1
Exhibit 10.38
EXECUTION COPY
================================================================================
AGREEMENT OF PURCHASE AND SALE
BETWEEN
CORPORATE PROPERTY INVESTORS
("Seller")
AND
DEVELOPMENT OPTIONS, INC.
("Purchaser")
Dated December 31, 1997
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions.............................. 1
SECTION 1.02. Definitions Generally........................................ 5
ARTICLE II
Agreement to Sell and Purchase the Mall................ 6
ARTICLE III
Purchase Price, Deposits and Escrow.................. 6
ARTICLE IV
Failure to Close
SECTION 4.01. Purchaser's Default ......................................... 7
SECTION 4.02. Seller's Default ............................................ 8
SECTION 4.03. Survival .................................................... 8
ARTICLE V
Closing and Transfer of Title
SECTION 5.01. Closing ..................................................... 9
SECTION 5.02. Closing Procedure ........................................... 9
SECTION 5.03. Purchaser's Performance ..................................... 12
SECTION 5.04. Evidence of Authority; Miscellaneous ........................ 12
ARTICLE VI
Prorations of Rents, Taxes, Etc.
SECTION 6.01. Rents; Rents as and when Collected .......................... 12
SECTION 6.02. Additional Items ............................................ 17
3
Page
----
ARTICLE VII
Loss due to Casualty or Condemnation
SECTION 7.01. Loss due to Condemnation ................................... 18
SECTION 7.02. Loss due to Casualty ....................................... 19
ARTICLE VIII
Maintenance of the Property...................... 20
ARTICLE IX
Broker................................. 21
ARTICLE X
Representations and Warranties
SECTION 10.01. Representations and Warranties of Seller ................... 21
SECTION 10.02. Representations and Warranties of Purchaser ................ 26
SECTION 10.03. No Implied Representations ................................. 26
SECTION 10.05. No Independent Investigation ............................... 28
SECTION 10.06. Effect of Estoppels ........................................ 29
SECTION 10.07. Survival of Seller's Warranties, etc ....................... 29
ARTICLE XI
Indemnification
SECTION 11.01. Seller's Indemnification ................................... 30
SECTION 11.02. Purchaser's Indemnification ................................ 31
SECTION 11.03. Surviving Covenants ........................................ 31
SECTION 11.04. No Limitations ............................................. 31
ARTICLE XII
Inspection Period........................... 31
ii
4
Page
----
ARTICLE XIII
Assignment............................... 32
ARTICLE XIV
Notices................................ 32
ARTICLE XV
Expenses................................ 33
ARTICLE XVI
Miscellaneous
SECTION 16.01. Successors and Assigns ..................................... 34
SECTION 16.02. Gender ..................................................... 34
SECTION 16.03. Captions ................................................... 34
SECTION 16.04. Construction ............................................... 34
SECTION 16.05. Entire Agreement ........................................... 34
SECTION 16.06. Cure by Guarantor .......................................... 34
SECTION 16.07. Original Document .......................................... 34
SECTION 16.08. Governing Law .............................................. 34
SECTION 16.09. Operating and Expense Statement ............................ 34
SECTION 16.10. No Third Party Beneficiary ................................. 35
SECTION 16.11. Exculpation ................................................ 35
SECTION 16.12. No Recording; Confidentiality .............................. 35
SECTION 16.13. Waiver of Trial by Jury .................................... 38
Exhibit A Personal Property
Exhibit B Land
Exhibit C Operating Agreements
Exhibit D Other Agreements
Exhibit E Form of Limited Warranty Deed
Exhibit F Permitted Encumbrances
Exhibit G Form of Bill of Sale
Exhibit H Form of Assignment and Assumption of Leases
Exhibit I Form of Assignment and Assumption of Operating Agreements
Exhibit J Form of Assignment and Assumption of Other Agreements
Exhibit K Form of Major and Non-Major Tenant Estoppel
Exhibit L Form of Adjoining Owners Estoppel
iii
5
Exhibit M Notices Relating to Operating Agreements
Exhibit N Rent Roll
Exhibit O Form of FIRPTA Affidavit
Exhibit P Delinquent Tenants
Exhibit Q Litigation
Exhibit R Schedule of Environmental Reports
Exhibit S Intangible Personal Property
Exhibit T Form of General Assignment
Exhibit U Audits in Progress
Exhibit V Financial Statements
Exhibit W Special Assessments
iv
6
THIS AGREEMENT OF PURCHASE AND SALE is made this 31st
day of December, 1997 by and between CORPORATE PROPERTY
INVESTORS, a Massachusetts business trust ("Seller"), and
DEVELOPMENT OPTIONS, INC., a Wyoming corporation
("Purchaser").
W I T N E S S E T H :
WHEREAS Seller is owner in fee (other than the portions thereof
owned by Adjoining Owners) of Burnsville Center, a regional shopping mall
located in Burnsville, Minnesota and more particularly described in this
Agreement.
WHEREAS Seller desires to sell such shopping mall to Purchaser, and
Purchaser desires to purchase such shopping mall from Seller, subject to and
upon all the terms, covenants and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings in this Agreement, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Wherever used in this Agreement, the
following terms shall have the meanings set forth in this Article I unless the
context of this Agreement clearly requires another interpretation:
"Adjoining Owners" shall mean J.C. Penney Properties, Inc., a
Delaware corporation, Dayton-Hudson Corporation, a Minnesota corporation, Sears,
Roebuck & Co., a New York corporation and Mervyn's, a California corporation.
"Adjoining Properties" shall mean the land and/or the improvements
thereon of Adjoining Owners which are not part of but are operated in
conjunction with such Mall under the terms of an Operating Agreement.
"Adjustment Point" shall have the meaning set forth in Section 6.01.
7
2
"Appurtenances" shall mean, with respect to the Mall and the Land,
all right, title and interest, if any, of Seller in and to the following: (a)
all land lying in the bed of any street, highway, road or avenue, open or
proposed, public or private, in front of or adjoining the Land, to the center
line thereof; (b) all rights of way, highways, public places, easements,
appendages, appurtenances, sidewalks, alleys, strips and gores of land adjoining
or appurtenant to the Land which are now or hereafter used in connection with
the Mall; (c) all awards to be made in lieu of any of the foregoing, or for
damages to the Land by reason of the change of grade of any street, highway,
road or avenue; and (d) all easements, rights and privileges benefiting the
Land, including those under the applicable Operating Agreement or Agreements.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which national banking institutions in New York City are authorized or
required to close.
"Closing" shall mean the closing of the sale of the Mall by Seller
to Purchaser provided for in Article V.
"Closing Date" shall have the meaning specified in Section 5.01.
"Deposit" shall have the meaning set forth in Section 3(a).
"Escrow Holder" shall mean the Title Company acting in its capacity
as escrow agent under Article III.
"Excepted Items" shall mean: (i) all items of personal property
owned by the Managing Agent, Tenants, subtenants, independent contractors,
business invitees, utilities or Adjoining Owners including all gift
certificates, registers and stock; (ii) all items of personal property not owned
but leased by Seller as identified on Exhibit A annexed hereto; and (iii) all
cash on hand, checks, money orders, prepaid postage in postage meters and,
subject to Article VI, accounts receivable.
"Governmental Authorities" shall mean all agencies, bureaus,
departments and officials of Federal, state, county, municipal and local
governments and public authorities having jurisdiction over the Mall or any part
thereof.
8
3
"Hazardous Materials" shall have the meaning set forth in subsection
10.01(k).
"Impositions" shall mean all real estate and personal property
taxes, general and special assessments, water and sewer charges, license fees
and other fees and charges assessed or imposed by Governmental Authorities upon
the applicable Property, Intangible Personal Property and/or Personal Property.
"Improvements" shall mean all buildings, facilities, equipment,
structures and improvements now located or hereafter erected on the Land, and
all fixtures constituting a part thereof, other than those owned by Adjoining
Owners.
"Inspection Period" shall have the meaning set forth in Article XII.
"Intangible Personal Property" shall mean all right, title and
interest of Seller in and to all telephone numbers listed after the name of the
Mall, all names (including the right to use the name Burnsville Mall), trade
names, designations, logos and service marks, licenses and permits (in each
case, the extent assignable) and the appurtenant good will, used in connection
with operation of the Mall (other than the names or variations thereof of
Seller, the Managing Agent, Adjoining Owners and Tenants), agreements to operate
for specific periods, radius restriction agreements and similar agreements made
by Tenants and Major Tenants, whether in their Leases or Operating Agreements or
in separate agreements, and all similar items of intangible personal property
owned by Seller and utilized solely in connection with the operation of the Mall
(excluding Excepted Items) including without limitation those set forth on
Exhibit S.
"knowledge" or "notice" when used in respect of Seller shall mean,
without independent investigation other than inquiry of the Managing Agent of
the Mall, the actual knowledge of or written notice received by Robert Johnson,
Wendy Thompson, James Selonick or Robert Lowenfish.
"Land" shall mean the following: all those certain lots, pieces of
parcels of land situate, lying and being in the County of Dakota, State of
Minnesota, more particularly described in Exhibit B annexed hereto and made a
part hereof, together with the Appurtenances.
9
4
"Leases" shall mean all leases, licenses, concessions and other
forms of agreement, written or oral, however denominated, wherein Seller (as a
party named therein or the successor thereto) grants to any party or parties,
other than the Managing Agent, the right of use or occupancy of any portion of
the Mall, and all renewals, modifications, amendments and guaranties affecting
the same, but expressly excluding the Operating Agreements and Other Agreements.
"Legal Requirements" shall mean all statutes, laws, ordinances,
rules, regulations, executive orders and requirements of all Governmental
Authorities which are applicable to the Mall or any part thereof or the use or
manner of use thereof, or to the owners, Tenants or occupants thereof in
connection with such ownership, occupancy or use.
"Letter of Credit" shall have the meaning set forth in Article III.
"Losses" shall have the meaning set forth in Section 11.01.
"Major Tenant" shall mean any Tenant of the Mall leasing an
aggregate amount of space in such Mall in excess of 15,000 square foot of gross
leasable area.
"Mall" shall mean the Land, the Improvements, the Appurtenances, the
Personal Property, the Leases, the Operating Agreements, the Other Agreements
and the Intangible Personal Property.
"Management Agreement" shall mean that certain agreement dated as of
November 15, 1996 between Seller and Managing Agent, as amended from time to
time.
"Managing Agent" shall mean Pembrook Management, Inc., a New York
corporation.
"Operating Agreements" shall mean all agreements and/or ground or
operating leases, as amended, by and between Seller or its predecessor in title
to the Mall and the Adjoining Owners and relating to the Mall.
"Other Agreements" shall mean all contracts, agreements and
documents relating to the Mall to which Seller or its predecessor in interest
shall be, at Closing, a party and by which Seller is bound and which Purchaser
is obligated to assume hereunder, other than the Operating
10
5
Agreements and Leases, and including without limitation, all service contracts,
construction contracts, leases of personal property and utility agreements.
"Permitted Encumbrances" shall have the meaning set forth in Section
5.02.
"Personal Property" shall mean all apparatus, machinery, devices,
appurtenances, equipment, furniture, furnishings, seasonal decorations and other
items of personal property (other than Intangible Personal Property and the
Excepted Items) owned by Seller and located at and used in connection with the
ownership, operation or maintenance of the Mall, and shall include the items
listed in Exhibit A.
"Property" shall mean the Land and the Improvements.
"Purchase Price" shall have the meaning set forth in Article III.
"Rents" shall mean all fixed, minimum, additional, percentage,
overage and escalation rents, common area and/or mall maintenance charges,
advertising and promotional charges, insurance charges, rubbish removal charges,
sprinkler charges, shoppers aid charges, water charges, utility charges, HVAC
charges and other amounts payable under the Leases or the Operating Agreements.
"Seller Estoppel" shall have the meaning specified in subsection
5.02(h).
"Surviving Covenants" shall mean any covenant contained in this
Agreement that by its terms survives the Closing.
"Tenants" shall mean the tenants, licensees, concessionaires or
other users or occupants under Leases.
"Tenant Notices" shall have the meaning specified in subsection
5.02(f).
"Title Company" shall mean First American Title Insurance Company,
228 East 45th Street, New York, New York 10017.
"Violations" shall mean violations of Legal Requirements existing
with respect to the Mall.
11
6
SECTION 1.02. Definitions Generally. Definitions in this Agreement
apply equally to both the singular and plural forms of the defined terms. The
words "include" and "including" shall be deemed to be followed by the phrase
"without limitation" when such phrase does not otherwise appear. The terms
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular section, paragraph or
subdivision. The article and section titles appear as a matter of convenience
only and shall not affect the interpretation of this Agreement. All article,
section, paragraph, clause, exhibit or schedule references not attributed to a
particular document shall be references to such parts of this Agreement.
ARTICLE II
Agreement to Sell and Purchase the Mall
Upon and subject to the terms and conditions of this Agreement,
Seller agrees to sell and convey all of Seller's rights, title and interest in
and to the Mall to Purchaser and Purchaser agrees to purchase all of Seller's
right, title and interest in and to the Mall from Seller. Seller shall convey
and Purchaser shall accept fee simple title to the Property in accordance with
the terms of this Agreement, subject only to the Permitted Encumbrances.
ARTICLE III
Purchase Price, Deposits and Escrow
The purchase price which the Purchaser agrees to pay and the Seller
agrees to accept for the Property shall be the sum of Eighty One Million Dollars
($81,000,000.00) (hereinafter referred to as the "Purchase Price"), payable as
follows:
(a) On or before January 6, 1998, Purchaser shall deliver to Escrow
Agent an irrevocable letter of credit in the stated amount of One Million Six
Hundred Sixty Thousand Dollars ($1,660,000), having terms and conditions
(including the issuer thereof and the expiry date thereof) satisfactory in all
respects to Seller (the "Letter of Credit"). The Letter of Credit, together with
the proceeds of any drawing thereunder, is sometimes referred to in this
Agreement as the "Deposit".
12
7
(b) The Purchase Price, plus or minus adjustments and credits
provided for in Article VI and any other applicable provisions of this
Agreement, shall be paid by Purchaser to Seller at the time of Closing by wire
transfer of immediately available Federal funds through the Escrow Holder, with
the transfer of funds to an account to be designated by Seller to be completed
by 2:00 p.m. on the Closing Date.
In addition to the Deposit, Purchaser shall deposit three (3) fully
executed copies of this Agreement with the Escrow Holder immediately after both
parties have executed it. The Escrow Holder shall retain one copy of this
Agreement and deliver one copy hereof to each of Purchaser and Seller. The
parties acknowledge that (i) Escrow Holder is acting solely as a stakeholder at
their request and for their convenience, (ii) Escrow Holder shall not be deemed
to be the agent of either of the parties and (iii) Escrow Holder shall have no
liability to any party on account of its failure to disburse the Deposit (beyond
disbursing the Deposit and any earnings thereon as directed by the parties or a
court of competent jurisdiction). As between Escrow Holder on the one hand, and
Seller and Purchaser on the other hand, Seller and Purchaser shall jointly and
severally indemnify and hold Escrow Holder harmless from and against all costs,
claims and expenses, including reasonable attorneys' fees, incurred in
connection with the performance of Escrow Holder's duties hereunder, except with
respect to actions or omissions taken or permitted by Escrow Holder in disregard
of this Agreement or involving bad faith or negligence on the part of the Escrow
Holder. As between Seller and Purchaser, the prevailing party in any dispute
concerning the Deposit shall be indemnified and held harmless from payments due
to the Escrow Holder under the preceding sentence.
ARTICLE IV
Failure to Close
SECTION 4.01. Purchaser's Default. (a) If Seller has complied with
all of the covenants and conditions contained herein in all material respects
and Purchaser fails to consummate this Agreement and take title by reason of a
default on Purchaser's part, then the parties hereto recognize and agree that
the damages that Seller will sustain as a result thereof will be substantial,
but difficult if not impossible to ascertain. Therefore, the parties agree that,
in the event of Purchaser's default as
13
8
aforesaid, Seller shall, as its sole remedy, first demand payment from Purchaser
in an amount equal to the Deposit as liquidated damages (in which event,
following full payment, the Letter of Credit shall be returned to Purchaser),
and if Seller has not received such amount by the earlier of five days after
Seller's demand or the day prior to the expiry date of the Letter of Credit,
then Seller shall be entitled to direct the Escrow Agent to draw under the
Letter of Credit in the full amount thereof and pay the proceeds of such drawing
to the Seller plus interest earned thereon, if any, as liquidated damages, and
after such payment or drawing neither party shall have any further rights or
obligations with respect to the other under this Agreement, except for the
Surviving Covenants. Seller acknowledges and agrees (1) that the Deposit plus
interest earned thereon is a reasonable estimate of and bears a reasonable
relationship to the damages that would be suffered and costs incurred by Seller
as a result of having withdrawn the Property from sale and the failure of
closing to occur due to a default by Purchaser under this Agreement and (2)
Purchaser seeks to limit its liability under this Agreement to the amount of the
Deposit plus interest earned thereon in the event this Agreement is terminated
and the transaction contemplated by this Agreement does not close due to a
default by Purchaser hereunder.
(b) In the event that after the Closing Date (i) Purchaser is in
default in the payment of any monetary obligation hereunder which continues for
more than ten days or (ii) is in default in the performance of any other
obligation hereunder which continues for more than 45 days, then Seller may seek
damages (but excluding consequential damages) from Purchaser.
SECTION 4.02. Seller's Default. In the event that Purchaser has
complied with all of the covenants and conditions contained herein and is ready,
willing and able to take title to the Property in accordance with this
Agreement, and Seller defaults in performance of its obligations in any material
respect hereunder and fails to consummate this Agreement, then Purchaser shall
be entitled to pursue, at its election, one of the following as its sole and
exclusive remedy: (i) terminate this Agreement and recover the Deposit plus any
interest accrued thereon, (ii) not terminate this Agreement and seek specific
performance of this Agreement or (iii) in the case of prior sale or mortgaging
of the Mall to any person or entity (other than Purchaser or its successors or
assigns) in breach of this Agreement, seek damages (but excluding consequential
damages) but only if Purchaser has theretofore
14
9
brought an action seeking specific performance of Seller's obligations under
this Agreement within six months after such prior sale or mortgaging. Except as
provided in the preceding clause (iii), Purchaser hereby waives any right to sue
Seller for damages (including consequential damages) for any default by Seller
hereunder, but if the Closing occurs, subject to the provisions of Sections
10.06 and 10.07, such waiver shall not apply to damages to which Purchaser may
be entitled hereunder by reason of any breach by Seller of any of its warranties
or representations hereunder which survive the Closing.
SECTION 4.03. Survival. The provisions of this Article IV shall be
Surviving Covenants.
ARTICLE V
Closing and Transfer of Title
SECTION 5.01. Closing. The parties hereto agree to conduct the
Closing at 10:00 a.m. New York, New York time on January 30, 1998 (the "Closing
Date") at the offices of Cravath, Swaine & Moore in New York, New York. Time
shall be of the essence with respect to the Closing Date, and this Agreement
shall terminate if for any reason the Closing does not occur on the Closing
Date.
SECTION 5.02. Closing Procedure. Seller shall execute and deliver or
cause to be delivered to Purchaser on or before the Closing:
(a) a Limited Warranty Deed, in the form attached hereto as Exhibit
E, proper for recording, conveying the Land and Improvements to Purchaser,
subject, however, to such title matters as are set forth in Exhibit F (the
"Permitted Encumbrances");
(b) a Bill of Sale in the form attached hereto as Exhibit G, dated
as of the date of Closing transferring the Personal Property to Purchaser,
which bill of sale shall contain no warranties, express or implied, by
Seller except that Seller owns the Personal Property transferred thereby,
free and clear of all liens or encumbrances except as set forth in Exhibit
F (the "Permitted Encumbrances");
(c) an Assignment and Assumption of Leases in the form attached
hereto as Exhibit H, dated the date of Closing, assigning all of the
Seller's right, title and interest as landlord in and to any Leases;
15
10
(d) an Assignment and Assumption of Operating Agreements in the form
attached hereto as Exhibit I, dated the date of Closing, assigning to
Purchaser all of Seller's right, title and interest in, to and under the
Operating Agreements;
(e) an Assignment and Assumption of Other Agreements in the form
attached hereto as Exhibit J, dated the date of Closing, assigning to
Purchaser all of Seller's right, title and interest in, to and under the
Other Agreements;
(f) a "General Assignment" by Seller to Purchaser, in the form
annexed hereto as Exhibit T, of all of Seller's right, title and interest
in and to the following, if any: (i) all warranties and guarantees of
manufacturers, suppliers and contractors, to the extent the same are
assignable, (ii) all permits of Governmental Authorities, and licenses and
approvals of private utilities and others, required for or necessary to
the operation and maintenance of the Mall, to the extent the same are
assignable and relate to the Mall, (iii) all cash security deposits held
by any utility with respect to the Mall (plus the interest accrued
thereon, if any), (iv) the Intangible Personal Property, (v) all site
plans, surveys, plans or speci fications and floor plans relating to the
Mall, (vi) all traffic pattern and similar studies, all architectural and
engineering plans (whether "as built" or design), including, without
limitation, any such plans relating to any proposed expansion or
renovation, and any feasibility or marketing studies prepared by third
parties for Seller or any affiliate of Seller, (vii) all catalogues,
booklets, manuals, files, logs, records, correspondence, tenant lists,
tenant prospect lists, tenant histories, tenant files, brochures and
materials, advertisements and other similar intangible property directly
relating to the Mall or any part thereof and, if necessary, separate
assignments in proper form relating to items in clause (iv) and (viii) all
agreements to operate for specific periods, radius restriction agreements
and similar agreements made by the tenants and anchor stores operating at
or in connection with the Premises.
(g) Tenant Notification Agreements (the "Tenant Notices"), dated the
date of the Closing, executed by Seller, and complying with applicable
statutes in order to relieve Seller of liability for tenant security
deposits (provided the security deposits are paid or
16
11
otherwise transferred to Purchaser), notifying the Tenants that the Property has
been sold to Purchaser and directing the Tenants to pay future rentals to
Purchaser (or Purchaser's designated agent);
(h) a standard form owner's policy of title insurance issued by the
Title Company with respect to the Mall, together with such customary
endorsements and affirmative coverage as Purchaser shall reasonably
request, dated as of the Closing Date, subject only to Permitted
Encumbrances;
(i) (x)(a) tenant estoppel certificate executed by each Major Tenant
in the form attached hereto as Exhibit K; provided that to the extent that
a Major Tenant fails to provide an estoppel certificate required to be
delivered hereunder and Purchaser elects to proceed with the Closing,
Seller shall deliver an estoppel certificate from Seller in the form
attached hereto as Exhibit K (the "Seller Estoppel"); plus (y) tenant
estoppel certificates from 60% of the remaining Tenants (by base rent and
by gross leasable area) in the form attached hereto as Exhibit K, provided
that to the extent that such estoppel certificates are not delivered and
Purchaser elects to proceed with the Closing, Seller shall deliver a
Seller's Estoppel with respect thereto; plus (z) an estoppel certificate
executed by all Adjoining Owners in the form attached hereto as Exhibit L;
provided, however, that if Seller has delivered estoppel certificates to
Purchaser more than 5 days prior to December 30, 1997 and Purchaser has
not disapproved such certificates in writing by December 30, 1997, such
estoppel certificates shall be deemed to satisfy the conditions specified
in this paragraph for the delivery thereof;
(j) an updated Rent Roll, in the form of the Rent Roll attached
hereto as Exhibit N, dated within 15 days of the date of the Closing;
(k) to the extent in Seller's possession or at Seller's disposal,
the originals of all Leases, as-built plans and specifications, Operating
Agreements, Other Agreements, all engineering and maintenance records
related to the Mall and all licenses, permits and certificates of
occupancy for the Property or the Improvements;
17
12
(l) an affidavit that Seller is not a "foreign person" in the form
attached as Exhibit O;
(m) a master key or duplicate key for all locks in the Improvements;
(n) such title affidavits and other customary documents are
reasonably requested by the Title Company to issue the owner's title
policy described in paragraph (g) above;
(o) an executed original of the closing statement in form and
substance mutually agreeable to Seller and Purchaser;
(p) evidence of termination of the Management Agreement and all
other agreements encumbering the Mall other than the Leases, the Operating
Agreements and the Other Agreements; and
(q) a certificate of Seller certifying to Purchaser that, subject to
Sections 10.06 and 10.07, the representations and warranties of Seller set
forth herein are true and correct in all material respects as of the
Closing Date as if made on such date.
SECTION 5.03. Purchaser's Performance. At the Closing, Purchaser
will cause the Purchase Price to be paid to Seller, will execute and deliver the
Tenant Notices, the Assignment and Assumption of Leases, the Assignment and
Assumption of Other Agreements, the Assignment and Assumption of Operating
Agreements and the Bill of Sale. It is a condition to Seller's obligations
hereunder that on the Closing Date all of Purchaser's representations and
warranties shall be true and correct in all material respects. It is a condition
to Purchaser's obligations hereunder that on the Closing Date all of Seller's
representations and warranties shall be true and correct in all material
respects.
SECTION 5.04. Evidence of Authority; Miscellaneous. Both parties
will deliver to the Title Company and each other such evidence or documents as
may reasonably be required by the Title Company or either party hereto
evidencing the power and authority of Seller and Purchaser and the due authority
of, and execution and delivery by, any person or persons who are executing any
of the documents required hereunder in connection with the sale of the Property.
Both parties will execute and deliver such
18
13
other documents as are reasonably required to effect the intent of this
Agreement.
ARTICLE VI
Prorations of Rents, Taxes, Etc.
At the Closing (except where a later date is specifically provided
for in this Article), the parties hereto shall adjust the items set forth below
as of 11:59 p.m. on the day preceding the Closing Date (the "Adjustment Point"),
and the net amount thereof shall be paid by Purchaser to Seller, or credited by
Seller to Purchaser, as the case may be, at the Closing.
SECTION 6.01. Rents; Rents as and when Collected. Rents shall be
apportioned as and when collected. Any Rents collected by Purchaser (which, for
purposes of this Section 6.01, shall include Rents collected by any property
manager or other agent acting for Purchaser) subsequent to the Closing (whether
due and payable prior to or subsequent to the Adjustment Point) shall be
adjusted as of the Adjustment Point, and any portion thereof properly allocable
to periods prior to the Adjustment Point, net of costs of collection properly
allocable thereto, if any, shall be paid by Purchaser to Seller promptly after
the collection thereof by Purchaser, but subject to the further provisions of
this Section 6.01 in the case of Rents due prior to the Adjustment Point. If
prior to the Closing Seller shall have collected, or if subsequent to the
Closing Seller shall collect, any Rents (which, for the purposes of this Section
6.01, shall include Rents collected by any property manager or other agent
acting for Seller) which are properly allocable in whole or in part to periods
subsequent to the Adjustment Point, the portion thereof so allocable to periods
subsequent to the Adjustment Point net of costs of collection properly allocable
thereto, if any, shall be credited to Purchaser by Seller at the Closing or, if
collected after the Closing, promptly remitted by Seller to Purchaser. As used
in this Section 6.01 the term "cost of collection" shall mean and include
reasonable attorneys' fees, a reasonable allocation of Seller's internal
collection costs and other costs incurred by Purchaser or Seller in collecting
any Rents, but shall not include (1) the regular fees payable to any property
manager for the Mall or (2) except for a reasonable allocation of Seller's
internal collection costs, the payroll costs of any employees of Seller,
Purchaser or its or their affiliates or
19
14
agents or any other internal costs or overhead of Seller or Purchaser.
6.1.1 One week prior to the Closing Seller shall deliver to
Purchaser (x) a list of all Tenants and Adjoining Owners which are delinquent in
payment of Rents as of such date, which list shall set forth the amount of each
such delinquency, whether such delinquency is (i) under 30 days, (ii) between 31
days and 60 days, (iii) between 61 days and 90 days or (iv) over 90 days and the
nature of the amount due, and (y) a list of each Tenant and Adjoining Owner
which paid percentage or overage rent based on sales or gross income during the
fiscal year in which the Closing Date occurs and the amount so paid by each such
Tenant or Adjoining Owner through the Adjustment Point. All amounts collected by
Purchaser from each delinquent Tenant or Adjoining Owner within 30 days after
the Closing, net of costs of collection, if any, shall be deemed to be in
payment of Rents (or the specific components of Rents) for the month in which
the Closing occurs, next in payment of Rents (or the specific components of
Rents) then due on account of any month after the month in which the Closing
occurs and finally in payment of delinquent Rents (or the specific components of
Rents) which are in arrears as of the first day of the month in which the
Closing occurs, as set forth on such list. All amounts collected by Purchaser
from each delinquent Tenant or Adjoining Owner more than 30 days after the
Closing, net of costs of collection, if any, shall be deemed to be in payment of
Rents (or the specific components of Rents) then due on account of each month
after the month in which the Closing occurs, next in payment of Rents (or the
specific components of Rents) due for the months in which the Closing occurs and
finally in payment of delinquent Rents (or the specific components of Rents)
which are in arrears as of the first day of the month in which the Closing
occurs, as set forth on the aforesaid list. Any amounts collected by Purchaser
from each delinquent Tenant or Adjoining Owner which, in accordance with the
preceding two sentences, are allocable to the month in which the Closing occurs
(as adjusted as of the Adjustment Point) or any prior month, net of costs of
collection properly allocable thereto, if any, shall be paid promptly by
Purchaser to Seller.
6.1.2 Purchaser shall use commercially reasonable efforts to bill
and collect any delinquencies set forth on the list delivered by Seller pursuant
to subsection 6.1.1 for a period of one (1) year after the Closing and the
amount thereof, as, when and to the extent collected by Purchaser, shall, if due
to Seller pursuant to the
20
15
provisions of subsection 6.1.1, be paid by Purchaser to Seller, net of costs of
collection, if any, properly allocable thereto, promptly after the collection
thereof by Purchaser. In no event shall Purchaser be obligated to institute any
actions or proceedings or to seek the eviction of any Tenant or Adjoining Owner
in order to collect any such delinquencies.
6.1.3 Following the Closing and upon Seller's written request,
Purchaser shall submit or cause to be submitted to Seller, within 30 days after
the end of each calendar quarter up to and including the calendar quarter ending
on March 31, 1999, but only so long as any delinquencies shall be owed to
Seller, a statement which sets forth all collections made by Purchaser from the
Tenants and Adjoining Owners which owe such delinquencies through the end of
such calendar quarter. Seller shall have the right from time to time following
the Closing until 90 days after receipt by Seller of the last quarterly
statement required hereunder, at Seller's expense, to examine and audit so much
of the books and records of Purchaser as relate to such delinquencies in order
to verify the collections reported by Purchaser in such quarterly statements.
6.1.4 Nothing contained in this Section 6.01 shall be deemed to
prohibit Seller, at its own expense, from instituting after the Closing any
actions or proceedings in its own name against any Tenant or Adjoining Owner
that is delinquent in the payment of $5,000 or more to Seller in order to
collect the amount of any delinquencies due in whole or in part to Seller from
such Tenant or Adjoining Owner; provided, however, that in no event shall (1)
Seller be entitled in any such action or proceeding to seek to evict any Tenant
or Adjoining Owner or to recover possession of its space or (2) Seller be
entitled to initiate or participate in any involuntary bankruptcy or similar
proceeding against any Tenant or Adjoining Owner. Purchaser agrees not to waive
or settle any delinquency owed in whole or in part to Seller without the prior
written consent of Seller, which consent may be granted or withheld in Seller's
sole discretion.
6.1.5 With respect to that portion of the Rents which constitute
percentage or overage rents, or other amounts payable by Tenants based upon the
sales or gross receipts of such entities, the following shall apply: (i) at the
Closing and/or, in the case of percentage or overage rents which are in arrears
or are payable in other than monthly installments, subsequent to the Closing,
21
16
percentage or overage rents shall be apportioned as provided in the other
subsections of this Section 6.01 in the case of Rents generally; and (ii)
following the end of the fiscal year on account of which such percentage or
overage rents are payable by each Tenant and receipt by Purchaser of any final
payment on account thereof due from such Tenant (including, without limitation,
any amount due as a result of an audit conducted by Seller or Purchaser),
Purchaser shall pay to Seller, net of costs of collection and audit, if any, the
excess, if any, of (x) the amount of percentage or overage rents paid by such
Tenant on account of such entire fiscal year multiplied by a fraction, the
numerator of which is the number of months (including any fraction of a month
expressed as a fraction) of such fiscal year prior to the Adjustment Point and
the denominator of which is 12 or such lesser number of months (including any
fraction of a month expressed as a fraction) as may have elapsed in such fiscal
year prior to the expiration of the Lease in question over (y) all amounts
theretofore received by Seller on account of the percentage or overage rents in
question for such fiscal year. If in any case the amount provided for in (y)
above exceeds the amount provided for in (x) above, Seller shall pay the amount
of such excess to Purchaser upon demand. If on the Closing Date Seller shall be
conducting any audits of payments of percentage or overage rents previously made
by Tenants for fiscal years prior to the ones in effect on the Closing Date,
Seller shall have the right to continue all such audits until completion thereof
and to collect and retain any amounts payable to Seller hereunder by reason
thereof. A schedule of all such audits in progress at the date hereof is annexed
hereto as Exhibit U. In addition, Seller shall have the right to initiate any
such audit within six months subsequent to the Closing.
6.1.6 With respect to that portion of Rents which are payable on an
annual, semi-annual or other non-monthly basis, Purchaser shall use commercially
reasonable efforts to bill and collect all such payments which become due after
the Closing, which payments, to the extent allocable to periods prior to the
Adjustment Period, shall be paid by Purchaser to Seller promptly after receipt
thereof, subject to costs of collection, if any, properly allocable thereto.
With respect to that portion of Rents that are attributable to payment of
expenses such as common area/mall maintenance charges, merchants' or other
association charges or advertising and promotional charges, such Rents shall be
apportioned based upon which party paid or will pay the correlating expenses for
the relevant period. With respect to that portion of Rents which are billed on
an index-based formula or on an estimated basis during the fiscal or other
22
17
period for which paid, at the end of such fiscal or other period Purchaser shall
determine whether the items in question have been overbilled or underbilled. If
Purchaser determines that there has been an overbilling and an overbilled amount
has been received, Seller shall, promptly after request by Purchaser, pay to
Purchaser the portion of such overbilled amount which is allocable (as provided
for such Rent in this Section 6.01) to the period prior to the Adjustment Point,
and promptly thereafter Purchaser shall reimburse the entire overbilled amount
to the Tenants which paid the same. If Purchaser determines that there has been
an underbilling, the additional amount shall be billed by Purchaser to the
Tenants, and any amount received by Purchaser, net of costs of collection, if
any, to the extent allocable (as provided for such Rent in this Section 6.01) to
periods prior to the Adjustment Point shall promptly be paid by Purchaser to
Seller.
6.1.7 Notwithstanding anything to the contrary set forth in this
Section 6.01, Seller shall be entitled to receive, and Purchaser shall pay to
Seller promptly after the receipt thereof, net of costs of collection, if any,
properly allocable thereto, (i) all amounts payable by Tenants on account of
Impositions which, pursuant to the terms of Section 6.02, it is Seller's
obligation to pay and discharge, which amounts shall be apportioned between
Seller and Purchaser in the same manner as the Impositions to which they relate
and (ii) all amounts payable by Tenants on account of utilities which, pursuant
to the terms of Section 6.02, it is Seller's obligation to pay and discharge,
which amounts shall be apportioned between Seller and Purchaser in the same
manner as the utilities to which they relate.
6.1.8 Any advance rental deposits or payments held by Seller on the
Closing Date and applicable to periods of time subsequent to the Adjustment
Point, and any security deposits held by Seller on the Closing Date, together
with interest thereon, if any, which, under the terms of the applicable Leases,
is payable to the Tenants thereunder, shall be paid or credited to Purchaser at
the Closing.
SECTION 6.02. Additional Items. At the Closing, the following
additional items shall be apportioned between the parties hereto as of the
Adjustment Point, with Seller to be obligated for or entitled to amounts
apportioned to the period through the Adjustment Point and Purchaser to be
23
18
obligated for or entitled to amounts apportioned to the period following the
Adjustment Point:
6.2.1 Impositions payable by Seller in respect of the Mall in the
calendar year 1998 regardless of the valuation date or lien affixation date
associated with such payments. In the case of special assessments payable in
installments specified in Exhibit W attached hereto, the installment for the
fiscal year in which the Closing Date occurs shall be apportioned as at the
Adjustment Point and Purchaser shall be responsible for paying all subsequent
installments thereof. If any Tenant in occupancy at the Closing Date or
Adjoining Owner is obligated to pay any Impositions directly to the applicable
taxing authority, such Impositions shall not be apportioned. Any refund obtained
by either Seller or Purchaser of real estate taxes for which an apportionment is
made pursuant to this subsection 6.2.1, net of the costs of obtaining such
refund and the amount thereof payable to Tenants and Adjoining Owners, shall be
apportioned as of the Adjustment Point.
6.2.2 Water and sewer charges, if any, payable by Seller on the
basis of the period or periods for which the same are payable. If there are
water meters at the Mall, Seller shall furnish readings to a date not more than
thirty (30) days prior to the Closing Date, and the unfixed meter charges and
the unfixed sewer charges, if any, based thereon for the intervening time shall
be apportioned on the basis of such last readings. Any water and sewer charges
payable by Tenants in occupancy on the Closing Date or Adjoining Owners directly
to the equity or entities furnishing such services shall not be apportioned.
6.2.3 Utilities and fuel payable by Seller, including without
limitation electricity and gas. Seller shall endeavor to have the meters for
such utilities read the day on which the Adjustment Point occurs and will pay
the bills rendered to it on the basis of such readings. If Seller does not
obtain such a meter reading with respect to any such utility, the adjustment
therefor shall be made on the basis of the most recently issued bills therefor
which are based on meter readings not earlier than thirty (30) days prior to the
Adjustment Point. Seller will receive a credit in the full amount of any cash
security deposits held by any utility companies (with interest thereon, if any,
in the amount accrued on such security deposits) and shall assign to Purchaser
at the Closing all of Seller's right, title and interest in and to such security
deposits. Purchaser will make its own arrangements for any security bonds
required by any utility companies by Closing and
24
19
Seller will be entitled to cancel any bonds previously furnished. If fuel oil,
propane or other fuel is used at the Mall, Seller shall deliver to Purchaser at
the Closing statements of the suppliers of such fuel dated within three days of
the Adjustment Point setting forth the quantity of fuel on hand and the cost
paid by Seller therefor, and Purchaser shall pay to Seller at the Closing the
cost of such fuel (including taxes thereon, if any) as shown on such statements.
Charges for any utilities payable by Tenants in occupancy on the Closing Date
and Adjoining Owners directly to the utility companies furnishing the same shall
not be apportioned.
6.2.4 Charges payable by Seller under the Other Agreements.
6.2.5 Contributions payable by Seller to merchants' and other
associations, and to promotional activities at the Mall, including gift
certificates.
6.2.6 Any other items of income or expense of the Mall, which, in
accordance with generally accepted business practices, should be apportioned
between Seller and Purchaser.
All prorated items that are not subject to an exact determination
shall be estimated by the parties with prorations adjusted to actual within 60
days after the Closing. The provisions of this Article VI shall be Surviving
Covenants.
ARTICLE VII
Loss due to Casualty or Condemnation
SECTION 7.01. Loss due to Condemnation. In the event of a
condemnation of all or a Substantial Portion (as hereinafter defined) of the
Land and Improvements which condemnation shall render a Substantial Portion of
the Land and Improvements untenantable or results in the Property not having
sufficient parking to comply with applicable law or the specific requirement of
any Lease or Operating Agreement, Purchaser may, upon written notice to Seller
given within ten (10) days of receipt of notice of such event, cancel this
Agreement, in which event the Escrow Holder at Purchaser's request shall return
the Deposit plus all interest earned thereon, this Agreement shall terminate and
neither party shall have any rights or obligations hereunder except for the
Surviving Covenants. In the event
25
20
that Purchaser does not elect to terminate, or if the condemnation affects less
than a Substantial Portion and does not affect the parking area in the manner
described above, then this Agreement shall remain in full force and effect, the
Purchase Price shall not be reduced and Purchaser shall be entitled to an
assignment of all of Seller's share of the condemnation award (net of (1) the
costs of collection incurred to the Closing Date, if any, and (2) if the
condemnation is temporary, the portion of such award, if any, attributable to
the period from and after the Closing Date, after deducting therefrom reasonable
expenditures made by Seller as a result of the related taking, but only to the
extent such portion was paid to Seller prior to the Closing Date).
Notwithstanding the foregoing, Seller shall be entitled to receive or retain out
of such condemnation award any reasonable amounts expended by Seller to restore
or protect the Mall. In no event shall Seller be obligated to repair or restore
the Land or Improvements. For purposes of this Section 7.01, a Substantial
Portion shall mean a condemnation of the Land and Improvements in excess of One
Million Dollars ($1,000,000) in value of the Property.
SECTION 7.02. Loss due to Casualty. In the event of Substantial Loss
or Damage (as hereinafter defined) to the Land and Improvements by fire or other
casualty, Purchaser, upon written notice to Seller given within ten (10) days of
receipt of notice of such event, may cancel this Agreement in which event the
Escrow Holder at Purchaser's request shall return the Deposit plus all interest
earned thereon to Purchaser and this Agreement shall terminate and neither party
shall have any rights or obligations hereunder except for the Surviving
Covenants. In the event that Purchaser elects not to terminate, or if the
casualty results in less than Substantial Loss or Damage, then this Agreement
shall remain in full force, the Purchase Price shall be reduced by the amount of
any deductible or co-payment amount under the related insurance policy,
Purchaser shall be entitled to an assignment of all of the proceeds of Seller's
fire or other casualty insurance and Seller shall have no obligation to repair
or restore the Land or Improvements. Notwithstanding the foregoing, Seller shall
be entitled to receive or retain (i) out of such casualty insurance proceeds,
any reasonable amounts expended by Seller to restore or protect the Mall and
(ii) in the case of rental or business interruption proceeds allocable to
periods prior to the Adjustment Point (apportioned consistent with Article VI),
loss of rents by reason of the fire or other casualty suffered by Seller prior
to the closing, which entitlement shall survive the Closing. At
26
21
the time of any assignment of insurance proceeds in accordance with this
Section, Seller shall notify Purchaser of any disputes between Seller and the
insurance carrier related to the claim giving rise to such proceeds. Seller will
reasonably cooperate with Purchaser in attempting to collect such proceeds from
the insurance carrier and if, in the reasonable judgment of Purchaser, a
collection action is necessary to obtain such proceeds, the reasonable costs of
such collection action will be paid by Seller. For purposes of this Section
7.02, "Substantial Loss or Damage" shall mean loss or damage to the Property the
cost for repair of which exceeds One Million Dollars ($1,000,000) of the value
of the Property.
ARTICLE VIII
Maintenance of the Property
Between October 28, 1997 and the Closing, Seller shall operate and
maintain the Property (or caused the Property to be operated and maintained) in
the ordinary course of business and consistent with past procedures and
practices heretofore followed in connection with the operation and maintenance
of the Property.
Between October 28, 1997 and the Closing, Seller shall not
intentionally cause any lien or other encumbrances to attach to the Property,
other then the lien for taxes not yet due and payable or any liens which Seller
is contesting in good faith (provided that all liens are released of record or
are adequately insured by Closing), and Seller shall not (i) lease any portion
of the Property, (ii) terminate any Lease, (iii) amend any Major Lease in any
manner or amend any other Lease if the effect thereof would be to reduce the
Rent payable thereunder, increase landlord's obligations in any material
respect, give rise to an obligation by Purchaser to pay any amounts in
accordance with the last paragraph of this Article or alter the use of the
premises by the Tenant or (iv) terminate any Operating Agreement or any Lease
without first obtaining Purchaser's written approval, which approval shall not
be unreasonably denied or delayed. Purchaser shall have ten (10) days from the
date Seller provides Purchaser with written notice of the business terms of the
new lease, or modification or termination of any existing lease, together with
any information reasonably requested by Purchaser regarding such tenant, to
approve or reject such lease, modification or termination. If Purchaser fails to
respond within said time
27
22
period, it shall be deemed to approve said lease, modification or termination,
as applicable.
Seller hereby agrees that it will be solely responsible for paying
all tenant improvement costs and leasing commissions incurred in connection with
any Lease entered into prior to October 28, 1997, whether such costs or
commissions are due and payable prior to or after the Closing Date whether or
not conditional as of the Closing Date upon subsequent extension or renewal and
Purchaser hereby agrees that it will be solely responsible for paying all tenant
improvement costs and leasing commissions incurred in connection with any Leases
entered into on or subsequent to October 28, 1997, whether such costs or
commissions are due and payable prior to or after the Closing Date. The
obligations of Seller under this Article VIII shall be Surviving Covenants.
ARTICLE IX
Broker
Seller and Purchaser each represent to the other that it has dealt
with no agent or broker who in any way has participated as a procuring cause of
the sale of the Property. Each party agrees to defend, indemnify and hold
harmless the other party for any and all judgments, costs of suit, attorneys'
fees, and other reasonable expenses which the other may incur by reason of any
action or claim against such party or the Property by any broker, agent, or
finder with whom the indemnifying party has dealt arising out of this Agreement
or any subsequent sale of the Property. The provisions of this Article IX shall
be Surviving Covenants hereunder and shall survive the Closing and any
termination of this Agreement.
ARTICLE X
Representations and Warranties
SECTION 10.01. Representations and Warranties of Seller. Seller
makes the following representations and warranties and agrees that Purchaser's
obligations under this Agreement are conditioned upon the truth and accuracy of
such representations and warranties in all material respects, both as of this
date and as of the date of the
28
23
Closing, subject to those limitations set forth in this Article X or otherwise
in this Agreement:
(a) (i) The Seller is not a party to, subject to or bound by any
agreement, contract, permit or other restriction of any nature, or any judgment,
order, statute, rule or regulation of any court, governmental body,
administrative agency or arbitrator, or any legal proceeding which would prevent
or be violated by, or under which there would be a default, or which would
result in creation of or claim of any lien, charge, or encumbrance upon any of
the Property as a result of any of the items set forth below; and (ii) no
registration or consent of, or payment of any premium, fee or penalty to, any
governmental authority or any other person or entity, which has not been
obtained or paid, is required for or will arise out of any of the items set
forth below:
(1) the execution, delivery and performance of this Agreement or any
other agreements, obligations or instruments referred to herein or
contemplated hereby; and
(2) the transfer and assignment to the Purchaser in accordance with
this Agreement of the Property and any agreements and liabilities to which
the Purchaser is taking subject or assuming pursuant to this Agreement.
(b) Seller is a business trust, organized, existing, and in good
standing under the laws of the Commonwealth of Massachusetts, and has all power
and authority to conduct the business of the Property and to enter into and
perform its obligations hereunder under the laws of the State of Minnesota.
(c) The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly authorized by
all necessary parties and no other proceedings on the part of Seller are
necessary in order to permit them to consummate the transaction contemplated
hereby. This Agreement has been duly executed and delivered by Seller and
(assuming valid execution and delivery by the Purchaser) is a legal, valid and
binding obligation of Seller enforceable against it in accordance with its
terms.
29
24
(d) With respect to the Leases:
(i) Exhibit N annexed hereto is a list of all of the Leases in
effect on the date of such exhibit. All of the information set forth on
Exhibit N is true, correct and complete. As of the date of Exhibit N,
there are no leases, licenses or other rights of occupancy or use of any
portion of the Mall granted by Seller or its predecessors in title and
remaining in effect as of the date of Exhibit N other than the Leases set
forth in said Exhibit. Except as set forth in the estoppel certificates
transmitted by a letter dated December 16, 1997 from Seller to Purchaser,
none of the Leases has been modified, amended or supplemented (whether
orally or in writing). No Tenant has any option to purchase the Mall or a
right of first refusal in respect of the sale of the Mall to a third party
and no Tenant has the right to purchase any portion of the Mall;
(ii) True, correct and complete copies of the Leases, and all
amendments and supplements thereto, have heretofore been made available
and/or delivered to Purchaser for review;
(iii) Exhibit P annexed hereto is a true, correct and complete list
of Tenants that are delinquent in the payment of Rents as of the date of
said schedule, which schedule sets forth the information specified in
clause (x) of Section 6.1.1; and
(iv) Each of the Leases listed in Exhibit N is in full force and
effect as of the date hereof. Seller has received no written notice from
any Tenant under a Lease listed in Exhibit N which is still outstanding
(x) that Seller has defaulted in performing any of its material
obligations under such Lease or (y) that such Tenant is entitled to any
reduction in, refund of or counterclaim or offset against, or is otherwise
disputing, any Rents paid, payable or to become payable by such Tenant
thereunder or is entitled to cancel or terminate such Lease or to be
released of any of its material obligations thereunder, except as set
forth in Exhibit N. With the exception of the delinquencies in the payment
to Rents specified in Exhibit P annexed hereto, to Seller's knowledge no
material default exists under any Lease by the Tenant thereunder. For
purposes of this Section 10.01(d)(iv) the term "Lease" does not include
licenses and concession agreements
30
25
which have original terms, including rights to renew or extend, of less
than six (6) months.
(e) With respect to the Operating Agreements:
(i) Exhibit C annexed hereto is a true, correct and complete list of
all documents which comprise all of the Operating Agreements, setting
forth the date of each such Operating Agreement and each amendment or
supplement thereto and the names of the parties thereto;
(ii) True, correct and complete copies of the Operating Agreements
and all amendments and supplements thereto have heretofore been made
available and/or delivered to Purchaser for review;
(iii) Each Operating Agreement is in full force and effect as of the
date hereof;
(iv) None of the Operating Agreements have been modified, amended or
supplemented (whether orally or in writing) except as set forth in Exhibit
C; and
(v) Seller has received no written notice from any party to an
Operating Agreement which is still in effect (x) that Seller has defaulted
in performing any of its obligations under such Operating Agreement or (y)
that such party is entitled to any reduction in, refund of or counterclaim
or offset against, or is otherwise disputing, any Rents paid, payable or
to become payable thereunder by such party or is entitled to cancel or
terminate such Operating Agreement or to be released of any of its
material obligations thereunder, except as set forth in Exhibit M. Except
as set forth on Exhibit P, to Seller's knowledge no material default
exists under any Operating Agreement on the part of the other parties
thereto. There are no obligations of Seller under or in respect of any of
the Operating Agreements for leasing or similar commissions and there are
no unperformed obligations for the performance of work (or payment of
allowances in lieu thereof) in the nature of tenant alterations under such
agreements.
(f) With respect to the Other Agreements:
(i) Exhibit D annexed hereto is a true, correct and complete list as
of the date of such exhibit of all Other Agreements, setting forth, with
respect to such
31
26
Other Agreements, the date thereof and of each amendment or supplement thereto,
the name of each party thereto (other than Seller) and a brief description of
the services provided thereunder or property covered thereby. Except as
specifically identified in Exhibit D, each Other Agreement can be terminated by
Purchaser on not more than thirty (30) days' notice without penalty;
(ii) True, correct and complete copies of the Other Agreements, and
all amendments and supplements thereto, have heretofore been made
available and/or delivered to Purchaser for review; and
(iii) To Seller's knowledge, each of the Other Agreements is in full
force and effect on the date hereof, and Seller has received no written
notice from any party to any Other Agreement which is still outstanding
that Seller has defaulted in performing any of its obligations under such
Other Agreement, except as set forth in Exhibit D. None of the Other
Agreements listed on Exhibit D has heretofore been amended or supplemented
(whether orally or in writing), except as set forth on Exhibit D.
(g) To Seller's knowledge, there is no condemnation proceeding
pending with regard to all or any part of the Property and there is no such
proceeding threatened or contemplated by any governmental authority.
(h) Seller has not received written notice of any violation of
building, health, safety, pollution control, fire or similar law, ordinance,
order or regulation respecting the Property which has not heretofore been
complied with.
(i) There are no pending litigations or other proceedings against
Seller affecting the Mall in respect of which Seller has been served with
process or otherwise received written notice except for (i) claims for death,
personal injury, property damage or worker's compensation for which the
insurance carrier has been notified on a timely basis and (ii) other litigations
or proceedings shown on Exhibit Q annexed hereto. Seller has no knowledge of any
threatened litigation or proceedings against Seller affecting the Mall except
litigation of the nature described in clause (i) above.
32
27
(j) Seller is not a "foreign person" as defined in the Federal
Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act,
as amended.
(k) The term "Hazardous Materials" means (i) toxic wastes, hazardous
materials, hazardous substances or other substances which are defined,
prohibited or regulated by, or listed in, any Federal, state or local law or
regulation addressing environmental protection or pollution control matters,
(ii) asbestos in friable condition or otherwise posing a threat to human health,
(iii) polychlorinated biphenyls (PCBs) and (iv) oil, petroleum and their
by-products. Except as may be specifically disclosed in the reports listed on
Exhibit R or in any written environmental reports obtained by Purchaser, and
except with respect to cleaning fluids and similar substances which may be used
in the routine operation or maintenance of the Mall in accordance with Legal
Requirements, (A) Seller has not itself caused any Hazardous Materials to be
utilized or stored in or on the Mall, or to be disposed of thereat or therefrom,
except in accordance with the provisions of applicable laws and (B) to Seller's
knowledge, no Hazardous Materials are present in, on or under the Mall at levels
or in quantities or amounts which would be in violation of, or would require
investigation or cleanup under, applicable laws. Seller has not received any
written notice from any Governmental Authority or other person or entity that
any condition exists at the Mall which constitutes or has resulted in a
violation of any Legal Requirement relating to Hazardous Materials or which
requires investigation or cleanup under any such Legal Requirements, or that any
claim has been or may be asserted against Seller by reason of any such
violation.
(l) Seller has received a notice of proposed property taxes with
respect to the Mall for 1998 of $3,967,482.58. There are no unpaid real estate
taxes or special assessments with respect to the Mall except taxes not yet due
and payable.
(m) The financial statements attached as Exhibit V hereto accurately
and correctly reflect in all material respects the operation of the Mall for the
periods covered thereby.
SECTION 10.02. Representations and Warranties of Purchaser.
Purchaser makes the following representations and warranties and agrees that
Seller's obligations under this Agreement are conditioned upon the truth and
accuracy of such representations and warranties in all material
33
28
respects, both as of this date and as of the date of Closing:
(a) Purchaser is a corporation organized, existing and in good
standing under the laws of the State of Wyoming, and has all power and authority
to conduct the business of the Property and to enter into and perform its
obligations hereunder under the laws of the State of Wyoming.
(b) The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly authorized by
all necessary parties and no other proceedings on the part of Purchaser are
necessary in order to permit them to consummate the transaction contemplated
hereby. This Agreement has been duly executed and delivered by Purchaser and
(assuming valid execution and delivery by the Seller) is a legal, valid and
binding obligation of Purchaser enforceable against it in accordance with its
terms.
SECTION 10.03. No Implied Representations. Purchaser acknowledges
that except as expressly set forth in this Agreement and in the documents and
instruments delivered by Seller to Purchaser, neither Seller nor any agent or
representative or purported agent or representative of Seller has made, and
Seller is not liable for or bound in any manner by, any express or implied
warranties, guarantees, promises, statements, inducements, representations or
information (including any information set forth in offering materials
heretofore furnished to Purchaser) pertaining to the Mall or any part thereof,
the physical condition thereof, environmental matters, income, expenses or
operation thereof or of the Personal Property or Intangible Personal Property,
the uses which can be lawfully made of the same under applicable zoning or other
laws or any other matter or thing with respect thereto, including, without
limitation, any existing or prospective Leases, Operating Agreements or Other
Agreements. Without limiting the foregoing, Purchaser acknowledges and agrees
that, except as expressly set forth in this Agreement and in the documents and
instruments delivered by Seller at the Closing, Seller is not liable for or
bound by (and Purchaser has not relied upon) any verbal or written statements,
representations, real estate brokers' "set-ups" or offering materials or any
other information respecting the Mall furnished by Seller or any broker,
employee, agent, consultant or other person representing or purportedly
representing Seller. Nothing contained in this Section 10.03 shall be deemed to
impair, limit or otherwise
34
29
affect Purchaser's rights under this Agreement in respect of the
representations, warranties and covenants of Seller set forth in this Agreement
and the other provisions hereof binding upon Seller.
SECTION 10.04. "As-Is" Purchase. Purchaser represents that it has
inspected the Mall, the physical and environmental condition and the uses
thereof and the fixtures, equipment and Personal Property included in this sale
to its satisfaction, that it has independently investigated, analyzed and
appraised the value and profitability thereof, the creditworthiness of Tenants
and Adjoining Owners and the presence of Hazardous Materials, if any, in or on
the Mall, that it has received copies of and/or has reviewed the Leases, the
Operating Agreements, the Other Agreements and all other documents referred to
herein, that it is thoroughly acquainted with all of the foregoing and that
Purchaser, in purchasing the Mall, will rely upon its own investigations,
analyses, studies and appraisals and not upon any information provided to
Purchaser by or on behalf of Seller with respect thereto (except in each case to
the extent covered by any warranties or representations of Seller set forth in
this Agreement, the Seller Estoppel or in any other document or instrument
delivered by Seller in connection with the Closing). Purchaser agrees to accept
the Mall "as is" and in its condition as at the date hereof, reasonable wear and
tear and damage by fire or other casualty (subject to the provisions of Article
VII) between the date hereof and the Closing Date excepted, and Purchaser shall
assume the risk that adverse matters, including, but not limited to,
construction defects and adverse physical and environmental conditions may not
have been revealed by Purchaser's investigations; and Purchaser, upon closing,
shall be deemed to have waived, relinquished and released Seller from and
against any and all claims, demands, causes of action, losses, damages,
liabilities, costs and expenses (including attorneys' fees and court costs) of
any and every kind or character, known or unknown, which Purchaser might have
asserted or alleged against Seller by reason of or arising out of any latent or
patent construction defects or physical conditions, violations of applicable
laws (including, without limitation, environmental laws) and any and all other
acts, omissions, events, circumstances or matters with respect to the Mall,
subject, however, to Purchaser's rights and remedies provided for in this
Agreement in the event of the breach of any of Seller's warranties,
representations or covenants contained herein, in Seller's estoppel certificate
or in any other document or instrument delivered by Seller in connection with
the Closing. Nothing contained
35
30
in this Section 10.04 shall be deemed to constitute a waiver by Purchaser of its
rights at law or in equity, if any (to the extent such rights are not limited
under any other applicable provision of this Agreement), to seek contribution or
other recourse against Seller in the event of a claim asserted against Purchaser
by a third party with respect to liabilities arising from or relating to any
circumstances or conditions which exist at or in respect of the Mall prior to
the Closing. Nothing contained in this Section 10.04 shall be deemed to impair,
limit or otherwise affect Purchaser's rights under this Agreement in respect of
the representations, warranties and covenants of Seller set forth in this
Agreement and the other provisions hereof binding on Seller. The provisions of
this Section 10.04 shall survive the Closing.
SECTION 10.05. No Independent Investigation. All representations and
warranties made herein by Seller which are based on Seller's knowledge are made,
and are hereby acknowledged by the Purchaser to be made, without independent
investigation regarding the facts contained therein, other than due inquiry of
the Managing Agent for the Mall, and are otherwise limited as provided in the
definition of "knowledge" or "notice".
SECTION 10.06. Effect of Estoppels. If prior to the Closing a Tenant
or Adjoining Owner provides to Purchaser an estoppel letter addressed to
Purchaser and delivered in response to a request made pursuant to this Agreement
which sets forth information with respect to any item as to which Seller has
made a representation or warranty or is otherwise set forth in the Seller
Estoppel, then Seller's representation and warranty in respect of such
information shall thereafter be null and void and of no further force or effect,
such representation and warranty shall not be deemed to have been remade as of
the Closing and Purchaser shall rely solely on the information set forth in such
estoppel letter.
SECTION 10.07. Survival of Seller's Warranties, etc. (a) Except as
otherwise provided in Section 10.06, all of Seller's representations and
warranties contained in this Article X as remade as of the Closing as provided
in Section 10.07(c) and subject to any modifications thereof made in any
certificate provided for in said Section, and all certifications,
representations and warranties made by Seller in the Seller Estoppel, shall
survive until 14 months after the date of the Closing; provided, however, that
(1) the representations and warranties set forth in Section 10.01(k) shall
survive until 18 months after the
36
31
date of the Closing and (2) Seller's liability for any breach of such
warranties, representations and certifications shall not expire as to any breach
or alleged breach thereof if notice of such breach or alleged breach is given by
Purchaser to Seller prior to 14 months after the date of the Closing (or, in the
case of the representations and warranties set forth in Section 10.01(k), 18
months after the date of the Closing) and, if such notice is given, legal
proceedings are instituted in respect of such breach or alleged breach within
one year after such notice is given.
(b) Notwithstanding anything to the contrary set forth in this
Article X, Seller shall have no liability to Purchaser for breach of any
warranty and representation set forth in this Article X or in the Seller
Estoppel or for breach by Seller of any of its agreements set forth in Article
VII unless and except to the extent that the damages due to Purchaser by reason
of all such breaches exceed $50,000, and in no event shall Seller be liable to
Purchaser for consequential damages in respect of any such breach. For purposes
of determining whether the dollar figure set forth in the preceding sentence has
been exceeded, Seller agrees that damages arising from a breach of any warranty
or representation with respect to a Lease, Operating Agreement or Other
Agreement shall be calculated over the entire term (without giving effect to
unexercised renewals) of such Lease, Operating Agreement or Other Agreement.
(c) All of Seller's representations and warranties set forth in this
Article X shall be deemed to have been remade on and as of the Closing Date,
subject, however, to the provisions of Section 10.06 and facts disclosed on the
updated Exhibits to this Agreement which are to be delivered by Seller to
Purchaser at the Closing pursuant to Article V (which updated Exhibits, upon
their delivery by Seller to Purchaser, shall for all purposes of this Agreement
constitute the indicated Exhibit or a part thereof); provided, however, that if
any matter or event shall have occurred between the date hereof and the date of
the Closing which does not result from any intentional act or omission of Seller
(other than one permitted under this Agreement), and which makes any such
warranty or representation untrue in any material respect as of the Closing
Date, Seller shall have the right to deliver a certificate to Purchaser at or
prior to the Closing which discloses such matter or event, and if Seller does
so, Seller shall not be liable to Purchaser following the Closing for the breach
of the warranty or representation in question which results from the occurrence
of such matter or
37
32
thing, but in no event shall Purchaser be obligated to close hereunder unless
the conditions precedent to Purchaser's obligation to close set forth in this
Agreement (including in Section 5.02) shall have been fulfilled.
(d) Notwithstanding anything to the contrary set forth in this
Article X or elsewhere in this Agreement, if prior to the Closing Purchaser has
or obtains knowledge that any of Seller's warranties or representations set
forth in this Article X or Seller's certifications, warranties or
representations made in the Seller Estoppel, is untrue in any respect, and
Purchaser nevertheless proceeds with the Closing, then the breach by Seller of
the warranties, representations or certifications as to which Purchaser shall
have such knowledge shall automatically be deemed waived by Purchaser and Seller
shall have no liability to Purchaser or its successors or assigns in respect
thereof. For the purposes of this Section 10.07(d), Purchaser shall be deemed to
have or to have obtained knowledge of any such matter or thing only if such
matter or thing (i) is set forth in any Lease, Operating Agreements, Other
Agreement or estoppel certificate which (or a copy of which) is stated in this
Agreement to have been delivered to and/or made available for review by
Purchaser, (ii) was contained in any written studies or reports furnished to
Purchaser by any third party consultants retained by it, (iii) was set forth in
a letter, memorandum or other written communication from Purchaser's attorney to
Purchaser in this transaction to Purchaser or (iv) was actually known (without
independent investigation) by, or was contained in a written notice received by,
John N. Foy or H. Jay Wiseman, Jr.
ARTICLE XI
Indemnification
SECTION 11.01. Seller's Indemnification. Seller hereby indemnifies
Purchaser (and its affiliates) for, and defends and holds Purchaser (and its
affiliates) harmless from and against, all costs, losses, damages, penalties,
liabilities and expenses, including without limitation reasonable attorneys'
fees and disbursements (collectively, "Losses"), actually imposed upon or
incurred by Purchaser (or any affiliate thereof) by reason of claims accruing
prior to the Closing Date that are made by any person or entity for personal
injury, death or property damage relating to the Mall.
38
33
SECTION 11.02. Purchaser's Indemnification. Purchaser hereby
indemnifies Seller (and its affiliates) for, and defends and holds Seller (and
its affiliates) harmless from and against, all Losses actually imposed upon or
incurred by Seller (or any affiliate thereof) by reason of claims accruing on or
after the Closing Date made by any person or entity for personal injury, death
or property damage.
SECTION 11.03. Surviving Covenants. The provisions of this Article
XI shall be Surviving Covenants.
SECTION 11.04. No Limitations. Except as specifically limited
herein, nothing contained in this Article XI is in any way intended to limit the
rights of Seller or Purchaser to pursue any remedies as may exist at law or in
equity against any unrelated third parties with respect to any liabilities
covered by this Article XI.
ARTICLE XII
Inspection Period
Purchaser shall have until January 13, 1998 (the "Inspection
Period") to (i) determine whether the aggregate annual income payable to the
owner of the Property pursuant to the Leases and the Operating Agreements that
does not qualify under the REIT income test set forth in Section 856(c)(2) of
the Internal Revenue Code of 1986, as amended, exceeds $100,000 and (ii) to
conduct interviews of any and all tenants of the Property. If Purchaser shall
determine in its sole discretion that the results of the determination described
in (i) above are unsatisfactory or that the results of interviews conducted
pursuant to (ii) above are unsatisfactory, in either such event prior to the end
of the Inspection Period, Purchaser may elect to terminate this Agreement and
abandon the transaction by written notice (a "Termination Notice") to Seller.
Any Termination Notice shall include reasonable detail as to the nature of the
conditions underlying Purchaser's determination. A Termination Notice shall
automatically become effective to terminate this Agreement unless Seller, by
delivery of written notice to Purchaser no more than three (3) Business Days
following Purchaser's delivery of a Termination Notice, elects to suspend the
effectiveness of any such Termination Notice by agreeing to cure all of the
matters specified in such Termination Notice as the basis for Purchaser's
termination within a period specified in such written notice, provided that (i)
such specified period shall in no
39
34
event be longer than 30 days and (ii) the matters specified in such Termination
Notice could reasonably be expected to be cured in all material respects by
Seller within such specified period. If such cure is not effected to Purchaser's
satisfaction (as determined in Purchaser's sole discretion), as evidenced by a
written acknowledgment of Purchaser, on or prior to the end of such 30-day
period, the Termination Notice shall thereupon become automatically effective,
this Agreement shall terminate without any further action of the parties hereto.
Upon the effectiveness of any Termination Notice pursuant to this Article XII,
the Deposit (including any interest earned thereon) shall be immediately
returned to Purchaser by the Escrow Agent and Seller shall have no rights with
respect thereto.
ARTICLE XIII
Assignment
Purchaser shall not, without the prior written consent of Seller,
assign this Agreement or its rights hereunder, in whole or in part, to any other
person or entity other than to one controlled by CBL & Associates Limited
Partnership.
ARTICLE XIV
Notices
All notices hereunder or required by law shall be sent via United
States Mail, postage prepaid, certified mail, return receipt requested, or via
any nationally recognized commercial overnight carrier with provisions for
receipt or via personal delivery, addressed to the parties hereto at their
respective addresses set forth below or as they have theretofore specified by
written notice delivered in accordance herewith:
Purchaser:
Development Options, Inc.
6148 Lee Highway, Suite 300
Chattanooga, TN 37421-2931
Attn: President
40
35
and
CBL & Associates Properties, Inc.
6148 Lee Highway, Suite 300
Chattanooga, TN 37421-2931
Attn: President
with a copy to:
Mary Ann Okrasinski, Esq.
CBL & Associates Properties, Inc.
6148 Lee Highway, Suite 300
Chattanooga, TN 37421-2931
Seller:
Corporate Property Investors
305 East 47th Street
New York, New York 10017
Attn: J. Michael Maloney
with a copy to:
Kevin J. Grehan, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Delivery will be deemed complete upon three business days following
deposit in U.S. Mail with respect to mailed notices and one business day
following deposit with a nationally recognized commercial overnight carrier with
respect to notices transmitted in that manner, but in all events upon actual
receipt or refusal to accept delivery.
ARTICLE XV
Expenses
Seller shall pay its own attorney's fees, the costs incurred to
repay any liens filed against the Real Property required to be removed from
title in accordance with the terms of this Agreement (other than taxes and
assessments which are not yet due and payable) and shall provide to Purchaser an
ALTA/ACSM survey of the Real
41
36
Property. Seller and Purchaser will each pay 50% of the Escrow Holder's escrow
fee, all standard title insurance premiums for an ALTA Owner's title insurance
policy and customary endorsements (excluding any premiums or other costs
incurred in connection with any mortgage financing), and all recording fees,
conveyance, transfer, and intangibles taxes. Purchaser shall pay its due
diligence expenses, including, but not limited to, the cost of any environmental
or engineering studies, it's own attorney's fees, and any title policy premium
or other costs required by any mortgagee of Purchaser.
ARTICLE XVI
Miscellaneous
SECTION 16.01. Successors and Assigns. All the terms and conditions
of this Agreement are hereby made binding upon the executors, heirs,
administrators, successors and permitted assigns of both parties hereto.
SECTION 16.02. Gender. Words of any gender used in this Agreement
shall be held and construed to include, any other gender, and words in the
singular number shall be held to include the plural, and vice versa, unless the
context requires otherwise.
SECTION 16.03. Captions. The captions in this Agreement are inserted
only for the purpose of convenient reference and in no way define, limit or
prescribe the scope or intent of this Agreement or any part hereof.
SECTION 16.04. Construction. No provision of this Agreement shall be
construed by any Court or other judicial authority against any party hereto by
reason of such party's being deemed to have drafted or structured such
provisions.
SECTION 16.05. Entire Agreement. This Agreement constitutes the
entire contract between the parties hereto and there are no other oral or
written promises, conditions, representations, understandings or terms of any
kind as conditions or inducements to the execution hereof and none have been
relied upon by either party.
SECTION 16.06. Cure by Guarantor. Seller agrees that to the extent
Purchaser is afforded any right to cure any default by Purchaser hereunder in
accordance with Section 4.01(b), CBL & Associates Limited Partnership, a
42
37
Delaware limited partnership, may exercise such right (but only during the time
period and to the extent Purchaser could have exercised such right).
SECTION 16.07. Original Document. This Agreement may be executed by
both parties in counterparts in which event each shall be deemed an original.
SECTION 16.08. Governing Law. This Agreement shall be construed, and
the rights and obligations of Seller and Purchaser hereunder, shall be
determined in accordance with the laws of the State of New York.
SECTION 16.09. Operating and Expense Statement. On or before
February 15, 1997, Seller shall provide to Purchaser, at Purchaser's expense,
such certifications from Seller's accountants as Purchaser may reasonably
require in order to meet Purchaser's financial reporting obligations 35 under
Federal securities laws. This provision shall be a Surviving Covenant.
SECTION 16.10. No Third Party Beneficiary. The parties hereto do not
intend to confer any benefit hereunder on any person, firm, corporation or other
entity other than the parties hereto and their permitted assigns.
SECTION 16.11. Exculpation. Corporate Property Investors is the
designation of the Trustees under a Declaration of Trust, as amended and
restated, on file with the Secretary of State of the Commonwealth of
Massachusetts, and neither the shareholders nor the Trustees, officers,
employees or agents of the Trust created thereby, nor any of their personal
assets, shall be liable hereunder, and all persons dealing with the Trust shall
look solely to the Trust estate for the payment of any claims hereunder or for
the performance hereof. In no event whatsoever shall recourse be had or
liability asserted against Purchaser's directors, officers, employees,
shareholders or agents or those of any designee of Purchaser who shall take
title to the Property pursuant to the terms of this Agreement.
SECTION 16.12. No Recording; Confidentiality. (a) The parties agree
that neither this Agreement nor any memorandum or notice hereof shall be
recorded or filed in any public records. If Purchaser violates the terms of this
Article, Seller, in addition to any other rights or remedies it may have, may
immediately terminate this Agreement by giving notice to Purchaser of its
election so to do. The provisions of this Article shall not be construed as
43
38
preventing Purchaser from filing a lis pendens against the Mall in the event it
institutes any litigation against Seller with respect to the transaction
provided for herein and, under applicable law, it is entitled to file such lis
pendens. The provisions of this Article shall survive the Closing or any
termination of this Agreement.
(b) Subject to disclosure obligations required by law, none of
Seller, Purchaser and their respective affiliates shall issue any press release
or otherwise make public any information with respect to this Agreement or the
transaction contemplated hereby prior to the Closing Date without the prior
written consent of the other party. None of Seller, Purchaser and their
respective affiliates shall discuss or disclose the existence of the transaction
contemplated hereby, the terms of this Agreement or the identity of the parties
hereto with any other person, except for those employees, prospective lenders,
advisors, attorneys, consultants and other professionals required to implement
the terms of this Agreement or to assist in Purchaser's due diligence and who
have agreed to maintain the confidentiality of the transaction and the
information they receive, and except to the extent required by law.
SECTION 16.13. Waiver of Trial by Jury. Seller and Purchaser waive
any right to trial by jury of any claim arising under or with respect to this
Agreement, whether now existing or hereafter arising. Seller and Purchaser
hereby agree that any such claim shall be decided by a court trial without a
jury and that any party hereto may file an original counterpart or a copy of
this Section with any court as written evidence of the consent of the other
party hereto to waiver of its right to trial by jury.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
DEVELOPMENT OPTIONS, INC., as
Purchaser,
by /s/ Development Options, Inc.
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
44
39
CORPORATE PROPERTY INVESTORS,
as Seller,
by /s/ Corporate Property Investors
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
Receipt of original copies of this Agreement executed by Seller and
Purchaser is acknowledged this 31st day of December, 1997.
FIRST AMERICAN TITLE INSURANCE
COMPANY, as Escrow Holder,
by /s/ First American Title
Insurance Company
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
45
EXHIBIT E
Limited Warranty Deed
46
EXHIBIT G
BILL OF SALE
Burnsville Center
CORPORATE PROPERTY INVESTORS, a Massachusetts business trust having
an office at Three Dag Hammarskjold Plaza, 305 East 47th Street, New York, NY
10017 ("Seller"), does hereby sell, assign, and transfer to ___________________
______________________________ and having an office at 6148 Lee Highway, Suite
33, Chattanooga, TN 37421-2931 ("Purchaser"), all of the right, title and
interest of Seller in and to all tangible personal property owned by Seller and
used in connection with the operation and maintenance of the land and buildings
known as Burnsville Center located in the County of Dakota, State of Minnesota.
Without limiting the generality of the foregoing, the personal property sold,
assigned and transferred hereby includes the property listed on Exhibit A
("Personal Property").
This Bill of Sale is made without any representation or warranty by
Seller, express or implied, except that Seller warrants to Purchaser that Seller
owns the personal property sold, assigned and transferred hereby, free and clear
of all liens or security interests other than [Permitted Exceptions].
Corporate Property Investors is the designation of the Trustees
under a Declaration of Trust, as amended and restated, on file with the
Secretary of State of the Commonwealth of Massachusetts, and neither the
shareholders nor the Trustees, officers, employees or agents of the Trust
created thereby, nor any of their personal assets, shall be liable hereunder,
and all persons dealing with the Trust shall look solely to the Trust estate for
the payment of any claims hereunder or for the performance hereof.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the __ day
of January, 1998.
CORPORATE PROPERTY INVESTORS
By
-----------------------------------------
47
EXHIBIT H
Assignment of Leases
FOR AND IN CONSIDERATION of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, CORPORATE PROPERTY INVESTORS, a Massachusetts Business
Trust and having an office at Three Dag Hammarskjold Plaza, 305 East 47th
Street, New York, NY 10017, ("Assignor"), does hereby sell, assign, transfer and
set over unto ___________________________________________ and having an office
at 6148 Lee Highway, Suite 300, Chattanooga, TN 37421-2931 ("Assignee"), the
Seller's interest in and to (i) all leases, licenses, concessions and other
forms of agreement, written or oral, however denominated, for occupancy of all
or any portion of the buildings (the "Buildings") located on the land described
on Schedule 1 annexed hereto and made a part hereof (the "Premises") or of any
portion of such land, and all renewals, modifications, amendments, guaranties
and other agreements affecting the same (collectively, the "Space Leases"),
including without limitation those certain Space Leases set forth on Exhibit N
(the "Rent Roll") and incorporated herein by reference, and (ii) all security
deposits, prepaid Rentals, cleaning fees and other deposits, together in each
case with all interest accrued thereon which is payable to tenants or occupants
under the Space Leases as set forth on Exhibit N (the "Rent Roll"), receipt of
which is hereby acknowledged by Assignee (the items described in clauses (i) and
(ii) above, collectively, the "Assigned Interest").
TO HAVE AND TO HOLD the Assigned Interest unto Assignee, its
successors and assigns, forever.
This assignment is made without representation or warranty, express
or implied, by Assignor except that Assignor warrants and represents that it is
the owner of the Assigned Interest, subject only to exceptions to title
permitted under the Purchase and Sale Agreement (as defined below), and that it
has not heretofore assigned or encumbered (except as aforesaid) the Assigned
Interest. Nothing contained in this Agreement shall negate or impair any
warranty or representation made by Assignor in the Purchase and Sale Agreement
dated December 15, 1997 between Assignor, as Seller, and Assignee, as Purchaser
(the "Purchase and Sale Agreement") which, under the terms of such agreement,
survives the Closing thereunder.
Assignee, for itself and its successors and assigns, (i) hereby
accepts the foregoing assignment, (ii) agrees to, and hereby does, assume and
agree to keep,
48
2
pay, perform, observe and discharge all of the terms, covenants, conditions,
agreements, provisions, and obligations contained in the Space Leases to be
kept, paid, performed, observed and discharged by the landlord thereunder (or in
the case of obligations, arising or accruing) from and after the date hereof and
(iii) agrees to, and hereby does, indemnify and hold harmless Assignor from and
against all claims, liabilities, damages and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) which may be asserted
against, imposed on or incurred by Assignor by reason of Assignee's failure to
perform any of its obligations under clause (ii) above, and including, without
limiting the generality of the foregoing, by reason of Assignee's disposition of
any of the security deposits listed on Exhibit N (the "Rent Roll").
Assignor agrees to, and hereby does, indemnify and hold harmless
Assignee from and against any and all claims, liabilities, damages and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
which may be asserted against, imposed on or incurred by Assignee by reason of
Assignor's failure to keep, pay, perform, observe or discharge any of the terms,
covenants, conditions, agreements, provisions or obligations contained in the
Space Leases to be kept, paid, performed, observed and discharged by the
landlord thereunder (or in the case of obligations, arising or accruing) prior
to the date hereof.
Nothing contained in this Assignment of Space Leases shall
constitute or be construed as an assignment by Assignor to Assignee of any
claims, rights or causes of action which Assignor may have against tenants under
Space Leases for rental or other charges due and payable thereunder and properly
allocable to periods prior to the date hereof, it being understood and agreed
that, subject to the Purchase and Sale Agreement, Assignor expressly reserves
all such claims, rights and causes of actions and the right to receive, settle,
waive and/or sue to recover all amounts due under the Space Leases which are
properly allocable to periods prior to the date hereof.
This assignment is delivered pursuant to the Purchase and Sale
Agreement and is subject to the terms and conditions thereof, including without
limitation Section 6.01.
Corporate Property Investors is the designation of the Trustees
under a Declaration of Trust, as amended and restated, on file with the
Secretary of State of the Commonwealth of Massachusetts, and neither the
shareholders
49
3
nor the Trustees, officers, employees or agents of the Trust created thereby,
nor any of their personal assets, shall be liable hereunder, and all persons
dealing with the Trust shall look solely to the Trust estate for the payment of
any claims hereunder or for the performance hereof.
IN WITNESS WHEREOF, this Assignment of Space Leases has been
executed by Assignor and Assignee as of the __ day of January, 1998.
, as
--------------------------------
Assignee,
by
-------------------------------------
--------------------------------
Name:
Title:
CORPORATE PROPERTY INVESTORS,
as Assignor,
by
-------------------------------------
--------------------------------
Name:
Title:
50
EXHIBIT I
Assignment of Operating Agreements
FOR AND IN CONSIDERATION of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, CORPORATE PROPERTY INVESTORS, a Massachusetts Business
Trust and having an office at Three Dag Hammarskjold Plaza, 305 East 47th
Street, New York, NY 10017, ("Assignor"), does hereby sell, assign, transfer and
set over unto _______________________, ______________________________________
and having an office at 6148 Lee Highway, Suite 300, Chattanooga, TN 37421-2931
("Assignee"), Assignor's interest (the "Assigned Interest") as a party to the
operating agreements described in Exhibit C (the "Operating Agreements").
TO HAVE AND TO HOLD the Assigned Interest unto Assignee, its
successors and assigns, forever.
This Assignment is made without representation or warranty, express
or implied, by Assignor except that Assignor warrants and represents that it is
the owner of the Assigned Interest, subject to exceptions to title permitted
under the Purchase and Sale Agreement (as defined below), and that it has not
heretofore assigned or encumbered (except as aforesaid) the Assigned Interest.
Nothing contained in this Assignment shall negate or impair any warranty or
representation made by Assignor in the Purchase and Sale Agreement dated
December 15, 1997 between Assignor, as Seller, and Assignee, as Purchaser (the
"Purchase and Sale Agreement") which, under the terms of such agreement,
survives the Closing thereunder.
Assignee, for itself and its successors and assigns, (i) hereby
accepts the foregoing assignment, (ii) agrees to, and hereby does, assume and
agree to keep, pay, perform, observe and discharge all of the terms, covenants,
conditions, agreements, provisions and obligations contained in the Operating
Agreements to be kept, paid, performed, observed and discharged by Assignor, as
owner thereunder, and arising or accruing from and after the date hereof and
(iii) agrees to, and hereby does, indemnify and hold harmless Assignor from and
against all claims, liabilities, damages and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) which may be asserted
against, imposed on or incurred by Assignor by reason of Assignee's failure to
perform any of its obligations under clause (ii) above.
Assignor agrees to, and hereby does, indemnify and hold harmless
Assignee from and against any and all claims,
51
2
liabilities, damages and expenses (including, without limitation, reasonable
attorneys' fees and disbursements) which may be asserted against, imposed on or
incurred by Assignee by reason of Assignor's failure to pay, perform, observe or
comply with any of the terms, covenants, conditions, agreements, provisions or
obligations contained in the Operating Agreements to be kept, paid, performed,
observed and discharged by Assignor, as owner thereunder, prior to the date
hereof.
Nothing contained in this Assignment of Operating Agreements shall
constitute or be construed as an assignment by Assignor to Assignee of any
claims, rights or causes of action which Assignor may have against any party to
any Operating Agreement for rental or other charges due and payable under the
Operating Agreement and properly allocable to periods prior to the date hereof,
it being understood and agreed that Assignor expressly reserves all such claims,
rights and causes of action and the right to receive, settle, waive and/or sue
to recover all amounts due under such Operating Agreement which are properly
allocable to periods prior to the date hereof.
Corporate Property Investors is the designation of the Trustees
under a Declaration of Trust, as amended and restated, on file with the
Secretary of State of the Commonwealth of Massachusetts, and neither the
shareholders nor the Trustees, officers, employees or agents of the Trust
created thereby, nor any of their personal assets, shall be liable hereunder,
and all persons dealing with the Trust shall look solely to the Trust estate for
the payment of any claims hereunder or for the performance hereof.
IN WITNESS WHEREOF, this Assignment has been executed by Assignor
and Assignee as of the ____ day of January, 1998.
ASSIGNOR:
CORPORATE PROPERTY INVESTORS
by
-------------------------------------
Name:
Title:
52
3
ASSIGNEE:
--------------------------------------------
by
--------------------------------------
Name:
Title:
53
EXHIBIT J
ASSIGNMENT OF OTHER AGREEMENTS
Burnsville Center
FOR TEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby acknowledged, CORPORATE PROPERTY
INVESTORS, a Massachusetts Business Trust organized and having an office at
Three Dag Hammarskjold Plaza, 305 East 47th Street, New York, NY 10017
("Assignor"), does hereby bargain, sell, assign, transfer, set over and deliver
unto _____________________________________ and having an office at 6148 Lee
Highway, Suite 300, Chattanooga, TN 37421-2931 ("Assignee"), all of Assignor's
right, title and interest (collectively, "Assignor's Interest") in and to
contracts and agreements listed on Exhibit D (the "Other Agreements"), which
Other Agreements relate to the real property and the improvements located
thereon more particularly described in Exhibit D (the "Other Agreements").
TO HAVE AND TO HOLD Assignor's Interest in the Other Agreements unto
Assignee, its successors and assigns, forever.
This Assignment is made without representation or warranty, express
or implied, by Assignor, except that Assignor warrants that it owns and has not
heretofore assigned or encumbered (except as set forth in the Purchase and Sale
Agreement mentioned below) its interest in and to any of the Other Agreements.
Without limiting the generality of the foregoing, Assignor does not warrant as
to whether any or all of the foregoing items are, by their terms, assignable.
Nothing contained in this Assignment shall negate or impair any warranty or
representation made by Assignor in the Purchase and Sale Agreement dated
December 15, 1997, between Assignor, as Seller, and Assignee, as Purchaser (the
"Purchase and Sale Agreement") which, under the terms of such agreement,
survives the Closing thereunder.
Assignee, for itself and its successors and assigns, (i) hereby
accepts the foregoing assignment, (ii) agrees to, and hereby does, assume and
agree to keep, pay, perform, observe and discharge all of the terms, covenants,
conditions, agreements, provisions and obligations in the Other Agreements to be
kept, paid, performed, observed and discharged by Assignor thereunder from and
after the date hereof and (iii) agrees to, and hereby does, indemnify Assignor
from and against all claims, liabilities, damages and expenses (including,
without
54
2
limitation, reasonable attorneys' fees and disbursements) which may be incurred
or imposed upon Assignor by reason of Assignee's failure to perform its
obligations under clause (ii) above.
Assignor, for itself and its successors and assigns, agrees to, and
hereby does, indemnify Assignee from and against all claims, liabilities,
damages and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) which may be incurred or imposed upon Assignee by reason of
Assignor's failure to pay, perform, observe and discharge all of the terms,
covenants, conditions, agreements, provisions and obligations in the Other
Agreements prior to the date hereof.
Corporate Property Investors is the designation of the Trustees
under a Declaration of Trust, as amended and restated, on file with the
Secretary of State of the Commonwealth of Massachusetts, and neither the
shareholders nor the Trustees, officers, employees or agents of the Trust
created thereby, nor any of their personal assets, shall be liable hereunder,
and all persons dealing with the Trust shall look solely to the Trust estate for
the payment of any claims hereunder or for the performance hereof.
IN WITNESS WHEREOF, this Assignment has been executed by Assignor
and Assignee as of the ____ day of January, 1998.
ASSIGNOR:
CORPORATE PROPERTY INVESTORS
by
-------------------------------------
Name:
Title:
ASSIGNEE:
--------------------------------------------
by
--------------------------------------
Name:
Title:
55
EXHIBIT L
Operating Agreement Estoppel Certificate
December __, 1997
Development Options, Inc.
6148 Lee Highway, Suite 300
Chattanooga, TN 37421-2931
Re: Burnsville Center
Burnsville, Minnesota
Gentlemen:
The undersigned understands that Development Options, Inc.
("Purchaser") has entered into a contract for the purchase of Burnsville Center
located in Burnsville, Minnesota, (the "Property") and that as a condition
precedent to such acquisition, Purchaser is requiring and will rely upon this
certificate from the undersigned.
The undersigned hereby certifies to Purchaser as well as to any
lender providing financing to Purchaser in connection with its acquisition of
the Property (individually, a "Beneficiary") that:
1. The undersigned is a party to the Operating Agreement described
in Exhibit A annexed hereto, which Operating Agreement has not been modified,
supplemented or amended (orally or in writing) except as set forth in Exhibit A
(as so modified, the "Agreement"). The Agreement contains all of the
understandings and agreements between the owner of the Property (the "Owner")
and the undersigned with respect to the Property and the property owned by the
undersigned at or adjacent to the Property.
2. The Agreement is in full force and effect. As of the date hereof,
the undersigned has not given any notice of default to the Owner under the
Agreement and, to the best
56
2
of the undersigned's knowledge, there are no defaults in the performance of any
provisions contained in the Agreement.
Dated: _________ __, 199_.
Very truly yours,
--------------------------------------------
By:
----------------------------------------
(signature)
----------------------------------------
(title)
57
EXHIBIT O
CERTIFICATION OF NONFOREIGN STATUS
(Entity - Transferor)
Section 1445 of the Internal Revenue Code provides that a transferee
(buyer) of a U.S. real property interest must withhold tax if the transferor
(seller) is a foreign person. To inform the transferee (buyer) that withholding
tax is not required upon the disposition of a U.S. real property interest by
(Name of Transferor) _______________the undersigned hereby certifies the
following:
(1) _______________________ is not a foreign corporation, foreign
partnership, foreign trust, or foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code and Income Tax
Regulations);
(2)______________________________ U.S. employer identification
number is _____________________;
(3) ______________________________ office address is
_______________________________________________; and
(4) The address of the real property being transferred is
___________________________________.
______________________________ understands that this certification
may be disclosed to the Internal Revenue Service by transferee and that any
false statement contained herein could be punished by fine, imprisonment, or
both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and I further
58
2
declare that I have authority to sign this document on behalf of
___________________________ .
Date: ____________, 199_
-----------------------------------
NAME OF ENTITY
By:
----------------------------------------
By:
----------------------------------------
By:
----------------------------------------
Sworn to before me this
____ day of ________, 199_.
- ------------------------------------
Notary Public
59
EXHIBIT T
GENERAL ASSIGNMENT
Burnsville Center
FOR TEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby acknowledged, CORPORATE PROPERTY
INVESTORS, a Massachusetts Business Trust and having an office at Three Dag
Hammarskjold Plaza, 305 East 47th Street, New York, NY 10017 ("Assignor"), does
hereby bargain, sell, assign, transfer, set over and deliver unto
____________________________________________________ having an office at 6148
Lee Highway, Suite 300, Chattanooga, TN 37421-2931 ("Assignee,"), all of
Assignor's right, title and interest (collectively, "Assignor's Interest") in
and to the following relating to the real property and the improvements located
thereon:
1. All warranties and guarantees of manufacturers, suppliers and
contractors, to the extent the same are assignable;
2. All permits of governmental authorities, and licenses and
approvals of private utilities and others, required for or necessary to the
operation and maintenance of the Mall, to the extent the same are assignable and
relate to the Mall;
3. All cash security deposits held by any utility with respect to
the Mall (as defined in the Purchase and Sale Agreement described below);
4. The Intangible Personal Property (as defined in the Purchase and
Sale Agreement described below);
5. All site plans, surveys, plans or specifications and floor plans
relating to the Mall;
6. All traffic pattern and similar studies, all architectural and
engineering plans (whether "as built" or design), including, without limitation,
any such plans relating to any proposed expansion or renovation, and any
feasibility or marketing studies prepared by third parties for Assignor or any
affiliate of Assignor;
7. all catalogues, booklets, manuals, files, logs, records,
correspondence, tenant lists, tenant prospect lists, tenant histories, tenant
files, brochures and materials, advertisements and other similar intangible
60
2
property directly relating to the Mall or any part thereof.
TO HAVE AND TO HOLD Assignor's Interest in the foregoing items
hereby assigned unto Assignee, its successors and assigns, forever.
This Assignment is made without representation or warranty, express
or implied, by Assignor, except that Assignor warrants that it has not
heretofore assigned or encumbered (except as set forth in the Purchase and Sale
Agreement mentioned below) Assignor's Interest in and to any of the items
assigned hereby. Without limiting the generality of the foregoing, Assignor does
not warrant as to whether any or all of the foregoing items are, by their terms,
assignable or the nature of the right, if any, of Assignor in and to the Names
under which the Premises is currently being operated. Nothing contained in this
Assignment shall negate or impair any warranty or representation made by
Assignor in the Purchase and Sale Agreement dated December 15, 1997, between
Assignor, as Seller, and Assignee, as Purchaser (the "Purchase and Sale
Agreement") which, under the terms of such agreement, survives the Closing
thereunder.
Assignor agrees to and shall, at Assignee's expense, cooperate with
Assignee as reasonably necessary to secure performance by any guarantor or
warrantor under any guaranty or warranty hereby assigned of any work Assignee
reasonably believes should be performed by such guarantor or warrantor pursuant
to any such guaranty or warranty.
Corporate Property Investors is the designation of the Trustees
under a Declaration of Trust, as amended and restated, on file with the
Secretary of State of the Commonwealth of Massachusetts, and neither the
shareholders nor the Trustees, officers, employees or agents of the Trust
created thereby, nor any of their personal assets, shall be liable hereunder,
and all persons dealing with the Trust
61
3
shall look solely to the Trust estate for the payment of any claims hereunder or
for the performance hereof.
IN WITNESS WHEREOF, this General Assignment has been executed by
Assignor as of the ____ day of January, 1998.
ASSIGNOR:
CORPORATE PROPERTY INVESTORS
by
--------------------------------------
Name:
Title:
ASSIGNEE:
----------------------------------------
by
--------------------------------------
Name:
Title:
62
EXHIBIT W
Special Assessments
None.