connection with or on or before the Closing.
(b) Seller will be responsible in accordance with its applicable welfare
plans in effect prior to the Closing for all medical and dental claims for
expenses incurred prior to the Closing Date by Employees and any other
employees, former employees and their dependents, including claims that are
filed after the Closing Date. Reimbursement of Employees and any other
employees, former employees and their dependents for medical and dental expenses
associated with such claims (including claims submitted on behalf of disabled
employees and their dependents) shall be determined in accordance with the terms
of Seller's medical and dental programs. Seller shall be responsible for
providing continuation coverage under its medical and dental plans for the
Employees and any other employees or former employees of Seller, as required by
Section 4980B of the Code and Part 6 of Title I of ERISA, or any relevant
benefit continuation requirements under state law to the extent required by Law.
Seller shall be solely responsible for, and Seller shall indemnify Purchaser and
its Affiliates against, any and all liabilities which have arisen or may arise
in connection with any benefit plan sponsored or maintained by Seller
(including, but not limited to, liabilities arising from income or excise tax
assessments, participant benefit claims, fiduciary conduct, or under Title IV of
ERISA), any and all liabilities that have arisen or may arise in any way from
the employment, compensation or benefits of any Employee or former employee of
Seller, or the termination thereof by Seller, including, without limitation, any
liability or obligation arising out of or relating to any act or omission by
Seller, any violation of or non-compliance with or obligation arising under any
applicable Law respecting employment and the termination thereof (including, but
not limited to, the WARN Act), compensation or benefits, and any and all costs,
liabilities and obligations for severance pay, accrued vacation pay, sick pay
and other benefits relating to any period of employment with Seller, whether
arising as a matter of Contract, Law or otherwise.
(c) Neither Purchaser nor its Affiliates shall adopt or become a
sponsoring employer of, or have any obligations with respect to, any of the
Seller's employee benefit plans. Other than as expressly provided in this
Section 7.8, neither Purchaser nor its Affiliates shall assume or have any
direct or indirect obligation or liability of any nature, whether matured or
unmatured, accrued or contingent, due or to become due or otherwise, to any
Employee or other present or former employee of Seller or its Affiliates, or to
any dependent, survivor or beneficiary thereof, arising out of or in relation to
such person's employment with Seller or its Affiliates or the termination of
such employment. Notwithstanding anything herein to the contrary, no provision
of this Section 7.8 will create any third party beneficiary or other rights in
any Employee or former employee, including any dependent, survivor or
beneficiary thereof, of Seller or its Affiliates in respect of employment (or
resumed employment) with either Purchaser or its Affiliates and no provision of
this Section 7.8 shall create any such rights in any such persons in
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respect of any benefits that may be provided, directly or indirectly, under any
employee benefit plan or arrangement which may be established or made available
by Purchaser or its Affiliates to the Transferred Employees. No provision of
this Agreement shall constitute a limitation on rights to amend, modify or
terminate after the Closing Date any employee benefit plan or arrangement of
Purchaser or its Affiliates.
(d) Seller and Purchaser agree to cooperate with each other in good faith
in effectuating the provisions of this Section 7.8 and to furnish each other
promptly with such information as is necessary and appropriate to carry out the
terms hereof.
7.9 INDEMNITOR'S ACKNOWLEDGEMENT AND ENVIRONMENTAL INSURANCE. Seller shall
use it good faith commercially reasonable efforts to obtain an acknowledgment
from each indemnitor or obligor under each environmental indemnity agreement
listed on Schedule 4.14 of the Disclosure Schedule ("Indemnitor's
Acknowledgement"), which shall be in a form and substance reasonably acceptable
to Purchaser, acknowledging that after the Transfer (i) each of Purchaser and
its Affiliates is a beneficiary under such agreement, (ii) such agreement is in
full force and effect and binding upon such indemnitor or obligor, and (iii)
there are no defaults under such agreement. Subject to AIG's approval, Seller
shall add Purchaser and its permitted designees under this Agreement as an
additional named (with full rights to recovery) insured under the Existing
Environmental Insurance Policy. Seller shall use its good faith efforts to
obtain AIG's approval. If Purchaser and its permitted designees are not added as
an additional named insured to Existing Environmental Insurance Policy, Seller
shall indemnify Purchaser and its permitted designees for all environmental
matters, however, its liability shall be limited to the amount of any insurance
proceeds Seller receives (less the costs of collection and less any amounts
required to cover Losses incurred by Seller that are covered by the Existing
Environmental Insurance Policy) under the Existing Environmental Insurance
Policy after having diligently pursued such claims under the Existing
Environmental Insurance Policy. If Purchaser and its permitted designees are
added as an additional named insured to Existing Environmental Insurance Policy,
Seller, provided AIG consents, shall keep such insurance policy in full force
and effect for its remaining term and Purchaser at its election and with AIG's
consent may at Purchaser's sole cost and expense extend the term of the Existing
Environmental Insurance Policy (this sentence shall survive Closing).
7.10 APPOINTMENT OF AGENT. At the Closing, each Assigning Subsidiary shall
appoint Seller as its agent for collecting and distributing to them any
consideration paid by Purchaser pursuant to this Agreement which is allocated to
their Purchased Asset, such that Purchaser only has to deliver such
consideration to Seller.
7.11 COMPANY LEASES. Company Leases are Excluded Assets.
7.12 OPTIONS. If prior to Closing, Hardee's at the Property commonly known
as Festival Centre in South Carolina exercises its purchase option or right of
first refusal to buy its premises pursuant to the terms of its Lease or
otherwise, Purchaser shall receive a credit against the Purchase Price in the
amount of $500,000. If any Tenant exercises its right to purchase a Property,
such Property shall automatically drop. If the Property is dropped under this
Section 7.12, it shall not be counted as a dropped Property for purposes of
Section 10.1(e).
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7.13 TRANSITIONAL SERVICES. Upon Purchaser's request, Seller and Purchaser
shall at Closing enter into the Transitional Services Agreement, substantially
in the form attached hereto as Exhibit 7.13 of the Disclosure Schedule (the
"Transitional Services Agreement"), pursuant to which, Seller will provide, with
respect to any or all of the Properties (as Purchaser elects), any or all of the
transitional services (as Purchaser elects) as set forth in the Transitional
Services Agreement.
7.14 MATTERS RELATING TO ASSUMED INDEBTEDNESS. If Seller is unable to
obtain prior to the Closing the consent of any holder with respect to Assumed
Indebtedness (which for purposes of this Agreement shall include any required
documentation by such holder to effectuate the assumption), Seller may, at its
sole option, elect to prepay such Assumed Indebtedness coincident with the
Closing at Seller's sole cost and expense (including all prepayment fees and
expenses), and Seller shall not receive a credit at the Closing in an amount
equal to one-half of the assumption fee which would have otherwise been payable
to the holder, provided, however, that if the aggregate principal amount of
Assumed Indebtedness so prepaid under all Sale Agreements is greater than
$20,000,000, Purchaser shall have the right to delay the Closing for the
Properties designated by Purchaser that are encumbered by such Assumed
Indebtedness with an outstanding principal amount equal to the excess of such
Assumed Indebtedness under all Sale Agreements of $20,000,000 (or as nearly
equal to such amount as practicable) as described below for a period not to
exceed 90 days after the Main Closing Date). Seller will endeavor to provide
Purchaser with as much advance notice of its intention with respect to such
Assumed Indebtedness. Seller must make such election by written notice to
Purchaser any time prior to the Closing and Purchaser shall have until the
Closing to elect to delay the Closing for any such Property by written notice to
Seller. Any Assumed Indebtedness that is duly elected by Seller to be prepaid
under this Section, shall not be Assumed Indebtedness for purposes of this
Agreement and shall be prepaid at the Closing or at any delayed Closing at
Seller's sole cost and sole cost and expense (including all prepayment fees and
expenses).
(a) If Purchaser elected to delay the closing of the Properties encumbered
by such Assumed Indebtedness that Seller has elected to prepay, the sale and
purchase of Properties encumbered by such Assumed Indebtedness and the
assumption of the liabilities relating thereto will be delayed for up to 90 days
after the Main Closing Date (as if such deferred date is the "Closing Date" with
respect to such Property), and at the Closing the transactions contemplated
hereby other than with respect to such Properties for which the Closing is
delayed (and any delayed closing pursuant to Section 9.4(g)) shall be
consummated and the Purchase Price payable at Closing shall be reduced by the
allocable purchase price of the Properties encumbered by such Assumed
Indebtedness as set forth in the letter agreement referred to in Section 7.7 and
the Assumed Indebtedness at Closing will not include the Assumed Indebtedness
with respect to such Properties and all other conditions and obligations with
respect to such Properties for which the Closing is delayed hereunder shall not
constitute conditions and obligations with respect to the Closing of the
Properties for which the Closing is not delayed hereunder. Subject to the
conditions set forth in Sections 9.2, 9.3 and 9.4, as they relate to the
Properties for which the closing is delayed, the closing of the sale and
purchase of such Properties and the assumption of the liabilities relating
thereto will take place no later than 10 Business Days following the date
Purchaser gives Seller notice that it is ready to close, but not later than 90
days after the Main Closing Date and the purchase price to be paid by Purchaser
for the applicable Property for which the Closing is delayed will be equal to
the allocable purchase price set forth in the letter
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agreement referred to in Section 7.7 subject to all applicable adjustments set
forth herein. Such delayed closing shall be deemed the "Closing" and the date
thereof the "Closing Date" with respect to such Properties that close at such
delayed Closing.
(b) In the event that Seller is unable to obtain prior to the Closing the
consent of any holder with respect to Assumed Indebtedness and Seller does not
elect to prepay such Assumed Indebtedness (or it is not prepayable), then
Purchaser may elect, in its sole discretion and by written notice to Seller, any
combination of the following (i) delay the closing for such Properties as
described below or (ii) drop such Properties. If Purchaser elects to delay the
closing of such Properties, the sale and purchase of such Properties and the
assumption of the liabilities relating thereto will be delayed until the consent
of the applicable holder can be obtained (but not later than 90 days after the
Main Closing Date) (as if such deferred date is the "Closing Date" with respect
to such Property), and at the Closing the transactions contemplated hereby other
than with respect to the Properties for which the closing is delayed shall be
consummated and the Purchase Price payable at Closing shall be reduced by the
allocable purchase price of the Properties encumbered by such Assumed
Indebtedness as set forth in the letter agreement referred to in Section 7.7 and
the Assumed Indebtedness at Closing will not include the Assumed Indebtedness
with respect to such Properties and all other conditions and obligations with
respect to such Properties for which the Closing is delayed hereunder shall not
constitute conditions and obligations with respect to the Closing of the
Properties for which the Closing is not delayed hereunder. Subject to the
conditions set forth in Sections 9.2, 9.3 and 9.4, as they relate to the
Properties for which the closing is delayed, the closing of the sale and
purchase of such Properties and the assumption of the liabilities relating
thereto will take place no later than 10 Business Days following the date
consent of the applicable holder is obtained and the purchase price to be paid
by Purchaser for the applicable Property will be equal to the allocable purchase
price set forth in the letter agreement referred to in Section 7.7 subject to
all applicable adjustments set forth herein. Such delayed closing shall be
deemed the "Closing" with respect to such Properties. If the consent of any
applicable holder is not obtained by 90 days after the Main Closing Date, then
the applicable Properties will be automatically dropped without further action
by Purchaser or Seller. If Purchaser elects to drop the Properties encumbered by
such Assumed Indebtedness, upon Seller's notice to Purchaser of its election,
this Agreement will be deemed amended, without any further action on the part of
any party, to revise the definition of Assumed Indebtedness to exclude the
Assumed Indebtedness with respect to such Properties. If the consent of any
holder with respect to the Assumed Indebtedness is conditioned on payment of any
fees in excess of 1% of the loan amount (excluding attorney fees), Purchaser may
elect, in its sole discretion and by written notice to Seller, to either (i)
agree to pay its one half share under Section 12.9, in which case Seller shall
pay its one half share of such costs under Section 12.9 or (ii) drop the
Properties encumbered by such Assumed. Indebtedness. In addition, any Property
dropped pursuant to this Section 7.14 shall not be counted as a dropped Property
for purposes of Section 10.1(e). Notwithstanding anything herein to the
contrary, Purchaser shall not be obligated to consent to any modifications to
the Assumed Loan Documents that would be adverse to Purchaser which the holder
of the Assumed Indebtedness may condition its consent upon.
(c) All obligations, liabilities, conditions and provisions set forth in
this Agreement, as applicable, shall continue in full force and effect with
respect to the applicable Properties that are subject to a deferred closing
under this Section 7.14.
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(d) PURCHASER'S RIGHT TO ELECT TO ASSUME ADDITIONAL INDEBTEDNESS.
Purchaser shall have the right upon written notice to Seller, not later than 30
days after the date hereof, to elect to have any or all of the Indebtedness on
Schedule 7.14(d) of the Disclosure Schedule treated as "Assumed Indebtedness"
pursuant to the terms hereunder and Seller shall update Schedule 4.11(a) of the
Disclosure Schedule within 3 Business Days from receipt of Purchaser's notice.
If the holder's consent is not obtained for any of the Indebtedness that
Purchaser elects under this Section to treat as Assumed Indebtedness, then such
Indebtedness shall no longer be deemed "Assumed Indebtedness" for purposes of
this Agreement.
7.15 VIOLATIONS. Seller shall, prior to the Closing and subject to Seller's
and any applicable Subsidiary's right to contest by appropriate proceedings, be
responsible for and comply with or remedy all written notices of violation of
law or municipal ordinances, orders or requirements that have been noted in or
issued in writing by any federal, state or municipal department having
jurisdiction over the Properties prior to the date of this Agreement and there
shall be a credit against the Purchase Price for the reasonable estimate of the
cost to comply with or remedy the same to the extent not cured prior to Closing.
Upon the Closing, Purchaser shall be responsible for and shall reimburse Seller
for the reasonable costs to comply or remedy all notices of violation of law or
municipal ordinances, orders or requirements that have been noted in or issued
by any federal, state or municipal department having jurisdiction over the
Properties on or after the date of this Agreement (provided same was not a
result of a breach any provision of this Agreement). Notwithstanding the
foregoing, if Purchaser and Seller are not able to agree on a reasonable
estimate of the cost to comply with or remedy such violations, then Seller shall
drop the Property with such violation (subject to Purchaser's right to waive the
violation with respect to such Property, nullify Seller's election to drop such
Property, and close without an adjustment to the Purchase Price for such
violation). In addition, any Property dropped pursuant to this Section 7.15
shall not be counted as a dropped Property for purposes of Section 10.1(e).
7.16 DROPPED PROPERTIES. (a) If Purchaser or Seller elects to drop a
Property by written notice under any Section in this Agreement, including
Sections 3.1, 3.4, 7.12, 7.14, 7.15, 8.2, 8.3, 9.2(b), 9.4(d), 9.4(e), 9.4(g),
9.4(h), 9.4(i), 10.2 or 10.3, upon notice of the election, this Agreement will
be deemed amended, without any further action on the part of any party, with
respect to each dropped Property, as follows, subject to Purchaser's right to
waive its objection and nullify Seller's election to drop such Property without
an adjustment to the Purchase Price with respect to such matter that was waived:
(i) the definition of Properties will not include the dropped
Property (and all Exhibits and Schedules and Disclosure Schedules shall be
deemed modified to reflect same as if such Property was not included in same),
except to the extent that any provision that is stated to survive the
termination of this Agreement would be applicable to the dropped 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 dropped Property, nor will any covenant, representation or
warranty be deemed made with respect to the dropped Property except to the
extent that any such covenant, representation or warranty is stated to survive
the termination of this Agreement, and Purchaser will not have any rights or
obligations under this Agreement with respect to the dropped Property and any
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condition that relates to such dropped Property, including the Assumed
Indebtedness with respect thereto, shall be deemed not to exist;
(iii) if applicable, the definition of Assumed Indebtedness will be
deemed amended to exclude any Indebtedness relating to the dropped Property;
(iv) Intentionally Omitted;
(v) the Purchase Price will be reduced by the allocable purchase
price of the dropped Property, as applicable, as set forth in the letter
agreement described in Section 7.7; and
(vi) if any dropped Property is cross collateralized with any
other Property then all such cross collateralized cross defaulted Properties
shall be deemed dropped, provided, however, they shall only be counted as one
dropped Property for purposes of Section 10.1(e), except to the extent it was
dropped under Section 7.14, and in each case only to the extent that a party is
entitled to count such Property as a dropped property for the purposes of
10.1(e).
7.17 DELIVERY OF FINANCIAL STATEMENTS. Seller agrees that, provided
Purchaser has executed and delivered any engagement letter as may be required by
Ernst and Young ("E&Y"), Seller will commission and cause E&Y, its independent
accountants, to provide Purchaser, at Purchaser's expense, with (a) a combined
statement of operations for the Purchased Assets under all Sale Agreements for
the year ended December 31, 2001, together with the related balance sheet as of
December 31, 2001, audited by E&Y, (b) a combined statement of operations for
the Purchased Assets for the nine month period ended September 30, 2002,
together with the related balance sheet as of September 30, 2002, reviewed by
E&Y, and (c) a "management's discussion and analysis" section comparing and
explaining specific line items in the foregoing statements. Such financial
statements and related information may be included in public filings made by
Purchaser, with the requisite consent of E&Y, at the times required by, and to
the extent required by, applicable securities laws or rules or policies of the
NYSE or, as reasonably determined by Purchaser to be advisable in connection
with an offering of its securities. In addition, at Purchaser's election,
Purchaser may have another accounting firm audit the statements referred to in
this Section, and Seller, shall provide access to the information necessary to
perform such audit to be provided. This provision shall survive Closing.
7.18 INSURANCE AND OTHER MATTERS. (a) Intentionally Omitted.
(b) To the extent Seller 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
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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.
(c) For a period not to exceed two (2) years following the Closing as long
as Purchaser or its Subsidiaries own the Purchased Assets, Purchaser shall
maintain the Purchased Assets so owned under Purchaser's blanket insurance
policy.
7.19 POST-CLOSING ACCESS. After the Closing, Purchaser will from time to
time, upon reasonable notice and during normal business hours, afford Seller
access to all books and records of the Properties that relate to the period of
Seller's ownership, including without limitation all accounting records and
employment and compensation data relating to employees employed by Seller, for
tax, accounting or other legal purposes. Purchaser will afford Seller reasonable
access to former employees of Seller or other Persons to assist Seller in its
review of those records. Purchaser will maintain all records relating to the
Properties for the maximum time period required to comply with all applicable
federal and state audit periods.
7.20 KEYBANK. Seller shall, (i) prior to the expiration of the Contract Due
Diligence Period, obtain the consent of the lender under that certain Credit
Agreement (the "Key Credit Agreement") dated November 18, 1998 by and between
EIG Operating Partnership, L.P. and KeyBank National Association, as a Bank and
as Syndication Agent and Administrative Agent to modify the Key Credit Agreement
such that Seller will be able to complete the transactions contemplated under
this Agreement without breaching the terms and conditions of the Key Credit
Agreement and (ii) prior to Closing have obtained such modifications to the Key
Credit Agreement. If such modifications are not implemented prior to Closing,
Purchaser, shall have the right to use a portion of the Purchase Price to pay
off the loan under the Key Credit Agreement and the amount paid to cure such
matter shall be credited against the Purchase Price. Seller shall use its
commercially reasonable efforts (including without limitation, paying any fees
and expenses associated therewith under the Key Credit Agreement) to obtain such
consent and modifications, and if applicable, to assist with paying off the loan
under the Key Credit Agreement. If such loan is paid off or such modifications
are obtained, this condition shall be deemed satisfied.
7.21 PURCHASER'S BOARD APPROVAL. Purchaser shall use its good faith efforts
to complete its due diligence in time for the scheduled board of director's
meeting on November 6, 2002 and to use its good faith efforts to submit and
recommend for approval the transactions contemplated under this Agreement
(subject to Purchaser's findings during its Due Diligence) and this Agreement at
such meeting (as it may be delayed).
VIII. CASUALTY AND CONDEMNATION
8.1 IN GENERAL. If, prior to the Closing Date, a Property is destroyed or
damaged by fire or other casualty or Seller receives notice of condemnation or
sale in lieu of condemnation of a Property, Seller will notify Purchaser of that
event and provide Purchaser with details of the extent of the damage or
condemnation, which details shall include information as to the Leases that are
impacted and Seller's restoration plans.
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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 no Significant Portion of any Property is (a) damaged
or destroyed or (b) condemned in whole or part. Seller will not be obligated to
repair or restore such damage or destruction or condemned Property, but Seller
will either (i) if all insurance or condemnation proceeds have been received,
credit to Purchaser at Closing an amount equal to the amount of casualty
insurance proceeds and condemnation proceeds collected by Seller as a result of
such damage or destruction or condemnation, of any deductible payable under
Seller's insurance policies (not to exceed the amount of loss not covered by
insurance) and the amount of insurance proceeds that would have been collected
by Seller but for the application of any "aggregate limits" under the insurance
policies less any sums expended by Seller toward the restoration or repair of
the Properties or in collecting insurance or condemnation proceeds, or (ii)
credit to Purchaser at Closing an amount equal to the amount of casualty
insurance proceeds and condemnation proceeds collected by Seller plus the amount
of any deductible payable under Seller's insurance policies (not to exceed the
amount of loss not covered by insurance) and the amount of insurance proceeds
that would have been collected by Seller but for the application of any
"aggregate limits" under the insurance policies less any sums expended by Seller
toward restoration or repair of the Properties or in collecting insurance or
condemnation proceeds and give Purchaser an assignment of Seller's right to
receive insurance or condemnation proceeds if any portion of the insurance or
condemnation proceeds are not collected before the Closing less, to the extent
not previously deducted from the proceeds credited to Purchaser at Closing, any
sums expended before the Closing to repair or restore the Properties or to
collect insurance or condemnation proceeds. The proceeds of any rent insurance
paid in respect of any casualty will be apportioned between Seller and Purchaser
as if the same were Rentals, as and when received.
(a) Notwithstanding anything herein to the contrary, to the extent there
is an uninsured loss, Purchaser shall receive a credit against the Purchase
Price for same unless Seller is not in breach of its obligations under Section
6.1(j) to keep the Properties insured and Seller elects by written notice within
5 Business Days (or Closing if Closing is in less than 5 Business Days) of
notice from Purchaser that there is an uninsured loss to drop the Property, in
which case such Property shall be dropped and there will be no such credit.
Notwithstanding anything herein to the contrary, if Seller elects to drop a
Property as aforesaid, Purchaser shall have the right to waive the credit for
the uninsured loss with respect to such Property, nullify Seller's election to
drop such Property, and close without an adjustment to the Purchase Price for
such uninsured loss.
8.3 MAJOR LOSS. If a Significant Portion of any Property is damaged or
destroyed or condemned (a "Major Loss"), then within 20 days after receipt of
notice of the Major Loss, Purchaser must give notice to Seller of its intention
to close the transaction in accordance with Section 8.2 as if a Major Loss had
not occurred and receive the benefits of Section 8.2 or to drop any or all of
the Properties affected by the Major Loss. In no event will Seller be obligated
to repair or restore such damage or destruction or condemnation. Arvada Plaza
shall not count as a dropped property for the purposes of Section 10.1(e).
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8.4 ADDITIONAL MATTERS. With respect to any 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(g), Seller will be permitted to incur or enter into
an agreement to incur any amount reasonably necessary to effect emergency or
necessary repairs related to preservation of the Property or health and safety
matters or which are required by the terms of any lease, REA, loan document, or
other agreement to which Seller 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 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.
8.5 ARVADA PLAZA. (a) The condemnation proceeding set forth on Schedule
4.5(a) (the "Arvada Condemnation Proceeding") with respect to the Property
commonly known as Arvada Plaza ("Arvada Plaza") is deemed to be a Major Loss.
Purchaser shall be deemed to have elected to utilize the provisions of Section
8.2 with respect to such Major Loss and Purchaser shall be entitled to all
condemnation proceeds with respect to such condemnation, as set forth in Section
8.2 and all insurance proceeds, including without limitation any rent
interruption insurance proceeds or policies that would apply to the time period
after Closing. Prior to Closing, Purchaser and Seller will mutually and
reasonably control the Arvada Condemnation Proceeding and Seller will not settle
or compromise any claims related to the Arvada Condemnation Proceeding without
Purchaser's consent.
(b) If prior to Closing, Arvada Plaza is not completely restored following
the completion of all phases of the temporary taking to install sewer pipes and
other matters, including, without limitation, repaving the parking lot (the
"Taking Restoration"), then Purchaser shall receive a credit against the
Purchase Price in the amount of 10% of the allocable purchase price of Arvada
Plaza as set forth in the letter agreement referred to in Section 7.7 (the
"Arvada Holdback"). The Arvada Holdback shall be held by Purchaser and on the
one year anniversary of the Closing, Purchaser shall pay to Seller the following
amount, if any: The Arvada Holdback less any losses in Rentals at Arvada Plaza
due to the Arvada Condemnation Proceeding (whether due to lease terminations,
tenants withholding rent or otherwise) which losses shall be determined after
netting out all condemnation proceeds and rent loss insurance proceeds obtained
by Purchaser in connection with the losses in Rentals. Notwithstanding the
foregoing, if at the
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one year anniversary of the Closing, there has not been a final settlement with
respect to the Arvada Condemnation Proceeding or the Taking Restoration has not
been completed, then Purchaser and Seller shall endeavor in good faith to arrive
at a mutually satisfactory resolution respecting the application of the Arvada
Holdback.
(c) If at or prior to the eighteen (18) month anniversary of the Closing,
King Soopers terminates its lease due to the Arvada Condemnation Proceeding,
Purchaser shall have the right to cause Seller to buy back Arvada Plaza (the
"Arvada Put Option") subject to the following:
(i) Purchaser must exercise the Arvada Put Option by written
notice to Seller not later than five (5) Business Days after the eighteen (18)
month anniversary of the Closing or the Arvada Put Option shall expire and be
null and void;
(ii) The closing shall occur and Seller shall purchase Arvada
Plaza on a mutually convenient date, not later than ten (10) Business Days after
Purchaser exercises its Arvada Put Option with closing documents and procedures
that Purchaser and Seller reasonably agree to;
(iii) The purchase price payable to Purchaser by Seller shall be
the purchase price allocated to Arvada Plaza as set forth in the letter
agreement referred to in Section 7.7 less any amount of the Arvada Holdback that
was not delivered to Seller, if any. Such purchase price shall be subject to all
applicable adjustments under Article II as if Purchaser was the Seller and
Seller was the Purchaser (but specifically excluding any adjustments made under
Sections 7.6, and 2.4(e)) and shall be paid be in immediately available funds by
wire transfer to an account designated by Purchaser. Purchaser shall assign to
Seller any rights it has to the Arvada Condemnation Proceeding and any proceeds
with respect thereto relating to the period of time after the closing with
respect to the Arvada Put Option. Seller shall receive a credit against the
purchase price for Arvada Plaza under the Arvada Put Option in the amount of any
condemnation proceeds that Purchaser received (less the cost of collection)
relating to the period of time after the closing with respect to the Arvada Put
Option. All closing costs shall be split as set forth in Section 12.9, as if
Seller was the Purchaser and Purchaser was the Seller, except that the credit
for title insurance shall be reduced to $1,000;
(iv) At Purchaser's election, Seller shall assume the Indebtedness
encumbering Arvada Plaza and receive a credit against the purchase price in the
amount of the then outstanding principal balance, provided, that such
Indebtedness is the Assumed Indebtedness that Purchaser assumed at the Closing
(subject to reductions due to amortization and partial prepayments). If a lender
consent is required to assume the Indebtedness encumbering Arvada Plaza,
Purchaser and Seller shall work together in good faith to obtain such consent,
and to have Seller assume the Indebtedness and for Purchaser and its Affiliates
to be released from all liability with respect thereto, if Purchaser and its
Affiliates are not so released from liability, Seller shall enter into an
agreement substantially similar to the Guaranty Indemnity Agreement to protect
Purchaser and its Affiliates; and
(v) Arvada Plaza and the Purchased Assets shall be transferred
free and clear of all Liens, other than the Permitted Encumbrances that
Purchaser took title subject to and any Indebtedness assumed pursuant to the
terms hereunder.
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(d) In connection with obtaining the consent of holder of the Arvada Plaza
Assumed Indebtedness for Purchaser to assume such Assumed Indebtedness, for
purposes of this Agreement, such consent shall not be deemed given if such
holder does not also consent to (i) the Arvada Put Option, (ii) the assumption
back by Seller, (iii) the release of Purchaser and its Affiliates of all
liability related to the Assumed Indebtedness upon the assumption back by
Seller, and (v) waiving the assumption fee for the assumption by Seller upon the
exercise of the Arvada Put Option.
IX. CLOSING
9.1 CLOSING. Subject to the satisfaction or waiver of all of the
conditions to closing contained in Article IX hereof, the closing of the
Transfer (the "Closing") will take place at 9:00 a.m.,
New York time, on a date
that is not later than 30 days after the expiration of the Contract Due
Diligence Period (but not later than January 16, 2003) as agreed to by Seller
and Purchaser (as extended by mutual consent of Purchaser and Seller, or as
extended pursuant to Sections 3.4(i) and 10.2(e) or as the Closing Date under
any other Sale Agreement may have been duly extended, except if there is a Main
Closing Date under such Sale Agreement and then the extension shall only be to
such Main Closing Date and a delay for an individual property shall not extend
the Closing hereunder, the "Closing Date"), subject to the satisfaction or
waiver of the conditions set forth in Article IX (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), at Xxxxxxx Xxxx & Xxxxxxxxx, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless another time, date or place is agreed
to in writing by the parties. Purchaser and Seller shall endeavor to enter into
a commercially reasonable escrow agreement with the Escrow Holder to facilitate
the Closing.
9.2 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE TRANSFER. The
respective obligations of each party to effect the Transfer will be subject to
the satisfaction or waiver by each of Purchaser and Seller at or prior to the
Closing Date of the following conditions:
(a) SIMULTANEOUS CLOSING. The closing, subject to permitted delayed
closings for certain Properties and the permitted dropping of certain Properties
under the Sale Agreements, of both the Contribution Agreement and the EIG Realty
Purchase Agreement shall have occurred simultaneously with the Transfer.
(b) NO INJUNCTION OR RESTRAINT. No judgment, order, decree or Law entered,
enacted, promulgated, enforced or issued by any court or other Governmental
Entity of competent jurisdiction or other legal restraint or prohibition
(collectively, "Restraints") shall be in effect preventing the consummation of
the Transfer; provided, however, that the terminating party shall have used its
reasonable best efforts to prevent the entry of and to remove any such
Restraints. Provided, however, Purchaser can elect to drop any Property subject
to such Restraint, such that there will no longer be a Restraint with respect to
a Purchased Asset and therefore this condition will be deemed satisfied.
(c) BOARD APPROVAL. Purchaser has obtained the consent of its Board of
Directors at or prior to the expiration of the Contract Due Diligence Period.
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(d) ASSUMED INDEBTEDNESS. Subject to the Property dropping, prepayment and
delayed closing mechanism for the Assumed Indebtedness under Section 7.14, all
conditions required by the holders of the Assumed Indebtedness for Purchaser to
assume the Assumed Indebtedness shall have been satisfied, including delivery of
all legal opinions, subordination of management agreements, and other
instruments required by the holders of the Assumed Indebtedness to be delivered
by Purchaser.
9.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller to
effect the Transfer is further subject to satisfaction or waiver by Seller of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES OF PURCHASER. The representations and
warranties of Purchaser set forth in this Agreement shall be true and correct at
and as of the Closing Date, as if made at and as of that time (except to the
extent expressly made as of an earlier date, in which case as of that date), in
all material respects and Seller will have received a certificate (which may be
qualified by knowledge to the same extent as the representations and warranties
of Purchaser are so qualified) signed on behalf of Purchaser by an authorized
officer of Purchaser, in that capacity, to that effect.
(b) PERFORMANCE OF COVENANTS OF PURCHASER. Purchaser shall have performed
in all material respects all covenants required to be performed by it under
Section 3.3 hereof prior to the Closing. Purchaser shall have executed and
delivered all documents and instruments required to be executed and delivered by
it under this Agreement at the Closing, Purchaser shall have delivered payment
of the Purchase Price (after application of the Deposit plus any interest and
other investment income thereon as provided in Section 2.1), and Purchaser shall
not have breached in any material respect any covenant that prevents Seller from
fulfilling its obligations under this Agreement or otherwise frustrates the
closing of the transactions contemplated under this Agreement.
(c) CLOSING DELIVERIES OF PURCHASER. Seller will have received from
Purchaser the following items:
(i) the Purchase Price (after application of the Deposit plus any
interest and other investment income thereon as provided in Section 2.1), after
all adjustments are made at the Closing in accordance with this Agreement
including without limitation Section 2.4;
(ii) a counterpart original of the Lease Assignment and Tenant
Loan Assignment, duly executed by Purchaser;
(iii) a counterpart original of the Contract Assignment, duly
executed by Purchaser;
(iv) a written notice, in the form attached hereto as Exhibit
9.3(c)(iv) of the Disclosure Schedule, executed by Purchaser and Seller or the
applicable Assigning Subsidiary and to be addressed and delivered to the Tenants
of the Properties, (i) acknowledging the sale of the applicable Property to
Purchaser, (ii) acknowledging that Purchaser has received and that Purchaser is
responsible for the Tenant Deposits (specifying the exact amount of the Tenant
Deposits), (iii) indicating that rent should thereafter be paid to Purchaser and
giving instructions therefor and (iv) that the property manager has been changed
(the "Tenant Notice Letters");
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(v) a counterpart original of the Ground Lease Assignment, if
any, duly executed by Purchaser;
(vi) Intentionally Omitted;
(vii) if applicable, a counterpart original of the Indemnity
Agreement in the form of Exhibit 6.4 of the Disclosure Schedule, duly executed
by Purchaser;
(viii) any certificates or similar documents, if any, required by a
Governmental Entity in connection with the sale of the Purchased Assets;
(ix) a counterpart original of the Closing Statement duly executed
by Purchaser;
(x) a counterpart original of the Closing Escrow Agreement, duly
executed by Purchaser; and
(xi) if required by Purchaser, a counterpart original of the
Transitional Services Agreement, duly executed by Purchaser.
9.4 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser
to effect the Transfer is further subject to satisfaction or waiver by Purchaser
of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. 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
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) INTENTIONALLY OMITTED.
(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) of the Disclosure
Schedule (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;
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(ii) one or more bills of sale in the form attached hereto as
Exhibit 9.4(d)(ii) of the Disclosure Schedule (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) of the Disclosure
Schedule (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) of the Disclosure Schedule (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) of the Disclosure Schedule certifying that Seller or the applicable
Assigning 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 and each Assigning Subsidiary;
(viii) the Tenant Deposits, either (x) as part of an adjustment to
the Purchase Price, or (y) in the form of letters of credit from Tenants of
which Purchaser is the beneficiary;
(ix) a schedule showing any changes as of 5 Business Days prior to
the Closing Date, to the Rent Roll and Schedules 4.5(c)-1 and 4.5(c)-2 of the
Disclosure Schedule;
(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) Intentionally Omitted.
(xii) a duly recorded copy or a fully executed original in
recordable form of the Festival REA;
(xiii) Intentionally Omitted;
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(xiv) an assignment and assumption of each Ground Lease
substantially in the form attached hereto as Exhibit 9.4(d)(xiv), duly executed
by Seller or the applicable Assigning Subsidiary (the "Ground Lease
Assignment");
(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, documents related to the Assumed
Liabilities, REAs, Ground Leases, Licenses and Permits, Records and Plans, and
all other documentation relating to the Purchased Assets or the Properties in
Seller's or any Assigning Subsidiary's possession;
(xviii) the title affidavits attached hereto as Exhibit 6.1(n) of the
Disclosure Schedule and the other affidavits, documents and information set
forth in Section 6.1(n);
(xix) any transferable bonds, warranties or guaranties which are in
any way applicable to the Properties, and are in Seller's or its Subsidiaries'
possession or control, together with an assignment thereof duly executed by
Seller or the applicable Assigning Subsidiary in form and substance reasonably
acceptable to Purchaser;
(xx) any certificates or similar documents, if any, required by
any Governmental Entity in connection with the sale of the Purchased Assets;
(xxi) an assignment of Seller's 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)(xxi) of the Disclosure Schedule
(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;
(xxii) the Closing Escrow Agreement and Mars Escrow Agreement duly
executed by Seller and Escrow Holder;
(xxiii) evidence of appointment of Seller as agent for the Assigning
Subsidiaries;
(xxiv) the Tenant estoppel certificates and Seller estoppel
certificates as provided for in Section 6.3, and the certificates with respect
to the REAs as provided for in Section 6.11;
(xxv) a certificate of Seller stating the principal balance of the
Assumed Indebtedness as of the date of Closing;
(xxvi) an updated list of Material Contracts as of a date no more
than 3 Business Days before the Closing Date;
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(xxvii) a letter from Seller directing its attorneys and accountants
who are in possession of any Records and Plans and loan documents relating to
the Properties to deliver copies thereof to Purchaser upon request of Purchaser
and at Purchaser's expense;
(xxviii) If required by Purchaser, a counterpart original of the
Transitional Services Agreement, duly executed by Seller;
(xxix) Evidence reasonably acceptable to Purchaser that Purchaser
and its permitted designees under this Agreement were added as an additional
named insured under the Existing Environmental Insurance Policy or an indemnity
agreement reasonably acceptable to Purchaser as set forth in Section 7.9 and
delivery of Indemnitor's Acknowledgement, if any that is obtained;
(xxx) Intentionally Omitted;
(xxxi) Secretary's certificate and resolutions for the directors and
shareholders of Seller to the effect that this Agreement and the transactions
contemplated hereby have been duly authorized by all necessary action of the
directors and shareholders of Seller;
(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; and
(xxxiii) a duly executed counterpart the Assignment Agreement
acknowledged by Seller.
(e) Purchaser shall have received the lender estoppels and ground lessor
estoppels substantially in the form or otherwise acceptable to Purchaser
referred to in Sections 6.9 and 6.10.
(i) However, if a lender estoppel is not obtained, Purchaser can
elect to drop the Property encumbered by the Assumed Indebtedness for which such
lender estoppel is not obtained. If Purchaser so elects to drop such Property,
Seller shall have the right to nullify the election to drop such Property
(unless Purchaser waives the condition to deliver such lender estoppel) by
electing to treat the failure to obtain such lender estoppel as a deemed failure
to obtain the respective holder's consent to the assumption of the respective
Assumed Indebtedness for purposes of this Agreement.
(ii) However, if a ground lessor estoppel is not obtained for the
Ground Lease related to Aurora Plaza in Aurora, Colorado, Purchaser can elect to
drop such Property.
(iii) However, if a ground lessor estoppel is not obtained for the
Ground Lease related to Xxxx Plaza in Vincennes, Indiana Purchaser can elect to
drop such Property, only if (x) Seller does not provide a substitute estoppel
(substantially in the form as set forth on Exhibit 6.9 of the Disclosure
Schedule) or (y) the Purchaser can not obtain a Title Policy without any special
exceptions relating to the failure to obtain an estoppel certificate from the
ground lessor.
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(iv) In addition, any Property dropped pursuant to this
Section 9.4(e) shall not be counted as a dropped Property for purposes of
Section 10.1(e).
(f) PRE-CLOSING THRESHOLD. For purposes of Sections 9.4(a) and (b), the
representations and warranties of Seller 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 (or would
result from upon or after Closing) the breaches of representations and
warranties (without giving effect to any materiality qualification) and
covenants under all Sale Agreements is more than the Pre-Closing Threshold.
(g) REQUIRED LEASES. All of the leases on Schedule 9.4(g) of the
Disclosure Schedule shall be in full force and effect in accordance with the
terms and conditions as set forth on Schedule 9.4(g) of the Disclosure Schedule
and other customary terms and conditions for similar leases in the Properties.
If the foregoing is not satisfied at Closing or waived by Purchaser, then
Purchaser shall have the following two options (i) delay the Closing pursuant to
Section 9.4(g)(i) for the Property associated with such lease or (ii) drop the
Property on Schedule 9.4(g) of the Disclosure Schedule associated with such
lease (such dropped Property shall not count as a dropped Property for purposes
of Seller's and/or a Non-Panther Party's right to terminate this Agreement or a
Sale Agreement under Section 10.1(e)). Exercise of either of the foregoing
options by Purchaser shall be deemed satisfaction of the applicable condition.
Seller may satisfy this condition with a lease to a different Tenant reasonably
acceptable to Purchaser with the same terms and conditions as set forth on
Schedule 9.4(g) of the Disclosure Schedule with respect to the lease that it is
replacing (such lease or a lease set forth on Schedule 9.4(g) of the Disclosure
Schedule with the same terms and conditions that are set forth on Schedule
9.4(g) of the Disclosure Schedule and other reasonable and customary terms and
conditions for similar leases in of the Properties are collectively, a "Required
Lease"). In addition, if a Required Lease is in full force and effect as of the
Closing (or Purchaser has waived such requirement and a Required Lease is still
not in full force and effect), (x) but the rent under such Required Lease will
not commence at the time set forth on Schedule 9.4(g) of the Disclosure
Schedule, Purchaser shall receive a credit against the Purchase Price in the
amount of the rent that would have been paid for the period between the rent
commencement date set forth on Schedule 9.4(g) of the Disclosure Schedule and
the actual rent commencement date and/or (y) but the rent under such Required
Lease is less than that set forth on Schedule 9.4(g) of the Disclosure Schedule,
Purchaser shall receive a credit against the Purchase Price in an amount equal
to applying the cap rate for such Property set forth on Schedule 9.4(g) of the
Disclosure Schedule to the difference between the actual yearly Rent and the
Rent set forth on Schedule 9.4(g) of the Disclosure Schedule.
(i) If a Required Lease is not executed at or prior to Closing,
Seller may elect, in its sole discretion and by written notice to Purchaser not
later than two (2) Business Days prior to Closing to delay the closing for each
affected Property. If Seller elects to delay the closing for an affected
Property, the sale and purchase of such affected Property and the assumption of
the liabilities relating thereto will be delayed until the Required Lease(s)
associated therewith on Schedule 9.4(g) of the Disclosure Schedule is in full
force and effect (but not later than six months from the Main Closing Date) (as
if such deferred date is the "Closing Date" with respect to such affected
Property), and at the Closing the transactions contemplated hereby other than
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with respect to such affected Property (and any delayed closing pursuant to
Section 7.14) shall be consummated and the Purchase Price payable at Closing
shall be reduced by the allocable purchase price of such affected Property as
set forth in the letter agreement referred to in Section 7.7 and the Assumed
Indebtedness at Closing will not include the Assumed Indebtedness with respect
to such affected Property and all other conditions and obligations with respect
to such affected Property shall not constitute conditions and obligations with
respect to the Closing of the Properties for which the Closing is not delayed
hereunder. Subject to the conditions set forth in Sections 9.2, 9.3 and 9.4, as
they relate to such affected Property the closing of the sale and purchase of
such affected Property and the assumption of the liabilities relating thereto
will take place no later than 10 Business Days following the date the Required
Lease(s) associated therewith on Schedule 9.4(g) of the Disclosure Schedule is
in full force and effect and the purchase price to be paid by Purchaser for such
affected Property will be equal to the allocable purchase price set forth in the
letter agreement referred to in Section 7.7 subject to all applicable
adjustments set forth herein. Such delayed closing shall be deemed the "Closing"
and the date thereof the "Closing Date" with respect to such affected Property.
If a Required Lease(s) associated therewith on Schedule 9.4(g) of the Disclosure
Schedule is not in full force and effect by the Closing (as it may have been
delayed), then at Purchaser's election by written notice to Seller such affected
Property will be dropped. All obligations, liabilities, conditions and
provisions set forth in this Agreement, as applicable, shall continue in full
force and effect with respect to the delayed closing for such affected Property
pursuant to this Section 9.4(g) of the Disclosure Schedule.
(ii) If the condition set forth in this Section 9.4(g) is not
satisfied as of the Closing (as it may have been delayed), and Purchaser does
not elect to drop such Property, then such condition shall be waived with
respect to such Required Lease and upon the Closing Purchaser shall receive a
credit against the Purchase Price as set forth above.
(h) FESTIVAL CENTRE. The two outparcels with respect to Festival Centre
that are outlined on Schedule 4.5(h) of the Disclosure Schedule shall be subject
to a declaration of restrictive covenants and easements (the "Festival REA"),
including use restrictions and operating and maintenance covenants and access
easements (as more particularly set forth in Exhibit 9.4(h) of the Disclosure
Schedule) with the beneficiary being the fee owner of Festival Centre to the
mutual satisfaction of Purchaser and Seller. Seller and Purchaser shall in good
faith attempt to agree on a reasonable form of the Festival REA within 30 days
from the date hereof. In addition, the consent of the holder of the Assumed
Indebtedness for the release of such outparcels shall be obtained, at Seller's
sole cost and expense and such outparcels shall be released from the lien
securing such Assumed Indebtedness. In addition, such outparcels shall be
properly subdivided and constitute one or more entire separate tax lots that do
not affect any other property in accordance with all Laws and all at Seller's
sole cost and expense. Subject to Section 7.14 with respect to obtaining such
holder's consent and completing the release of such outparcels, if any of the
foregoing of this Section 9.4(h) is not satisfied at Closing or waived by
Purchaser, then Purchaser shall acquire such out parcels and grant Seller an
option to purchase them back substantially in the form of EXHIBIT 9.4(H) of the
Disclosure Schedule.
(i) SELLER MATERIAL ADVERSE EVENT (WITH RESPECT TO ITEMS OTHER THAN
(IV) IN THE DEFINITION OF SELLER MATERIAL ADVERSE EVENT). In the event a Seller
Material Adverse Event (with respect to items other than (iv) in the definition
of Seller Material Adverse Event) shall have
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occurred, then Purchaser shall have the following options (i) drop any or all of
the Properties impacted by such Seller Material Adverse Event or (ii) waive the
condition. Exercise of the foregoing option by Purchaser shall be deemed
satisfaction of the applicable condition.
X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER
10.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by mutual written consent of the parties at any time prior to Closing,
whereupon Purchaser will be entitled to the return of the Deposit plus any
interest or other investment income earned thereon and Seller shall deliver
and/or cause the Escrow Holder to deliver the same to Purchaser;
(b) by either Purchaser or Seller, if any Restraint having the effects set
forth in Section 9.2(b) shall be in effect and shall have become final and
nonappealable, in which case Purchaser will be entitled to the return of the
Deposit plus any interest or other investment income earned thereon and Seller
shall deliver and/or cause the Escrow Holder to deliver the same to Purchaser,
provided that the party seeking to terminate this Agreement pursuant to this
Section 10.1(b) shall have used its reasonable best efforts to prevent entry of
and to remove such Restraint;
(c) by either Seller or Purchaser, upon thirty (30) day's prior written
notice, if the Transfer is not consummated by the Closing Date, or such later
date for the applicable Properties as extended under Section 7.14 or 9.4(g) or
to which the parties may agree in their respective sole discretion, in which
case Purchaser will be entitled to the return of the Deposit plus any interest
or other investment income earned thereon and Seller shall deliver and/or cause
the Escrow Holder to deliver the same to Purchaser, provided, in the case of
termination pursuant to this Section 10.1(c), the terminating party shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have proximately contributed to the occurrence of the
failure referred to in this Section and the terminating party shall not be in
breach of Section 9.4(a) if it is the Seller or Section 9.3(a) if it is the
Purchaser;
(d) by Purchaser as provided in or permitted by Sections 3.1, 10.2 and
10.3, or by Seller as provided in or permitted by Section 3.1, in which case
Purchaser will be entitled to the return of the Deposit plus any interest or
other investment income earned thereon and Seller shall deliver and/or cause the
Escrow Holder to deliver the same to Purchaser;
(e) by either Seller or Purchaser, if more than six (6) Properties that
can be counted for this Section 10.1(e) under all of the Sale Agreements have
been dropped from the Transfer pursuant to this Agreement, including, under
Sections 3.1(c), 3.4, 8.2, 8.3, 9.2(b), 9.4(d), 9.4(g), 9.4(h), 9.4(i), 10.2 or
10.3, (but not under Sections 7.14, 7.12, 7.15, 9.4(e) or by Seller under
Sections 3.1(c)(B), 3.4(d)(i), 3.4(g), 9.4(g), or 10.2 (as applicable)), in
which case Purchaser will be entitled to the return of the Deposit plus any
interest or other investment income earned thereon and Seller shall deliver
and/or cause the Escrow Holder to deliver the same to Purchaser; and
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(f) automatically in the event any Sale Agreement has been duly terminated
pursuant to its terms, unless such other Sale Agreement was duly terminated
solely because all Properties under such Sale Agreement were withdrawn or
dropped (without triggering the termination right in Section 10.1(e) of such
Sale Agreement) and the Deposit shall be treated in the same manner as the
deposit under the terminated Sale Agreement.
Seller shall not be entitled to exercise any right under this Section 10.1 if a
Non-Panther Party would not be able to exercise such right under another Sale
Agreement if the same matter existed under such other Sale Agreement.
Purchaser shall not be entitled to exercise any right under this Section 10.1 if
a Non-Hickory Party would not be able to exercise such right under another Sale
Agreement if the same matter existed under such other Sale Agreement.
10.2 PRE-CLOSING BREACHES. (a) Purchaser will promptly provide written
notice (the "Pre-Closing Breach Notice") to Seller upon having knowledge of (i)
any breach by Seller prior to Closing of its representations and warranties set
forth in this Agreement (without giving effect to any materiality
qualification), (ii) any breach by Seller of its covenants, (iii) failure to
deliver any document required under Section 9.4(d) which is an Exhibit hereto or
in the Disclosure Schedule (other than the lender estoppel certificates as
provided for in Section 6.9, the certificates with respect to the Ground Leases
as provided for in Section 6.10 and the certificates with respect to the REAs as
provided for in Section 6.11) or any other document that Seller deliberately,
intentionally and unreasonably fails to deliver and/or (iv) the occurrence of a
Seller Material Adverse Event (with respect to item (iv) in the definition of
Seller Material Adverse Event) (collectively, (but excluding in each case (x)
matters constituting Material Title Defects or otherwise the subject of Section
3.4 (which are governed by Sections 3.4 and 10.3 for the failure to comply with
Section 3.4) and (y) any matter related to the physical, structural and
environmental condition (except a breach of Section 4.6) of the Properties
(which are governed under Article 8) "Pre-Closing Breaches"). Such notice shall
state Purchaser's Cure Value. If the aggregate amount of Purchaser's Cure Values
attributable to Pre-Closing Breaches under all Sale Agreements is equal to or
less than the Pre-Closing Threshold, as applicable, 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 to
Purchaser (or Losses that Purchaser would incur upon or after Closing) related
thereto shall be subject to indemnification by Seller subject to the provisions
of Article XI.
(b) If the aggregate amount of the Purchaser's Cure Values resulting from
Pre-Closing Breaches under all Sale Agreements is greater than the Pre-Closing
Threshold, as applicable, Seller may elect (but shall not be obligated), by
notice to Purchaser within 10 days after receipt of Purchaser's Pre-Closing
Breach Notice, any one of the options described in the next sentence. In
Seller's sole and absolute discretion, Seller may elect any combination of the
following after taking into account similar actions taken under any Sale
Agreement (i) decrease the Purchase Price by the excess of the Purchaser's Cure
Value with respect to such Pre-Closing Breaches over either or both, as
applicable, Pre-Closing Threshold (per Property or per Portfolio, as
applicable), (ii) cure certain Pre-Closing Breaches, (iii) drop one or more
Properties with Pre-Closing Breaches under all Sale Agreements, or (iv) elect
not to cure one or more Pre-Closing
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Breaches such that there are still Pre-Closing Breaches. 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 Pre-Closing Breaches. If a Property is
dropped under this Section 10.2 the Pre-Closing Breaches relating to such
Property will not apply or count for any purpose under this Agreement or a Sale
Agreement.
(c) If Seller elects or is deemed to have elected option (iv) under
Section 10.2(b) not to cure any Pre-Closing Breach and there are Pre-Closing
Breaches which based upon the Purchaser's Cure Values for Pre-Closing Breaches
under all Sale Agreements are greater than the Pre-Closing Threshold, as
applicable, or Seller elected to cure such Pre-Closing Breaches, but has failed
to cure same at or prior to the Closing Date, Purchaser may elect, by delivery
of notice to Seller within 5 Business Days after receipt of Seller's notice or
deemed election (or on the Closing Date, if applicable), any combination of the
following options (if Purchaser fails to deliver notice of its election
hereunder, Purchaser will be deemed to have made the election in clause (ii)
below with respect to a reduction in the Purchase Price) after taking into
account similar actions taken under any Sale Agreement:
(i) drop one or more Properties (subject to the maximum number of
dropped Properties in section 10.1(e)) that are so effected by a Pre-Closing
Breach (either individually or in the aggregate) such that after dropping such
Property or Properties there will no longer be any Pre Closing Breaches that
exceed either or both, as applicable, the Pre-Closing Threshold (per Property or
per portfolio, as applicable). In addition, if such Pre Closing Breach was a
result of a Willful Covenant Default, such dropped Property shall not count as a
dropped Property for purposes of Seller's right to terminate this Agreement
under Section 10.1(e) or a Sale Agreement;
(ii) decrease the Purchase Price by an amount of the Purchaser's
Cure Value for Pre-Closing Breaches under all Sale Agreements exceeds either or
both as applicable the Pre-Closing Threshold (per Property or per Portfolio, as
applicable) and proceed toward Closing with such decreased Purchase Price; or
(iii) waive one or more of such Pre-Closing Breaches and proceed to
Closing without any reduction of or credit against the Purchase Price with
respect to the matters so waived.
Provided, however, if Purchaser elects option (i) or (ii) above, Seller shall
have the right to nullify Purchaser's election by written notice within two (2)
Business Days and deem that Purchaser elect the other of option (i) or (ii) that
Purchaser did not originally elect.
(d) To the extent that Seller elects to drop a Property under this Section
10.2, Purchaser shall have the right to nullify the election to drop a Property
and waive such Pre Closing Breaches and proceed to Closing without any reduction
of or credit against the Purchase Price with respect to such Pre-Closing Breach.
(e) To the extent any time period permitted pursuant to Section 10.2 would
extend beyond the then scheduled Closing Date, the Closing Date shall be
extended to allow for the proper delivery of notices and election of procedures
under the time frames set forth in Section 10.2,
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subject to a maximum extension of 30 days (together with all other extensions
under Sections 3.4).
10.3 DEFAULTS AND REMEDIES. (a) Notwithstanding anything to the contrary
contained in this Agreement, if Closing does not occur by the scheduled Closing
Date by reason of any Seller default (other than Pre-Closing Breaches with are
governed by Section 10.2, provided, however, failure to deliver a closing
delivery under Section 9.4(d) shall entitle Purchaser the right and remedy of
specific performance), Purchaser as its sole remedy may elect any one of the
following:
(i) terminate this Agreement and receive the return of the
Deposit, including all interest and other investment income earned thereon, and
Seller shall deliver and/or cause the Escrow Holder to deliver the same to
Purchaser, at which time this Agreement will be null and void and neither party
will have any rights or obligations under this Agreement, except for the
provisions that are expressly stated to survive the termination of this
Agreement; 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 and remedy of injunctive relief and specific performance under Section
12.7 to enforce Seller's or a Subsidiaries' obligations hereunder.
(b) Notwithstanding anything to the contrary contained in this Agreement,
if (i) Purchaser shall have failed to pay the Purchase Price at the Closing or
if Purchaser has failed to satisfy Section 9.3(b) or Purchaser fails to deliver
any document required under Section 9.3(c) which is an Exhibit hereto or any
other document that Purchaser deliberately, intentionally and unreasonably fails
to deliver or (ii) if any of Purchaser's representations or warranties set forth
in this Agreement shall not be true, correct and complete on the Closing Date as
if made at and as of that time (except to the extent expressly made as of an
earlier date, in which case as of that date), in all material respects, Seller's
sole and exclusive remedy will be to terminate this Agreement and to receive the
Deposit, together with all interest and other investment income earned thereon,
as liquidated damages, at which time this Agreement will be null and void and
neither party shall have any rights or obligations under this Agreement, except
for such provisions that are expressly stated to survive the termination of this
Agreement. Seller and Purchaser acknowledge and agree that (i) the Deposit and
any interest and other investment income earned thereon is a reasonable estimate
of and bears a reasonable relationship to the damages that would be suffered and
costs incurred by Seller as a result of having withdrawn the Purchased Assets
from sale and the failure of Closing to occur due to a default of Purchaser
under this Agreement; (ii) the actual damages suffered and costs incurred by
Seller as a result of such withdrawal and failure to close 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
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damages do not apply to any indemnity obligation of Purchaser under this
Agreement that survives termination of this Agreement.
10.4 EFFECT OF TERMINATION. In the event of termination of this Agreement
by either Seller or Purchaser as provided in Sections 3.1, 10.1, 10.2 or 10.3,
this Agreement will forthwith become void and have no further effect, without
any liability or obligation on the part of Purchaser or Seller (other than
Sections 3.2 and 3.3, Section 7.1, Sections 10.3, 11.2(b) and 11.3(b) and this
Section 10.4 and Article XII, and any other Section which expressly is stated to
survive termination, which provisions survive such termination) and except for
the obligation to return the deposit to Purchaser, if Purchaser is entitled to
same.
10.5 AMENDMENT. This Agreement may be amended by the parties in writing by
applicable corporate or partnership action at any time before the Closing Date.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
10.6 EXTENSION; WAIVER. At any time prior to the Closing Date, the parties
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions of the other party contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise will not constitute a waiver of those rights. Any
waiver or extension under this Section 10.6 of any Sale Agreement shall
constitute a waiver or extension under all Sale Agreements with respect to the
matter so waived or extended.
10.7 WAIVER OF PRE-CLOSING BREACHES. Notwithstanding anything herein to the
contrary, Purchaser's waiver of any Pre-Closing Breach and election to Close
over any such Pre-Closing Breach, shall constitute a waiver by Purchaser of only
that amount attributable to such Pre-Closing Breach in excess of the applicable
Pre-Closing Thresholds and the amount of any such Loss below such Pre-Closing
Thresholds incurred by Purchaser shall constitute a Loss subject to
indemnification by Seller pursuant to section 11.2.
XI. SURVIVAL; INDEMNIFICATION
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties to this Agreement shall survive the Closing Date for a
period of twelve (12) months following the Closing Date except for those in
Sections 4.8, 4.10 and Section 7.8 and Section 12.11, which shall survive
indefinitely. Article II shall survive until the Final Closing Adjustment is
made, unless a longer time for survival is specifically set forth therein.
11.2 INDEMNIFICATION BY SELLER. (a) From and after the Closing Date, Seller
shall, subject to the provisions of this Article XI, indemnify, defend and hold
harmless Purchaser and its subsidiaries and their respective officers,
directors, employees, agents, representatives, successors and permitted assigns
(collectively, the "Purchaser Indemnitees"), from and against any and all
actions, proceedings, costs, damages (excluding consequential and other indirect
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damages other than diminution in value of the Purchased Assets resulting from an
event subject to indemnification hereunder), claims, losses, liabilities
(absolute and contingent), fines, penalties, payments, costs and expenses
(including reasonable counsel, consultants, and engineering fees and expenses,
interest, penalties and disbursements, but excluding any costs, damages, claims,
liabilities, fines, penalties, payments, costs and expenses to the extent that
an indemnitee recovers with respect thereto pursuant to any insurance policy)
(collectively, "Losses"), that may be asserted against or suffered or incurred
by Purchaser Indemnitees arising out of, or relating to, any Pre-Closing
Property Liabilities (other than Employee Related Liabilities) and/or any breach
of any representation or warranty, covenant or agreement (excluding same by
Seller which are indemnified under other subsections of this Section 11.2) by
Seller made in this Agreement or any document or instrument delivered pursuant
hereto (including any Seller estoppel delivered under Section 6.3). This Section
11.2 will include Pre-Closing Breaches that are not waived or cured and to the
extent such Pre-Closing Breaches survive Closing pursuant to this Agreement.
(b) Seller shall indemnify and hold harmless Purchaser Indemnitees from
and against any and all Losses that may be asserted against or suffered or
incurred by Purchaser Indemnitees arising out of, or relating to, all brokers
and finders (including X.X. Xxxxxx Securities Inc.) claiming by, through or
under Seller and in any way relating to the sale and purchase of the Purchased
Assets pursuant to this Agreement. The foregoing indemnification shall not apply
to Lease Expenses which shall be governed by Section 2.4.
(c) Seller shall indemnify and hold harmless the Purchaser Indemnitees
from and against any and all Losses that may be asserted against or suffered or
incurred by the Purchaser Indemnitees arising out of, or relating to, any breach
of Seller's representations and warranties in Section 4.8, the Elkhart EPA
Liability , the Employee Related Liabilities and any 1031 Transaction of Seller
(but not Purchaser's 1031 Transaction) (collectively, with the liabilities under
Section 11.2(b), the "Non-Capped Liabilities").
11.3 INDEMNIFICATION BY PURCHASER. (a) From and after the Closing Date,
Purchaser, subject to the provisions of this Article XI, shall indemnify, defend
and hold harmless Seller and its Subsidiaries and their respective members,
partners, managers, officers, directors, employees, agents, representatives,
successors and permitted assigns (collectively, the "Seller Indemnitees"), from
and against any and all Losses that may be asserted against or suffered or
incurred by the Seller Indemnitees arising out of, or relating to, any breach of
any representation, warranty, covenant or agreement on the part of Purchaser
made in this Agreement or any document or instrument delivered pursuant hereto,
any Assumed Liabilities, any 1031 Transaction of Purchaser (but not Seller's
1031 Transaction), if any or any violation or alleged violation of federal or
state securities laws resulting from the disclosure of or omission of
information in any securities filing or offering document of Purchaser
concerning Seller or the Subsidiaries.
(b) Purchaser shall indemnify and hold harmless Seller Indemnitees from
and against any and all Losses that may be asserted against or suffered or
incurred by Seller Indemnitees arising out of, or relating to, all brokers and
finders claiming by, through or under Purchaser and in any way relating to the
sale and purchase of the Purchased Assets pursuant to this Agreement, including,
without limitation, reasonable attorneys' fees and disbursements incurred by
Seller
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Indemnitees in connection with such Losses. The foregoing indemnification shall
not apply to Lease Expenses which shall be governed by Section 2.4.
11.4 NOTICE AND RESOLUTION OF CLAIMS.
(a) NOTICE. Each Person entitled to indemnification pursuant to Section
11.2 or 11.3 (an "Indemnitee") shall give written notice to the indemnifying
party or parties from whom indemnity is sought (the "Indemnifying Party"),
promptly after obtaining knowledge of any claim that it may have under Section
11.2 or 11.3, as applicable. The notice shall set forth in reasonable detail the
claim and the basis for indemnification. Failure to give the notice in a timely
manner shall not release the Indemnifying Party from its obligations under
Section 11.2 or 11.3, as applicable, except to the extent that the failure
materially prejudices the ability of the Indemnifying Party to contest that
claim.
(b) DEFENSE OF THIRD PARTY CLAIMS. If a claim for indemnification pursuant
to Section 11.2 or 11.3 shall arise from any action that involves an
indemnifiable claim brought by third party (a "Third Party Claim"), the
Indemnifying Party may assume the defense of the Third Party Claim, provided the
Indemnifying Party proceeds with diligence and in good faith with respect
thereto. If the Indemnifying Party assumes the defense of the Third Party Claim,
the defense shall be conducted by counsel chosen by the Indemnifying Party,
which shall be reasonably acceptable to Indemnitee, provided that the Indemnitee
shall retain the right to employ its own counsel and participate in the defense
of the Third Party Claim which shall be at its own expense unless (i) the
Indemnitee is advised by counsel reasonably satisfactory to the Indemnifying
Party, that use of counsel of the Indemnifying Party's choice would be expected
to give rise to a conflict of interest, (ii) the Indemnifying Party shall not
have employed counsel to represent the Indemnitee within a reasonable time after
notice of the assertion of any such claim or institution of any such action or
proceeding, or (iii) the Indemnifying Party shall authorize the Indemnitee in
writing to employ separate counsel at the expense of the Indemnifying Party. In
no event shall the Indemnifying Party be obligated to pay the fees and expenses
of more than one counsel (other than local counsel) for all Indemnitees with
respect to any claim indemnified under this Article XI. Notwithstanding the
foregoing provisions of this Section 11.4(b), (i) no Indemnifying Party shall be
entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnitee's prior written consent unless
as part of the settlement the Indemnitee is released from all liability with
respect to the Third Party Claim and the settlement does not impose any
equitable remedy on the Indemnitee, adversely affect the Indemnitee's business
or require the Indemnitee to admit any wrongdoing, and (ii) no Indemnitee shall
be entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnifying Party's prior written
consent unless as part of the settlement the Indemnifying Party is released from
all liability with respect to the Third Party Claim and the settlement does not
impose any equitable remedy on the Indemnifying Party, adversely affect the
Indemnifying Party's business or any of its properties or require the
Indemnifying Party to admit any wrongdoing.
11.5 LIMITATIONS ON LIABILITY. (a) Seller's obligations to indemnify the
Purchaser Indemnitees for any Losses pursuant to Section 11.2(a); (i) shall not
be effective unless the aggregate amount of all Losses under all Sale Agreements
(including Losses related to Pre-Closing Breaches, but excluding any Losses
related to Pre-Closing Breaches that are cured by
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Seller prior to Closing) exceeds the Post-Closing Threshold and then only to the
extent of such excess and (ii) in no event shall Seller's liability, in the
aggregate, when combined with the liability of all Non-Panther Parties under
Section 11.2(a) and all Sale Agreements, exceed in the aggregate $6,500,000 less
any amount expended by Seller or any Non-Panther Parties under any Sale
Agreement to cure prior to Closing any Pre-Closing Breaches under any Sale
Agreement (the "Cap"). No payments made to any Person that is not Purchaser or
an Affiliate of Purchaser shall be counted against or otherwise reduce or be an
offset against the Cap. The provisions of this Section shall not apply to
Sections 11.2(b) or (c).
(b) No party shall be entitled to indemnification under Section 11.2(a)
unless the indemnification notice is delivered to the Indemnifying Party on or
before the date that is of twelve (12) months following the Closing Date.
Accordingly, on the day after twelve (12) months following the Closing, Seller
and its Subsidiaries on the one hand, and Purchaser on the other hand, shall be
fully discharged and released (without the need for any separate release or
other documentation) from any and all liability or obligation to the other party
or any successor or assign with respect to indemnification under Section
11.2(a), except solely for those matters that are then the subject of a pending
notice of claim delivered on or prior to such date. The provisions of this
Section shall not apply to Sections 11.2(b) or (c).
(c) Purchaser's liability to any and all Seller Indemnitees is limited to
the direct and indirect interest of Purchaser in and to the Purchased Assets.
11.6 EXCLUSIVE REMEDY. The provisions of this Article XI shall constitute
the sole and exclusive remedy of Purchaser, on the one hand, and Seller, on the
other, for any Losses suffered by either of them from and after the Closing on
account of any breach by the other of any representations, warranties, covenants
or agreements contained in this Agreement or any document or instrument
delivered pursuant hereto (including any Seller estoppel delivered under Section
6.3), except with respect to payment obligations under Article II, the indemnity
obligations under Sections 1.4, 2.7, 3.3, 6.4 and 7.8, and the agreements under
Section 12.11. Notwithstanding the foregoing, the remedy of specific performance
will be available in respect of the following covenants that survive Closing:
the last sentence of Sections 2.4(b)(v) and 2.7 and 7.9 and Sections 6.1(q),
7.1, 7.2(iv), 7.6(d), 7.13, 8.4(c), 8.5(a), 10.3(a)(ii) and 12.11.
11.7 SECURITY FOR POST-CLOSING OBLIGATIONS OF SELLER. On the Closing Date,
as collateral security for the performance of certain obligations of the
Non-Panther Parties under the Sale Agreements and to the extent rights under the
Redemption Agreement are assigned pursuant to the Assignment Agreement,
including Seller's indemnification obligations under this Article XI and under
Sections 2.4, 2.5 and 2.6, Seller shall deposit into escrow with Escrow Holder
cash or a letter of credit reasonably acceptable to Purchaser, in the amount of
the Cap to be held in escrow for the period of time beginning on the Main
Closing Date through the period ending on the later of (a) twelve (12) months
after the Main Closing Date or (b) the date on which all Claims made within such
twelve (12) month period pursuant to this Agreement have been resolved or
otherwise disposed. The amount held in escrow shall not be reduced by any
insurance proceeds received by Seller or any Subsidiary. In connection
therewith, Seller and Purchaser will execute an escrow agreement (the "Closing
Escrow Agreement") with Escrow Holder, EIG Realty and Excel Realty Partners,
L.P. in the form attached as Exhibit 11.7-1. The
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collateral set forth hereunder shall only be for the benefit of Purchaser and
its Affiliates and no other Person shall have any rights to such collateral.
XII. GENERAL PROVISIONS
12.1 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement will be in writing (whether expressly set
forth in the body of the document or not) and will be delivered personally, sent
by overnight courier (providing proof of delivery) to 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:
EIG Operating Partnership, L.P.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: X. Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
if to Purchaser to:
New Plan Excel Realty Trust, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
All notices will be deemed given only when actually received or, if receipt is
refused, upon the date of refusal.
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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 or of the Disclosure Schedule, as indicated, or
to the other Sale Agreements when used in connection with the Sale Agreements.
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; BINDING EFFECT; NO THIRD-PARTY BENEFICIARIES. This
Agreement and the Schedules and Exhibits attached hereto or in the Disclosure
Schedule and the documents and instruments delivered and to be delivered
hereunder constitute the entire agreement of the parties and supersede all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter of this Agreement, including the letter of intent
dated August 19, 2002 from Purchaser and accepted by EIG Realty, Inc. but
excluding the Confidentiality Agreement as modified by Section 7.1. This
Agreement shall not bind any party hereto unless and until fully executed by all
parties hereto and delivered to all such parties. This Agreement shall not
confer any rights or remedies upon any Person other than the parties hereto, the
Persons entitled to indemnification hereunder, and in each case their respective
successors, heirs, legal representatives and permitted assigns.
12.5 GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the Laws of the State of
New York, regardless of the Laws that
might otherwise govern under applicable conflicts of law principles thereof.
12.6 ASSIGNMENT. Neither this Agreement, nor any of the rights, interests
or obligations under this Agreement, may be assigned or delegated, in whole or
in part, by operation of law or otherwise by any of the parties without the
prior written consent of the other party. Notwithstanding the foregoing,
Purchaser shall have the right to designate any Affiliate to take title to any
or all of the Purchased Assets by notice to Seller given at least 20 days prior
to Closing (45 days if Purchaser intends to designate an Affiliate other than a
wholly owned Affiliate to take title to any Purchased Assets subject to any
Assumed Indebtedness) provided there is no increase in the costs borne by Seller
under Section 12.9, and provided further Purchaser will remain liable to Seller
with respect to all liabilities and obligations to be assumed by the transferee
with respect to such Purchased Assets and Purchaser will guarantee the
obligations of those Affiliates to the other parties to the Assumed Liabilities
and Assumed Indebtedness if so requested if and to the extent Purchaser would
have been liable to such other party for the Assumed Indebtedness and Assumed
Liabilities had Purchaser not designated an Affiliate to take title to the
Purchased Asset under this Section 12.6. Each such designated Affiliate of
Purchaser shall be entitled to all of the rights and benefits of Purchaser under
this
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Agreement, without expanding any of such rights. Subject to the foregoing, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
12.7 ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement
12.8 SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
12.9 EXPENSES. Except as provided in this Section 12.9, each party will
bear its own costs and expenses related to negotiation and execution of this
Agreement, and obtaining third party consents to the performance of that party's
obligations under this Agreement. Seller will be responsible for all third party
consents or approvals necessary in order for Seller to consummate the
transactions, except for the costs and fees of the holders of the Assumed
Indebtedness (which is set forth below). Purchaser will be responsible for all
fees and costs of any financial advisor to Purchaser, and Seller will be
responsible for the fees and costs of X.X. Xxxxxx Securities, Inc., and any
other financial advisor to Seller. Purchaser will be responsible for all
diligence costs and inspection fees, including without limitation the costs of
environmental and engineering reviews and audits, appraisals, accounting and
other financial reviews. Purchaser and Seller will each pay one half of any
fees, costs and expenses (including debt assumption fees) paid to lenders and
their counsel (or third parties) in obtaining consents for any debt assumptions,
modifications or waiver related to the Assumed Indebtedness. Seller will be
responsible for all costs and expenses related to prepayment penalties, bank
fees and other associated costs to remove and discharge liens which Seller is
obligated to discharge hereunder. Seller and Purchaser will each pay one-half of
(x) any transfer taxes and recording fees (including any documentary stamps and
other similar fees), (y) and the costs to update the existing surveys or obtain
new surveys and (z) any amounts charged for endorsements to the Title Policies
(or the lender's title policies) required by reason of any Assumed Indebtedness.
Purchaser shall receive a credit against the Purchase Price in the total amount
of $50,000 for any title insurance premiums and other charges and fees under all
Sale Agreements (excluding however any amounts charged for endorsements to the
Title Policies other than those required by reason of any Assumed Indebtedness,
and any cancellation fees all of which amounts shall be at Purchaser's expense).
12.10 NO RECORDATION. Seller and Purchaser agree that neither this
Agreement nor any memorandum or notice thereof shall be recorded and Purchaser
agrees (a) not to file any notice of pendency or other instrument (other than a
judgment or LIS PENDENS filed by Purchaser in connection with its enforcement of
its rights hereunder) against any of the Properties or any
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portion thereof in connection herewith, and (b) to indemnify Seller and the
Seller Subsidiaries against all costs, expenses and damages, including without
limitation, reasonable attorneys' fees and disbursements incurred by the Seller
and Seller Subsidiaries by reason of the filing by Purchaser of such notice of
pendency or other instrument.
12.11 1031 TRANSACTION. Notwithstanding anything to the contrary set forth
herein, Seller may take such steps as Seller shall deem necessary or desirable
to qualify the sale of each Property (or any portion thereof) under Section 1031
of the Code, including the use of, and/or assignment of this Agreement to, a
"qualified intermediary" within the meaning of Treas. Regs. Section
1.1031(k)-(g)(4), or the use of any other multiparty arrangement described in
Treas. Regs. Section 1.1031(k)-1(g) and/or in accordance with revenue procedure
2000-37 (a "1031 TRANSACTION"). Purchaser shall reasonably cooperate (which
cooperation shall be at Seller's sole cost and expense) in so structuring a 1031
Transaction, if so desired by Seller, provided that such structuring shall not
affect Purchaser's rights or obligations hereunder except to a DE MINIMIS
extent. Notwithstanding anything to the contrary contained herein, in no event
shall Purchaser be required to accept title to any property other than the
Property in connection with any such 1031 Transaction. Seller agrees to
indemnify Purchaser from and against all losses resulting from any claim made
against Purchaser in connection with such 1031 Transaction by Seller. In
addition, Purchaser may take such steps as Purchaser shall deem necessary or
desirable to qualify the purchase of each Property (or any portion thereof) as a
1031 Transaction including a reverse 1031 Transaction. Purchaser expressly
reserves the right to assign its rights, but not its obligations, hereunder to a
"qualified intermediary" as provided in Treas. Regs. Section 1.031(k)-1(g)(4) on
or before the Closing Date. Seller shall cooperate (which cooperation shall be
at Purchaser's expense) in so structuring a 1031 Transaction, including a
reverse 1031 Transaction, if so desired by Purchaser, provided that such
structuring shall not affect Seller's rights hereunder except to a DE MINIMIS
extent. Notwithstanding anything to the contrary contained herein, in no event
shall Seller be required to accept any property other than cash in connection
with any such 1031 Transaction from any entity in satisfaction of Purchaser's
obligation to pay the Purchase Price. Purchaser agrees to indemnify Seller from
and against all losses resulting from any claim made against Seller in
connection with such 1031 Transaction of Purchaser.
12.12 RELEASE. From and after the Closing under the EIG Realty
Purchase
Agreement, EIG Realty shall automatically be released from any liabilities to
Purchaser hereunder arising solely due to EIG Realty's status as, or act or
omission taken in its capacity as, a former general partner of Seller, provided
that at or prior to the Closing under the EIG Realty
Purchase Agreement another
entity or entities shall have succeeded EIG Realty as the general partner or
general partners of Seller. The immediately preceding sentence shall not in any
way release any successor general partner to EIG Realty.
[REMAINDER OF PAGE LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized all as of the date first
written above.
EIG OPERATING PARTNERSHIP, L.P.
By: EIG Realty, Inc., its general partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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EXHIBIT B
DEFINITIONS
CERTAIN DEFINITIONS. Defined terms used herein shall have the correlative
meaning in the other Sale Agreements when used in connection with such other
Sale Agreements. As used in this Agreement, the following terms have the
following meanings when used herein with initial capital letters:
"Accepted Due Diligence Title Objection" shall have the meaning set forth
in Section 3.4(a)
"Assignment Agreement" means EIG Realty's assignment of its right, title
and interest in and to the Redemption Agreement, together with an acknowledgment
thereto by Seller, which shall be in substantially the same form as the document
attached as Exhibit Y to the Disclosure Schedule.
"Affiliate" (or words of similar import) shall mean, as to any Person, any
other Person that, directly or indirectly, is in control of, is controlled by or
is under common control with such Person or is a director or officer of such
Person or of an Affiliate of such Person, and with respect to Seller shall
include without limitation, any Assigning Subsidiary, any Subsidiary, and Rhino
Investment Group, LLC and its Subsidiaries.
"Agreement" means this Purchase Agreement by and among Purchaser and Seller
(as it may be amended in writing by Purchaser and Seller).
"AIG" shall mean the insurer under the Existing Environmental Insurance
Policy.
"Applicable Operating Expense Fiscal Year" shall have the meaning set forth
in Section 2.4(c).
"Applicable Percentage Rent Fiscal Year" shall have the meaning set forth
in Section 2.4(b)(iii).
"Arvada Condemnation Proceeding" shall have the meaning set forth in
Section 8.5.
"Arvada Holdback" shall have the meaning set forth in Section 8.5.
"Arvada Plaza" shall have the meaning set forth in Section 8.5.
"Arvada Put Option" shall have the meaning set forth in Section 8.5.
"Assigning Subsidiary" means any Subsidiary that has a direct ownership
interest in any of the Purchased Assets, including without limitation, Trust
#2303 created pursuant to that certain Land Trust Agreement dated August 28,
1992 with Premier Trust Services, Inc. (predecessor in interest to the current
trustee), as trustee for the benefit of Freeport Associates, L.P.
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"Assumed Indebtedness" means the Indebtedness described on Schedule 4.11(a)
of the Disclosure Schedule.
"Assumed Liabilities" shall have the meaning set forth in Section 1.3.
"Assumed Loan Documents" shall have the meaning set forth in Section
4.11(a).
"Audited Financial Statements" shall have the meaning set forth in Section
4.20.
"Bankruptcy" means the commencement of any proceeding under any applicable
bankruptcy, reorganization, liquidation, insolvency, creditor's rights, or
similar law now or hereafter in effect or commencement of a proceeding in which
a receiver, liquidator or trustee is sought to be appointed.
"Xxxx of Sale" shall have the meaning set forth in Section 9.4(d)(ii).
"Budgets" shall have the meaning set forth in Section 4.21.
"Business Day" means a day other than Saturday, Sunday or any day on which
commercial banks in
New York,
New York are authorized or obligated to close.
"Cap" shall have the meaning set forth in Section 11.5(a).
"Claims" shall have the meaning set forth in Section 1.5(a).
"Closing" shall have the meaning set forth in Section 9.1.
"Closing Date" shall have the meaning set forth in Section 9.1.
"Closing Escrow Agreement" shall have the meaning set forth in Section
11.7.
"Closing Statement" shall have the meaning set forth in Section 2.4(a)(ii).
"Code" shall have the meaning set forth in Section 2.3(b).
"Confidentiality Agreement" shall have the meaning set forth in Section
7.1.
"Company Leases" means those certain leases for real property where the
Seller or its Affiliate is a tenant.
"Consultants" shall have the meaning set forth in Section 3.2.
"Continuing Loan Guaranty" shall have the meaning set forth in Section 6.4.
"Contract Assignment" shall have the meaning set forth in Section
9.4(d)(iv).
"Contract Due Diligence Period" shall mean the period ending on the earlier
of December 17, 2002 and the date that Purchaser obtains the approval of its
board of directors to the transactions contemplated under this Agreement.
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"Contracts" means all agreements, contracts, management agreements, leasing
agreements, environmental indemnity agreements under which Seller or any
Assigning Subsidiary is a beneficiary, maintenance contracts, equipment leasing
agreements, open purchase orders and other contracts for the provision of labor,
services, materials or supplies relating to the Purchased Assets or any
Property, Improvements or Personal Property and under which Seller or any
Subsidiary is currently paying or receiving compensation for services rendered
in connection with the Purchased Assets or any Property, together with all
renewals, supplements, amendments and modifications thereof, all Material
Contracts and any new such agreements entered into after the date hereof and
shall also mean that certain Lease that may have expired, but has continuing
obligations of the tenant thereunder by and between Simon Property Group, L.P.
and Amoco Oil Company as amended by that certain Lease Amendment dated June 10,
1994 by and between Simon Property Group, L.P. and Amoco Oil Company, provided,
however, the following shall not be a Contract: that certain Settlement
Agreement dated December 31, 1998 by and between Elkhart Plaza West, LLC;
Xxxxxxx Xxxx; Xxxxxxxxxx Block, Inc.; Xxxx Xxxxxxx-Xxxxxx; Xxxxxx Xxxxxxxx Paint
Spot, Inc.; the Mathisens; and Alt & Xxxxxx Engineering Services, Inc.
"Contribution Agreement" shall have the meaning set forth in the Recitals.
"Deed" shall have the meaning set forth in Section 9.4(d)(i).
"Delinquent" shall have the meaning set forth in Section 2.4(b)(v).
"Deposit" shall have the meaning set forth in Section 2.3.
"Due Diligence" shall have the meaning set forth in Section 3.1(a).
"Due Diligence Objection Notice" shall have the meaning set forth in
Section 3.1(c).
"Due Diligence Response Notice" shall have the meaning set forth in Section
3.1(c).
"Due Diligence Title Objection" shall have the meaning set forth in Section
3.4(a).
"EIG Realty Purchase Agreement" shall have the meaning set forth in the
Recitals.
"Elkhart EPA Liability" shall mean any liability to the United States
Environmental Protection Agency ("EPA") or imposed by the EPA for the costs and
expenses previously incurred by the EPA (including, without limitation,
oversight and remediation costs) in connection with a prior environmental
condition at the Property commonly known as Elkhart Plaza West, Elkhart,
Indiana.
"Employees" shall have the meaning set forth in Section 7.8(a).
"Employee Related Liabilities" shall mean the following:
(a) any liabilities or obligations resulting from or by reason of the
employment of any employees or former employees of Seller or any Subsidiary or
any employee benefits plan or employment arrangement of Seller or the
Subsidiaries (including, but not limited to, 401(k), pension and deferred
compensation plans and medical/dental, disability, worker's compensation
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and life insurance programs, whether or not self-insured and accrued vacation
and sick time), termination or severance pay due employees or independent
contractors of Seller or any Subsidiary or bonus or deferred compensation due
employees or former employees of Seller or any Subsidiary or any or all of
Seller's or a Subsidiary's obligations to any such employee or under any such
plan or employment arrangement;
(b) any reductions in workforce or other employment terminations,
including any "mass layoff" or "plant closing" as those terms are defined by the
WARN Act relating to the employees or former employees of Seller or any
Subsidiary occurring in connection with or on or before Closing; and
(c) any collective bargaining agreements, programs and practices, or other
employment agreements, employment offer letters or similar agreements with or
relating to employees or former employees of Seller or any Subsidiary.
"Environmental Law" means any Law or order of any Governmental Entity
relating to the regulation or protection of human health, safety, natural
resources, or the environment or to emissions, discharges, releases or
threatened releases of Hazardous Materials into the environment (including
without limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" shall have the meaning set forth in Section 2.3(a).
"Escrow Holder" means Fidelity National Title Insurance Company, with an
address of 0 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000.
"Existing Environmental Insurance Policy" shall mean the American
International Specialty Lines Insurance Company Pollution Legal Liability Select
Policy (Policy Number PLS 1957619) covering EIG Operating Partnership, L.P. as
the Named Insured and each of the properties named therein effective as of
February 12, 2001.
"E&Y" shall have the meaning set forth in Section 7.17.
"Final Adjustment Date" shall have the meaning set forth in Section 2.5.
"Final Closing Adjustment" shall have the meaning set forth in Section 2.5.
"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.
"General Partner" shall have the meaning set forth in Section 5.7(f).
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"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.
"Ground Lease Assignment" shall have the meaning set forth in Section
9.4(d)(xiv).
"Guarantor" shall have the meaning set forth in Section 6.4.
"Hazardous Materials" means (i) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs), (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants" or words of similar import under any Environmental Law, and
(iii) any other chemical or other material or substance, exposure to which is
now prohibited, limited or regulated by any Governmental Entity under any
Environmental Law.
"Improvements" means all of the buildings, structures, fixtures,
facilities, installations and other improvements, of every kind and description
now or hereafter located on the Properties, including, without limitation, any
and all plumbing, air conditioning, heating, ventilating, mechanical, electrical
and other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, security devices, signs and light fixtures.
"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
hedging transactions (valued at the termination value thereof), and (v) all
guarantees of such Person of any such indebtedness of any other Person.
"Indemnifying Party" shall have the meaning set forth in Section 11.4(a).
"Indemnity Agreement" shall have the meaning set forth in Section 6.4.
"Indemnitee" shall have the meaning set forth in Section 11.4(a).
"Indemnitor's Acknowledgement" shall have the meaning set forth in Section
7.9.
"Intellectual Property" means the name of each Property and all other
copyrights, trademarks, brand names, service marks, trade names, data, telephone
numbers, licenses, labels, logos, marketing materials, designs, covenants by
others not to compete, rights, privileges and any registrations or applications
for registrations of the foregoing used in the conduct of the Properties or the
Purchased Assets, and any right to recovery for infringement thereof (including
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past infringement) and any and all goodwill associated therewith or connected
with the use thereof and symbolized thereby, including, without limitation, all
of the items set forth on Schedule 1.1(a)(iii)(D) of the Disclosure Schedule.
"Key Credit Agreement" shall have the meaning set forth in Section 7.20.
"Knowledge of Seller" shall have the meaning set forth in Section 4.24.
"Laws" shall have the meaning set forth in Section 4.2(b).
"Lease Assignment" shall have the meaning set forth in Section 9.4(d)(iii).
"Lease Expenses" means, collectively, any and all leasing commissions,
tenant improvements, allowances (including free rent), and lease buyout costs
and expenses actually paid or incurred by Seller or the Assigning Subsidiaries
prior to Closing or to be incurred by Purchaser for any space set forth in
Schedule 2.4(e) of the Disclosure Schedule arising out of or in connection with
any Lease. Lease Expenses shall include, without limitation, (a) brokerage
commissions and fees payable pursuant to a commission agreement or Lease to
effect any such leasing transaction (including, without limitation, any fees
owed to an affiliated or third-party property manager or leasing agent), (b)
expenses incurred for repairs, improvements, equipment, painting, decorating,
partitioning and other items to satisfy the tenant's requirements with regard to
such leasing transaction, and (c) expenses incurred for the purpose of
satisfying or terminating the obligations of a Tenant under a new Lease to the
landlord under another lease (whether or not such other lease covers space in
any Property).
"Leases" shall have the meaning set forth in Section 4.5(b).
"Leasing Guidelines" shall have the meaning set forth in Section 6.2.
"Licenses and Permits" shall mean, collectively, all licenses,
registrations, franchises, permits, concessions, orders, approvals, certificates
of occupancy, dedications, subdivision maps and entitlements now or hereafter
issued, approved or granted by any Governmental Entity in connection with the
Properties or the Purchased Assets, together with all renewals and modifications
thereof.
"Liens" shall have the meaning set forth in Section 1.1(a).
"Losses" shall have the meaning set forth in Section 11.2(a).
"Main Closing Date" shall mean the Closing Date pursuant to Section 9.1
whereupon the closing of the Transfer occurs with respect to all Properties
other than those for which the closing is delayed pursuant to and in accordance
with Section 7.14 and/or Section 8.5.
"Major Loss" shall have the meaning set forth in Section 8.3.
"Material Contracts" shall have the meaning set forth in Section 4.14.
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"Material Title Defects" means title matters affecting any Property for
which Purchaser obtained a Title Commitment and Survey prior to the end of the
Contract Due Diligence Period and that are (i) not disclosed or referred to (or
if disclosed or referred to is a Rejected Due Diligence Title Objection) in the
Title Commitment or Survey prior to the end of the Contract Due Diligence
Period, (ii) are not Permitted Encumbrances, and (iii) that individually or in
the aggregate(together with Rejected Due Diligence Title Objections) have a cost
of removal or correction in excess of $100,000 with respect to any individual
Property or in the aggregate, together with title matters that would satisfy
clauses (i) and (ii) in the definition of Material Title Defects in each Sale
Agreement, have a cost of removal or correction in excess of $1,250,000 for all
such Properties unless the same are required to be removed under Section 3.4(f).
For purposes of clarification, a Rejected Due Diligence Title Objection shall be
deemed to be a Material Title Defect (without the necessity for Purchaser to
make another objection to such matter after the expiration of the Contract Due
Diligence Period) so long as such Rejected Due Diligence Title Objection
otherwise satisfies the definition of a Material Title Defect. For the purposes
of this definition, the Purchaser's Cure Value shall be deemed to be the cost of
removal or correction for the applicable matter objected to unless Seller
objects in which case Purchaser and Seller must reasonably agree on the amount.
"Non-Hickory Parties" shall mean Purchaser, Excel Realty Partners, L.P. and
their respective Affiliates.
"Non-Panther Parties" shall mean Seller, EIG Realty, Inc. and their
respective Affiliates.
"NYSE" shall have the meaning set forth in Section 7.1(b).
"Objectionable Due Diligence Item" shall mean any of the following: (i) an
environmental matter or condition relating to a Property, including without
limitation, relating to Hazardous Materials or violations of Environmental Laws,
(ii) the failure of a Property or its operation to comply with any applicable
Laws (including, without limitation, the Americans with Disabilities Act of
1990, as amended, zoning, building, land use and health and safety Laws), (iii)
any discrepancy disclosed between of any Lease and the information previously
provided to Purchaser through ARGUS runs or the Rent Rolls, (iv) any discrepancy
disclosed between (a) any Operating Expense and real estate taxes from the
historical financial information and other information previously provided to
Purchaser (b) amounts reimbursed by Tenants for Operating Expenses and real
estate taxes from the historical financial information and other information
previously provided to Purchaser and (c) the historical capital expenditure
information from the historical capital expenditure information previously
provided to Purchase, (v) if any property condition report commissioned by
Purchaser prior to or during the Due Diligence Period discloses any physical
conditions at a Property which will require repairs, replacements or other
remediation, 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 that are not specifically identified,
with respect to roof or parking facilities, in the 5 Year Capital Budget in
Exhibit X of the Disclosure Schedule, or, if so identified, the amount exceeds
such line item amount set forth therein, and, with respect to all other
conditions at a Property the amount exceeds the amount set forth for such
Property under the category "other" in the 5 Year Capital Budget, (vi) if
Purchaser determines that its budgets, plans and/or redevelopment plans for the
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Redevelopment Properties or Sunshine Plaza are not consistent with the budgets,
plans and/or redevelopment plans for the Redevelopment Properties or Sunshine
Plaza previously provided to Purchaser, (vii) any violations of or matters which
could rise to a violation (after the giving of notice and/or the passage of
time) of an exclusivity, use or no build provisions in a Lease or other maters
which do or would allow (after the giving of notice and/or the passage of time)
a Tenant to exercise its remedies under its Lease with respect to co-tenancy and
kick-out provisions in its Lease and (viii) the effect of Circuit City going
dark in Circuit City Plaza in Crestwood, Missouri.
"Operating Expenses" shall have the meaning set forth in Section 2.4(c).
"Other Rent" shall have the meaning set forth in Section 2.4(b)(iv).
"Permitted Encumbrances" means and includes all of the following: tax
liens, mechanics', materialmen's and artisan's liens, special assessment liens
and other similar liens, in each case not yet delinquent and are subject to
proration under Section 2.4(n) or being contested in good faith in appropriate
proceedings (provided that Seller will bond over same at Closing or provide
Purchaser with security with respect to same reasonably acceptable to Purchaser)
(it being agreed by Purchaser and Seller that if any tax or assessment is levied
or assessed with respect to the Properties after the date hereof and the owner
of the Properties has the election to pay such tax or assessment either
immediately or under a payment plan with interest, Seller may elect to pay under
a payment plan, which election shall be binding on Purchaser); any encumbrances
caused by Purchaser, its Consultants or its agents, representatives or
employees; the rights of the Tenants, as tenants only, under the Leases; all
matters disclosed in the Title Commitments and Surveys delivered to Purchaser as
of the expiration of the Contract Due Diligence Period (except for Due Diligence
Title Objections); Liens securing the Assumed Indebtedness; and any matters
deemed to constitute Permitted Encumbrances under Section 3.4 hereof; provided,
however, Liens securing Pre-Closing Property Liabilities or Employee Related
Liabilities and other Liens that Seller has expressly agreed to remove or
discharge under this Agreement, including Section 3.4(f) and those that are the
subject of a Title Objection shall not be Permitted Encumbrances to the extent
that same are not waived at Closing. After the expiration of the Contract Due
Diligence Period, applicable zoning and building ordinances and land use
regulations that are not subject to a Due Diligence Title Objection or a Due
Diligence Objection Notice, shall be Permitted Encumbrance.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
"Personal Property" means all tangible personal property, which is located
at and used in connection with any of the Properties or the Purchased Assets as
of the Closing Date, but specifically excluding (a) any personal property owned,
financed or leased by the Tenants (other than any Tenant that is a Seller or
Subsidiary) under Leases, (b) any computer software which either is licensed to
Seller, or Seller deems proprietary, (c) any tangible personal property owned by
any unaffiliated on-site property manager, or (d) any warrants, stock options or
other equity securities related to the Assigning Subsidiaries or any direct or
indirect partner of the Assigning Subsidiaries. Personal Property shall not
include any attorney work product or any attorney-client privileged documents.
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"Post-Closing Threshold" shall mean Losses of $3,250,000 in the aggregate
for all Properties under all Sale Agreements (or the Purchased Assets related to
such Properties) with respect to all Properties or the Purchased Assets related
to such Properties. For the purposes of this definition, the Purchaser's Cure
Value shall be deemed to be the Losses unless Seller objects in which case
Purchaser and Seller must reasonable agree on the amount.
"Pre-Closing Breaches" shall have the meaning set forth in Section 10.2(a).
"Pre-Closing Taxable Period" means with respect to any tax, any applicable
taxable period ending on or prior to consummation of the transactions
contemplated hereby on the Closing Date or the allocable portion of any
applicable taxable period that includes but does not end on the Closing Date.
"Pre-Closing Breach Notice" shall have the meaning set forth in Section
10.2.
"Pre-Closing Property Liabilities" shall have the meaning set forth in
Section 1.3 and any liabilities under Settlement Agreement dated December 31,
1998 by and between Elkhart Plaza West, LLC; Xxxxxxx Xxxx; Xxxxxxxxxx Block,
Inc.; Xxxx Xxxxxxx-Xxxxxx; Xxxxxx Xxxxxxxx Paint Spot, Inc.; the Mathisens; and
Alt & Xxxxxx Engineering Services, Inc.
"Pre-Closing Threshold" shall mean Losses under all Sale Agreements (or
Losses that would be realized upon or after Closing) of $500,000 per Property
(or the Purchased Assets related to such Property) with respect to a Property or
the Purchased Assets related to such Property or $3,250,000 in the aggregate for
all Properties (or the Purchased Assets related to such Properties) with respect
to all Properties or the Purchased Assets related to such Properties. For the
purposes of this definition, the Purchaser's Cure Value shall be deemed to be
the Losses unless Seller objects in which case Purchaser and Seller must
reasonably agree on the amount.
"Properties" shall have the meaning set forth in Recital A.
"Property" shall have the meaning set forth in Recital B.
"Proration Items" shall have the meaning set forth in Section 2.4(a).
"Proration Time" shall have the meaning set forth in Section 2.4(a).
"Purchased Assets" shall have the meaning set forth in Section 1.1.
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Purchaser" means New Plan Excel Realty Trust, Inc., a Maryland
corporation.
"Purchaser Indemnitees" shall have the meaning set forth in Section
11.2(a).
"Purchaser's Cure Value" shall mean, as applicable, the Purchaser's good
faith reasonable estimate of the dollar amount of (i) Losses to Purchaser (or
Losses that Purchaser would incur upon or after Closing) resulting from
Pre-Closing Breaches and/or (ii) removal or
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correction of a particular matter, for Objection Due Diligence Items or Due
Diligence Title Objections or Title Objections.
"REAs" shall have the meaning set forth in Section 4.16.
"Real Property" means those certain parcel(s) of real property comprising
the Property described in Schedule 1.1(a)(i)(A) of the Disclosure Schedule,
together with the applicable owner's right, title and interest, if any, in and
to the appurtenances pertaining thereto, including, but not limited to, the
applicable owner's right, title and interest in and to the adjacent streets,
alleys and right-of-ways, and any easement rights, air rights, subsurface
rights, development rights and water rights.
"Records and Plans" means, collectively: (i) all books and records,
including, but not limited to, property operating statements, specifically
relating to the Properties and the Purchased Assets; (ii) all structural
reviews, architectural drawings and environmental, engineering, soils, seismic,
geologic and architectural reports, studies and certificates pertaining to the
Real Property or the Improvements; (iii) all preliminary, final and proposed
plans, specifications and drawings of the Improvements or the Real Property or
the Properties or any portion thereof; and (iv) with respect to the Properties
and the Purchased Assets, the accounting, billing and financial records,
personnel records, blueprints, specifications, warranties, plats, maps, surveys,
building and machinery diagrams, maintenance and production records,
environmental records and reports, sales and property Tax records and Tax
Returns for the Properties and sales records. The terms "Records and Plans"
shall not include (v) any document or correspondence which would be subject to
the attorney-client privilege; (w) any document or item which Seller is
contractually 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.
"Redemption Agreement" shall have the meaning set forth in Section 4.28.
"Redevelopment Properties" means those certain properties commonly known as
Xxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxxx and Xxx Xxxxx Xx. Xxxxxx Xxxxx, Xxxxxxx.
"Rejected Due Diligence Title Objection" shall have the meaning set forth
in Section 3.4(a)
"Rentals" shall mean fixed monthly rentals, additional rentals, percentage
rentals, escalation rentals (which include each Tenant's prorated share of
building operation and maintenance costs and expenses as provided for under the
applicable Lease, to the extent the same exceeds any expense stop specified in
such Lease), retroactive rentals, all administrative charges, utility charges,
tenant or real property association dues, storage rentals, special event
proceeds, temporary rents, telephone receipts, locker rentals, vending machine
receipts and other sums and charges payable by Tenants under the Leases or from
other occupants or users of the Property.
"Rent Roll" shall have the meaning set forth in Section 4.5(b).
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"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(b).
"Section 1060 Allocation" shall have the meaning set forth in Section 7.7.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Seller Indemnitees" shall have the meaning set forth in Section 11.2(a).
"Seller Material Adverse Event" means the occurrence of any of the
following after the date of this Agreement and prior to the Closing: (i)
Bankruptcy of any of Circuit City, Ahold, Delhaize America, Kroger and Xxxx
Xxxxx, (ii) Bankruptcy of any two of TJX Companies, Big Lots, Family Dollar,
Pathmark and Hobby Lobby, (iii) any of the following tenants (Aldi at Glengary,
Northern Handyman at Jefferson, Staples at Xxxx Plaza or Merchandise Outlet at
Packard) at any Property close or cease to operate, but not including a
temporary closure (regardless of whether or not the Tenant is paying rent), (iv)
there are any (a) exceptions in the Tenant estoppels obtained under Section 6.3
for which Seller elects not to deliver a Seller estoppel under Section 6.3 and
the dollar amount of any reduction in value of the Purchased Assets resulting
therefrom, plus (b) Losses under all Sale Agreements (or Losses under all Sale
Agreements that would be realized upon or after Closing) relating to a total
gross leasable area of 20,000 square feet or more at any Property closing or
ceasing to operate, but not including a temporary closure (regardless of whether
or not the Tenant is paying rent), plus (c) the Losses under all Sale Agreements
(or Losses under all Sale Agreements that would be realized upon or after
Closing) from Pre-Closing Breaches under Section 10.2 under any Sale Agreement
exceeds in the aggregate the Pre-Closing Threshold, and (v) after the Contract
Due Diligence Period, there is first disclosed at any of the Properties that
there is or may exist a violation of Environmental Laws or contamination that
Purchaser deems material.
"Seller Party" and "Seller Parties" shall have the meanings set forth in
Section 1.5.
"Significant Adjustment" means reductions in the Purchase Price under
either or both of the REIT Purchase Agreement and this Agreement arising from
any right or privilege granted to the Non-Hickory Parties in either the REIT
Purchase Agreement or this Agreement which, in the aggregate, are equal to or
greater than $3,000,000 (which figure shall include the Mars Deposit).
"Significant Portion" with respect to a Property means any taking by
condemnation or destruction or damage by fire or other casualty in excess of 25%
of the gross leaseable area of a Property or that deprives the affected Property
of any major access to public roads or allows an anchor tenant to terminate its
Lease.
"Subsidiary" means any entity in which Seller has an interest whether
directly or indirectly, including without limitation, the Assigning Subsidiaries
and their subsidiaries and "Subsidiaries" is the plural of Subsidiary.
"Surveys" shall have the meaning set forth in Section 3.4(a).
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"Taking Restoration" shall have the meaning set forth in Section 8.5
"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.
"1031 Transaction" shall have the meaning set forth in Section 12.11.
"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 11.3(b).
"Title Commitments" shall have the meaning set forth in Section 3.4(a).
"Title Objections" shall have the meaning set forth in Section 3.4(b).
"Title Policies" means the ALTA or TLTA owner's or leasehold form title
policies, which title policies insure the fee simple or leasehold interests, as
applicable, of the in the applicable Properties.
"Transfer" shall have the meaning set forth in Section 1.1(a).
"Transferred Employees" shall have the meaning set forth in Section 7.8(a).
"Transitional Services Agreement" shall have the meaning set forth in
Section 7.13.
"Unaudited Financial Statements" shall have the meaning set forth in
Section 4.20.
"Vehicles" shall have the meaning set forth in Section 1.1(iii)(H).
"WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. Sections 2101, ET. SEQ., and any similar provision of any
applicable State Law.
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"Willful Covenant Default" shall mean a knowing and intentional breach by
the Seller of the covenants in Sections 6.1(g), (i), (j), (m), (n), (u), and (v)
and Section 6.2 and 6.6 and the willful failure to deliver any of the Closing
Documents in Section 9.4(d).
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