PURCHASE AND SALE AGREEMENT
1. IDENTIFICATION OF PARTIES
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is
made as of September 26, 1996, by and between LA SALLE STREET
FUND INCORPORATED OF DELAWARE, a Delaware corporation
("Seller"), and MACERICH VALLEY VIEW LIMITED PARTNERSHIP, a
California limited partnership ("Purchaser").
2. DESCRIPTION OF THE PROPERTY
In consideration of the mutual undertakings of the
parties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby agrees to sell and convey to
Purchaser and Purchaser hereby agrees to purchase from Seller
all of Seller's right, title and interest in and to the
following:
(a) That certain real property located in the City of
Dallas, County of Dallas, State of Texas, commonly known as
Valley View Shopping Center and more particularly described on
Exhibit A attached hereto ("Land"), together with all buildings
and improvements located thereon (collectively, "Improvements");
(b) All of Seller's interest as lessor in all leases,
subleases and other occupancy agreements covering the Land and
Improvements (said agreements, together with any and all
amendments, modifications, supplements or extensions thereto,
are hereinafter referred to collectively as the "Leases") and
identified in the Rent Roll (hereinafter defined));
(c) All of Seller's interest in all rights,
privileges, easements and appurtenances to the Land and the
Improvements including, without limitation, all of Seller's
interest in and to oil, gas and other minerals and water rights
and all easements, rights-of-way and other appurtenances used or
connected with the beneficial use or enjoyment of the Land and
the Improvements (the Land, the Improvements, and all such
rights, privileges, easements and appurtenances (including,
without limitation, Seller's interest as lessor under the
Leases) are sometimes collectively hereinafter
referred to as the "Real Property"). Title to a portion of the
Real Property comprising approximately 2.14 acres is held in the
name of La Salle Street Fund Incorporated, a Maryland
corporation("Guarantor"). Prior to the Closing Date, Seller
shall cause such portion of the Real Property to be transferred
and conveyed to Seller;
1
- ----------------------------------------------------------------
(d) All personal property, equipment, supplies and
fixtures (collectively, "Personal Property") owned by Seller
located on the Real Property and used or useful in the operation
of the Real Property, including, without limitation, the
personal property identified on Exhibit O attached hereto;
(e) All of Seller's right, title and interest in and
to any and all reciprocal easement agreements, supplemental or
separate agreements with an Anchor (hereinafter defined)
development agreements, and the like of or pertaining to the
Property, all as more particularly described on Exhibit M as
attached hereto (each an "Operating Agreement" and collectively,
the "Operating Agreements"); and
(f) All trademarks, trade names (including, without
limitation, the right to use the name Valley View Shopping
Center), contract rights, guarantees, licenses, approvals,
certificates, permits and warranties used or useful in
connection with the foregoing and all telephone numbers for the
Property (collectively, the "Intangible Personal Property").
(The Real Property, the Personal Property and the Intangible
Personal Property are sometimes collectively hereinafter
referred to as the "Property").
3. PURCHASE PRICE
The purchase price of the Property ("Purchase Price")
shall be the sum of Eighty Five Million, Five Hundred Thousand
Dollars ($85,500,000) and shall be paid by Purchaser by wire
transfer to Seller on the Closing Date (hereinafter defined),
net of all prorations as provided herein.
4. TITLE
(a) Purchaser shall, promptly after the date hereof,
order from Commonwealth Land Title Insurance Company, a
Pennsylvania corporation ("Title Company") a commitment for an
owner's policy of title insurance on the Property ("Title
Commitment"), together with copies of all documents relating to
the title exceptions referred to in such Title Commitment
(collectively, "Underlying Documents").
(b) Seller shall, promptly after the date hereof,
cause to be prepared and delivered to Purchaser and to the Title
Company an ALTA survey ("Survey")prepared by a surveyor
reasonably acceptable to Purchaser ("Surveyor"). The Survey
2
- ----------------------------------------------------------------
shall (i) show all easements and similar matters disclosed in
the Title Commitment, (ii) include the form of certification set
forth on Exhibit T attached hereto ("Approved Certification"),
(iii) show all matters described on the Approved Certification,
and (iv) show the location, number and size (i.e., standard or
compact) of all parking spaces on the Property. The Survey
shall be certified as true and correct by the Surveyor for the
benefit of Purchaser and the Title Company.
On or before the date ("Title Approval Date") which is
twenty (20) days after Purchaser's receipt of all of the Survey
(in the form required pursuant to Section 4(b) hereof), the
Title Commitment and all Underlying Documents, Purchaser shall
notify Seller, in writing, of any disapproved title exceptions
or survey matters (each a "Disapproved Matter" and collectively
the "Disapproved Matters"). All other title exceptions set
forth in the Title Commitment, all other matters shown by the
Survey and all other Liens (hereinafter defined) created by
Purchaser shall constitute "Permitted Encumbrances".
Purchaser's failure to disapprove in writing any title or survey
exception set forth in the Title Commitment on or before the
Title Approval Date shall be deemed an approval of the subject
title or survey exception as to which Purchaser failed to so
timely disapprove. Purchaser and Seller agree that any
mortgage, deed of trust or other similar monetary encumbrance
affecting the Property shall be a Disapproved Matter, and Seller
hereby agrees that any such mortgage, deed of trust or other
monetary encumbrance shall be removed (or, in the case of
mechanic's or materialmen's liens, bonded against in a manner
satisfactory to Purchaser and the Title Company), at Seller's
sole cost and expense, prior to or concurrently with the
Closing. In addition, Seller shall be obligated to remove or
cure,prior to Closing, any title or survey matters affecting the
Property which are caused or created by Seller after the date
hereof, unless otherwise permitted under the terms of this
Agreement or approved by Purchaser, in writing, in its sole and
absolute discretion. As a condition to the Closing, Seller
shall use its reasonable efforts to remove, or cause to be
removed, all Disapproved Matters or, in the alternative, obtain
title insurance in form and substance satisfactory to Purchaser
insuring against the effect of such Disapproved Matter (and any
3
- ----------------------------------------------------------------
Disapproved Matter which is so insured against also shall be
deemed to be a "Permitted Encumbrance"). No less than ten (10)
days after receiving Purchaser's list of the Disapproved
Matters, Seller shall notify Purchaser in writing of any
Disapproved Matters which Seller is unable to cause to be
removed or satisfactorily insured against and Purchaser shall
then, within ten (10) days of receipt of such notice, elect, by
giving written notice to Seller and Escrow Holder (hereinafter
defined) (i) to terminate this Agreement, or (ii) to waive its
disapproval of such exceptions or survey matters (such
exceptions or survey matters shall then be deemed to be
"Permitted Encumbrances"). Purchaser's failure to give such
written notice shall be deemed an election to waive its
disapproval of such exceptions or survey matters. In the event
Purchaser elects to terminate this Agreement pursuant to this
Section 4, then the provisions of Section 16(c) hereof shall
apply.
5. SELLER'S DELIVERIES
Seller shall, within five (5) days of the date hereof,
deliver to Purchaser, or make available at the Property, all of
the following documents:
(a) A statement of insurance coverages and premiums
by policy type and copies of insurance policies for the fire,
extended coverage on the Improvements and primary liability
insurance maintained by or for the benefit of Seller
(collectively, "Existing Insurance Policies"); provided that, to
the extent coverage is provided by Seller's blanket policies,
Seller need not deliver such Existing Insurance Policies but
shall instead deliver to Purchaser certificates of such
insurance.
(b) A copy of all income and expense statements, year
end financial and monthly operating statements for the Property
(collectively, "Operating Statements") and sales volume reports
for 1994 and 1995 and, to the extent available, the current
year; and copies of operating budgets for the current year.
(c) A copy of "as built" plans and specifications of
the Improvements and any other plans and specifications relating
to the Property in Seller's possession or control.
4
- ----------------------------------------------------------------
(d) Copies of any inspection, soils, engineering,
physical, environmental or architectural notices, studies,
reports or plans in Seller's possession or control which relate
to the physical condition or operation of the Property or
recommended improvements thereto.
(e) A copy of the bill or bills issued and received
by Seller for the most recent year for which bills have been
issued
for all real estate taxes (including assessed value) and
personal property taxes and a copy of any and all notices in
Seller's possession pertaining to real estate taxes or
assessments applicable to the Property (collectively, "Tax
Bills"). Seller shall promptly deliver to Purchaser a copy of
any such bills or notices received by Seller from the date
hereof until: (i) if the Closing occurs, June 30, 1997, or (ii)
if no Closing occurs, until the termination of this Agreement in
accordance with its terms.
(f) Copies of all outstanding operating, maintenance,
repair, service, pest control and supply contracts (including,
without limitation, janitorial, elevator, scavenger and
landscaping agreements), equipment rental agreements (including
but not limited to equipment leases and conditional sales
agreements), all contracts for repair or capital replacement to
be performed at the Property, and any other contracts relating
to or affecting the Property and binding on, or affecting, the
owner of the Property (other than Leases) (collectively,
"Contracts").
(g) A copy of all Leases and any other agreements
which are in effect with the Tenants (hereinafter defined) of
the Property, and any guarantees thereof, all as amended,
together with current financial statements and sales reports
concerning each Tenant (to the extent in Seller's possession or
control), Seller's current lease plan for the Property, Seller's
standard form of lease for the Property, current leasing status
reports (including a vacant space inventory) and existing lease
proposals, which leasing status reports and lease proposals
Seller hereby agrees to update periodically for Purchaser up to
the date of Closing.
5
- ----------------------------------------------------------------
(h) Copies of all governmental certificate(s) of
occupancy, licenses, permits, authorizations, approvals and
other entitlements obtained by Seller and in Seller's possession
or control with respect to the Property, or any portion thereof,
occupancy thereof or any present or proposed use thereof,
including, without limitation, elevator permits, liquor
licenses, if any, and such other permits as are necessary for
the present operation of the Property with full use of all
Improvements located thereon, and any entitlements in Seller's
possession or control with respect to any contemplated expansion
of the Property (collectively, "Governmental Approvals").
(i) A copy of all guarantees, warranties and other
documents or instruments relating to the Property in Seller's
possession or control.
(j) Copies of all pending litigation documents
relating to the Property in Seller's possession or control
(except for those matters being handled or defended directly by
Seller's insurance carrier).
(k) A copy of all documents constituting the
Operating Agreements (including, without limitation, any
amendments, modifications, supplements or extensions thereto).
(l) Current financial statements for Guarantor and
operating statements for the Property. Such financial and
operating statements: (A) will be held in strict confidence,
and (B) will not be disclosed to any third party without
Seller's prior written consent. Notwithstanding the immediately
preceding sentence: (1) Purchaser may distribute such financial
and operating statements (or disclose information contained
therein) to its affiliates, partners, investors, directors,
officers,
employees, agents, attorneys, consultants, or lenders, on the
condition that such persons maintain the confidentiality of such
financial and operating statements, and (2) such financial and
operating statements shall not be considered confidential if
such financial statements are or become generally available to
the public other than through a violation of this Section.
(m) Copies of current utility bills for the Property
to the extent in Seller's possession or control.
6
- ----------------------------------------------------------------
(n) A description of all work being done by Seller in
any Tenant space(s) and a list of all Contracts (together with
copies thereof) and amounts payable in connection with such
work.
(o) Copies of all reports and other documents
scheduled on Exhibit B-3 (collectively, "Seller Reports").
(p) Any other documents and information reasonably
requested by Purchaser which Seller can obtain with good faith
efforts.
At any reasonable time prior to the Closing and with
two (2) days prior notification to Seller, Purchaser, its
employees, agents and consultants shall be entitled: (i) to
audit, examine and copy any and all books and records maintained
by Seller or its agents relating to receipts and expenditures
pertaining to the Property for 1994, 1995 and 1996; (ii) to
interview the Tenants; and (iii) to interview employees of
Seller employed at the Property and the manager of the Property
and its employees employed at the Property. Seller shall cause
any such manager to cooperate with Purchaser and its agents,
representatives and consultants in conducting its due diligence
review. Seller shall cooperate with any auditors and other
personnel designated by Purchaser to conduct such review and
shall make such books and records available to the auditors and
such other personnel. Seller may, if it so elects, have a
representative of Seller accompany Purchaser (or Purchaser's
employees, agents or consultants, as applicable) during any of
Purchaser's inspections and interviews under clauses (i), (ii)
and (iii) immediately above. Purchaser shall also have the
right to conduct physical and structural inspections of the
Property, including environmental inspections, subject to the
terms and provisions of that certain License and Indemnity
Agreement ("License Agreement") dated August 13, 1996 between
The Macerich Partnership, L.P. and La Salle Street Fund
Incorporated, a copy of which is attached hereto as Exhibit X.
6. CONDITIONS PRECEDENT TO CLOSING
(a) The following shall each be conditions precedent to
Purchaser's obligation to consummate the transaction
contemplated herein (collectively, "Purchaser's Conditions
Precedent") but failure of any of Purchaser's Conditions
Precedent through no fault of Seller shall not constitute a
default by Seller hereunder:
7
-----------------------------------------------------------
(i) Purchaser shall have approved, in its
sole and absolute discretion, or been deemed to approve in
accordance with the terms hereof, on or before the Title
Approval Date, the Title Commitment, the Underlying
Documents and the Survey pursuant to Section 4 hereof.
(ii) Purchaser shall have approved, in its sole
and absolute discretion, or been deemed to approve in
accordance with the terms hereof, on or before September
30, 1996 ("Due Diligence Termination Date") the following
(collectively, "Due Diligence Matters"): (A) the results
of all soils, environmental, engineering and other physical
due diligence tests and inspections of the Property and
surrounding areas by firms selected by Purchaser to perform
the same, and (B) the results of its review of the Leases,
Contracts, Operating Agreements and all the agreements,
books, records and the like delivered to Purchaser or made
available to it hereunder, which review may include,
without limitation, Purchaser having (1) determined that
the creditworthiness of the Tenants is within the financial
risk parameters Purchaser is willing to accept, (2)
verified that it is willing to accept and be bound by the
Operating Agreements, the Leases (including, but not
limited to, minimum rentals to be paid, percentage rents,
parking charges, common area maintenance charges, operating
expense escalations, CPI increases, real estate tax
escalations, Tenant allowances, termination and expansion
rights and renewal options), (3) verified that the Property
has sufficient parking to meet the requirements of the
Operating Agreements and Leases and all applicable codes
and other requirements of governmental authorities, and
(4) verified the accuracy of the vacant space inventory
which shall be delivered to Purchaser by Seller.
Purchaser's failure to disapprove in writing any of the Due
Diligence Matters on or before the Due Diligence
Termination Date shall be deemed an approval of the Due
Diligence Matters. Purchaser shall have the one-time right
(in its sole discretion) to extend, by written notice
delivered to Seller on or before the Due Diligence
Termination Date, the Due Diligence Termination Date for up
to an additional ten (10) days for the sole purpose of
completing all of its tests, inspections and reviews under
this Section 6(a)(ii).
8
- ----------------------------------------------------------------
(iii) Purchaser shall have received and
approved, in its sole and absolute discretion, at least
five (5) days prior to the Closing (hereinafter defined):
(1) Executed estoppel certificates, dated
not earlier than September 15, 1996, substantially in the
form of Exhibit G-1 and containing fill-in information
consistent with the Rent Roll (hereinafter defined) or
otherwise containing fill-in information approved by
Purchaser in its sole discretion ("Tenant Estoppel
Estoppel Certificate(s)"), from (i) all Tenants
under Leases of the Property, and (ii) J.C. Penney Company,
Inc. ("Penney") as to that certain Lease Agreement dated as
of April 18, 1996 by and between Seller and Penney ("Penney
Lease"). Notwithstanding the foregoing, an estoppel
certificate dated not earlier than September 15, 1996, and
containing fill-in information consistent with the Rent
Roll or otherwise containing fill-in information approved
by Purchaser in its sole discretion, will be deemed an
approved Tenant Estoppel Certificate hereunder even if (x)
a Tenant deletes paragraphs 14 and/or 16 of Exhibit G-1,
(y) a Tenant Lease allows a Tenant to furnish an estoppel
certificate in the form of Exhibit G-2 ("Lease Estoppel
Certificate"), and such Tenant furnishes an estoppel
certificate in such form, or
(z) a Tenant discloses a bankruptcy disclosed by Seller on
Exhibit P-2 attached hereto. Seller shall use reasonable
efforts to obtain all such estoppel certificates and shall
use reasonable efforts to cause such estoppel certificates
to be in the form of Exhibit G-1 (without modification).
In the event the condition contained in clause (i) above is
not met notwithstanding Seller's reasonable efforts, the
condition in clause (i) shall be deemed satisfied if Tenant
Estoppel Certificates are received from all Tenants under
Leases covering in excess of 7,500 square feet and from
Tenants under Leases covering, in the aggregate, at least
ninety percent (90%) of the remaining occupied, gross
leasable area of the Property (collectively, "Tenant
Estoppel Threshold"). If the Tenant Estoppel Threshold is
not met, Purchaser shall have the right, in its sole and
absolute discretion, to allow Seller to provide, and Seller
9
-----------------------------------------------------------
covenants and agrees to provide to Purchaser, at Closing a
certification in the form of Exhibit G-3, containing fill-
in information consistent with the Rent Roll or otherwise
containing fill-in information approved by Purchaser in its
sole discretion ("Seller's Estoppel Certificate"), with
respect to those of the Tenants failing to deliver an
estoppel certificate as required hereunder whom Purchaser
shall specify (but excluding any Tenants who deliver
executed, but modified Tenant Estoppel Certificates);
provided that Seller shall only be required to deliver that
number of Seller's Estoppel Certificates as shall be
required to enable Purchaser to receive approved Tenant
Estoppel Certificates satisfying the Tenant Estoppel
Threshold. Seller also covenants and agrees to provide at
Closing, with respect to all Tenants who failed to provide
a Tenant Estoppel Certificate containing the statement set
forth in paragraph 12 of Exhibit G-1, a Seller's estoppel
certificate containing the statement in such paragraph with
respect to all such Tenants, but only in instances where
such statement is deleted by the particular Tenant (and not
where such statement is disputed, contradicted or modified
by such Tenant.) Any Tenant Estoppel Certificate received
by Purchaser after the Closing shall enable Seller to
remove its certification with respect to the Tenant for
which the Tenant Estoppel Certificate is received to the
extent that such Tenant Estoppel Certificate confirms the
information set forth in Seller's certification. Seller
shall have the one-time right (in its sole discretion) to
extend, by written notice delivered to Purchaser at least
three (3) days prior to the Closing Date, the Closing Date
for up to thirty (30) days for the sole purpose of
obtaining sufficient Tenant Estoppel Certificates so as to
enable it to meet the Tenant Estoppel Threshold;
(2) Executed estoppel certificates, dated
not earlier than September 15, 1996, substantially in the
form of Exhibit G-4, from each of Dillard Texas Operating
Limited Partnership ("Dillard"), The May Department Stores
Company ("Foleys") and Sears, Roebuck and Company (each an
"Anchor", and collectively, the "Anchors") and all other
persons or entities which are parties to the Operating
Agreements (or any of them) with respect to each of the
10
- ----------------------------------------------------------------
Operating Agreements to which such persons and/or entities
are a party; and
(iv) On or before the Title Approval Date,
Purchaser shall have confirmed to its satisfaction (or been
deemed to confirm in accordance with the terms hereof)
that:
(1) The Title Company shall be committed to
issue a T-1 (Texas Owner's) policy of title insurance insuring
Purchaser's fee simple interest in the Real Property, dated the
day of the Closing, with liability in the amount of the Purchae
Price, together with direct access reinsurance agreements and
subject only to the Permitted Encumbrances, and shall contain:
(i) a survey deletion endorsement, and (ii) such other
endorsements as Purchaser shall reasonably request and as are
available in the State of Texas (collectively, "Title Policy"),
and
(2) The Surveyor shall be committed to
issue to Purchaser the Survey approved by Purchaser
pursuant to Section 4.
(v) On the Closing Date (and unless waived by
Purchaser in its sole and absolute discretion), Tenants
occupying, in the aggregate, 80% of the gross leasable area
of the Property and all Anchors shall be in occupancy of
their respective premises and in substantial compliance
with the terms of their respective Leases and Operating
Agreements.
(vi) On or before the Closing Date, Penney shall
have opened the Penney Store for business in not less than
233,000 square feet of Floor Area (as that term is defined
in the Penney Lease) and shall be operating (as of the
Closing Date) in at least 233,000 square feet of Floor Area
under the trade name of "Penney" (or "JCPenney"). In the
event this Purchaser's Condition Precedent is not satisfied
by the Closing Date, (A) Seller shall have the one-time
right (in its sole discretion) to extend the Closing Date,
by written notice delivered to Purchaser at least three (3)
days prior to the Closing Date, for up to thirty (30) days
to allow for satisfaction of this Purchaser's Condition
Precedent, and (B) Purchaser shall have the right (in its
11
- ----------------------------------------------------------------
sole discretion) to extend the Closing Date one or more
times to such later date(s) as Purchaser shall specify to
allow for satisfaction of this Purchaser's Condition
Precedent, but such extensions shall in no event result in
a Closing Date later than the first to occur of (1)
December 31, 1996, or (2) five (5) days after the date the
Purchaser's Condition Precedent in this Section 6(a)(vi) is
satisfied.
(vii) Seller shall have executed and
delivered to Purchaser a Certificate updating the
representations and warranties of Seller through Closing,
and certifying that Seller has complied in all material
respects with its obligations under this Agreement, which
Certificate Seller covenants to deliver, except that if
Seller cannot make any of its representations and
warranties as of Closing through no fault of its own,
Purchaser's sole remedy will be to terminate this Agreement
or waive the condition that such representation or warranty
be remade as of Closing.
(viii) Seller shall have completed all work, if
any, being done in any Tenant space(s) by Seller and shall
have provided Purchaser with evidence satisfactory to
Purchaser that all amounts payable in connection with such
have been fully paid and with unconditional lien releases
from all mechanics, materialmen and suppliers performing
work or providing supplies or materials in connection with
such work. If all of such work has not been completed by
the Closing Date and/or such work has not been paid for,
and Purchaser waives such condition(s) in writing,
Purchaser shall receive a credit against the Purchase Price
for the estimated cost of any such work which is not so
completed or for any amounts not so paid by the Closing
Date.
(ix) Seller shall have performed all of its
obligations under this Agreement in all material respects,
and is ready, willing and able to close.
(x) Price Waterhouse shall have completed the
SEC Financial Statements (hereinafter defined).
(b) The following shall each be condition precedents
to Seller's obligation to consummate the transaction
contemplated herein (collectively, "Seller's Conditions
12
- ----------------------------------------------------------------
Precedent") but failure of any of Seller's Conditions Precedent
through no fault of Purchaser shall not constitute a default by
Purchaser hereunder:
(i) Purchaser shall have performed all of its
obligations under this Agreement in all material respects,
and is ready, willing and able to close.
(ii) Purchaser shall have executed and delivered
to Seller a Certificate updating the representations and
warranties of Purchaser through Closing, and certifying
that Purchaser has complied in all material respects with
its obligations under this Agreement, which Certificate
Purchaser covenants to deliver, except that if Purchaser
cannot make any of its representations and warranties as of
Closing through no fault of its own, Seller's sole remedy
will be to terminate this Agreement or waive the condition
that such representation or warranty be remade as of
Closing.
(c) Purchaser's Conditions Precedent and, Seller's
Conditions Precedent are hereinafter collectively referred to as
the "Conditions Precedent" and each as a "Condition Precedent".
In the event any Condition Precedent is not satisfied by the
date set for satisfaction of such Condition Precedent, the party
for whose benefit the Condition Precedent is for may elect, by
giving written notice to the other party and Escrow Holder (i)
to terminate this Agreement, or (ii) to waive satisfaction of
such Condition Precedent and proceed to consummate the Closing.
A party's failure to give such written notice of termination (in
the event a Condition Precedent for such party's benefit has not
been satisfied by the date set for satisfaction of such
Condition Precedent) shall be deemed an election to waive the
subject Condition Precedent. In the event either party elects
to terminate this Agreement pursuant to this Section 6, then the
provisions of Section 16(c) hereof shall apply.
7. COVENANTS OF SELLER
Seller hereby covenants with Purchaser, as follows:
(a) Prior to the Closing, Seller shall neither
execute any new Lease, Contract or Operating Agreement, nor
13
- ----------------------------------------------------------------
terminate, renew, amend or modify any existing Lease, Contract
or Operating Agreement or grant any major discretionary
concession or waiver thereunder without Purchaser's prior
written consent, which consent shall not be unreasonably
withheld or delayed. Purchaser's consent shall be deemed given
unless Purchaser notifies Seller to the contrary within three
(3) business days of Purchaser's receipt of Seller's written
request for approval, which shall include all information
reasonably required by Purchaser, including the terms of such
Lease, credit information on the Tenant and the proposed Lease
or amendment document. Prior to the Closing, Seller shall not,
without Purchaser's prior written consent, accept from any of
the Tenants payment of rent or other charges more than one month
in advance or apply any security deposit to rent due from any
Tenant. At the Closing, the unapplied cash security deposits
under each of the Leases (as set forth on Exhibit Q attached
hereto) shall be credited to Purchaser. Without limiting
Purchaser's final approval rights over any new Leases, Purchaser
hereby pre-approves the negotiation by Seller with the following
four (4) "Pre-Approved Tenants" for leases on the following
terms:
Pre-Approved Pre-Approved
Location # Tenant(s) Allowance(s) Square Feet
Store #1054 Gap/Gap Kids $ 225,000 3,455
Store #2118 Restaurant $ 360,000 6,000
Store #2232 NASCAR Thunder $ 350,000 4,000
Store #2070 Gymboree $ 80,000 2,229
Total Pre-approved
Allowance $1,015,000
Any portion of the "Total Pre-Approved Allowance" (as
indicated above) which is not paid by Seller prior to the
Closing to the appropriate Pre-Approved Tenant pursuant to the
terms of a final Lease approved by Purchaser shall be credited
against the Purchase Price payable by Purchaser at the Closing.
(b) The Existing Insurance Policies, or equivalent
coverage, shall remain continuously in force through the day of
the Closing.
14
- ----------------------------------------------------------------
(c) At all times prior to the Closing, Seller shall
operate, maintain and manage the Property substantially in the
manner it is currently being operated and maintained, shall
maintain present services, shall keep on hand sufficient
materials, supplies, equipment and other personal property for
the efficient operation and management of the Property in the
manner it is currently being operated, and shall perform when
due all of Seller's obligations under the Leases as necessary to
prevent the Seller from being in default thereunder, or any
other Lien (hereinafter defined) encumbering the Property, the
Contracts, the Operating Agreements, the Governmental Approvals
and other agreements relating to the Property and otherwise in
accordance with all applicable laws, ordinances, rules and
regulations affecting the Property; provided, however, this
Section 7(c) shall not impose upon Seller any obligation to
perform any work between the date hereof and the Closing in
order to cause the Property to brought into compliance either
with the Americans with Disabilities Act ("ADA") or
Environmental Laws (hereinafter defined). Except as otherwise
provided herein, Seller shall deliver the Property at the
Closing in substantially the same condition as it was on the
date hereof, reasonable wear and tear excepted and, subject to
the other provisions of this Agreement, damage by Tenants and
other third parties and casualty excepted, and shall terminate,
as of the day of the Closing, any existing management agreement
applicable to the Property and those of the Contracts designated
in writing by Purchaser (no less than ten (10) days prior to
Closing) which may by their terms be so terminated without cost
or penalty due to early termination. None of the Personal
Property shall be removed from the Real Property, unless
replaced by Personal Property of equal or greater utility and
value.
(d) Seller has paid, or will pay in full prior to the
Closing in the ordinary course of Seller's business (which may
include payment in arrears), all bills and invoices for labor,
goods, material and services of any kind relating to the
maintenance and operation of the Property substantially in the
manner it is currently being operated and maintained, utility
charges, and employee salary and other accrued benefits relating
to the period prior to the Closing.
(e) Seller agrees to pay any Leasing Commissions
(hereinafter defined) which are or will become due and payable
15
- ----------------------------------------------------------------
prior to the Closing, except as may otherwise be agreed to in
writing between Seller and Purchaser prior to the Closing. All
Leasing Commissions which, on an absolute or contingent basis,
will become due and payable after the Closing, including fees or
commissions with respect to renewals, extensions or the leasing
of additional space, and the amount thereof, will be credited
against the Purchase Price payable by Purchaser at the Closing,
except as may otherwise be agreed to in writing between Seller
and Purchaser prior to the Closing. Seller agrees to pay any
Tenant Incentives (hereinafter defined) which are or will become
due and payable prior to the Closing. All alterations,
installations, decorations and other tenant improvement work
required to be performed by the lessor under the Leases or other
agreements affecting the Property and all tenant improvement
allowances which lessor under the Leases is obligated to pay to
Tenants, including, without limitation, the Total Pre-Approved
Allowance and any free rent which the Tenants under the Leases
are entitled to receive at any time after the Closing
(collectively, the "Tenant Incentives"), which, on an absolute
or contingent basis, will become due and payable (or with
respect to free rent, credited) after the Closing, will be
credited against the Purchase Price payable by Purchaser at the
Closing. Notwithstanding the foregoing, Purchaser shall be
responsible for paying any Leasing Commissions and/or Tenant
Incentives payable with respect to any new Leases approved by
Purchaser between September 9, 1996 and the Closing Date
(expressly excluding new Leases with any of the Pre-Approved
Tenants). The term "Tenant Incentives" shall exclude: (x) any
rent relief granted to Tenants as set forth on Exhibit P-3
attached hereto, and (y) any rent abatements and the like which
Tenants are entitled to receive pursuant to their respective
Leases incident to a casualty, condemnation, interruption in
services and the like.
(f) After the date hereof and prior to the Closing,
no part of the Property, or any interest therein, will be
alienated or otherwise transferred, except as expressly
permitted by this Agreement or approved by Purchaser in writing.
(g) Seller shall pay in the ordinary course of
Seller's business (which may include payment in arrears) all
amounts required to be paid by it under the Leases, Operating
16
- ----------------------------------------------------------------
Agreements, Contracts and Liens. As used herein, the term
"Liens" shall mean all liens, security interests, mortgages,
deeds of trust, charges, claims, encumbrances, pledges, options,
rights of first offer or first refusal, or other similar
encumbrances of any nature whatsoever against the Property.
(h) If, after the Closing, Purchaser reasonably
desires to review certain records of Seller pertaining to the
Property, then Purchaser will so notify Seller. Such notice
must state in reasonable detail (1) the specific books or
records of Seller which Purchaser desires to review, and (2) the
event, dispute or other reason causing Purchaser to desire
access to Seller's records. For the period from the Closing
Date until December 31, 1997, within ten (10) days after
Seller's receipt of any such notice, or such longer time as
Seller reasonably requires, Seller will use reasonable efforts
to locate and make available to Purchaser for Purchaser's review
and copying the requested records. However, Seller will have no
obligation to reveal or make available to Purchaser any records
of Seller or any information which do not relate specifically
and directly to the Property or any records or information
constituting Confidential Information. For purposes of this
paragraph, "Confidential Information" means any appraisals,
analyses or evaluations prepared by or for Seller; personnel
files and payroll information; any records pertaining to
investors; any corporate records, minutes or reports; mortgage
or financing documents; portfolio level correspondence, books
and records; any records pertaining to property other than the
Property or to entities other than Seller; any records or
information which Seller reasonably believes it is prohibited by
law, agreement, order or regulation from releasing; any records
or information the release or disclosure of which Seller
reasonably believes would constitute a breach of the fiduciary
obligations of Seller or any affiliate of Seller; and any other
records or information which Seller reasonably determines is
confidential. All costs and expenses relating to Purchaser's
review of such records and information, including, without
limitation, photocopying costs, will be borne by Purchaser.
(i) If and when Seller becomes aware of same, Seller
shall promptly notify Purchaser of any change in any condition
with respect to the Property or of any event or circumstance
17
- ----------------------------------------------------------------
which makes any representation or warranty under this Agreement
materially untrue or misleading, or any covenant of either party
under this Agreement incapable or materially less likely of
being performed.
(j) Concurrently with the Closing, Seller shall
terminate all leasing and management agreements pertaining to
the Property, and Seller will be solely responsible for any and
all termination fees, liquidated damages or other charges
payable as a result thereof.
(k) Seller shall, at Purchaser's sole cost and
expense, engage Price Waterhouse as independent auditors to
prepare such financial statements with respect to calendar year
1995 as Price Waterhouse determines may be necessary for
Purchaser to comply with Rule 3-14 of SEC Regulation S-X
(collectively, "SEC Financial Statements") in accordance with a
scope of work approved by Purchaser. Seller shall request that
such SEC Financial Statements shall be completed on or before
the Closing Date. Purchaser shall pay directly to the
independent auditor preparing such work, all costs and expenses
on account thereof. Purchaser agrees to indemnify, defend and
hold harmless Seller from all loss, cost and
expense (including reasonable attorneys' fees) incurred or
suffered by Seller by reason of such audit. Purchaser
acknowledges and agrees that Seller is retaining Price
Waterhouse as an accommodation to Purchaser, and that Seller has
no responsibility or liability for the accuracy, completeness or
results of the audit, or for Purchaser's compliance with Rule 3-
14 of SEC Regulation S-X, or any other similar law, rule or
regulation. Purchaser hereby indemnifies Seller and holds Seller
harmless against any and all claims, liabilities, actions,
causes of action, losses, costs and expenses pertaining to
Purchaser's compliance or lack of compliance with any laws,
rules or regulations pertaining specifically to securities,
investments, investors or real estate investment trusts.
Purchaser's obligations under this Section 7(k) shall survive
the Closing or earlier termination of this Agreement; provided,
however, (i) any claim brought by Seller with respect to a
breach or an alleged breach of this Section 7(k) must be made by
Seller by written notice to Purchaser on or before December 31,
1997, and (ii) if Seller elects to sue on any such claim, any
litigation brought with respect to such claim must be filed on
or before March 1, 1998.
18
- ----------------------------------------------------------------
The liability of Seller for a breach of any of
Seller's covenants contained in Sections 7(d), (e), (g), (h) and
(j) shall not be merged into any instrument or conveyance
delivered at the Closing and shall survive the Closing Date;
provided, however, (i) any claim brought by Purchaser with
respect to a breach or an alleged breach of any of such
covenants must be made by Purchaser by written notice to Seller
on or before December 31, 1997, and (ii) if Purchaser elects to
sue on any such claim, any litigation brought with respect to
such claim must be filed on or before March 1, 1998.
8. REPRESENTATIONS AND WARRANTIES OF SELLER
(a) Seller represents and warrants to Purchaser that
the following matters are true and correct as of the execution
of this Agreement and will also be true and correct as of the
Closing:
(i) To the best of Seller's knowledge and except
as set forth on Exhibit B-1, there are no material
physical, structural, or mechanical defects in the Property
(including, without limitation, the plumbing, heating,
sprinkler, air conditioning, ventilation and electrical
systems and the roof) and, to the best of Seller's
knowledge, except as set forth on Exhibit B-1, all such
items are in good operating condition and repair. As used
in this Section 8(a)(i), the word "material" shall mean any
physical, structural or mechanical defects that,
individually or in the aggregate, would cost in excess of
$150,000 to repair.
(ii) To the best of Seller's
knowledge and except as set forth on Exhibit B-2, the use
and operation of the Property is in substantial compliance
with all applicable building codes, zoning, subdivision,
and land use laws, and all other applicable local, state
and federal laws and regulations, except that (A) Seller
makes no representation as to whether the Property is in
compliance with the ADA, and (B) except as set forth in
Section 8(a)(xiv) hereof, Seller makes no representation as
to whether the Property is in compliance with Environmental
Laws. Seller has received no notice from any governmental
19
-----------------------------------------------------------
authority advising Seller of a present uncured violation
(or an alleged present uncured violation) of any such laws
or regulations (including, without limitation, any
violation or alleged violation of any ADA laws or
Environmental Laws).
(iii) To the best of Seller's knowledge, the
operating statements, financial statements, income and
expense reports, Leases, Operating Agreements and Contracts
are (or will be, at delivery) true, correct and complete
copies in all material respects. To the best of Seller's
knowledge, Seller has (or, within five (5) business days of
the date hereof, will have) delivered to Purchaser, or made
available at the Property, all documents, reports and other
materials described in Section 5 hereof. To the best of
Seller's knowledge and except as set forth on Exhibit B-2,
the Governmental Approvals are in full force and effect,
except that (A) Seller makes no representation as to
whether the Property is in compliance with the ADA, and (B)
except as set forth in Section 8(a)(xiv) hereof, Seller
makes no representation as to whether the Property is in
compliance with Environmental Laws.
(iv) The Rent Roll attached hereto as Exhibit P
is true, correct and complete. At the Closing, Seller
shall deliver to Purchaser an updated Rent Roll which will
be true, correct and complete as of the Closing. Each such
Rent Roll contains a list (which at the time such list is
given hereunder contains the most current information)
setting forth with respect to each space subject to a
Lease: the number identifying such space, the name of the
tenant ("Tenant") occupying such space, the approximate
number of square feet comprising such space, the current
annual minimum monthly rental and percentage rental rate
under the Lease for such space, the percentage rent break
point, all other charges payable by such Tenant (including
charges for real estate taxes, operating expenses,
environmental or utility charges [e.g., water, sewer, HVAC
and electricity] and similar items), the commencement and
expiration dates of the term of such Lease, and the date of
such Lease and all amendments thereof. There are no (x)
other leases or occupancy agreements affecting the Property
other than the Leases or (y) any lease takeover agreements
with Tenants or proposed tenants for any other property.
20
-----------------------------------------------------------
Seller further represents and warrants as follows with
respect to each of the Leases: (1) the Lease constitutes
the entire agreement with such Tenant relating to the
property leased to it under the Lease, and has not been
amended, modified, supplemented or extended (in writing or
otherwise), except for such amendments, modifications,
supplements and extensions described on the Rent Roll;
(2) except as set forth on the Rent Roll and except for
Penney, the Tenant has no right of first refusal or option
to purchase all or any portion of the Property pursuant to
the Lease; (3) to the best of Seller's knowledge and except
as set forth on the Rent Roll, there exists no present
uncured material default by either party under the Lease;
(4) to the best of Seller's knowledge, neither Tenant nor
Seller (as landlord) has delivered or received any notices
of default for material defaults that remain presently
uncured under theLease; and (5) the Tenant is not currently
asserting any defense to, or offset or claim against, its
rent or the performance of its other obligations under the
Lease, except as set forth on the Rent Roll.
(v) Exhibit Q attached hereto is a true and
complete list of the amount of all security deposits
received from the Tenants, less amounts previously applied
or returned to such Tenants, and of any letters of credit
provided for such purpose in lieu of cash.
(vi) Exhibit C attached hereto is a true, correct
and complete schedule of all of the Contracts including,
without limitation, Contracts pertaining to any work being
performed by Seller in any Tenant space(s). Except for the
Contracts, the Leases, the Permitted Encumbrances, the
Operating Agreements and agreements entered into in
conformance with Section 7 hereof, there are no other Liens
or agreements affecting the Property which will survive the
Closing. Seller further represents and warrants as follows
with respect to each of the Contracts: (1) the Contract
constitutes the entire agreement of the parties thereto
with respect to the subject matter thereof, and has not
been amended, modified, supplemented or extended (in
writing or otherwise), except for such amendments,
modifications, supplements and extensions described on
Exhibit C; (2) to
21
----------------------------------------------------------
the best of Seller's knowledge, there exists no present
uncured material default by any party under the Contract;
(3) to the best of Seller's knowledge, no party to such
Contract has delivered or received any notices of default
for material defaults that remain presently uncured under
the Contract; and (4) no party to such Contract is
currently asserting any defense to, or offset or claim
against, the payment or performance of its other
obligations under the Contract, except as set forth on
Exhibit C.
(vii) Exhibit M attached hereto is a true,
correct and complete schedule of the Operating Agreements
and there are no other agreements of any kind between
Seller and the Anchors (whether oral or written) except the
Operating Agreements. With respect to each of the
Operating Agreements: (1) the Operating Agreement
constitutes the entire agreement of the parties thereto
with respect to the Property, and has not been amended,
modified, supplemented or extended (in writing or
otherwise), except for such amendments, modifications,
supplements and extensions described on Exhibit M; (2) to
the best of Seller's knowledge, there exists no present
uncured material default by any party under the Operating
Agreement; (3) to the best of Seller's knowledge, no party
to such Operating Agreement has delivered or received any
notices of default for material defaults that remain
presently uncured under the Operating Agreement; and (4) no
party to such Operating Agreement is currently asserting
any defense to, or offset or claim against, the performance
of its obligations under the Operating Agreement.
(viii) The term "Leasing Commissions" means
any brokerage or leasing fees or commissions, finder's fees
or other compensation due or payable on an absolute or
contingent basis to any person, firm, corporation, or other
entity, with respect to or on account of any of the Leases
or any prospective lessee of the Property that may have
been introduced to or shown the Property prior to the
Closing. Except as disclosed on Exhibit N, no Leasing
22
-----------------------------------------------------------
Commissions shall, by reason of any existing agreement,
become due(A) during the terms of any of the Leases or with
respect to any renewal or extension thereof or the leasing
of additional space by any Tenant, or (B) for any Lease
entered into by Purchaser after the Closing Date with a
lessee that was introduced to or shown the Property prior
to the Closing Date (except if the subject broker claiming
the Leasing Commission (x) was a broker engaged by, or
representing, Purchaser, or (y) was engaged by, or
representing the Tenant, and Purchaser had actual knowledge
of such engagement or representation prior to the signing
of the subject Lease). Purchaser covenants that from the
date of Closing until December 31, 1997, it shall include a
provision in all Leases executed during such period
wherein, with respect to each such Lease, the Tenant
represents whether or not it has been represented by any
broker with respect to such Lease. There are no Leasing
Commissions or Tenant Incentives due or payable on an
absolute or contingent basis except as set forth on Exhibit
N attached hereto.
(ix) To the best of Seller's knowledge, no
environmental, zoning or other land-use regulation
proceedings are instituted or pending against Seller or the
Property which would detrimentally or materially affect the
value of the Property or the use and operation of the
Property for its intended purpose, and to the best of
Seller's knowledge, there are no special taxes or
assessments affecting the Property other than as set forth
in the Title Commitment.
(x) To the best of Seller's knowledge, no
condemnation proceedings against the Property are
instituted or pending and Seller has not received any
notices that any such condemnation proceedings are
instituted, pending or threatened.
23
-----------------------------------------------------------
(xi) Except as set forth on Exhibit U: (1) to
the best of Seller's knowledge, all water, sewer, gas,
electric, telephone, and drainage facilities and all other
utilities required for the current use and operation of the
Property by Tenants are installed to the property lines of
the Land, are all connected pursuant to valid permits, and
are adequate to service the Property, and (2) Seller has
not received any notice from any governmental agency
requesting compliance of, or notifying Seller of any
violation of, such utilities with applicable law.
(xii) Seller has not received any notice that
any licenses, permits, certificates or approvals required
from any governmental authorities having jurisdiction over
the Property for the present use and operation of the
Property: (1) are invalid, (2) have been violated, (3)
have lapsed, terminated or been revoked, and/or (4) are
otherwise no longer in full force and effect.
(xiii) Except as disclosed on Exhibit D, to
the best of Seller's knowledge, there are no legal
proceedings or actions of any kind or character instituted
or pending affecting the Property, the Leases, the
Contracts, the Operating Agreements, this Agreement or the
transactions contemplated hereby. Seller has delivered to
Purchaser copies of all documents relating to any of the
matters set forth in Exhibit D (except for those matters
being handled or defended directly by Seller's insurance
carrier).
(xiv) Except as disclosed in any of the
Seller Reports, Seller has not generated, used,
manufactured, treated, released or disposed of any
Hazardous Materials (hereinafter defined) at, on or beneath
the Land or the Improvements, except for de minimis amounts
of Hazardous Materials: (A) used in the normal operation
of shopping centers similar to the Property, and (B) used,
stored, transported and disposed of in compliance with all
applicable Environmental Laws. To the best of Seller's
knowledge and except as disclosed in any of the Seller
Reports and except for hydraulic fluid present in "Truck
Dock Court A" on the Property, no Hazardous Materials have
been generated, used, manufactured, treated, released, or
24
-----------------------------------------------------------
disposed of, or presently exist, at, on or beneath the Land
or the Improvements in violation of any Environmental Laws.
To the best of Seller's knowledge, Seller has not been
notified by any governmental authority of any
noncompliance, liability or claim relating to Hazardous
Materials in connection with the Land or the Improvements.
Without limiting anything contained herein, Seller
represents and warrants to Purchaser that, to the best of
Seller's knowledge, the Property has never been used as a
landfill or commercial waste facility. For purposes of
this Agreement, the term "Hazardous Materials" shall mean
any chemical, compound, material, mixture or substance that
is now listed in any Environmental Laws as a "hazardous
substance", "toxic substance", or the like, or any
petroleum product or underground storage tanks. For
purposes of this Agreement, the term "Environmental Laws"
shall mean the Comprehensive Environmental Response,
Compensation and Liability Act
(42 U.S.C. 9601 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), the Clean
Air Act (42 U.S.C. 7401 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. 1801 et seq.), the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.), and any
similar applicable state and local laws and ordinances and
the regulations implementing such statutes.
(xv) At the Closing and except for contracts
relating to emergency repairs (of which Seller has notified
Purchaser in writing) and such other contracts approved by
Purchaser in writing, there will be no outstanding
contracts made by Seller for the construction or repair of
any improvements to the Property which have not been fully
paid for, and Seller shall cause to be discharged (or will
bond against in a manner satisfactory to Purchaser and the
Title Company) all mechanics' or materialmen's liens
arising from any labor or materials furnished to the
Property by Seller prior to the Closing.
(xvi) Seller has not received any notice from
any insurance carrier of any defects or inadequacies in the
Property, or in any portion thereof, which would adversely
25
----------------------------------------------------------
affect the insurability thereof or the cost of such
insurance. Except as set forth on Exhibit D attached
hereto, there are no pending insurance claims made by or on
behalf of Seller (or any of its lenders) relating to the
Property.
(xvii) Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue
Code of 1986, as amended ("Code"). Seller will furnish to
Purchaser, prior to the Closing, an affidavit in the form
attached hereto as Exhibit E.
(xviii) Seller is a corporation duly formed,
validly existing and in good standing under the laws of the
State of Delaware, and is not insolvent; this Agreement has
been, and all the documents executed by Seller which are to
be delivered to Purchaser at the Closing will be, duly
authorized, executed, and delivered by Seller, is, and in
the case of the documents to be delivered will be, legal,
valid, and binding obligations of Seller enforceable
against Seller in accordance with their respective terms,
and does not, and in the case of the documents to be
delivered will not, violate any provisions of any agreement
to which Seller is a party or to which it is subject and
does not, and in the case of documents to be delivered will
not, require the consent or approval of any other person or
entity.
(xix) Seller has, prior to the date hereof,
paid to Foleys the $3,000,000 payment required to be paid
to Foleys pursuant to Section 1.4 of that certain First
Amendment to Supplement Agreement dated as of April 18,
1996 ("Foleys First Amendment") by and between Seller and
Foleys. Such $3,000,000 was timely and fully paid by
Seller to Foleys when required to be paid pursuant to the
Foleys First Amendment.
(xx) Attached hereto as Exhibit S-1 is a true
correct and complete list of all employees employed by
Seller with respect to the Property. Attached hereto as
Exhibit S-2 is a true, correct and complete list of all
employees employed by LaSalle Management ("Seller's
Manager") with respect to the Property. There exist none
26
----------------------------------------------------------
of the following between Seller and/or Seller's Manager and
any of the employees listed on Exhibits S-1 or S-2: any
collective bargaining, employment, labor, employee benefit
and health and welfare plan or other similar agreements.
(xxi) Seller's parent is a REOC (i.e., a Real
Estate Operating Company) and none of the assets of Seller or
Seller's parent constitute Plan Assets (hereinafter defined).
(b) All representations and warranties made in this
Section 8 shall not merge into any instrument or conveyance
delivered at the Closing but shall survive the Closing;
provided, however, (i) any claim brought by Purchaser with
respect to a breach or an alleged breach of any of Seller's
representations and warranties contained in this Section 8 must
be made by Purchaser by written notice to Seller on or before
December 31, 1997, and
(ii) if Purchaser elects to sue on any such claim, any
litigation brought with respect to such claim must be filed on
or before March 1, 1998.
(c) Whenever the phrase, "to the best of Seller's
knowledge" is used in this Agreement, such phrase shall be
limited to the actual current knowledge, without inquiry or
investigation, of the following persons: Michael Lee, James
Hanson, Sanford Villesvik, Jayne Morin and Steve Furley
(collectively, "Key Persons"); provided, the phrase "to the best
of Seller's knowledge" shall not include any constructive or
imputed knowledge.
(d) Seller shall promptly advise Purchaser in writing
of any information it receives prior to the Closing which
indicates that a representation or warranty made by Seller
hereunder is untrue in any material respect. If Purchaser has
actual knowledge (provided that "actual knowledge" shall not
include any fact contained in any document which has not either
(i) actually been reviewed by Purchaser or its representatives
or (ii) made available at the Property for inspection by
Purchaser and its representatives) prior to Closing that any of
the foregoing representations or warranties are not true and
27
- ----------------------------------------------------------------
correct and Purchaser nonetheless elects to proceed with
Closing, Purchaser shall be deemed to have waived any claims for
breach of such representation or warranty with respect to such
disclosed matter only.
(e) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO: (A) THE VALUE, NATURE, QUALITY
OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
WATER, SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE
PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL
ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT MAY CONDUCT
THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS
OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF
THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE
PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF
REPAIR OF THE PROPERTY, OR (H) COMPLIANCE WITH ANY ENVIRONMENTAL
LAWS (AS DEFINED IN SECTION 8(a) HEREOF) OR ANY POLLUTION OR
LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS,
INCLUDING THE EXISTENCE IN OR ON THE PROPERTY OF HAZARDOUS
MATERIALS (AS DEFINED IN SECTION 8(a) HEREOF OR (I) ANY OTHER
MATTER WITH RESPECT TO THE PROPERTY. ADDITIONALLY, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PERSON ACTING ON
BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF
OF PURCHASER ACKNOWLEDGES THAT NO PERSON HAS MADE, ANY
REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR
PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED
HEREIN; AND NO SUCH REPRESENTATION, WARRANTY, AGREEMENT,
GUARANTY, STATEMENT OR PROMISE, IF ANY, MADE BY ANY PERSON
ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON SELLER
UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY
TO INSPECT THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN
INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION
PROVIDED OR TO BE PROVIDED BY SELLER EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH
28
- ----------------------------------------------------------------
RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES
AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS
TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH
INFORMATION. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR
WRITTEN STATEMENT, REPRESENTATION OR INFORMATION PERTAINING TO
THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL
ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM
EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED
FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL
FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS
BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL OF THE
PROPERTY IS SOLD BY SELLER AND PURCHASED BY PURCHASER SUBJECT TO
THE FOREGOING. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE
CLOSING OR ANY TERMINATION HEREOF.
9. REPRESENTATIONS AND WARRANTIES OF PURCHASER
(a) Purchaser represents and warrants to Seller that
the following matters are true and correct as of the execution
of this Agreement and will also be true and correct as of the
Closing:
(i) Purchaser is a limited partnership duly
formed, validly existing and in good standing under the
laws of the State of California, and is not insolvent; this
Agreement has been, and all the documents executed by
Purchaser which are to be delivered to Seller at the
Closing will be, duly authorized, executed, and delivered
by Purchaser, is, and in the case of the documents to be
delivered will be, legal, valid, and binding obligations of
Purchaser enforceable against Purchaser in accordance with
their respective terms, and does not, and in the case of
the documents to be delivered will not, violate any
provisions of any agreement to which Purchaser is a party
or to which it is subject and does not, and in the case of
documents to be delivered will not, require the consent or
approval of any other person or entity.
(ii) Purchaser is not and is not acting on behalf
of an "employee benefit plan" within the meaning of Section
3(3)
29
- ----------------------------------------------------------------
of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or a "plan" within the meaning of Section
4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), and none of the assets of Purchaser constitute
"plan assets" within the meaning of 29 C.F.R. 2510.3-101
of any such employee benefit plan or plans ("Plan Assets").
(b) The representations and warranties made in this
Agreement by Purchaser shall be continuing and shall be deemed
remade by Purchaser as of the Closing with the same force and
effect as in fact made at that time. All representations and
warranties made in this Section 9 shall not merge into any
instrument or conveyance delivered at the Closing, but shall
survive the Closing; provided, however, (i) any claim brought by
Seller with respect to a breach or an alleged breach of any of
Purchaser's representations and warranties contained in this
Section 9 must be made by Seller by written notice to Purchaser
on or before December 31, 1997, and (ii) if Seller elects to sue
on any such claim, any litigation brought with respect to such
claim must be filed on or before March 1, 1998.
10. SELLER'S CLOSING DOCUMENTS
On or before Closing, Seller shall deliver or cause to
be delivered to Purchaser or Escrow Holder the following, in
form and substance acceptable to Purchaser:
(a) A Special Warranty Deed, substantially in the
form of Exhibit H attached hereto ("Deed"), executed by Seller.
(b) A bill of sale, executed by Seller, substantially
in the form of Exhibit I attached hereto.
(c) An assignment, substantially in the form of
Exhibit J attached hereto ("Contract Assignment"), executed by
Seller.
(d) An assignment of lessor's interest in the Leases,
substantially in the form of Exhibit K attached hereto ("Lease
Assignment"), executed by Seller.
30
- ----------------------------------------------------------------
(e) Assignments of Seller's interest in the Operating
Agreements, substantially in the form of Exhibit L attached
hereto ("Operating Agreement Assignment"), executed by Seller.
(f) To the extent not previously delivered to
Purchaser, originals of the Leases, Operating Agreements, the
Contracts (all to the extent originals are in Seller's
possession or control, or otherwise, complete copies of any
missing originals) and certificate(s) of occupancy and other
instruments evidencing the Governmental Approvals (if the same
are in Seller's possession or control).
(g) Any keys in the possession or control of Seller
to all locks located in the Property.
(h) Letters executed by Seller and its management
agent, if any, addressed to all Tenants, in the form of Exhibit
F-1 attached hereto ("Tenant Notice Letter"), notifying and
directing payment of all rent and other sums due from Tenants
from and after the date of the Closing to be made to Purchaser
or at its direction.
(i) Letters executed by Seller and its management
agent, if any, addressed to all vendors under Contracts assumed
by Purchaser hereunder in the form of Exhibit F-2 attached
hereto ("Vendor Notification Letter").
(j) Reasonable proof of the authority of Seller's
signatories.
(k) A Rent Roll, prepared as of the day of the
Closing, certified by Seller to be true and correct through the
day of the Closing.
(l) An Affidavit in the form of Exhibit E attached
hereto.
(m) If required by applicable law, documentary
stamp/transfer tax affidavit of consideration paid which is
executed by Seller.
31
- ----------------------------------------------------------------
(n) Any other documents, instruments or agreements
reasonably necessary to close the transaction as contemplated by
this Agreement.
(o) Any other documents, instruments or agreements
required by the Title Company.
(p) A Guaranty ("Guaranty"), executed by Guarantor,
in the form of Exhibit V attached hereto.
(q) Assignments of all of Seller's right, title and
interest in all bank accounts relating to the gift certificates
distributed by Seller to users of the Property.
(r) Assignments of all of Seller's right, title and
interest in any non-cash security deposits held by Seller under
the Leases (including, without limitation, any letters of credit
furnished to Seller by Tenants).
11. PURCHASER'S CLOSING DOCUMENTS
On or before the Closing, Purchaser shall deliver to
Seller or Escrow Holder:
(a) An executed counterpart of the Contract
Assignment.
(b) An executed counterpart of the Lease Assignment.
(c) An executed counterpart of the Operating
Agreement Assignment.
(d) Executed counterparts of each of the Tenant
Notification Letter and Vendor Notification Letter.
(e) If required by applicable law, documentary
stamp/transfer tax affidavit of consideration paid which is
executed by Purchaser.
(f) Any other documents, instruments or agreements
reasonably necessary to close the transaction as contemplated by
this Agreement.
32
- ----------------------------------------------------------------
(g) Any other documents, instruments or agreements
required by the Title Company.
12. PRORATIONS AND ADJUSTMENTS
The parties agree that they shall use the Proration
Method set forth on Exhibit R attached hereto to determine all
prorations and adjustments to be made in connection with the
Closing and the transaction contemplated by this Agreement.
13. CLOSING
The purchase and sale contemplated herein shall close
through an escrow ("Escrow") at the offices of Commonwealth Land
Title Company of Dallas ("Escrow Holder") at the address
indicated in Section 21.5 hereof on a business day mutually
acceptable to Seller and Purchaser, but no later than October
15, 1996 ("Closing Date") subject to Purchaser's and Seller's
respective rights to extend the Closing Date as set forth in
Section 6(a)(vi) hereof. As used in this Agreement, the term
"Closing" or "Closing Date" means the date that Purchaser is
insured as the fee owner of the Property (pursuant to the
approved Title Policy) and all other closing documents and
closing deliveries have been made by the parties as contemplated
herein. The Closing shall occur as a "New York style" closing,
and Seller covenants and agrees to deliver to the Title Company
a so-called gap indemnity agreement. At the Closing, Seller
shall deliver possession of the Property to Purchaser subject to
the rights of the Tenants under the Leases.
14. CLOSING COSTS
(a) Seller shall pay (i) one hundred percent (100%)
of the premiums for a Texas Owner's (Form T-1) policy of title
insurance, all costs of the Survey, the cost of all title
endorsements which are used for title curative purposes under
Section 4, and all costs incurred to repay any Liens; and
(ii) fifty percent (50%) of the escrow fees.
(b) Purchaser shall pay (i) one hundred percent
(100%) of any endorsements to title (including the costs of a
survey deletion endorsement) other than endorsements which
Seller is required to pay under Section 14(a) hereof, and (ii)
fifty percent (50%) of the escrow fees. In addition to the
33
- ----------------------------------------------------------------
foregoing, and notwithstanding anything to the contrary
contained herein, if the Closing occurs, Purchaser shall be
obligated to pay to Dillard the $2,000,000 payment required to
be paid to Dillard pursuant to Section 3.01 of that certain
Amended and Restated Supplemental Agreement dated as of April
18, 1996 by and between Dillard and Seller, and Seller shall
have no liability therefor.
(c) All other closing costs and expenses (not
otherwise allocated in this Section 14), due or incurred in
connection with this transaction shall be allocated between the
parties in accordance with the local custom of Dallas, Texas.
(d) Each party shall bear the expense of its own
counsel.
15. LOSS BY FIRE, OTHER CASUALTY OR CONDEMNATION; ANCHOR
CLOSING
(a) In the event that prior to the Closing, the
Property, or any part thereof, is destroyed or materially
damaged (as defined in Section 15(e) hereof), Purchaser shall
have the right, exercisable by giving written notice to Seller
and Escrow Holder within fifteen (15) days after receiving
written notice of such damage or destruction, either (i) to
terminate this Agreement, or (ii) to accept the Property in its
then condition and to proceed with the Closing with an abatement
or reduction in the Purchase Price in an amount which is the
lesser of the cost of repair or of the deductible for the
applicable insurance coverage, in which case Seller shall not
restore the Property and Purchaser shall be entitled to receive
an assignment of all of Seller's rights to any insurance
proceeds payable by reason of such damage or destruction. If
Purchaser elects to proceed under clause (ii) above, Seller
shall not compromise, settle or adjust any claims to such
proceeds without Purchaser's prior written consent, which shall
not be unreasonably withheld or delayed.
(b) In the event that prior to the Closing, there is
any non-material damage to the Property, or any part thereof,
Seller shall repair or replace such damage prior to the Closing
and Purchaser shall proceed with the Closing. Notwithstanding
the preceding sentence, in the event Seller is unwilling or
unable to repair or replace such damage, Seller shall notify
Purchaser of such fact ("Seller's Notice") and Purchaser shall
34
- ----------------------------------------------------------------
thereafter have the right, exercisable by giving written notice
to Seller and Escrow Holder within fifteen (15) days after
receiving Seller's Notice, either (i) to terminate this
Agreement, or (ii) to accept the Property in its then condition
and to proceed with the Closing with an abatement or reduction
in the Purchase Price in an amount which is the lesser of the
cost of repair or of the deductible for the applicable insurance
coverage, in which case Seller shall not restore the Property
and Purchaser shall be entitled to receive an assignment of all
of Seller's rights to any insurance proceeds payable by reason
of such damage or destruction. If Purchaser elects to proceed
under clause (ii) above, Seller shall not
compromise, settle or adjust any claims to such proceeds without
Purchaser's prior written consent, which shall not be
unreasonably withheld or delayed. For purposes of completing
any repairs or replacements under this Section 15(b), the
Closing may be extended for a reasonable time to allow such
repairs or replacements to be made by Seller.
(c) In the event that prior to the Closing, all or
any material portion (as defined in Section 15(e) hereof) of the
Property is subject to a taking or a threatened taking by public
authority, Purchaser shall have the right, exercisable by giving
written notice to Seller and Escrow Holder within fifteen (15)
days after receiving written notice of such taking, either (i)
to terminate this Agreement, or (ii) to accept the Property in
its then condition and to proceed with the Closing without an
abatement or reduction in the Purchase Price, in which case
Seller shall not restore the Property and Purchaser shall be
entitled to receive an assignment of all of Seller's rights to
any condemnation award payable by reason of such taking. If
Purchaser elects to proceed under clause (ii) above, Seller
shall not compromise, settle or adjust any claims to such award
without Purchaser's prior written consent, which shall not be
unreasonably withheld or delayed.
(d) In the event that prior to the Closing, any non-material portion
of the Property is subject to a taking or a threatened taking by public
authority, Purchaser shall accept the Property in its then condition and proceed
with the Closing without an abatement or reduction in the Purchase Price, in
which case Purchaser shall be entitled to receive an assignment
of all of Seller's rights to any condemnation award payable by
reason of such taking. In the event of any such non-material
35
- ----------------------------------------------------------------
taking, Seller shall not compromise, settle or adjust any claims
to such award without Purchaser's prior written consent, which
shall not be unreasonably withheld or delayed.
(e) For the purpose of this Section 15, damage to the
Property or a taking of a portion thereof shall be deemed to
involve a material portion thereof if (i) the reasonably
estimated cost of restoration or repair of such damage or the
amount of the condemnation award with respect of such taking
shall exceed One Million Dollars ($1,000,000), (ii) access to
the Property is prevented or otherwise impeded for in excess of
sixty (60) days by the casualty or taking, (iii) any Tenant
occupying in excess of Ten Thousand (10,000) square feet of
space in the Property terminates its Lease due to the casualty
or taking, (iv) occupancy in excess of Twenty-Five Thousand
(25,000) square feet of space in the Property is prevented for
in excess of sixty (60) days due to such casualty or taking, or
(v) all or any portion of the parking areas of the Property are
taken.
(f) In the event that prior to the Closing, any of
the Anchors shall terminate the Operating Agreement as to its
parcel, or shall cease operating at the Property (other than
temporarily due to damage, destruction, remodeling, renovation
or any similar cause) or cease operating at the Property under
the name under which it was operating as of the date of this
Agreement or such Anchor shall have the right, prior to the
Closing, to do any of the foregoing (unless such right shall
have expired or been waived) ("Anchor Closure"), Purchaser shall
have the right, exercisable by giving written notice to Seller
and Escrow Holder within fifteen (15) days after receiving
written notice of such Anchor Closure, either (i) to terminate
this Agreement, or (ii) to accept the Property in its then
condition (as affected by the Anchor Closure) and to proceed
with the Closing without an abatement or reduction
in the Purchase Price, in which case Purchaser shall be entitled
to receive an assignment of all of Seller's right, title and
interest in and to any awards, damages or the like payable by
the Anchor by reason of such Anchor Closure. If Purchaser
elects to proceed under clause (ii) above, Seller shall not
compromise, settle or adjust any claims to such awards, damages
or the like without Purchaser's prior written consent, which
shall not be unreasonably withheld or delayed.
36
- ----------------------------------------------------------------
(g) Seller agrees to give Purchaser written notice of
any of the events or occurrences described in this Section 15
promptly after learning of the same.
(h) In the event this Agreement terminates pursuant
to this Section 15, it shall terminate pursuant to Section 16(c)
hereof.
16. DEFAULT
(a) If Seller shall fail to consummate the sale of
its interest in the Property to Purchaser in accordance with the
provisions of this Agreement for any reason except for
Purchaser's default of Purchaser's obligations pursuant to this
Agreement or as provided in paragraph (c) of this Section, when
Purchaser has fulfilled all its obligations hereunder and is
ready, willing and able to close, then Purchaser, after having
given Seller ten (10) days prior written notice of the specific
nature of Seller's breach (within which such period Seller may
cure such breach) may elect one of the following remedies: (i)
be entitled to specific performance of this Agreement, or (ii)
be entitled to terminate Purchaser's obligations under this
Agreement by written notice to Seller. Notwithstanding anything
to the contrary herein and in addition to any other remedies of
Purchaser herein or at law or in equity, if Purchaser terminates
this Agreement, Purchaser shall be entitled to recover damages
(expressly excluding, however, incidental or consequential
damages) suffered by Purchaser by reason of Seller's default up
to a maximum amount of Three Hundred Fifty Thousand Dollars
($350,000).
(b) If Purchaser shall fail timely to consummate the
purchase of the Property in accordance with the provisions of
this Agreement for any reason except for Seller's default of
Seller's obligations pursuant to this Agreement or as provided
in paragraph (c) of this Section, when Seller has fulfilled all
its obligations hereunder and is ready, willing and able to
close, then Seller, after having given Purchaser ten (10) days
prior written notice of the specific nature of Purchaser's
breach (within which such period Purchaser may cure such
breach), may elect one of the following remedies: (i) be
entitled to specific performance of this Agreement, or (ii) be
entitled to terminate Seller's obligations under this Agreement
37
- ----------------------------------------------------------------
by written notice to Purchaser. Notwithstanding anything to the
contrary herein and in addition to any other remedies of Seller
herein or at law or in equity, if Seller terminates this
Agreement, Seller shall be entitled to recover damages
(expressly excluding, however, incidental or consequential
damages) suffered by Seller by reason of Purchaser's default up
to a maximum amount of Three Hundred Fifty Thousand Dollars
($350,000).
(c) If Purchaser terminates this Agreement pursuant
to any specific provision hereof that gives Purchaser such right
(other than termination of this Agreement by Purchaser as the
result of Seller's default of Seller's obligations under this
Agreement), or if Seller terminates this Agreement pursuant to
any specific provision hereof that gives Seller such right
(other than termination of this Agreement by Seller as the
result of Purchaser's default of Purchaser's obligations under
this Agreement), or if either party terminates this Agreement
because the transaction contemplated by this Agreement cannot be
consummated due to the failure of any of such party's respective
Conditions Precedent (except breach by the other party) to
occur, this Agreement thereupon shall (except those provisions
contained herein which are stated to survive a termination)
terminate and be of no further force and effect and Seller and
Purchaser shall have no further rights and obligations with
respect to this Agreement.
(d) In the event this Agreement is terminated prior
to the Closing, then:
(i) all counterparts of any documents executed
by the parties and delivered to the Escrow Holder and any
monies deposited with Escrow Holder shall be returned to
the respective depositing parties;
(ii) any monies delivered to the Escrow Holder
or other third parties on account of the Purchase Price
and/or the prorations shall be returned to the party that
delivered any such monies to the Escrow Holder or other
third parties; and
(iii) all documents delivered to Purchaser by
Seller shall be returned by Purchaser to Seller.
The provisions of this Section 16 shall survive any
termination of this Agreement.
38
- ----------------------------------------------------------------
17. INDEMNIFICATION
(a) Seller hereby agrees to indemnify, defend, and
hold free and harmless Purchaser from and against any losses,
damages, costs and expenses (including, without limitation,
reasonable attorneys' fees) as a result of any obligations,
liabilities, claims or Liens relating to (i) any claims for
personal injury or property damage alleged to have been suffered
prior to the Closing and during Seller's period of ownership by
any third party relating to the Property or Seller's interests
therein, whether direct, contingent or consequential; (ii) any
breach by Seller of any of its representations, warranties,
covenants and agreements contained herein; and/or (iii) any
Employee Claims (as defined in Section 20 hereof).
(b) Purchaser hereby agrees to indemnify, defend, and
hold free and harmless Seller from and against any losses,
damages, costs and expenses (including, without limitation,
reasonable attorneys' fees) as a result of any obligations,
liabilities, claims or Liens relating to (i) any claims for
personal injury or property damage alleged to have been suffered
from and after the Closing and during Purchaser's period of
ownership by any third party relating to the Property or
Purchaser's interests therein, whether direct, contingent or
consequential, subject to and without limiting Seller's
indemnity under Section 17(a)(ii) above, and/or (ii) any breach
by Purchaser of any of its representations, warranties,
covenants and agreements contained herein.
(c) The provisions of this Section 17 shall survive
the
Closing and shall be subject to the additional terms and
conditions of Exhibit W attached hereto; provided, however, with
respect to Sections 17(a)(ii) and 17(b)(ii) hereof, the
indemnification claim shall only survive so long as the
applicable underlying representations, warranties, covenants and
agreements survive hereunder.
(d) Notwithstanding anything to the contrary
contained herein, the indemnities in Sections 17(a)(i) and
17(b)(i) hereof shall not be deemed to include any claims of any
governmental entity alleging violation of any Environmental Laws
with respect to the Property.
39
- ----------------------------------------------------------------
18. BROKER'S COMMISSION
(a) La Salle Partners Limited has acted as Seller's
broker in connection with the transactions contemplated by this
Agreement and Seller covenants and agrees to pay all fees and
other compensation due or payable to such entity. Except as
disclosed in the immediately preceding sentence, Seller and
Purchaser each represent and warrant to the other that neither
has employed any real estate agent, broker or finder in
connection with the transactions contemplated by this Agreement
and each party agrees to indemnify, defend and hold free and
harmless the other from and against any losses, damages, costs
and expenses (including, without limitation, reasonable
attorneys' fees) incurred by such party by reason of any person
or entity claiming a brokerage commission, finder's fee or other
compensation is due or payable by reason of such indemnifying
party's acts or omissions.
(b) The provisions of this Section 18 shall survive
the Closing or any earlier termination of this Agreement.
19. ESCROW
19.1 Escrow Holder; Instructions. Purchaser and
Seller shall promptly cause Escrow to be opened for the
consummation of the transaction contemplated by this Agreement
by delivering three (3) fully signed originals, or signed
original counterparts, of this Agreement, executed by Purchaser
and Seller to Escrow Holder at its address for notice set forth
in Section 21.5 hereof. Escrow Holder shall promptly execute
all such three (3) originals of this Agreement and return (i)
one (1) fully executed original of this Agreement to Purchaser,
and (ii) one (1) fully executed originals of this Agreement to
Seller. This Agreement, together with such further
instructions, if any, as the parties shall provide to Escrow
Holder by written agreement, shall constitute the escrow
instructions. If any requirements relating to the duties or
obligations of the Escrow Holder hereunder are not acceptable to
Escrow Holder, or if Escrow Holder requires additional
instructions, the parties hereto agree to make such deletions,
substitutions and additions hereto as counsel for Purchaser and
Seller shall mutually approve, which additional instructions
shall not substantially alter the terms of this Agreement unless
40
- ----------------------------------------------------------------
otherwise expressly provided therein.
19.2 Deposits into Escrow.
(a) Seller shall deposit, or cause to be
deposited, into the Escrow, in time to permit the closing
of the transaction contemplated hereby on the Closing Date,
the items described in Sections 10(a), 10(d), 10(e), 10(l)
and 10(m)
hereof. Escrow Holder is hereby authorized to use the
foregoing documents and instruments to close the Escrow
only if and when: (i) Escrow Holder holds for the account
of Seller all net sums to be paid by Purchaser to Seller
through Escrow at the Closing; (ii) Title Company can and
will issue the Title Policy concurrently with the Closing;
(iii) Escrow Holder receives telephonic authorization from
Seller or its counsel that Seller's Conditions Precedent
and all other conditions to the Closing have been
satisfied; and (iv) Escrow Holder has prepared and the
parties shall have approved final closing statements for
each of Seller and Purchaser (collectively, "Approved
Closing Statements"), which Approved Closing Statements
shall show the amounts to be paid, credited, debited or
adjusted (as the case may be) by the parties as more fully
set forth herein.
(b) Purchaser shall deposit, or cause to be
deposited, into the Escrow, in time to permit the closing
of the transaction contemplated hereby on the Closing Date:
(1) The Purchase Price, less adjustments
per the Approved Closing Statements.
(2) The additional amount, if any, which
Escrow Holder estimates to be necessary to pay
Purchaser's share under this Agreement of the closing
costs, expenses and prorations of this transaction;
and
(3) The items described in Sections 11(b),
11(c) and 11(e) hereof.
Escrow Holder is hereby authorized to use said funds,
instruments and documents to close the Escrow only if and when:
(i) Escrow Holder holds for Purchaser the documents described in
Section 19.2(a) hereof; (ii) Title Company can and will issue
the
Title Policy concurrently with the Closing; (iii) Escrow Holder
receives telephonic authorization from Purchaser or its counsel
41
- ----------------------------------------------------------------
that all of Purchaser's Conditions Precedent and all other
conditions to the Closing have been satisfied; and (iv) Escrow
Holder has prepared and the parties shall have approved the
Approved Closing Statements.
19.3 Close of Escrow. Provided that Escrow Holder
shall not have received written notice from Purchaser or Seller
of the failure of any Condition Precedent to the Closing or any
other condition to the Closing or of the termination of the
Escrow, only if and when Purchaser and Seller have deposited
into the Escrow the matters required by this Agreement and Title
Company can and will issue the Title Policy concurrently with
the Closing, Escrow Holder shall:
(a) Deliver to Purchaser: the Deed, the Lease
Assignment and the Operating Agreement Assignment, by
causing such documents to be recorded; and causing such
documents to be mailed to Purchaser after they have been
recorded.
(b) Deliver to Seller: the Purchase Price less
adjustments per the Approved Closing Statements.
(c) Deliver to Purchaser: any funds deposited
by Purchaser, and any interest earned thereon, in excess of
the amount required to be paid by Purchaser hereunder.
(d) Cause the Title Policy to be issued to
Purchaser by Title Company.
20. EMPLOYMENT MATTERS
(a) Purchaser and Seller agree that Purchaser has not
assumed and shall not assume any obligations to (or regarding
the employment of), any persons previously or currently employed
by Seller or Seller's Manager. As of the Closing Date, Seller
shall terminate or reassign and shall cause Seller's Manager to
terminate or reassign all of its and Seller's Manager's
employees employed at the Property in accordance with all
applicable laws.
(b) Purchaser shall not assume, shall not take
subject to and shall not be liable for, any liabilities or
obligations of any kind or nature, whether absolute, contingent,
accrued, known or unknown, to former or current employees of any
of Seller, Seller's Manager: (i)which arise or accrue prior to
the Closing including, without limitation, any liabilities or
obligations of any of Seller or Seller's Manager in connection
42
- ----------------------------------------------------------------
with any employee benefit plans or collective bargaining
agreements, employment agreements or other similar arrangement,
any liabilities or obligations with respect to employment
arising under any federal, state or municipal statute or common
law, or any liabilities or obligations in respect of retiree
health benefits, and (ii) with respect to severance payments or
other termination payments to the extent such employees are
either not hired by Purchaser at Closing or not hired by
Purchaser on a permanent basis after the expiration of any
probationary period (which probationary period shall not exceed
ninety (90) days) (collectively, "Employee Claims"). Seller
covenants and agrees that no portion of any liability respecting
the Employee Claims listed in clause (ii) immediately above
shall be passed through or charged to the Tenants either by
Seller or Seller's Manager.
(c) As of the Closing Date, Purchaser may, at its
option, offer employment to any employee of Seller and/or
Seller's Manager on such terms and conditions as may be mutually
agreed upon by Purchaser and such employees. Seller shall not
impede any efforts of Purchaser to hire any such employees with
respect to whom Purchaser elects to offer employment (but Seller
may still elect to offer reassignment to some or all of such
employees), and shall provide Purchaser with copies of all
employment contracts. Seller agrees to consult with Purchaser on
all material oral or written communications or meetings
primarily regarding future employment with such employees.
21. MISCELLANEOUS
21.1 Each party executing this Agreement hereby
represents and warrants that the individuals executing this
Agreement on behalf of such party has the capacity set forth on
the signature pages hereof with full power and authority to bind
the party on whose behalf he or it is executing this Agreement
to the terms hereof.
21.2 This Agreement and the License Agreement
constitute the entire agreements between the parties hereto with
respect to the subject matter hereof and supersede all prior
agreements between the parties with respect to the matters
contained in this Agreement and the License Agreement. Any
waiver, modification, consent or acquiescence with respect to
43
- ----------------------------------------------------------------
any provision of this Agreement or with respect to any failure
to perform in accordance herewith shall be set forth in writing
and duly executed by or on behalf of the party to be bound
thereby. No waiver by any party of any breach hereunder shall
be deemed a waiver of any other or subsequent breach.
21.3 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which when taken together shall constitute one and the same
instrument. The signature page of any counterpart may be
detached therefrom without impairing the legal effect of the
signature(s) thereon provided such signature page is attached to
any other counterpart identical thereto except having additional
signature pages executed by other parties to this Agreement
attached thereto.
21.4 Time is of the essence in the performance of and
compliance with each of the provisions and conditions of this
Agreement.
21.5 Any communication, notice or demand of any kind
whatsoever which either party may be required or may desire to
give to or serve upon the other shall be in writing and
delivered by personal service (including express or courier
service), by electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by
registered or certified mail, postage prepaid, return receipt
requested or by personal service), or by registered or certified
mail, postage prepaid, return receipt requested, addressed as
follows:
Seller: La Salle Street Fund Incorporated of
Delaware
200 East Randolph Drive
Chicago, Illinois 60601 Attention:
Sanford M. Villesvik Telecopy No.:
(312) 782-4339
With a copy to: La Salle Partners Limited
200 East Randolph Drive Chicago,
Illinois 60601 Attention: James
Hanson Telecopy No.: (312) 782-4339
44
- ---------------------------------------------------------------
and to: Hagan & Olian
200 East Randolph Drive
Suite 4322
Chicago, Illinois 60601
Attention: Robert Hagan, Esq. Telecopy
No.: (312) 228-0982
Purchaser: Macerich Valley View Limited
Partnership
c/o The Macerich Company
233 Wilshire Boulevard
Suite 700
Santa Monica, California 90401
Attention: Arthur M. Coppola and
Richard A. Bayer, Esq.
Telecopy No.: (310) 395-2791
With a copy to: The Macerich Company
Two Galleria Tower
13455 Noel Road Suite 1480
Dallas, Texas 75240
Attention: Edward C. Coppola, Jr.
Telecopy No.: (214) 458-7021
and to: O'Melveny & Myers
1999 Avenue of the Stars
Suite 700
Los Angeles, California 90067
Attention: James H. Kinney, Esq.
Telecopy No.: (310) 246-6779
Escrow Holder: Commonwealth Land Title Company of
Dallas
1700 Pacific Avenue
Suite 4740
First City Center Building Dallas,
Texas 75201
Telecopy No.: (214) 754-9066
Attention: Beverly Griesse
Any party may change its address for notice by written notice
given to the other in the manner provided in this Section 21.5.
Any such communication, notice or demand shall be deemed to have
45
- ----------------------------------------------------------------
been duly given or served on the date personally served, if by
personal service, on the date of confirmed dispatch, if by
electronic communication, or on the date shown on the return
receipt or other evidence of delivery, if mailed.
21.6 The parties agree to execute such instructions to
Title Company or Escrow Holder and such other instruments and to
do such further acts as may be reasonably necessary to carry out
the provisions of this Agreement.
21.7 The making, execution and delivery of this
Agreement by the parties hereto has been induced by no
representations, statements, warranties or agreements other than
those expressly set forth herein.
21.8 Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be valid
under applicable law, but, if any provision of this Agreement
shall be invalid or prohibited thereunder, such invalidity or
prohibition shall be construed as if such invalid or prohibited
provision had not been inserted herein and shall not affect the
remainder of such provision or the remaining provisions of this
Agreement.
21.9 The language in all parts of this Agreement shall
be in all cases construed simply according to its fair meaning
and not strictly for or against any of the parties hereto for
any reason (including, without limitation, by virtue of the fact
that this Agreement may have been drafted or prepared by counsel
for one of the parties, it being recognized that both Purchaser
and Seller, and their respective counsel, contributed materially
and substantially to the preparation of this Agreement).
Section headings of this Agreement are solely for convenience of
reference and shall not govern the interpretation of any of the
provisions of this Agreement.
21.10 This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
46
- ----------------------------------------------------------------
21.11 In the event either Purchaser or Seller brings
any suit or other proceeding relating to or arising out of this
Agreement, the transaction described herein or the enforcement
hereof, or with respect to a breach of a representation or
warranty hereunder, the prevailing party (as determined by the
court, agency or other authority before which such suit or
proceeding is commenced) shall, in addition to such other relief
as may be awarded, be entitled to recover attorneys' fees,
expenses and costs of investigation as actually incurred
(including, without limitation, attorneys' fees, expenses and
costs of investigation incurred in appellate proceedings or in
connection with the enforcement or collection of any judgment
obtained in any suit or other proceeding relating to or arising
out of this Agreement, the transactions described herein or the
enforcement hereof, or with respect to a breach of a
representation or warranty hereunder, costs incurred in
establishing any right to indemnification, or in any action or
participation in connection with this Agreement in, or in
connection with, any case or proceeding under Chapters 7, 11 or
13 of the Bankruptcy Code, 11 United States Code Sections 101 et
seq., or any successor statutes). The parties hereto expressly
agree that (i) any attorneys' fees incurred in connection with
the enforcement or collection of any judgment obtained in any
suit or other proceeding relating to or arising out of this
Agreement, the transactions described herein or the enforcement
hereof, or with respect to the breach of a representation or
warranty hereunder shall be recoverable as a separate item, (ii)
the provisions of this Section 21.11 shall survive the entry of
any judgment with respect to the subject matter or enforcement
of this Agreement or with respect to the breach of a
representation or warranty hereunder, and (iii) the provisions
of this Section 21.11 will not merge, or be deemed to have
merged, into any judgment. For purposes of this Agreement, the
term "attorneys' fees" or "attorneys' fees and costs" shall mean
the fees and expenses of counsel to the parties hereto, which
may include printing, photostating, duplicating and other
expenses, air freight charges, and fees billed for law clerks,
paralegals and other persons not admitted to the bar but
performing services under the supervision of an attorney.
47
- ----------------------------------------------------------------
21.12 This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and to their
respective transferees, successors, and assigns; provided,
however, that neither this Agreement nor any of the rights or
obligations of a party hereunder shall be transferred or
assigned by a party without the prior written consent of the
other party hereunder except that Purchaser may transfer this
Agreement and its rights and obligations hereunder to any of The
Macerich Company, a Maryland corporation ("Macerich"), The
Macerich Partnership, L.P., a Delaware limited partnership
("Macerich OP") or to an entity controlled, controlled by, or
under common control with any of Macerich, Macerich OP or the
Purchaser without Seller's consent but on written notice given
at least ten (10) days prior to the Closing.
21.13 All Exhibits attached hereto are incorporated
herein by this reference.
21.14 Notwithstanding anything to the contrary
contained herein, this Agreement shall not be deemed or
construed to make the parties hereto partners or joint
venturers, or to render either party liable for any of the debts
or obligations of the other, it being the intention of the
parties to merely create the relationship of contributor and
recipient with respect to the
Property to be conveyed as contemplated hereby.
21.15(a) All information and material regarding this
Agreement as well as all information obtained by Purchaser
in connection with its investigation of the Property: (i)
will be held in strict confidence, and (ii) will not be
disclosed to any third party without the other party's
prior written consent.
(b) Until the Closing occurs, each party agrees
not to make any public announcements of the terms of this
Agreement without the consent of the other party.
(c) Notwithstanding anything to the contrary in
this Section 21.15: (i) either party may disclose the
terms of this Agreement or any information obtained in
connection with inspections of the Property to its
respective affiliates, partners, investors, directors,
officers, employees, agents, attorneys, consultants,
48
-----------------------------------------------------------
lenders, or as required by law on the condition that such
persons maintain the confidentiality of this Agreement, and
(ii) no such information shall be considered confidential
if it is information (1) that is or becomes generally
available to the public other than through a violation of
this Section 21.15; (2) that was available to or in the
possession of Purchaser or one of the Purchaser's
representatives prior to its disclosure by Seller;
(3) Purchaser or one of Purchaser's representatives
received from a third party which, to the knowledge of
Purchaser or such Purchaser representative, was not bound
to Seller by a confidentiality agreement with respect to
such information; or
(4) is developed by Purchaser or one of Purchaser's
representatives without reliance upon such information.
Purchaser's obligations under this Section 21.15 shall
terminate upon the Closing. For purposes of this Section,
each party will be entitled to rely on the advice of its
counsel as to whether a disclosure is required by law.
21.16 Upon the Closing, all provisions of this
Agreement shall terminate except for the following Sections
of this Agreement which shall survive the Closing
indefinitely or such earlier period of time as is expressly
set forth herein: Sections 3, 7(d), (e), (g), (h), (j) and
(k), 8, 9, 14, 15 (but only those provisions of Section 15
providing for (i) the assignment of awards, damages,
proceeds and the like, (ii) the handling of claims, and
(iii) any work a party is required to perform thereunder),
16, 17, 18, 20(b), 21, Exhibit R and Exhibit W.
21.17 INTENTIONALLY OMITTED.
21.18 (a) This Agreement is entered into by La Salle
Advisors Limited, a Delaware limited partnership, as duly
appointed agent of La Salle Street Fund Incorporated of
Delaware and on the express condition that any obligation
of La Salle Street Fund Incorporated of Delaware or La
Salle Advisors Limited or any affiliate shall be
enforceable only against, and payable only out of, the
property of La Salle Street Fund Incorporated of Delaware,
49
-----------------------------------------------------------
and neither any Key Person nor any of the officers or
employees of La Salle Street Fund Incorporated of Delaware
or of La Salle Advisors Limited or of any affiliate shall
be held to any personal liability whatsoever. Nothing
contained in this Section 21.18(a),
however, shall be deemed to affect or otherwise alter
Guarantor's obligations under the Guaranty, which
obligations shall remain absolute and unconditional as more
fully set forth in such Guaranty.
(b) This Agreement is entered into by Macerich
Valley View Limited Partnership, a California limited
partnership, on the express condition that any obligation
of Macerich Valley View Limited Partnership or any
affiliate shall be enforceable only against, and payable
only out of, the property of Macerich Valley View Limited
Partnership, and neither the partners of such entity or any
of the officers or employees of such entity or its partners
or any affiliate of such entity or its partners, or any
officers or employees of any of the foregoing entities
shall be held to any personal liability whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized
representatives as of the date first above written.
PURCHASER:
MACERICH VALLEY VIEW LIMITED PARTNERSHIP,
a California limited partnership
By: Macerich Valley View GP Corp.,
a Delaware corporation,
General Partner
By: /s/Richard A. Bayer
-------------------
Its: General Counsel and Secretary
50
- ----------------------------------------------------------------
SELLER:
LA SALLE STREET FUND INCORPORATED OF
DELAWARE, a Delaware corporation
by La Salle Advisors Limited, its authorized
agent
By: /s/ Sanford M. Villesvik
-------------------------
Its: Vice President
-----------------------
51
- ----------------------------------------------------------------
ESCROW HOLDER:
ESCROW HOLDER, by its execution below, hereby accepts
(as of the date first above written) the foregoing Agreement and
agrees to act as Escrow Holder under this Agreement in strict
accordance with its terms.
COMMONWEALTH LAND TITLE COMPANY OF TEXAS, a
Texas corporation
By: /s/ Beverly Griesse
--------------------
Its: Senior Vice President
----------------------
52
- ----------------------------------------------------------------