PURCHASE AND SALE AGREEMENT
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
and
COLONIAL REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
as Tenants in Common,
as Seller
and
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST,
a Pennsylvania business trust
as Buyer
Property Name: Fashion Square Mall
Location: Orlando, Florida
Effective Date: October 14, 2004
TABLE OF CONTENTS
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PAGE
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ARTICLE 1. - CERTAIN DEFINITIONS.................................................................................1
ARTICLE 2. - SALE OF PROPERTY....................................................................................7
ARTICLE 3. - PURCHASE PRICE......................................................................................7
3.1 Deposit Money...................................................................................7
3.2 Cash at Closing.................................................................................7
ARTICLE 4. - TITLE MATTERS.......................................................................................7
4.1 Title to Real Property..........................................................................7
4.2 Title Defects...................................................................................7
4.2.1 Buyer's Objections to Title............................................................8
4.2.2 Discharge of Title Objections..........................................................9
4.2.3 No New Exceptions......................................................................9
4.3 Title Insurance.................................................................................9
ARTICLE 5. - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY....................................................10
5.1 Buyer's Inspections and Due Diligence..........................................................10
5.2 As-Is Sale.....................................................................................10
5.3 Termination of Agreement During Due Diligence Period...........................................11
5.4 Buyer's Certificate............................................................................11
ARTICLE 6. - ADJUSTMENTS AND PRORATIONS.........................................................................11
6.1 Lease Rentals..................................................................................11
6.1.1 Definition of "Rent"..................................................................11
6.1.2 Rents.................................................................................11
6.1.3 Other Revenues........................................................................12
6.1.4 Marketing Funds.......................................................................13
6.2 Reimbursable Lease Expenses....................................................................13
6.3 Real Estate and Personal Property Taxes........................................................13
6.3.1 Proration of Ad Valorem Taxes.........................................................13
6.3.2 Insufficient Information..............................................................14
6.3.3 Special Assessments...................................................................14
6.3.4 Tenant Reimbursements.................................................................14
6.4 Other Property Operating Expenses..............................................................15
6.5 Closing Costs..................................................................................15
6.6 Apportionment Credit...........................................................................16
6.7 Cash Security Deposits.........................................................................16
6.8 Gift Certificate Program Credit................................................................16
6.9 Ground Lease Rents.............................................................................16
6.9.1 Shopping Center Ground Lease and Non-Shopping Center Ground Lease Rents...............16
6.9.2 Sears Ground Lease....................................................................16
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6.10 Tenant Improvement Allowance Credit............................................................17
6.11 Roof Credit....................................................................................17
6.12 Delayed Adjustment; Delivery of Operating and Other Financial Statements.......................17
ARTICLE 7. - CLOSING............................................................................................17
7.1 Closing Date...................................................................................17
7.2 Title Transfer and Payment of Purchase Price...................................................17
7.3 Seller's Closing Deliveries....................................................................18
7.4 Buyer's Closing Deliveries.....................................................................21
ARTICLE 8. - CONDITIONS TO CLOSING..............................................................................22
8.1 Conditions to Seller's Obligations.............................................................22
8.2 Conditions to Buyer's Obligations..............................................................23
8.3 Waiver of Failure of Conditions Precedent......................................................23
8.4 Approvals not a Condition to Buyer's Performance...............................................24
ARTICLE 9. - REPRESENTATIONS AND WARRANTIES.....................................................................24
9.1 Buyer's Representations........................................................................24
9.1.1 Buyer's Authorization.................................................................24
9.1.2 Buyer's Financial Condition...........................................................24
9.2 Seller's Representations.......................................................................24
9.2.1 Seller's Authorization................................................................25
9.2.2 Other Seller's Representations........................................................25
9.2.3 Delivery of Documents.................................................................26
9.2.4 Designated Employees..................................................................26
9.3 General Provisions.............................................................................26
9.3.1 No Representation as to Leases........................................................26
9.3.2 Definition of "Seller's Knowledge"....................................................26
9.3.3 Seller's Representations Deemed Modified..............................................26
9.3.4 Notice of Breach; Seller's Right to Cure..............................................27
9.3.5 Survival; Limitation on Seller's Liability............................................27
ARTICLE 10. - COVENANTS.........................................................................................28
10.1 Buyer's Covenants..............................................................................28
10.1.1 [Intentionally Omitted]...............................................................28
10.1.2 Buyer's Indemnity; Delivery of Reports................................................28
10.1.3 Limit on Government Contacts..........................................................28
10.2 Seller's Covenants.............................................................................29
10.2.1 Contracts.............................................................................29
10.2.2 Maintenance of Property...............................................................29
10.2.3 Access to Property....................................................................30
10.2.4 Termination of Certain Contracts......................................................30
10.2.5 New Leases; Lease Modifications.......................................................30
10.3 Mutual Covenants...............................................................................33
10.3.1 Publicity.............................................................................33
10.3.2 Broker................................................................................33
10.3.3 Tax Protests; Tax Refunds and Credits.................................................33
10.3.4 Confidentiality.......................................................................34
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10.4 Survival.......................................................................................34
ARTICLE 11. - FAILURE OF CONDITIONS; DEFAULT....................................................................34
11.1 To Seller's Obligations........................................................................34
11.2 To Buyer's Obligations.........................................................................35
ARTICLE 12. - CONDEMNATION/CASUALTY.............................................................................35
12.1 Condemnation...................................................................................35
12.1.1 Right to Terminate....................................................................35
12.1.2 Assignment of Proceeds................................................................35
12.2 Destruction or Damage..........................................................................36
12.3 Insurance......................................................................................36
12.4 Effect of Termination..........................................................................37
12.5 Waiver.........................................................................................37
ARTICLE 13. - ESCROW............................................................................................37
ARTICLE 14. - -[INTENTIONALLY OMITTED]..........................................................................38
ARTICLE 15. - THEATER CONSTRUCTION..............................................................................38
15.1 Theater Project................................................................................38
15.2 Changes in Plans and Specifications............................................................39
15.3 Construction Schedule..........................................................................39
15.4 License........................................................................................40
15.5 Seller Indemnity...............................................................................40
15.6 Minimum Rent Reimbursement.....................................................................40
15.7 Assignment of Construction Warranties..........................................................41
15.8 Survival.......................................................................................41
ARTICLE 16. - MISCELLANEOUS.....................................................................................42
16.1 Buyer's Assignment.............................................................................42
16.2 Designation Agreement..........................................................................42
16.3 Survival/Merger................................................................................42
16.4 Integration; Waiver............................................................................43
16.5 Governing Law..................................................................................43
16.6 Captions Not Binding; Exhibits.................................................................43
16.7 Binding Effect.................................................................................43
16.8 Severability...................................................................................43
16.9 Notices........................................................................................43
16.10 Counterparts...................................................................................45
16.11 No Recordation.................................................................................45
16.12 Additional Agreements; Further Assurances......................................................45
16.13 Construction...................................................................................45
16.14 ERISA..........................................................................................45
16.15 Maximum Aggregate Liability....................................................................46
16.16 WAIVER OF JURY TRIAL...........................................................................47
16.17 Facsimile Signatures...........................................................................47
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EXHIBITS
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Exhibit A Legal Description
Exhibit B List of Contracts
Exhibit C Form of As-Is Certificate And Agreement
Exhibit D Form of Assignment of Ground Lease
Exhibit E-1 Form of Special Warranty Deed
Exhibit E-2 Form of Quit Claim Deed
Exhibit F Form of Bill of Sale
Exhibit G Form of Assignment of Leases
Exhibit H Form of Assignment of Intangible Property
Exhibit I Intentionally Omitted
Exhibit J Form of FIRPTA Affidavit
Exhibit K Form of Buyer's ERISA Certificate
Exhibit L Litigation Notices, Contract Defaults and Governmental Violations
Exhibit M List of Tenants
Exhibit N Form of Tenant Estoppel Certificate
Exhibit O-1 Form of Shopping Center Ground Lease Estoppel Certificate
Exhibit O-2 Form of Non-Shopping Center Ground Lease Estoppel Certificate
Exhibit P Form of Sears Estoppel Certificate
Exhibit Q Theater Lease Provision
Exhibit R List of Plans Owning 10% of Separate Account
Exhibit S Estoppel Letter from Colonial
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made to be effective as of
October 14, 2004, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey corporation, and COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware
limited partnership, as Tenants-in-Common (collectively, "Seller"), and
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust
("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1. -- CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Broker" shall mean Granite Partners, L.L.C.
"business day" shall mean any day other than a Saturday, Sunday or any
federal or State of Florida holiday. If any period hereunder expires on
a day that is not a business day, or any event or condition is required
by the terms of this Agreement to occur or be fulfilled on a day that
is not a business day, such period shall expire or such event or
condition shall occur or be fulfilled, as the case may be, on the next
succeeding business day.
"Buyer's Representatives" shall mean Buyer and its employees.
"Closing" shall mean the closing of the Transaction.
"Closing Date" shall mean a date selected by Buyer by giving ten (10)
days' advance notice to Seller, but in no event earlier than November
15, 2004, and in no event later than December 15, 2004 (as the same may
be extended pursuant to the express terms of this Agreement).
"Colonial" shall mean Colonial Realty Limited Partnership, a Delaware
limited partnership, one of the tenants-in-common comprising Seller.
"Contracts" shall mean all service, supply, maintenance, utility and
commission agreements, all equipment leases, and all other contracts,
subcontracts and agreements relating to the Real Property and the
Personal Property (including all contracts, subcontracts and agreements
relating to the construction of any unfinished tenant improvements),
all of which are described in EXHIBIT B attached hereto and
incorporated herein by this reference, and any additional contracts,
subcontracts and agreements entered into in accordance with the terms
of Subsection 10.2.1 hereof.
1
"Confidential Materials" shall mean any books, computer software,
records or files that consist of or contain appraisals, the capital
budgets for calendar year 2005 or any future period, the operating
budgets for calendar year 2006 or any future period, strategic plans
for the Real Property, internal analyses, information regarding the
marketing of the Property for sale, submissions relating to obtaining
internal authorization for the sale of the Property by Seller, attorney
and accountant work product, attorney-client privileged documents,
internal correspondence of Seller and its affiliates and correspondence
between or among such parties, or other information in the possession
or control of Seller or Seller's property manager which such party
reasonably deems proprietary or confidential. No files related to the
historical leasing, operation and maintenance of the Property, the
payment of rent, defaults by tenants or relationships with tenants
shall be deemed Confidential Materials.
"deemed to know" (or words of similar import) shall have the following
meaning: (a) Buyer shall be "deemed to know" of the existence of a fact
or circumstance to the extent that any Buyer's Representative knows of
such fact or circumstance, or such fact or circumstance is disclosed by
this Agreement, the Documents, or any studies, tests, reports, or
analyses prepared by or for or otherwise obtained by Buyer or Buyer's
Representatives; and (b) Buyer shall be "deemed to know" that any
Seller's warranty is untrue, inaccurate or incorrect to the extent that
any Buyer's Representative has knowledge of information which is
inconsistent with such Seller's Warranty, or this Agreement, the
Documents, or any studies, tests, reports or analyses prepared by or
for or otherwise obtained by Buyer or Buyer's Representatives contains
information which is inconsistent with such Seller's Warranty.
"Designated Employees" shall mean Lawrence J. Frank and John Moss.
"Documents" shall mean the documents and instruments applicable to the
Property or any portion thereof that Seller or any of the other Seller
Parties deliver or make available to Buyer prior to Closing or
otherwise allow Buyer access to prior to Closing, including, but not
limited to, the Title Commitment, the Survey, the Title Documents, and
the Property Documents, together with the documents and items delivered
by Seller pursuant to Section 7.3.
"Due Diligence" shall mean examinations, inspections, investigations,
tests, studies, analyses, appraisals, evaluations and/or investigations
with respect to the Property, the Documents, and other information and
documents regarding the Property, including, without limitation,
examination and review of title matters, applicable land use and zoning
Laws and other Laws applicable to the Property, the physical condition
of the Property, and the economic status of the Property.
"Due Diligence Period" shall mean the period commencing on the LOI Date
and expiring on October 4, 2004.
"Effective Date" shall mean the date first set forth in this Agreement,
which shall be the date on which both Buyer and Seller have executed
and delivered this Agreement.
S-2
"Escrow Agent" shall mean Broad and Cassel, as agent for First American
Title Insurance Company, whose mailing address is 215 South Monroe
Street, Suite 400, P.O. Box 11300, Tallahassee, Florida 32301,
Attention: Ralph C. Datillio, Esq., in its capacity as escrow agent.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Ground Leases" shall mean, collectively, the Shopping Center Ground
Lease, the Non-Shopping Center Ground Lease and the Sears Ground Lease.
"Hazardous Materials" shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal, state or local
governmental authority because of its toxicity, infectiousness,
radioactivity, explosiveness, ignitability, corrosiveness or
reactivity, including, without limitation, asbestos or any substance
containing more than 0.1 percent asbestos, the group of compounds known
as polychlorinated biphenyls, flammable explosives, oil, petroleum or
any refined petroleum product.
"Laws" shall mean all municipal, county, state or federal statutes,
codes, ordinances, laws, rules or regulations.
"Leases" shall mean all leases of tenants of the Property on the
Closing Date.
"Liabilities" shall mean, collectively, any and all problems,
conditions, losses, costs, damages, claims, liabilities, expenses,
demands or obligations of any kind or nature whatsoever.
"LOI Date" shall mean August 26, 2004, the date of full execution of
the letter of interest between Buyer and Seller with respect to the
Property.
"New Leases" shall mean, collectively, any lease for space at the
Property entered into between the LOI Date and the Closing Date.
"Non-Shopping Center Ground Lease" shall mean that certain Non-Shopping
Center Ground Lease dated March 14, 1972 between The McCrory Holding
Company, a Delaware corporation, Sun Bank, N.A., as Trustee under the
Last Will and Testament of John H. McCullough, deceased, Charlotte
Maguire and Raymer F. Maguire, Jr., as Trustees under Article VI of the
Last Will and Testament of Raymer F. Maguire, deceased, and Charlotte
Maguire, individually, as lessors, and Orlando Office Park Associates,
Ltd., as lessee, a memorandum of which was recorded March 17, 1972, in
Official Records Book 2194, page 654, of the Public Records of Orange
County, Florida, as amended.
"Other Property Rights" shall mean, collectively, Seller's interest in
and to all of the following, if and to the extent the same are
assignable by Seller without any expense to Seller: (a) to the extent
that the same are in effect as of the Closing Date, any licenses,
permits and other written authorizations necessary for the use,
operation or ownership of the Real Property, (b) those guaranties and
warranties in effect with respect to any portion of the Property as of
the Closing Date, and (c) all rights of Seller (if any) to the name
"Fashion Square Mall" (it being acknowledged by Buyer that Seller does
not have exclusive rights to use such name and that Seller has not
registered the same in any manner).
S-3
"Owner's Policy" shall mean an ALTA Owner's Form of title insurance
policy in the amount of the Purchase Price.
"Permitted Exceptions" shall mean and include all of the following
(except to the extent any matters included in clauses (b), (c), (d) and
(j) are objected to by Buyer as provided in Section 4.2 hereof): (a)
applicable zoning and building ordinances and land use regulations, (b)
all liens, encumbrances, covenants, conditions, restrictions, easements
and other matters of record except to the extent that the same are
caused or created by Seller in violation of the terms of Section 4.2.3;
(c) such exceptions to title as are listed on Schedule B of the Title
Commitment, (d) such state of facts as disclosed in the Survey, (e)
such state of facts as would be disclosed by a physical inspection of
the Property, (f) the lien of taxes and assessments not yet due and
payable (it being agreed by Buyer and Seller that if any tax or
assessment is levied or assessed with respect to the Property after the
date hereof and the owner of the Property has the election to pay such
tax or assessment either immediately or under a payment plan with
interest, Seller may elect to pay under a payment plan, which election
shall be binding on Buyer), (g) any exceptions caused by Buyer, its
agents, representatives or employees, (h) such other exceptions as the
Title Company shall commit to insure over, without any additional cost
to Buyer, whether such insurance is made available in consideration of
payment, bonding, indemnity of Seller or otherwise, (i) the rights of
the tenants under the Leases, (j) any matters of which Buyer knows or
is deemed to know prior to the expiration of the Due Diligence Period,
and (k) any matters deemed to constitute additional Permitted
Exceptions under Subsection 4.2.1 hereof.
"Personal Property" shall mean, collectively, (a) all tangible personal
property owned by Seller that is located on the Real Property and used
in the ownership, operation and maintenance of the Real Property, and
(b) all books, records and files relating to the Real Property or the
Leases, and the historical net income of the Real Property but
specifically excluding any Confidential Materials and any computer
software that is licensed to Seller or Seller's property manager.
"Plans" shall mean employee benefit plans, as defined in Section 3(3)
of ERISA.
"Property" shall mean, collectively, (a) the Real Property, (b) the
Personal Property, (c) Seller's interest as landlord in all Leases; (d)
if and to the extent assignable by Seller without any expense to
Seller, the Contracts, and (e) the Other Property Rights.
"Property Documents" shall mean, collectively, (a) the Leases, (b) the
Contracts, (c) the Ground Leases, and (d) any other documents or
instruments which constitute or otherwise create any portion of the
Property.
S-4
"Prudential" shall mean The Prudential Insurance Company of America, a
New Jersey corporation, one of the tenants-in-common comprising Seller.
"Real Property" shall mean those certain interests (including leasehold
interests under the Ground Leases) in parcels of real estate located in
Orlando, Florida, and legally described in Exhibit A attached hereto
and incorporated herein by this reference, together with all buildings,
improvements and fixtures located thereon and owned by Seller as of the
Closing Date and all rights, privileges and appurtenances pertaining
thereto including all of Seller's right, title and interest in and to
all rights-of-way, open or proposed streets, alleys, easements, strips
or gores of land adjacent thereto.
"Reimbursable Lease Expenses" shall mean, collectively, any and all
costs, expenses and fees paid by Seller prior to Closing or costs,
expenses and fees incurred by Seller prior to Closing arising out of or
in connection with (a) any extensions, renewals or expansions provided
for in any Lease which are exercised between the LOI Date and the
Closing Date, (b) any extensions, renewals or expansions not provided
for in any Lease which are approved or deemed approved by Buyer, and
(c) any New Lease which has been approved or deemed approved by Buyer
(collectively, "New Leasing Documents"). Reimbursable Lease Expenses
shall include, without limitation, (i) brokerage commissions and fees
to effect any such leasing transaction, (ii) expenses incurred for
repairs, improvements, equipment, painting, decorating, partitioning
and other items to satisfy the tenant's requirements with regard to
such leasing transaction, (iii) legal fees for services in connection
with the preparation of documents and other services rendered in
connection with the effectuation of the leasing transaction, (iv) if
there are any rent concessions covering any period that the tenant has
the right to be in possession of the demised space, the rents that
would have accrued during the period of such concession prior to the
Closing Date as if such concession were amortized over (A) with respect
to any extension or renewal, the term of such extension or renewal, (B)
with respect to any expansion, that portion of the term remaining under
the subject Lease after the date of such expansion, or (C) with respect
to any New Lease, the entire initial term of any such New Lease, and
(v) expenses incurred for the purpose of satisfying or terminating the
obligations of a tenant under a New Lease to the landlord under another
lease (whether or not such other lease covers space in the Property).
Notwithstanding the foregoing, with respect to the New Leases with
Great American Cookie, J & J Cajun and Morrows Candy, only fifty
percent (50%) of the brokerage commissions and tenant improvement
expenses, as described in clauses (i) and (ii) above, incurred in
connection with such New Leases shall be included in Reimbursable Lease
Expenses.
"Required Tenants" shall mean, collectively, (a) Burdine's, JC Penney,
Dillard's, Hi-Tech Institute and Premier Theater, and (b) other tenants
of the Property that (i) are obligated under their Leases to deliver
estoppel certificates to the landlord and (ii) collectively occupy no
less that seventy-five percent (75%) of the area under lease at the
Property (excluding the area leased under the Leases with the tenants
listed in clause (a) above, and also excluding Leases having terms of
less than one (1) year).
S-5
"Sears Ground Lease" shall mean that certain Ground Lease dated
February 19, 1992 between Sears, Roebuck and Co., as lessor, and Fund A
Orlando, Inc., as lessee, a memorandum of which was recorded May 21,
1992, in Official Records Book 4414, page 801, of the Public Records of
Orange County, Florida, as amended.
"Sears REA" shall mean that certain Easement, Restriction and Operating
Agreement dated March 20, 1972 by and among Sears, Roebuck and Co.,
Orlando Joint Venture, Federated Department Stores, Inc. and Adcor
Realty Corporation, a memorandum of which was recorded on March 30,
1972, in Official Records Book 2200, page 404, of the Public Records of
Orange County, Florida, as amended.
"Seller Parties" shall mean and include, collectively, (a) each party
comprising Seller; (b) Seller's counsel; (c) Broker; (d) Seller's
property manager, (e) any direct or indirect equity owner, officer,
director, employee, or agent of Seller, its counsel, Broker, Seller's
property manager or any direct or indirect equity owner of Seller; and
(f) any other entity or individual affiliated or related in any way to
any of the foregoing.
"Seller's Warranties" shall mean Seller's representations and
warranties set forth in Section 9.2 and any documents executed by
Seller for the benefit of Buyer in connection with Closing, as such
representations and warranties may be deemed modified or waived by
Buyer as herein provided.
"Separate Account" shall mean a pooled separate account of Prudential.
"Shopping Center Ground Lease" shall mean that certain Shopping Center
Ground Lease dated March 13, 1972, between The McCrory Holding Company,
a Delaware corporation, The First National Bank at Orlando, as Trustee
under the Last Will and Testament of John H. McCullough, deceased,
Charlotte Maguire Behrman and Raymer F. Maguire, Jr., as Trustees under
Article VI of the Last Will and Testament of Raymer F. Maguire,
deceased, and Charlotte Maguire Behrman, individually, joined by her
husband Mayes Behrman, as lessor, and Leonard L. Farber, as lessee, a
memorandum of which was recorded March 17, 1972, in Official Records
Book 2194, page 642, of the Public Records of Orange County, Florida,
as amended.
"Survey" shall mean a survey of the Property prepared by a surveyor
licensed in the State of Florida.
"Tax Year" shall mean the period commencing on January 1 of each
calendar year and ending on December 31 of each calendar year, being
the real estate tax assessment year for the county in which the
Property is located.
"Title Commitment" shall mean a commitment to issue an Owner's Policy
of Title Insurance with respect to the Property, issued by the Title
Company.
"Title Company" shall mean First American Title Insurance Company.
S-6
"Title Documents" shall mean all recorded documents referred to on
Schedule B of the Title Commitment as exceptions to coverage.
"Transaction" shall mean the transaction contemplated by this
Agreement.
ARTICLE 2. -- SALE OF PROPERTY
Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions set forth in this Agreement and
the Exhibits attached hereto, all of Seller's right, title and interest in and
to the Property.
ARTICLE 3. - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property is
the sum of ONE HUNDRED TWENTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($123,500,000.00) in immediately available funds (the "Purchase Price").
The Purchase Price shall be paid in the following manner:
3.1 Deposit Money. On or before 5:00 p.m. Eastern time on the fifth (5th)
day following the full execution and delivery of this Agreement, and as
a condition precedent to the effectiveness of this Agreement, Buyer
shall deposit the sum of TWO MILLION AND NO/100 DOLLARS ($2,000,000.00)
in immediately available funds with Escrow Agent (the "Deposit"). The
Deposit shall be held and delivered by Escrow Agent in accordance with
the provisions of Article 13. Any interest earned on the Deposit shall
be considered a part of the Deposit. Except as otherwise set forth
herein, the Deposit shall be applied against the Purchase Price on the
Closing Date and shall otherwise be held and delivered by Escrow Agent
in accordance with the Provisions of Article 13. Notwithstanding any
provision in this Agreement to the contrary, if Buyer fails timely to
make the Deposit as provided herein, Buyer shall be deemed to have
elected to terminate this Agreement, and the parties shall have no
further rights or obligations hereunder except for obligations which
expressly survive the termination of this Agreement.
3.2 Cash at Closing. On the Closing Date, Buyer shall pay to Seller an
amount equal to the balance of the Purchase Price, subject to the
prorations and adjustments set forth in Article 6 or as otherwise
provided under this Agreement, plus any other amounts required to be
paid by Buyer at Closing, in immediately available funds by wire
transfer as more particularly set forth in Section 7.2.
ARTICLE 4. - TITLE MATTERS
4.1 Title to Real Property. Buyer shall use good faith and reasonable
efforts to obtain (a) the Title Commitment, (b) copies of all of the
Title Documents, and (c) the Survey, as soon as reasonably practicable
after the LOI Date. Upon receipt, Buyer shall furnish Seller's counsel
with copies of such items.
4.2 Title Defects.
S-7
4.2.1 Buyer's Objections to Title.
(a) Prior to the end of the Due Diligence Period, Buyer shall
have the right to object in writing to any title matters
that appear on the Title Commitment or Survey. In addition,
after expiration of the Due Diligence Period, Buyer shall
have the right to object in writing to any title matters
that (i) are not Permitted Exceptions, and (ii) materially
adversely affect Buyer's title to the Real Property, and
(iii) first appear on any supplemental title reports or
updates to the Title Commitment issued after expiration of
the Due Diligence Period, so long as such objection is made
by Buyer within five (5) business days after Buyer becomes
aware of the same (but in any event prior to the Closing
Date). Unless Buyer is entitled to and does timely object
to any such title matters, all such title matters shall be
deemed to constitute additional Permitted Exceptions. Any
exceptions which are timely objected to by Buyer shall be
herein collectively called the "Title Objections."
(b) If this Agreement is not terminated by Buyer in accordance
with the provisions hereof, Seller shall, at Closing,
remove or cause to be removed any Title Objections to the
extent (and only to the extent) that (i) such Title
Objections have not been caused by Buyer or any Buyer,
Representatives, and (ii) such Title Objections are either
(A) liens evidencing monetary encumbrances (other than
liens for non-delinquent general real estate taxes), or (B)
liens created or suffered to exist by Seller or its agents
and affiliates but only to the extent such liens are
created after the date of this Agreement in violation of
Section 4.2.3 (collectively, the "Required Exceptions"). In
addition, Seller may elect (but shall not be obligated) to
remove, or cause to be removed at its expense, any other
Title Objections, as provided in Section 4.2.2.
(c) To the extent that the same do not constitute Required
Exceptions, Seller shall notify Buyer in writing within
fifteen (15) business days after receipt of Buyer's notice
of Title Objections (but in any event, prior to the Closing
Date) whether Seller elects to remove the same. If Seller
elects not to remove one or more of such Title Objections,
then within five (5) business days after Seller's election
(but in any event, prior to the Closing Date), Buyer may
elect in writing to either (i) terminate this Agreement, in
which event the Deposit shall be paid to Buyer, and
thereafter, the parties shall have no further rights or
obligations hereunder except for obligations that expressly
survive the termination of this Agreement, or (ii) waive
such Title Objections, in which event the Closing shall
occur as herein provided without any reduction of or credit
against the Purchase Price. Any such Title Objection so
waived (or deemed waived) by Buyer shall be deemed to
constitute an additional Permitted Exception, and the
Closing shall occur as herein provided without any
reduction of or credit against the Purchase Price.
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(d) If Seller is unable, after using good faith, commercially
reasonably efforts, to remove any Required Exceptions or
other Title Objections that it has previously elected to
remove prior to the Closing, Buyer may at Closing elect
either to (a) terminate this Agreement, in which event the
Deposit shall be paid to Buyer, and thereafter, the parties
shall have no further rights or obligations hereunder
except for obligations which expressly survive the
termination of this Agreement, or (b) waive such Title
Objections, in which event the Closing shall occur as
herein provided without any reduction of or credit against
the Purchase Price (except that if Buyer uses its own funds
to cure any Title Exceptions consisting of monetary liens,
Buyer shall be entitled to a corresponding credit against
the Purchase Price). Seller shall be entitled to a
reasonable adjournment of the Closing (not to exceed ninety
(90) days) for the purpose of the removal of any Required
Exceptions or other Title Objections, which removal will be
deemed effected by the issuance of title insurance
eliminating or insuring against the effect of the Title
Objections as provided in Section 4.2.2.
4.2.2 Discharge of Title Objections. If on the Closing Date there are
any Required Exceptions or any other Title Objections which
Seller has elected to pay and discharge, Seller may use any
portion of the Purchase Price to satisfy the same, provided
Seller shall either (a) deliver to Buyer at the Closing
instruments in recordable form and sufficient to cause such Title
Objections to be released of record, together with the cost of
recording or filing such instruments, or (b) cause the Title
Company to insure over the same, without any additional cost to
Buyer, whether such insurance is made available in consideration
of payment, bonding, indemnity of Seller or otherwise, provided
that any such insurance over any matter other than a monetary
lien shall be subject to Buyer's approval, which shall not be
unreasonably withheld, conditioned or delayed.
4.2.3 No New Exceptions. From and after the date hereof, Seller shall
not execute any deed, easement, restriction, covenant or other
matter affecting title to the Property unless Buyer has received
a copy thereof and has approved the same in writing. If Buyer
fails to object in writing to any such proposed instrument within
five (5) business days after receipt of such instrument, Buyer
shall be deemed to have approved the proposed instrument. Buyer
shall not unreasonably withhold, condition or delay its approval
with respect to any such instrument.
4.3 Title Insurance. At Closing, the Title Company shall issue to Buyer the
Owner's Policy insuring that title to the Real Property is vested in
Buyer, subject only to the Permitted Exceptions, and with extended
coverage over the standard general exceptions. Buyer shall be entitled
to request that the Title Company provide such endorsements (or
amendments) to the Owner's Title Policy as Buyer may reasonably
require, provided that (a) such endorsements (or amendments) shall be
at no cost to, and shall impose no additional liability on, Seller, (b)
Buyer's obligations under this Agreement shall not be conditioned upon
Buyer's ability to obtain such endorsements and, if Buyer is unable to
obtain such endorsements, Buyer shall nevertheless be obligated to
proceed to close the Transaction without reduction of or set off
against the Purchase Price, and (c) the Closing shall not be delayed as
a result of Buyer's request for endorsements.
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ARTICLE 5. - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
5.1 Buyer's Inspections and Due Diligence. During the Due Diligence Period,
Seller shall provide Buyer and Buyer's representatives access to the
Property and all files related to the leasing, operation and
maintenance of the Property, the payment of rent, defaults by tenants
and relationships with tenants (but specifically excluding Confidential
Materials). Seller shall also provide Buyer and Buyer's representatives
access to financial records of the property wherever located to the
extent reasonably necessary for Buyer to confirm that rents and gross
receipts for services meet the REIT tests for federal income tax
purposes (but specifically excluding Confidential Materials). Buyer
shall complete its Due Diligence at its sole cost and expense. Buyer
shall independently inspect and investigate the Property and verify
such information with respect to the Property as Buyer deems necessary
or desirable to evaluate fully the Transaction and the physical
condition and economic status of the Property. Such Due Diligence shall
include, without limitation, Buyer's review and approval, in its sole
and absolute discretion, of all title matters, applicable land use and
zoning laws and regulations, the physical condition of the Property,
leases and contracts affecting the Property and such other items
related to the Property as Buyer may deem relevant. Seller agrees to
make employees of Seller's property manager available to Buyer and
Buyer's Representatives during the Due Diligence Period as reasonably
requested by Buyer. Buyer shall immediately return the Property to its
condition existing prior to any tests and inspections performed by
Buyer's Representatives or consultants. By Buyer's execution of this
Agreement, Buyer hereby confirms its agreement to indemnify, defend and
hold each of the Seller Parties free and harmless from and against any
and all Liabilities (including reasonable attorneys' fees and expenses)
arising out of or resulting from the entry on the Property and/or the
conduct of any Due Diligence by Buyer's Representatives or consultants
at any time prior to Closing; provided, however, that Buyer's
obligations under the foregoing indemnity shall not apply to the mere
discovery of a pre-existing environmental or physical condition at the
Property.
5.2 As-Is Sale. Buyer acknowledges and agrees that during the Due Diligence
Period, Buyer has conducted and shall conduct such Due Diligence as
Buyer deems necessary or appropriate. In addition, Buyer acknowledges
and agrees that (a) except as set forth herein, the Property shall be
sold, and Buyer shall accept possession of the Property on the Closing
Date, "AS IS, WHERE IS, WITH ALL FAULTS," with no right of setoff or
reduction in the Purchase Price; (b) except for Seller's Warranties,
none of the Seller Parties have or shall be deemed to have made any
verbal or written representations, warranties, promises or guarantees
(whether express, implied, statutory or otherwise) to Buyer with
respect to the Property, any matter set forth, contained or addressed
in the Documents (including without limitation the accuracy and
completeness thereof) or the results of Buyer's Due Diligence; and (c)
Buyer shall independently confirm to its satisfaction all information
that it considers material to its purchase of the Property or the
Transaction. Buyer expressly understands and acknowledges that it is
possible that unknown Liabilities may exist with respect to the
Property, and that Buyer explicitly took such possibility into account
in determining and agreeing to the Purchase Price, and that a portion
of such consideration, having been bargained for between parties with
knowledge of the possibility of such unknown Liabilities, shall be
given in exchange for a full accord and satisfaction and discharge of
all such Liabilities.
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5.3 Termination of Agreement During Due Diligence Period. If Buyer, in its
sole and absolute discretion, is not satisfied with the results of its
Due Diligence during the Due Diligence Period, Buyer may terminate this
Agreement by written notice to Seller given in accordance with the
provisions of Section 16.9 hereof at any time prior to 5:00 p.m.
Eastern Time on the first business day following the expiration of the
Due Diligence Period, and, in the event of such termination, neither
Seller nor Buyer shall have any liability hereunder except for those
obligations which expressly survive the termination of this Agreement,
and Buyer shall be entitled to the return of the Deposit. In the event
Buyer fails to terminate this Agreement prior to 5:00 p.m. Eastern Time
on the first business day following the expiration of the Due Diligence
Period, Buyer shall be deemed to have waived its rights to terminate
this Agreement in accordance with this Article 5.
5.4 Buyer's Certificate. Buyer shall deliver to Seller, at the Closing, a
certificate in the form of Exhibit C attached hereto and incorporated
herein by this reference.
ARTICLE 6. - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
6.1 Lease Rentals.
6.1.1 Definition of "Rent". For purposes of this Article 6, the term
"Rent" shall mean all base rents, percentage rents, additional
rent, common area maintenance charges and any tax and operating
expense reimbursements and escalations due from the tenants under
the Leases.
6.1.2 Rents. All collected Rents shall be prorated between Seller and
Buyer as of 12:01 a.m. on the Closing Date. Seller shall be
entitled to all Rents attributable to the period up to but not
including the Closing Date. Buyer shall be entitled to all Rents
attributable to any period on and after the Closing Date. Except
with respect to percentage rents (which shall be prorated as
provided below), Rents not collected as of the Closing Date shall
not be prorated at the time of Closing. With respect to
percentage rent due from any tenant, Buyer and Seller agree that
at Closing, estimated percentage rent shall be prorated for the
calendar year in which the Closing occurs (even though the same
may not have been collected as of the Closing) based upon the
amount of percentage rent due from such tenant for the calendar
year immediately prior to the calendar year in which the Closing
occurs. After Closing, Buyer shall make a good faith effort for a
period not less than six (6) months to collect any Rents not
collected as of the Closing Date on Seller's behalf and to tender
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the same to Seller upon receipt (which obligation of Buyer shall
survive the Closing and not be merged therein); provided,
however, that all Rents collected by Buyer on or after the
Closing date shall first be applied to all amounts due under the
Leases at the time of collection (i.e., current Rents and sums
due Buyer as the current owner and landlord) with the balance (if
any) payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Seller agrees that the
invoicing of delinquent tenants on a monthly basis shall
constitute a good faith effort and Buyer shall not be obligated
to enforce its rights under the Leases, or threaten such
enforcement, or to bring any proceedings in a court of law or
equity. Buyer shall not have an exclusive right to collect the
sums due Seller under the Leases, and Seller hereby retains its
rights to pursue any tenant under the Leases for sums due Seller
for periods attributable to Seller's ownership of the Property
(including, without limitation, any percentage rent that may be
due with respect to any period of time prior to Closing,
regardless of when the same is to be paid to the owner of the
Property pursuant to the terms of the applicable Lease);
provided, however, that Seller (i) shall be required to notify
Buyer in writing of its intention to commence or pursue such
legal proceedings; (ii) shall only be permitted to commence or
pursue any legal proceedings after the date which is three (3)
months after Closing and shall commence such proceeding, if at
all, prior to the 1st anniversary of the Closing Date; and (iii)
shall not be permitted to commence or pursue any legal
proceedings against any tenant seeking eviction of such tenant or
the termination of the underlying lease. The terms of the
immediately preceding sentence shall survive the Closing and not
be merged therein.
6.1.3 Other Revenues. Revenues from Property operations (other than
Rents (which shall be prorated as provided in Subsection 6.1.2),
and security deposits (which will be apportioned as provided in
Section 6.7), that are actually collected shall be prorated
between Buyer and Seller as of 12:01 a.m. on the Closing Date.
Seller shall be entitled to all such revenues attributable to any
period to but not including the Closing Date, and Buyer shall be
entitled to all such revenues attributable to any period on and
after the Closing Date. After Closing, Buyer shall make a good
faith effort for a period not less than six (6) months to collect
any such revenues not collected as of the Closing Date on
Seller's behalf and to tender the same to Seller upon receipt
(which obligation of Buyer shall survive the Closing and not be
merged therein); provided, however, that all such other revenues
collected by Buyer on or after the Closing Date shall first be
applied to all amounts that may be due from such payor to Buyer
at the time of collection with the balance (if any) payable to
Seller, but only to the extent of amounts delinquent and actually
due to Seller. Seller agrees that the invoicing of delinquent
payors on a monthly basis shall constitute a good faith effort
and Buyer shall not be obligated to enforce its rights under the
agreements pursuant to which such revenues are due, or threaten
such enforcement, or to bring any proceedings in a court of law
or in equity. Buyer shall not have an exclusive right to collect
such revenues, and Seller hereby retains its rights to pursue any
parties for sums due Seller for periods attributable to Seller's
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ownership of the Property; provided, however, that Seller (i)
shall be required to notify Buyer in writing of its intention to
commence or pursue such legal proceedings; (ii) shall only be
permitted to commence or pursue any legal proceedings after the
date which is three (3) months after Closing and shall commence
such proceeding, if at all, prior to the 1st anniversary of the
Closing Date; and (iii) to the extent any such delinquent payor
is a tenant at the Property, shall not be permitted to commence
or pursue any legal proceedings against such tenant seeking
eviction of such tenant or the termination of the underlying
lease. The terms of the immediately preceding sentence shall
survive the Closing and not be merged therein.
6.1.4 Marketing Funds. Advertising and marketing funds collected by
Seller prior to closing, net of closing expenses not assumed by
Buyer, will be credited against the Purchase Price.
6.2 Reimbursable Lease Expenses. At Closing, Buyer shall reimburse Seller
for the Reimbursable Lease Expenses to the extent required by the terms
of Section 10.2.5.
6.3 Real Estate and Personal Property Taxes. Proration of Ad Valorem Taxes.
Subject to the terms of Section 6.3.4 below, Buyer and Seller shall
only prorate ad valorem real estate and personal property taxes for the
Property that are assessed for the Tax Year in which Closing occurs. In
the event Closing does not occur until 2005, Seller shall pay 2004 real
estate and personal property taxes at or prior to Closing, whether or
not due and payable. There shall be no proration of ad valorem real
estate or personal property taxes other than as set forth hereinabove,
and, as between Buyer and Seller, Buyer agrees that it shall be solely
responsible for all such ad valorem real estate and personal property
taxes due and payable after the Closing. The proration of the ad
valorem real estate and personal property taxes assessed for the Tax
Year in which Closing occurs shall be calculated as follows:
(a) Seller shall be responsible for that portion of such
taxes equal to (i) the total such taxes assessed for
the Tax Year in which Closing occurs, multiplied by
(ii) a fraction, the numerator of which shall be the
number of days in such Tax Year prior to the Closing
Date, and the denominator of which shall be 366; and
(b) Buyer shall be responsible for that portion of such
taxes equal to (i) the total such taxes assessed for
the Tax Year in which Closing occurs, multiplied by
(ii) a fraction, numerator of which shall be the
number of days in such Tax Year subsequent to and
including the Closing Date, and the denominator of
which shall be 366.
Notwithstanding anything herein to the contrary, Seller agrees
to collect and remit to the appropriate taxing authority all
sales and use taxes required by Law to be collected by Seller
prior to the Closing Date, and Buyer agrees to collect and
remit to the property taxing authorities all sales and use
taxes required by Law to be collected by Buyer on or after the
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Closing Date. Each party hereby agrees to indemnify and hold
the other party harmless from and against any and all
liability such party may incur, including interest, penalties
and costs, by reason of the failure of the other party to
collect and remit to the appropriate taxing authorities all
sales and use taxes required to be collected by such party
during its period of ownership. The provisions of this
paragraph shall survive Closing and shall not be merged
therein; provided, however, that Seller's indemnity obligation
under this Section 6.3.1 shall expire upon the date on which
the Florida Department of Revenue issues a Transferee
Liability Certificate for Seller stating that no taxes,
interest or penalties are due with respect to the Property.
Seller's indemnity obligation under this Section 6.3.1 (i)
shall be the several (and not the joint and several)
obligation of the parties comprising Seller, and (ii) shall
not be subject to the cap on Seller's liability provided for
in Section 16.15.
6.3.2 Insufficient Information. If, at Closing, the real estate
and/or personal property tax rate and assessments have not
been set for the taxes assessed for the Tax Year in which
Closing occurs, then the proration of such taxes shall be
based upon the rate and assessments for the preceding Tax
Year, and such proration shall be adjusted between Seller and
Buyer after Closing upon presentation of written evidence that
the actual taxes assessed for the Tax Year in which Closing
occurs differ from the amounts used at Closing and in
accordance with the provisions of Section 6.8.
6.3.3 Special Assessments. Seller shall pay all installments of
special assessments due and payable prior to the Closing Date,
and Buyer shall pay all installments of special assessments
due and payable on and after the Closing Date. Special
assessments, if any, for the month of Closing will be
prorated.
6.3.4 Tenant Reimbursements. Notwithstanding the foregoing terms of
this Article 6, Seller shall have no obligation to pay (and
Buyer shall not receive a credit at Closing for) any real
estate or personal property taxes or special assessments to
the extent that (x) Buyer is entitled after Closing to
reimbursement of taxes and assessments, or the recovery of any
increase in taxes and assessments, from the tenants under the
Leases (including payments due from tenants for the month in
which Closing occurs but which are not actually received by
Seller prior to Closing), and (y) such reimbursements from
tenants under the Leases are not more than thirty (30) days
past due as of the Closing Date, regardless of whether Buyer
actually collects such reimbursement or increased taxes and
assessments from such tenants after Closing, it being
understood and agreed by Buyer and Seller that (a) as between
Buyer and Seller, Buyer shall be responsible for payment of
all of such real estate or personal property taxes and
assessments, and (b) the burden of collecting such
reimbursements shall be solely on Buyer. Furthermore, Seller
and Buyer acknowledge and agree that, notwithstanding any
provision in any of the Leases to the contrary, the tax
reimbursement payments to be paid by tenants of the Property
during the Tax Year in which Closing occurs are to be applied
to pay the real estate taxes assessed for such Tax Year and,
therefore, Buyer shall not receive a credit for any amounts
due and payable by tenants of the Property prior to the
Closing as real estate tax reimbursements (other than real
estate tax reimbursements actually received by Seller prior to
Closing which are applicable to the month in which Closing
occurs, which reimbursements shall be prorated between Buyer
and Seller).
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6.4 Other Property Operating Expenses. Operating expenses for the Property
shall be prorated as of 12:01 a.m. on the Closing Date. Seller shall
pay all utility charges and other operating expenses attributable to
the Property to, but not including the Closing Date (except for those
utility charges and operating expenses payable by tenants in accordance
with the Leases), and Buyer shall pay all utility charges and other
operating expenses attributable to the Property on or after the Closing
Date. To the extent that the amount of actual consumption of any
utility services is not determined prior to the Closing Date, a
proration shall be made at Closing based on the last available reading,
and post-closing adjustments between Buyer and Seller shall be made
within twenty (20) days of the date that actual consumption for such
pre-closing period is determined, which obligation shall survive the
Closing and not be merged therein. If any utility charges are paid in
advance or in arrears, appropriate prorations shall be made as of the
Closing Date. Seller shall not assign to Buyer any deposits which
Seller has with any of the utility services or companies servicing the
Property. Buyer shall arrange with such services and companies to have
accounts opened in Buyer's name beginning at 12:01 a.m. on the Closing
Date. Notwithstanding the foregoing terms of this section, Seller shall
have no obligation to pay (and Buyer shall not receive a credit at
Closing for) any operating expenses to the extent that (x) Buyer is
entitled after Closing to reimbursement of operating expenses from
tenants, or the recovery of any increase in operating expenses, from
the tenants under the Leases (including payments due from tenants for
the month in which Closing occurs but which are not actually received
by Seller prior to Closing), and (y) such reimbursements from tenants
under the Leases are not more than thirty (30) days past due as of the
Closing Date, regardless of whether Buyer actually collects such
reimbursement or increased operating expenses from such tenants after
Closing, it being understood and agreed by Buyer and Seller that (a) as
between Buyer and Seller, Buyer shall be responsible for payment of all
of such operating expenses, and (b) the burden of collection such
reimbursements shall be solely on Buyer.
6.5 Closing Costs. Buyer shall pay the following costs: (a) all premiums
and charges in connection with the Owner's Title Policy (including any
endorsements) issued to Buyer, (b) the cost of preparing the Survey,
(c) all recording and filing charges in connection with the instrument
by which Seller conveys the Property, (d) one-half of the Title Company
escrow and closing charges, (e) one-half of all documentary stamp
taxes, transfer taxes, sales taxes and similar charges applicable to
the transfer of the Property to Buyer ("Transfer Taxes"), (f) all costs
of Buyer's Due Diligence, including fees due its consultants and
attorneys, and (g) all lenders' fees related to any financing to be
obtained by Buyer. Seller shall pay the following costs: (a) one-half
of the Title Company escrow and closing charges, and (b) one-half of
all Transfer Taxes, and (c) all fees due its attorneys. The obligations
of the parties under this Section 6.5 shall survive the Closing (and
not be merged therein) or any earlier termination of this Agreement.
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6.6 Apportionment Credit. In the event the apportionments to be made at the
Closing result in a credit balance (a) to Buyer, such sum shall be paid
(at Seller's option) at the Closing by giving Buyer a credit against
the Purchase Price in the amount of such credit balance, or (b) to
Seller, Buyer shall pay the amount thereof to Seller at the Closing by
wire transfer of immediately available funds to the account or accounts
to be designated by Seller for the payment of the Purchase Price.
6.7 Cash Security Deposits. At Closing, Seller shall give Buyer a credit
against the Purchase Price in the aggregate amount of any cash security
deposits then held by Seller under the Leases less any administrative
or similar charges to which Seller may be entitled under applicable
Law.
6.8 Gift Certificate Program Credit. At Closing, Seller shall give Buyer a
credit against the Purchase Price in an amount equal to the aggregate
value of gift certificates issued by Seller in connection with its
operation of the Real Property which are unredeemed as of the Closing
Date.
6.9 Ground Lease Rents.
6.9.1 Shopping Center Ground Lease and Non-Shopping Center Ground
Lease Rents. Rent due and payable under the Shopping Center
Ground Lease and the Non-Shopping Center Ground Lease shall be
prorated between Seller and Buyer as of 12:01 a.m. on the
Closing Date. If Buyer and Seller determine that Seller shall
have paid rent under the aforesaid Ground Leases in excess of
the rents actually due and payable under said Ground Leases
for the period prior to the Closing Date, then, at Closing,
Buyer shall give Seller a credit in the amount of such excess.
If Buyer and Seller determine that the rents actually due and
payable under said Ground Leases for the period prior to the
Closing Date shall exceed the rents actually paid by Seller
for such period, at Closing, Seller shall give Buyer a credit
in the amount of such shortfall. Within sixty (60) days
following Closing, Seller shall deliver to Buyer "Tenant
Statements" in the form and substance required by the Shopping
Center Ground Lease and the Non-Shopping Center Ground Lease
certifying to Buyer the rents received and the ground rent
payable with respect to such Ground Leases for Seller's period
of ownership in the calendar year in which Closing occurs.
Buyer shall be entitled to rely on such Tenant Statements,
which shall survive Closing and shall not be merged into the
assignment of such Ground Leases, and no other parties
(including, without limitation, the ground lessors under the
Ground Leases) shall be entitled to rely upon such Tenant
Statements. The provisions of this Section 6.9.1 shall survive
the Closing and not be merged therein.
6.9.2 Sears Ground Lease. Rent due and payable under the Sears
Ground Lease shall be prorated between Seller and Buyer as of
12:01 a.m. on the Closing Date. Seller shall be responsible
for the payment of Sears Ground Lease rent attributable to the
period up to but not including the Closing Date. Buyer shall
be responsible for the payment of Sears Ground Lease rent
attributable to any period on and after the Closing Date.
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6.10 Tenant Improvement Allowance Credit. At Closing, Seller shall give
Buyer a credit against the Purchase Price in an amount equal to the
aggregate tenant improvement allowances provided for in the Tenant
Leases that have not been paid to tenants, to the extent that such
allowances arise under Tenant Leases other than New Leases (which are
the responsibility of Buyer). In calculating the undisbursed
allowances, Seller shall be entitled to rely upon the statements made
by the tenants with respect thereto in their respective tenant estoppel
certificates.
6.11 Roof Credit. At Closing, Seller shall give Buyer a credit against the
Purchase Price in the amount of $350,000 on account of improvements to
the roofs at the Property.
6.12 Delayed Adjustment; Delivery of Operating and Other Financial
Statements. If at any time following the Closing Date, the amount of an
item listed in any section of this Article 6 shall prove to be
incorrect (whether as a result in an error in calculation or a lack of
complete and accurate information as of the Closing), the party in
whose favor the error was made shall promptly pay to the other party
the sum necessary to correct such error upon receipt of proof of such
error, provided that such proof is delivered to the party from whom
payment is requested on or before one (1) year after Closing (such
period being referred to herein as the "Post Closing Adjustment
Period"). In order to enable Seller to determine whether any such
delayed adjustment is necessary, Buyer shall provide to Seller current
operating and financial statements for the Property no later than the
date one (1) month prior to the expiration of the Post-Closing
Adjustment Period. The provisions of this Section 6.12 shall survive
the Closing and not be merged therein.
ARTICLE 7. - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
7.1 Closing Date. Subject to Seller's right to extend the Closing as
provided in this Agreement, Closing shall occur on the Closing Date.
The parties shall endeavor to conduct an escrow-style closing through
the Escrow Agent so that neither party need attend the Closing. If,
however, such an escrow closing is not practical, Buyer and Seller
shall conduct a "pre-closing" at 10:00 a.m. Eastern Time on the last
business day prior to the Closing Date at the offices of Buyer's
attorney, with title transfer and payment of the Purchase Price to be
completed on the Closing Date as set forth in Section 7.2. Time is of
the essence with respect to the Closing Date.
7.2 Title Transfer and Payment of Purchase Price. Provided all conditions
precedent to Seller's obligations hereunder have been satisfied, Seller
agrees to convey the Property to Buyer upon confirmation of receipt of
the Purchase Price by the Escrow Agent as set forth below. Provided all
conditions precedent to Buyer's obligations hereunder have been
satisfied, Buyer agrees to pay the amount specified in Article 3 by
timely delivering the same to the Escrow Agent no later than 2:00 p.m.
Eastern Time on the Closing Date and unconditionally directing the
Escrow Agent to deposit the same in Seller's designated account by 3:00
p.m. Eastern Time on the Closing Date. For each full or partial day
after 3:00 p.m. Eastern Time on the Closing Date that Seller has not
received in its account the payment specified in Article 3, Buyer shall
pay to Seller one (1) day's interest on the unpaid funds at the rate
per annum equal to the "prime rate" as such rate is reported in the
"Money Rates" section of The Wall Street Journal, as published and
distributed in New York, New York, in effect from time to time.
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7.3 Seller's Closing Deliveries. At Closing, Seller shall deliver or cause
to be delivered the following:
(a) Deeds. With respect to Parcel D (as identified on
Exhibit A attached hereto), a special warranty deed
in the form of Exhibit E-1 attached hereto and
incorporated herein by this reference ("Special
Warranty Deed") executed and acknowledged by Seller.
With respect to Parcel E (as identified on Exhibit A
attached hereto), a quit claim deed in the form of
Exhibit E-2 attached hereto and incorporated herein
by this reference ("Quit Claim Deed").
(b) Ground Lease Assignments. An assignment of the
leasehold estate under each Ground Lease in the form
of Exhibit D attached hereto and incorporated herein
by this reference ("Ground Leasehold Assignments")
executed and acknowledged by Seller.
(c) Bill of Sale. A bill of sale in the form of Exhibit F
attached hereto and incorporated herein by this
reference ("Bill of Sale") executed by Seller.
(d) Assignment of Tenant Leases. An assignment and
assumption of tenant leases, in the form of Exhibit G
attached hereto and incorporated herein by this
reference ("Assignment of Leases") executed by
Seller.
(e) Assignment of Intangible Property. An assignment and
assumption of the Contracts and the Other Property
Rights (to the extent the same are not transferred by
the Special Warranty Deed, Quit Claim Deed, Ground
Leasehold Assignments, Bill of Sale or Assignment of
Leases) in the form of Exhibit H attached hereto and
incorporated herein by this reference ("Assignment of
Intangible Property") executed by Seller.
(f) Non-Foreign Status Affidavit. A non-foreign status
affidavit in the form of Exhibit J attached hereto
and incorporated herein by this reference, as
required by Section 1445 of the Internal Revenue
Code, executed by each party comprising Seller.
(g) Other Documents. Such other documents as may be
reasonably required by the Title Company or as may be
agreed upon by Seller and Buyer to consummate the
Transaction.
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(h) Tax Returns. Duly completed and signed real estate
transfer tax and sales tax declarations.
(i) Letters of Credit as Tenant Security Deposits. With
respect to any security deposits which are letters of
credit, Seller shall, whether or not the same are
assignable, (i) deliver to Buyer at the Closing such
letters of credit, (ii) execute and deliver such
other instruments as the issuers of such letters of
credit shall reasonably require, and (iii) cooperate
with Buyer to change the named beneficiary under such
letters of credit to Buyer so long as Seller does not
incur any additional liability or expense in
connection therewith.
(j) Closing Statement. A closing statement, setting forth
the prorations and adjustments to the Purchase Price
to be made pursuant to Article 6 (the "Closing
Statement") executed by Seller. Seller shall deliver
to Buyer a draft Closing Statement for Buyer's review
at least five (5) business days prior to the Closing
Date; provided, however, that if Seller fails to
timely deliver to Buyer a draft Closing Statement as
required herein, Buyer's sole remedy shall be to
extend the Closing Date to the date that is five (5)
business days after the date on which Seller delivers
the initial draft Closing Statement to Buyer, which
remedy shall be exercised, if at all, by giving
Seller written notice of such election on or before
the date that is two (2) business days before the
originally-scheduled Closing Date.
(k) Occupancy Tenant Estoppel Certificates. Executed
estoppel certificates from the Required Tenants, each
of which (i) shall be dated no earlier than October
1, 2004, and (ii) shall be substantially in the form
which such tenant is required to provide pursuant to
the terms of its Lease or, if no form is specified in
such Lease, substantially in the form of Exhibit N
attached hereto and incorporated herein by this
reference; provided, however, that the estoppel
certificates for each of Burdine's, J.C. Penney's and
Dillard's shall also (1) confirm that the Sears REA
is in full force and effect and (2) state that the
certifying party knows of no existing defaults by
another party under the Sears REA, or, if any such
defaults are known, specifying the same. To the
extent that any such tenant estoppel certificates are
received by Buyer after the expiration of the Due
Diligence Period, such estoppel certificates must
confirm in all material respects the information
contained in the Documents delivered to, made
available to or otherwise obtained by Buyer and
Buyer's Representatives prior to the expiration of
the Due Diligence Period. Seller shall deliver each
such estoppel certificate to Buyer and Buyer's
counsel following Seller's receipt thereof and,
unless Buyer shall deliver to Seller (in the manner
required by Section 16.9 below) a written objection
to the substance of any such estoppel within five (5)
business days after receipt of same, Buyer shall be
deemed to have approved such estoppel certificate,
and such estoppel certificate shall be deemed to
confirm in all material respects the information
contained in the Documents.
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(l) Ground Lease Estoppel Certificates Executed estoppel
certificates from each of the lessors under the
Shopping Center Ground Lease and the Non-Shopping
Center Ground Lease, each of which (i) shall be dated
no earlier than October 1, 2004, and (ii) shall be
substantially in the form which such lessor is
required to provide pursuant to the terms of its
Ground Lease or, if no form is specified in such
Ground Lease, substantially in the form of Exhibit O
attached hereto and incorporated herein by this
reference. To the extent that any such estoppel
certificates are received by Buyer after the
expiration of the Due Diligence Period, such estoppel
certificates must confirm in all material respects
the information contained in the Documents delivered
to, made available to or otherwise obtained by Buyer
and Buyer's Representatives prior to the expiration
of the Due Diligence Period. Seller shall deliver
each such estoppel certificate to Buyer and Buyer's
counsel following Seller's receipt thereof and,
unless Buyer shall deliver to Seller (in the manner
required by Section 16.9 below) a written objection
to the substance of any such estoppel within five (5)
business days after receipt of same, Buyer shall be
deemed to have approved such estoppel certificate,
and such estoppel certificate shall be deemed to
confirm in all material respects the information
contained in the Documents.
(m) Sears Estoppel Certificate. An executed estoppel
certificate from Sears, Roebuck and Co. in connection
with the Sears REA and the Sears Ground Lease which
(i) shall be dated no earlier than October 1, 2004,
and (ii) shall be substantially in the form which
Sears is required to provide pursuant to the terms of
the Sears REA or the Sears Ground Lease or, if no
form is specified in the Sears REA or the Sears
Ground Lease, substantially in the form of Exhibit P
attached hereto and incorporated herein by this
reference. To the extent that such estoppel
certificate is received by Buyer after the expiration
of the Due Diligence Period, such estoppel
certificate must confirm in all material respects the
information contained in the Documents delivered to,
made available to or otherwise obtained by Buyer and
Buyer's Representatives prior to the expiration of
the Due Diligence Period. Seller shall deliver such
estoppel certificate to Buyer and Buyer's counsel
following Seller's receipt thereof and, unless Buyer
shall deliver to Seller (in the manner required by
Section 16.9 below) a written objection to the
substance of such estoppel within five (5) business
days after receipt of same, Buyer shall be deemed to
have approved such estoppel certificate, and such
estoppel certificate shall be deemed to confirm in
all material respects the information contained in
the Documents.
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(n) Evidence of Authority. Documentation to establish to
the reasonable satisfaction of Buyer and the Title
Company the due authorization of execution by the
parties comprising Seller of all documents
contemplated by this Agreement.
(o) Theater Documents. All documents and items required
to be delivered pursuant to Article 15 hereof.
(p) Letter to Tenants. A letter to Tenants under the
Leases and to the vendors under Contracts which are
assumed by Buyer advising that future rent payments
and invoices under Contracts are to be sent to Buyer
at the address specified in Section 15.9 hereof or to
such other address as Buyer shall specific prior to
the Closing Date.
(q) Termination of Contracts. A copy of a termination of
the Leasing and Management Contract with Colonial
Realty Limited Partnership (or an affiliate thereof),
together with an estoppel from such entity to the
effect that it has been paid all management and
leasing fees due and payable to it on or before the
Closing Date and that no management or leasing fees
or commissions are thereafter payable to it by Buyer
except with respect to New Leases approved by Buyer.
(r) Colonial Estoppel Certificate. An executed estoppel
certificate from Colonial substantially in the form
of Exhibit S attached hereto and incorporated herein
by this reference.
(s) Keys and Original Documents. Keys to all locks on the
Real Property in Seller's or Seller's property
manager's possession and originals or, if originals
are not available, copies, of all of the Property
Documents, to the extent not previously delivered to
Buyer.
The items to be delivered by Seller in accordance with the terms of
Subsections (a) through (r) of this Section 7.3 shall be delivered to
Escrow Agent no later than 5:00 p.m. Eastern Time on the last business
day prior to the Closing Date, and the items to be delivered by Seller
in accordance with the terms of Subsection (s) of this Section 7.3
shall be delivered outside of escrow and shall be deemed delivered if
the same are located at the Property on the Closing Date.
7.4 Buyer's Closing Deliveries. At the Closing, Buyer shall deliver or
cause to be delivered to the following:
(a) Purchase Price. The Purchase Price, as adjusted for
apportionments and other adjustments required under
this Agreement, plus any other amounts required to be
paid by Buyer at Closing.
(b) Ground Leasehold Assignments. The Ground Leasehold
Assignments executed by Buyer.
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(c) Assignment of Leases. The Assignment of Leases
executed by Buyer.
(d) Assignment of Intangible Property. The Assignment of
Intangible Property executed by Buyer.
(e) Buyer's As-Is Certificate. The certificate of Buyer
required under Article 5 hereof.
(f) Buyer's ERISA Certificate. The certificate of Buyer
substantially in the form of Exhibit K attached
hereto and incorporated herein by this reference and
any other certificate or other information reasonably
required by Prudential to satisfy Prudential that the
Transaction does not constitute a non-exempt
prohibited transaction under ERISA and that the
Transaction complies with ERISA in all respects.
(g) Evidence of Authority. Documentation to establish to
Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the Property
and Buyer's delivery of the documents required to be
delivered by Buyer pursuant to this Agreement
(including, but not limited to, the organizational
documents of Buyer, as they may have been amended
from time to time, resolutions of Buyer and
incumbency certificates of Buyer).
(h) Other Documents. Such other documents as may be
reasonably required by the Title Company or may be
agreed upon by Seller and Buyer to consummate the
Transaction.
(i) Tax Returns. Duly completed and signed real estate
transfer tax and sales tax declarations.
(j) Closing Statement. The Closing Statement, executed by
Buyer.
The Purchase Price shall be paid in accordance with the terms of
Section 7.2 hereof, and the items to be delivered by Buyer in
accordance with the terms of Subsections (b) through (j) of this
Section 7.4 shall be delivered to Escrow Agent no later than 5:00 p.m.
Eastern Time on the last business day prior to the Closing Date.
ARTICLE 8. - CONDITIONS TO CLOSING
8.1 Conditions to Seller's Obligations. Seller's obligation to close the
Transaction is conditioned on all of the following, any or all of which
may be waived by Seller by an express written waiver, at its sole
option:
(a) Representations True. All representations and
warranties made by Buyer in this Agreement shall be
true and correct in all material respects on and as
of the Closing Date, as if made on and as of such
date except to the extent they expressly relate to an
earlier date;
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(b) Buyer's Financial Condition. No petition has been
filed by or against Buyer under the Federal
Bankruptcy Code or any similar state or federal Law,
whether now or hereafter existing;
(c) Buyer's Deliveries Complete. Buyer shall have
delivered the funds required hereunder and all of the
documents to be executed by Buyer set forth in
Section 7.4 and shall have performed all other
covenants, undertakings and obligations, and complied
with all conditions required by this Agreement, to be
performed or complied with by Buyer at or prior to
the Closing; and
(d) Compliance with Covenants. Buyer shall have complied
in all material respects with Buyer's covenants and
agreements set forth in this Agreement.
8.2 Conditions to Buyer's Obligations. Buyer's obligation to close the
Transaction is conditioned on all of the following, any or all of which
may be expressly waived by Buyer in writing, at its sole option:
(a) Representations True. Subject to the provisions of
Section 9.3, all representations and warranties made
by Seller in this Agreement, as the same may be
amended as provided in Section 9.3, shall be true and
correct in all material respects on and as of the
Closing Date, as if made on and as of such date,
except to the extent that they expressly relate to an
earlier date;
(b) Title Conditions Satisfied. At the time of the
Closing, title to the Property shall be as provided
in Article 4 of this Agreement;
(c) Seller's Deliveries Complete. Seller shall have
delivered all of the documents and other items
required pursuant to Section 7.3 and shall have
performed all other covenants, undertakings and
obligations, and complied with all conditions
required by this Agreement, to be performed or
complied with by Seller at or prior to the Closing;
(d) Waiver of Ground Lessor Rights of First Refusal. The
lessor under each of the Shopping Center Ground Lease
and the Non-Shopping Center Ground Lease shall have
executed and delivered written waivers of the right
of first refusal to purchase the leasehold estate
held by each of them under its respective Ground
Lease; and
(e) Compliance with Covenants. Seller shall have complied
in all material respects with Seller's covenants and
agreements set forth in this Agreement.
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8.3 Waiver of Failure of Conditions Precedent. At any time or times on or
before the date specified for the satisfaction of any condition, Seller
or Buyer may elect in writing to waive the benefit of any such
condition set forth in Section 8.1 or Section 8.2, respectively. By
closing the Transaction, Seller and Buyer shall be conclusively deemed
to have waived the benefit of any remaining unfulfilled conditions set
forth in Section 8.1 and 8.2, respectively. In the event any of the
conditions set forth in Sections 8.1 or 8.2 are neither waived nor
fulfilled, Seller or Buyer (as appropriate) may exercise such rights
and remedies, if any, that such party may have pursuant to the terms of
Article 11 hereof; provided that notwithstanding the foregoing, the
sole right of Buyer in the event of failure of the condition set forth
in Section 8.2(d), shall be to terminate this Agreement, in which event
the Deposit shall be returned to Buyer.
8.4 Approvals not a Condition to Buyer's Performance. Subject to Buyer's
right to terminate this Agreement prior to the expiration of the Due
Diligence Period in accordance with the terms of Article 5 hereof,
Buyer acknowledges and agrees that its obligation to perform under this
Agreement is not contingent upon Buyer's ability to obtain any (a)
governmental or quasi-governmental approval of changes or modifications
in use or zoning, or (b) modification of any existing land use
restriction, or (c) consents to assignments of any service contracts,
management agreements or other agreements which Buyer requests, or (d)
endorsements to the Owner's Title Policy.
ARTICLE 9. - REPRESENTATIONS AND WARRANTIES
9.1 Buyer's Representations. Buyer represents and warrants to, and
covenants with, Seller as follows:
9.1.1 Buyer's Authorization. Buyer (a) is duly organized (or
formed), validly existing and in good standing under the laws
of its State of organization, (b) is authorized to consummate
the Transaction and fulfill all of its obligations hereunder
and under all documents contemplated hereunder to be executed
by Buyer, and (c) has all necessary power to execute and
deliver this Agreement and all documents contemplated
hereunder to be executed by Buyer and to perform all of its
obligations hereunder and thereunder. This Agreement and all
documents contemplated hereunder to be executed by Buyer have
been duly authorized by all requisite partnership, corporate
or other required action on the part of Buyer and are the
valid and legally binding obligation of Buyer enforceable in
accordance with their respective terms. Neither the execution
and delivery of this Agreement and all documents contemplated
hereunder to be executed by Buyer, nor the performance of the
obligations of Buyer hereunder or thereunder will result in
the violation of any Law or any provision of the
organizational documents of Buyer or will conflict with any
order or decree of any court or governmental instrumentality
of any nature by which Buyer is bound.
9.1.2 Buyer's Financial Condition. No petition has been filed by or
against Buyer under the Federal Bankruptcy Code or any similar
state or federal Law.
9.2 Seller's Representations. Seller represents and warrants to Buyer as
follows:
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9.2.1 Seller's Authorization. Seller: (a) is duly organized (or
formed), validly existing and in good standing under the laws
of its State of organization and the State in which the
Property is located, (b) is authorized to consummate the
Transaction and fulfill all of its obligations hereunder and
under all documents contemplated hereunder to be executed by
Seller, and (c) has all necessary power to execute and deliver
this Agreement and all documents contemplated hereunder to be
executed by Seller and to perform all of its obligations
hereunder and thereunder. This Agreement and all documents
contemplated hereunder to be executed by Seller have been duly
authorized by all requisite partnership, corporate or other
required action on the part of Seller and are the valid and
legally binding obligation of Seller, enforceable in
accordance with their respective terms. Neither the execution
and delivery of this Agreement and all documents contemplated
hereunder to be executed by Seller, nor the performance of the
obligations of Seller hereunder or thereunder will result in
the violation of any Law or any provision of the
organizational documents of Seller or will conflict with any
order or decree of any court or governmental instrumentality
of any nature by which Seller is bound.
9.2.2 Other Seller's Representations.
(a) Except as set forth on Exhibit L, there is no current
or pending litigation against Seller of which Seller
has received written notice and which, in the
reasonable judgment of Seller, if determined
adversely to Seller, would materially adversely
affect the Property.
(b) As of the date of this Agreement, except for (A)
contracts, subcontracts and agreements set forth on
Exhibit B (collectively, the "Contracts"), (B) leases
with tenants of the Property as set forth on Exhibit
M, and (C) matters, agreements and instruments of
record, Seller has not entered into any contracts,
subcontract or agreements affecting the Property that
will be binding upon Buyer after the Closing.
(c) Except as disclosed on Exhibit L, Seller has not
received any written notice of default from any
parties to the Contracts which has not been cured by
Seller.
(d) As of the date of this Agreement, the only tenants
under leases or other occupancy agreements at the
Property are the tenants disclosed on Exhibit M.
(e) Seller has no employees at the Property, all of such
employees being employees of the Seller's property
manager.
(f) Except as disclosed on Exhibit L, as of the date of
this Agreement, Seller has not received any written
notice from any governmental authority with respect
to the violation of any zoning law or ordinance
applicable to the Property which has not been cured
by Seller.
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(g) The Documents contain true, correct and complete
copies of all Leases, the Ground Leases, a rent roll
and any notices of landlord default given by tenants
at the Property.
9.2.3 Delivery of Documents. Seller has requested that the current
manager of the Property give or otherwise make available to
Buyer or Buyer's Representatives all books, records, and other
writings in such manager's possession related in any material
way to the use, ownership or operation of the Property, other
than those books, records and writings that are Confidential
Materials.
9.2.4 Designated Employees. The Designated Employees are the
individuals who have been primarily responsible for the
management of the Property on behalf of Seller for the three
(3) year period immediately prior to the date hereof.
9.3 General Provisions.
9.3.1 No Representation as to Leases. Seller does not represent or
warrant that the Leases will be in force or effect on the
Closing Date or that the tenants will have performed their
obligations thereunder.
9.3.2 Definition of "Seller's Knowledge". All references in this
Agreement to "Seller's knowledge" or words of similar import
shall refer only to the actual knowledge of the Designated
Employees and shall not be construed to refer to the knowledge
of any other officer, director, shareholder, employee, agent
or representative of Seller or its members, or any affiliate
of any of the foregoing, or to impose or have imposed upon the
Designated Employees any duty to investigate the matters to
which such knowledge, or the absence thereof, pertains,
including, but not limited to, the contents of the files,
documents and materials made available to or disclosed to
Buyer or the contents of files maintained by the Designated
Employees. There shall be no personal liability on the part of
the Designated Employees arising out of any representations or
warranties made herein.
9.3.3 Seller's Representations Deemed Modified. To the extent that
Buyer knows or is deemed to know prior to the expiration of
the Due Diligence Period that Seller's representations and
warranties are inaccurate, untrue or incorrect in any way,
such representations and warranties shall be deemed modified
to reflect Buyer's knowledge or deemed knowledge, as the case
may be. In addition, the representation and warranty set forth
in clause (g) of Section 9.2.2 shall be null and void and of
no further force or effect if and to the extent that Buyer
receives estoppel certificates from tenants under the Leases
or from any lessor under the Ground Leases that confirm the
truth of said representation and warranty.
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9.3.4 Notice of Breach; Seller's Right to Cure. If after the
expiration of the Due Diligence Period but prior to the
Closing, Buyer or any Buyer's Representative obtains actual
knowledge that any of Seller's Warranties are untrue,
inaccurate or incorrect in any material respect, Buyer shall
give Seller written notice thereof within ten (10) business
days of obtaining such knowledge that the same, individually
or collectively, are material (as defined below) (but, in any
event, prior to the Closing). If at or prior to the Closing,
Seller obtains actual knowledge that any of Seller's
Warranties are untrue, inaccurate or incorrect in any material
respect, Seller shall give Buyer written notice thereof within
ten (10) business days of obtaining such knowledge the same,
individually or collectively, are material (as defined below)
(but, in any event, prior to the Closing). In either such
event, Seller shall have the right to cure such
misrepresentation or breach and shall be entitled to a
reasonable adjournment of the Closing (not to exceed ninety
(90) days) for the purpose of such cure. If Seller is unable
to so cure any misrepresentation or breach, then Buyer, as its
sole remedy for any and all such materially untrue, inaccurate
or incorrect material representations or warranties, shall
elect either (a) to waive such misrepresentations or breaches
of representations and warranties and consummate the
Transaction without any reduction of or credit against the
Purchase Price, or (b) to terminate this Agreement by written
notice given to Seller on the Closing Date, in which event
this Agreement shall be terminated, the Deposit shall be
returned to Buyer, and, thereafter, neither party shall have
any further rights or obligations hereunder except as provided
in the immediately following sentence and in any section
hereof that by its terms expressly provides that it survives
any termination of this Agreement. If any such Seller's
Warranty was, to Seller's knowledge, materially untrue,
inaccurate or incorrect at the time such Seller's Warranty was
made, and as a result thereof, Buyer elects to terminate this
Agreement, then Seller shall reimburse Buyer for its actual
out-of-pocket costs (not to exceed $250,000) incurred in
connection with entering into the letter of intent, entering
into this Agreement, investigating the Property and performing
its Due Diligence. If any such Seller's Warranty is untrue,
inaccurate or incorrect but is not untrue, inaccurate or
incorrect in any material respect, Buyer shall be deemed to
waive such misrepresentation or breach of warranty, and Buyer
shall be required to consummate the Transaction without any
reduction of or credit against the Purchase Price. The
untruth, inaccuracy or incorrectness of a Seller's Warranty
shall be deemed material only if Buyer's aggregate damages
resulting from the untruth, inaccuracy or incorrectness of the
representations or warranties, individually or collectively,
are reasonably estimated to exceed $100,000.00.
9.3.5 Survival; Limitation on Seller's Liability. Seller's
Warranties in Section 9.2 shall survive the Closing and not be
merged therein for a period of twelve (12) months, and Seller
shall only be liable to Buyer hereunder for a breach of a
Seller's Warranty made herein or in any of the documents
executed by Seller at the Closing with respect to which a
written claim is made by Buyer against Seller on or before the
expiration of twelve (12) months after the date of the
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Closing. Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of Seller for
breaches of Seller's Warranties herein or in any documents
executed by Seller at Closing shall be limited as set forth in
Section 16.15 hereof. Notwithstanding the foregoing, however,
if the Closing occurs, Buyer hereby expressly waives,
relinquishes and releases any right or remedy available to it
at law, in equity, under this Agreement or otherwise to make a
claim against Seller for damages that Buyer may incur, or to
rescind this Agreement and the Transaction, as the result of
any of Seller's Warranties being untrue, inaccurate or
incorrect if (a) Buyer knew or is deemed to know that such
representation or warranty was untrue, inaccurate or incorrect
at the time of the Closing, or (b) Buyer receives a confirming
estoppel certificate as set forth in Section 9.3.3, or (c)
Buyer's damages as a result of such representations or
warranties being untrue, inaccurate or incorrect are
reasonably estimated to aggregate less than $100,000.00.
ARTICLE 10. - COVENANTS
10.1 Buyer's Covenants. Buyer hereby covenants as follows:
10.1.1 [Intentionally Omitted]
10.1.2 Buyer's Indemnity; Delivery of Reports. Buyer hereby agrees to
indemnify, defend, and hold Seller and each of the other
Seller Parties free and harmless from and against any and all
Liabilities (including reasonable attorneys' fees and
expenses) arising out of or resulting from (a) the breach of
the terms of Subsection 10.3.4 or (b) the entry on the Real
Property and/or the conduct of any Due Diligence by Buyer or
any of Buyer's Representatives or consultants at any time
prior to the Closing, which indemnity shall survive the
Closing (and not be merged therein) or any earlier termination
of this Agreement. If this Agreement is terminated for any
reason other than Seller's default, Buyer shall deliver
promptly to Seller copies of all third party reports
commissioned by or on behalf of Buyer or Buyer's
Representatives evidencing the results of its Due Diligence.
10.1.3 Limit on Government Contacts. Notwithstanding any provision in
this Agreement to the contrary, except in connection with the
preparation of a so-called "Phase I" environmental report with
respect to the Property, Buyer shall not contact any
governmental official or representative regarding Hazardous
Materials or the environmental condition of the Property
without Seller's prior written consent thereto, which consent
shall not be unreasonably withheld, conditioned or delayed. In
addition, if Seller's consent is obtained by Buyer, Seller
shall be entitled to receive at least five (5) days' prior
written notice of the intended contact and to have a
representative present when Buyer has any such contact with
any governmental official or representative; provided that if
such five (5) day notice is given, Buyer shall have the right
to extend the Due Diligence Period by five (5) additional
days.
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10.2 Seller's Covenants. Seller hereby covenants as follows:
10.2.1 Contracts.
(a) Without Buyer's prior consent, which consent shall
not be unreasonably withheld, between the date hereof
and the Closing Date, Seller shall not extend, renew,
replace or modify any Contract or enter into any new
service contract or agreement unless such contract or
agreement (as so extended, renewed, replaced or
modified) can be terminated by the owner of the
Property without penalty on not more than thirty (30)
days' notice. Seller shall provide Buyer not less
than five (5) business days' prior written notice to
provide its consent to any such contract, extension,
renewal, replacement or modification. If Buyer fails
to object in writing to any such proposed action
within such five (5) business day period, Buyer shall
be deemed to have approved the proposed action.
Buyer's consent shall not be unreasonably withheld,
conditioned or delayed.
(b) On or before the Closing, Seller shall terminate any
management and exclusive leasing agreements currently
in effect with respect to the Property at the sole
cost and expense of Seller.
10.2.2 Maintenance of Property. Except to the extent Seller is relieved of
such obligations by Article 12 hereof, and except as provided in
Article 15 hereof, between the date hereof and the Closing Date, Seller
shall maintain and keep the Property in a manner consistent with
Seller's past practices with respect to the Property; provided,
however, that subject to Buyer's right to terminate this Agreement
prior to the expiration of the Due Diligence Period in accordance with
the terms of Article 5 hereof, Buyer hereby agrees that it shall accept
the Property subject to, and Seller shall have no obligation to cure,
any violations of Laws, and any physical conditions which would give
rise to violations (collectively, a "Violation"), (a) if the aggregate
cost of such cure is estimated to exceed $500,000 or (b) if and to the
extent that the cost of curing such Violation may be charged to the
tenants at the Property pursuant to the terms of their respective
leases. Between the date hereof and the Closing Date, Seller will
advise Buyer of any written notice Seller receives from any
governmental authority of the violation of any Laws regulating the
condition or use of the Property and if the aggregate cost of such cure
is estimated to be $500,000 or less, then to the extent such cost
cannot be charged to tenants as aforesaid, Seller agrees to grant Buyer
a credit at Closing in the amount of such cost. If (A) Seller does not
cure any such Violation, (B) Seller received notice of such Violation
after the expiration of the Due Diligence Period, (C) the aggregate
cost to cure such Violation is estimated to exceed $500,000, and (D)
the cost of curing such Violation may not be charged to the tenants at
the Property pursuant to the terms of their respective leases, then
Buyer shall have the right, by written notice given to Seller, to
terminate this Agreement on or before the Closing Date. If Buyer
terminates this Agreement pursuant to this Section 10.2.2, then the
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Deposit shall be returned to Buyer and Seller shall reimburse Buyer for
its out-of-pocket costs (not to exceed $250,000) in connection with
entering into the letter of interest, entering into this Agreement,
investigating the Property and performing its Due Diligence. Following
such termination, neither party to this Agreement shall have any
further rights or obligations hereunder other than any arising under
the immediately preceding sentence or in any section herein which
expressly provides that it survives the termination of this Agreement.
10.2.3 Access to Property. Between the date hereof and the Closing Date Seller
shall allow Buyer or Buyer's Representatives access to the Property
upon reasonable prior notice at reasonable times provided (a) such
access does not interfere with the operation of the Property or the
rights of tenants; (b) Buyer shall coordinate with Seller and Seller's
property manager prior to and during each visit; (c) neither Buyer nor
Buyer's Representatives or consultants shall contact any tenant without
Seller's prior consent (which may be obtained by contacting Mrs. Mary
Lou Davis, Telephone (407) 304-1330, Fax: (407) 894-8381, Email:
mdavis@colonialprop.com), provided that Seller consents to Buyer's
interviews of The Limited, Sears, Burdine's, JC Penney, Dillard's,
Hi-Tech Institute and Premier Theater, so long as Buyer coordinates
such interviews as provided in clause (b) above; (d) Seller or its
designated representative shall have the right to pre-approve and be
present during any physical testing of the Property; and (e) Buyer
shall return the Property to the condition existing prior to such tests
and inspections. Prior to such time as Buyer or any of Buyer's
Representatives or consultants enter the Property, Buyer shall (i)
obtain policies of general liability insurance which insure Buyer and
Buyer's Representatives and consultants with liability insurance limits
of not less than $1,000,000 combined single limit for personal injury
and property damage and name Seller and Seller's property manager as
additional insureds and which are with such insurance companies,
provide such coverages and carry such other limits as Seller shall
reasonably require (it being understood that Seller has approved AIG),
and (ii) provide Seller with certificates of insurance evidencing that
Buyer has obtained the aforementioned policies of insurance.
10.2.4 Termination of Certain Contracts. If Buyer notifies Seller in writing
prior to the Closing Date that Buyer elects to have any Contracts
terminated prior to Closing, Seller shall use good faith and reasonable
efforts to terminate the Contracts so designated by Buyer effective as
of the Closing Date; provided, however, that in no event shall Seller
be required by the foregoing to pay any sums (or incur any other
liability) to the other parties to said Contracts. If Seller is unable
to so terminate the aforementioned Contracts effective as of the
Closing Date, then Seller shall assign and Buyer shall assume the same
at Closing in accordance with the terms of this Agreement and the
Assignment of Intangible Property.
10.2.5 New Leases; Lease Modifications.
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(a) After the LOI Date, and subject to the terms of this
Section 10.2.5, Seller shall continue to lease the
Property in accordance with Seller's past practices
with respect to the Property. From and after the
expiration of the Due Diligence Period, Seller shall
not, without Buyer's prior written consent (which
shall not be unreasonably withheld, conditioned or
delayed), (a) enter into a New Lease; (b) modify or
amend any Lease (except pursuant to the exercise by a
tenant of a renewal, extension or expansion option or
other right contained in such tenant's Lease); or (c)
consent to any assignment or sublease in connection
with any Lease. Seller shall furnish Buyer with a
written notice of the proposed action, which shall
contain information regarding the proposed action
that Seller believes is reasonably necessary to
enable Buyer to make informed decisions with respect
to the advisability of the proposed action. If Buyer
fails to object in writing to any such proposed
action within five (5) business days after receipt of
the aforementioned information, Buyer shall be deemed
to have approved the proposed action. If any Lease
requires that the landlord's consent be given under
the applicable circumstances (or not be unreasonably
withheld), then Buyer shall be deemed ipso facto to
have approved such action. Any notice from Buyer
rejecting the proposed action shall include a
description of the reasons for Buyer's rejecting the
proposed action shall include a description of the
reasons for Buyer's rejection. If Buyer rejects the
proposed action, Seller nevertheless retains full
right, power and authority to execute such documents
as are necessary to effect such action, and Seller
shall promptly advise Buyer of the same. The
foregoing notwithstanding, in the event that Buyer
has rejected the proposed action but Seller
nonetheless proceeds to carry out such action, Buyer
shall have the right, within five (5) business days
after receipt of Seller's notice that Seller has
taken such action, to elect to terminate this
Agreement by the delivery to Seller of a written
notice of termination, in which case the Deposit
shall be paid to Buyer. Seller shall reimburse Buyer
for its actual out-of-pocket costs (not to exceed
$250,000) in connection with entering into the letter
of interest, entering into the Agreement,
investigating the Property or performing its Due
Diligence and thereafter, the parties shall have no
further rights or obligations hereunder other than
any arising under this sentence and any section of
this Agreement that expressly provides that it shall
survive the termination of this Agreement. If Buyer
fails to notify Seller within such time period, Buyer
shall be deemed to have fully waived any rights to
terminate this Agreement pursuant to this Section
10.2.5 with respect to such action. Seller shall
deliver to Buyer a true and complete copy of each
such New Lease, renewal or extension agreement,
modification or amendment, as the case may be,
promptly after the execution and delivery thereof.
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(b) Lease Enforcement. Seller shall have the right, but
not the obligation (except to the extent that
Seller's failure to act shall constitute a waiver of
such rights or remedies), to enforce the rights and
remedies of the landlord under any Lease by summary
proceedings or otherwise (including, without
limitation, the right to remove any tenant), and to
apply all or any portion of any security deposits
then held by Seller toward any loss or damage
incurred by Seller by reasons of any defaults by
tenants, and the exercise of any such rights or
remedies shall not affect the obligations of Buyer
under this Agreement in any manner or entitle Buyer
to a reduction in, or credit or allowance against,
the Purchase Price or give rise to any other claim on
the part of Buyer. Notwithstanding the foregoing, (a)
Seller shall take no action against any Tenant which
leases more than 5,000 square feet without the prior
written consent of Buyer which may be withheld in its
sole discretion (but which shall be given or denied
within five (5) business days after request
therefor), (b) Seller can so apply security deposits
only if a lease is terminated, and (c) to the extent
any security deposits are so applied, Seller shall
pay over to Buyer any excess between (x) the amounts
so applied, and (y) rents and other charges which had
accrued and would have been due and payable up to the
Closing Date.
(c) Lease Expenses. At Closing, Buyer shall reimburse
Seller for any and all Reimbursable Lease Expenses to
the extent that the same have been paid by Seller
prior to Closing. In addition, at Closing, Buyer
shall assume Seller's obligations to pay, when due
(whether on a stated due date or accelerated) any
Reimbursable Lease Expenses unpaid as of the Closing,
and Buyer hereby agrees to indemnify and hold Seller
harmless from and against any and all Liabilities
(including reasonable attorneys' fees and expenses)
with respect to such Reimbursable Lease Expenses
which remain unpaid for any reason at the time of
Closing, which obligations of Buyer shall survive the
Closing and shall not be merged therein. Each party
shall make available to the other all records, bills,
vouchers and other data in such party's control
verifying Reimbursable Lease Expenses and the payment
thereof. Notwithstanding anything contained herein to
the contrary, Seller shall be responsible for a
portion of the Reimbursable Lease Expenses calculated
by multiplying the aggregate Reimbursable Lease
Expenses for any tenant by a fraction, the numerator
of which is the total base rents actually collected
by Seller under the New Leasing Document giving rise
to the Reimbursable Lease Expenses, the denominator
of which is the aggregate base rent due under such
New Leasing Document; provided, however, that if
Seller's share of the Reimbursable Lease Expenses
with respect to any such New Leasing Document exceeds
the base rent actually received by Seller pursuant to
such New Leasing Document, then Seller's
responsibility for such Reimbursable Lease Expenses
shall be limited to the base rents actually received
by Seller.
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10.2.6 Annual Report. Seller shall, prior to the Closing Date or
November 15, 2004, whichever occurs first in time, cause an
Annual Report (as defined below) to be prepared and filed with
all appropriate governmental agencies. Following the filing of
such Annual Report (and in any event prior to the Closing
Date), Seller shall provide Buyer with evidence of such filing
along with a copy of such Annual Report. As used herein, the
term "Annual Report" shall mean a report in the form required
by Article VII of that certain Orlando Fashion Square
Development Order recorded on August 9, 1991 in Official
Records Book 4314, Page 4006 in Orange County, Florida, and as
the same has been amended from time to time (the "DRI Order").
10.3 Mutual Covenants.
10.3.1 Publicity. Seller and Buyer each hereby covenant and agree
that (a) prior to the Closing neither Seller nor Buyer shall
issue any Release (as hereinafter defined) with respect to the
Transaction without the prior consent of the other, except to
the extent required by applicable Law or the rules or
regulations of any governmental agency or securities exchange,
and (b) after the Closing, any Release issued by either Seller
or Buyer shall be subject to the review and approval of both
parties (which approval shall not be unreasonably withheld),
except to the extent required by applicable Law or the rules
or regulations of any governmental agency or securities
exchange. If either Seller or Buyer is required by applicable
Law or the rules or regulations of any governmental agency or
securities exchange to issue a Release, such party shall, at
least two (2) business days prior to the issuance of the same,
deliver a copy of the proposed Release to the other party for
its review. As used herein, the term "Release" shall mean any
press release or public statement with respect to the
Transaction or this Agreement.
10.3.2 Broker. Seller and Buyer expressly acknowledge that Broker has
acted as the exclusive broker with respect to the Transaction
and with respect to this Agreement, and that Seller shall pay
any brokerage commission due to Broker in accordance with the
separate agreement between Seller and Broker. Seller agrees to
hold Buyer harmless and indemnify Buyer from and against any
and all Liabilities (including reasonable attorneys' fees and
expenses) suffered or incurred by Buyer as a result of any
claims by Broker or any other party claiming to have
represented Seller as broker in connection with the
Transaction. Buyer agrees to hold Seller harmless and
indemnify Seller from and against any and all Liabilities
(including reasonable attorneys' fees and expenses) suffered
or incurred by Seller as a result of any claims by any party
(other than Broker) claiming to have represented Buyer as
broker in connection with the Transaction.
10.3.3 Tax Protests; Tax Refunds and Credits. Seller shall have the
right to continue and to control the progress of and to make
all decisions with respect to any contest of the real estate
taxes and personal property taxes for the Property assessed
for the Tax Year in which the Closing occurs and all prior Tax
Years. Buyer shall have the right to control the progress of
and to make all decisions with respect to any tax contest of
the real estate taxes and personal property taxes for the
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Property assessed for all Tax Years subsequent to the Tax Year
in which the Closing occurs. All real estate and personal
property tax refunds an credits received after Closing with
respect to the Property shall be applied in the following
order of priority: first, to pay the costs and expenses
(including reasonable attorneys' fees and expenses) incurred
in connection with obtaining such tax refund or credit;
second, to pay any amounts due to any past or present tenant
of the Property as a result of such tax refund or credit to
the extent required pursuant to the terms of the Leases; and
third, apportioned between Buyer and Seller as follows:
(a) with respect to any refunds or credits attributable
to real estate and personal property taxes assessed
for the Tax Year in which the Closing occurs, such
refunds and credits shall be apportioned between
Buyer and Seller in the manner provided for in
Section 6.3;
(b) with respect to any refunds or credits attributable
to real estate and personal property taxes assessed
for any period prior to the Tax Year in which the
Closing occurs, Seller shall be entitled to the
entire refunds and credits; and
(c) with respect to any refunds or credits attributable
to real estate and personal property taxes assessed
for any period after the Tax Year in which the
Closing occurs, Buyer shall be entitled to the entire
refunds and credits.
10.3.4 Confidentiality. The terms of Section 14 (entitled
"Confidentiality") of that certain letter of interest dated
August 26, 2004 executed and accepted by Buyer and Seller with
respect to the Property are hereby incorporated in this
Agreement by reference, and Seller and Buyer agree to continue
to be bound by the terms of such confidentiality provision.
10.4 Survival. The provisions of this Article 10 shall survive the Closing
(and not be merged therein) or earlier termination of this Agreement.
ARTICLE 11. - FAILURE OF CONDITIONS; DEFAULT
11.1 To Seller's Obligations. If, on or before the Closing Date, (i) Buyer
is in default of any of its obligations hereunder, or (ii) the Closing
otherwise fails to occur by reason of Buyer's failure or refusal to
perform its obligations hereunder in a prompt and timely manner, then
Seller may elect to (a) terminate this Agreement by written notice to
Buyer; or (b) waive the condition and proceed to close the Transaction.
If this Agreement is so terminated, then Seller shall be entitled to
retain, as its sole and exclusive remedy, the Deposit as agreed upon
and liquidated damages for all loss, damages and expenses suffered by
Seller, it being agreed that Seller's damages are impractical or
extremely difficult to ascertain and the amount of the Deposit
represents a reasonable estimate of the damages which Seller will
sustain in the event of a default hereunder by Buyer, and thereafter
neither party to this Agreement shall have any further rights or
obligations hereunder other than any arising under any section herein
which expressly provides that it survives the termination of this
Agreement.
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11.2 To Buyer's Obligations. If, at the Closing, (i) Seller is in default of
any of its obligations hereunder, or (ii) the Closing otherwise fails
to occur by reason of Seller's failure or refusal to perform its
obligations hereunder in a prompt and timely manner, Buyer shall have
the right to elect, as its sole and exclusive remedy, to (a) terminate
this Agreement by written notice to Seller, promptly after which the
Deposit shall be returned to Buyer and Seller shall reimburse Buyer for
its out-of-pocket costs (not to exceed $250,000) in connection with
entering into the letter of interest, entering into this Agreement,
investigating the Property and performing its Due Diligence, or (b)
waive the condition and proceed to close the Transaction, or (c) seek
specific performance of this Agreement by Seller. As a condition
precedent to Buyer's exercise of any right it may have to bring an
action for specific performance hereunder, Buyer must commence such an
action within ninety (90) days after the occurrence of Seller's
default. Buyer agrees that its failure timely to commence such an
action for specific performance within such ninety (90) day period
shall be deemed a waiver by Buyer of its right to commence an action
for specific performance, as well as a waiver by it of any right it may
have to file or record a notice of lis pendens or notice of pendency of
action or similar notice against any portion of the Property.
ARTICLE 12. - CONDEMNATION/CASUALTY
12.1 Condemnation.
12.1.1 Right to Terminate. If, prior to the Closing Date, all or any
significant portion (as hereinafter defined) of the Property
is taken by eminent domain (or is the subject of a pending
taking which has not yet been consummated), Seller shall
notify Buyer in writing of such fact promptly after obtaining
knowledge thereof, and, thereafter, either Buyer or Seller
shall have the right to terminate this Agreement by giving
written notice to the other no later than ten (10) days after
the giving of Seller's notice, and the Closing Date shall be
extended, if necessary, to provide sufficient time for Buyer
or Seller to make such election. The failure by Buyer and
Seller to so elect in writing to terminate this Agreement
within such ten (10) day period shall be deemed an election
not to terminate this Agreement. For purposes hereof, a
"significant portion" of the Property shall mean such a
portion as shall have a value, as reasonably determined by
Seller, in excess of Ten Million Dollars ($10,000,000.00), or
such portion of the Property, a taking of which entitles any
of Burdine's, JC Penney, Dillard's, Hi-Tech Institute and
Premier Theater to terminate its lease pursuant to the terms
thereof. If either party elects to terminate this Agreement as
aforesaid, the provisions of Section 12.4 shall apply.
12.1.2 Assignment of Proceeds. If (a) neither Seller nor Buyer elects
to terminate this Agreement as aforesaid if all or any
significant portion of the Property is taken, or (b) a portion
of the Property not constituting a significant portion of the
Property is taken or becomes subject to a pending taking, by
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eminent domain, there shall be no abatement of the Purchase
Price; provided, however, that, at the Closing, Seller shall
pay to Buyer the amount of any award for or other proceeds on
account of such taking which have been actually paid to Seller
prior to the Closing Date as a result of such taking (less all
costs and expenses, including attorneys' fees and expenses,
incurred by Seller as of the Closing Date in obtaining payment
of such award or proceeds) and, to the extent such award or
proceeds have not been paid, Seller shall assign to Buyer at
the Closing (without recourse to Seller) the rights of Seller
to, and Buyer shall be entitled to receive and retain, all
awards for the taking of the Property or such portion thereof.
12.2 Destruction or Damage. In the event any of the Property is damaged or
destroyed prior to the Closing Date, Seller shall notify Buyer in
writing of such fact promptly after obtaining knowledge thereof. If any
such damage or destruction (a) is an insured casualty, (b) would cost
less than Ten Million Dollars ($10,000,000.00) to repair or restore and
(c) none of Burdine's, JC Penney, Dillard's, Hi-Tech Institute or
Premier Theater has the right to terminate its lease pursuant to the
terms thereof as a result of such damage or destruction, then this
Agreement shall remain in full force and effect, and Buyer shall
acquire the Property upon the terms and conditions set forth herein. In
such event, Buyer shall receive a credit against the Purchase Price
equal to the deductible amount applicable under Seller's casualty
policy less all costs and expenses, including attorneys' fees and
expenses, incurred by Seller as of the Closing Date in connection with
the negotiation and/or settlement of the casualty claim with the
insurer (the "Realization Costs"), and Seller shall assign to Buyer all
of Seller's right, title and interest in and to all proceeds of
insurance on account of such damage or destruction. In the event the
Property is damaged or destroyed prior to the Closing Date and the cost
of repair would equal or exceed Ten Million Dollars ($10,000,000.00),
the casualty is an uninsured casualty, or any of Burdine's, JC Penney,
Dillard's, Hi-Tech Institute or Premier Theater has the right to
terminate its lease pursuant to the terms thereof as a result of such
damage or destruction then, notwithstanding anything to the contrary
set forth above in this section, Buyer shall have the right, at its
election, to terminate this Agreement. Buyer shall have thirty (30)
days after Seller notifies Buyer that a casualty has occurred to make
such election by delivery to Seller of a written election notice (the
"Election Notice") and the Closing Date shall be extended, if
necessary, to provide sufficient time for Buyer to make such election.
The failure by Buyer to deliver the Election Notice within such thirty
(30) day period shall be deemed an election not to terminate this
Agreement. In the event Buyer does not elect to terminate this
Agreement as set forth above, this Agreement shall remain in full force
and effect, Seller shall assign to Buyer all of Seller's right, title
and interest in and to any and all proceeds of insurance on account of
such damage or destruction, if any, and, if the casualty was an insured
casualty, Buyer shall receive a credit against the Purchase Price equal
to the deductible amount (less the Realization Costs) under Seller's
casualty insurance policy.
12.3 Insurance. Seller shall maintain the property insurance coverage
currently in effect for the Property through the Closing Date.
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12.4 Effect of Termination. If this Agreement is terminated pursuant to
Section 12.1 or Section 12.2, the Deposit shall be returned to Buyer.
Upon such refund, this Agreement shall terminate and neither party to
this Agreement shall have any further rights or obligations hereunder
other than any arising under any section herein which expressly
provides that it shall survive the termination of this Agreement.
12.5 Waiver. The provisions of this Article 12 supersede the provisions of
any applicable Laws with respect to the subject matter of this Article
12.
ARTICLE 13. - ESCROW
The Deposit and any other sums which the parties agree shall be held in escrow,
and any interest earned thereon (herein collectively called the "Escrow
Deposits"), shall be held by the Escrow Agent, in trust, and disposed of only in
accordance with the following provisions:
(a) The Escrow Agent shall invest the Escrow Deposits in
government insured interest-bearing instruments
reasonably satisfactory to both Buyer and Seller or
in a mutual fund with assets in excess of One Billion
Dollars which invests in government-issued interest
bearing instruments reasonably satisfactory as
aforesaid, shall not commingle the Escrow Deposits
with any funds of the Escrow Agent or others, and
shall promptly provide Buyer and Seller with
confirmation of the investments made.
(b) If the Closing occurs, the Escrow Agent shall deliver
the Escrow Deposits to, or upon the instructions of,
Seller on the Closing Date and the Escrow Deposits
shall be credited on account of the Purchase Price.
(c) If for any reason the Closing does not occur, the
Escrow Agent shall deliver the Escrow Deposits to
Seller or Buyer only upon receipt of a written demand
therefor from such party, subject to the following
provisions of this Subsection (c). If for any reason
the Closing does not occur and either party makes a
written demand upon the Escrow Agent for payment of
the Escrow Deposits, the Escrow Agent shall give
written notice to the other party of such demand. If
the Escrow Agent does not receive a written objection
from the other party to the proposed payment within
ten (10) days after the giving of such notice, the
Escrow Agent is hereby authorized to make such
payment. If the Escrow Agent does receive such
written objection within such period, the Escrow
Agent shall continue to hold such amount until
otherwise directed by written instructions signed by
Seller and Buyer or a final judgment of a court.
(d) The parties acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and
for their convenience, that the Escrow Agent shall
not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be
liable to either of the parties for any action or
omission on its part taken or made in good faith, and
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not in disregard of this Agreement, but shall be
liable for its negligent acts and for any Liabilities
(including reasonable attorneys' fees and expenses)
incurred by Seller or Buyer resulting from the Escrow
Agent's mistake of law respecting the Escrow Agent's
scope or nature of its duties. Seller and Buyer shall
jointly and severally indemnify and hold the Escrow
Agent harmless from and against all Liabilities,
including reasonable attorneys' fees and expenses,
incurred in connection with the performance of the
Escrow Agent's duties hereunder, except with respect
to actions or omissions taken or made by the Escrow
Agent in bad faith, in disregard of this Agreement or
involving negligence on the part of the Escrow Agent.
(e) Buyer shall pay any income taxes on any interest
earned on the Escrow Deposits. Buyer represents and
warrants to the Escrow Agent that its taxpayer
identification number is 23-6216339.
(f) The Escrow Agent has executed this Agreement in the
place indicated on the signature page hereof in order
to confirm that the Escrow Agent shall hold the
Escrow Deposits, in escrow, and shall disburse the
Escrow Deposits, pursuant to the provisions of this
Article 13.
ARTICLE 14. - - [INTENTIONALLY OMITTED]
ARTICLE 15. - THEATER CONSTRUCTION
15.1 Theater Project. The parties acknowledge that Seller is currently
engaged in construction of landlord's work in connection with a new
theater under construction at the Property in the location shown on
Exhibit A-1 hereto, pursuant to a certain Lease dated April 9, 2004 by
and between Seller and Premier Cinema Corporation (the "Theater
Lease"). Landlord's work as required by the Theater Lease ("Landlord's
Work") is described in Exhibit "B" to said lease, a copy of which is
attached hereto as Exhibit Q. Exhibit Q also describes certain work to
be done by the tenant under the Theater Lease ("Tenant's Work").
Seller, as landlord, has agreed to reimburse said tenant for the cost
of Tenant's Work, such reimbursement not to exceed the sum of
$3,513,560 (the "TI Cost Reimbursement"). Buyer has heretofore reviewed
and approved the plans and specifications for Landlord's Work (the
"Plans and Specifications"). Seller shall have and retain
responsibility for (a) completion of Landlord's Work as herein
provided, and (b) payment of the TI Cost Reimbursement, subject to the
terms of this Section 15.1. Buyer covenants and agrees that it shall
deliver to Seller copies of any written notices received by Buyer from
the tenant under the Theater Lease pursuant to Section 3.04 of the
Theater Lease or otherwise in connection with the performance of
Landlord's Work, promptly upon receipt of same. As used herein, the
term "completion" of Landlord's Work shall mean completion of
construction thereof in accordance with Laws, the terms of the Theater
Lease and the Plans and Specifications, free and clear of mechanics'
and materialmen's liens (except any such liens that are insured over as
provided in Section 4.2.2). Promptly following Buyer's receipt of
written notice from Seller that the Landlord's Work has been completed,
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Buyer shall request an estoppel certificate from the tenant under the
Theater Lease, addressed to Buyer and Seller, which estoppel
certificate shall contain, inter alia, a statement of such tenant's
acceptance of Landlord's Work and an acknowledgement of the completion
thereof. Buyer agrees to use commercially reasonable and diligent
efforts to obtain such executed estoppel certificate and to deliver a
copy to Seller promptly upon receipt thereof. Following Seller's
receipt of such estoppel certificate, Seller shall pay to Buyer the
then-undisbursed balance of the TI Cost Reimbursement, following which
Buyer shall be deemed to have assumed the obligation to advance funds
to the tenant under the Theater Lease, in accordance with the terms
thereof, for payment of the cost of Tenant's Work. Seller's payment to
Buyer of any undisbursed TI Cost Reimbursement pursuant to this Section
15.1 shall be deemed to have satisfied all corresponding obligations of
Seller to make payment thereof to the tenant under the Theater Lease.
Seller's obligation to pay the TI Cost Reimbursement to the Theater
Lease tenant or to the Buyer (as the case may be, as provided herein)
shall not be subject to the cap on Seller's liability provided for in
Section 16.15.
15.2 Changes in Plans and Specifications. Seller shall not make or permit
any changes in the Plans and Specifications without the prior written
consent of Buyer, which shall not be unreasonably withheld, conditioned
or delayed. Seller shall give Buyer notice of any proposed change
order, and if Buyer fails to give Seller notice of disapproval of such
change order (specifying the reasons for disapproval) within five (5)
business days following such notice from Seller (or such shorter period
as may be required for the approval of change orders under the
construction contract for the performance of Landlord's Work), such
change order shall be deemed approved by Buyer. Notwithstanding the
foregoing, Seller may, without Buyer's consent, enter into any change
order required by Laws or by governmental authorities, which change
order shall be deemed approved by Buyer. The term "Plans and
Specifications" shall include any change orders approved or deemed
approved by Buyer.
15.3 Construction Schedule.
15.3.1 Outside Completion Date. Seller shall use good faith diligent
efforts to complete construction of Landlord's Work no later
than March 1, 2005, subject to extensions for force majeure
(the "Outside Completion Date"). As used herein, the term
"force majeure" shall mean events of war, civil commotion,
acts of God, inclement weather (beyond normal occurrences),
strikes, shortages of materials, governmental regulations not
in existence as of the date hereof, fire or other casualty,
which are beyond the control of, and not caused by acts or
omissions of, Seller (but not including any lack of financing
or funds).
15.3.2 Compliance with DRI Order. Seller hereby indemnifies and
agrees to defend and hold harmless Buyer from and against any
and all Liabilities (including reasonable attorneys' fees and
expenses) suffered or incurred by Buyer as a result of
Seller's failure to complete, on or before December 30, 2004,
the "development" (as that term is defined in Chapter 380,
Florida Statutes (2004)) associated with the relocation of the
theater formerly located in a freestanding building to the
mall, by converting existing retail commercial space in the
mall to theater space within Phase I of the Project (as
defined in the Fourth Amendment to the DRI Order), which
indemnity obligation (i) shall be the several (and not the
joint and several) obligation of the parties comprising
Seller, and (ii) shall not be subject to the cap on Seller's
liability provided for in Section 16.15, but rather, the
maximum amount which may be awarded to and collected by Buyer
pursuant to this Section 15.3.2 shall not exceed Ten Million
Dollars ($10,000,000.00).
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15.4 License. If completion of Landlord's Work has not theretofore occurred,
effective at and subject to Closing, Buyer grants to Seller, its
employees, agents, contractors and subcontractors and all other parties
engaged by Seller in construction of Landlord's Work, a non-exclusive
license to come on the Property for purposes of completing Landlord's
Work and for no other purpose, for a term ending thirty (30) days
following the Outside Completion Date. Seller shall not transfer any of
its rights as licensee hereunder without the prior written consent of
Buyer, which may be given or withheld in Buyer's sole and exclusive
discretion. Seller shall not permit any lien to be filed against the
Property for any labor or materials in connection with Landlord's Work
at the direction or sufferance of Seller (except any such liens that
have been insured over as provided in Section 4.2.2).
15.5 Seller Indemnity. Seller hereby indemnifies and agrees to defend and
hold harmless Buyer from and against any and all Liabilities (including
reasonable attorneys' fees and expenses) suffered or incurred by Buyer
(a) as a direct result of the performance of Landlord's Work (including
without limitation any unpaid construction costs or mechanics' or
materialmen's liens in connection with Landlord's Work and losses
suffered by Buyer as a direct result of Seller's exercise of its rights
to enter upon the Property as described in Section 15.4 above) and (b)
pursuant to the terms of the Theater Lease, due to Seller's failure
timely to disburse portions of the TI Cost Reimbursement during the
period prior to the date on which Seller transfers the then-undisbursed
balance of the TI Cost Reimbursement to Buyer, which indemnity
obligation (i) shall be the several (and not the joint and several)
obligation of the parties comprising Seller, and (ii) shall not be
subject to the cap on Seller's liability provided for in Section 16.15.
Notwithstanding anything contained herein to the contrary, Seller shall
not be required to indemnify Buyer for the matters described in clause
(b) of this Section 15.5 to the extent that such loss suffered by Buyer
results from a delay in the Commencement Date with respect to which
Buyer is entitled to compensation pursuant to the terms of Section 15.6
below, it being the intent of the parties that the Buyer not receive
duplicate compensation for such matters.
15.6 Minimum Rent Reimbursement. Buyer has advised Seller that Buyer based
its offer to purchase the Property upon the expectation that rent will
commence under the Theater Lease as of April 1, 2005. Due to the
scheduling of Landlord's Work, the tenant's obligation to pay rent
under the Theater Lease may not commence on or before April 1, 2005.
Seller has advised Buyer that Seller is negotiating an amendment to the
Theater Lease ("Theater Amendment") which will set the "Commencement
Date" (as defined in the Theater Lease) at a date no later than April
15, 2005. Seller shall pay to Buyer on a per diem basis, subject to the
terms hereof, a sum equal to the "Minimum Rent" that would be due under
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the Theater Lease (if the term of the Theater Lease were to commence on
April 1, 2005) for the period between April 1, 2005 and the earlier to
occur of (i) the actual occurrence of the Commencement Date under the
Theater Lease and (ii) September 30, 2005. Seller shall pay such sums
to Buyer within fifteen (15) days following written request therefor
from Buyer; provided, however, that Buyer shall make such request to
Seller no more that once per month, and Buyer may only seek payment
from Seller in arrears. Buyer acknowledges and agrees that Seller's
obligations under this Section 15.6 are not a guaranty of the Theater
Lease tenant's payment of rent, but that this Section 15.6 is only
intended to compensate Buyer (to the extent provided herein) in the
event that the Commencement Date does not occur on of before April 1,
2005. In addition, if (a) Seller fails to complete Landlord's Work on
or before December 31, 2004, and (b) the tenant under the Theater Lease
fails to open for business on or before the rent commencement date
under such lease, and (c) Buyer is required to grant such tenant a
credit pursuant to the terms of Section 36.15.A of the Theater Lease,
then Seller shall reimburse Buyer for a portion of such credit equal to
the product of (1) the total amount of such credit (but not to exceed
$137,042.00), multiplied by (2) the percentage obtained by dividing (A)
the number of days following the actual rent commencement date under
the Theater Lease through and including the date on which such tenant
is required to open for business pursuant to the terms of the Theater
Lease, by (B) 365. Notwithstanding the foregoing, if Seller succeeds in
obtaining the modification of the Theater Lease described in Section
15.7 below, the immediately preceding sentence shall become null and
void, and Seller shall have no obligation to reimburse Buyer for any
portion of any such credit under the Theater Lease.
15.7 Theater Amendment. Seller shall use commercially reasonable efforts to
include within the Theater Amendment a modification of the defined term
"Lease Year", such that the first Lease Year for purposes of
calculating the "Rent to Sales Ratio" (as defined in the Theater Lease)
shall commence on the date on which the tenant under the Theater Lease
first opens its premises for business with the public.
15.8 Assignment of Construction Warranties. Following completion of
Landlord's Work and the Theater Lease tenant's execution and delivery
of the estoppel certificate described in Section 15.1 above, Seller
shall assign to Buyer any warranties that Seller may have received from
third parties in connection with the performance of Landlord's Work (if
any), and thereafter, Seller shall have no further responsibility or
obligations in connection with Landlord's Work. Notwithstanding the
terms of Section 15.5 above, Seller will have no liability to Buyer
with respect to defects in Landlord's Work and Buyer agrees that its
sole recourse will be under any warranties assigned to Buyer pursuant
to this Section 15.8; provided, however, that prior to Seller's
assignment of the above-described warranties to Buyer, upon written
request from Buyer, Seller shall use commercially reasonable efforts to
enforce the obligations of the contractor(s) under such warranties.
15.9 Survival. The provisions of this Article 15 shall survive the Closing
(and not be merged therein).
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ARTICLE 16. - MISCELLANEOUS
16.1 Buyer's Assignment. Buyer shall not assign this Agreement or its rights
hereunder to any individual or entity without the prior written consent
of Seller, which consent Seller may grant or withhold in its sole
discretion, and any such assignment shall be null and void ab initio.
In the event of any permitted assignment by Buyer, any assignee shall
assume any and all obligations and liabilities of Buyer under this
Agreement but, notwithstanding such assumption, Buyer shall continue to
be liable hereunder. Seller hereby consents to the assignment by Buyer
of this contract to any partnership, limited partnership or limited
liability company directly or indirectly controlled by Buyer.
16.2 Designation Agreement. Section 6045(e) of the United States Internal
Revenue Code and the regulations promulgated thereunder (herein
collectively called the "Reporting Requirements") require an
information return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in connection with
the Transaction. Escrow Agent is either (x) the person responsible for
closing the Transaction (as described in the Reporting Requirements) or
(y) the disbursing title or escrow company that is most significant in
terms of gross proceeds disbursed in connection with the Transaction
(as described in the Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the "Reporting
Person" (as defined in the Reporting Requirements)
for the Transaction. Escrow Agent shall perform all
duties that are required by the Reporting
Requirements to be performed by the Reporting Person
for the Transaction.
(b) Seller and Buyer shall furnish to Escrow Agent, in a
timely manner, any information requested by Escrow
Agent and necessary for Escrow Agent to perform its
duties as Reporting Person for the Transaction.
(c) Escrow Agent hereby requests Seller to furnish to
Escrow Agent Seller's correct taxpayer identification
number. Seller acknowledges that any failure by
Seller to provide Escrow Agent with Seller's correct
taxpayer identification number may subject Seller to
civil or criminal penalties imposed by law.
Accordingly, Seller hereby certifies to Escrow Agent,
under penalties of perjury, that Seller's correct
taxpayer identification numbers are 63-1098468
(Colonial) and 22-1211670 (Prudential).
(d) Each of the parties hereto shall retain this
Agreement for a period of four (4) years following
the calendar year during which Closing occurs.
16.3 Survival/Merger. Except for the provisions of this Agreement which are
explicitly stated to survive the Closing, (a) none of the terms of this
Agreement shall survive the Closing, and (b) the delivery of the
Special Warranty Deed, Quit Claim Deed and other Closing documents and
instruments by Seller and the acceptance thereof by Buyer shall effect
a merger, and be deemed the full performance and discharge of every
obligation on the part of Buyer and Seller to be performed hereunder.
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16.4 Integration; Waiver. This Agreement, together with the Exhibits hereto,
embodies and constitutes the entire understanding between the parties
with respect to the Transaction and all prior agreements,
understandings, representations and statements, oral or written, are
merged into this Agreement. Neither this Agreement nor any provision
hereof may be waived, modified, amended, discharged or terminated
except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or
termination is sought, and then only to the extent set forth in such
instrument. No waiver by either party hereto of any failure or refusal
by the other party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or refusal to so
comply.
16.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Florida.
16.6 Captions Not Binding; Exhibits. The captions in this Agreement are
inserted for reference only and in no way define, describe or limit the
scope or intent of this Agreement or of any of the provisions hereof.
All Exhibits attached hereto shall be incorporated by reference as if
set out herein in full.
16.7 Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
16.8 Severability. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable shall
not be affected thereby, and each term and provision of this Agreement
shall be valid and enforced to the fullest extent permitted by law.
16.9 Notices. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall be
deemed duly given or made at the time and on the date when received by
facsimile if such date is a business day (provided that the sender of
such communication shall orally confirm receipt thereof by the
appropriate parties and send a copy of such communication to the
appropriate parties within one (1) business day of such facsimile) or
when personally delivered if such date is a business day as shown on a
receipt therefor (which shall include delivery by a nationally
recognized overnight delivery service) or three (3) business days after
being mailed by prepaid registered or certified mail, return receipt
requested, to the address for each party set forth below. Any party, by
written notice to the other in the manner herein provided, may
designate an address different from that set forth below.
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IF TO BUYER: Pennsylvania Real Estate Investment Trust
----------- c/o PREIT Services LLC
The Bellevue, Third Floor
200 South Broad Street
Philadelphia, Pennsylvania 19102
Attention: Jeffrey A. Linn, Executive
Vice President
Telephone #: (215) 875-0748
Telecopy #: (215) 546-0240
COPY TO: Pennsylvania Real Estate Investment Trust
------- c/o PREIT Services LLC
The Bellevue, Third Floor
200 South Broad Street
Philadelphia, Pennsylvania 19102
Attention: Bruce Goldman, Executive Vice
President
Telephone #: (215) 875-0780
Telecopy #: (215) 546-8543
COPY TO: Drinker, Biddle & Reath LLP
------- One Logan Square, 20th Floor
18th & Cherry Streets
Philadelphia, Pennsylvania 19103-6996
Attention: Clifford Swain, Esq.
Telephone #: (215) 988-2796
Telecopy #: (215) 988-2757
IF TO SELLER: The Prudential Insurance Company of America
------------ c/o Prudential Real Estate Investors
8 Campus Drive, Fourth Floor
Arbor Circle South
Parsippany, New Jersey 07054-4493
Attention: Peter L. Ruggiero
Telephone #: (973) 683-1724
Telecopy #: (973) 734-1411
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COPY TO: The Prudential Insurance Company of America
------- c/o Prudential Real Estate Investors
PAMG-RE Law Department
8 Campus Drive, Fourth Floor
Arbor Circle South
Parsippany, New Jersey 07054-4493
Attention: Gregory Radke, Esq.
Telephone #: (973) 734-1420
Telecopy #: (973) 683-1788
AND A COPY TO: Colonial Realty Limited Partnership
------------- 2101 6th Avenue North
Suite 750
Birmingham, Alabama 35203
Attention: John Moss
Telephone #: (205) 250-8761
Telecopy #: (205) 986-6961
16.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original and all of which counterparts taken together
shall constitute one and the same agreement.
16.11 No Recordation. Seller and Buyer each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded, and
Buyer agrees (a) not to file any notice of pendency or other instrument
(other than a judgment) against the Property or any portion thereof in
connection herewith and (b) to indemnify Seller against all
Liabilities, including, without limitation, reasonable attorneys' fees
and expenses, incurred by Seller by reason of the filing by Buyer of
such notice of pendency or other instrument.
16.12 Additional Agreements; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute
and deliver such documents as the other party shall reasonably request
in order to consummate and make effective the Transaction; provided,
however, that the execution and delivery of such documents by such
party shall not result in any additional liability or cost to such
party.
16.13 Construction. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation
of this Agreement or any amendment hereof or Exhibit hereto.
16.14 ERISA. Buyer hereby acknowledges that Prudential has informed Buyer of
the following:
(a) Prudential's interest in the Property is allocated
entirely to a Separate Account. Plans invest in the
Separate Account.
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(b) The assets of the Separate Account are deemed plan
assets under ERISA. Each of the Plans whose interest
in the Separate Account exceeds 10% of the total
assets of the Separate Account is identified on
Exhibit R attached hereto and incorporated herein by
this reference.
(c) The Property is subject to the prohibited transaction
restrictions of ERISA and the Internal Revenue Code,
prohibiting certain transactions between a plan and a
"party in interest" (or "disqualified person") as
those terms are defined in Section 3(14) of ERISA, or
Section 4975(e)(2) of the Internal Revenue Code,
respectively.
Buyer represents and warrants to Seller and Prudential that:
(i) Buyer is not an employee benefit plan
subject to the provisions of Title IV of
ERISA or subject to the minimum funding
standards under Part 3, Subtitle B, Title I
of ERISA or Section 412 of the Internal
Revenue Code or Section 302 of ERISA, and
none of the assets of Buyer constitute or
will constitute assets of any such employee
benefit plans subject to Part 4, Subtitle B,
Title I of ERISA.
(ii) Buyer is not a "governmental plan" within
the meaning of Section 3(32) of ERISA, and
the funds used by Buyer to acquire the
Property are not subject to state statutes
regulating investments of and fiduciary
obligations with respect to governmental
plans.
(iii) Buyer is not a Separate Account, or an
"affiliate" of Prudential as defined in
Section IV(b) of PTE 90-1.
(iv) Buyer is not a "party in interest" (as that
term is defined in Section 3(14) of ERISA)
with respect to any of the Plans listed on
Exhibit R.
Buyer hereby agrees to execute such documents or provide such
information as Seller or Prudential may require in connection with the
Transaction or to otherwise assure Seller and Prudential that: (i) the
Transaction is not a prohibited transaction under ERISA, (ii) that the
Transaction is otherwise in full compliance with ERISA and (iii) that
neither Seller nor Prudential is in violation of ERISA by compliance
with this Agreement and by closing the Transaction. Seller shall not be
obligated to consummate the Transaction unless and until the
Transaction complies with ERISA and each of Seller and Prudential is
satisfied that the Transaction complies in all respects with ERISA. The
obligations of Buyer under this section shall survive the Closing and
shall not be merged therein.
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16.15 Maximum Aggregate Liability. Notwithstanding any provision to the
contrary contained in this Agreement or any documents executed by
Seller pursuant hereto or in connection herewith and except as provided
in Section 15.1, the maximum aggregate liability of Seller and the
Seller Parties, and the maximum aggregate amount which may be awarded
to and collected by Buyer, in connection with the Transaction, the
Property, under this Agreement and under any and all documents executed
pursuant hereto or in connection herewith (including, without
limitation, in connection with the breach of any of Seller's Warranties
for which a claim is timely made by Buyer) shall not exceed Three
Million Dollars ($3,000,000.00). The provisions of this section shall
survive the Closing (and not be merged therein) or any earlier
termination of this Agreement.
16.16 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
PROCEEDINGS BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE TRANSACTION, THIS
AGREEMENT, THE PROPERTY OR THE RELATIONSHIP OF BUYER AND SELLER
HEREUNDER.
16.17 Facsimile Signatures. Signatures to this Agreement transmitted by
telecopy shall be valid and effective to bind the party so signing.
Each party agrees to promptly deliver an execution original to this
Agreement with its actual signature to the other party, but a failure
to do so shall not affect the enforceability of this Agreement, it
being expressly agreed that each party to this Agreement shall be bound
by its own telecopied signature and shall accept the telecopied
signature of the other party to this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed as of the date(s) set forth below to be effective as of the day
and year first above written.
SELLER:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Peter L. Ruggerio
-----------------------------------------
Name: Peter L. Ruggerio
Title: Vice President
Date: October 14, 2004
- and -
COLONIAL REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership
By: COLONIAL PROPERTIES TRUST, an Alabama
Real Estate Investment Trust, its
General Partner
By: /s/ John L. Moss
------------------------------------
Name: John L. Moss
Title: Senior Vice President
Date: October 11, 2004
BUYER:
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a
Pennsylvania business trust
By: /s/ Jeffrey A. Linn
-------------------------------------
Name: Jeffrey A. Linn
Title: Executive Vice President
Date: October 13, 2004
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AGREEMENT OF ESCROW AGENT
-------------------------
The undersigned has executed this Agreement solely to confirm its
agreement to (a) hold the Escrow Deposits in escrow in accordance with the
provisions hereof and (b) comply with the provisions of Article 13 and Section
16.2.
BROAD AND CASSEL, as Agent for
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ Ralph C. Datillio
-----------------------------------
Name: Ralph C. Datillio
Title: Partner
Date: October 15, 2004
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