EXHIBIT 2.1
THE SELLERS NAMED HEREIN,
collectively, as Sellers
AND
COROC HOLDINGS L.L.C.,
as Purchaser
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PURCHASE AND SALE AGREEMENT
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Dated: as of October 3, 2003
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TABLE OF CONTENTS
Page
1. DEFINITIONS......................................................1
2. PURCHASE AND SALE................................................1
3. PURCHASE PRICE AND DEPOSIT; ALLOCATION OF PURCHASE PRICE.........2
4. GMAC LOAN........................................................4
5. STATUS OF TITLE; PERMITTED ENCUMBRANCES; TITLE INSURANCE.........6
6. APPORTIONMENTS...................................................8
7. PROPERTY NOT INCLUDED IN SALE...................................17
8. COVENANTS OF SELLER.............................................17
9. CONDITIONS TO CLOSING...........................................19
10. CONDITION OF THE PROPERTY.......................................21
11. REPRESENTATIONS OF SELLER.......................................22
12. REPRESENTATIONS OF PURCHASER....................................31
13. INDEMNIFICATION, LIMITATIONS AND PROCEDURES.....................32
14. RISK OF LOSS....................................................34
15. BROKERS AND ADVISORS............................................36
16. TAX REDUCTION PROCEEDINGS.......................................36
17. TRANSFER TAXES; TRANSACTION COSTS...............................37
18. DELIVERIES TO BE MADE ON THE CLOSING DATE.......................38
19. CLOSING DATE....................................................41
20. NOTICES.........................................................41
21. DEFAULT BY PURCHASER OR SELLERS.................................43
22. FIRPTA COMPLIANCE...............................................44
23. ACCESS TO THE PROPERTY..........................................44
24. ENTIRE AGREEMENT; AMENDMENTS....................................46
25. WAIVER..........................................................46
26. PARTIAL INVALIDITY..............................................46
27. SECTION HEADINGS................................................46
28. GOVERNING LAW...................................................47
29. ASSIGNMENT; NO RECORDING OF CONTRACT............................47
30. CONFIDENTIALITY AND PRESS RELEASES..............................47
31. FURTHER ASSURANCES..............................................48
32. NO THIRD PARTY BENEFICIARIES....................................49
33. JURISDICTION AND SERVICE OF PROCESS.............................49
34. WAIVER OF TRIAL BY JURY.........................................49
35. MISCELLANEOUS...................................................49
36. ATTORNEYS' FEES.................................................50
37. ESCROW PROVISIONS...............................................50
38. HOLDBACK........................................................52
39. STATE SPECIFIC PROVISIONS.......................................55
SCHEDULES
Schedule 1 Definitions
Schedule R1 Sellers and Properties
Schedule 3(e) Allocated Purchase Prices
Schedule 4(a) GMAC Loan Documents
Schedule 4(a)-I Security Instruments
Schedule 4(a)-II Assignments of Leases and Rents
Schedule 4(a)-III Environmental Indemnity Agreements
Schedule 4(a)-IV Management Agreement Assignments
Schedule 4(a)-V Borrower's Certifications
Schedule 5(a) Permitted Encumbrances
Schedule 5(b) Title Commitments and Existing Surveys
Schedule 11(a)(v) Financial Statements
Schedule 11(a)(vi) Insurance
Schedule 11(a)(viii) Violations of Laws
Schedule 11(a)(ix) Violations of Permits
Schedule 11(a)(x) Environmental Matters
Schedule 11(a)(xi)-(A) List of Leases
Schedule 11(a)(xi)-(B) Written Notices of Default
Schedule 11(a)(xi)-(C) Tenant Inducement Costs
Schedule 11(a)(xi)-(D) Rent Rolls
Schedule 11(a)(xi)-(E) Pending Rent Audits
Schedule 11(a)(xii) List of Contracts
Schedule 11(a)(xiii) List of Security Deposits
Schedule 11(a)(xiv) Arrearage Schedule
Schedule 11(a)(xv) Litigation
Schedule 11(a)(xix) Brokerage Agreements
Schedule 11(a)(xxi) Outstanding Principal and Reserve Balances
of Existing Financing
Schedule 11(a)(xxiii) Motor Vehicles Owned by Sellers
Schedule 11(a)(xxv) Trademarks and Websites
Schedule 16 Tax Certiorari Proceedings
EXHIBITS
Exhibit 3(d) Escrow Agent's Wire Instructions
Exhibit 8(g) Form of Tenant Estoppel Certificate
Exhibit 8(h) Form of Ground Lessor Consent
Exhibit 18(a)(v) Form of Deed
Exhibit 18(a)(vi) Form of Bill of Sale
Exhibit 18(a)(xiii) Seller's Title Affidavit
Exhibit 18(c)(ii) Assignment and Assumption of Leases and
Contracts
Exhibit 18(c)(iii) General Assignment and Assumption Agreement
Exhibit 18(c)(vi) Form of Assignment and Assumption of
Ground Lease
Exhibit 18(c)(viii) Form of Letter to Tenants
Exhibit 18(c)(ix) Form of Assignment and Assumption of
TIF Agreement
Exhibit 18(c)(x) Form of Assignment and Assumption of the
Westbrook II Contract
Exhibit 22 FIRPTA Affidavit
Exhibit 37(e) Sellers' Taxpayer Identification Numbers
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as
of the ___ day of October, 2003, between each of the entities listed in the
column entitled "Sellers" on Schedule R1 attached hereto and made a part hereof
(individually, a "Seller"; collectively, "Sellers"), each having an address at
c/o Rothschild Realty, Inc., 1251 Sixth Avenue, 51st Floor, New York, New York
10020 and COROC HOLDINGS L.L.C., a Delaware limited liability company, having an
address at 345 Park Avenue, New York, New York 10154 ("Purchaser").
W I T N E S S E T H :
WHEREAS, Sellers are collectively the owners of those certain
parcels of land (or leasehold interests therein) more particularly described on
Schedule R1 attached hereto (the "Land") together with the buildings and other
improvements located on the Land (the "Improvements"; the Land and the
Improvements, collectively, the "Properties"). Each Seller is the owner of the
Property listed in the column entitled "Property" opposite its name on Schedule
R1 attached hereto. The Properties, together with the Asset-Related Property (as
defined below), shall be referred to herein, collectively, as the "Assets"; and
WHEREAS, subject to the terms and conditions of this
Agreement, Purchaser desires to purchase from Sellers, and Sellers desire to
sell to Purchaser, the Assets on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, the parties hereto, intending
to be legally bound, covenant and agree as follows:
1. DEFINITIONS.
Capitalized terms set forth herein shall have the meanings
ascribed to such terms in the text hereof or on Schedule 1 attached hereto. As
used in this Agreement, the term "Business Day" shall mean every day, other than
Saturdays, Sundays and any other day on which clearing banks in New York City,
New York are not generally open for the conduct of banking business during
normal business hours.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions of this Agreement, at the Closing,
Sellers shall sell, transfer and deliver to Purchaser the Assets, free and clear
of all liens, mortgages, attachments, pledges, encumbrances, charges, options,
rights of first refusal, claims or security interests of any nature whatsoever
("Liens") except for the Permitted Encumbrances, and Purchaser will purchase
such Assets from Sellers, for the Purchase Price. The transfer of the Assets to
Purchaser shall include the transfer of all Asset-Related Property relating to
each Property. For purposes of this Agreement, "Asset-Related Property" shall
mean all right, title and interest of each Seller and, to the extent set forth
below, the Existing Manager or any affiliate thereof, in and to (i) the
easements, covenants and other rights appurtenant to such Seller's Property and
in any land lying in the bed of any street, road, avenue or alley, open or
closed, in front of or adjoining such Property and to the center line thereof,
(ii) all furniture, fixtures, vehicles, equipment, computers and other personal
property (except the Excluded Personality) owned by such Seller (or on behalf of
such Seller through the Existing Manager or any affiliate of either of them)
which are now, or may hereafter prior to the Closing Date be, placed in or
attached to such Seller's Property, subject to depletions and ordinary wear and
tear, (iii) to the extent they may be transferred under applicable law, all
licenses, permits and authorizations presently issued to a Seller (or on behalf
of such Seller through the Existing Manager or any affiliate of either of them)
in connection with the operation of all or any part of such Seller's Property as
it is presently being operated, (iv) to the extent assignable, all guarantees
and warranties, if any, issued to a Seller (or Existing Manager or any affiliate
thereof, held on behalf of such Seller) by any manufacturer or contractor in
connection with construction or installation of equipment or any component of
the improvements included as part of such Seller's Property, all leases,
licenses or any other occupancy agreements demising any space at any of the
Properties, whether written or oral, together with all amendments, modifications
and supplements (collectively, the "Leases") and Contracts (other than the
Terminated Contracts), and all security and escrow deposits held by such Seller
in connection therewith, in effect on the Closing Date, all books, records,
tenant files, Property files and similar items (to the extent none of the above
is confidential information that Seller reasonably determines may not be
provided to Purchaser) in a Seller's or the Existing Manager's possession which
relate to the operation or management of such Seller's Property, other than any
legally privileged materials and attorney work product, (vii) any cash escrows
or reserves held by the Lender on behalf of Sellers under the Existing Financing
as of the Closing Date, (viii) all Trademarks and all registrations,
applications and common law rights relating to such Trademarks, together with
the goodwill of the business symbolized thereby, (ix) the Websites, any
intellectual property rights in such Websites, including the goodwill of the
business symbolized thereby, any associated numerical internet protocol address
related thereto and any website operated at such domain name, (x) to the extent
assignable without additional cost to such Seller, all contact information,
email databases and mailing lists relating to customers and maintained by such
Seller or the Existing Manager, (xi) to the extent assignable without additional
cost to such Seller, all computer software licenses for programs used in
connection with such Seller's Property, (xii) all brochures, marketing materials
and advertising materials relating to each Property and (xiii) to the extent
assignable, all general intangibles relating to the ownership of such Seller's
Property owned by such Seller (or on behalf of such Seller through the Existing
Manager or by an affiliate of either of them); provided, however, that in no
event shall the term "Asset-Related Property" be deemed to include the software
known as the Vertical Market Software for the Real Estate Industry, distributed
by Management Reports, Inc., or any data or other information contained therein
or maintained in connection therewith.
(b) The parties hereto acknowledge and agree that the value of any personal
property at the Property is de minimis and no part of the Purchase Price is
allocable thereto. Although it is not anticipated that any sales tax shall be
due and payable, Purchaser agrees that Purchaser shall pay any and all sales
and/or compensating use taxes imposed upon or due in connection with the
transactions contemplated hereunder under any applicable laws. Purchaser shall
file all necessary tax returns with respect to all such taxes and, to the extent
required by applicable law, Seller will join in the execution of any such tax
returns.
3. PURCHASE PRICE AND DEPOSIT; ALLOCATION OF PURCHASE PRICE.
(a) Subject to the credits set forth in Section 3(c) hereof and the adjustments
set forth in Section 6 hereof, the aggregate purchase price for all of the
Assets is FOUR HUNDRED NINETY-ONE MILLION DOLLARS ($491,000,000) (the "Purchase
Price").
(b) The Purchase Price shall be payable as follows:
(i) Simultaneously with the execution of this Agreement by Purchaser, Purchaser
shall deliver (or cause to be delivered) to the Title Company, as escrow agent
("Escrow Agent"), the amount of Ten Million Dollars ($10,000,000) (together with
any interest earned thereon, the "Deposit"). Escrow Agent shall hold the Deposit
in accordance with the provisions of Section 37 hereof and shall immediately
notify Sellers and Purchaser upon its receipt thereof; and
(ii) At the Closing, Sellers shall be entitled to direct Escrow Agent to
disburse the Deposit to Sellers, and Purchaser shall deliver the balance of the
Purchase Price (i.e., the Purchase Price, as adjusted pursuant to Section 6
hereof and as reduced by any credit applied pursuant to Section 3(c) hereof,
less the Deposit) to the Escrow Agent with irrevocable instructions to
immediately disburse same to Sellers, together with instructions confirming
Sellers' right to the Deposit. Such balance of the Purchase Price shall be paid
in cash.
(c) At the Closing, Purchaser shall be entitled to a credit against the Purchase
Price in the amount equal to the outstanding principal balance of the Existing
Financing as of the Closing (the "Outstanding GMAC Principal Balance"), whether
or not Purchaser elects to defease the Existing Financing in accordance with
Section 4(c) hereof, without giving effect to any amounts required to be paid by
Purchaser in excess of such outstanding principal balance (including, without
limitation, all fees, third-party costs and expenses) in connection with any
such defeasance.
(d) All monies payable by Purchaser under this Section shall be paid by wire
transfer of immediately available federal funds for credit to the Escrow Agent
in accordance with the instructions set forth on Exhibit 3(d) hereto, unless
otherwise directed by Escrow Agent.
(e) Purchaser and Sellers acknowledge and agree that the Purchase Price has been
allocated to the Assets in accordance with the provisions of Section 1060 of the
Internal Revenue Code and the regulations promulgated thereunder and such
allocation is set forth on Schedule 3(e) hereto (the "Allocated Purchase
Price"). The Allocated Purchase Price shall be binding upon the parties hereto
and upon each of their successors and assigns. Purchaser and Seller each shall
report and file all tax returns (including amended tax returns and claims for
refund and IRS Form 8594, Asset Acquisition Statement) and shall cooperate in
the filing of any forms consistent with the amounts set forth on Schedule 3(e),
unless otherwise required pursuant to a final "determination" as defined in
Section 1313(d) of the Internal Revenue Code; provided, however, that
notwithstanding the foregoing neither Purchaser nor Sellers shall take any
position contrary thereto or inconsistent therewith (including, without
limitation, in any audits or examinations by any taxing authority or any other
proceedings).
(f) Purchaser and Sellers agree that it is a material consideration of this
Agreement that neither party shall have the right to terminate this Agreement in
part with respect to a Property, it being the intent of the parties that, unless
Sellers and Purchaser shall otherwise mutually agree in writing, this Agreement
sets forth an "all or none" transaction.
4. GMAC LOAN.
(a) Each Seller listed on Schedule 4(a) hereto has granted a mortgage or deed of
trust to GMAC Commercial Mortgage Corporation (together with its successors and
assigns, "Lender") as security for an existing mortgage financing (the "Existing
Financing"), originally made by Lender to such Sellers, jointly and severally,
in the original aggregate principal amount of $200,000,000. It is the intention
of Sellers and Purchaser, and Purchaser hereby agrees, that Purchaser shall
acquire the Properties, subject to all of the obligations of the Sellers from
and after the Closing under that certain Loan Agreement, dated as of June 18,
1998 (the "Loan Agreement"), and all related loan documents for the Existing
Financing as set forth on Schedule 4(a) hereto (together with the Loan
Agreement, collectively, the "Loan Documents"). In addition, it is the intention
of Sellers and Purchaser, and Purchaser hereby agrees, that, at Closing,
Purchaser (or its, direct or indirect, wholly-owned subsidiary or subsidiaries)
shall assume each and every obligation of Sellers arising from and after the
Closing under the Loan Documents to which such Sellers are a party.
(b) Sellers and Purchaser shall use commercially reasonable efforts to obtain
the consent of Lender to the transactions contemplated by this Agreement that
require the consent of Lender in accordance with the Loan Documents, including,
without limitation, the assumption by Purchaser (or its, direct or indirect,
wholly-owned subsidiary or subsidiaries) of all of the obligations of Sellers
under the Loan Documents arising from and after the Closing. Purchaser agrees,
at its sole cost and expense, to deliver such information as may be reasonably
required by Lender in connection with Lender's evaluation of the transactions
contemplated hereby, including, without limitation, financial statements,
non-consolidation opinions, qualified property management agreements and title
endorsements (provided that Sellers shall be responsible for those fees, costs
and other amounts charged by Lender as provided in Section 17(b) hereof).
Purchaser agrees that, no later than ten Business Days after the date hereof, it
shall submit to Lender a description of its proposed ownership structure of the
Properties, including identifying Blackstone Real Estate Partners IV L.P.,
Tanger Properties Limited Partnership and General Electric Capital Corporation
and their respective affiliates (collectively, the "Controlling Capital
Partners") as the source of not less than 95% of the capital to be utilized by
Purchaser in acquiring the Properties ("Purchaser's Capital Structure").
Purchaser further agrees that, in connection with obtaining such consent, all
materials delivered by or on behalf of Purchaser to Lender (or the applicable
rating agencies) shall be consistent with the representations and warranties of
Purchaser set forth in Section 12(e) hereof, and copies of all such material
shall be sent concurrently to Sellers. The obligation of each of Sellers and
Purchaser to close the transactions contemplated herein shall be conditioned
upon the execution and delivery of an assignment and assumption agreement in
form and substance reasonably satisfactory to Lender, such Sellers and Purchaser
(the "Loan Assignment and Assumption Document"), which Loan Assignment and
Assumption Document shall include (i) the full general unconditional release of
such Sellers (including Public Employees Retirement System of Ohio ("OPERS"), as
applicable) from all obligations arising under the Existing Financing and the
Loan Documents from and after the Closing Date, (ii) a statement from Lender
dated as of a date on or about the Closing disclosing as of the Closing (A) the
Outstanding GMAC Principal Balance, (B) all interest, fees and other amounts due
Lender under the Existing Financing ("Additional GMAC Debt"), (C) the cash
balance of all escrows and reserves held by Lender as collateral under the Loan
Documents, (D) a list of all of the Loan Documents, and (E) the absence of
defaults under the Loan Documents, and (iii) a consent by Lender to (A) the
transactions contemplated by this Agreement, (B) Purchaser's Capital Structure,
(C) the organizational documents of each Controlling Capital Partner, (D)
transfers from time to time of direct or indirect interests in Purchaser or
control of Purchaser, in each case, among the Controlling Capital Partners and
(E) Tanger Properties Limited Partnership ("Affiliated Manager") as the new
property manager of the Properties. Each of Purchaser's, direct or indirect,
wholly-owned subsidiary or subsidiaries assuming the obligations of one or more
Sellers under the Existing Financing and Purchaser, to the extent it is assuming
the obligations of one or more Seller under the Existing Financing, shall comply
with the special purpose entity requirements set forth in the Loan Documents.
Sellers shall each use commercially reasonable efforts to execute and deliver
such other documents and opinions as may be reasonably required by Lender;
provided, however, that Sellers and Purchaser agree that Sellers shall not be
obligated to pay Lender any assumption fees in excess of the assumption fee, if
any, expressly set forth in the Loan Documents.
(c) Notwithstanding the provisions of Section 4(a) or Section 4(b) hereof, if
Purchaser elects not to have the Existing Financing encumber any of the
Properties as of the Closing, Sellers shall cooperate with Purchaser in
exercising the rights of the applicable Sellers under Section 5 of the Loan
Agreement to effect a Defeasance (as such term is defined in the Loan Agreement)
with respect to all of the Properties encumbered by the Existing Financing;
provided, however, that (i) any such Defeasance must be accompanied by the full
general unconditional release of such Sellers (including OPERS, as applicable)
for any obligations arising under the Existing Financing and the Loan Documents
from and after such Defeasance, (ii) Purchaser shall be solely responsible for
any and all costs, fees and other amounts required in connection with such
Defeasance, including, without limitation, any and all costs of Lender and
Lender's counsel, whether required in the form of a deposit or advance payment,
and the amount of all collateral required to be posted in connection with such
Defeasance, including any guaranties thereof, and Purchaser shall be solely
responsible for the issuance of any and all legal opinions, accountant
certifications, analyses, reports and other documentation required of Sellers in
connection with such Defeasance and (iii) no such Defeasance shall become
effective until and unless the Closing occurs in accordance herewith.
Notwithstanding the foregoing, Purchaser's right to effect a Defeasance shall be
conditioned on Purchaser's full and timely performance of all conditions
precedent to such Defeasance, with Sellers' reasonable cooperation (at
Purchaser's expense), and full and timely payment of all amounts required in
connection with such Defeasance, whether incurred by (or charged to) Purchaser,
Sellers or any party acting on behalf of any of them in connection with such
Defeasance.
(d) Unless Section 4(c) applies, in connection with obtaining the consent of
Lender, Purchaser covenants that it shall represent to Lender that Affiliated
Manager shall assume management the Properties encumbered by the Existing
Financing effective as of the Closing.
5. STATUS OF TITLE; PERMITTED ENCUMBRANCES; TITLE INSURANCE.
(a) Subject to the terms and provisions of this Agreement, at Closing, each
Property shall be conveyed to Purchaser subject only to the Existing Financing
and the matters described on Schedule 5(a) hereto with respect to such Property
(collectively, the "Permitted Encumbrances").
(b) (i) The parties acknowledge that Purchaser has received, reviewed and
approved copies of the title commitments, each issued by Fidelity National Title
Insurance Company of New York (the "Title Company"), as more particularly
described on Schedule 5(b) hereto (collectively, the "Title Commitments"),
together with copies of all instruments disclosed on the Title Commitments.
Purchaser may order commitments to update the Title Commitments (collectively,
the "Update Commitment") (and Purchaser has ordered but not yet received a
commitment for the Lands more particularly described on Schedule R1-6),
additional title insurance, if desired, and endorsements through the Title
Company for any title insurance obtained in connection with the transactions
contemplated hereby. Purchaser also acknowledges that it has received, reviewed
and approved, certain land surveys for each Property described on Schedule 5(b)
(the "Existing Surveys") prior to the date hereof and that Purchaser has no
objection to any matters set forth on such Existing Surveys; provided, however,
that Purchaser acknowledges that it has ordered updated land surveys for each
Property (the "Updated Surveys") and Purchaser shall have the right to object to
any matters disclosed on such Updated Surveys which were not disclosed on the
applicable Existing Survey which would (A) create an exception to title over
which the Title Company is not willing to insure over without additional cost to
Purchaser, (B) interfere with the current use or operation of such Property or
(C) otherwise materially impair the value of such Property (the foregoing, a
"Survey Objection").
(ii) Purchaser shall direct the Title Company to deliver a copy of any Update
Commitment to Sellers simultaneously with its delivery of the same to Purchaser.
If, prior to the Closing Date, an Updated Survey received by Purchaser shall
disclose matters which were not disclosed on the Existing Surveys and which
constitute Survey Objections, or if the Title Company shall deliver any Update
Commitment which discloses a Lien or other title exception which is not a
Permitted Encumbrance with respect to a Property (each, an "Update Exception"),
then Purchaser shall have until the earlier of (A) five (5) Business Days after
delivery of such Update Commitment or Updated Survey, as the case may be, or (B)
the Business Day immediately preceding the Closing Date (the "Update Objection
Date"), time being of the essence, to deliver written notice to Sellers
objecting to any of the Update Exceptions (the "Update Objections"). If
Purchaser fails to deliver a notice of Update Objections by the Update Objection
Date, Purchaser shall be deemed to have objected to all Update Exceptions and
the same shall be deemed Update Objections and shall not be deemed Permitted
Encumbrances with respect to such Property, except as provided in Section
5(b)(ii) hereof. If Purchaser shall deliver such notice of Update Objections by
the Update Objection Date, any Update Exceptions which are not objected to in
such notice shall not constitute Update Objections and shall be deemed Permitted
Encumbrances.
(iii) Purchaser shall not be entitled to object to, and shall be deemed to have
approved, any Liens or other title exceptions (and the same shall not constitute
Update Objections but shall be deemed Permitted Encumbrances) (1) over which the
Title Company is willing to insure (without additional cost to Purchaser), (2)
against which the Title Company is willing to provide affirmative insurance
(without additional cost to Purchaser), (3) which are Liens or title exceptions
which affect the interest of tenants as tenants only under the Leases or (4)
which will be extinguished upon the transfer of the Property. Notwithstanding
anything to the contrary contained herein, if Sellers are unable to eliminate
any of the Update Objections by the Closing Date, unless the same are waived by
Purchaser without any abatement in the Purchase Price, Sellers may, upon at
least two (2) Business Days' prior notice ("Title Cure Notice") to Purchaser
(except with respect to matters first disclosed during such two (2) Business Day
period, as to which matters notice may be given at any time through and
including the Closing Date) adjourn the Closing Date in order to attempt to
eliminate such exceptions for a period ("Title Cure Period") not to exceed the
later of (A) thirty (30) days or, (B) the date which is ten (10) Business Days
after the Lender shall have given its consent to the assumption of the Existing
Financing by Purchaser.
(c) If Sellers are unable to eliminate any of the Update Objections within the
Title Cure Period then, Purchaser shall have the right to terminate this
Agreement by notice given to Seller within ten (10) Business Days following
expiration of the Title Cure Period (a "Title Default Termination Notice"), time
being of the essence, in which event Purchaser shall be entitled to a return of
the Deposit. If Purchaser shall fail to deliver the Title Default Termination
Notice within the ten (10) Business Day period described therein, time being of
the essence, (i)such Update Exceptions shall be deemed to be, for all purposes,
a Permitted Encumbrance, (ii) Purchaser shall be deemed to have agreed to
proceed with the acquisition of the Properties without abatement of the Purchase
Price, and (iii) Sellers shall have no obligations whatsoever after the Closing
Date with respect to a Seller's failure to cause such Update Exceptions to be
eliminated. Upon the proper and timely giving of any Title Default Termination
Notice, the Deposit shall be returned to Purchaser and this Agreement shall
terminate and neither party hereto shall have any further rights or obligations
hereunder other than those which are expressly provided to survive the
termination hereof.
(d) It is expressly understood that in no event shall Sellers be required to
bring any action or institute any proceeding, or (except as provided in the next
sentence) to otherwise incur any costs or expenses, in order to attempt to
eliminate any Update Objection. Notwithstanding the foregoing, Sellers shall be
required to remove (or cause to be removed from record), by payment, bonding or
otherwise: any Update Objections which have been voluntarily recorded or
otherwise placed by Sellers or any affiliate against a Property on or following
the date of the applicable Title Commitment (other than with the approval or
deemed approval of Purchaser, which approval shall not be unreasonably withheld,
conditioned or delayed), (ii) the lien of any mortgage affecting a Property,
whenever created, other than the lien of any mortgage securing the Existing
Financing, or any Update Objections which would not fall within the definition
of clause (i) above and which can be removed by the payment of a liquidated sum
of money, provided that with respect to such items set forth in this clause
(iii), in no event shall Sellers be obligated to expend amounts in excess of
$200,000 with respect to any one Property or $2,000,000 in the aggregate with
respect to all Properties pursuant to the provisions of this sentence.
(e) If Sellers shall have adjourned the Closing Date in order to cure Update
Objections in accordance with the provisions of this Section 5, Sellers shall,
upon the satisfactory cure thereof, promptly reschedule the Closing Date, upon
at least five (5) Business Days' prior notice to Purchaser (the "New Closing
Notice"); it being agreed, however, that if any matters which are Update
Objections arise between the date the New Closing Notice is given and the
rescheduled Closing Date, Sellers may again adjourn the Closing for a reasonable
period or periods, in order to attempt to cause such exceptions to be eliminated
by sending Purchaser a Title Cure Notice, it being agreed, however, that Sellers
shall not be entitled to adjourn the new Closing Date pursuant to this Section 5
for a period or periods in excess of forty-five (45) days in the aggregate.
(f) If the Update Commitment discloses judgments, bankruptcies or other returns
against other entities having names the same as or similar to any Seller, on
request the applicable Seller shall deliver (or cause to be delivered) to the
Title Company affidavits showing that such judgments, bankruptcies or other
returns are not against such entity in order to request the Title Company to
omit exceptions with respect to such judgments, bankruptcies or other returns or
to insure over same.
(g) Purchaser and Sellers shall deliver to the Title Company evidence reasonably
requested by the Title Company (i) to establish the legal existence of Purchaser
and Sellers, (ii) the authority of the respective signatories of Sellers and
Purchaser to bind the Sellers and Purchaser, as the case may be, and (iii)
satisfaction of the title requirements set forth on Schedule B-1 of each Title
Commitment or Update Commitment, other than Permitted Encumbrances.
6. APPORTIONMENTS.
(a) The adjustments described in this Section 6 shall be calculated with respect
to each Property as of Closing. The aggregate Purchase Price to be paid by
Purchaser to Sellers shall be adjusted by the aggregate of all adjustments.
(b) All of the apportionments in this Section 6, including the following, except
as specifically provided herein, shall be apportioned between Sellers and
Purchaser as of 11:59 p.m. on the day immediately preceding the Closing Date
(the "Apportionment Date") on the basis of the actual number of days of the
month which shall have elapsed as of the Closing Date and based upon the actual
number of days in the month and a 365 day year; provided, however, that solely
for purposes of an initial calculation thereof for the Closing, any payments
from tenants or other third-parties to be pro-rated in accordance with this
Section 6 which are then held in a lockbox account with the Lender, shall be
calculated on the date that is two days preceding the Closing Date and, upon
collection thereof by Purchaser, all remaining sums due and payable to Seller as
of the Apportionment Date shall be remitted to Seller by Purchaser:
(i) as more particularly set forth in Section 6(c) hereof, prepaid rents, fixed
rents and additional rents payable pursuant to the Leases (including, without
limitation, operating expense escalation payments, real estate tax escalation
payments and percentage rent, if any, payable under the Leases) (collectively,
"Rents");
(ii) fuel, if any, as estimated by Sellers' suppliers, at current cost, together
with any sales taxes paid in connection therewith, if any (a letter from such
fuel supplier shall be conclusive evidence as to the quantity of fuel on hand
and the current cost therefor);
(iii) prepaid fees for licenses and other permits assigned to Purchaser at the
Closing or otherwise remaining in force for the benefit of the owner of the
applicable Property after the Closing;
(iv) any amounts payable to, or prepaid or payable by (or on behalf of), the
owner of the Property under any service, maintenance, supply, marketing,
billboard, coop billboard agreements or other agreement relating to the
operation of the Property (together with all modifications, amendments and
supplements relating thereto, collectively, the "Contracts") which are set forth
on Schedule 11(a)(xii) (other than the Terminated Contracts) or are entered into
after the date hereof in accordance with the terms of this Agreement; and
(v) all other pro-ratable items normally and customarily pro-rated for
commercial properties in the jurisdiction in which such Property is located.
(c) (i) Monthly base rents (collectively, "Base Rents") under the Leases shall
be adjusted and prorated on an if, as and when collected basis. Base Rents
collected by or on behalf of Sellers, after the Closing Date from tenants who
owe Base Rents for periods prior to the Closing Date, shall be applied first, in
payment of Base Rents for the month in which the Closing Date occurs; second, in
payment of Base Rents for the month immediately preceding the Closing Date; (C)
third, in payment of Base Rents for all periods after the Closing Date and (D)
fourth, after Base Rents for all periods after the Closing Date have been paid
in full, in payment of Base Rents for the periods prior to the Closing Date and
not paid pursuant to the preceding subclauses (A) or (B). Each such amount, less
reasonable collection costs, shall be adjusted and prorated as provided above,
and the party receiving such amount (or the benefit of such amount) shall,
within thirty (30) days, pay (or cause to be paid) to the other party the
portion thereof to which such party is so entitled.
(ii) Purchaser shall bill (or cause to be billed) tenants owing Base Rents for
periods prior to the Closing Date, on a monthly basis for a period of ninety
(90) days following the Closing Date, and during such period, Purchaser shall
use commercially reasonable efforts to collect (or cause to be collected) such
past due Base Rents; provided, however, that Purchaser shall have no obligation
to commence (or cause the owner of any Property to commence) any actions or
proceedings to collect any such past due Base Rents. Base Rents collected by (or
on behalf of) Purchaser after the Closing Date to which Sellers are entitled
pursuant to Section 6(c)(i) shall be paid to Sellers within thirty (30) days
after receipt thereof by Purchaser (or Purchaser's agent). Purchaser shall
provide Sellers monthly statements setting forth the status of such collection
efforts. Commencing as of ninety-one (91) days after the Closing Date, Sellers
may take all steps it deems appropriate, at their sole cost and expense,
including, without limitation, the prosecution of one or more lawsuits, to
collect Base Rents delinquent as of the Closing Date which are still uncollected
(provided, however, that Sellers may not cause any Lease to be terminated or
attempt to cause any tenant thereunder to be evicted), and Purchaser shall cause
the owner of the Property with respect to which such Base Rents are to be
collected to reasonably cooperate in any and all such actions.
(iii) With respect to any Lease that provides for the payment of additional or
escalation rent based upon (A) a percentage of a tenant's gross sales during a
specified annual or other period or (B) Property Taxes, operating expenses,
labor costs, cost of living indices or porter's wages (collectively, "Overage
Rent"), such Overage Rent shall be adjusted and prorated on an if, as and when
collected basis.
(iv) Purchaser shall (or shall cause the owner of each Property to) (A) render
bills for any Overage Rent payable for any accounting period that expired prior
to the Closing Date, but which is to be paid after the Closing Date; (B) bill
tenants for such Overage Rent attributable to an accounting period that expired
prior to the Closing Date, on a monthly basis, for a period of ninety (90) days
thereafter; and (C) use commercially reasonable efforts in the collection of
such Overage Rent; provided, however, that Purchaser shall have no obligation to
commence (or cause the owner of any Property to commence) any actions or
proceedings to collect any such Overage Rents. If Purchaser shall be unable to
collect such Overage Rents during the aforementioned ninety (90) day period,
Sellers shall have the right to pursue tenants to collect such delinquencies, at
its sole cost and expense, including, without limitation, the prosecution of one
or more lawsuits (provided, however, that Sellers may not cause any Lease to be
terminated or attempt to cause any tenant thereunder to be evicted), and
Purchaser shall cause the owner of the Property with respect to which such
Overage Rents are to be collected to reasonably cooperate in any and all such
actions. Sellers shall furnish to Purchaser all information relating to the
period prior to the Closing Date necessary for the billing of such Overage Rent,
and Purchaser shall deliver to Sellers, concurrently with delivery to tenants,
copies of all statements relating to Overage Rent for any period prior to the
Closing Date. Purchaser shall bill (or cause to be billed) tenants for Overage
Rents for accounting periods prior to the Closing Date in accordance with and on
the basis of such information furnished by Sellers.
(v) Overage Rent payable for the accounting period in which the Closing Date
occurs shall be apportioned between Sellers and Purchaser based upon the ratio
that the portion of such accounting period prior to the Closing Date bears to
the entire such accounting period. If, prior to the Closing Date, Sellers (or
their agent) receive any installments of Overage Rent attributable to Overage
Rent for periods from and after the Closing Date, such sums shall be apportioned
at the Closing Date. If Purchaser (or its agent) receives any installments of
Overage Rent attributable to Overage Rent for periods prior to the Closing Date,
such sums (less reasonable collection costs actually incurred by Purchaser)
shall be paid to Sellers within thirty (30) days after Purchaser (or its agent)
receives payment thereof.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents
then due and payable in the following order of priority: (A) first, in payment
of Overage Rents for the accounting period in which the Closing Date occurs, (B)
second, in payment of Overage Rents for the period preceding the accounting
period in which the Closing Date occurs and (C) third, in payment of Overage
Rents for the accounting period following the one in which the Closing Date
occurs.
(vii) To the extent any portion of Overage Rent is required to be paid monthly
by tenants on account of estimated amounts for the current period, and at the
end of each calendar year (or, if applicable, at the end of each lease year or
tax year or any other applicable accounting period), such estimated amounts are
to be recalculated based upon the actual expenses, taxes and other relevant
factors for that calendar (lease or tax) year, with the appropriate adjustments
being made with such tenants, then such portion of the Overage Rent shall be
prorated between Sellers and Purchaser on the Closing Date based on such
estimated payments (i.e., with (A) Sellers entitled to retain all monthly
installments of such amounts with respect to periods prior to the calendar month
in which the Closing Date occurs, to the extent such amounts are as of the
Closing Date estimated to equal the amounts ultimately due to Sellers for such
periods, (B) Purchaser entitled to receive all monthly installments of such
amounts with respect to periods following the calendar month in which the
Closing Date occurs, and (C) Sellers and Purchaser apportioning all monthly
installments of such amounts with respect to the calendar month in which the
Closing Date occurs). At the time(s) of final calculation and collection from
(or refund to) tenants of the amounts in reconciliation of actual Overage Rent
for a period for which estimated amounts have been prorated, there shall be a
re-proration between Sellers and Purchaser based on the period in time each
party owned the relevant Asset, with the net credit resulting from such
re-proration, after accounting for amounts required to be refunded to tenants,
being payable to the appropriate party (i.e., to Sellers if the recalculated
amounts exceed the estimated amounts and to Purchaser if the recalculated
amounts are less than the estimated amounts).
(viii) To the extent that any tenant, pursuant to a right contained in an
existing tenant lease, conducts an audit respecting any Overage Rent calculation
(a "Rent Audit") for an accounting period that expired prior to the Closing
Date, or otherwise becomes entitled to a refund of Overage Rent with respect to
a period prior to the Closing Date, Sellers shall be liable for any refunds due
to such tenant or be the recipient of any additional payments due by such tenant
as the result of such Rent Audit. The results of any Rent Audit for any other
accounting period shall be apportioned in the same manner as Overage Rent. Rent
Audits for accounting periods that expire prior to the Closing Date shall be
settled by the owner of the Property acting in accordance with Sellers'
instructions or, if Seller so elects, shall be settled by such Seller directly,
in each case at Sellers' sole cost and expense and in accordance with the
applicable existing tenant Lease, subject to Purchaser's approval, which shall
not be unreasonably withheld, delayed or conditioned; provided, however, that
Purchaser's consent to any such settlement shall not be required if the tenant
as part of such settlement agrees that such settlement shall not be binding on
the landlord in calculating similar amounts for subsequent years and tenant will
not introduce any such settlement in challenging amounts due in any such
subsequent year. Rent Audits for accounting periods prior to the Closing Date
but extending after the Closing Date shall be settled by the owner of the
Property acting in accordance with Purchaser's instructions and in accordance
with the applicable existing Lease, but Sellers shall receive notice of all
negotiations or proceedings in connection therewith, shall have the right to
intervene therein and must approve all matters to be approved by the landlord
under the applicable existing tenant Lease in connection therewith, which
approval shall not be unreasonably withheld, delayed or conditioned, and any and
all costs relating to such audit shall be apportioned in accordance with the
respective periods within such audit period that the Property was owned,
directly or indirectly, by Sellers and Purchaser.
(ix) To the extent that any amounts are paid or payable by a tenant under a
Lease to an owner of a Property prior to the Closing Date in advance of the
period to which such expense applies, whether as a one time payment or in
installments (e.g. for real property tax escalations), such amounts shall be
apportioned as provided above but based upon the period for which such payments
were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage
Rents, such as charges for common area charges or maintenance, marketing,
electricity, steam, water, cleaning, overtime services, insurance, sundry
charges or other charges of a similar nature (collectively, "Additional Rent"),
such rent shall be applied based on the period covered by such Additional Rent
charge (i.e., the period the applicable work, utility or service was provided).
For any Additional Rent payable for a period that expired prior to the Closing
Date, but which shall be paid after the Closing Date, Purchaser shall pay the
entire amount thereof to Sellers within thirty (30) days after receipt thereof,
less any reasonable collection costs actually incurred. Purchaser shall (A)
render bills for any Additional Rent payable for any period that expired prior
to the Closing Date, but which is to be paid after the Closing Date; (B) bill
tenants for such Additional Rent attributable to a period that expired prior to
the Closing Date, on a monthly basis, for a period of ninety (90) days
thereafter; and (C) use commercially reasonable efforts in the collection of
such Additional Rent; provided, however, that Purchaser shall have no obligation
to commence (or cause the owner of any Property to commence) any actions or
proceedings to collect any such Additional Rent. If Purchaser shall be unable to
collect such Additional Rent during the aforementioned ninety (90) day period,
Sellers shall have the right to pursue tenants to collect such delinquencies
(including, without limitation, the prosecution of one or more lawsuits),
provided that Sellers may not cause any Lease to be terminated or attempt to
cause any tenant thereunder to be evicted, and Purchaser shall cause the owner
of the Property with respect to which such Additional Rent is to be collected to
reasonably cooperate in any and all such actions. Sellers shall furnish to
Purchaser all information relating to the period prior to the Closing Date
necessary for the billing of such Additional Rent, and Purchaser shall deliver
to Sellers, concurrently with delivery to tenants, copies of all statements
relating to Additional Rent for any period prior to the Closing Date. Purchaser
shall bill tenants for Additional Rent relating to periods prior to the Closing
Date in accordance with and on the basis of such information furnished by
Sellers. Additional Rent payable for the period in which the Closing Date occurs
shall be apportioned between Sellers and Purchaser based upon the same method
used to apportion the underlying expense being billed to such tenant, or if such
expense is not being apportioned, then based upon the ratio that the portion of
such accounting period prior to the Closing Date bears to the entire such
accounting period.
(xi) To the extent any payment received from a tenant after Closing does not
indicate whether the payment is for an item of Base Rent, Overage Rent or
Additional Rent, and the same cannot be clearly determined from the context of
such payment (e.g., it is not accompanied by an invoice for an item of Base
Rent, Overage Rent or Additional Rent in such amount), then such payment will be
applied: first, to payment of any Base Rent then due or delinquent, in
accordance with paragraphs (i) and (ii) above; second, to payment of any
Additional Rent then due or delinquent, in accordance with paragraph (x) above;
and third, to any Overage Rent then due or delinquent, in accordance with
paragraphs (iii)-(ix) above.
(xii) To the extent any Seller receives any Base Rents, Overage Rents, or
Additional Rent after the Closing Date from any tenant, such Seller shall,
within five (5) Business Days, pay (or cause to be paid) such amount to
Purchaser in which event such amounts shall be distributed by Purchaser in
accordance with the applicable provisions of this Section 6(c).
(d) Real estate taxes, personal property taxes, vault charges and taxes,
business improvement district taxes and assessments and any other governmental
taxes, charges or assessments levied or assessed against the Property
(collectively, "Property Taxes") shall be adjusted and prorated based on the
periods of ownership by Sellers and Purchaser with Sellers being responsible for
all Property Taxes accrued through the date of Closing (regardless of when
payable) and Purchaser being responsible for all Property Taxes accruing after
the Closing (regardless of when payable). If the Closing Date shall occur either
before an assessment is made or a tax rate is fixed for the tax period in which
the Closing Date occurs, the apportionment of such Property Taxes based thereon
shall be made at the Closing Date by applying the tax rate for the preceding
year to the latest assessed valuation, but, promptly after the assessment and/or
tax rate for the current year are fixed, the apportionment thereof shall be
recalculated and Sellers or Purchaser, as the case may be, shall make an
appropriate payment to the other within five (5) Business Days based on such
recalculation. If as of the Closing Date the Property or any portion thereof
shall be affected by any special or general assessments which are or may become
payable in installments, Sellers shall pay the unpaid installments of such
assessments which are due prior to the Closing Date and Purchaser shall pay the
installments which are due on or after the Closing Date.
(e) If there are water meters at the Property, the unfixed water rates and
charges and sewer rents and taxes covered by meters, if any, shall be
apportioned (i) on the basis of an actual reading done within thirty (30) days
prior to the Apportionment Date, or (ii) if such reading has not been made, on
the basis of the last available reading. If the apportionment is not based on an
actual current reading, then upon the taking of a subsequent actual reading, the
parties shall, within thirty (30) days following notice of the determination of
such actual reading, readjust such apportionment and Sellers shall deliver to
Purchaser or Purchaser shall deliver to Seller, as the case may be, the amount
determined to be due upon such readjustment.
(f) Charges for all electricity, steam, gas and other utility services
(collectively, "Utilities") shall be billed to Sellers' account up to the
Apportionment Date and, from and after the Apportionment Date, all Utilities
shall be billed to Purchaser's account. If for any reason such changeover in
billing is not practicable as of the Closing Date, as to any Utility, such
Utility shall be apportioned on the basis of actual current readings or, if such
readings have not been made, on the basis of the most recent bills that are
available. If any apportionment is not based on an actual current reading, then
upon the taking of a subsequent actual reading, the parties shall, within thirty
(30) days following notice of the determination of such actual reading, readjust
such apportionment and Sellers shall promptly deliver to Purchaser, or Purchaser
shall promptly deliver to Sellers, as the case may be, the amount determined to
be due upon such adjustment. Sellers shall arrange for a final reading of all
utility meters (covering gas, water, steam and electricity) as of the Closing,
except meters the charges of which are payable by tenants of each Property
pursuant to such tenant's lease. Sellers and Purchaser shall jointly execute a
letter to each applicable utility company advising such utility companies of the
termination of Sellers' responsibility for such charges for utilities furnished
to the applicable Property as of the date of the Closing and commencement of
Purchaser's responsibilities therefor from and after such date.
(g) Purchaser and the owner of the Property, as owned (directly or indirectly)
by Purchaser, shall have no right to receive any rental insurance proceeds which
relate to the period prior to the Closing Date and, if any such proceeds are
delivered to (or for the benefit of) Purchaser, Purchaser shall, within thirty
(30) days following receipt thereof, pay the same to Seller.
(h) If the Closing occurs, Purchaser agrees that it shall be responsible for the
payment of all Tenant Inducement Costs which become due and payable (whether
before or after the Closing Date) arising from, relating to or in connection
with (i) any renewals, modifications, amendments or expansions of existing
Leases or other supplementary agreements relating thereto entered into between
the date hereof and the Closing Date, in each case which have been approved (or
deemed approved) by Purchaser to the extent required pursuant to the terms of
Section 8 hereof, that certain lease proposed to be executed after the date
hereof, by and between R.R. Laconia, Inc. and UR of Tilton NH, LLC, up to the
actual Tenant Inducement Costs thereof, but not to exceed $250,000 and (iii) any
new Leases entered into between the date hereof and the Closing Date, in each
case which have been approved (or deemed approved) by Purchaser to the extent
required pursuant to the terms of Section 8 hereof; provided, however, Sellers
agree and shall be responsible for the payment of a pro rata portion of such
Tenant Inducements Costs based on the portion of the term of the Lease to which
such Tenant Inducement Costs relate which has expired prior to Closing,
excluding the Tenant Inducement Costs set forth in subclause (ii). Seller shall
be responsible for all other Tenant Inducement Costs with respect to the Leases
not payable by Purchaser pursuant to the immediately preceding sentence. If, as
of the Closing Date, Sellers shall have paid any Tenant Inducement Costs for
which Purchaser is responsible pursuant to the foregoing provisions, Purchaser
shall reimburse Sellers therefor at Closing provided that Sellers shall supply
invoices and statements for all such Tenant Inducement Costs to Purchaser prior
to the Closing Date. For purposes hereof, the term "Tenant Inducement Costs"
shall mean any out-of-pocket payments required under a Lease to be paid by the
landlord thereunder to or for the benefit of the tenant thereunder which is in
the nature of a tenant inducement or concession, including, without limitation,
tenant improvement costs, design, refurbishment and other work allowances,
landlord's work to prepare the space for delivery to or occupancy by a tenant,
fees for permits or tapping into utilities, lease buyout costs, and moving
allowances and any leasing commissions in connection with such Leases; provided,
however, that "Tenant Inducement Costs" shall not include loss of income
resulting from any free rental period (it being agreed that Sellers shall bear
such loss resulting from any free rental period with respect to the period prior
to the Closing Date and that Purchaser shall bear such loss with respect to the
period from and after the Closing Date). At Closing, Purchaser shall receive a
credit against the balance of the Purchase Price in an amount equal to all
Tenant Inducement Costs which are Seller's responsibility under this Section
6(h) and which have not then been paid.
(i) Any amounts actually received by a Seller or Purchaser in respect of tax
increment or similar financing (net of any amounts which are payable by such
Seller to any third-party) for the accounting period in which the Closing Date
occurs shall be apportioned between such Seller and Purchaser as and when
received and based upon the ratio that the portion of such accounting period
prior to the Closing Date bears to the entire such accounting period.
(j) At Closing, Purchaser shall receive a credit against the balance of the
Purchase Price in an amount equal to the positive difference, if any, of (A) all
marketing fees, contributions or other similar payments made by any tenant at
the Property to Sellers which are allocable to the period prior to the Closing,
less (B) the sum of (1) all contributions made by Sellers in respect of such
marketing fees, contributions or other similar payments for which Sellers are
entitled to reimbursement from tenants but have not yet collected from tenants
at the Property, (2) amounts expended by Sellers for purposes of advertising or
marketing such Property in accordance with the terms of such tenant's Lease,
whether allocable to the period prior to Closing or after Closing (including any
termination fees for terminating any marketing agreements as of Closing required
by Purchaser to be terminated) and (3) an amount reasonably estimated by Sellers
to be due for marketing expenses incurred prior to Closing for which invoices
have not been received as of Closing. In furtherance of the foregoing, Sellers
and Purchaser agree that Sellers shall be entitled to all payments from tenants
in respect of periods prior to the Closing and shall be liable for such
marketing expenses allocable for periods prior to the Closing and Purchaser
shall be entitled to all payments from tenants in respect of periods from and
after the Closing and shall be liable for such marketing expenses allocable for
periods from and after the Closing.
(k) (1) At or prior to the Closing, Sellers and Purchaser and/or their
respective agents or designees will jointly prepare a preliminary closing
statement (the "Preliminary Closing Statement") which will show the adjustments
and prorations calculated with respect to each Property and the net amount due
either to Sellers or to Purchaser as the result of the sum of all adjustments
and prorations provided for in this Agreement, and such net due amount will be
added to or subtracted from the cash balance of the Purchase Price to be paid to
Sellers at the Closing pursuant to Section 3, as applicable.
(2) Within 180 days following the Closing Date, Sellers and
Purchaser will jointly prepare a supplemental closing statement reasonably
satisfactory to Seller and Purchaser in form and substance (the "Supplemental
Closing Statement") setting forth the determination of the adjustments and
prorations provided for herein and setting forth any items which are not capable
of being determined at such time (and the manner in which such items shall be
determined and paid). The net amount due Sellers or Purchaser, if any, by reason
of adjustments to the Preliminary Closing Statement as shown in the Supplemental
Closing Statement, shall be paid in cash by the party obligated therefor
directly to the party due such amount within five (5) Business Days following
the obligated party's receipt of the approved Supplemental Closing Statement.
The adjustments, prorations and determinations agreed to by Sellers and
Purchaser in the Supplemental Closing Statement shall be conclusive and binding
on the parties hereto except for any items which are not capable of being
determined at the time the Supplemental Closing Statement is agreed to by
Sellers and Purchaser, which items shall be determined and paid in the manner
set forth in the Final Closing Statement set forth below and except for other
amounts due hereunder pursuant to provisions which survive the Closing.
(3) Within 365 days following the Closing Date, Sellers and
Purchaser will jointly prepare a final closing statement reasonably satisfactory
to Seller and Purchaser in form and substance (the "Final Closing Statement")
setting forth the final determination of the adjustments and prorations provided
for herein and setting forth any items which are not capable of being determined
at such time (and the manner in which such items shall be determined and paid).
The net amount due Sellers or Purchaser, if any, by reason of adjustments to the
Supplemental Closing Statement as shown in the Final Closing Statement, shall be
paid in cash by the party obligated therefor directly to the party due such
amount within thirty (30) days following the obligated party's receipt of the
approved Final Closing Statement. The adjustments, prorations and determinations
agreed to by Sellers and Purchaser in the Final Closing Statement shall be
conclusive and binding on the parties hereto except for any items which are not
capable of being determined at the time the Final Closing Statement is agreed to
by Sellers and Purchaser, which items shall be determined and paid in the manner
set forth in the Final Closing Statement and except for other amounts due
hereunder pursuant to provisions which survive the Closing. The adjustments,
prorations and determinations agreed to by Sellers and Purchaser in the Final
Closing Statement shall be conclusive and binding on the parties hereto. Prior
to and following the Closing Date, each party shall provide the other with such
information as the other shall reasonably request (including, without
limitation, access to the books, records, files, ledgers, information and data
with respect to the Property during normal business hours upon reasonable
advance notice) in order to make the preliminary, supplemental and final
adjustments and prorations provided for herein.
(l) If any amount to be paid after Closing under this Section 6 shall not be
paid in cash when due hereunder, the same shall bear interest (which shall be
delivered together with the applicable payment hereunder) from the date due
until so paid at a rate per annum equal to the Prime Rate (as such rate may vary
from time to time) as reported in the Wall Street Journal plus 3% (the "Default
Rate"). To the extent a payment provision in this Section 6 does not specify a
period for payment, then for purposes hereof such payment shall be due within
thirty (30) days of the date such payment obligation is triggered.
(m) At Closing, Purchaser shall receive a credit against the balance of the
Purchase Price in an amount equal to the security deposits provided for under
the Leases which are then being held by Sellers in cash and as set forth on
Schedule 11(a)(xiii).
(n) At Closing, Purchaser shall receive a credit against the balance of the
Purchase Price in an amount equal to any unpaid Additional GMAC Debt.
(o) At Closing, Purchaser shall pay to Sellers an amount equal to the cash
escrows and reserves (including interest accrued thereon) held by Lender on
behalf of Sellers under the Existing Financing, including, without limitation,
escrows and reserves for taxes, insurance, capital reserves and ground lease
payments, which are transferred to Purchaser pursuant to this Agreement.
(p) Each item of fixed and additional rent under the Ground Lease shall be
prorated as of the Apportionment Date.
(q) At Closing, Purchaser shall receive a credit against the balance of the
Purchase Price in an amount equal to any net proceeds then received by Sellers
under the Westbrook II Contract.
(r) The provisions of this Section 6 shall survive the Closing.
7. PROPERTY NOT INCLUDED IN SALE. Notwithstanding anything to the contrary
contained herein, it is expressly agreed by the parties hereto that any
fixtures, furniture, furnishings, equipment or other personal property,
including, without limitation, trade fixtures in, on, around or affixed to an
Improvement owned or leased by any tenant (other than through a lease from or
with any Seller or any affiliate of any Seller) (collectively, "Excluded
Personalty"), shall not be included in the Asset to be sold to Purchaser by any
Seller hereunder, and shall, in no event, be deemed as being owned by any
Seller.
8. COVENANTS OF SELLER. During the period from the date hereof until the Closing
Date, each Seller shall:
(a) not enter into any new Leases at its Property, or amend, modify, supplement,
extend, terminate or accept the surrender of any Leases at its Property (except
in connection with the exercise by a tenant of renewal options, expansion
options, assignment rights or subletting rights granted to such tenant under its
existing Lease), in each case without Purchaser's prior written consent;
provided, however, that Purchaser agrees that in connection with the approval of
any new lease or any amendment, modification, supplement, extension or
termination of any existing lease, Purchaser shall give its consent or rejection
based on a term sheet, lease requisition or other similar summary of proposed
lease terms (including a list of all Tenant Inducement Costs in connection with
such proposed lease) within forty-eight (48) hours of its receipt of same from
Sellers and if Purchaser (i) does not approve or reject same within such period,
then Purchaser shall be deemed to have given its consent thereto and such Seller
shall be entitled, without further approval or consent from Purchaser, to enter
into lease documentation substantially consistent with the summary of terms
submitted to Purchaser and (ii) rejects such summary of terms, then Purchaser
shall specify its reason for same in reasonable detail;
(b) use commercially reasonable efforts to maintain in full force and effect the
insurance policies currently in effect with respect to its Property (or
replacements continuing similar coverage);
(c) operate, manage and lease (subject to the provisions of this Section 8) its
Property in all material respects in a manner consistent with the past practice
of such Seller;
(d) not (i) enter into any new Contract with respect to its Property which
cannot be cancelled by the owner of the Property for any or no reason on 30, or
fewer, days notice; (ii) enter into any new Contract with respect to its
Property which requires the owner of the Property to pay more than $15,000 in
any 30 day period; (iii) materially amend, modify, supplement or terminate any
Contract with respect to its Property (other than the Terminated Contracts)
except a Contract which is cancelable by either party for any or no reason upon
30, or fewer, days notice; or (1) materially amend, modify, supplement or
terminate any Contract with respect to its Property (other than the Terminated
Contracts) if such Contract as so amended, modified or supplemented would
require the owner of the Property to pay more than $15,000 in any 30 day period,
in each case without Purchaser's prior written consent; and Sellers shall, if
requested in writing by Purchaser, send notice of termination on the Closing
Date under such Contracts as Purchaser shall so request. Purchaser represents
that it has reviewed and approved the Contracts listed on Schedule 11(a)(xii) as
of the date hereof which are not cancelable on less than 30 days notice and
Purchaser agrees that such Contracts shall not be required to be cancelled as of
the Closing Date by Sellers;
(e) comply in all material respects with the terms of the Loan Documents and the
Ground Lease and not amend or modify the Loan Documents or amend, modify or
terminate the Ground Lease without Purchaser's prior written consent, in its
sole discretion;
(f) promptly notify Purchaser of any material default under any Lease at its
Property, any casualty or condemnation affecting all or any portion of its
Property, any material repairs needed at its Property, and any litigation
affecting it or its Property;
(g) deliver to the tenants under each Lease at its Property an estoppel
certificate in the form attached hereto as Exhibit 8(g) or in the form as may be
set forth under such tenant's lease and request that such tenants execute same
and return them to Seller; provided, however, that in no event shall any Seller
be required to bring any action or institute any proceeding, or to otherwise
incur any material expenditures in connection therewith;
(h) use commercially reasonable efforts to obtain a consent and estoppel
certificate from the ground lessor, substantially in the form attached hereto as
Exhibit 8(h) (the "Ground Lessor Consent"), under that certain Ground Lease,
dated as of November 9, 1994, by and between Anthony Iacono and Rosemarie
Iacono, as ground lessor, and RBO Associates, L.P., as original ground lessee,
as amended by that certain First Amendment to Ground Lease Agreement, dated
February 28, 1995, as subsequently assigned to R.R. Rehoboth, Inc. (the "Ground
Lease"); provided, however, that in no event shall Sellers be required to bring
any action or institute any proceeding, or to otherwise incur any material
expenditures in connection therewith;
(i) terminate all existing management agreements, leasing agreements, brokerage
agreements and other agreements binding upon such Seller or affecting such
Seller's Property that are not listed on Schedule 11(a)(xii) attached hereto on
or before the Closing (the "Terminated Contracts"), and cause such property
managers and on-site leasing or brokerage agents working under such terminated
contracts to vacate its Property prior to the Closing, all at such Seller's sole
cost and expense;
(j) comply in all material respects with the terms of the Westbrook II Contract
and not amend, modify or terminate the Westbrook II Contract without Purchaser's
prior written consent, in its sole discretion;
(k) comply in all material respects with the terms of the TIF Agreement and not
amend, modify or terminate the TIF Agreement without Purchaser's prior written
consent, in its sole discretion;
(l) not make material alterations to any of its Property, except for such
alterations undertaken pursuant to any of the Leases or to preserve life, safety
or property;
(m) not have the right to apply any security deposits held under Leases or to
return the security deposit of any tenant held under Leases without Purchaser's
prior written consent, except that each Seller shall have the right to (i) apply
any security deposits held under Leases held by such Seller in respect of
defaults by tenants under the applicable Leases which are continuing for more
than sixty (60) days or tenants whose Leases have expired or have been
terminated in accordance with such Lease and pursuant to the terms of this
Agreement and (ii) return the security deposit of any tenant thereunder who, in
the good faith judgment of such Seller, is entitled to the return of such
deposit pursuant to the terms of its Lease or otherwise by law;
(n) deliver to L.L. Bean, Inc., within five (5) Business Days after the date
hereof, the required written notice in respect of the LL Bean ROFR in a form
approved by Purchaser, which approval shall not be unreasonably withheld,
conditioned or delayed; and
(o) not voluntarily create or incur to exist any liens or encumbrance on or
against its Property other than Permitted Encumbrances.
9. CONDITIONS TO CLOSING.
(a) Conditions to Obligations of Sellers. The obligation of Sellers to effect
the Closing shall be subject to the fulfillment or written waiver by Sellers at
or prior to the Closing Date of the following conditions (the "Sellers' Closing
Conditions"):
(i) Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement shall be true and correct as of the
Closing Date, as though made at and as of the Closing Date; provided, however,
that the fact that one or more of such representations and warranties may not be
true or correct at such time shall not constitute a failure of this condition so
long as all such untrue or incorrect representations and warranties, in the
aggregate, do not result in a Material Adverse Effect. For purposes of this
sub-section, "Material Adverse Effect" shall mean any condition, event, change
or effect the results of which is that Sellers incur or will incur Losses in the
aggregate in excess of $2,000,000.
(ii) Performance of Obligations. Purchaser shall have performed all material
obligations required to be performed by it under this Agreement on and prior to
the Closing Date, including payment of the full balance of the Purchase Price
due hereunder.
(iii) Loan Assignment and Assumption Document. Unless a Defeasance is effected,
delivery of a Loan Assignment and Assumption Document in accordance with Section
4(b) hereof, or, if a Defeasance has been effected, the full general
unconditional release of Sellers from all obligations arising under the Existing
Financing and the Loan Documents from and after the Closing.
(iv) Delivery of Documents. Each of the documents required under Section 18 to
be delivered by Purchaser at Closing shall have been duly executed, as required,
and delivered as provided herein.
(b) Conditions to Obligations of Purchaser. The obligations of Purchaser to
effect the Closing shall be subject to the fulfillment or written waiver by
Purchaser at or prior to the Closing Date of the following conditions (the
"Purchaser's Closing Conditions"):
(i) Representations and Warranties. The representations and warranties of each
Seller contained in this Agreement shall be true and correct when made and as of
the Closing Date, as though made at and as of the Closing Date (except for
representations and warranties made as of a particular date, which shall have
been true and correct as of such date); provided, however, that the fact that
one or more of such representations and warranties may not be true or correct at
such time shall not constitute a failure of this condition so long as all such
untrue or incorrect representations and warranties, in the aggregate, do not
result in a Material Adverse Effect; provided, however, that in the event that a
Material Adverse Effect has occurred, Purchaser shall notify Seller on becoming
aware of the same and Sellers, in their sole discretion, may elect to give
Purchaser a credit against the Purchase Price in an amount equal to the
difference between the aggregate amount of Losses giving rise to such Material
Adverse Effect and $2,000,000, and upon such credit being given, this condition
shall be deemed satisfied. For purposes of this sub-section, "Material Adverse
Effect" shall mean any condition, event, change or effect the results of which
is that Purchaser incurs or will incur Losses in the aggregate in excess of
$2,000,000.
(ii) Performance of Obligations. Each Seller shall have performed all material
obligations required to be performed by such Seller under this Agreement on and
prior to the Closing Date.
(iii) Loan Assignment and Assumption Document. Unless a Defeasance is effected,
Purchaser shall have received the Loan Assignment and Assumption Document in
accordance with Section 4(b) hereof.
(iv) Delivery of Documents. Each of the documents required under Section 18 to
be delivered by each Seller at Closing shall have been delivered as provided
herein.
(v) Delivery of Holdback. Sellers shall have delivered the Holdback to the
Holdback Escrow Agent; provided, however, that Sellers may satisfy such
obligation by directing, or Purchaser may cause the satisfaction of such
obligation by causing, an amount equal to the Holdback to be paid to the
Holdback Escrow Agent out of monies otherwise payable to Sellers in connection
with Section 3(b)(ii) hereof; and, provided, further, that any such monies paid
to the Holdback Escrow Agent and held as the Holdback shall be deemed payments
made by Purchaser in accordance with Section 3(b)(ii) hereof.
(vi) Ground Lessor Consent. Purchaser shall have received the Ground Lessor
Consent, substantially in the form of Exhibit 8(h).
(vii) Title. Title to each of the Properties shall be delivered to Purchaser in
the manner required under Section 5, subject only to the Permitted Encumbrances.
(viii) Delivery of LL Bean ROFR Waiver; Purchaser's Extension. Sellers shall
have delivered evidence reasonably satisfactory to Purchaser of L.L. Bean Inc.'s
waiver of the LL Bean ROFR with respect to the applicable transactions
contemplated hereby (the "LL Bean ROFR Waiver"); provided, however, that if such
waiver has not been delivered by Sellers to Purchaser by October 27, 2003, then
Purchaser may elect, upon written notice sent to Sellers not later than November
2, 2003, to extend the Closing, from time to time, to a date not later than
February 1, 2004.
(c) Failure of Condition.
(i) If Purchaser is unable to satisfy (and Sellers have not waived in writing)
any of the Sellers' Closing Conditions by the Closing Date, then this Agreement
shall terminate. Upon the effectiveness of such termination, Purchaser shall be
entitled to receive the Deposit (unless under Section 21(a) Sellers are entitled
to retain the Deposit) and, subject to the provisions of Section 21, neither
party shall have any further rights or obligations hereunder, except those
expressly stated to survive the termination hereof. Nothing in this Section
9(c)(i) shall limit, restrict or negate any rights or remedies that Sellers have
under Section 21 of this Agreement in the event of a default by Purchaser.
(ii) If any Seller is unable to satisfy (and Purchaser has not waived in
writing) any of the Purchaser's Closing Conditions by the Closing Date, then,
Purchaser may elect to terminate this Agreement. Upon the effectiveness of such
termination, Purchaser shall be entitled to receive the Deposit and, subject to
the provisions of Section 21, neither party shall have any further rights or
obligations hereunder, except those expressly stated to survive the termination
hereof. Nothing in this Section 9(c)(ii) shall limit, restrict or negate any
rights or remedies that Purchaser has under Section 21 hereof in the event of a
default by any Seller.
10. CONDITION OF THE PROPERTY.
(a) PURCHASER EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY CLOSING DOCUMENT, NEITHER SELLERS, NOR ANY PERSON ACTING ON
BEHALF OF SELLERS (INCLUDING, WITHOUT LIMITATION, ROTHSCHILD REALTY, INC.), NOR
ANY PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY
PURCHASER IN CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER,
DIRECTOR, PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE,
ACCOUNTANT, ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT, CONTRACTOR,
SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES (SELLERS, AND ALL OF THE
OTHER PARTIES DESCRIBED IN THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER THAN
PURCHASER) SHALL BE REFERRED TO HEREIN COLLECTIVELY AS THE "EXCULPATED PARTIES")
HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE
(INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO ANY PROPERTY, THE PERMITTED
USE OF ANY PROPERTY OR THE ZONING AND OTHER LAWS, REGULATIONS AND RULES
APPLICABLE TO ANY PROPERTY OR THE COMPLIANCE BY ANY PROPERTY THEREWITH, THE
REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH ANY PROPERTY, OR OTHERWISE
RELATING TO ANY PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREIN. PURCHASER
FURTHER ACKNOWLEDGES THAT ALL MATERIALS WHICH HAVE BEEN PROVIDED BY OR ON BEHALF
OF ANY OF THE EXCULPATED PARTIES HAVE BEEN PROVIDED WITHOUT ANY WARRANTY OR
REPRESENTATION, EXPRESSED OR IMPLIED, EXCEPT TO THE EXTENT EXPRESSLY SET FORTH
HEREIN OR IN ANY CLOSING DOCUMENT, AS TO THEIR CONTENT, SUITABILITY FOR ANY
PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS AND PURCHASER SHALL NOT HAVE ANY
RECOURSE AGAINST SELLERS OR ANY OF THE OTHER EXCULPATED PARTIES IN THE EVENT OF
ANY ERRORS THEREIN OR OMISSIONS THEREFROM. PURCHASER IS ACQUIRING EACH PROPERTY
BASED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION AND INSPECTION OF EACH
PROPERTY AND NOT IN RELIANCE ON ANY INFORMATION PROVIDED BY SELLERS, OR ANY OF
THE OTHER EXCULPATED PARTIES, EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH
HEREIN OR IN ANY CLOSING DOCUMENT. PURCHASER EXPRESSLY DISCLAIMS ANY INTENT TO
RELY ON ANY SUCH MATERIALS PROVIDED TO IT BY SELLERS IN CONNECTION WITH ITS DUE
DILIGENCE AND AGREES THAT IT SHALL RELY SOLELY ON ITS OWN INDEPENDENTLY
DEVELOPED OR VERIFIED INFORMATION, TOGETHER WITH THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENT.
(b) EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED FOR IN THIS AGREEMENT OR
IN ANY CLOSING DOCUMENT, PURCHASER ACKNOWLEDGES AND AGREES THAT IT IS PURCHASING
EACH PROPERTY "AS IS" AND "WITH ALL FAULTS", BASED UPON THE CONDITION (PHYSICAL
OR OTHERWISE) OF SUCH PROPERTY AS OF THE DATE OF THIS AGREEMENT, REASONABLE WEAR
AND TEAR, AND SUBJECT TO THE PROVISIONS OF SECTION 14 HEREOF. EXCEPT TO THE
EXTENT OTHERWISE EXPRESSLY PROVIDED FOR IN THIS AGREEMENT OR IN ANY CLOSING
DOCUMENT, PURCHASER ACKNOWLEDGES AND AGREES THAT ITS OBLIGATIONS UNDER THIS
AGREEMENT SHALL NOT BE SUBJECT TO ANY FINANCING CONTINGENCY OR OTHER
CONTINGENCIES OR SATISFACTION OF CONDITIONS AND PURCHASER SHALL HAVE NO RIGHT TO
TERMINATE THIS AGREEMENT OR RECEIVE A RETURN OF THE DEPOSIT.
(c) Except with respect to any claims arising out of any breach of
representations or warranties or covenants set forth in this Agreement or any
Closing Document, Purchaser, for itself and its agents, affiliates, successors
and assigns, hereby releases and forever discharges the Exculpated Parties from
any and all rights, claims and demands at law or in equity, whether known or
unknown at the time of this Agreement, which Purchaser has or may have in the
future, arising out of the physical, environmental, economic or legal condition
of the Property, including, without limitation, any claim for indemnification or
contribution arising under the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.) or any similar
federal, state or local statute, rule or ordinance relating to liability of
property owners for environmental matters.
11. REPRESENTATIONS OF SELLER.
(a) Except as to representations made as of a specific date, each Seller, for
itself solely as it relates to such Seller's Assets, hereby represents and
warrants to Purchaser as of the date hereof, and (except as to representations
made as of a specific date) as of the Closing, as follows:
(i) Organization. Each Seller is a corporation or a limited liability company
and is duly organized or formed, validly existing and in good standing under the
laws of the state of its organization or formation as more particularly set
forth on Schedule R1.
(ii) Authorization and Enforceability. Such Seller has the requisite right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All acts and other proceedings required to be
taken by such Seller to authorize the execution and delivery of this Agreement,
and performance of the transactions contemplated hereby by such Seller, have
been duly and properly taken. This Agreement has been duly executed and
delivered by such Seller and constitutes the legal, valid and binding obligation
of such Seller, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or other laws
affecting creditor's rights generally and except for equitable remedies.
(iii) Seller's Authority to Own Properties. Such Seller has the requisite power
and authority to own, lease and operate its Property identified opposite its
name on Schedule R1 hereto, and to carry on its business as presently conducted.
In all instances where such Seller owns a Property in a state different from the
state under the laws of which such Seller was organized, (i) each such Seller
that is a corporation is duly qualified or registered as a foreign corporation
to do business, and is in good standing, in the state where the Property of such
Seller is located, and (ii) each such Seller that is a limited liability company
is and shall be duly qualified or registered as a foreign limited liability
company to do business, and is in good standing, in the state where the Property
of such Seller is located.
(iv) No Violations of Laws or Agreements. (1) The execution, delivery and
performance by such Seller of this Agreement and the consummation by such Seller
of the transactions contemplated hereby will not (A) violate in any material
respect any provision of law or any rule or regulation to which such Seller or
its Property is subject (it being understood that the necessity for filings and
consents is dealt with separately in subparagraph (2) below), (B) conflict with
or violate any order, judgment, injunction, award or decree binding upon such
Seller or directly relating to its Property, conflict with or violate the
certificate of incorporation, bylaws, or other similar governing documents of
such Seller, (D) constitute a default or give rise to a right of termination,
cancellation or acceleration of any right or obligation of such Seller under any
provision of any agreement, contract or other instrument binding upon such
Seller or any license, franchise, permit or other similar authorization held by
such Seller, or (E) result in the creation or imposition of any Lien upon any of
the assets of such Seller or its Property, except, in the case of any of the
foregoing clauses other than clause (C), for any such conflict, violation,
default, right or Lien which would not, individually or in the aggregate, be
material.
(2) Except for the consent of GMAC to the assignment and assumption of the
Existing Financing, the consent by the Ground Lessor to the assignment and
assumption of the Ground Lease, and the waiver by L.L. Bean, Inc. of a right of
first refusal contained in that certain Business Property Lease, dated October
14, 1994, originally between L.L. Bean, Inc. and RBO Associates , L.P. with
respect to Rehoboth Outlets I, Sussex County, Delaware (the "LL Bean ROFR") with
respect to the applicable transactions contemplated hereby, the execution,
delivery and performance by such Seller of this Agreement and the consummation
by such Seller of the transactions contemplated hereby do not require any
consent from, or filing with, any governmental or regulatory authority or any
other person or entity, except for any action, consent or filing that Purchaser
is required to obtain or make.
(v) Financial Statements. Schedule 11(a)(v) hereto contains (a) the audited
consolidated balance sheet of such Seller as of December 31, 2002, and the
related audited consolidated statement of income of such Sellers for the fiscal
years then ended, together with the notes to such financial statements (the
"Year End Financial Statements") and (b) the unaudited consolidated balance
sheet of such Seller as of June 30, 2003 (the "Interim Balance Sheet") and the
related unaudited consolidated statement of income of such Seller for the 6
month period then ended (collectively, the "Interim Financial Statements" and,
together with the Year End Financial Statements, the "Financial Statements")).
The Financial Statements have been prepared in accordance with the books and
records of such Seller. Except as set forth in Schedule 11(a)(v) hereto, the
Financial Statements present fairly, in all material respects, the consolidated
financial position of such Seller as of the date of such Financial Statements
and the consolidated results of operations of such Seller for applicable periods
then ended, in conformity with generally accepted accounting principles
("GAAP"), subject, in the case of the Interim Financial Statements, to the
absence of footnotes and year-end adjustments. Since the date of the Interim
Financial Statement to the date of the execution of this Agreement, such Seller
has operated its Property in the ordinary course consistent with past practice
and there has not been a material adverse change in the financial condition or
result of operation of such Property taken as a whole.
(vi) Insurance. Schedule 11(a)(vi) contains a list of all policies of insurance
held by, or maintained on behalf of, such Seller in effect for policy periods
beginning on or after January 1, 2003, indicating for each policy the carrier,
the insured, the type of insurance, the amounts of coverage and the expiration
date, as well as a description of all claims in excess of $5,000 made thereunder
within the one (1) year period prior to the date hereof. Except as set forth on
Schedule 11(a)(vi), all such policies are in full force and effect, and such
Seller has not received any written notice of cancellation, material amendment
or material dispute as to coverage with respect to any such policies.
(vii) No Dissolution. Such Seller has not adopted a plan of liquidation or
resolutions providing for a liquidation, dissolution, merger, consolidation or
other reorganization.
(viii) Compliance with Applicable Laws. To such Seller's knowledge, except as
set forth in Schedule 11(a)(viii), such Seller and its Property are in
compliance with all applicable statutes, laws, ordinances, rules and regulations
of any governmental authority or instrumentality, domestic or foreign (other
than Environmental Laws, which are dealt with separately in Section 11(a)(x)
hereof), except where noncompliance would not be material.
(ix) Permits. To the knowledge of such Seller, all material governmental
licenses, permits or authorizations of such Seller (other than those relating to
environmental matters, which are dealt with separately in Section 11(a)(x)
hereof) (the "Permits") are in full force and effect and are validly held by
such Seller, and such Seller is in compliance in all material respects with such
Permits. Except as set forth on Schedule 11(a)(ix), such Permits will not be
subject to suspension, modification or revocation solely as a result of the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby. To the knowledge of such Seller, it has all of the Permits
(other than those referred to above) which are required to carry on the business
of such Seller as such business is now conducted. Except as set forth on
Schedule 11(a)(ix), such Seller has received no written notice of any violation
of any Permit, and, to the knowledge of such Seller, no proceeding is pending or
threatened in writing to revoke or limit any Permit.
(x) Environmental.
(1) Except as set forth in Schedule 11(a)(x) hereto, to the knowledge of such
Seller:
(A) No Environmental Claims have been asserted in writing against such Seller
nor has such Seller received written notice of any threatened or pending
Environmental Claim against such Seller.
(B) Such Seller has delivered (or will make available prior to the Closing) to
Purchaser true and complete copies of all environmental reports, studies,
investigations or correspondence with governmental agencies or third party
claimants regarding any Environmental Liabilities of such Seller or any
environmental conditions at any of the Properties, which are in possession of
such Seller.
(2) "Environmental Claim" refers to any complaint, summons, citation, written
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other written communication from
any governmental agency, department, bureau, office or other authority, or any
third party involving violations of Environmental Laws or Releases of Hazardous
Materials from (A) any assets, properties or businesses of such Seller or any
predecessor in interest (including the Property); (B) from adjoining properties
or businesses; or (C) from or onto any facilities which received Hazardous
Materials generated by such Seller or any predecessor in interest.
(3) "Environmental Laws" includes the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., and any other federal,
state, local or municipal laws, statutes, regulations, rules or ordinances
imposing liability or establishing standards of conduct for protection of the
environment; each as in effect as of the Closing Date.
(4) "Environmental Liabilities" means any monetary obligations, losses,
liabilities, damages, costs and expenses (including all reasonable out-of-pocket
fees, disbursements and expenses of counsel, out-of-pocket expert and consulting
fees and out-of-pocket costs for required environmental site assessments,
remedial investigation and feasibility studies), fines, penalties, and sanctions
incurred as a result of any Environmental Claim filed by any governmental
authority or any third party which relate to any violations of Environmental
Laws, Remedial Actions, Releases or threatened Releases of Hazardous Materials
from or onto (A) any property owned or operated by such Seller or a predecessor
in interest, including the Property, or (B) any facility which received
Hazardous Materials generated by such Seller or a predecessor in interest.
(5) "Hazardous Materials" shall include (A) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminants, pollutant,
toxic pollutant, toxic or hazardous substances, extremely hazardous substance,
hazardous waste, medical waste, biohazardous or infectious waste, special waste,
or solid waste under Environmental Laws; (B) petroleum, petroleum-based or
petroleum-derived products (except for de minimis discharges of
petroleum-related products, such as gasoline, by vehicles of business invitees);
(C) polychlorinated biphenyls; (D) any substance exhibiting a hazardous waste
characteristic including but not limited to corrosivity, ignitability, toxicity
or reactivity as well as any radioactive or explosive materials; and (E) any
asbestos-containing materials.
(6) "Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching or migrating of Hazardous Materials
(including the abandonment of barrels, containers or other closed receptacles
containing Hazardous Materials) into the environment.
(7) "Remedial Action" means all actions to (A) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (B) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (C) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (D) any other actions
defined as "remedial action" under 42 U.S.C. 9601(24).
(xi) Leases. Schedule 11(a)(xi)-(A) is a true, correct and complete list of all
of tenants at the Properties indicating the suite number and square footage
occupied by such tenants with respect to such Seller's Property as of October 1,
2003. Such Seller has delivered to or made available for inspection by
Purchaser, true and complete copies of all Leases set forth on Schedule
11(a)(xi)-(A) hereto. Except as set forth on Schedule 11(a)(xi)-(A), no rent
payable under such Leases has been paid more than 30 days in advance. Except as
set forth on Schedule 11(a)(xi)-(B), within the last thirty (30) days prior to
the date hereof, such Seller has not either received or delivered any written
notices from or to any of the tenants under such Leases asserting that either
such Seller or any such tenants are in default in any material respects in
respect of non-monetary provisions under any of the respective Leases, and to
such Seller's knowledge, no party is in default of any of its material
obligations under any of such Leases. Except as set forth on Schedule
11(a)(xi)-(A), no party under any Lease has any right of first refusal, right of
first offer, purchase option or other similar right or options in connection
with all or any portion of any Property (other than the LL Bean ROFR). There are
no Tenant Inducement Costs with respect to the Leases of such Seller's Property
which have not been paid in full except as set forth on Schedule 11(a)(xi)-(C).
Attached as Schedule 11(a)(xi)-(D) is a true and correct rent roll with respect
to the Leases at such Seller's Property. Except as set forth on Schedule
11(a)(xi)-(E), there are no pending Rent Audits as of the date hereof.
(xii) Contracts. Schedule 11(a)(xii) hereto is a true, correct and complete list
of all of the Contracts that will be binding upon or in effect with respect to
such Seller's Property as of the date immediately following the Closing (unless
any such Contract expires in accordance with its terms and is not renewed or a
new Contract is entered into in accordance with Section 8(d) hereof) and such
Contracts will have not been amended, supplemented or otherwise modified except
as set forth on such Schedule. Such Seller has delivered to or made available
for inspection by Purchaser true and complete copies of all Contracts, which are
in writing, set forth on Schedule 11(a)(xii). To such Seller's knowledge, no
party is in default of any of its material obligations under any such Contracts.
(xiii) Security Deposits. Schedule 11(a)(xiii) hereto is a true, correct and
complete list of the security deposits held by such Seller under the Leases in
effect with respect to its Property as of the date hereof, and specifies which
security deposits are in the form of a letter of credit.
(xiv) Tenant Arrearages. Except as set forth on Schedule 11(a)(xiv), all rent
due and payable under the Leases of space at such Seller's Property as of the
date hereof has been paid in full.
(xv) Litigation. Except for the matters set forth on Schedule 11(a)(xv), there
is no action, suit, litigation, hearing or administrative proceeding pending or,
to such Seller's knowledge, threatened in writing against such Seller or against
its Property.
(xvi) Condemnation. There are no condemnation or eminent domain proceedings
pending or, to such Seller's knowledge, threatened in writing against such
Seller's Property.
(xvii) Collective Bargaining Agreement. There is no collective bargaining
agreement or any other employment agreement to which such Seller is a party and
relating to its Property.
(xviii) Employees. There are no employees of such Seller.
(xix) Brokerage Agreements. Schedule 11(a)(xix) hereto sets forth a true,
correct and complete list of all brokerage agreements relating to the Leases in
effect with respect to such Seller's Property, and such brokerage agreements
have not been amended, supplemented or otherwise modified except as set forth on
such Schedule and contain the entire agreement between such Seller and the
broker named therein. Such Seller has delivered to Purchaser true, correct and
complete copies of all such brokerage agreements listed in Schedule 11(a)(xix)
(the "Brokerage Agreements"). All brokerage commissions payable under the
Brokerage Agreements with respect to the Leases which are due and payable on or
prior to the Closing Date, have been paid or have been caused to be paid by such
Seller or will be paid or will be caused to be paid by such Seller on or prior
to the Closing Date, and Purchaser shall have no obligations with respect
thereto. Any brokerage commissions which may become due and payable pursuant to
the Brokerage Agreements after the Closing Date by reason of the exercise after
the date hereof of any renewal option, extension option, expansion option, lease
of additional space, right of first offer, right of first refusal or similar
right or option or the lapse or waiver of any right of cancellation, shall be
the obligation of Purchaser to pay as provided in Section 6 hereof and Purchaser
hereby agrees to assume all such obligations; provided that all other
obligations under the Brokerage Agreements, including obligations known as of
the Closing but not payable until after the Closing, shall not be assumed by
Purchaser and shall remain the obligation of such Seller.
(xx) GMAC Look-Back Representation. Such Seller hereby represents and warrants
to Purchaser that Purchaser shall not incur any loss or liability under any
Recourse Liability Provision set forth in any Loan Document on account of any
action taken by any Seller (or any agent duly authorized to act on behalf of any
Seller, including, without limitation, the Existing Manager) to the extent that
any such action was taken prior to the Closing. The term "Recourse Liability
Provision" shall mean Section 15.3 in each of the documents listed on Schedule
4(a)-I hereto. The representation and warranty set forth in this Section
11(a)(xx) shall be deemed the "GMAC Look-back Representation".
(xxi) GMAC Loan. Schedule 4(a) hereto sets forth a true, correct and complete
list of all of the Loan Documents, and the Loan Documents have not been amended,
modified or otherwise supplemented except as set forth on Schedule 4(a) and
contain the entire agreement between such Seller and Lender. Such Seller has
delivered to or made available for inspection by Purchaser a true, correct and
complete copy of the Loan Documents. Based solely on information received from
Lender, the outstanding principal balance of the Existing Financing, and the
balance of all escrows held in connection with the Existing Financing, in each
case as of September 30, 2003, are set forth on Schedule 11(a)(xxi). All
interest and other amounts due and payable under the Loan Documents have been
paid in full, and to such Seller's knowledge, no default exists under the Loan
Documents.
(xxii) Ground Lease. The Ground Lease has not been amended, supplemented or
otherwise modified except as set forth in the definition thereof and contains
the entire agreement between the parties thereto for the leasing of the property
demised thereunder. A true and complete copy of the Ground Lease has been
delivered by Sellers to, or made available for inspection by, Purchaser. All
rents and other amounts due and payable under the Ground Lease have been paid in
full, and neither the ground lessee, nor to such Seller's knowledge the ground
lessor, is in default of any of its material obligations under the Ground Lease.
(xxiii) Personal Property. Schedule 11(a)(xxiii) contains a list of all of the
motor vehicles owned by such Seller. Such Seller owns any personal property
located at its Property free and clear of any lien, pledge, charge, security
interest, encumbrance, adverse claim or restriction and such personal property
is all of the personal property used and required in the operation of the
Property of such Seller in the manner currently operated.
(xxiv) Westbrook II Contract. Seller has delivered to, or made available for
inspection by Purchaser, a true and complete copy of the Purchase and Sale
Agreement, dated as of March 25, 2002, by and between R.R. Westbrook II, LLC, as
seller, and Westbrook Flat Rock LLC, as purchaser, as the same was amended by
letter agreements dated August 15, 2002, August 19, 2002, August 20, 2002,
October 31, 2002, December 9, 2002, February 12, 2003, May 27, 2003 and June 10,
2003 (collectively, the "Westbrook II Contract") and the Westbrook II Contract
has not been further amended, supplemented or otherwise modified. The Westbrook
II Contract is in full force and effect and neither the Seller, nor to such
Seller's knowledge the purchaser thereunder, is in default of any of its
material obligations under the Westbrook II Contract.
(xxv) Trademarks. Schedule 11(a)(xxv) sets forth (A) all of the trademarks,
tradenames, service marks, brand names, corporate names, domain names and logos
owned, held or possessed by Sellers or the Existing Manager and used in
connection with the ownership or operation of the Properties (the "Trademarks")
and (B) all internet domain names (the "Websites") owned, held or possessed by
Sellers or the Existing Manager and used in connection with the ownership or
operation of the Properties. Sellers (or Existing Manager) are the owners of the
Trademarks, and to the best of Sellers' Knowledge, the Trademarks are free and
clear of any claim or conflict with or infringement or violation of the
intellectual property rights of others and all Liens. The Trademarks are duly
registered or filed with the applicable Governmental Authorities.
(xxvi) TIF Agreement. Sellers have delivered to Purchaser a true and complete
copy of that certain Amended and Restated Private Redevelopment Contract
Pursuant to Tuscola, Illinois Redevelopment Project Area Tax Increment Plan,
dated November 22, 1999, and any and all amendments, modifications, supplements
or assignments in connection thereto (as so amended, modified, supplemented or
assigned, the "TIF Agreement"). The TIF Agreement is in full force and effect
and has not been further amended or modified. All amounts due and payable to the
property owner have been paid and neither the applicable Seller, nor to such
Seller's Knowledge the other parties thereto, are in default of any of their
respective obligations under the TIF Agreement. Such Seller has not received any
notices challenging or contesting any payments to the property owner under the
TIF Agreement and to the best of such Seller's knowledge there are no threatened
claims or proceedings contesting the payments under the TIF Agreement. Such
Seller has delivered to Purchaser a true and complete copy of that certain
Purchase and Sale Agreement dated as of June 3, 1993, by and between Tuscola
Mills Development Limited Partnership (together with its successors and assigns,
"Mills") and Rothschild Realty, Inc., as amended by that certain First Amendment
to Purchase Agreement, dated February 9, 1994 (as so amended, the "Mills
Agreement"), and the Mills Agreement has not been further amended, supplemented
or otherwise modified. All payments due and payable to Mills pursuant to the
Mills Agreement as it relates to the TIF Agreement have been paid in full by
such Seller.
(xxvii) ERISA. Either (a) such Seller is not, and is not acting on behalf of, an
employee benefit plan (as defined in Section 3(3) of ERISA) subject to Title I
of ERISA or Section 4975 of the Internal Revenue Code or (b) no non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code will result from the consummation of the transactions
contemplated by this Agreement.
(xxviii) Property. The Property being conveyed by such Seller pursuant to this
Agreement comprises all Property owned by such Seller.
(b) Any and all uses of the phrase, "to the best of Seller's knowledge" or other
references to Seller's knowledge in this Agreement shall be limited to the
actual, present, conscious knowledge of John McGurk, Richard Lewis and Scott
Peters (collectively, the "Seller Knowledge Individuals") as to a fact at the
time given without any investigation or inquiry. Without limiting the foregoing,
Purchaser acknowledges that the Seller Knowledge Individuals have not performed
and are not obligated to perform any investigation or review of any files or
other information in the possession of Sellers, or to make any inquiry of any
persons, or to take any other actions in connection with the representations and
warranties of any Seller set forth in this Agreement. Neither the actual,
present, conscious knowledge of any other individual or entity, nor the
constructive knowledge of the Seller Knowledge Individuals or of any other
individual or entity, shall be imputed to the Seller Knowledge Individuals.
(c) The representations and warranties of each Seller contained in this Section
11 shall survive the Closing for 365 days following the Closing Date (the
"Limitation Period").
(d) The representations and warranties of each Seller set forth in this Section
11 are subject to the following limitations: (i) each Seller does not represent
or warrant that any particular Lease or Contract will be in force or effect as
of the Closing or that the tenants or contractors thereunder, as applicable,
will not be in default thereunder and (ii) except as set forth in this Section
11, Sellers are not representing or warranting as to the status of the Permitted
Encumbrances, it being acknowledged and agreed that any and all obligations that
Sellers may have with respect to Permitted Encumbrances (or the clearance of any
Update Objections) shall be limited solely to the obligations set forth in
Section 5 hereof.
(e) The provisions of Section 10 shall be deemed incorporated by reference and
made a part of all Closing Documents.
(f) Notwithstanding anything to the contrary contained in this Agreement,
Sellers shall have no liability for any Losses due to a breach of any covenant
(including indemnities), representation or warranty of Sellers contained herein
or in any document executed by Sellers pursuant to this Agreement, including any
instruments delivered at Closing (a "Closing Document"), unless and until the
aggregate of all such Losses exceeds Seven Hundred Fifty Thousand Dollars
($750,000) (the "Threshold"); provided, however, that, in no event will Sellers'
aggregate liability for any such Losses exceed Fifteen Million Dollars
($15,000,000) in the aggregate (the "Cap"). Following the Closing, Purchaser's
sole remedy on account of any Losses described above, shall be to make a claim
under Section 13 and Section 38 hereof (a "Claim"), until the amount on deposit
in the Holdback equals Zero Dollars ($0.00).
(g) The Threshold shall not serve as a limitation on the liability of Sellers on
account of Losses incurred due to the breach of any of the obligations of the
Seller under the following:
(i) Section 6. Apportionments;
(ii) Section 14. Risk of Loss;
(iii) Section 15. Brokers and Advisors;
(iv) Section 16. Tax Reduction Proceedings;
(v) Section 17. Transfer Taxes; and
(vi) the GMAC Look-Back Representation.
(h) At the Closing, each Seller shall deliver an instrument (the "Representation
Update") advising Purchaser in what respects such Seller's representations and
warranties in Section 11(a) are inaccurate as of the Closing Date. Nothing in
this Section 11(h) shall limit or negate Purchaser's rights under Section
9(c)(i) with respect to any inaccurate representations or warranties, and the
fact that a Seller has delivered a Representation Update shall not make accurate
a representation or warranty that was inaccurate.
12. REPRESENTATIONS OF PURCHASER.
Purchaser hereby represents and warrants to Sellers as of the
date hereof and as of Closing that:
(a) Organization. Purchaser is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
(b) Authorization and Enforceability. Purchaser has the requisite company power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. All company acts and other proceedings required to be taken
by Purchaser to authorize the execution and delivery of this Agreement, and
performance of the transactions contemplated hereby, by Purchaser have been duly
and properly taken. This Agreement has been duly executed and delivered by
Purchaser and constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws affecting
creditor's rights generally and except for equitable remedies.
(c) No Violations of Laws or Agreements.
(i) The execution, delivery and performance by Purchaser of this Agreement and
the consummation by Purchaser of the transactions contemplated hereby will not
(A) violate in any material respect any provision of law or any rule or
regulation to which Purchaser is subject (it being understood that the necessity
for filings and consents is dealt with separately in the subparagraph (ii)
below), (B) conflict with or violate any order, judgment, injunction, award or
decree binding upon Purchaser, (C) conflict with or violate the Certificate of
Formation, Limited Liability Company Agreement or other similar governing
documents of Purchaser, (D) constitute a default or give rise to a right of
termination, cancellation or acceleration of any right or obligation of
Purchaser under any provision of any agreement, contract or other instrument
binding upon any of Purchaser, or (E) result in the creation or imposition of
any Lien upon any of the assets of Purchaser.
(ii) Except for the consent of Lender to the assignment and assumption of the
Existing Financing, the consent by the Ground Lessor to the assignment and
assumption of the Ground Lease and the waiver by L.L. Bean Inc. of the LL Bean
ROFR with respect to the applicable transactions contemplated hereby, the
execution, delivery and performance by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby do not require any consent
from, or filing with, any governmental or regulatory authority, except for any
action, consent or filing that Sellers or Purchaser (or its affiliates) are
required to obtain or make including any filings required under applicable
securities law.
(d) ERISA. Either Purchaser is not acquiring the Assets with the assets of an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to Title I of
ERISA or Section 4975 of the Internal Revenue Code or, if such plan assets will
be used to acquire the Assets, no non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code would result
from the consummation of the transactions contemplated by this Agreement.
(e) Existing Financing. In connection with the assumption of the Existing
Financing, Purchaser acknowledges and agrees that the Loan Documents prohibit
(i) any secondary financing secured either in whole or in part by any Property
or any interest therein and (ii) any mezzanine financing, collateral or equity
pledge, all as more particularly set forth in the Loan Documents. In connection
with the transactions contemplated hereby, Purchaser shall not incur any
indebtedness for borrowed money (whether secured or unsecured) which shall be in
violation of the prohibitions against same set forth in the Loan Documents.
(f) Survival. The representations and warranties of Purchaser contained in this
Section 12 shall survive the Closing for 365 days.
(g) Notwithstanding anything to the contrary contained in this Agreement (but
subject to Section 21(a) hereof), Purchaser shall have no liability for any
Losses of Sellers due to a breach of any covenant (including indemnities),
representation or warranty of Purchaser contained herein or in any Closing
Document executed by Purchaser, unless and until the aggregate of all such
Losses exceeds the Threshold; provided, however, that, subject to Section 21(a)
hereof, in no event will Purchaser's aggregate liability for any such Losses
exceed the Cap.
13. INDEMNIFICATION, LIMITATIONS AND PROCEDURES.
(a) Indemnification by Seller. Subject to Sections 11(f) hereof, from and after
the Closing, Sellers shall indemnify and defend Purchaser and its affiliates and
their respective officers, partners, members, employees and directors (the
"Purchaser Indemnified Parties") against, and hold them harmless from, any
losses, liabilities, claims, damages, amounts paid in settlement of suits,
actions, claims or proceedings, judgments and expenses (including reasonable
legal fees and expenses, but not consequential damages of any type) ("Losses")
suffered or incurred by any of the Purchaser Indemnified Parties, as a direct
consequence of any breach of any representation or warranty of any Seller made
under Section 11 of this Agreement or any Closing Document or any breach in any
material respect of any covenant of Sellers made under this Agreement or any
Closing Document hereof; provided, however, that, in the case of either
subclause (i) or (ii) above, such breach was not disclosed to, or otherwise
known by, Purchaser prior to or at Closing.
(b) Indemnification by Purchaser. From and after the Closing, Purchaser shall
indemnify and defend Sellers and its affiliates and their respective officers,
partners, members, employees and directors (the "Seller Indemnified Parties")
against, and hold them harmless from, any Losses suffered or incurred by any of
the Seller Indemnified Parties as a direct consequence of any breach of any
representation or warranty of Purchaser made under Section 12 of this Agreement
or any Closing Document hereof and any breach in any material respect of any
covenant of Purchaser made under this Agreement or any Closing Document hereof;
provided, however, that, in the case of either subclause (i) or (ii) above, such
breach was not disclosed to, or otherwise known by, Sellers prior to or at
Closing.
(c) Indemnification Limitations and Treatment of Proceeds.
(i) Purchaser and Sellers each acknowledge and agree that, from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
relating to the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Section 13, which shall be subject,
in all events, to the terms and provisions of Sections 11 and 12.
(ii) Amounts paid in respect of indemnification obligations of the parties
pursuant to this Section 13 shall be treated as an adjustment to Purchase Price;
provided, however, that amounts paid in respect to a matter relating to a
particular Property shall be applied to the portion of the Purchase Price
allocated to such Property and all other amounts shall be applied, pro rata,
among all the Properties.
(d) Procedures Relating to Indemnification.
(i) A party seeking indemnification pursuant to Section 13(a) or 13(b) (an
"Indemnified Party") shall give prompt notice to the party from whom such
indemnification is sought (the "Indemnifying Party") of the assertion of any
claim or assessment, and shall notify the Indemnifying Party of the commencement
of any action, suit, audit or proceeding by a third party in respect of which
indemnity may be sought hereunder (a "Third Party Claim") within 30 days of such
party receiving written notice of such commencement. The Indemnified Party will
give the Indemnifying Party such information with respect thereto as the
Indemnifying Party may reasonably request. Thereafter, the Indemnified Party
shall deliver to the Indemnifying Party, within five business days after the
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the Third
Party Claim. The Indemnifying Party shall have the right, exercisable by written
notice to the Indemnified Party within 15 days following receipt of notice from
the Indemnified Party of the commencement of or assertion of any Third Party
Claim, to assume the defense of such Third Party Claim, using counsel selected
by the Indemnifying Party (and reasonably satisfactory to the Indemnified
Party). Should the Indemnifying Party so elect to assume the defense of a Third
Party Claim, the Indemnifying Party will not be liable to the Indemnified Party
for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof unless the defense of such claim by counsel to the
Indemnifying Party presents such counsel with a conflict of interest (other than
in respect of the indemnity obligation of the Indemnifying Party). Regardless of
whether the Indemnifying Party elects to assume the defense of any such Third
Party Claim, except as set forth in Section 13(d)(iii) below, neither the
Indemnified Party nor the Indemnifying Party shall admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the other party's prior written consent.
(ii) The Indemnifying Party or the Indemnified Party, as the case may be, shall
in any event have the right to participate, at its own expense, in the defense
of any Third Party Claim which the other is defending.
(iii) The Indemnifying Party, if it shall have assumed the defense of any Third
Party Claim, shall have the right to consent to the entry of judgment with
respect to, or otherwise settle such Third Party Claim; provided, however, (i)
there is no finding or admission of any violation of any judgment, ruling,
order, writ, award, decree, statute, law, ordinance, code, rule or regulation or
any court or foreign, federal, state, county or local government or any other
governmental, regulatory or administrative agency or authority, (ii) in the case
of an entry of a judgment, such judgment is concurrently satisfied in full by
the Indemnifying Party and (iii) in the case of a settlement, all obligations
under such settlement agreement are satisfied in full by the Indemnifying Party
and the Indemnified Party receives a full general unconditional release by the
maker of such Third Party Claim. Otherwise, such settlement only may be made
with the written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(iv) Whether or not the Indemnifying Party chooses to defend or prosecute any
Third Party Claim, all the parties hereto shall cooperate in the defense or
prosecution thereof and shall furnish such records, information and testimony,
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested in connection therewith. Such cooperation shall
include access during normal business hours afforded to the Indemnifying Party
to, and reasonable retention by the Indemnified Party of, records and
information which are reasonably relevant to such Third Party Claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith.
(v) The Indemnifying Party shall deliver to the Indemnified Party in cash the
amount of any Loss to which the Indemnified Party may become entitled by reason
of the provisions of this Section 13, such delivery to be made within ten (10)
days after (A) such Losses are finally agreed to by the Indemnified Party and
the Indemnifying Party or (B) such Losses are determined by the final
unappealable judgment of a court of competent jurisdiction.
14. RISK OF LOSS.
(a) Sellers and Purchaser intend that the provisions of this Section 14
supersede any laws applicable to any Property governing the effect of fire, any
other casualty, damage, destruction, eminent domain, takings or condemnation in
contracts of sale for real property (including, without limitation, Section
5-1311 of the General Obligations Law of the State of New York).
(b) In the event that any Property is damaged or destroyed by fire or other
casualty (a "Casualty") after the date hereof, the obligations of the parties
hereunder shall not be affected in any way except as set forth in this Section
14. In such event, Purchaser shall acquire the Property affected by such event,
as provided in this Agreement and without any abatement of or reduction in
Purchase Price, and at the Closing, Sellers shall pay over to Purchaser all the
proceeds of any insurance or other monies actually collected in connection with
such Casualty and Purchaser shall receive a credit from the cash due at Closing
for the amount of the deductible on such casualty insurance policy yet to be
paid by Sellers, less the amount of all reasonable costs incurred by the
applicable Seller in connection with the repair of all damage or destruction
resulting from such Casualty, and
Sellers shall assign (or cause to be assigned) to Purchaser all right, title
and interest in and to any uncollected insurance proceeds and other claims in
respect of such Casualty, in each case with respect to the preceding clauses (i)
and (ii), subject to the terms and conditions set forth in the Loan Documents.
Notwithstanding anything to the contrary contained herein, provided that the
Closing occurs as contemplated hereby, as between Sellers and Purchaser, at
Closing, Purchaser shall have the sole right to the benefit of any and all
insurance proceeds and other claims in respect of any Casualty occurring on any
Property between the date hereof and the Closing, either directly or pursuant to
its acquisition of the Property on which such Casualty occurred.
(c) If, prior to the Closing Date, all or any portion of any Property is taken
by eminent domain or condemnation (or is the subject of a pending taking which
has not been consummated) (a "Condemnation"), Sellers shall notify Purchaser of
such fact promptly after Sellers obtain actual knowledge of such fact, and the
obligations of the parties hereunder shall not be affected in any way except as
set forth in this Section 14. In such event, Purchaser shall acquire the
Property affected by such event, as provided in this Agreement and without any
abatement of or reduction in Purchase Price, and at the Closing, (i) Sellers
shall pay (or cause to be paid) over to Purchaser all awards and other proceeds
for such Condemnation actually collected, less the amount of all costs incurred
by the applicable Seller in connection with any such proceeding, and Sellers
shall assign to Purchaser all right, title and interest in and to any
uncollected awards and other proceeds for such Condemnation, in each case with
respect to the preceding clauses (i) and (ii), subject to the terms and
conditions set forth in the Loan Documents. Notwithstanding anything to the
contrary contained herein, provided that the Closing occurs as contemplated
hereby, at Closing, as between Sellers and Purchaser, Purchaser shall have the
sole right to the benefit of any and all awards and other proceeds in respect of
any such Condemnation occurring on any Property between the date hereof and the
Closing, either directly or pursuant to its acquisition of the Property on which
such Condemnation occurred.
(d) Notwithstanding the provisions of this Section 14 to the contrary, if one or
more Casualties and/or Condemnations occur during the time between the date
hereof and the Closing Date and (i) the cost to repair or restore the Properties
affected by such Casualties or Condemnations or (ii) the decline in the fair
market value of the Properties affected by such Casualties or Condemnations due
to such Casualties or Condemnations is in either case more than $25,000,000,
then such event shall be deemed to be an "Unexpected Loss Event". Upon the
occurrence of an Unexpected Loss Event, Purchaser shall have the option to
terminate this Agreement upon written notice to Sellers and the Escrow Agent
delivered within 20 Business Days after receipt of notice of the Casualty or
Condemnation and, upon receipt of such notice, the Escrow Agent shall return the
Deposit to Purchaser, and thereupon this Agreement shall terminate and be of no
further force or effect and the parties hereto shall be released from further
performance of this Agreement except for the obligations specified to survive
termination.
15. BROKERS AND ADVISORS.
(a) Purchaser represents and warrants to Sellers that it has not dealt or
negotiated with, or engaged on its own behalf or for its benefit, any broker,
finder, consultant, advisor, or professional in the capacity of a broker or
finder (each a "Broker") in connection with this Agreement or the transactions
contemplated hereby other than Deutsche Bank Securities Inc. ("Seller's
Broker"). Purchaser hereby agrees to indemnify, defend and hold Sellers harmless
from and against any and all claims, demands, causes of action, losses, costs
and expenses (including reasonable attorneys' fees, court costs and
disbursements) arising from any claim for commission, fees or other compensation
or reimbursement for expenses made by any Broker (other than Seller's Broker)
engaged by or claiming to have dealt with Purchaser in connection with this
Agreement or the transactions contemplated hereby.
(b) Each Seller represents and warrants to Purchaser that it has not dealt or
negotiated with, or engaged on its own behalf or for its benefit, any Broker in
connection with this Agreement or the transactions contemplated hereby other
than Seller's Broker. Each Seller hereby agrees to indemnify, defend and hold
Purchaser and its direct and indirect shareholders, officers, directors,
partners, principals, members, employees, agents, contractors and any successors
or assigns of the foregoing, harmless from and against any and all claims,
demands, causes of action, losses, costs and expenses (including reasonable
attorneys' fees, court costs and disbursements) arising from any claim for
commission, fees or other compensation or reimbursement for expenses made by any
Broker (including Seller's Broker) engaged by or claiming to have dealt with
such Seller in connection with this Agreement or the transactions contemplated
hereby. Sellers agree to pay Seller's Broker any and all commissions and
compensation payable to Seller's Broker in connection with the transactions
contemplated by this Agreement.
(c) The provisions of this Section 15 shall survive the termination of this
Agreement or the Closing.
16. TAX REDUCTION PROCEEDINGS.
Schedule 16 attached hereto and made a part hereof sets forth
the tax certiorari proceedings or tax protest proceedings (a "Tax Certiorari
Proceeding") currently pending with respect to each Property. Each Seller may
file and/or prosecute an application for the reduction of the assessed valuation
of the Property owned by such Seller, or any portion thereof, for real estate
taxes or a refund of Property Taxes previously paid for the fiscal year in which
the Closing Date occurs (the "Current Tax Year"). Each Seller shall have the
right to withdraw, settle or otherwise compromise Tax Certiorari Proceedings
affecting real estate taxes assessed against any Property (i) for any fiscal
period prior to the Current Tax Year without the prior consent of Purchaser and
(ii) for the Current Tax Year provided Purchaser shall have consented with
respect thereto, which consent shall not be unreasonably withheld, conditioned
or delayed. The amount of any tax refunds (net of attorneys' fees and other
costs of obtaining such tax refunds) with respect to any portion of any Property
for the Current Tax Year shall be apportioned between Sellers and Purchaser as
of the Apportionment Date with an allocation of the portion thereof which must
be returned to tenants pursuant to the terms of the Leases; Sellers hereby
agreeing to be responsible for the return of such refund to such tenants for the
period up to and including the Apportionment Date and Purchaser having such
obligation for the return of such refunds attributable to the period from and
after the Closing Date. If, in lieu of a tax refund, a tax credit is received
with respect to any portion of any Property for the Current Tax Year, then (A)
within thirty (30) days after receipt by Sellers or Purchaser, as the case may
be, of evidence of the actual amount of such tax credit (net of attorneys' fees
and other costs of obtaining such tax credit), the tax credit apportionment
shall be readjusted between Sellers and Purchaser, and (B) upon realization by
Purchaser of a tax savings on account of such credit, Purchaser shall pay to
Sellers an amount equal to the savings realized (as apportioned). All refunds,
credits or other benefits applicable to any fiscal period prior to the Current
Tax Year shall belong solely to Sellers (and Purchaser shall have no interest
therein) and, if the same shall be paid to Purchaser or anyone acting on behalf
of Purchaser, same shall be paid to Sellers within thirty (30) days following
receipt thereof and, if not timely paid, with interest thereon from the 30th day
following such receipt until paid to Sellers at a rate equal to the Default
Rate. All refunds, credits or other benefits applicable to any fiscal period
after the Current Tax Year shall belong solely to Purchaser (and Seller shall
have no interest therein) and, if the same shall be paid to Sellers or anyone
acting on behalf of Sellers, same shall be paid to Purchaser within thirty (30)
days following receipt thereof and, if not timely paid, with interest thereon
from the 30th day following such receipt until paid to Purchaser at a rate equal
to the Default Rate. The provisions of this Section 16 shall survive the
Closing.
17. TRANSFER TAXES; TRANSACTION COSTS.
(a) At the Closing, Sellers and Purchaser shall execute, acknowledge, deliver
and file, all such returns as may be necessary to comply with any applicable
city, county or state conveyance tax laws (collectively, as the same may be
amended from time to time, the "Transfer Tax Laws"). The transfer taxes payable
pursuant to the Transfer Tax Laws shall collectively be referred to as the
"Transfer Taxes". At the Closing, Sellers shall pay the Transfer Taxes payable
under the Transfer Tax Laws, if any, in connection with the consummation of the
transactions contemplated by this Agreement and any and all charges and expenses
on account of such Transfer Taxes shall be allocated to Sellers.
(b) Each Seller shall be responsible for (i) the costs of its legal counsel,
advisors and other professionals employed by it in connection with the sale of
the Properties and the other transactions contemplated hereby, (ii) any
recording fees relating to its obligations to remove Update Objections, (iii)
subject to Section 17(c)(iii), all assumption fees, review fees and other
amounts charged by Lender (including, without limitation, reimbursements for the
fees, costs and expenses of Lender's attorneys and the cost of any rating agency
confirmations) in connection with the transactions contemplated hereby, and (iv)
any recording fees for documentations to be recorded in connection with the
transactions contemplated by this Agreement; provided, however, that Sellers
shall not be obligated to pay Lender any assumption fees in excess of the
assumption fee, if any, expressly set forth in the Loan Documents.
(c) Except as otherwise provided above, Purchaser shall be responsible for (i)
the costs and expenses associated with its due diligence, (ii) the costs and
expenses of its legal counsel, advisors, agents and other professionals employed
or engaged by it in connection with the acquisition of the Properties, the
assumption (or defeasance of) the Existing Financing and the other transactions
contemplated hereby, all premiums and fees for title examination and title
insurance and endorsements obtained and all related charges and survey costs in
connection therewith and all title costs incurred due to or in connection with
requests made by Lender as a condition to its delivery of the Loan Assignment
and Assumption Document, (iv) all costs, fees and expenses incurred in
connection with (A) a Defeasance of the Existing Financing and (B) any new
financing obtained by Purchaser, including without limitation, loan fees,
mortgage recording taxes, financing costs and lender's legal fees, and (v) all
escrow fees.
(d) The provisions of this Section 17 shall survive the Closing.
18. DELIVERIES TO BE MADE ON THE CLOSING DATE.
(a) Seller's Documents and Deliveries. On the Closing Date, each Seller shall
deliver or cause to be delivered to Purchaser the following:
(i) copies of its Certificates of Incorporation or Certification of Formation,
as applicable, including all amendments thereto, certified by the Secretary of
State of its jurisdiction of incorporation or formation;
(ii) certificates from the Secretary of State of its jurisdictions of
incorporation, formation or existence, as applicable, to the effect that it is
in good standing in such jurisdiction and listing all of its charter documents
on file in such state, dated within thirty (30) days prior to the Closing Date
(or such later date as may be reasonably acceptable to Purchaser and the Title
Company if the Closing has been adjourned);
(iii) a certificate from the Secretary of State or other appropriate official in
each state in which such Seller is qualified to do business to the effect that
such Seller is in good standing in such state; in each case, dated within thirty
(30) days prior to the Closing Date (or such later date as may be reasonably
acceptable to Purchaser and the Title Company if the Closing has been
adjourned);
(iv) incumbency certificates with respect to each of the persons signing this
Agreement and any other document or certificate in connection herewith on behalf
of such Seller and evidence reasonably satisfactory to Purchaser of such
Seller's authority to execute and deliver this Agreement and the Closing
Documents;
(v) a duly executed and acknowledged deed (or local equivalent), in the form of
Exhibit 18(a)(v), containing such additional items or modifications as are
required under the laws of the applicable jurisdiction to render such instrument
in form acceptable for recording, effective to convey fee simple interest in the
Property owned by such Seller;
(vi) a duly executed Bill of Sale in the form of Exhibit 18(a)(vi);
(vii) originals of all letters of credit held by each Seller as security under
the Leases, but only to the extent the same have not been applied in accordance
with the Leases or returned to tenants (in each case to the extent permitted
hereunder) and relate to tenants occupying space in such Seller's Property on
the Closing Date pursuant to Leases then in effect (the "Transferred L/C
Security Deposits") and, thereafter, such Seller shall reasonably cooperate with
Purchaser after Closing to obtain the proper assignment of any such letter of
credit following Closing, and at Purchaser's written direction after Closing,
such Seller agrees to draw down on any such letter of credit in accordance with
the provisions of the applicable Lease, provided, however, that Purchaser agrees
to indemnify and save Sellers harmless from and against all claims, demands,
causes of action, losses, costs (including without limitation, court costs and
reasonable attorneys' fees), liabilities and damages with respect to an
unauthorized draw on any such letter of credit;
(viii) a duly executed certification as to such Seller's nonforeign status as
prescribed in Section 22 in the form of Exhibit 22;
(ix) its Representation Update;
(x) keys to its Property;
(xi) Asset-Related Property described in clause (vi) of Section 2(a) hereof;
(xii) original counterparts of all Leases, Contracts (other than the Terminated
Contracts), the Westbrook II Contract, licenses and permits, GMAC Loan
Documents, and the Ground Lease to the extent in such Seller's or the Existing
Manager's actual possession (or can be reasonably obtained by such Seller or the
Existing Manager);
(xiii) a standard seller's affidavit to the Title Company with respect to such
Seller's Property in the form of Exhibit 18(a)(xiii);
(xiv) a determination letter from the Illinois Department of Revenue ("IL
Department") pursuant to Chapter 35, Section 5/902(d) of the Illinois Income Tax
Act, 35 ILCS 5/101 and (the "IL Act"), with respect to each Seller owning any
Property in the State of Illinois to the effect that such Seller has no
assessed, but unpaid, amount of tax, penalties or interest due under the IL Act
("Clearance Letter"), or showing the amount claimed due by the IL Department in
which case Purchaser is authorized to withhold from the Purchase Price the
amount of tax, penalties and interest claimed by the IL Department to be
assessed but unpaid in accordance with the IL Act, which amount shall be
retained in escrow until receipt of a Clearance Letter with respect thereto;
(xv) a Tax Compliance Certificate from the South Carolina Department of Revenue
with respect to each Seller owning any Property in the State of South Carolina;
(xvi) evidence reasonably satisfactory to Purchaser of L.L. Bean's waiver of the
LL Bean ROFR with respect to the applicable transactions contemplated hereby;
(xvii) possession and occupancy of its Property, subject only to the Permitted
Encumbrances; and
(xviii) such additional documents as shall be reasonably required to consummate
the transactions contemplated by this Agreement.
(b) Purchaser's Documents and Deliveries. On the Closing Date, Purchaser shall
deliver or cause to be delivered to Sellers the following:
(i) payment of the balance of the Purchase Price payable at the Closing as
adjusted pursuant to Section 6 hereof, in the manner required under this
Agreement; and
(ii) such additional documents as shall be reasonably required to consummate the
transactions contemplated by this Agreement.
(c) Jointly Executed Documents: Each Seller and Purchaser shall, on the Closing
Date, each execute, acknowledge (as appropriate) and exchange the following
documents:
(i) the returns required under the Transfer Tax Laws, if any, and any other tax
laws applicable to the transactions contemplated herein;
(ii) an Assignment and Assumption of Leases and Contracts in the form of Exhibit
18(c)(ii) hereof;
(iii) a General Assignment and Assumption Agreement in the form of Exhibit
18(c)(iii);
(iv) [INTENTIONALLY DELETED];
(v) the Loan Assignment and Assumption Document, together with any other
documents required by Lender to effectuate the assignment and assumption of the
Existing Financing, including all of Sellers' right, title and interest in any
cash escrows held by Lender under the Loan Documents;
(vi) the Assignment and Assumption of the Ground Lease in the form of Exhibit
18(c)(vi);
(vii) any other affidavit, document or instrument required to be delivered by
Sellers or Purchaser or reasonably requested by the Title Company, pursuant to
the terms of this Agreement or applicable law in order to effectuate the
transfer of beneficial ownership to each of the Property, together with the
legal ownership of each Property;
(viii) letters to all tenants under all of the Leases at such Seller's Property
in the form of Exhibit 18(c)(viii), it being acknowledged and agreed that
Purchaser shall be responsible for delivery of same to tenants;
(ix) an Assignment and Assumption of the TIF Agreement in the form of Exhibit
18(c)(ix);
(x) an Assignment and Assumption of the Westbrook II Contract in the form
of Exhibit 18(c)(x) hereof; and
(xi) a closing statement consistent with the terms of this Agreement.
19. CLOSING DATE.
Subject to the terms and conditions hereof, the closing (the
"Closing") of the purchase and sale of the Assets shall be held at the offices
of Seller's attorneys, Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New
York 10022, at 10:00 a.m. on October 27, 2003; provided, however, that if the
consent of Lender to the assumption by Purchaser of the Existing Financing shall
not have been received by such date, then the Closing shall occur on the date
that is ten (10) Business Days after such consent has been received, subject in
each case to adjournment of the Closing as and when permitted in accordance with
the provisions of this Agreement; provided, however, that in the event the
consent of Lender to the assumption by Purchaser of the Existing Financing shall
not have been received by December 31, 2003, then either Sellers or Purchaser
shall have the right to terminate this Agreement on ten (10) Business Days
written notice to the other; provided, however, that if the consent of Lender to
the assumption by Purchaser of the Existing Financing is received within such
ten-Business Day period or Purchaser elects to pursue a Defeasance pursuant to
Section 4(c), then such written notice of termination shall be automatically
null and void and of no further force and effect. Upon such termination by
either Sellers or Purchaser under this Section 19, this Agreement shall
terminate and neither party hereto shall have any further rights or obligations
hereunder other than those which are expressly provided to survive the
termination and the Deposit shall be delivered to Purchaser. October 27, 2003,
or such later date to which the Closing shall be adjourned pursuant to the terms
of this Section 19 or other express terms of this Agreement is referred to
herein as the "Closing Date". All transactions at the Closing shall be deemed to
take place simultaneously.
20. NOTICES.
All notices, demands, requests or other communications
(collectively, "Notices") required to be given or which may be given hereunder
shall be in writing and shall be sent by (a) certified or registered mail,
return receipt requested, postage prepaid, or (b) national overnight delivery
service, or (c) facsimile transmission (provided that the original shall be
simultaneously delivered by national overnight delivery service or personal
delivery), or (d) personal delivery, addressed as follows:
(i) If to any Seller:
Rothschild Realty Inc.
1251 6th Avenue
51st Floor
New York, New York 10020
Attention: Mr. John D. McGurk
Fax: (212) 403-3520
with a copy to:
Charter Oak Partners
8000 Towers Crescent Drive
Suite 950
Vienna, Virginia 22182
Attention: Scott Peters
Fax: (703) 905-4439
and
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Jeffrey A. Lenobel, Esq.
Fax: (212) 593-5955
(ii) If to Purchaser:
c/o Blackstone Real Estate Acquisitions IV L.L.C.
345 Park Avenue
New York, New York 10154
Attention: Jonathan D. Gray
Fax: (212) 583-5573
with a copy to:
Tanger Properties Limited Partnership
3200 Northline Avenue, Suite 360
Greensboro, North Carolina 27408
Attention: Stanley K. Tanger
Fax: (336) 852-2560
and
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Gregory J. Ressa, Esq.
Fax: (212) 455-2502
and
Vernon, Vernon, Wooten, Brown,
Andrews & Garrett, P.A.
522 Lexington Avenue
Burlington, North Carolina 27216
Attention: John H. Vernon, III, Esq.
Fax: (336) 226-3866
Any Notice so sent by certified or registered mail, national overnight delivery
service or personal delivery shall be deemed given on the date of receipt or
refusal as indicated on the return receipt, or the receipt of the national
overnight delivery service or personal delivery service. Any Notice sent by
facsimile transmission shall be deemed given when received as confirmed by the
telecopier electronic confirmation receipt. A Notice may be given either by a
party or by such party's attorney. Sellers or Purchaser may designate, by not
less than five (5) Business Days' notice given to the others in accordance with
the terms of this Section 20, additional or substituted parties to whom Notices
should be sent hereunder.
21. DEFAULT BY PURCHASER OR SELLERS.
(a) If (i) Purchaser shall default in the payment of the Purchase Price or if
Purchaser shall default in the performance of any of its other material
obligations to be performed on the Closing Date, or Purchaser shall default in
the performance of any of its material obligations to be performed prior to the
Closing Date and, with respect to any default under this clause (ii) only, such
default shall continue for five (5) Business Days after notice to Purchaser,
Sellers' sole remedy by reason thereof shall be to terminate this Agreement
and, upon such termination, Seller shall be entitled to retain the Deposit as
sole and liquidated damages for Purchaser's default hereunder, it being agreed
that the damages by reason of Purchaser's default are difficult, if not
impossible, to ascertain, and thereafter Purchaser and Sellers shall have no
further rights or obligations under this Agreement, except for those that are
expressly provided in this Agreement to survive the termination hereof.
(b) If (i) Sellers shall default in any of their material obligations to be
performed on the Closing Date or Sellers shall default in the performance of
any of their material obligations to be performed prior to the
Closing Date and, with respect to any default under this clause (ii) only, such
default shall continue for five (5) Business Days after notice to Sellers,
Purchaser as its sole remedy by reason thereof (in lieu of prosecuting an action
for damages or proceeding with any other legal or equitable course of conduct,
the right to bring such actions or proceedings being expressly and voluntarily
waived by Purchaser, to the extent legally permissible, following and upon
advice of its counsel) shall have the right, subject to the other provisions of
this Section 21(b), (A) to seek to obtain specific performance of Sellers'
obligations hereunder, provided that any such action to obtain specific
performance shall be commenced within 60 days after such default and, if
Purchaser prevails thereunder, Sellers shall reimburse Purchaser for all
reasonable legal fees, court costs and all other reasonable costs of such
action, or (B) to receive a return of the Deposit, it being understood that if
Purchaser fails to commence an action to obtain specific performance within 60
days after such default, Purchaser's sole remedy shall be to receive a return of
the Deposit. If Purchaser elects to commence an action to obtain specific
performance of this Agreement then, as a condition precedent to any suit for
such specific performance, Purchaser shall, on or before the Closing Date, time
being of the essence, have fully performed all of its material obligations
hereunder which are capable of being performed (other than the payment of the
Purchase Price, which shall be paid as and when required by the court in the
suit for specific performance). Upon such return and delivery, this Agreement
shall terminate and neither party hereto shall have any further obligations
hereunder except for those that are expressly provided in this Agreement to
survive the termination hereof. Notwithstanding the foregoing, if, solely as the
result of any willful and intentional act, or willful and intentional failure to
act, by Seller, Purchaser may, within 60 days after such default, so long as
Purchaser shall agree in writing to release Sellers from any liability under
this Agreement and waive any rights Purchaser may have under this Agreement, at
law or in equity to commence an action for specific performance, then, in
addition to Purchaser's receiving a refund of the Deposit, Sellers shall
reimburse Purchaser for all of Purchaser's actual out-of-pocket costs and
expenses incurred solely in connection with the transactions contemplated by
this Agreement not in excess of $2,000,000 (the "Expense Reimbursement Amount");
provided, however, that (1) Sellers' obligation to pay the Expense Reimbursement
Amount (or any portion thereof) shall be conditioned on the absence of any
material default hereunder by Purchaser, and (2) Purchaser provides to Sellers
reasonable written documentation of its expenses and reimbursables requested
under this Section 21(b). Notwithstanding the foregoing, Purchaser shall have no
right to seek specific performance if Sellers shall be prohibited from
performing its obligations hereunder by reason of any law, regulation or other
legal requirement applicable to Sellers (or any of them) or if Purchaser has
elected to terminate this Agreement and obtain the Expense Reimbursement Amount
under this Section 21(b).
(c) The provisions of this Section 21 shall survive the termination hereof.
22. FIRPTA COMPLIANCE.
Sellers shall comply with the provisions of the Foreign
Investment in Real Property Tax Act, Section 1445 of the Internal Revenue Code
of 1986 (as amended, "FIRPTA"). Sellers acknowledge that Section 1445 of the
Internal Revenue Code provides that a transferee of a United States real
property interest must withhold tax if the transferor is a foreign person. To
inform Purchaser that withholding of tax is not required upon the disposition of
a United States real property interest by it, each Seller hereby represents and
warrants that it is not a foreign person as that term is defined in the Internal
Revenue Code and Income Tax Regulations. On the Closing Date, each Seller shall
deliver to Purchaser a certification as to its non-foreign status in the form of
Exhibit 22, and shall comply with any temporary or final regulations promulgated
with respect thereto and any relevant revenue procedures or other officially
published announcements of the Internal Revenue Service of the U.S. Department
of the Treasury (the "IRS") in connection therewith.
23. ACCESS TO THE PROPERTY.
(a) Subject to the provisions of Section 23(c) hereof, Purchaser and its agents,
employees, consultants, inspectors, appraisers, engineers and contractors
(collectively "Purchaser's Representatives") shall have the right, through the
Closing Date, from time to time, upon the advance notice required pursuant to
Section 23(c), to enter upon and pass through the Properties during normal
business hours to examine and inspect the same.
(b) Each Seller shall make available to Purchaser, at the management office at
each Property or at the offices of Charter Oak Group, Ltd. ("Existing Manager"),
to the extent in any Seller's (or Existing Manager's) possession: plans and
specifications; environmental and engineering reports relating to each Property;
copies of all Leases and Contracts; and the books and records relating to the
applicable Seller and operation of such Property (but excluding any books and
records of such Seller such as, without limitation, any records relating to such
Seller's selling or financing negotiations or third-party appraisals or any
internal documents relating to the value of such Property).
(c) In conducting the inspection of the Properties and its due diligence review,
Purchaser shall at all times comply with all laws and regulations of all
applicable governmental authorities, and neither Purchaser nor any of
Purchaser's Representatives shall (i) contact or have any discussions with any
of Sellers' agents, representatives (except for John McGurk, Scott Peters and
James Quigley) or employees (whether at a Property or at the offices of Existing
Manager) or contractors providing services to any Property, unless, in each
case, Purchaser obtains the prior written consent of Sellers, which shall not be
unreasonably withheld or delayed, it being agreed that all such contacts or
discussions shall, pending any such approval, be directed to Scott Peters ((703)
905-4411) or John McGurk ((212) 403-3510), (ii) interfere with the business of
any Seller (or any of its tenants) conducted at the Property or disturb the use
or occupancy of any occupant of any Property or (iii) damage any Property (or
any portion thereof). In conducting the foregoing inspection, Purchaser and
Purchaser's Representatives shall at all times comply with, and shall be subject
to, the rights of the tenants under the Leases (and any persons claiming under
or through such tenants). Seller may from time to time establish reasonable
rules of conduct for Purchaser and Purchaser's Representatives in furtherance of
the foregoing. Purchaser shall schedule and coordinate all inspections,
including, without limitation, any environmental tests and tenant interviews,
with Sellers and shall give Sellers at least two (2) Business Days' prior notice
thereof. Sellers shall be entitled to have a representative present at all times
during each such inspection and each interview of any tenant. Purchaser agrees
to pay to Sellers on demand the cost of repairing and restoring any damage or
disturbance which Purchaser or Purchaser's Representatives shall cause to the
Property. All inspection fees, appraisal fees, engineering fees and other costs
and expenses of any kind incurred by Purchaser or Purchaser's Representatives
relating to such inspection and its other due diligence shall be at the sole
expense of Purchaser. In the event that the Closing hereunder shall not occur
for any reason whatsoever (other than Sellers' default), Purchaser shall
promptly return to Sellers or destroy all copies of all due diligence materials
delivered by or on behalf of Sellers to Purchaser. Purchaser and Purchaser's
Representatives shall not be permitted to conduct borings of any Property or
drilling in or on any Property in connection with the preparation of an
environmental audit or in connection with any other inspection of any Property
without the prior written consent of Sellers which shall not be unreasonably
withheld or delayed (and, if such consent is given, Purchaser shall be obligated
to pay to Sellers on demand the cost of repairing and restoring any damage as
aforesaid, and, if requested by Sellers, all such reasonably estimated costs in
advance). The provisions of Section 23(c) shall survive the Closing or any
termination of this Agreement.
(d) Prior to conducting any physical inspection or testing at any Property,
other than mere visual examination, including without limitation, boring,
drilling and sampling of soil, Purchaser shall obtain, and during the period of
such inspection or testing shall maintain, at its expense, comprehensive general
liability insurance, including a contractual liability endorsement, and personal
injury liability coverage, with Sellers, the Existing Manager, if any, as
additional insureds, from an insurer reasonably acceptable to Sellers, which
insurance policies must have limits for bodily injury and death of not less than
Three Million Dollars ($3,000,000) for any one occurrence and not less than
Three Million Dollars ($3,000,000) for property damage liability for any one
occurrence. Prior to making any entry upon any Property, Purchaser shall furnish
to Sellers a certificate of insurance evidencing the foregoing coverages.
(e) Purchaser agrees to indemnify and hold Sellers and Existing Manager and
their respective direct and indirect shareholders, officers, directors,
partners, principals, members, employees, agents and contractors, and any
successors or assigns of the foregoing (collectively with Seller, "Seller
Related Parties") harmless from and against any and all losses, costs, damages,
liens, claims, liabilities or expenses (including, but not limited to,
reasonable attorneys' fees, court costs and disbursements) incurred by any of
Seller's Related Parties arising from or by reason of Purchaser's and/or
Purchaser's Representatives' access to, or inspection of, any Property, or any
tests, inspections or other due diligence conducted by or on behalf of Purchaser
(but not for Losses caused by previously undisclosed conditions). The provisions
of Section 23(e) shall survive the Closing or any termination of this Agreement.
24. ENTIRE AGREEMENT; AMENDMENTS.
(a) This Agreement contains all of the terms agreed upon between Sellers and
Purchaser with respect to the subject matter hereof, and all prior agreements,
understandings, representations and statements, oral or written, between Sellers
and Purchaser are merged into this Agreement.
(b) This Agreement may not be changed, modified or terminated, except by an
instrument executed by each Seller and Purchaser.
(c) The provisions of this Section 24 shall survive the Closing or the
termination hereof.
25. WAIVER.
No waiver by either party of any failure or refusal by the
other party to comply with its obligations shall be deemed a waiver of any other
or subsequent failure or refusal to so comply. The provisions of this Section 25
shall survive the Closing or the termination hereof.
26. PARTIAL INVALIDITY.
If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, subject to Section 3(f) hereof, the remainder of this Agreement,
or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and shall be enforced to the fullest extent permitted by law. The provisions of
this Section 26 shall survive the Closing or the termination hereof.
27. SECTION HEADINGS.
The headings of the various sections of this Agreement have
been inserted only for the purposes of convenience, and are not part of this
Agreement and shall not be deemed in any manner to modify, explain, expand or
restrict any of the provisions of this Agreement. The provisions of this Section
27 shall survive the Closing or the termination hereof.
28. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
New York, without giving effect to conflict of laws principles thereof. The
provisions of this Section 28 shall survive the Closing or the termination
hereof.
29. ASSIGNMENT; NO RECORDING OF CONTRACT.
(a) This Agreement and the various rights and obligations arising hereunder
shall inure to the benefit of and be binding upon Sellers and Purchaser and
their respective successors and permitted assigns; provided, however, that none
of the representations or warranties made by Sellers (or any of them) hereunder
shall inure to the benefit of any person or entity that may, after the Closing
Date, succeed to Purchaser's interest in Property.
(b) Neither this Agreement nor any of the rights of Purchaser hereunder may be
assigned by Purchaser without the prior written consent of Sellers, which
consent may be denied for any reason whatsoever or for no reason.
Notwithstanding the foregoing, Purchaser may (i) assign this Agreement to one or
more wholly-owned and wholly-controlled, single purpose entities created or
formed to own and control one or more of the Properties, so long as (A)
Purchaser certifies to Sellers that Purchaser will not receive any profit in
connection with such assignment, (B) Purchaser provides evidence and a
certification confirming the ownership and control of such assignee and (C) at
least ten (10) Business Days prior to the Closing Date, Purchaser delivers
written notice of such intended assignment, but such assignment shall not be
effective unless and until the Closing Date and, at Closing, Purchaser delivers
to Sellers an original counterpart of an assignment and an assumption of
Purchaser's obligations hereunder executed by Purchaser and such assignee,
together with the certifications required above, executed by Purchaser and such
assignee or (ii) upon notice to Sellers, designate one or more affiliates of
Purchaser to take title to each Property.
(c) Neither this Agreement nor any memorandum hereof may be filed or recorded in
any public (or other) official records, including, without limitation, the real
estate (or other) records of any jurisdiction in which any Property is located,
without first obtaining each Seller's consent thereto; provided, however, that
Tanger Factory Outlet Centers, Inc., a North Carolina corporation, and Tanger
Properties Limited Partnership, a North Carolina limited partnership, shall have
the right to attach this Agreement (or a memorandum hereof) as an exhibit to its
Form 10-K filing to the extent such attachment is reasonably deemed to be
legally required.
(d) The provisions of Section 29(a) and 29(c) shall survive the Closing or the
termination hereof. The provisions of Section 29(b) shall survive the
termination hereof.
30. CONFIDENTIALITY AND PRESS RELEASES.
(a) Purchaser agrees that the Confidentiality Agreement, dated as of May 11,
2003, by and between RFR Holding LLC and Rothschild Realty, Inc., as
supplemented and amended by that certain agreement, dated as of September 11,
2003, and executed by Blackstone Real Estate Acquisitions IV L.L.C. and
acknowledged by Rothschild Realty, Inc. (as supplemented and amended, the
"Confidentiality Agreement"), as the same have extended prior to the date
hereof, remains in full and effect in accordance with its terms, provided, the
terms of such Confidentiality Agreement shall not survive the Closing.
(b) Upon the full execution of this Agreement by the parties hereto, Purchaser
and Sellers shall issue a press release jointly prepared, agreed to and approved
by Purchaser and Sellers disclosing the purchase and sale of Properties
contemplated under this Agreement. Except as provided in this Section 30(b),
prior to the Closing, neither Purchaser nor any Seller shall issue any press
releases (or other public statements) with respect to the transaction
contemplated in this Agreement without approval of the other parties hereto,
which approval may be withheld in such parties sole and absolute discretion.
Notwithstanding anything to the contrary contained herein or in the
Confidentiality Agreement, Sellers, Purchaser and their respective affiliates
shall not be prohibited from holding an investor conference in connection with
the transactions contemplated by this Agreement or disclosing to any person or
any entity any information to the extent necessary to comply with applicable
federal or state securities laws or any required filings with any federal or
state governmental or regulatory agency or with any national securities
exchange.
(c) The provisions of Section 30(a) shall survive the termination of this
Agreement and the provisions of Section 30(b) shall survive the termination
hereof or the Closing.
31. FURTHER ASSURANCES.
(a) Sellers and Purchaser will do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, assignments, notices, transfers and
assurances as may be reasonably required by the other party, for the better
assuring, conveying, assigning, transferring and confirming unto Purchaser the
Property and for carrying out the intentions or facilitating the consummation of
this Agreement. Purchaser and Sellers shall reasonably cooperate with the Title
Company in connection with obtaining title insurance insuring title to each
Property subject only to the relevant Permitted Encumbrances. The provisions of
this Section 31 shall survive the Closing.
(b) Sellers shall cooperate (at no cost to Sellers and at Purchaser's sole cost
and expense) with Purchaser to provide Purchaser access to such factual
information concerning the operation of the Properties as may be reasonably
requested by Purchasers, and in the possession or control of Sellers, or its
property manager or accountants, to enable Tanger Factory Outlet Centers, Inc.,
a North Carolina corporation, to file its Form 8-K, if, as and when such filing
may be required by the Securities and Exchange Commission as a result of the
transactions contemplated by this Agreement. At no cost to Sellers and at
Purchaser's sole cost and expense, Sellers shall allow Purchaser's auditor to
conduct an audit of the income statements of the Properties for the year of
Closing (to the date of Closing) and the two (2) prior years, and shall
cooperate (at no cost to Seller and at Purchaser's sole cost and expense) with
Purchaser's auditor in the conduct of such audit and in connection with such
audit deliver to Buyer's auditor a customary representation letter in a form
acceptable to Sellers and such auditor. Such auditor's letter shall in no way be
deemed an expansion of any rights of Purchaser or obligations of any Seller
under this Agreement, and such auditor's letter shall confer no third-party
beneficiary rights to any party. The obligations of Sellers under this
subsection shall survive the Closing.
32. NO THIRD PARTY BENEFICIARIES.
This Agreement is an agreement solely for the benefit of
Sellers and Purchaser (and their permitted successors and/or assigns). No other
person, party or entity shall have any rights hereunder nor shall any other
person, party or entity be entitled to rely upon the terms, covenants and
provisions contained herein. The provisions of this Section 32 shall survive the
Closing or the termination hereof.
33. JURISDICTION AND SERVICE OF PROCESS.
The parties hereto agree to submit to personal jurisdiction in
the State of New York in any action or proceeding arising out of this Agreement
and, in furtherance of such agreement, the parties hereby agree and consent that
without limiting other methods of obtaining jurisdiction, personal jurisdiction
over the parties in any such action or proceeding may be obtained within or
without the jurisdiction of any court located in New York and that any process
or notice of motion or other application to any such court in connection with
any such action or proceeding may be served upon the parties by registered or
certified mail to or by personal service at the last known address of the
parties, whether such address be within or without the jurisdiction of any such
court. The provisions of this Section 33 shall survive the Closing or the
termination hereof.
34. WAIVER OF TRIAL BY JURY.
Sellers and Purchaser hereby irrevocably and unconditionally
waive any and all right to trial by jury in any action, suit or counterclaim
arising in connection with, out of or otherwise relating to this agreement. The
provisions of this Section 34 shall survive the closing or the termination
hereof.
35. MISCELLANEOUS.
(a) This Agreement may be executed in multiple counterparts and by facsimile,
each of which shall be deemed an original and together constitute one and the
same instrument.
(b) Any consent or approval to be given hereunder (whether by Sellers or
Purchaser) shall not be effective unless the same shall be given in advance of
the taking of the action for which consent or approval is requested and shall be
in writing. Except as otherwise expressly provided herein, any consent or
approval requested of Sellers or Purchaser may be withheld by Sellers or
Purchaser in its sole and absolute discretion.
(c) Purchaser and Sellers hereby acknowledge that (i) Purchaser and Sellers
jointly and equally participated in the drafting of this Agreement and all other
agreements contemplated hereby, (ii) both Purchaser and Sellers have been
adequately represented and advised by legal counsel with respect to this
Agreement and the transactions contemplated hereby, and (iii) no presumption
shall be made that any provision of this Agreement shall be construed against
either party by reason of such role in the drafting of this Agreement and any
other agreement contemplated hereby.
(d) Unless otherwise expressly provided herein, any and all payments required to
be made under this Agreement shall be made by wire transfer of immediately
available federal funds for the credit of the party to whom such payment is
required to be made, which wire transfer shall be made in accordance with
instructions to be provided by party to whom such payment is required to be
made. If wire instructions have not been provided to the party obligated to make
such payment, such party shall request such wire instructions by providing
notice to the party entitled to receive such funds.
(e) Notwithstanding anything to the contrary contained in this Agreement, the
liability and obligations of Sellers shall be joint and several in all respects.
(f) During the term of this Agreement, neither Sellers nor their affiliates
shall solicit, authorize the solicitation of, or enter into any agreement or
discussions with any third party concerning any offer or possible offer for a
third party to acquire, finance, refinance the Assets or any interest therein
(whether debt or equity, directly or indirectly) or with respect to any similar
transaction.
(g) The provisions of this Section 35 shall survive the Closing or the
termination hereof.
36. ATTORNEYS' FEES.
In the event of any litigation between the parties hereto to
enforce any of the provisions of this Agreement or any right of either party
hereto, the unsuccessful party to such litigation agrees to pay to the
successful party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred herein by the successful party in and as part of the
judgment rendered in such litigation, whether at trial, on appeal and any
petition for review, in addition to all other sums provided by applicable law.
37. ESCROW PROVISIONS.
(a) Upon receipt by Escrow Agent of the Deposit, Escrow Agent shall cause the
same to be deposited into an interest bearing account selected by Escrow Agent,
it being agreed that Escrow Agent shall not be liable for any loss of such
investment (unless due to Escrow Agent's gross negligence or willful misconduct)
or any failure to attain a favorable rate of return on such investment. Escrow
Agent shall deliver the Deposit to Seller or to Purchaser, as the case may be,
under the following conditions:
(i) The Deposit shall be delivered to Sellers at the Closing upon receipt by
Escrow Agent of a statement executed by Sellers and Purchaser that the Deposit
may be released; or
(ii) The Deposit shall be delivered to Sellers following receipt by Escrow Agent
of written demand therefor from Sellers stating that Purchaser has defaulted in
the performance of its obligations under this Agreement, if Purchaser shall not
have given written notice of objection in accordance with the provisions set
forth below; or
(iii) The Deposit shall be delivered to Purchaser following receipt by Escrow
Agent of written demand therefor from Purchaser stating that Sellers have
defaulted in the performance of their obligations under this Agreement or that
this Agreement was terminated under circumstances entitling Purchaser to the
return of the Deposit, and specifying the Section of this Agreement which
entitles Purchaser to the return of the Deposit or if Sellers shall not have
given written notice of objection in accordance with the provisions set forth
below; or
(iv) The Deposit shall be delivered to Purchaser or Sellers as directed by joint
written instructions of each Seller and Purchaser; or
(v) The Deposit shall be delivered to Purchaser upon a termination of this
Agreement by either Purchaser or Seller pursuant to the terms of Section 19; or
(vi) The Deposit shall be delivered to Purchaser following receipt by Escrow
Agent of a Title Default Termination Notice; or (vii) The Deposit shall be
delivered to Purchaser upon a termination of this Agreement by Purchaser
pursuant to Section 14(d).
(b) Upon the filing of a written demand for the Deposit by Sellers or Purchaser,
pursuant to Section 37(a)(ii), Section 37(a)(iii) or Section 37(a)(vi), Escrow
Agent shall promptly give notice thereof (including a copy of such demand) to
the other party. The other party shall have the right to object to the delivery
of the Deposit, by giving written notice of such objection to Escrow Agent at
any time within ten (10) days after such party's receipt of notice from Escrow
Agent, but not thereafter. Such notice shall set forth the basis for objecting
to the delivery of the Deposit. Upon receipt of such notice of objection, Escrow
Agent shall promptly give a copy of such notice to the party who filed the
written demand. If Escrow Agent shall have timely received such notice of
objection, Escrow Agent shall continue to hold the Deposit until (i) Escrow
Agent receives written notice from Sellers and Purchaser directing the
disbursement of the Deposit, in which case Escrow Agent shall then disburse the
Deposit in accordance with said direction, or (ii) litigation is commenced
between Sellers and Purchaser, in which case Escrow Agent shall deposit the
Deposit with the clerk of the court in which said litigation is pending, or
(iii) Escrow Agent takes such affirmative steps as Escrow Agent may elect, at
Escrow Agent's option, in order to terminate Escrow Agent's duties hereunder,
including but not limited to depositing the Deposit in court and commencing an
action for interpleader, the costs thereof to be borne by whichever of Sellers
or Purchaser is the losing party.
(c) Escrow Agent may rely and act upon any instrument or other writing
reasonably believed by Escrow Agent to be genuine and purporting to be signed
and presented by any person or persons purporting to have authority to act on
behalf of Sellers or Purchaser, as the case may be, and shall not be liable in
connection with the performance of any duties imposed upon Escrow Agent by the
provisions of this Agreement, except for Escrow Agent's own gross negligence,
willful misconduct or default. Escrow Agent shall have no duties or
responsibilities except those set forth herein. Escrow Agent shall not be bound
by any modification, cancellation or rescission of this Agreement unless the
same is in writing and signed by Purchaser and each Seller, and, if Escrow
Agent's duties hereunder are affected, unless Escrow Agent shall have given
prior written consent thereto. Escrow Agent shall be reimbursed by Sellers and
Purchaser for any expenses (including reasonable legal fees and disbursements of
outside counsel), including all of Escrow Agent's fees and expenses with respect
to any interpleader action incurred in connection with this Agreement, and such
liability shall be joint and several; provided that, as between Purchaser and
Sellers, the prevailing party in any dispute over the Deposit shall be entitled
to reimbursement of any such expenses paid to Escrow Agent. In the event that
Escrow Agent shall be uncertain as to Escrow Agent's duties or rights hereunder,
or shall receive instructions from Purchaser or Seller that, in Escrow Agent's
opinion, are in conflict with any of the provisions hereof, Escrow Agent shall
be entitled to hold and apply the Deposit and may decline to take any other
action. After delivery of the Deposit in accordance herewith, Escrow Agent shall
have no further liability or obligation of any kind whatsoever.
(d) Escrow Agent shall have the right at any time to resign upon ten (10)
Business Days prior notice to Sellers and Purchaser. Sellers and Purchaser shall
jointly select a successor Escrow Agent and shall notify Escrow Agent of the
name and address of such successor Escrow Agent within ten (10) Business Days
after receipt of notice of Escrow Agent of its intent to resign. If Escrow Agent
has not received notice of the name and address of such successor Escrow Agent
within such period, Escrow Agent shall have the right to select on behalf of
Sellers and Purchaser a bank or trust company to act as successor Escrow Agent
hereunder. At any time after the ten (10) Business Day period, Escrow Agent
shall have the right to deliver the Deposit to any successor Escrow Agent
selected hereunder, provided such successor Escrow Agent shall execute and
deliver to Sellers and Purchaser an assumption agreement whereby it assumes all
of Escrow Agent's obligations hereunder. Upon the delivery of all such amounts
and such assumption agreement, the successor Escrow Agent shall become the
Escrow Agent for all purposes hereunder and shall have all of the rights and
obligations of the Escrow Agent hereunder, and the resigning Escrow Agent shall
have no further responsibilities or obligations hereunder.
(e) The party receiving such interest shall pay any income taxes thereon;
provided, however, that, if Sellers receives the interest on the Deposit as a
credit against the Purchase Price to Purchaser, then Purchaser shall pay any
income taxes on such interest received by Sellers. The taxpayer identification
numbers of each Seller is set forth on Exhibit 37(e) hereto, and Purchaser's
taxpayer identification number is 20-0273336.
(f) The provisions of this Section 37 shall survive the Closing or termination
of this Agreement.
38. HOLDBACK. Sellers shall deliver to the Title Company (in such capacity, the
"Holdback Escrow Agent") at Closing, out of the Purchase Price, an amount equal
to $15,000,000 ( as the same may be reduced in accordance with Section 38(b)(i)
below, the "Holdback"), which shall be held in escrow by the Holdback Escrow
Agent in accordance with the terms and conditions set forth below.
(a) The Holdback Escrow Agent shall invest the Holdback in an account with a
federally insured financial institution at the direction of Sellers (the
"Holdback Account"). The Holdback Account shall be maintained for the period
commencing on the Closing Date and expiring on the date which is the first
anniversary of the Closing (the "Holdback Return Date"). All interest and other
income earned on the Holdback Account shall be paid to Sellers by the Holdback
Escrow Agent on the first day of each calendar month without any direction or
authorization of any party. In no event shall any such interest or income be
included as part of the Holdback.
(b) The Holdback, or a portion thereof, as applicable, shall be the property of
Sellers and shall be paid over to either Purchaser or Sellers, as applicable, in
accordance with the following provisions:
(i) On the date that is one hundred eighty (180) days after the Closing Date
(the "Burn-off Date"), the amount of the Holdback shall be reduced to Seven
Million Five Hundred Thousand Dollars ($7,500,000.00), so long as Purchaser has
not provided the Sellers and the Holdback Escrow Agent with notice of a Claim
prior to the Burn-off Date. If Purchaser has provided Sellers and the Holdback
Escrow Agent with notice of a Claim prior to the Burn-off Date, then Holdback
Escrow Agent shall pay to Sellers on the Burn-off Date from the Holdback Account
the amount, if any, by which the amount on deposit in the Holdback Account
exceeds the sum of (A) the aggregate amount of all such Claims made by Purchaser
prior to the Burn-off Date which has not been resolved and (B) Seven Million
Five Hundred Thousand Dollars ($7,500,000.00);
(ii) On the date that is the first anniversary of the Closing Date, the entire
amount then on deposit in the Holdback Account shall be paid to Sellers so long
as Purchaser has not provided the Holdback Escrow Agent with notice of a Claim
prior to the Holdback Return Date. If Purchaser has provided Sellers and the
Holdback Escrow Agent with notice of a Claim prior to the Holdback Return Date,
then Holdback Escrow Agent shall pay to Sellers on the Holdback Return Date from
the Holdback Account the amount, if any, by which the amount on deposit in the
Holdback Account exceeds the aggregate amount of all such Claims made by
Purchaser prior to the Holdback Return Date;
(iii) After all Claims made by Purchaser prior to the Holdback Return Date have
been fully resolved (either by final, nonappealable court order or by written
agreement of Sellers and Purchaser), the balance of the Holdback (after payment
of amounts due under subclause (ii) above), shall be paid to Sellers; and
(iv) To Sellers and/or Purchaser, as directed by a written instrument executed
by each Seller and Purchaser.
(c) Purchaser shall notify Sellers and the Holdback Escrow Agent at such time
that Purchaser is making a Claim. Such notice shall be sent simultaneously to
said parties and must include specific details concerning the Claim, including
the basis for and amount of such Claim.
(d) Except with respect to the payment of interest on the Holdback to Sellers
pursuant to Section 38(a) hereof, prior to paying all or any portion of the
Holdback to any party (the "Holdback Claiming Party") pursuant to the provisions
of this Section 38, the Holdback Escrow Agent shall deliver written notice to
the other party (the "Holdback Non-Claiming Party") stating its intention to pay
all or any portion of the Holdback to the Holdback Claiming Party. The Holdback
Non-Claiming Party shall have a period of ten (10) days in which to deliver
notice to Holdback Escrow Agent agreeing to payment from the Holdback Account to
the Holdback Claiming Party or disagreeing with such payment. If the Holdback
Non-Claiming Party agrees that the Holdback (or a portion) shall be paid to the
Holdback Claiming Party, then the Holdback Escrow Agent shall so pay the
Holdback to the Holdback Claiming Party. If the Holdback Non-Claiming Party
disagrees with such payment, then the Holdback Escrow Agent shall not make such
payment and shall continue to hold the Holdback and shall not make any
disposition of the Holdback except as provided in Section 38(f) hereof. The
failure of the Holdback Non-Claiming Party to deliver a notice within the ten
(10) day period shall be deemed delivery of a notice on the last day of such ten
(10) day period agreeing to payment of the Holdback to the Holdback Claiming
Party.
(e) It is agreed that the duties of the Holdback Escrow Agent are only as herein
specifically provided, and are purely ministerial in nature, and that the
Holdback Escrow Agent shall incur no liability whatever except for willful
misconduct or gross negligence, as long as the Holdback Escrow Agent has acted
in good faith. Each Seller and Purchaser release the Holdback Escrow Agent from
any act done or omitted to be done by the Holdback Escrow Agent in good faith in
the performance of its duties hereunder.
(f) The Holdback Escrow Agent is acting as a stakeholder only with respect to
the Holdback. If there is any dispute as to whether the Holdback Escrow Agent is
obligated to deliver the Holdback or to whom said Holdback is to be delivered,
the Holdback Escrow Agent shall not make any delivery, but in such event the
Holdback Escrow Agent shall hold same until receipt by the Holdback Escrow Agent
of an authorization in writing, signed by all the parties having interest in
such dispute, directing the disposition of same, or in the absence of such
authorization the Holdback Escrow Agent shall hold the Holdback until the final
determination of the rights of the parties in an appropriate proceeding by
final, nonappealable court order. If such written authorization is not given,
the Holdback Escrow Agent may bring an appropriate action or proceeding for
leave to deposit the Holdback in a court having jurisdiction over this matter
pending such determination. The Holdback Escrow Agent shall be reimbursed for
all costs and expenses of such action or proceeding including, without
limitation, reasonable attorneys' fees and disbursements, by the party hereto
determined not to be entitled to the Holdback. Upon making delivery of the
Holdback in the manner herein provided, the Holdback Escrow Agent shall have no
further liability hereunder.
(g) The Holdback Escrow Agent has executed this Agreement in order to confirm
that upon delivery of the Holdback to the Holdback Escrow Agent, the Holdback
Escrow Agent will hold the Holdback in escrow, pursuant to the provisions
hereof.
(h) Except as provided in Section 38(f) above, Sellers and Purchaser shall each
pay one-half (1/2) of any and all costs and expenses incurred by the Holdback
Escrow Agent as a result of this transaction; provided, however, that if a Claim
is made, the non-prevailing party in any legal proceeding or arbitration
proceeding in connection with such Claim shall pay all costs and expenses
incurred by the Holdback Escrow Agent.
(i) The provisions of this Section 38 shall survive the Closing.
39. STATE SPECIFIC PROVISIONS.
(a) Delaware. The provisions under this Agreement as they relate to the
assignment and assumption of the Existing Financing shall not be deemed to be
the provision of financing by any of the Sellers for purposes of applicable
state laws on seller financing.
(b) Oregon Statutory Notice: The following statement is made pursuant to Or.
Rev. Stat. Section 93.040 with respect to the Property located in the State of
Oregon: THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE
PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE
LAWS AND REGULATIONS, WHICH, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE
CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH LIMIT LAWSUITS AGAINST FARMING
OR FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD
CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED
USES AND EXISTENCE OF FIRE PROTECTION FOR EXISTING STRUCTURES.
[No Further Text on this Page; Signature Page Follows]
IN WITNESS WHEREOF, Sellers and Purchaser have caused this
Agreement to be executed the day and year first above written.
GLENWOOD INDUSTRIAL PARK II LLC,
R.R. BAYSIDE, INC.,
R.R. FOLEY, INC.,
R.R. HILTON HEAD, INC.,
R.R. HILTON HEAD II, INC.,
R.R. KINGSBURG, INC.,
R.R. LACONIA, INC.,
R.R. LINCOLN CITY, INC.,
R.R. MYRTLE BEACH, INC.,
R.R. PARK CITY, INC.,
R.R. REHOBOTH, INC.,
R.R. SEASIDE, INC.,
R.R. TUSCOLA, INC.,
R.R. WESTBROOK, INC.,
R.R. WESTBROOK II, LLC, and
WALNUT HILL HOLDINGS II LLC
By:
Name: John D. McGurk
Title: President
COROC HOLDINGS L.L.C.
By: BROC Portfolio L.L.C.,
a Delaware limited liability company
By:
Name: Jonathan D. Gray
Title: Senior Managing Director
By: TANGER COROC, LLC,
a North Carolina limited liability company
By: Tanger Devco LLC,
a North Carolina limited liability
company
its member
By:
Name:
Title:
[SIGNATURE PAGE CONTINUED]
Executed solely for the purpose of accepting the escrow on the terms and
conditions set forth in Section 37 of the above and foregoing Agreement.
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK
By:
Name:
Title:
Executed solely for the purpose of accepting the holdback escrow on the terms
and conditions set forth in Section 38 of the above and foregoing Agreement.
HOLDBACK ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK
By:
Name:
Title: