1
Exhibit 2.7
AGREEMENT
by and between
The Commack Site, Inc. Owner
and
Ramco-Gershenson Properties, L.P., Recipient
Toys 'R Us Store Site
Commack, New York
Table of Contents
Paragraph Caption Page
- --------- ------- ----
1. Contribution; Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Contribution Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Existing Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Condition of Title and Related Matters . . . . . . . . . . . . . . . . . . . . . 11
6. Possession; Agreements and Leases . . . . . . . . . . . . . . . . . . . . . . . 14
7. Adjustments to Contribution Price . . . . . . . . . . . . . . . . . . . . . . . 20
8. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9. Representations and Warranties of Owner . . . . . . . . . . . . . . . . . . . . 30
10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11. Fire or Other Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
14. Entire Agreement; Successors and Assigns. . . . . . . . . . . . . . . . . . . . 55
15. Captions or Headings; Cross-References . . . . . . . . . . . . . . . . . . . . . 56
2
16. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
17. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
18. Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
19. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . 57
20. Indemnification and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 57
21. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
22. Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3
Exhibits
"A" Legal Description of Premises
"B" Permitted Encumbrances
"C" Intentionally Omitted
"D" Tenant Allowances and Tenant Improvements
"E" Rent Roll and Schedule of Leases
"F" Leasing Brokerage Commissions Payable After Closing
"G" Service Agreements Noting Those Not Subject to 30 Day
Termination
"H" Intentionally Omitted
"I" Pending or Threatened Litigation
"J" Insurance Policies
"K" List of Environmental Reports
"L" List of Engineering Reports
"M" Form of Tenant Estoppel Certificate
Schedules
1 Personal Property
2 Intentionally Omitted
6 Repairs or Improvements to be Completed by Owner
8 Intentionally Omitted
8(a) Intentionally Omitted
(h)(2) Violation Notices
(h)(3) Insurance Notices for Repairs
(k)(1) Real Estate Tax Appeals
(l)(4) Security Deposit Claims
(l)(5) Notices from Tenants; Release of Guarantor
(m)(1) Rights of First Refusal and Options to Purchase
(n)(4) Non-qualified Income
4
AGREEMENT
This Agreement is made as of the day of April, 1995, by
and between THE COMMACK SITE, INC., a Delaware corporation (hereinafter called
"Owner") and RAMCO-GERSHENSON PROPERTIES, L.P., a Delaware limited partnership
(hereinafter called "Recipient").
INTRODUCTION
A. Owner is the owner of a fee estate in the property or
properties known as Toys 'R Us store site located in Commack, New York and more
particularly described on Exhibit "A" (the "Premises").
B. It is intended that pursuant to this Agreement
Recipient will acquire from Owner the fee simple estate in such Premises.
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants herein contained and intending to be legally bound, hereby
agree as follows:
I. Contribution; Premises.
(a) Owner agrees to contribute to Recipient and
Recipient agrees to accept from Owner, upon the terms and conditions hereinafter
set forth, the Premises.
(b) The Premises consist of:
(i) all those certain lots or pieces of
ground, described by metes and bounds on Exhibit "A" and the
5
buildings and improvements located thereon (the "Premises"); the Premises also
include (A) all easements, rights-of-way or use, privileges, licenses,
appurtenances, interests and other rights of Owner appurtenant to or benefitting
the Premises, including, without limitation, the lessee's interest under any
ground leases; (B) all right, title and interest of Owner in and to any land
lying in the bed of any streets, roads, or avenues, opened or unopened, existing
or proposed, vacated or hereafter to be vacated, public or private in front of,
behind or adjoining the Premises and also as they extend beyond the Premises for
ingress and egress to or from the Premises or any part thereof and for the
installation, replacement, maintenance and use of utility facilities; (C) all
right, title and interest of Owner in and to any award made or to be made in
lieu thereof and in and to any unpaid award for damage to the Premises by reason
of change of grade of any street, road, highway, avenue or alley, or otherwise
and Owner agrees to assign to Recipient at Closing all of such Owner's rights in
any such award; (D) all of Owner's rights to connect with and to utilize, for
service to the Premises or any part thereof, any private or public utility
facilities as may now or hereafter be within or without the boundaries of the
Premises; (E) Owner's interest in the Leases (hereafter defined); (F) all
licenses, permits, certificates of occupancy and governmental approvals with
respect to the Premises to the extent assignable (Owner agrees that if any such
permits or approvals are not assignable and are necessary to the use and
operation of the
-2-
6
Premises, Owner shall apply for and obtain, at Owner's expense, such permit or
approval in the name of Recipient); (G) all trade names used in connection with
the Premises, to the extent assignable; (H) all plans and specifications for
improvements to the Premises in the possession of Owner or any Affiliate (as
defined in subparagraph 9(a) below) of Owner; (I) all of Owner's rights, title
and interest in and to all contracts (including, without limitation, any
electrical supply contracts and the right to resell electricity as may be
provided therein), warranties and guarantees, if any, with regard to the
foregoing and the Personal Property (as hereinafter defined); (J) any and all
manuals, files, logs, records, correspondence, purchaser prospect list, tenant
lists, tenant prospect lists and other mailing lists, current sales brochures
and material, current leasing brochures and materials, current advertising
materials and other items in the possession of Owner or any Affiliate of Owner,
including, without limitation, soil, environmental inspections, studies and
reports, current market studies, and similar inspections with respect to the
sale, management, leasing, promotion, ownership, maintenance, use, occupancy and
operation of the Premises; and (K) all of Owner's rights to insurance proceeds
by reason of a loss insured under any Owner's insurance policy; as well as all
and singular the mineral rights, waters, water courses, rights, liberties,
privileges, hereditaments and appurtenances whatsoever belonging to the Premises
and owned by Owner or in any way
-3-
7
appertaining and the reversions and remainders, rents, issues and profits
thereof; and
(ii) the fixtures, furnishings, equipment
and other items of personal property owned by Owner and located on and used in
connection with the operation of the Premises, including, without limitation,
the property described in Schedule 1 hereto (the "Personal Property").
II. Contribution Price.
(a) The consideration (sometimes referred to
herein as the "Contribution Price") to be given by Recipient to Owner shall be
limited partnership interests in Recipient (the "Operating Partnership
Interests"), which shall be exchangeable for common shares of beneficial
interest ("Shares") of Ramco-Gershenson Properties Trust, a Maryland business
trust (the "REIT"), subject to the restrictions and on the basis to be
established in the limited partnership agreement of Recipient. The Operating
Partnership Interests will be divided into units ("OP Units") in the manner
determined by the general partner of Recipient.
(b) Simultaneously with the contribution of the
Premises contemplated hereby, Recipient will be engaging in a number of other
transactions pursuant to the terms and conditions of a certain Master
Combination Agreement, of even date herewith, by and among Recipient, the REIT
and others (the "Master Agreement"). The number of Operating Partnership
Interests to be
-4-
8
issued to Owner shall be determined in accordance with the provisions of the
Master Agreement.
(c) Owner acknowledges and confirms that (i)
neither the Operating Partnership Interests nor the Shares have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws; and (ii) neither the Operating Partnership Interests nor
the Shares may be sold or otherwise transferred by Owner except in accordance
with law. Owner by execution of this Agreement hereby acknowledges, represents
and warrants that the Operating Partnership Interests being acquired hereunder
are being acquired for Owner's account (or for the account of the partners of
Owner) and not for the account of any other person or persons, for investment
and not with a view to the disposition thereof in violation of the Securities
Act.
III. Existing Mortgages. There are no mortgages
encumbering the Premises other than certain mortgages held by the REIT which are
noted on Exhibit "B" and shall be satisfied at Closing (the "Existing
Mortgages").
IV. Closing.
(a) Closing shall occur at the time and on the
date ("Closing Date") specified by Recipient, but in no event later than
December 31, 1995.
(b) Closing is the event during which, among other
things, Recipient shall deliver the Contribution Price to
-5-
9
Owner, Owner shall sign and deliver the limited partnership agreement of
Recipient as a limited partner, Owner shall deliver to Recipient the deed (a
covenant deed, special warranty deed or such comparable form of deed as may be
the customary means of conveyance with a warranty for the grantor's acts in the
jurisdiction in which the Premises is located), bills of sale and other
documents to be delivered hereunder and the parties will sign and deliver such
other documents or instruments as may be required pursuant to this Agreement.
(c) Intentionally omitted.
(d) At Closing, Owner shall deliver to Recipient
the deed, subject only to the Permitted Encumbrances (as such term is defined in
Paragraph 5(a) below).
(e) At Closing, Owner shall execute and deliver to
Recipient a Bill of Sale transferring title to the Personal Property to
Recipient, free and clear of all liens, claims and encumbrances, except the
Permitted Encumbrances and including a general warranty of title by Owner, but
excluding all other warranties, of any nature or kind, except to the extent
specifically set forth in this Agreement.
(f) At Closing, Owner shall execute and deliver to
Recipient two counterparts of an assignment of (i) all of its rights and
interest under all contracts relating to the Premises to which Owner is a party
with respect to the construction, maintenance, security, operation, management,
supplies, equipment, rental collection, advertising or other services
-6-
10
(collectively, and together with any substitute contract entered into pursuant
to Paragraph 6(b) below, the "Service Agreements"), to the extent assignable
(Owner agrees that if any such Service Agreement is not assignable and is
necessary to the use and operation of the Premises, Owner shall cause a new
Service Agreement to be entered into with Recipient on substantially similar
terms), together with the original or duplicate original of each such Service
Agreement, (ii) intangible property of Owner (other than accounts receivable or
other items of income which, under the terms of this Agreement, are to remain
the property of Owner after Closing), (iii) warranties and guarantees still in
effect and (iv) other assets to be transferred and assigned hereunder. The
assignment shall contain an assumption by Recipient of the obligations arising
under the Service Agreements after Closing. The assignment shall contain a
reciprocal indemnity with Owner indemnifying Recipient for liabilities arising
prior to Closing and Recipient indemnifying Owner for liabilities arising after
Closing (except for liabilities arising after Closing for which Owner has agreed
to indemnify Recipient hereunder). At the Closing, Recipient shall execute the
counterparts of such assignment and each party shall retain a copy.
(g) At Closing, Owner shall execute, acknowledge
and deliver to Recipient two counterparts of an assignment by Owner of Owner's
interest in all existing Leases and guarantees thereof then in effect, which
shall contain an assumption by
-7-
11
Recipient of the obligations arising under the Leases after the Closing. The
assignment shall contain a reciprocal indemnity with Owner indemnifying
Recipient for liabilities arising prior to Closing and Recipient indemnifying
Owner for liabilities arising after Closing (except for liabilities arising
after Closing for which Owner has agreed to indemnify Recipient hereunder). At
Closing, Recipient shall execute the counterparts of such assignment and each
party shall retain one copy.
(h) At Closing, Owner shall deliver the originals,
if available, of all Leases and amendments thereto and guarantees thereof and
all ground leases directly to Recipient.
(i) At Closing, Owner shall execute and deliver a
notice (suitable for reproduction) to tenants advising of the transfer of the
Premises to Recipient and advising the tenants to pay all future rentals to
Recipient.
(j) At Closing, Owner shall deliver to Recipient
all tenant deposits, including security deposits and other deposits, together
with interest thereon if required by law, contract or otherwise with respect to
the Premises (or credit said deposits to Recipient as part of the Paragraph 7
adjustments).
(k) At Closing, Owner shall cause to be furnished
and delivered to Recipient, the marked-up title commitment constituting the
irrevocable contractual obligation of the Title Insurance Company (as such term
is defined in subparagraph 5(a)
-8-
12
below) to issue its title policy in accordance with Paragraph 5(a)(i) below (the
"Title Policy").
(l) At Closing, Owner shall deliver directly to
Recipient copies of building plans and specifications for the Premises, if
available.
(m) At Closing, Owner shall deliver possession of
the Premises to Recipient, subject only to the rights of tenants under their
respective Leases and the Permitted Encumbrances.
(n) At Closing, Owner shall deliver directly to
Recipient the following, to the extent in the possession of Owner or any
Affiliate of Owner: copies of all certificates of occupancy, licenses, permits,
authorizations and approvals required by law and issued by all governmental
authorities having jurisdiction over the Premises, together with copies of all
certificates issued by any local board of fire underwriters (or other body
exercising similar functions). Owner shall also deliver at Closing the original
or copies of each bill, together with proof of payment thereof (if any of the
same have been paid), for current real estate and personal property taxes.
(o) At Closing, Owner shall deliver to Recipient a
Non-Foreign Transferor Certificate, certifying that Owner is not a "foreign
person" within the meaning of Section 1445 of the Internal Revenue Code of 1986,
as amended (the "Code").
(p) At Closing, Owner shall execute and deliver to
Recipient a disclosure of any material variations, as of the
-9-
13
Closing Date, from the representations and warranties set forth in this
Agreement.
(q) At the Closing and on the Closing Date, Owner
shall execute and deliver to Recipient an assignment, in recordable form,
whereby any ground lease or leasehold estate created by such ground lease is
assigned by Owner to Recipient, subject only to the Permitted Encumbrances.
Owner will also obtain and deliver to Recipient an estoppel letter in form and
substance reasonably satisfactory to Recipient and any consents necessary to
effectuate such assignment.
(r) At or after Closing, Owner shall execute and
deliver to Recipient or other entity designated by Recipient, such other
documents or instruments as in the reasonable opinion of counsel for Recipient
may be necessary to effectuate the transactions described in this Agreement and
to transfer title to the Premises of Owner as contemplated by this Agreement,
provided that such documents or instruments do not increase the liability of
Owner.
(s) At the Closing, Owner and Recipient shall
prepare and execute a closing statement to evidence the disbursements and
receipts made and received in connection with the Closing.
(t) At Closing, Owner shall execute and deliver to
Recipient an assignment, in recordable form, of such development rights, if any,
that Owner may have under that
-10-
14
certain Deed, dated June 3, 1977 and recorded in the office for the Recorder of
Suffolk County, New York at Liber 8257, page 381.
(u) At the Closing and on the Closing Date,
Recipient shall do or perform the following:
(1) Execute and deliver to Owner signed
counterparts of the limited partnership agreement of Recipient evidencing the
Contribution Price; and
(2) Deliver to Owner executed
counterparts of the assignments contemplated in subparagraphs 4(f) and 4(g)
above.
(v) This transaction shall be closed by means of a
so called New York Style Closing, with the concurrent delivery of the documents
of title, transfer of Premises and delivery of the Title Policy. Owner shall
provide, if required by the Title Insurance Company, an undertaking (the "Gap
Undertaking") to the Title Insurance Company necessary to effectuate the New
York Style Closing, in form and content reasonably acceptable to those providing
the Gap Undertaking and limited to matters arising from acts of Owner.
V. Condition of Title and Related Matters.
(a) Title.
(i) At Closing, title to the Premises
shall be such as will be insured, solely in Recipient's name as good and
marketable by Commonwealth Land Title Insurance Company (the "Title Insurance
Company") at regular rates pursuant to the standard stipulations and conditions
of the 1970 Form B ALTA
-11-
15
Policy of Owner's Title Insurance as revised in 1984 and as the same may be
modified by such endorsements, affirmative coverage and other matters which have
been requested by Recipient prior to the date hereof (and such other
endorsements and affirmative coverages as may hereafter be reasonably required
by Recipient), free and clear of all liens and encumbrances, except for the
Permitted Encumbrances. The term "Permitted Encumbrances" as to each Premises
shall mean those title matters set forth as to such Premises on Exhibit "B"
attached. At Closing, title to the Personal Property associated with each
Premises shall only be subject to the Permitted Encumbrances as to such Premises
except for the Personal Property described on Schedule 1 which is denoted as
being leased or financed. Owner shall deliver to the Title Insurance Company
such commercially reasonable instruments as the Title Insurance Company requires
to issue endorsements and other coverages, in such form as Recipient reasonably
requires. The premiums and other costs of title insurance shall be borne by
Recipient and paid at Closing.
(ii) Intentionally omitted.
(iii) If title to the Premises is not, at
Closing, insurable as set forth in Paragraph 5(a), Recipient may elect, as its
sole right and remedy, to terminate this Agreement as to the Premises and the
contribution thereof by Owner, whereupon this Agreement and the other five (5)
agreements of even date herewith by and between Recipient and certain Affiliates
of Owner, each of which is a wholly owned subsidiary
-12-
16
of the REIT (the "Related RPS Agreements") shall become null and void, neither
Recipient nor Owner shall have any further rights or obligations under this
Agreement and Recipient and such Affiliates of Owner shall have no further
rights or obligations under the Related RPS Agreements. Notwithstanding the
foregoing, Owner shall be obligated to cure encumbrances which are not Permitted
Encumbrances if such encumbrances evidence an obligation which is a fixed and
ascertainable amount. Owner shall have the right to cure any title defects
until the date prior to the Closing Date.
(b) Survey. At Closing, Owner will deliver to
Recipient an as-built survey (the "Survey") of the Premises, prepared by a
registered land surveyor or engineer, licensed in the jurisdiction in which the
Premises is located. The Survey shall be certified to Recipient, Owner, the
Trust, the REIT, Title Insurance Company, and any lender of Recipient holding or
to hold a mortgage on the Premises in form acceptable to Recipient and shall be
dated no earlier than a date acceptable to Recipient.
(c) UCC Searches. Owner shall deliver to
Recipient prior to Closing current searches of all Uniform Commercial Code
financing statements filed with the Secretary of State and/or county clerk
against Owner or the Premises, together with bankruptcy, tax lien and judgment
searches and searches for pending litigation in all appropriate jurisdictions.
It is a condition of Closing that such searches reveal that other than
-13-
17
the Permitted Encumbrances there are no bankruptcies, actions, claims or liens
against Owner or affecting or encumbering or which might affect or encumber the
Premises or any interest in the Premises which will continue after Closing.
(d) REA Estoppels. Owner shall deliver the
estoppel letters received by Owner from those parties under reciprocal easement
agreements, if any, for which Recipient has requested that Owner request
estoppel letters. Owner agrees to use reasonable and diligent efforts to obtain
such estoppel letters.
VI. Possession; Agreements and Leases; Operations Prior to
Closing.
(a) At Closing, Owner will transfer to Recipient
possession of the Premises and the Personal Property subject to the leases for
the Premises described in Exhibit "E" (other than those leases which expire or
are terminated or modified as contemplated by the provisions of this
subparagraph set forth below) and any new leases entered into after the date
hereof (collectively, the "Leases") and will assign to Recipient (or to
Recipient's designee) the landlord's interest in each Lease and any guarantees
with regard to each Lease; and the Leases will not be subject to the rights of
brokers to be paid leasing brokerage commissions, finders or referral fees or
similar commissions payable after Closing except as set forth on Exhibit "F" of
this Agreement. Owner covenants that Owner shall not enter into new Leases or
modify or terminate any Lease (except by reason of a
-14-
18
default by the tenant thereunder) except as hereafter provided. Owner and
Recipient agree that, as to proposed new Leases to be entered into, Owner will
submit its completed standard lease request form prior to negotiating the Lease,
and Recipient shall have three (3) business days after receipt of such form in
which to object to or propose modifications to such proposed Lease. Recipient's
failure to respond to the notice shall be deemed an acceptance of the terms of
such Lease. Owner agrees to obtain Recipient's approval of any subsequent
modifications to such economic terms, provided that Owner shall have the right
to make customary modifications to its standard lease form so long as such
modifications do not affect the following terms (collectively the "Economic
Terms"): (i) the term, (ii) square footage, (iii) tenant improvement or tenant
allowance amounts, (iv) rent, (v) percentage rent or (vi) the obligation to pay
a proportionate share of taxes or common area maintenance (except to the extent
that Owner customarily caps such charges or allows certain other modifications
to the scope of inclusions in common area maintenance clauses). Owner shall
have the right to modify the terms of an existing Lease provided that Owner
first gives to Recipient prior written notice of any proposed modifications to
the Economic Terms of the existing Lease. Recipient shall have three (3)
business days after receipt of such notice to object or propose modifications to
the proposed terms. Recipient's failure to object to such proposed modification
within such three (3) business day period shall be deemed an acceptance of the
terms of
-15-
19
such modification to the existing Lease. The termination of any of the Leases
prior to Closing as permitted herein shall not excuse Recipient from its
obligation to complete Closing and to pay the full Contribution Price, except as
set forth in Paragraph 8 below.
(b) Except as set forth on Exhibit "G", there are
no existing Service Agreements except those which are terminable without cause
or penalty upon not more than thirty (30) days' notice. Except as set forth in
Paragraph 8 below, the termination of any of the Service Agreements prior to
Closing by reason of the expiration of its term or by reason of a default
thereunder shall not excuse Recipient from its obligation to complete Closing
and to pay the full Contribution Price, provided that if the service in question
is necessary or appropriate to the proper operation of the Premises, Owner will
obtain a substitute contract on commercially reasonable terms prior to Closing.
(c) Owner agrees to use reasonable and diligent
efforts to cause each tenant under a Lease to deliver to Recipient at or prior
to Closing a written statement ("Tenant Estoppel Certificate") substantially in
the form of Exhibit "M" attached to this Agreement. Tenants occupying an entire
separate building or in excess of 7,500 rentable square feet are referred to as
"Major Tenants." If Owner obtains Tenant Estoppel Certificates from the Major
Tenants of the Premises and, subject to the terms of subparagraph 8(a) below, is
unable to obtain all
-16-
20
of the other Tenant Estoppel Certificates, after using reasonable and diligent
efforts to obtain them, then Owner shall deliver at Closing a certificate
representing to Recipient (to Owner's knowledge as to actual or potential tenant
defaults) the facts that are to be covered by the Tenant Estoppel Certificates
which have not been obtained. Notwithstanding the foregoing sentence, Owner's
certification shall terminate with respect to any tenant at such time that Owner
delivers an estoppel certificate from such tenant which such certificate shall
expressly state that Recipient is relying on such certificate in releasing Owner
from Owner's certification and provided further that the estoppel provided by
the tenant is consistent with the certification provided by Owner. Owner's
representations shall be deemed for all purposes hereunder to have been made
under Paragraph 9 hereof.
(d) Operations Prior to Closing. Between the date
of the execution of this Agreement and Closing:
(i) Owner shall, at its expense, make
all repairs and replacements, structural and non-structural, which are required
with respect to any portion of the Premises to maintain it in its present
condition. Owner shall also complete, at its expense to the extent that the
expenses may not be passed through to tenants, any repairs or capital
improvements which Owner commences prior to Closing, including the repairs or
improvements set forth on Schedule 6 attached hereto. Owner shall cure, prior to
the Closing Date or, at Recipient's sole
-17-
21
option, as soon after the Closing Date as is reasonably practical, any violation
of Applicable Laws (as defined in Paragraph 9(h) below) which existed prior to
the Closing Date unless the cost to cure the same shall exceed $250,000 as
determined by a contractor acceptable to Recipient. If the cost to cure exceeds
such amount, Owner shall have the right to terminate this Agreement. Upon any
such termination by Owner, this Agreement and the Related RPS Agreements shall
become null and void, neither Recipient nor Owner shall have any further rights
or obligations under this Agreement and Recipient and the Affiliates of Owner
shall have no further rights or obligations under the Related RPS Agreements.
(ii) Owner shall operate and manage the
Property in the same manner as it has been operated and managed prior to the
date of this Agreement and in accordance with Applicable Laws. Owner shall
submit to Recipient monthly reports of rental collections, occupancy and
vacancies.
(iii) Owner shall perform any and all acts,
and shall make any and all payments, necessary to cause the representations and
warranties of Owner in this Agreement to be true and correct as of the date made
or as of the Closing Date if then required to be true and correct.
(iv) Owner shall comply with all of the
obligations of Owner under the Leases, the Service Agreements and all other
agreements and contractual arrangements by which Owner and/or the Premises are
bound or affected. Owner shall maintain
-18-
22
Owner's insurance policy in full force and effect and shall pay all required
premiums and other charges.
(v) Recipient, its attorneys,
accountants, architects, engineers and other representatives shall be afforded
access to the Premises and to all books, records and files relating thereto from
time to time prior to Closing for the purposes of inspections, preparation of
plans, taking of measurements, making of surveys, making of appraisals, and
generally for the ascertainment of the condition of the Premises; and there
shall be furnished to Recipient all plans and specifications, engineering
reports, feasibility studies, operating statements, governmental permits and
approvals, contracts, leases, surveys, title information and other documentation
concerning the Premises in the possession of Owner and/or Owner's management
agent.
(vi) Promptly after receipt thereof by
Owner, Owner shall deliver to Recipient the following:
(A) a copy of any notice of
default given or received under any of the Leases or the Service Agreements or
any notices of termination given for any Lease;
(B) a copy of any tax bill, notice
or statement of value, or notice of change in a tax rate affecting or relating
to the Premises;
(C) a copy of any notice of an
actual or alleged violation of Applicable Laws; and
-19-
23
(D) a copy of any notice of any
condemnation proceedings with respect to the Premises.
VII. Adjustments to Contribution Price.
(a) (i) Taxes, Rents, etc. Real estate taxes
(on the basis of the due dates of the tax bills for the period for which such
taxes are assessed) on the Premises, personal property taxes on the Personal
Property, minimum water and sewer rentals, rents, including without limitation
expense pass throughs, percentage rents, income from and expenses for
electricity and other sums paid by tenants, licensees and concessionaires and
collected by Owner prior to Closing under the Leases, payments due under the
Service Agreements which are to be assigned to Recipient, prepaid license fees
and other charges for licenses and permits for the Premises which will remain in
effect for Recipient's benefit after Closing, rental under any ground lease,
municipal rubbish removal charges, lease rejection awards made in any bankruptcy
proceedings of a tenant, and prepaid insurance premiums for insurance which will
remain in effect for Recipient's benefit after Closing, if any, shall be
apportioned pro rata between Owner and Recipient on a per diem basis as of
midnight on the day before the Closing Date, so that Owner shall bear all
expenses with respect to the Premises and benefit from all items of income with
respect to the Premises through the day before the Closing Date. To the extent
that the amounts of the items to be adjusted are not reasonably ascertainable as
of the
-20-
24
Closing Date, they shall be adjusted as promptly after the Closing Date as the
amounts thereof are ascertained.
(ii) All rents and other sums collected by
Recipient after the Closing Date, up to the respective amounts currently due
Recipient from time to time, will be retained by Recipient and applied on
account of the rents and other sums due to Recipient. At Closing, Owner shall
identify all tenants which are in arrears in the payment of rent or other sums
due under the Leases on the Closing Date. If any tenant shall pay to Recipient
after the Closing Date a sum in excess of all rents and other sums which have
accrued to Recipient, and which excess sum is on account of arrearages which
became due prior to Closing, Recipient will remit to Owner such excess net of a
proportionate share of the cost of collection based on the relative amounts
recovered by each of Owner and Recipient, to be applied on account of the
arrearages due to Owner. Owner shall not bring any suit or other proceeding, on
behalf of Owner, against any tenant currently in occupancy under the Leases
after the Closing Date on account of rental delinquencies. Recipient assumes no
obligation to collect or enforce the payment of any such moneys which may be
owing to Owner. If Recipient employs an agent to collect rent under the Leases
after Closing, such agent shall have the right to deduct and retain from Owner's
share of any rent or other payments received by Recipient after the Closing Date
a pro rata share of the compensation payable to such agent
-21-
25
by Recipient, based on the relative amounts recovered by each party.
(iii) Any refunds received by Recipient under any of
the Service Agreements on account of payments which are applicable to periods
prior to the Closing Date shall be apportioned by Recipient when received and
the portion thereof attributable to periods prior to the Closing Date shall be
paid by Recipient to Owner.
(iv) All amounts collected from tenants
pursuant to provisions in the Leases (or in any reciprocal easement agreements)
on account of real estate taxes shall be transferred to Recipient on the Closing
Date. Owner shall be responsible for the collection of all such amounts up to
the Closing Date and Recipient shall be responsible for the collection of all
such amounts from and after the Closing Date. At Closing, the difference
between the aggregate amount collectable by Owner under the Leases and
reciprocal easement agreements on account of real estate taxes for the tax
period in which the prorated taxes are due, and the amount of real estate taxes
for the Premises for the tax period in which the Closing Date occurs, shall be
credited through a cash adjustment to Owner or Recipient, as applicable.
(v) Common area maintenance expenses
which by the terms of the Leases (or any reciprocal easement agreements) are
recoverable in whole or in part from tenants of the Premises (or parties to
reciprocal easement agreements) shall
-22-
26
be calculated on the basis of the actual expenses incurred by the parties as of
the Closing Date. Owner shall be responsible for the collection of all such
amounts up to the Closing Date and Recipient shall be responsible for the
collection of all such amounts from and after the Closing Date. Owner and
Recipient recognize that the common area maintenance expense contributions made
by tenants or parties to reciprocal easement agreements during the month in
which Closing occurs will be applied by Owner for the common area maintenance
expenses incurred for the Premises during the month which precedes the month in
which Closing occurs (the "Pre-Closing Month"). Notwithstanding such
application, items of common area maintenance expense and income shall be
prorated as of the Closing Date, except that the parties shall defer the cash
adjustment to be made to Recipient which arises from Owner's application of the
common area maintenance expense contributions made during the month in which
Closing occurs to the expenses incurred during the Pre-Closing Month until the
year-end common area maintenance reconciliation is made under the Leases. If
Owner shall have failed to have paid common area maintenance expenses incurred
for any period prior to the Pre-Closing Month, or if Owner shall have collected
payments for such expenses for periods beyond Closing, then there shall be a
credit to Recipient in the form of a cash adjustment for the amount of such
expense or excess.
(vi) If the apportionment of any
percentage rents, "escalation" payments relating to operating expenses,
-23-
27
merchant's association dues or fees for promotion, income and expenses for
electricity or other payments received by Recipient after the Closing Date from
a tenant under any of the Leases on account of periods prior to the Closing Date
or on account of sums which are attributable to expenses incurred by the
landlord for periods of time prior to the Closing Date, cannot be precisely
determined at the Closing Date, Owner and Recipient shall reasonably estimate
the apportionment of such sums pro rata between Recipient and Owner on a per
diem basis as of the Closing Date. A post-closing adjustment shall be made, if
necessary, between Recipient and Owner for such apportioned items when the
amounts thereof can be ascertained.
(vii) The apportionment of "percentage
rent", and the amounts due by Recipient to Owner, respectively, under each of
the Leases for "percentage rent", shall be made or paid with respect to the
lease year (as defined in such Lease) in which the Closing Date falls and the
post-Closing adjustment shall be made at the time that the accounting for the
tenant's percentage rent obligation for the lease year is determined under the
Lease. The amount to be apportioned shall be the total of the amounts collected
by both Recipient and Owner as percentage rent for such percentage rent lease
year. Owner's portion thereof shall be an amount which bears the same ratio to
the total percentage rent for the applicable percentage rent lease year as the
number of days up to but excluding the Closing Date in such percentage rent
lease year shall bear to the full number
-24-
28
of days in such percentage rent lease year; and Recipient shall be entitled to
retain the remaining portion.
(viii) If the Premises is not separately
assessed for real estate tax purposes as of the Closing Date, the real estate
tax assessment attributable to the Premises shall be deemed to be that portion
of the total assessment of the buildings on the larger parcel with which the
Premises is assessed, which bears the same ratio to such total assessment of
buildings as the ground floor area of buildings on the Premises bears to the
total ground floor area of buildings on the larger parcel; and that portion of
the total assessment of the land constituting the larger parcel with which the
Real Property is assessed, which bears the same ratio to such total assessment
of land as the land area in the Premises bears to the total land area in the
larger parcel.
(ix) If bills for real estate taxes on the
Premises have not been issued as of the Closing Date, and if the amount of real
estate taxes for the then current tax fiscal year is not then known, the
apportionment of real estate taxes shall be made at Closing on the basis of the
prior year's real estate taxes and a post-Closing adjustment shall be made when
the actual amounts are ascertained.
(x) If, at Closing, the Premises or any
part thereof is affected by an assessment which is payable in installments of
which the first installment is then a charge or lien, or has been paid, then all
unpaid installments of such
-25-
29
assessments shall be prorated between the parties as of the date of Closing as
follows: Owner shall be responsible for those installments thereof for years
prior to the year in which Closing occurs and Recipient shall be responsible for
those installments thereof for years following the year in which Closing occurs;
the installment due for the year in which Closing occurs shall be prorated
between the parties on a per diem basis.
(xi) Any credit due to Recipient pursuant
to this Paragraph 7(a) shall be paid in cash to Recipient at Closing and not
applied as a credit against the Contribution Price, and any credit due to Owner
pursuant to this Paragraph 7(a) shall be paid by Recipient in cash to Owner at
Closing as an addition to the Contribution Price.
(b) Security Deposits. The total sum of all
tenant security deposits listed on Exhibit "E", as updated at Closing, together
with all interest earned thereon as of the Closing Date which Owner is obligated
to pay to tenants, shall be given to Recipient or its designee at Closing and
not as a credit against the Contribution Price.
(c) Utility Meter Readings. At Closing, Owner
shall pay all charges for the water, electric, gas and other utility meters
servicing the Premises (other than meters measuring exclusively utility
consumption which is to be paid in full by tenants under Leases) apportioned on
the basis of the prior month's readings. When the charges for the month during
which Closing occurs are ascertained, the parties shall make any
-26-
30
necessary post-Closing adjustments. The apportionment of items of expense and
income for tenant contributions on account of utilities shall be handled in the
same manner as items of expense and income for tenant contributions for common
area maintenance are handled as described in subparagraph 7(a)(v) above.
(d) Transfer and Sales Taxes. Recipient shall pay
at Closing all realty transfer documentary fees, stamps and taxes imposed on the
Deed, the conveyance of the Premises or the transaction contemplated by this
Agreement. Ordinary charges for recording instruments shall be paid at Closing
by Recipient. Owner and Recipient acknowledge and agree that the Personal
Property to be transferred hereunder is not being sold in the normal course of
Owner's trade or business, and agree to execute the appropriate exemption
certificates for the purpose of obtaining sales tax exemptions with respect to
the transfer of the Personal Property. Recipient shall be obligated to pay any
sales tax which may be payable in connection with the sale of the Personal
Property if such sale is not exempt from taxation.
(e) Tenant Improvement Costs. Owner shall pay at
or prior to Closing all tenant improvement costs, tenant allowances and other
bona fide third party costs and expenses actually incurred for Leases entered
into on or before December 31, 1994. Owner agrees to indemnify, defend and hold
Recipient harmless from and against any liability associated with such costs. If
Closing occurs, Recipient shall pay the unamortized portion (amortized over the
period rent is due under
-27-
31
the Lease) of all tenant improvement costs, tenant allowances, and other bona
fide third-party costs and expenses actually incurred in connection with
procuring the tenant for those Leases entered into after December 31, 1994. In
the event that, at the time of Closing, Owner has outstanding obligations which
are the responsibility of Owner but which are not payable at that time because
the work relating thereto has not been completed, Owner shall, at Closing,
deposit with the Title Company an amount equal to the reasonable estimate of the
amount of such outstanding obligations. Such amount shall be held in escrow by
the Title Company pursuant to escrow instructions mutually acceptable to Owner
and Recipient, and shall be released to Owner upon proof reasonably satisfactory
to Recipient that such obligations have been paid or that such funds shall be
applied to the payment of such outstanding obligations.
VIII. Conditions to Closing.
(a) The obligation of Recipient to consummate
Closing hereunder is conditioned upon the following:
(i) All representations and warranties
of Owner shall be true in all material respects as of the date hereof and as of
Closing, except to the extent that changes may occur in the Rent Roll which do
not have a material adverse affect on the income from the Premises.
(ii) Owner shall have performed all of
its covenants and obligations to be performed at or prior to Closing.
-28-
32
(iii) The Title Policy described in
Paragraph 5(a)(i) shall have been issued and shall be in full force and effect.
(iv) Intentionally omitted.
(v) Tenant Estoppel Certificates
acceptable to Recipient shall have been obtained from the Major Tenants and from
other tenants which, in the aggregate, occupy seventy percent (70%) or more of
the leased and occupied square footage of the portion of the Premises which is
not occupied by Major Tenants.
(vi) Estoppel Certificates acceptable to
Recipient shall have been obtained from lessors under any ground lease to be
assigned.
(vii) Owner shall have delivered the
opinions of Counsel to Recipient in the form and substance acceptable to
Recipient.
(viii) Closing shall occur simultaneously
under each of the Related RPS Agreements.
(b) Recipient may waive any condition to Closing
in whole or in part.
(c) Recipient may, but shall not be obligated to,
terminate this Agreement and all of the obligations hereunder if any of the
conditions set forth in Paragraph 8(a) above are not satisfied. In the event
that Recipient terminates this Agreement pursuant to the provisions hereof, (i)
each of the Related RPS Agreements shall also terminate and (ii) Owner shall be
entitled,
-29-
33
without charge, to copies of any studies, surveys and reports relating to the
Premises prepared by or for Recipient in connection with this Agreement.
(d) This Agreement and the rights and obligations
of the parties hereunder are expressly subject to the terms and conditions of
the Master Agreement.
IX. Representations and Warranties of Owner. Owner
represents and warrants as follows:
(a) Organization; Authority. Owner is a
corporation duly formed and subsisting under the laws of its jurisdiction of
formation and has the requisite power and authority to enter into and perform
its obligations under this Agreement. Owner is a wholly-owned subsidiary of the
REIT. For the purposes of this Agreement, an "Affiliate" of Owner is defined as
any party that is owned one hundred percent (100%) directly or indirectly by the
REIT or a party over which the REIT has the power to cause the direction of the
management and policies, whether by voting rights, contract or otherwise.
(b) Due Authorization; Binding Agreement.
Except as and to the extent otherwise provided in the Master Agreement, (i) the
execution, delivery and performance of this Agreement by Owner has been duly and
validly authorized by all necessary action of Owner and (ii) this Agreement has
been duly executed and delivered by Owner, or an authorized representative of
Owner and constitutes a legal, valid and binding obligation of
-30-
34
Owner, enforceable against Owner in accordance with the terms hereof.
(c) Consents and Approvals. Except as and to the
extent otherwise provided in the Master Agreement, no consent, waiver, approval
or authorization of, or filing, registration or qualification with, or notice
to, any governmental unit or any other person is required to be made, obtained
or given by Owner prior to or as a condition to the execution, delivery and
performance of this Agreement, except as have been made, obtained or given.
(d) No Violation. Except as and to the extent
otherwise provided in the Master Agreement, none of the execution, delivery or
performance of this Agreement by Owner does or will, with or without the giving
of notice, lapse of time or both, (i) violate, conflict with or constitute a
default under any term or condition of (A) the organizational documents of Owner
or any material provision of any Significant Agreement (as defined below) or
other agreement to which Owner is a party or by which it or its assets or
properties are bound, or (B) any terms or provisions of any judgment, decree,
order, statute, injunction, rule or regulation of a governmental unit applicable
to Owner or (ii) result in the creation of any lien or other encumbrance upon
the assets or properties of Owner.
(e) Absence of Undisclosed Liabilities and
Contractual Obligations. Except for immaterial liabilities arising in the
ordinary course of business since the date of
-31-
35
Owner's most recent financial statements (true and correct copies of which have
been delivered to Recipient) and for those matters specifically and adequately
accrued or reserved in such financial statements, to Owner's knowledge, Owner
has no liabilities of any nature, whether matured or unmatured, fixed or
contingent, regardless of whether the disclosure thereof would otherwise be
required under the method of accounting used in the preparation of Owner's
financial statements, which would have, individually or in the aggregate, a
material adverse effect upon Owner or the Premises. For purposes hereof,
"Significant Agreement" means and includes any of the following to which Owner
is a party or by which Owner or any of its assets or properties may be bound, in
each such case as amended and currently in effect, inclusive of any waivers
relating thereto:
(1) all agreements, instruments and
documents evidencing, securing, or pertaining to the contractual obligations of
Owner that involve annual payments or receipts in excess of $20,000;
(2) all leases where Owner is the lessee
(including capital leases) which are not terminable without penalty on not more
than ninety (90) days' notice and that involve annual payments and receipts in
excess of $20,000;
(3) all ground leases where Owner is a
ground lessee;
(4) all reciprocal easement agreements
affecting the Premises; and
-32-
36
(5) all agreements representing
obligations for borrowed money in excess of $20,000. There are no Significant
Agreements of Owner other than the Leases, agreements which are Permitted
Encumbrances and the Service Agreements.
(f) Litigation. There are no claims, actions,
suits, proceedings or investigations pending, or, to Owner's knowledge,
threatened before any court, governmental unit or any arbitrator against Owner
or its assets or properties or with respect to the transactions contemplated by
this Agreement except (A) the matters, if any, set forth on Exhibit "I", none of
which, individually or in the aggregate, would have a material adverse effect on
Owner or the Premises or would prohibit or restrain the consummation of the
transactions contemplated by this Agreement.
(g) Attachment, Execution, Etc. No attachments,
execution proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings are pending or, to the knowledge
of Owner, threatened against Owner or any of its assets, nor are any of such
proceedings contemplated by Owner.
(h) As to governmental notices, compliance,
violations etc.:
1. Operation of Premises; Compliance
with Laws. Owner's sole business is the operation and ownership of the
Premises. To Owner's knowledge, Owner has complied with all laws applicable to
the conduct of the business of Owner and
-33-
37
Owner's use and operation of its Premises and has obtained all licenses,
certificates, approvals and permits required for the conduct thereof, except
where the failure to do so would not have a material adverse effect on Owner,
Recipient or the Premises. To Owner's knowledge, such licenses, certificates,
approvals and permits are in full force and effect, Owner has not taken any
action that would (or failed to take any action the omission of which would)
result in the revocation of such licenses, certificates, approvals or permits
and Owner has not received any notice of violation from any federal, state or
municipal entity or notice of an intention by any such government entity to
modify or revoke any certificate, approval, license or permit issued by it to
such Owner that in each case has not been cured or otherwise resolved to the
satisfaction of such government entity, except where such failure or such action
would not have a material adverse effect on Owner or the Premises.
2. Except as set forth on Schedule
(h)(2), Owner has not received any written notice with respect to the Premises
from any public authority concerning any eminent domain or condemnation
proceeding, or any uncorrected violation of any ordinance, public regulation,
statute, permit, site plan approval, zoning or subdivision regulation or urban
redevelopment plan applicable to the Premises; and, except for the Permitted
Encumbrances, neither Owner nor, to the knowledge of Owner, any previous owner
of the Premises, has sold, transferred, conveyed, or entered into any agreement
regarding transfer of any
-34-
38
development rights relating to the Premises which is not of record in the
Registry of Deed's Office (or such other office in which the land records are
maintained in the county in which the Premises is located).
3. Except as set forth on Schedule
(h)(3), to Owner's knowledge Owner has complied with all work orders,
requirements and demands of each and every insurance company insuring all or any
part of the Premises.
4. To the knowledge of Owner, the
continued maintenance, operation and use of any buildings, structures or other
improvements on the Premises for their respective present purposes will not
violate any federal, state, county or municipal laws, ordinances, orders, codes,
regulations or requirements affecting all or any portion of the Premises,
including, without limitation, housing, building, safety, health, environmental,
fire or zoning ordinances, codes and regulations of the respective jurisdictions
within which the Premises are located (together, "Applicable Laws"), or the
certificate(s) of occupancy issued for the Premises.
5. To Owner's knowledge, there are no
material unperformed obligations relative to the Premises outstanding pursuant
to any written agreements with any governmental or quasi-governmental body or
authority.
(i) As to environmental matters: Recipient has
received the environmental report(s) described on Exhibit "K" (collectively the
"Environmental Report"). Except as disclosed
-35-
39
in the Environmental Report, (i) neither Owner nor any partner of Owner has done
anything to cause or knowingly permit and, to the knowledge of Owner, no other
person or entity has done anything to cause or permit Hazardous Materials (as
defined below) to be now, or in the past, located on (except for reasonable
amounts used in the ordinary course for the construction, operation or
maintenance of the Premises by Owner in accordance with all applicable laws or
used by tenants of the Premises in the ordinary course of operation of their
business, which use by tenants is, and has been, to the knowledge of Owner, in
accordance with all applicable laws), in or under the Premises or released into
the environment, or discharged, placed or disposed of at, on or under the
Premises; (ii) neither Owner nor any partner of Owner has done anything to cause
or knowingly permit and, to the knowledge of Owner, no other person or entity
has done anything to cause or permit any underground storage tanks to be located
at the Premises now or in the past; (iii) neither Owner nor any partner of Owner
has done anything to cause or knowingly permit and, to the knowledge of Owner,
no other person or entity has done anything to cause or permit the Premises to
be used to store, treat or dispose of Hazardous Materials; and (iv) neither
Owner nor any partner of Owner has done anything to cause or knowingly permit
and, to the knowledge of Owner, no other person or entity has done anything to
cause or permit the Premises and its prior uses to fail to comply with, at all
times, any applicable Environmental Laws (as hereafter defined) or any
-36-
40
other governmental law, regulation or requirement relating to environmental and
occupational health and safety matters and Hazardous Materials. To the
knowledge of Owner, there currently exist no facts or circumstances that would
give rise to a material Environmental Claim (as defined below).
The term "Hazardous Materials" shall mean any
substance, material, waste, gas or particulate matter which is regulated by any
local governmental authority, the state in which the Premises is located, or the
United States Government, including, but not limited to, any material or
substance which is (i) defined as a "hazardous waste", "hazardous material",
"hazardous substance", "extremely hazardous waste", or "restricted hazardous
waste" or words of similar import under any provision of any Environmental Law;
(ii) petroleum or petroleum products; (iii) polychlorinated biphenyl; (iv)
radioactive material; (v) radon gas; (vi) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq.
(33 U.S.C. Section 1317); (vii) defined as a "hazardous waste" pursuant to
Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (42 U.S.C. Section 6903); or (viii) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C.
Section 9601). The term "Environmental Laws" shall mean all statutes
specifically described in the foregoing sentence and all federal, state and
local environmental health and safety
-37-
41
statutes, ordinances, codes, rules, regulations, orders and decrees regulating,
relating to or imposing liability or standards concerning or in connection with
Hazardous Materials. The term "Environmental Claim" shall mean any
administrative, regulatory or judicial action, suit, demand, demand letter,
claim, lien, notice of non-compliance or violation, investigation or proceeding
relating in any way to any Environmental Law or any permit issued under any such
Environmental Law including, without limitation, (a) by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to health, safety or the
environment.
(j) As to engineering matters:
1. Recipient has received the
engineering report(s) described on Exhibit "L" (the "Engineering Report").
Except as disclosed in the Engineering Report, to the knowledge of Owner there
are no material defects in or damage to the structure (including the roof and
walls) of the Premises. To the knowledge of Owner, the systems of the Premises,
including any elevators, heating, ventilation, air conditioning, plumbing,
electrical, drainage, fire alarm, communications, sprinkler, security and
exhaust systems are in operational and working order and such systems do not
contain any material hidden defect which
-38-
42
was not susceptible of being identified or detected in the course of the due
diligence review conducted in connection with the preparation of the Engineering
Report.
2. Owner has no knowledge that the flood
hazard area designation for the Premises as shown on the Survey is incorrect.
3. All water, sewer, gas, electric,
telephone, and other public utilities and all storm water drainage necessary for
the operation of the Premises (1) either enter the Premises through open public
streets adjoining the Premises, or, if they pass through adjoining private land,
do so in accordance with valid public or private easements or rights of way
which will inure to the benefit of Recipient, (2) are installed, connected and
operating, with all installation and connection charges paid in full, including,
without limitation, connection and the permanent right to discharge sanitary
waste into the collector system of the appropriate sewer authority, (3) to
Owner's knowledge, are being utilized in compliance with all applicable
governmental and environmental protection authorities' laws, rules, regulations
and requirements, and (4) to Owner's knowledge, have been adequate and, to the
knowledge of Owner, will continue to be adequate to service the Premises as
improved and presently used. To the knowledge of Owner, no moratorium,
proceeding or other fact or condition exists which (A) threatens to impair
continued furnishing of such services to the Premises at regular rates and fees,
or (B) could
-39-
43
result in the discontinuance of such services presently available or necessary.
Water and sanitary sewer are public.
(k) As to real estate taxes and assessments:
1. The copies of the real property tax
bills for the Premises for the current tax year which have been furnished by
Owner to Recipient are true and correct and complete copies of all of such tax
bills. All real estate taxes due and payable as of the Closing have been paid
in full and, except as set forth on Schedule (k)(1), there are no pending or, to
the knowledge of Owner, threatened proceedings for the correction or reduction
of the assessed valuation of the Premises for the current or prior tax years.
2. The Premises alone constitute one or
more entire tax parcel(s) for real estate tax purposes, and are not taxed as
part of a larger tax parcel.
3. Owner has received no notice that,
and to the knowledge of Owner, there are no public improvements in the nature of
off-site improvement, or otherwise, which have been ordered to be made and/or
which have not heretofore been assessed and there are no special or general
assessments (other than regular, annual real estate taxes) pending against or
presently being considered in formal municipal or quasi-municipal proceedings
which will affect the Premises.
(l) As to leases:
1. Except for the Leases (and any
seasonal sales leases which will be terminated prior to Closing), Owner
-40-
44
has not entered into any other contracts for the sale or leasing of the Premises
or any portion thereof.
2. As of the Closing, no persons or
entities, other than Owner and the tenants under the Leases and their permitted
subtenants and licensees, shall have any right to the possession, use or
occupancy of the Premises or any portion thereof for any reason whatsoever.
3. Exhibit "E" (the "Rent Roll") is true
and correct in all material respects as of the date noted thereon and discloses
all Leases and the basic, and additional rents (which include all pass-throughs
of taxes, expenses or other items, and percentage rents, payable by the Tenant
to the Lessor, but not including utility charges) due for the dates shown
thereon (collectively, "Rents"). The Leases include all tenancies, licenses
and, to the knowledge of Owner, all subleases and other rights of occupancy or
use for all or any portion of the Premises pursuant to which Owner is landlord
or licensor, all as amended, renewed and extended to the date of the Rent Roll,
whether oral or written.
4. Each security deposit given by the
tenant (the "Security Deposit") has been and is held by Owner or its agent in
compliance with the respective Lease and, to Owner's knowledge, applicable law.
There are no unfulfilled obligations as to Security Deposits to tenants under
Leases the terms of which have expired or been terminated and there is no suit,
action or other claim made, or, to the knowledge of Owner,
-41-
45
pending or threatened with respect to any such Security Deposit, except as set
forth on Schedule (l)(4).
5. The following is true with respect to
each Lease:
(a) the Lease is valid and
subsisting and in full force and effect in accordance with its terms. No Lease
has been modified, in writing or otherwise, except as set forth on Exhibit "E"
and Exhibit "E" contains an accurate and complete list of all of the material
documents which comprise the Lease or materially affect the rights of the
parties to the Lease;
(b) subject to the provisions of
Paragraph 7(e), all obligations of the lessor thereunder which accrue prior to
or on the date of Closing shall have been performed and paid for in full by
Owner on or prior to Closing;
(c) except as set forth in on
Exhibit "E" or in Schedule (l)(5) and except for delinquencies in payment of
rent of less than thirty (30) days, to Owner's knowledge there has been no
material default or event which, with the giving of notice or the lapse of time,
or both, would constitute a default, on the part of the lessor thereunder and,
except as set forth in Schedule (l)(5) the tenant has not asserted and, to the
knowledge of Owner, has no defense to or offset or claim against its rent or the
performance of its other obligations under the Lease;
(d) except as set forth on
Exhibit "E", no tenant has prepaid any rent for more than one (1) month if the
-42-
46
lease term has commenced and two (2) months if the lease term has not yet
commenced and no tenant has been charged for nor paid more than its
proportionate share of real estate taxes, insurance or common area maintenance
as prescribed by such tenant's Lease;
(e) except as set forth on
Schedule (l)(5), Owner has received no written notice from any tenant or any
guarantor of a Lease to a Major Tenant (as defined in Paragraph 6(c) of this
Agreement) that such tenant or guarantor is or may become unable or unwilling to
pay its rent or other sums due under its Lease, continue to operate for the
balance of the term of the Lease, operate in accordance with the exclusives
prescribed under the Lease or otherwise perform any of its other material
obligations under the Lease;
(f) Owner has not, and to the
knowledge of Owner, except as set forth on Schedule (l)(5), no other person has,
released or discharged any guarantor, voluntarily or involuntarily or by
operation of law, from any obligation with respect to the Lease that such
guarantor has guaranteed;
(g) at the time of Closing, no
rents will have been assigned, pledged or encumbered;
(h) all of the Leases are
assignable by Owner without the consent of any other party and after such
assignment all rights and benefits thereunder shall automatically inure to the
benefit of Recipient; and
(i) Owner does not own, directly
or indirectly, (i) five percent (5%) or more of the total combined
-43-
47
earnings of all classes of stock entitled to vote, or five percent (5%) or more
of the total number of shares of all classes of stock, of any tenant of the
Premises or (ii) an interest of five percent (5%) or more in the assets or net
profits of any tenant of the Premises.
(m) As to title:
1. Owner has not done or suffered or
permitted to be done or committed any act or matter which would render legal and
equitable title to the Premises to not be good and marketable, such as will be
insured as such by the Title Insurance Company on Owner's Policy form specified
in Paragraph 5(a) above, subject only to the Permitted Encumbrances and the
Leases, and the Existing Mortgages which will be satisfied at Closing.
2. To Owner's knowledge, there has been
no violation by Owner or the Premises of any provision, condition or agreement
contained in any restrictive covenant, cross-easement agreement or similar
instrument or agreement affecting the Premises or any portion thereof, which
would have a material adverse effect on Owner or the Premises.
3. The Personal Property located on the
Premises, other than that owned by tenants, the management company, utility
companies or contractors is owned or leased by Owner, includes all the types and
approximate quantities of personal property heretofore owned or leased by Owner
and used in the ownership, operation and maintenance of the improvements
-44-
48
located on the Premises and, if owned or leased by Owner, as of Closing, is
owned or leased by Owner free and clear of any liens or security interests of
any kind, except for Permitted Encumbrances, the Existing Mortgages which shall
be satisfied at Closing or as otherwise disclosed on Schedule 1.
4. To the knowledge of Owner, any
curb-cut and street-opening permits or licenses required for vehicular access to
and from the Premises to any adjoining street or to any parking spaces utilized
in connection with the Premises have been obtained and paid for by Owner, are in
full force and effect and shall inure to the benefit of Recipient. To the
knowledge of Owner, no fact or condition exists which would result in the
termination or material impairment of access to the Premises from adjoining
public or private streets or ways.
5. To the knowledge of Owner, each
Premises is an independent unit which does not now rely on any facilities (other
than facilities covered by Permitted Encumbrances [including, without
limitation, any reciprocal easement agreements] or facilities of municipalities
or public utility and water companies and other than parking areas which the
Premises makes legal use of under any reciprocal easement agreements) located on
any property not included in such Premises to fulfill any municipal or
governmental requirement or for the furnishing to the Premises of any essential
building systems or utilities.
6. Except as set forth on Schedule
(m)(1) and Exhibit "B" hereto, and except as may be contained in Leases
-45-
49
of over 4,000 square feet, there are no purchase contracts, options, or any
other agreements of any kind, written or oral, recorded or unrecorded, whereby
any person or entity other than Owner or Recipient will have acquired or will
have any basis to assert any right, title or interest in, or right to
possession, use, enjoyment or proceeds of all or a portion of the Premises.
(n) As to financial matters:
1. Owner has paid or will pay prior to
Closing all bills and invoices for labor, goods, materials and services of any
kind and taxes due and assessments payable relating to the Premises and utility
charges for periods prior to Closing.
2. Except as otherwise provided in
Paragraph 7(e) above, Owner shall pay in full at or prior to the Closing, all
expenses theretofore payable connected with the negotiation, execution and
delivery of each Lease executed prior to January 1, 1995, including, without
limitation, recording fees required to be paid by the lessor under any Lease.
3. All alterations, improvements or
other work required to have been completed by Owner under any reciprocal
easement agreements, Leases executed prior to January 1, 1995, and other
agreements to which it is a party, including, without limitation, all
alterations, improvements and other work or allowances therefor required to
prepare space for the initial occupancy of each tenant under a lease, has
heretofore been completed and/or paid for in full. All unpaid
-46-
50
tenant allowances and/or unfinished tenant improvements to be paid for and/or
done by the lessor under the Leases are described in Exhibit "D".
4. Except as set forth on Schedule
(n)(4), there is no income derived from the Premises other than rental income
and interest income. The rental income derived from the Premises constitutes
"rent from real property" as defined in Section 856(d)(1) of the Code. The
interest income derived from the operation of the Premises constitutes
"interest" as defined in Section 856(c)(2)(B) of the Code.
5. Intentionally omitted.
(o) As to insurance:
1. Exhibit "J" sets forth an accurate
and complete list of the insurance policies relating to the Premises or any part
thereof and naming Owner as an insured; all such policies are in full force and
effect and all premiums thereunder as of the Closing have been paid to the
extent due; and no notice of cancellation has been received with respect thereto
and, to the knowledge of Owner, none is threatened. Owner represents that Owner
does not currently self-insure with respect to any portion of the insurance.
2. Owner has not received any notice
from any insurance company of any defect or inaccuracies in any of the Premises,
or any parts thereof, which would adversely affect the insurability of any of
the Premises, or would increase the cost of insurance beyond that which would
ordinarily and customarily
-47-
51
be charged for similar properties in the vicinity of such Premises. All of the
Premises are fully insured in accordance with prudent and customary practice.
(p) As to Service Agreements: A current, complete
and correct copy of each Service Agreement which is not terminable without cause
on thirty (30) days' notice or for which an affiliate of Owner is the other
party thereto has been delivered to Recipient and there are no material
construction, management, leasing, service, equipment, supply, maintenance or
concession agreements (oral or written, formal or informal) with respect to or
affecting all or any portion of the Premises except as delivered to Recipient.
Each Service Agreement is valid and binding and as of Closing all amounts due
thereunder will have been paid. Neither Owner, nor any of its agents is in
default under any Service Agreement or has received any notice from any party to
any Service Agreement claiming the existence of any default or breach thereunder
which would have a material adverse effect on Owner or the Premises and no event
or omission has occurred which, with the giving of notice or the lapse of time
of both would constitute such a default. Except as disclosed on Exhibit "G",
all Service Agreements are terminable without cause on thirty (30) days' notice
or less without payment of any penalty or termination payment.
(q) Other:
1. Owner has no employees.
-48-
52
2. No representation or warranty of
Owner contained in this Agreement, in any Exhibit hereto, or in any other
instrument to be executed by Owner and delivered to Recipient at the Closing
pursuant to this Agreement contains any untrue statement of a material fact.
Except for the express representations and warranties set forth in this
Agreement, THE PREMISES IS BEING SOLD IN AN "AS IS" AND "WITH ALL FAULTS"
CONDITION AS OF THE TIME OF CLOSING and no other statements or representations,
express or implied, have been made or are made or are deemed to be made by Owner
or by any Affiliate of Owner.
3. Owner is not a "foreign person"
within the meaning of Section 1445 of the Code.
4. As used in this Agreement, the term
"to Owner's knowledge" shall mean the actual, unimputed knowledge of Joel M.
Pashcow, John J. Johnston, Jr., Esquire and Steven Liechtung.
10. Notices.
(a) All notices, demands, requests or other
communications required or permitted under the terms of this Agreement shall be
in writing and, unless and until otherwise specified in a written notice by any
party, shall be sent to the parties at the following respective addresses:
-49-
53
if intended for Recipient:
27600 Northwestern Highway
Suite 200
Southfield, Michigan 48034
Attn: Mr. Dennis Gershenson
Fax Number (810) 350-9925
With a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226-3583
Attn: Richard J. Burstein, Esquire
Fax Number (313) 962-0176
if intended for Owner:
c/o RPS Realty Trust
733 Third Avenue
New York, NY 10017
Attn: Mr. Herbert Liechtung
Fax Number (212) 972-0423
and
c/o RPS Realty Trust
801 Brickell Avenue
Suite 900
Miami, FL 33131
Attn: Mr. Herbert Liechtung
Fax Number (305) 789-6672
With copies to:
Wolf, Block, Schorr & Solis-Cohen
Twelfth Floor
Packard Building
S.E. Corner 15th & Chestnut Streets
Philadelphia, Pennsylvania 19102-2678
Attn: Elizabeth H. Mai, Esquire
Fax Number (215) 977-2346
and
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022-3598
Attn: Steven L. Lichtenfeld, Esquire
Fax Number (212) 836-7150
-50-
54
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other
communication shall be deemed to have been properly served for all purposes if
(i) hand delivered against a written receipt of delivery, (ii) mailed by
registered or certified mail of the United States Postal Service, return
receipt requested, postage prepaid, (iii) delivered to a nationally recognized
overnight courier service for next business day delivery, to its addressee at
the address set forth above in this Paragraph or (iv) delivered via telecopier
or facsimile transmission to the facsimile number listed in this Paragraph,
provided, however, that if such communication is given via telecopier or
facsimile transmission, an original counterpart of such communication shall
concurrently be sent in either the manner specified in clause (i), (ii) or
(iii) of this subparagraph (b).
(c) Each such notice, demand, request or other
communication shall be deemed to have been received by its addressee upon the
earlier of (i) actual receipt or refusal by the addressee or (ii) two (2)
business days after deposit thereof at any main or branch United States post
office, if sent in accordance with clause (ii) of subparagraph 10(b), and one
(1) business day after delivery to the courier if sent pursuant to clause (iii)
of subparagraph 10(b).
-51-
55
11. Fire or Other Casualty.
(a) Owner shall maintain in full force and effect
until the date of Closing the fire and extended coverage insurance policies now
in effect on the Premises.
(b) In the event that any building on the Premises
shall have been materially damaged by fire or other casualty (in a manner which
adversely affects the operation of the Premises as a whole or which could have
an adverse economic consequence to Owner, the Premises or Recipient) and not
restored as of Closing, Recipient shall have the right to terminate this
Agreement by written notice to Owner unless the conditions described below are
satisfied, in which event Recipient agrees that it shall postpone Closing as to
the Premises to enable Owner to repair and restore the damage to the building to
at least the condition existing prior to the casualty. Recipient agrees that it
shall postpone the Closing in the event of a casualty if the following
conditions are satisfied as of the Closing Date: (i) that Owner agrees to
promptly commence restoration of the Premises, (ii) that the Premises will be
restored to at least the condition existing prior to the casualty and that
restoration can be completed within one year from the date of the casualty at a
cost not to exceed the insurance proceeds made available for restoration, as
determined by a contractor selected by Recipient, (iii) that no tenant under any
of the Leases having a material impact on the Rent Roll has a right to terminate
its Lease prior to the end of the one-year period as a result of such casualty,
-52-
56
(iv) Rents or rental insurance continue to be paid under the Leases to enable
Owner to satisfy all of its obligations with respect to the Premises until the
restoration is complete and (v) Owner and Recipient agree to a mutually
satisfactory amendment to this Agreement to address the amount of, and any
adjustments to, the Contribution Price and such other matters as may be
necessary for the parties to address. In the event of Recipient's termination
of this Agreement, neither Recipient nor such Owner shall have any further
rights or obligations under this Agreement, this Agreement shall be null and
void and the Related RPS Agreements shall also terminate and shall be null and
void. If this Agreement is not so terminated and Closing is not postponed, or
if such casualty is unknown to Recipient, then the proceeds of the insurance
policies attributable to the Premises or the Personal Property paid by the
insurer(s) (including the proceeds of any self-insurance) and received by Owner
prior to Closing and not used by Owner for the repair of the Premises or the
Personal Property (and Recipient hereby authorizes Owner to cause Owner to use
the proceeds for such purpose) shall be part of the assets of Owner transferred
to Recipient at Closing and, in such event, there shall be no reduction in the
Contribution Price by reason of any such unpaid claim.
(c) Owner shall certify to Recipient at Closing
that no damage by fire or other casualty has occurred, or, if such has occurred,
shall describe in writing the nature and extent of such damage and whether such
damage has been restored.
-53-
57
12. Condemnation.
(a) If any material part or parts of the Premises
shall be taken by the exercise of the power of eminent domain after the date
hereof and prior to Closing, this Agreement may be terminated by Recipient by
written notice to Owner. For the purposes hereof, a "material part or parts" of
the Premises shall mean such a part of the Premises as shall (i) give the right
to any tenant to terminate its Lease, or (ii) will materially and adversely
affect any required parking for the Premises or any source of ingress to and
egress from the Premises for a period which will exceed one month, as determined
by Recipient, or (iii) otherwise materially and adversely affects the
mechanical, plumbing or other systems of the Premises or (iv) otherwise causes
the Premises to be out of compliance with laws applicable to the Premises. In
the event of Recipient's termination, neither Recipient nor Owner shall have any
further rights or obligations under this Agreement, this Agreement shall be null
and void and the Related RPS Agreements shall also terminate and shall be null
and void. If this Agreement is not so terminated, then this Agreement shall
continue in full force and effect and there shall be no abatement of the
Contribution Price. As of Closing, Owner shall transfer to Recipient all of
Owner's rights and claims to any awards arising therefrom as well as the amount
of any money theretofore received by such Owner on account thereof, net of any
expenses incurred by such Owner, including, without limit thereto, reasonable
counsel fees, in collecting the
-54-
58
award. With respect to any such taking after the date of this Agreement, Owner
shall furnish to Recipient a copy of the declaration of taking promptly after
receipt thereof.
(b) Owner shall certify to Recipient at Closing
that no such taking has occurred, or, if such has occurred, shall describe in
writing the nature and extent of such taking.
13. Brokers. Recipient and Owner each represent and
warrant to the other that it has dealt with no broker or other intermediary in
connection with this transaction or the Premises. Notwithstanding the
foregoing, the parties acknowledge that the REIT has engaged at its expense Dean
Witter Reynolds Inc. as a financial advisor in connection with the transactions
contemplated by the Master Agreement. In the event that any broker or other
intermediary claims to have dealt with Owner or with Recipient in connection
with this transaction or the Premises, to have introduced the Premises to
Recipient for contribution, or to have been the inducing cause of the
contribution, Owner and Recipient shall indemnify, defend and save the other
harmless from and against any claim for commission or compensation by such
broker or other intermediary, as well as all costs and liabilities incurred by
the others by reason thereof, if its representation or warranty above is false.
14. Entire Agreement; Successors and Assigns.
The entire agreement between Owner and Recipient with
respect to the Premises and the contribution thereof is expressly set forth in
this Agreement, the Master Agreement and
-55-
59
the related documents referenced therein, and the parties are not bound by any
agreement, understandings, provisions, conditions, representations or warranties
other than as are expressly set forth in this Agreement, the Master Agreement
and the related documents referenced therein. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal representatives, successors and assigns.
15. Captions or Headings; Cross-References. The captions
or headings of the Paragraphs of this Agreement are for convenience only, and
shall not control or affect the meaning or construction of any of the terms or
provisions of this Agreement. References in this Agreement to Paragraphs and
subparagraphs are references to Paragraphs and subparagraphs of this Agreement,
unless expressly stated to the contrary. References in this Agreement to
Exhibits and Schedules are, unless expressly stated to the contrary, references
to Exhibits and Schedules to this Agreement, each of which is part of this
Agreement.
16. Amendments.
No change, alteration, amendment, modification or
waiver of any of the terms or provisions of this Agreement shall be valid,
unless in writing and signed by the parties to this Agreement.
17. Applicable Law. This Agreement shall be governed and
construed according to the laws of New York, and venue shall lie in, the
appropriate jurisdiction in the State of New York.
-56-
60
18. Maintenance of Records. Owner shall transfer to
Recipient and Recipient shall maintain all tenant files, tenant correspondence,
operating and capital budgets, blueprints, plans and specifications, drawings
and studies of the Premises at the Premises or at an office of Recipient, for a
period of seven (7) years after Closing. Owner, upon reasonable prior notice to
Recipient, shall for a period of seven (7) years after the Closing have access
to such records at any reasonable time and from time to time during normal
business hours and shall be entitled to copy such records at its expense.
19. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
Closing; provided, however, that no claim for a breach of any representation or
warranty contained in this Agreement may be maintained by Recipient unless
Recipient shall have delivered a written notice ("Notice of Breach") specifying
the details (to the extent known at such time) of such claimed breach to Owner
between the Closing Date and a date designated by Recipient, which date may be
earlier than, but in no event later than, April 30, 1997 (the "Survival
Period").
20. Indemnification and Remedies.
(a) After Closing, as Recipient's sole remedy as a
result of or arising out of any inaccuracy in or breach of any representation,
warranty or covenant of Owner in this Agreement, any assignment or other
agreement transferring assets or property (or interests therein), or in any
other agreement with respect to
-57-
61
the conveyance, assignment, contribution or other transfer of the Premises (or
interests therein), assets, agreements, rights or other interests conveyed,
assigned, contributed or otherwise transferred to Recipient (the "Indemnified
Matters"), Owner agrees to indemnify and hold harmless Recipient, the REIT, each
subsidiary of Recipient or the REIT, and any of their officers, directors,
trustees, employees, agents or other affiliates (each, an "Indemnified Party"
and collectively, the "Indemnified Parties") from and against all demands,
claims, actions or causes of action, assessments, losses, fines, penalties,
damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses of counsel chosen by the Indemnified
Parties and costs of litigation and reasonable fees and expenses of accountants
chosen by the Indemnified Parties) and charges sustained or incurred by any of
the Indemnified Parties; provided that, no claim for indemnity may be maintained
hereunder unless an Indemnified Party shall have delivered a written notice
identifying such claims to the Indemnitors (as defined below) within the
Survival Period.
(b) Recourse for the indemnity obligation of Owner
set forth in subparagraph (a) above shall be limited as set forth in Sections
7.2 and 7.3 of the Master Agreement.
(c) If a claim for indemnification is or may be
asserted under this Paragraph 20, the person or entity against whom or which
such claim is or may be asserted shall have the right, at its own expense, to
participate in the defense of any
-58-
62
claim, action or proceeding ("Claim") asserted which resulted in the claim for
indemnification, and if such right is exercised, the parties shall cooperate in
the defense of such action or proceeding. If a claim is asserted which is
subject to possible indemnification under this Paragraph 20, the person against
whom such claim is asserted shall give prompt notice thereof to Owner; provided,
however, that the failure to so provide prompt notice shall not relieve Owner
from the indemnification obligations hereunder, unless and to the extent such
failure prejudices Owner's defense with regard to such claim.
(d) Indemnification of the Indemnified Parties
pursuant to this Paragraph 20 shall be the exclusive remedy of the Indemnified
Parties for any breach of any representation, obligation, warranty or covenant
of Owner under this Agreement or reconfirmation thereof at Closing and the
liability of such parties shall be limited as provided in this Paragraph 20.
(e) Owner is relieved of liability hereunder if
and to the extent the Indemnified Parties recover for any loss or damage under
any applicable title insurance policy. Each Indemnified Party shall use best
efforts to collect for any such loss or damage under any title insurance policy
covering such loss or damage.
(f) Notwithstanding anything to the contrary
contained in this Paragraph 20, Owner shall not be liable with respect to any
settlement which is made of any claim or any
-59-
63
amounts payable under any such settlement without the prior written consent of
Owner.
(g) Notwithstanding anything to the contrary in
this Agreement, no officer, director, trustee, agent or employee of Owner or the
REIT shall have any personal liability with respect to this Agreement or the
transactions contemplated herein.
(h) Prior to Closing, in the event that either
party hereto breaches any representation, warranty or covenant set forth in this
Agreement (the "Defaulting Party"), the other party hereto shall have the right
to pursue all remedies at law or in equity against the Defaulting Party and/or
the Premises; provided, however, that in the event that Recipient is the
Defaulting Party as a result of the breach of a warranty set forth herein, Owner
shall have no rights or remedies against any individual partner in Recipient who
is not a member of the Ramco Group and provided further that in the event that
Owner is the Defaulting Party as a result of the breach of a warranty set forth
herein, Recipient's remedies shall be limited to pursuing a damage claim against
Owner.
21. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all together shall
constitute one and the same Agreement.
22. Structure. Notwithstanding the provisions of this
Agreement, Owner shall have the right, at its election, to restructure the
transactions contemplated herein as a conveyance
-60-
64
by means of a merger, stock transfer or other such structure, and this Agreement
shall be amended and restated to reflect any such restructuring. In the event
of any such restructuring, the consideration for such merger, stock transfer or
other conveyance shall be the same OP Units as Owner would have received under
this Agreement.
IN WITNESS WHEREOF, the parties hereto, intending legally to be
bound, have executed this Agreement as of the day and year first above written.
RECIPIENT:
RAMCO-GERSHENSON PROPERTIES, L.P., a
Delaware limited partnership
By: Ramco REIT, Inc., a Delaware
corporation, general partner
By: /s/Bruce Gershenson
---------------------------------
Attest:
-----------------------------
[Corporate Seal]
CONTRIBUTOR (OWNER):
THE COMMACK SITE, INC., a Delaware
corporation
By: /s/Stanley Rappoport
-----------------------------------------
Attest:
-------------------------------------
[Corporate Seal]
-61-
65
EXHIBIT "A"
LEGAL DESCRIPTION OF PREMISES
COMMACK
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Village of Commack, Town of Smithtown, County of Suffolk and State of New York,
bounded and described as follows:
BEGINNING at a point on the Northerly side of Veterans Memorial Highway distant
648.90 feet Easterly from the intersection of the Northerly side of Veterans
Memorial Highway and the Easterly side of Veterans Memorial Highway;
RUNNING THENCE along land now or formerly of Carl S. Burr and Louis G. MacDowell
the following courses and distances:
1) North 0 degrees 26 minutes 50 seconds East, 405.11 feet;
2) North 76 degrees 36 minutes 20 seconds East, 50.00 feet;
3) North 0 degrees 26 minutes 50 seconds East, 200.00 feet to the Southerly side
of Jericho Turnpike (N.Y. State Route 25);
THENCE along the Southerly side of Jericho Turnpike, North 76 degrees 36 minutes
20 seconds East, 300.00 feet to land now or formerly Wendell;
THENCE along last mentioned land the following courses and distances:
1) South 0 degrees 26 minutes 50 seconds West, 100.00 feet;
2) North 76 degrees 36 minutes 20 seconds East, 25.00 feet;
3) South 0 degrees 26 minutes 50 seconds West, 100.00 feet;
4) North 76 degrees 36 minutes 20 seconds East, 13.12 feet to land now or
formerly Auto Baseball Corp.;
THENCE along last mentioned land South 0 degrees 26 minutes 50 seconds West,
652.95 feet to the Northerly side of Veterans Memorial Highway;
THENCE along the Northerly side of Veterans Memorial Highway North 67 degrees 11
minutes 40 seconds West, 407.47 feet to the point or place of BEGINNING.
66
EXHIBIT "B"
PERMITTED ENCUMBRANCES
COMMACK
Commonwealth Land Title Insurance Company
Title Number RH941013, dated July 15, 1994
Permitted Encumbrances shall include all items set forth in Schedule
B-II of the above-referenced title insurance commitment that were not raised as
objections in a certain memorandum from Honigman, Miller, Schwartz and Cohn
entitled "Review of RPS Title Work and Surveys" dated February 6, 1995.
Permitted Encumbrances shall include resolution of such issues.
67
Title No. RH941013
THIS COMPANY CERTIFIES THAT A GOOD AND MARKETABLE TITLE TO THE PREMISES
DESCRIBED IN SCHEDULE A, SUBJECT TO THE LIENS, INCUMBRANCES AND OTHER
MATTERS, IF ANY, SET FORTH IN THIS CERTIFICATE MAY BE (CONVEYED)
(MORTGAGED) BY:
The Commack Site, Inc.
Who acquired title by deed from COMTOY ASSOCIATES, deed dated 12-30-92 and
recorded 1-15-93 in Liber 11608 cp 303.
SCHEDULE B IN WHICH ARE SET FORTH THE ADDITIONAL MATTERS WHICH WILL APPEAR
IN THE POLICY AS EXCEPTIONS FROM COVERAGE, UNLESS DISPOSED OF TO THE
COMPANY'S SATISFACTION PRIOR TO THE CLOSING OR DELIVERY OF THE POLICY:
DISPOSITION
13. Subject to Terms and Conditions contained in Memorandum of Lease
dated 9-25-70 recorded 2-16-71 in Liber 6885 cp 272 between THE
GOODRICH INVESTORS GROUP as lessor and T.R.U. REALTY CORP. as
lessee (copy herein).
14. Assignment of Lessor's Interest in Lease dated 1-29-71 recorded
2-16-71 in Liber 6885 cp 279 between the GOODRICH INVESTORS GROUP
and S.J.K. and ASSOCIATES, INC. as assigned by assignment dated
2-8-71 recorded 2-26-71 in Liber 6892 cp 30 to the GOODRICH
INVESTORS GROUP; as assigned by assignment dated 3-24-76 recorded
3-30-76 in Liber 8010 cp 204 by GIT REALTY and MORTGAGE INVESTORS
(formerly known as the GOODRICH INVESTORS GROUP) to GIT
INDUSTRIES, INC. as assigned by assignment dated 6-8-77 recorded
6-23-77 in Liber 8257 cp 375 to TIMES REALTY CORPORATION, N.V.
and further assigned by assignment dated 12-30-92 recorded
2-19-93 in Liber 11618 cp 874 between COMTOY ASSOCIATES and THE
COMMACK SITE, INC. (copies herein).
** 16. Assignment of Lessor's interest in Lease dated 10-24-85 recorded
1-15-86 in liber 9956 cp 267 between COMTOY ASSOCIATES and
RESOURCES PENSION SHARES I. (copy herein).
(Continued)
** Subject to removal by satisfaction at closing.
68
SCHEDULE B CONTINUED TITLE No. RH941013
17. Subject to covenant to convey recited in Deed dated 6-8-77
recorded 6-23-77 in Liber 8257 cp 381 (affects Southerly part of
the premises). (copy herein).
18. Subject to the Rights granted in unrecorded reconveyance deed
contained in Deed recorded in liber 9956 cp 285. (copy herein).
20. Assignment of owners rights recorded in liber 9956 cp 281, a)
option contained in clause of the first paragraph of article 9
of the lease dated 9-25-70 between GOODRICH INVESTORS GROUP as
landlord and TRU REALTY CORP., as tenants. (copy herein).
** 21. The following 1 U.C.C.-1 are filed against the subject premises:
DEBTOR: COMTOY ASSOCIATES
SECURED PARTY: RESOURCES PENSION SHARES I
FILED: 2-27-86
INDEX NUMBER: 86-04296
AS ASSIGNED BY UCC NO. 89-01159
(copy herein)
* 22. Company excepts all loss, cost or damage by reason of the
noncompliance with Article 31B of the Tax Law (Capital Gains
Tax).
* 23. In the absence of a survey, Company will not certify as to the
location nor dimensions of within described premises on all
sides, and will except any state of facts an accurate survey may
show.
NOTE: Effective July 1, 1993 each document that is to be
recorded or filed with the Suffolk County Clerk's Office
or Registrar's Office must be accompanied by the
Recording and Endorsement page, a copy of which is
enclosed for your information and use.
NOTE: All documents to be recorded in the Office of the Suffolk
County Clerk or filed in the Office of the Suffolk County
Registrar must be executed in BLACK INK only, and all
pages thereof must be CLEARLY LEGIBLE, or this Company
can assume no responsi-bility for the recording/filing of
same.
* Subject to removal by title company.
** Subject to removal by satisfaction at closing.
2
69
EXHIBIT "C"
DESCRIPTION OF EXISTING MORTGAGE
COMMACK
Commonwealth Land Title Insurance Company
Title Number RH941013, dated July 15, 1994
The property is currently subject to the following Mortgage, as denoted
on the Mortgage Schedule of the above-mentioned title insurance commitment:
Mortgage, as amended, in the principal amount of $1,999,415.29 in favor
of Resources Pension Shares I, dated October 25, 1985, and recorded at
Liber 11317, Page 135 in the records of the Recorder of Suffolk County,
New York, as assigned to RPS Realty Trust by Assignment, dated December
28, 1988 and recorded at Liber 15556, Page 188 in the records of the
Recorder of Suffolk County, New York.
70
EXHIBIT "D"
TENANT ALLOWANCES AND TENANT IMPROVEMENTS
COMMACK
All tenant allowances and tenant improvements required to be made by
landlord under leases entered into prior to 1/1/95 will be paid or completed, as
the case may be, by Owner prior to closing. As of the date of the execution of
this Agreement, there are no outstanding tenant allowances or tenant improvement
obligations required under leases entered into after 1/1/95.
71
EXHIBIT "E"
RENT ROLL AND SCHEDULE OF LEASES
COMMACK
See attached.
72
SUMMARY OF SALIENT DATA
OWNER: The Commack Site, Inc.
LOCATION: The subject property is located on the south
side of Jericho Turnpike (Route 25) with
access from the north side of Veterans
Memorial Highway, which partly bounds it on
the south, in Commack (Suffolk County) Long
Island, New York.
DESCRIPTION: The subject property consists of an existing
one story retail/warehouse building. The
building contains 47,500 square feet occupied
solely and entirely by Toys-R-Us.
YEAR BUILT: 1970
LAND AREA: 5.97 Acres
OCCUPANCY: 100%
NET OPERATING Annual rental obligation $216,000
INCOME: Percentage Rent (93/94) 113,143
Net Operating Income $329,143
COMMENTS: The subject property is encumbered by a long
term lease originally executed on September
25, 1970 and expiring on January 31, 2001,
guaranteed by Toys-R-Us, Inc. (parent company)
a New York Stock Exchange Company. In
addition, the tenant also retains the right to
extend the lease by four consecutive five-year
periods under the same initial terms. The
lease is a net lease with the tenant
responsible for all expenses including real
estate taxes, insurance, repairs (interior and
exterior), utilities, structural repairs, etc.
The contractual fixed rental payment between
the lessor and the lessee is $216,000 per year
in equal monthly installments due on the first
day of each month. In addition there is a
percentage lease clause which provides for
payment of 1.5% of all gross sales over
$6,000,000. Gross sales for the last fiscal
year have exceeded $15,000,000, which resulted
in annual overage revenues in excess of
$113,000.
73
PERCENTAGE RENT: Year Ending: % Rent
------------ ------
1/94 $113,143
1/93 87,051
1/92 75,377
1/91 60,961
1/90 68,177
1/89 63,274
2
74
N.L.
S.R. J.J.
DELINQUENT REPORT AS OF 3/13/95 E.R.F. S.L.
---------------------------------------------
THE COMMACK SITE, INC.
- ----------------------
Amount Amount Prior Unpaid
Tenant Billed Rec'd Arrears Balance Comments
------ ------ ------ ------- ------- --------
1 - None $0.00 $0.00 $0.00 $0.00
----- ----- ----- -----
Totals $0.00 $0.00 $0.00 $0.00
===== ===== ===== =====
3
75
Lease Documents
Toys R Us
1. Lease, dated 9/25/70 with T.R.U. Realty Corp.
Percentage Rent 1.5% of Gross Sales in excess of $6,000,000
Options: None
2. Guaranty
3. First Amendment, dated 1/20/71
4. Modification Agreement, dated 9/25/70
5. Assignment of Lease, dated 10/23/85
76
EXHIBIT "F"
LEASING BROKERAGE COMMISSIONS PAYABLE AFTER CLOSING
COMMACK
As of the date of the execution of this Agreement, there are no
outstanding leasing brokerage commissions payable after closing.
77
EXHIBIT "G"
SERVICE AGREEMENTS NOT SUBJECT
TO 30 DAY TERMINATION
COMMACK
None.
78
EXHIBIT "H"
Intentionally omitted.
79
EXHIBIT "I"
PENDING OR THREATENED LITIGATION
COMMACK
As of the date of the execution of this Agreement, there is no pending
or threatened litigation.
80
EXHIBIT "J"
INSURANCE POLICIES
COMMACK
See attached.
81
================================================================================
ACORD(R) | EVIDENCE OF PROPERTY INSURANCE DATE (MM/DD/YY)
| 02/01/95
- --------------------------------------------------------------------------------
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
- --------------------------------------------------------------------------------
PRODUCER | COMPANY
|
WILLIS CORROON CORP OF NY | THE HOME INSURANCE COMPANY
7 HANOVER SQUARE | U.S. FIDELITY & GUARANTY CO.
NEW YORK, NY 10004-2594 | LEXINGTON INSURANCE CO.
| GREENWICH INSURANCE CO.
CODE SUB-CODE |
|
- --------------------------------------------------------------------------------
INSURED | LOAN NUMBER | POLICY NUMBER
| | MLP 91089965
TOYS "R" US INC., ETAL | ---------------------------------------------------
| EFFECT DATE | EXPIRATION DATE | CONT. UNTIL
461 FROM ROAD | (MM/DD/YY) | (MM/DD/YY) | TERMINATED
PARAMUS, NJ 07652 | 02/01/95 | 02/01/96 | IF CHECKED / /
|----------------------------------------------------
| THIS REPLACES PRIOR EVIDENCE DATED:
|
================================================================================
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
LOCATION DESCRIPTION
================================================================================
COVERAGE INFORMATION
- --------------------------------------------------------------------------------
COVERAGE/ /FORMS |AMOUNT OF INSURANCE | DEDUCTIBLE
- --------------------------------------------------------------------------------
"ALL RISK" OF PHYSICAL LOSS OR DAMAGE | $10,000.00 | AS PER
SUBJECT TO THE POLICY TERMS, CONDITIONS | | POLICY
AND EXCLUSIONS. | | FORM.
| |
| |
| |
| |
| |
================================================================================
REMARKS (Including Special Conditions)
- --------------------------------------------------------------------------------
AS RESPECTS TOYS "R" US LOCATION #6303, COMMACK, NY
THE CERTIFICATE HOLDER IS INCLUDED AS ADDITIONAL INSURED/LOSS PAYEE
AND/OR MORTGAGEE, A.T.I.M.A.
THE COMMACK SITE, INC. AND RPS REALTY TRUST ARE INCLUDED AS ADDITIONAL
INSUREDS.
================================================================================
CANCELLATION
- --------------------------------------------------------------------------------
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 90 WRITTEN NOTICE, AND WILL SEND
--
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
================================================================================
ADDITIONAL INTEREST
- --------------------------------------------------------------------------------
NAME AND ADDRESS |NATURE OF INTEREST
|
THE COMMACK SITE, INC. | / / MORTGAGEE / / ADDITIONAL INSURED
733 3RD AVENUE, STE 2400 |
NEW YORK, NY 10017 |
ATTN: NANCY COMERFORD | / / LOSS PAYEE / / (OTHER)
| -----------
|----------------------------------------------
CERT_#: 712|SIGNATURE OF AUTHORIZED AGENT OF COMPANY
| /s/
- --------------------------------------------------------------------------------
ACORD 27 (2/88) (C)ACORD CORPORATION 1988
================================================================================
82
EXHIBIT "K"
LIST OF ENVIRONMENTAL REPORTS
COMMACK
Phase I Environmental Assessment prepared by McLaren/Hart, Project
Number 07.0803063.001, dated February 6, 1995, written by Charlie Kavanaugh.
83
EXHIBIT "L"
LIST OF ENGINEERING REPORTS
COMMACK
Soil and Materials Engineers, Inc. Engineering Report, dated October
25, 1994, SME Project Number PM-22060.
84
EXHIBIT "M"
FORM OF TENANT ESTOPPEL CERTIFICATE
COMMACK
See attached.
85
EXHIBIT M
Ramco-Gershenson Properties, L.P.
27600 Northwestern Highway
Suite 201
Southfield, MI 48034
Gentlemen:
[Applicable Ownership Entity] ("Landlord") and the undersigned
tenant ("Tenant") have entered into a lease for a portion of the shopping center
commonly known as ____________ (the "Shopping Center"). The documents described
in Exhibit A constitute a true, correct and complete list of the lease and any
amendments, supplements or modifications thereto (collectively, the "Lease").
The Tenant hereby certifies that it is the lessee under the Lease. Tenant
understands that Landlord intends to transfer the Shopping Center to
Ramco-Gershenson Properties, L.P. ("Transferee"). At the request of Landlord,
and with the knowledge that Transferee shall rely on the accuracy of the
information contained herein, the undersigned certifies that as of the date
hereof:
1. Exhibit A contains a true, correct and complete
description of the Lease and the Lease has not been cancelled and is in full
force and effect.
2. The current monthly minimum rent is $____________.
The Tenant has paid the minimum rent, and Tenant has paid its proportionate
share of taxes, common area maintenance charges and other charges due, including
without limitation electricity charges under the terms of the Lease, through and
including the date of this letter. Tenant has no offsets or claims against the
payment of rent or other charges due under the Lease. Landlord has not assumed
or agreed to perform any obligation of Tenant or any affiliate thereof under any
other lease or other agreement to which Tenant or its affiliates is a party.
3. Tenant is not affiliated with Landlord.
4. All improvements to the Premises required by the Lease
to be performed by Landlord as of the date hereof have been completed in
accordance with the provisions of the Lease and Landlord has paid any sums
required to be paid to Tenant therefor. [MODIFY WHERE TI WORK IS IN PROGRESS.]
5. To the best knowledge of Tenant as of the date of this
certificate, Landlord is not in default in the performance of any covenant,
agreement or condition contained in the Lease,
86
and the undersigned knows of no event which, with notice and the passage of time
or both, could result in such a default.
6. The Lease term commenced on ______________ and expires
on ___________ and there are no options to extend or to renew the term except as
specifically set forth in the Lease.
7. No rent has been paid more than one month in advance.
8. The amount of the security deposit presently held by
Landlord is $___________________.
9. Tenant has no right of first refusal to purchase,
option to purchase, or other right to purchase the Premises or any part thereof.
[ADD EXCEPTIONS WHERE APPROPRIATE TO REFLECT TENANT'S WAIVER OF THE RIGHTS.]
10. The undersigned has accepted and is in possession of
the Premises.
11. The interest of the Tenant under the Lease has not
been assigned, and no portion of the Premises has been sublet, except as may be
indicated on Exhibit A.
12. The person or persons executing this document on
behalf of the Tenant have the power and authority to execute this document.
Very truly yours,
[TENANT]
By: __________________
Name:
Title:
Dated: _______________, 1995
2
87
SCHEDULE 1
PERSONAL PROPERTY
COMMACK
None.
88
SCHEDULE (H) (2)
VIOLATION NOTICES
COMMACK
As of the date of the execution of this Agreement, there are no
outstanding violation notices.
89
SCHEDULE (H) (3)
INSURANCE NOTICES FOR REPAIRS
COMMACK
As of the date of the execution of this Agreement, there are no
outstanding insurance notices for repairs.
90
SCHEDULE (K) (1)
REAL ESTATE TAX APPEALS
COMMACK
None pending.
91
SCHEDULE (L) (4)
SECURITY DEPOSIT CLAIMS
COMMACK
As of the date of the execution of this Agreement, there are no
claims against security deposits.
92
SCHEDULE (L) (5)
MATERIAL TENANT DEFAULTS; TENANTS OVER 30 DAYS DELINQUENT IN RENT;
TENANTS ASSERTING DEFENSES, OFFSETS OR CLAIMS AGAINST RENT OR OTHER
LEASE OBLIGATION; REASON TO BELIEVE TENANT OR ANY GUARANTOR IS OR MAY
BECOME UNABLE OR UNWILLING TO PERFORM; GUARANTORS RELEASED OR
DISCHARGED
COMMACK
None as of the date of the execution of this Agreement.
93
SCHEDULE (M) (1)
RIGHTS OF FIRST REFUSAL AND OPTIONS TO PURCHASE OR LEASE;
TERMINATION RIGHTS
COMMACK
A 28,634 square foot parcel in the southeast corner of the premises is
subject to being conveyed to GIT Industries, Inc., a predecessor-in-title, for
commercial development. If the option is excercised, RPS would have certain
rights either as a joint venturer or grantee of rents to participate in the
development enterprise. The purchaser would be required to create reciprocal
easements between the conveyed parcel and the remainder of the premises.
94
SCHEDULE (N) (4)
Intentionally omitted.
95
SCHEDULE (6)
COMMACK
None.