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EXHIBIT 2.4
AGREEMENT OF PURCHASE AND SALE
TANASBOURNE TOWN CENTER PHASE I SHOPPING CENTER
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AND
BOLD, L.L.C.
AND
OPUS NORTHWEST, L.L.C.
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TABLE OF CONTENTS
PAGE
1. RECITALS ....................................................................................................1
1.01 Definitions.............................................................................................1
1.02 Land/Improvements.......................................................................................1
1.03 Real Property...........................................................................................1
1.04 Contractor..............................................................................................1
2. AGREEMENT TO PURCHASE AND SELL ..............................................................................1
2.01 Purchase/Sale...........................................................................................2
3. PURCHASE PRICE AND MANNER OF PAYMENT ........................................................................2
3.01 Purchase Price..........................................................................................2
3.02 Purchase Price Portions.................................................................................2
4. ESCROW....... ...............................................................................................3
4.01 Escrow Agent............................................................................................3
4.02 Filings.................................................................................................3
5. SITE ANALYSIS ...............................................................................................4
5.01 Site Analysis Documents.................................................................................4
5.02 Access..................................................................................................5
5.03 Site Analysis Period....................................................................................5
5.04 Cure of Unacceptable Conditions.........................................................................6
6. SURVEY AND TITLE INSURANCE ..................................................................................7
6.01 Survey..................................................................................................7
6.02 Title Commitment........................................................................................8
6.03 Purchaser's Objections; Seller's Cure...................................................................8
6.04 Title Policy............................................................................................9
7. SELLER'S CLOSING DOCUMENTS AND ESCROW .......................................................................9
7.01 Deed....................................................................................................9
7.02 Assignment of Leases...................................................................................10
7.03 Leases and Tenant Documents............................................................................10
7.04 Bill of Sale...........................................................................................10
7.05 Assignment of Contracts................................................................................10
7.06 Violations/Work Orders Affidavit.......................................................................10
7.07 Keys...................................................................................................10
7.08 Plans and Specifications...............................................................................11
7.09 Title Insurance Affidavit..............................................................................11
7.10 FIRPTA Certificate/Withholding.........................................................................11
7.11 Form 1099..............................................................................................11
7.12 Books and Records......................................................................................11
7.13 Letters to Tenants.....................................................................................11
7.14 Recording Requirements.................................................................................11
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7.15 Estoppel Certificates..................................................................................11
7.16 Termination of Management and Seller Affiliated Contracts..............................................12
7.17 Permits/Guaranties.....................................................................................12
7.18 Closing Statements.....................................................................................12
7.19 Escrow Instructions....................................................................................12
7.20 Date Down Certificate..................................................................................12
7.21 Agreement Estoppel Certificate.........................................................................13
7.22 Reserved Lots Covenant.................................................................................13
7.23 Vacant Space Acknowledgment............................................................................13
7.24 Best Products Subdivision..............................................................................13
7.25 Allocable Share Agreement..............................................................................13
7.26 Assignment of Declaration..............................................................................13
7.27 Other Documents........................................................................................13
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS ..............................................................13
8.01 Assignment of Leases...................................................................................14
8.02 Assignment of Contracts................................................................................13
8.03 Closing Statements.....................................................................................13
8.04 Escrow Instructions....................................................................................14
8.05 Recording Requirements.................................................................................14
8.06 Date Down Certificate..................................................................................14
8.07 Project Covenant.......................................................................................14
8.08 Allocable Share Agreement..............................................................................14
8.09 Best Products Subdivision..............................................................................14
8.10 Vacant Space Acknowledgment............................................................................14
8.11 Other Documents........................................................................................14
9. CONDUCT OF BUSINESS PRIOR TO CLOSING .......................................................................14
9.01 Affirmative and Negative Covenants.....................................................................14
9.02 Payments...............................................................................................16
9.03 Lien Removal...........................................................................................16
10. REPRESENTATIONS AND WARRANTIES .............................................................................17
10.01 Seller's Representations and Warranties...............................................................17
10.02 Purchaser's Representations and Warranties............................................................21
10.03 Intentionally Deleted.................................................................................22
10.04 Indemnification.......................................................................................22
11. SHARED CLOSING COSTS AND OTHER EXPENSES ....................................................................23
11.01 Expenses..............................................................................................23
11.02 Shared Closing Costs..................................................................................23
12. CONDITIONS... ..............................................................................................24
12.01 Purchaser's Conditions................................................................................24
12.02 Seller's Conditions...................................................................................24
12.03 Rights Upon Failure of a Condition....................................................................25
13. EARN-OUT..... ..............................................................................................25
13.01 Defined Terms.........................................................................................25
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13.02 Closing Date Purchase Price Computation...............................................................28
13.03 Lease Assignment Reservation..........................................................................28
13.04 New Leases............................................................................................28
13.05 Earn-Out Period.......................................................................................30
13.06 Casualty During Earn-Out Period.......................................................................31
13.07 Earn-Out Payments.....................................................................................31
13.08 Footage Payment.......................................................................................32
13.09 Intentionally Deleted.................................................................................33
13.10 Seller's New Lease Obligations........................................................................33
13.11 Punchlist.............................................................................................33
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS .....................................................................34
14.01 Rents.................................................................................................34
14.02 Arrears...............................................................................................35
14.03 Unknown Rents.........................................................................................35
14.04 Utilities.............................................................................................36
14.05 Contracts.............................................................................................36
14.06 Taxes.................................................................................................36
14.07 Assessment Installments...............................................................................37
14.08 Permits...............................................................................................38
14.09 Security Deposits/Tenant Inducements..................................................................38
14.10 Customary Items.......................................................................................38
15. CLOSING.....................................................................................................38
15.01 Closing Contingency and Closing Date..................................................................38
16. POSSESSION... ..............................................................................................38
16.01 Possession and Post Closing Work......................................................................38
17. RISK OF LOSS ...............................................................................................39
17.01 Risk..................................................................................................39
17.02 Damage and Destruction................................................................................39
17.03 Condemnation and Eminent Domain.......................................................................40
18. DEFAULTS AND REMEDIES ......................................................................................40
18.01 Seller's/Contractor's Defaults........................................................................40
18.02 Purchaser's Defaults..................................................................................41
18.03 Seller's Remedies.....................................................................................41
18.04 Purchaser's Remedies..................................................................................41
18.05 Post Closing Purchaser's Remedies.....................................................................42
19. CROSS DEFAULT OBLIGATION....................................................................................42
20. ASSIGNMENT..................................................................................................42
21. NOTICES.....................................................................................................43
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22. ATTORNEYS' FEES AND DISBURSEMENTS...........................................................................44
23. NO CONSEQUENTIAL DAMAGES....................................................................................45
24. MISCELLANEOUS ..............................................................................................45
24.01 Successors............................................................................................45
24.02 Modifications/Waivers.................................................................................45
24.03 Entire Agreement......................................................................................45
24.04 Counterparts..........................................................................................45
24.05 Captions..............................................................................................45
24.06 Gender/Singular/Plural................................................................................45
24.07 Exhibits Incorporated.................................................................................45
24.08 Governing Law.........................................................................................46
24.09 Severability..........................................................................................46
24.10 Date for Performance..................................................................................46
24.11 Further Action........................................................................................46
24.12 Intentionally Deleted.................................................................................46
24.13 Confidentiality.......................................................................................46
24.14 Time of the Essence...................................................................................46
24.15 Construction..........................................................................................46
24.16 Interest..............................................................................................47
24.17 Warranty Work.........................................................................................47
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AGREEMENT OF PURCHASE AND SALE
TANASBOURNE TOWN CENTER PHASE I SHOPPING CENTER
This Agreement of Purchase and Sale (the "Agreement") is made as of the
2nd day of July, 1996, by and between BOLD, L.L.C., a Delaware limited liability
company ("Seller"); OPUS NORTHWEST, L.L.C., a Delaware limited liability company
("Contractor"); and DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio
corporation ("Purchaser"). Seller and Purchaser (singularly, a "Party,"
collectively, the "Parties") agree as follows:
1. RECITALS.
1.01 DEFINITIONS. The location of all defined terms used in this Agreement are
set forth in the Glossary of Terms that is attached hereto and made a part
hereof.
1.02 LAND/IMPROVEMENTS. Seller is the sole owner of fee simple title to (i)
certain land (the "Land") situated in the City of Hillsboro, State of Oregon,
more particularly described on Schedule 1.02 attached hereto and made a part
hereof which shall include all residual land and outlots, except the Best
Products and Hollywood Video pad (collectively, "Best Products Pad") and Outlots
7 and 8 (collectively, "Reserved Lots"), as shown on the site plan attached
hereto as Schedule 1.02(a) (the "Site Plan"); and (ii) all the buildings,
structures and improvements (collectively, the "Improvements") situated on the
Land. The Reserved Lots are not included in the Land and are reserved unto
Seller; and
1.03 REAL PROPERTY. Seller desires to sell, and Purchaser desires to purchase,
the Land and Improvements owned by Seller, and all of Seller's right, title and
interest in and to all rights, privileges, options, leases, licenses,
concessions, hereditaments, appurtenances, easements and rights of way in any
manner belonging to or pertaining to the Land and the Improvements, including
without limitation, rights in and to any streets, alleys or other ways adjacent
to the Land, open or proposed, and the fixtures in or upon the Land and the
Improvements owned by Seller. The Land, the Improvements and all of the items
mentioned in this Paragraph 1.03 are hereinafter collectively referred to as the
"Real Property" and are commonly known as "Tanasbourne Town Center (Phase I)
Shopping Center"; and
1.04 CONTRACTOR. Contractor was the prior owner of the Real Property. Contractor
sold the Real Property to Seller and pursuant thereto undertook, for the benefit
of Seller, certain obligations with respect to the development of the Real
Property. As a result, in fulfillment of the performance of said obligations to
Seller, Contractor is a party to this Agreement for (i) the performance of those
obligations for the benefit of Purchaser specifically set forth in Sections
5.04, 10.04, 13.10, 13.11, 16.01 and 24.17 hereof, and (ii) the making of those
representations and warranties specifically set forth in Paragraph 10.01(viii),
(ix), (xi), (xii), (xiv), (xxii) and (xxvi).
2. AGREEMENT TO PURCHASE AND SELL.
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2.01 PURCHASE/SALE. Upon and subject to the terms and conditions set forth in
this Agreement, Seller agrees to sell and Purchaser agrees to purchase all of
the following that is hereinafter collectively referred to as the "Project":
(a) The Real Property;
(b) All tangible personal property (the "Personal Property") owned by
Seller that is now or hereafter located upon the Real Property and used in
connection with the ownership, operation, management, or maintenance of the Real
Property and that is set forth on Schedule 2.01(b) attached hereto;
(c) All intangible personal property (the "Intangible Property") owned
by Seller that is now or is hereafter located upon the Real Property or is used
in connection with the Real Property, including without limitation, (i) all
trade names, logos and telephone numbers, excluding those tradenames or logos
depicting or containing the name or trademark of Bold, L.L.C. or its affiliates
(including any Opus company) and excluding telephone numbers not exclusively
used in connection with the Project; (ii) all Guaranties (as hereinafter
defined) given by Seller or any third party contractors (including Contractor),
subcontractors, vendors and suppliers relating to their performance, quality of
workmanship and quality of materials supplied in connection with the
construction or repair of the Improvements or the purchase of any Personal
Property to the extent any Guaranties remain outstanding as of the Closing Date
(as hereinafter defined) that are set forth on Schedule 5.01(g) attached hereto,
and (iii) to the extent transferable by Seller, all of Seller's right, title and
interest in certificates of occupancy (or the local equivalent), permits,
licenses, approvals and authorizations (collectively, the "Permits") issued by
any federal, state, county and municipal governmental or quasi-governmental
authority relating to the Real Property.
3. PURCHASE PRICE AND MANNER OF PAYMENT.
3.01 PURCHASE PRICE. The total sum (the "Purchase Price") to be paid by
Purchaser to Seller for the sale of the Project is the sum of the Closing
Payment and those Footage Payments and Earn-Out Payments, if any (as those terms
are hereinafter defined), computed, in part, in respect to the base rents set
forth in the Rent Roll attached hereto as Schedule 3.01, all as provided in
Section 13 hereof. The actual amount of the Purchase Price is subject to the
computations and elections provided in Section 13 hereof and subject to the
adjustments, if any, provided in Section 14 hereof. Portions of the Purchase
Price will be paid at various times as hereinafter provided.
3.02 PURCHASE PRICE PORTIONS. The Purchase Price shall be paid as follows:
(a) Lump Sum Payment. $1,080,123.00 ("Lump Sum Payment"),
which Purchaser shall deposit with Seller on the closing date, if it
occurs, under the terms of that certain Other Sale Agreement for Maple
Grove Crossing, by and between Purchaser, as
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purchaser thereunder, and Opus Corporation, as the Other Seller ("Maple
Grove Agreement"). The Lump Sum Payment, for and in consideration of
Seller entering into this Agreement, permitting Purchaser to perform
Tests and Studies (as hereinafter defined) and, among other
consideration, taking the Project off of the market during the Site
Analysis Period (as hereinafter defined), shall be retained and deemed
earned by Seller on the first to occur of the termination of this
Agreement for any reason whatsoever (including a default by Seller),
and the Closing Date.
(b) Initial Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Initial Deposit"), which Purchaser deposited with Escrow
Agent simultaneous with the execution of this Agreement by Purchaser and Seller.
(c) Second Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Second Deposit") which Purchaser shall deposit with Escrow
Agent (as hereinafter defined) on the expiration date of the Site Analysis
Period, if Purchaser elects to proceed with this transaction, as more fully
provided in Paragraph 5.03 below (the Initial Deposit and the Second Deposit are
hereinafter collectively referred to as the "Deposit"). The term "Deposit" shall
be deemed to include all interest accruing on the Deposit during the term of
this Agreement.
(d) Closing Date Price. So much of the Purchase Price computed
in accordance with the provisions of Paragraph 13.02 hereof that is payable as
of the Closing Date, after giving credit for the Lump Sum Payment, Deposit and
after making the adjustments, if any, as provided in Section 14 hereof, shall be
paid by wired funds to the Escrow Agent for disbursement to Seller on the
Closing Date by not later than 2:00 P.M. Central Daylight Savings Time.
(e) Earn-Out Period Payments. As provided in Paragraph 13.07,
those Earn-Out Payments that are payable during, or in some instances, after the
Earn-Out Period (as hereinafter defined) shall be paid by wired funds to the
Escrow Agent for disbursement to Seller when required by the provisions of
Paragraph 13.07.
(f) Footage Payment. As provided in Paragraph 13.08, if a
Footage Payment (as hereinafter defined) is payable, it shall be paid by wired
funds to the Escrow Agent for disbursement to Seller when required pursuant to
Paragraph 13.08.
4. ESCROW.
4.01 ESCROW AGENT. The Parties hereby designate First American Title Insurance
Company as the escrow agent ("Escrow Agent" or "Title Company"). By execution of
this Agreement, Escrow Agent agrees to be bound by the terms and conditions of
this Agreement which relate to the Escrow Agent and its rights and obligations
hereunder.
4.02 FILINGS. The Parties hereby designate Escrow Agent to serve as "Real Estate
Broker," as defined in Section 6045 of the Internal Revenue Code, as amended,
for the purpose of making such reports and filing such returns as shall be
required thereunder from time to time.
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5. SITE ANALYSIS.
5.01 SITE ANALYSIS DOCUMENTS. To the extent not heretofore delivered, promptly
after the execution of this Agreement, Seller agrees (i) to make available for
inspection at reasonable times by Purchaser and its agents any and all
documents, instruments, surveys, reports, plans, permits, approvals, studies,
reviews, analyses, contracts, agreements and other materials relating to the
acquisition, development, construction, ownership and operation of the Project
that are in Seller's possession or under its control, and (ii) to deliver to
Purchaser true and correct copies of the following documents (in respect to
clause (ii) collectively hereafter referred to as "Site Analysis Documents"):
(a) "As-built" survey of the Project showing the location of
all Improvements thereon and any easements encumbering the Project.
(b) Soil, topographical, and other reports relating to the
Project, including the environmental reports set forth on Schedule 5.01(b)
("Environmental Reports") attached hereto.
(c) Operating statements and records sufficient to accurately
show all revenues, income, costs and expenses of operating and maintaining the
Project for the period on and after the opening of the Project for business.
(d) All written contracts for repair, maintenance, garbage
removal, concessions, vending, service contracts, and other services to be
performed with respect to the Project.
(e) All Leases (as hereinafter defined) and all written
licenses, concessions and tenancies with Tenants (as hereinafter defined)
occupying or having the right to occupy any portion of the Project, and Seller's
written statement of any oral leases, licenses, concessions and tenancies with
tenants, licensees, concessionaires or others occupying or having the right to
occupy or use any portion of the Project, if any.
(f) All architectural drawings, engineering studies, plans and
specifications relating to the original and current construction of the Project
(hereinafter collectively referred to as "Plans").
(g) All warranties and guaranties that remain outstanding as
of the Closing Date that have been given by Seller or any third party
contractors, subcontractors, vendors and suppliers relating to their
performance, quality of workmanship and quality of materials supplied in
connection with the construction, manufacture, development, installation and
operation of the Improvements, Personal Property and any and all fixtures,
equipment and items of personal property comprising all or any part of the
Improvements located in or used in connection with the Project (collectively
hereinafter referred to as "Guaranties"), all of which are set forth on Schedule
5.01(g) attached hereto.
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5.02 ACCESS. Seller acknowledges that to enable Purchaser to proceed with this
transaction, Purchaser already has and, during the Site Analysis Period (as
hereinafter defined) may undertake or cause to have undertaken tests and
studies, including, but not limited to, marketing, engineering, environmental,
feasibility and soil that Purchaser, in its reasonable discretion, deems
necessary to determine the feasibility of its acquisition of the Project
(hereinafter collectively referred to as "Tests and Studies"). The Tests and
Studies conducted by or on behalf of Purchaser and the restoration of the
Project in respect thereto as hereinafter provided shall be done in such a
fashion so as to not disrupt the ordinary course of business of Seller or any of
the Tenants, New Tenants (as hereinafter defined) or Seller's contractors or
subcontractors, including the Contractor.
Purchaser and its agents, contractors or employees shall have
the right to enter upon the Project for the purpose of performing its Tests and
Studies, provided said activities (i) shall not (y) in any way damage the
Project in such a fashion or to a degree that prevents its restoration by
Purchaser as hereafter provided substantially to the condition of the Project
that existed immediately prior thereto, or (z) void or make voidable any
Guaranties of portions thereof (but in any event subject to Seller's prior
consent that shall not be unreasonably withheld or delayed), and (ii) Seller or
its designated agents have the right to participate in (provided Seller and its
agents do not interfere with) such Tests and Studies. Purchaser shall give
Seller twenty-four (24) hour advance notice before Purchaser and its agents,
contractors or employees enter upon the Project. In the event this Agreement
fails to close for any reason, except for Seller's willful refusal to convey
(absent a material default hereunder by Purchaser) title to the Land as required
hereunder, or Seller acknowledges or it is subsequently determined that Seller
is in material default hereunder ("Restoration Forgiveness"), Purchaser shall
restore the Project to substantially the same condition that existed immediately
prior to such surveying, inspecting and testing that was undertaken by or on
behalf of Purchaser prior to the date of this Agreement or during the Site
Analysis Period. Except in the instance of a Restoration Forgiveness, Purchaser
shall keep the Project free of all liens in connection with the Tests and
Studies and shall cause all such liens to be removed immediately upon its being
notified of same. Except in the instance of a Restoration Forgiveness, Purchaser
agrees to indemnify, defend and hold Seller harmless against any liabilities,
claims and damages, including, without limitation, any property damage, personal
injury or claim of lien against the Project resulting from the activities
permitted by this Paragraph 5.02 (including, without limitation, reasonable
attorneys' fees and expenses paid or incurred by Seller during litigation, if
any), which indemnity shall survive the Closing Date or the expiration,
cancellation or termination of this Agreement.
5.03 SITE ANALYSIS PERIOD. Purchaser shall have the Site Analysis Period in
which to conduct the Tests and Studies and to ascertain whether the Project is
acceptable to Purchaser. "Site Analysis Period" shall mean the period expiring
on June 17, 1996. If the Project is determined to be unacceptable to Purchaser,
for any reason whatsoever, in Purchaser's sole discretion, Purchaser shall have
the right to terminate this Agreement by giving written notice of termination on
or prior to the date of expiration of the Site Analysis Period, in which event
the Deposit shall be returned to Purchaser and the Lump Sum Payment shall be
retained and deemed earned by Seller. In accordance with the provisions of
11.02(b) hereof, Seller and Purchaser shall each pay 50% of the Shared Closing
Costs incurred as of the termination date, and neither
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of the Parties nor Contractor shall have any further rights or obligations
hereunder, except those specifically provided herein that survive the
termination of this Agreement. A failure to so notify Seller of Purchaser's
election to terminate or proceed with this Agreement as aforesaid prior to the
expiration of the Site Analysis Period shall be deemed as notice to Seller that
Purchaser has elected to terminate this Agreement as aforesaid.
5.04 CURE OF UNACCEPTABLE CONDITIONS. Any of the Tests and Studies of Purchaser
and/or its agents or representatives conducted during the Site Analysis Period
that discloses that there are (i) any defects or deficiencies of the Project in
respect to its compliance with any and all codes, ordinances, statutes, Permits,
approvals or licenses issued in respect to the Project or promulgated by any
federal, state, county or municipal governmental or quasi-governmental authority
which are required by such governmental or quasi-governmental authority to
correct; (ii) defects in the materials or workmanship of the Project from that
which is required to be in substantial compliance with the Plans, except that
portion thereof, if any, that relates to materials for, or workmanship of
improvements constructed or to be constructed on behalf of Tenants or New
Tenants that form a part of Post Closing Work (as hereinafter defined); or (iii)
a violation of Environmental Laws (as hereinafter defined) not disclosed on the
Environmental Reports that, in respect to clauses (i), (ii) and (iii), can be
corrected and cured for an estimated aggregate cost (in respect to the Project)
not to exceed One Hundred Thousand Dollars ($100,000.00), shall be collectively
hereinafter referred to as "Unacceptable Conditions." It is understood that
regardless of the cost, the Warranty Work obligations set forth in Paragraph
24.17 hereof shall not be included as an Unacceptable Condition in respect to
the $100,000.00 limitation and the cost of performing Warranty Work shall be in
addition to any cost for curing or correcting Unacceptable Conditions. In the
event Purchaser discovers what it deems to be Unacceptable Conditions as a
result of the Tests and Studies, Purchaser shall notify ("Condition Notice")
Seller and Contractor, in writing, of the same promptly following Purchaser's
discovery thereof, but in no instance later than three (3) business days
following the expiration of the Site Analysis Period. Such Condition Notice
shall include a copy of those portions of the Tests and Studies disclosing such
Unacceptable Condition(s). Within ten (10) days following Seller's receipt of
the Condition Notice, if any, Seller and Contractor shall advise ("Condition
Response") Purchaser, in writing, of Seller's and Contractor's good faith
determination and estimate of (1) those matters contained in the Condition
Notice that do not qualify as Unacceptable Conditions; (2) the time within which
the remaining matters contained in the Condition Notice will be cured or
corrected; and (3) the aggregate cost to Seller and Contractor of curing and
correcting such remaining matters. In the event the Condition Response is
unacceptable to Purchaser, Seller, Contractor and Purchaser shall promptly meet
and confer, in good faith, to attempt to resolve the unacceptable aspects to
Purchaser of the differences between the Condition Notice and the Condition
Response or the time within which or the aggregate cost for which Seller and
Contractor estimated in the Condition Response for curing or correcting as
aforesaid. In the event Seller, Contractor and Purchaser are unable to resolve
such differences, Purchaser may elect to (a) terminate this Agreement, (b)
proceed to Closing in respect to Seller's and Contractor's obligations to cure
or correct those matters set forth in the Condition Response, modified, if at
all, as a result of the aforesaid conference between Purchaser, Seller and
Contractor (provided the estimated aggregate cost of performing the same does
not exceed $100,000.00 or such greater amount Seller and Contractor in their
sole discretion, have agreed to expend), or (c) select those
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specific line items from the Condition Response that Purchaser requires to have
corrected (provided the estimated aggregate cost of performing the same does not
exceed $100,000.00). Purchaser, within ten (10) business days after such
conference, shall advise Seller and Contractor, in writing, of Purchaser's
election. If the Condition Notice, Condition Response or the time periods
specified above for elections of Purchaser extend beyond the Closing Date, the
Closing Date shall be extended to the date five (5) business days subsequent to
the date Purchaser elects, if at all, to proceed with the Closing. In the event
Purchaser elects to terminate this Agreement, the Deposit shall be returned to
Purchaser, the Lump Sum Payment shall be retained and deemed earned by Seller,
Purchaser and Seller shall each pay fifty percent (50%) of the Shared Closing
Costs incurred as of the termination date, and neither of the Parties nor
Contractor shall have any further rights or obligations hereunder, except those
specifically provided herein that survive the termination of this Agreement. In
the event Purchaser elects to proceed to Closing pursuant to clause (b) above,
the matters contained in the Condition Response, modified, if at all, by
Purchaser's, Seller's and Contractor's conference and provided the estimated
aggregate cost of curing or correcting the same is One Hundred Thousand and
no/100 ($100,000.00) or less (or such greater amount Seller and Contractor
accept as aforesaid) shall be deemed to be the Unacceptable Conditions to which
Seller and Contractor are bound. In the event Purchaser elects to proceed to
Closing pursuant to clause (c) above, the specific line items selected by
Purchaser that are set forth in the Condition Response (provided the estimated
aggregate cost of curing or correcting the same is $100,000.00 or less) shall be
deemed to be the Unacceptable Conditions to which Seller and Contractor are
bound. Thereafter, Contractor on behalf of Seller and for the benefit of
Purchaser shall undertake to cure or correct such Unacceptable Conditions, at
its sole cost and expense (regardless of the actual cost ultimately incurred by
Contractor in respect thereto) within the time (subject to Force Majeure, as
hereinafter defined) set forth in the Condition Response. The obligation of
Contractor to cure or correct such Unacceptable Conditions shall survive the
Closing. In the event (y) Contractor fails to commence the cure of an
Unacceptable Condition(s) on or prior to the time specified in the Condition
Response for the cure thereof, or (z) Contractor commences the cure of an
Unacceptable Condition(s), but fails to complete such cure prior to the time
specified in the Condition Response (subject to Force Majeure), Purchaser may
off-set so much of any Earn-Out Payment or Footage Payment subsequently payable
by Purchaser hereunder by the amount of the reasonable costs and expenses
incurred by Purchaser for undertaking and completing the uncured Unacceptable
Condition(s). The curing or correcting of any Unacceptable Condition shall be
done in accordance with the Plans. However, if such curing or correcting
requires a variance from the Plans, Seller shall not undertake such variance
without obtaining Purchaser's prior written consent, which consent shall not be
unreasonably withheld or delayed.
6. SURVEY AND TITLE INSURANCE.
6.01 SURVEY. Seller shall cause an "as-built" Survey (the "Survey") of the Real
Property to be updated during the Site Analysis Period. The Survey shall be
certified to Seller, Purchaser, and the Title Company. The Survey shall satisfy
all of the requirements set forth on
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Schedule 6.01 that is attached to and made a part of the Exhibit Agreement (as
hereinafter defined).
6.02 TITLE COMMITMENT. During the Site Analysis Period, to the extent not
theretofore delivered, Seller shall (i) cause the Title Company to issue and
deliver to Purchaser a title insurance commitment for an owner's extended
coverage policy of title insurance, in the amount of that portion of the
Purchase Price then estimated to be payable to Seller on the Closing Date,
committing the Title Company to insure Purchaser as the owner of fee simple
title to the Real Property and all easements appurtenant thereto (the
"Commitment"), and (ii) copies of each document described on Schedule B of the
Commitment.
6.03 PURCHASER'S OBJECTIONS; SELLER'S CURE. Other than those title exceptions
("Permitted Exceptions") set forth in Schedule 6.03 attached hereto and made a
part hereof, which shall include the plat of subdivision, party-wall agreement
and Allocable Share Agreement set forth in Paragraphs 7.24, 7.25, 8.08 and 8.09
hereof, and exceptions caused by or claimed under or through Seller that will be
removed at Closing (as hereinafter defined) if (i) the Commitment reveals any
other matters or exceptions ("Title Defects"), or (ii) the Survey reveals any
defects which affect the marketability of the Real Property or are deemed
objectionable by Purchaser ("Survey Defects"), Purchaser shall notify Seller, in
writing, of the same within fifteen (15) days following the date of delivery to
Purchaser of the last of the Commitment and Survey ("Defects Notice"). In the
event Purchaser fails to deliver a Defects Notice as aforesaid, Seller shall
advise Purchaser of such failure, in writing. If Purchaser fails, within three
(3) business days thereafter to deliver a Defects Notice, it shall be deemed a
notice to Seller that Purchaser has elected to waive such defects, if any, and
to proceed with the transaction contemplated hereby, subject to the fulfillment
of Seller's obligations hereunder. Except for Title Defects or Survey Defects
that are caused by or claimed under or through Seller that can be removed or
discharged by the payment of a sum of money (including, without limitation, a
Mortgage(s), as hereafter defined), Seller shall have no affirmative obligation
to cure or correct any Title Defects or Survey Defects, except as provided in
Seller's Response (as hereinafter defined). Within fifteen (15) days following
Seller's receipt of a Defects Notice, Seller, at its option, shall notify
Purchaser of those Title Defects and Survey Defects that Seller shall undertake
to cure or correct ("Seller's Response"). In the event Seller (a) elects in
Seller's Response not to satisfy a specified Title Defect or Survey Defect or
(b) is unable, within sixty (60) days after Purchaser's receipt of Seller's
Response, to satisfy the Title Defect or Survey Defect which Seller had elected
in Seller's Response to so satisfy, Purchaser may, at its option, (1) accept
title to the Real Property subject to the Title Defects and/or Survey Defects
raised by Purchaser in which event such Title Defects and Survey Defects shall
be deemed to be Permitted Exceptions, or (2) cancel this Agreement and receive a
full refund of the Deposit, whereupon Seller shall pay all Shared Closing Costs,
the Lump Sum Payment shall be retained and deemed earned by Seller, and this
Agreement shall be of no further force and effect, except for those matters
which are specifically set forth in this Agreement as surviving the expiration
or termination of this Agreement. If the Defects Notice, Seller's Response or
the time periods specified above for elections of Purchaser extend beyond the
time specified for the Closing Date, the Closing Date shall be extended to the
date five (5) business days subsequent to the date Purchaser elects, if at all,
to proceed with the Closing.
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6.04 TITLE POLICY. It shall be a condition precedent to Purchaser's obligation
to consummate the transaction contemplated by this Agreement that the Title
Company can and will issue an ALTA Owner's Policy of Title Insurance (Form B,
Amended 1987 or such other Owner's Policy that is the custom of the Title
Company to issue in the State or Oregon, provided such Owner's Policy contains a
waiver of creditors' rights) (the "Title Policy") in the full amount of that
portion of the Purchase Price payable by Purchaser on the Closing Date as
provided in Paragraph 13.02 hereof, insuring Purchaser as the owner in fee
simple of the Project, and all appurtenant easements thereto, free and clear of
all liens and encumbrances, except for the Permitted Exceptions, and without
exception for rights or claims of parties in possession not shown by the public
records, encroachments, overlaps, boundary line disputes, or any other matter
disclosed by the Survey which Purchaser has not waived or approved or is deemed
to have approved pursuant to Paragraph 6.03 hereof, provided, however, that the
Title Policy may show the rights of the Tenants and New Tenants (as hereinafter
defined) under New Leases (as hereinafter defined) that are fully executed prior
to the Closing as parties in possession (or right to possession) as tenants
only. Purchaser shall attempt to cause the Title Company, as part of the Title
Policy, to issue the following endorsements in the form of those set forth in
Schedule 6.04 attached hereto ("Endorsements"): CC&R Endorsement (unless
easements appurtenant to the Project are additionally insured parcels on
Schedule A of the Title Policy, Access, Survey, Contiguity (but only to the
extent of contiguous portions of the Land as depicted on Schedule 1.02 attached
hereto), Encroachment, and Zoning 3.1 (with parking). Any Survey or physical
inspection requirements imposed as a condition to the issuance of the Title
Policy may be satisfied by Seller as a Shared Closing Cost, except costs and
expenses in respect to correcting Survey Defects which shall be paid by Seller.
Seller shall execute such affidavits and certificates as the Title Company may
require as a condition to the issuance of the Title Policy, and a copy of each
such affidavit or certificate shall be delivered to Purchaser. In addition, as
part of the Shared Closing Costs, Seller shall cause (i) the Title Policy to be
dated down (or reissued) to the date each Earn-Out Payment (as hereinafter
defined) is paid during or after the Earn-Out Period showing no new exceptions,
except the Permitted Exceptions, the subject or previous New Leases, and
exception caused, permitted or claimed by, through or under Purchaser or its
successors and assigns; and (ii) the amount of the Title Policy's coverage to be
increased to an amount that equals the subject Earn-Out Payment.
7. SELLER'S CLOSING DOCUMENTS AND ESCROW.
At Closing, Seller shall execute and deliver the following
documents to Escrow Agent:
7.01 DEED. A signed bargain and sale deed in the form and substance (modified
for the subject jurisdiction) attached to the Exhibit Agreement as Schedule 7.01
(the "Deed") conveying to Purchaser, good, indefeasible and insurable title to
the Real Property and the Improvements, free and clear of all liens and
encumbrances of any type whatsoever, except for the Permitted
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Exceptions. The Permitted Exceptions shall be specifically, and not
categorically, excepted from the warranty of title in the Deed.
7.02 ASSIGNMENT OF LEASES. An assignment (the "Lease Assignment") in the form
attached to the Exhibit Agreement as Schedule 7.02 of all (except in respect to
the Assignment Reservation as provided in Paragraphs 13.03, 14.01, 14.02 and
14.03 hereof) of the Seller's right, title and interest as lessor under the
leases, tenancies, occupancy agreements, rental agreements, options, licenses
and concessions, and all of the foregoing (hereinafter collectively referred to
as the "Leases") which are described on Schedule 7.02(a) attached hereto, and
all New Leases that are fully executed prior to the Closing, together with all
security deposits, cleaning deposits, key deposits and advance rental payments
(collectively, the "Security Deposits") made by the lessees, tenants, occupants,
optionees, licensees and concessionaires (collectively, the "Tenants") and New
Tenants under the Leases and subject New Leases.
7.03 LEASES AND TENANT DOCUMENTS. All original copies of the Leases and New
Leases that are fully executed prior to Closing, Tenant and the subject New
Tenant financial statements, their sales reports and other Tenant and the
subject New Tenant related documents, and to the extent, if any, that original
copies are not delivered, Seller shall deliver copies which shall be accompanied
by an affidavit sworn to by Seller confirming that the copies delivered are true
and complete copies of the originals.
7.04 BILL OF SALE. A bill of sale in the form attached to the Exhibit Agreement
as Schedule 7.04, transferring and conveying to Purchaser all of Seller's right,
title and interest to the Personal Property and the Intangible Property.
7.05 ASSIGNMENT OF CONTRACTS. An assignment (the "Contract Assignment") in the
form attached to the Exhibit Agreement as Schedule 7.05, of all of Seller's
right, title and interest as the owner of the Project under the service
contracts and agreements, personal property leases and agreements (collectively,
the "Contracts") which are described on Schedule 7.05(a) attached hereto and
which have been approved by Purchaser as being those Contracts that are assigned
to Purchaser pursuant to the Contract Assignment.
7.06 VIOLATIONS/WORK ORDERS AFFIDAVIT. An affidavit, in form and substance of
Schedule 7.06 attached to the Exhibit Agreement, confirming that Seller has
complied with and discharged (or, to the extent Seller has not complied with and
discharged, an explanation of that which remains to be done to cause compliance
and discharge) (i) all notices, if any, that either Seller or its management
agent managing the Real Property received concerning any and all uncured
violations (the "Violations") of any law, statute, ordinance, regulation, rule,
requirement, order, judgment or decree enacted, adopted, imposed, issued,
entered or filed by any governmental authority (concerning or affecting the
Project or any part thereof), and (ii) all work orders concerning the Project or
any part thereof, if any (the "Work Orders") issued by any insurance carriers
insuring a risk in respect to the Project.
7.07 KEYS. All keys to the Project.
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7.08 PLANS AND SPECIFICATIONS. To the extent not delivered prior to Closing Date
as part of the Site Analysis Documents, all Plans.
7.09 TITLE INSURANCE AFFIDAVIT. Any affidavit required by the Title Company to
remove the standard printed exceptions from the Title Policy.
7.10 FIRPTA CERTIFICATE/WITHHOLDING. A certificate in the form and substance
attached to the Exhibit Agreement as Schedule 7.10 ("FIRPTA Affidavit").
7.11 FORM 1099. Any information with respect to Seller in connection with the
conveyance of the Real Property by Seller to Purchaser required by either (i)
IRC Sec. 6045 or Treas. Regs. Sec. 1.6045, or (ii) Treas. Form 1099 or its
instructions. If required thereby, the Escrow Agent shall timely (x) prepare and
file a Form 1099 in accordance with the provisions of Treas. Regs. Sec. 1.6045,
and (y) furnish the Parties with copies.
7.12 BOOKS AND RECORDS. Copies of all accounting books and records relating to
the operation and maintenance of the Project.
7.13 LETTERS TO TENANTS. Letters in the form and substance set forth in Schedule
7.13 that is attached to the Exhibit Agreement (the "Tenant Letters") addressed
to the Tenants and New Tenants of New Leases executed prior to Closing and
signed by Seller, advising the Tenants of the sale of the Project and the
Purchaser's right to receive the Rents (as hereinafter defined) under their
respective Leases.
7.14 RECORDING REQUIREMENTS. All documents and affidavits required of Seller to
record the Deed.
7.15 ESTOPPEL CERTIFICATES. An estoppel certificate in the form and substance
set forth in Schedule 7.15 that is attached to the Exhibit Agreement ("Tenant
Estoppel") showing no material exceptions that is executed (not more than
forty-five (45) days prior to the Closing Date or such earlier date Purchaser
reasonably accepts, except in the instance of Haggen, as hereinafter defined,
whose Tenant Estoppel shall not be dated more than thirty (30) days prior to the
Closing Date) by (i) all Tenants or New Tenants of Leases and New Leases that
are Qualified Leases (as hereinafter defined) on or prior to the Closing Date
that have demised to them space in the Project containing 7,500 square feet or
more, and (ii) at least eighty percent (80%) (calculated on a square foot basis)
of all Tenants or New Tenants of Leases or New Leases that are Qualified Leases
on or prior to the Closing Date that have demised to them space in the Project
containing less than 7,500 square feet. To the extent Seller is unable to
deliver to Purchaser Tenant Estoppels from all or any of the remaining Tenants
or New Tenants in the Project under such Qualified Leases in respect to premises
containing less than 7,500 square feet or a Tenant Estoppel in respect to a
premises that is 7,500 square feet or less that contains a material exception
noted by the applicable Tenant or New Tenant, Seller shall be entitled to
deliver to Purchaser Seller's estoppel certificate ("Seller's Estoppel"), in
form and substance reasonably acceptable to Purchaser, confirming the terms and
conditions of the Lease or subject New Lease for which a Tenant Estoppel was not
delivered to Purchaser or, if delivered, that contains a
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material exception. Such Seller's Estoppel shall be deemed a representation and
warranty by Seller as to the terms and conditions of the subject Lease or New
Lease, and the Seller's Estoppel shall not be subject to the time limitation for
claims set forth in Paragraph 10.04(b) hereof. After the Closing, when and as
Purchaser receives a Tenant Estoppel (without material exception) for which
Seller delivered a Seller's Estoppel, the subject Seller's Estoppel shall be
released by Purchaser and returned to Seller and shall be deemed to be of no
further force and effect.
7.16 TERMINATION OF MANAGEMENT AND SELLER AFFILIATED CONTRACTS. Notwithstanding
any other provision of this Agreement, in respect to any agreements or contracts
that are not to be included as part of the Contract Assignment, agreements
("Termination Agreements") signed by (i) the parties to any management agreement
for the Real Property, and (ii) the parties to all other such agreements or
contracts between the Seller or its predecessors in interest and parties
affiliated with or controlled by Seller or any of Seller's principals, which
Termination Agreements terminate such management agreement and other such
agreements and contracts as of the Closing Date, without any liability or
obligation on the part of the Purchaser or the Project.
7.17 PERMITS/GUARANTIES. Original or copies of Permits and originals of the
Guaranties which, in each instance, Seller agrees to keep in full force and
effect, and to comply with all of the terms and conditions thereof prior to
Closing.
7.18 CLOSING STATEMENTS. Closing Statements executed by Seller.
7.19 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the Closing.
7.20 DATE DOWN CERTIFICATE. A certificate of Seller (the "Seller Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 7.20 certifying that Seller's representations and warranties set forth
in Paragraph 10.01 of this Agreement are true and correct as of the Closing Date
as modified by the Schedules that are attached hereto pursuant to Paragraph
10.01 hereof updated to the Closing Date. In the event any updated Schedules
disclose a material deviation from the prior applicable Schedule as reasonably
determined by Purchaser, Purchaser shall have three (3) business days from the
date Purchaser receives a copy of the Seller Date Down Certificate in which to
elect to terminate this Agreement or to proceed with the Closing. In the event
Purchaser fails to notify Seller, in writing, of Purchaser's election to
terminate this Agreement, it shall act as notice to Seller that Purchaser has
elected to terminate this Agreement. In the event Purchaser elects to terminate
this Agreement, the Deposit shall be refunded to Purchaser, the Lump Sum Payment
shall be retained and deemed earned by Seller, Purchaser and Seller shall each
pay fifty percent (50%) of the Shared Closing Costs, and this Agreement shall be
of no further force and effect, except in respect to those provisions
specifically provided herein as surviving the termination of this Agreement.
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7.21 AGREEMENT ESTOPPEL CERTIFICATE. An estoppel certificate in form and
substance attached hereto as Schedule 7.21 ("Agreement Estoppel") showing no
material exceptions that are executed by each party to those easement agreements
or other agreements or undertakings (including, but not limited to, development
agreements) affecting the Project on and after the Closing Date that require the
performance of obligations by the owner of the Project and the approval of such
performance by the other party to the same that are identified by Purchaser to
Seller, in writing, not less than fifteen (15) days prior to the Closing Date.
To the extent such Agreement Estoppel shows a material exception or the party to
such easement agreements or other agreements or undertakings identified by
Purchaser as aforesaid fails to deliver an Agreement Estoppel, Seller shall be
entitled to deliver its undertaking confirming, in form and substance reasonably
acceptable to Purchaser, the terms and conditions of the Agreement Estoppel to
the extent applicable in the form attached hereto as Schedule 7.21, and such
confirmation by Seller shall not be subject to the time limitation for claims
set forth in Paragraph 10.04(b) hereof. After the Closing, when and as Purchaser
receives an Agreement Estoppel for which Seller delivered its undertaking as
aforesaid, the subject undertaking shall be released by Purchaser and returned
to Seller and shall be deemed to be of no further force and effect.
7.22 RESERVED LOTS COVENANT A declaration encumbering title to the Reserved Lots
in respect to the exclusion of uses thereon that violate any of the exclusive
uses permitted under Leases or New Leases for the Project as of the Closing
Date, in form and content reasonably acceptable to Seller and Purchaser.
7.23 VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the location within the
Project of any space that is Vacant Space as of the Closing.
7.24 BEST PRODUCTS SUBDIVISION. To the extent not executed by Seller prior to
the Closing Date, a plat of subdivision subdividing the Best Products Pad from
the rest of the Project. The plat of subdivision shall be in form and content
reasonably acceptable to Purchaser and Seller.
7.25 ALLOCABLE SHARE AGREEMENT. The Allocable Share Agreement in the form
attached hereto as Schedule 7.25.
7.26 ASSIGNMENT OF DECLARATION. An Assignment of Declaration in the form
attached hereto as Schedule 7.26 assigning to Purchaser Seller's rights under
the terms of the Reciprocal Easement Agreement that is a Permitted Encumbrance.
7.27 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the transaction contemplated by this Agreement.
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS.
At Closing, Purchaser shall execute and deliver the following
to Escrow Agent:
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8.01 ASSIGNMENT OF LEASES. The Lease Assignment, acknowledging the assumption by
Purchaser of Seller's obligations under the Leases which accrue after the
Closing Date.
8.02 ASSIGNMENT OF CONTRACTS. The Contract Assignment, acknowledging the
assumption by Purchaser of Seller's obligations under the Contracts which accrue
after the Closing Date.
8.03 CLOSING STATEMENTS. Closing Statements executed by Purchaser.
8.04 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the Closing.
8.05 RECORDING REQUIREMENTS. All documents and affidavits required of Purchaser
to record the Deed.
8.06 DATE DOWN CERTIFICATE. A certificate of Purchaser (the "Purchaser Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 8.06 certifying that Purchaser's representations and warranties set
forth in Paragraph 10.02 of this Agreement are true and correct as of the
Closing Date.
8.07 PROJECT COVENANT. A declaration encumbering title to the Project in respect
to exclusion of uses thereon that violate any of the exclusive uses permitted
under that certain lease pursuant to which Best Products is the tenant on the
Best Products Pad.
8.08 ALLOCABLE SHARE AGREEMENT. The Allocable Share Agreement in the form
attached hereto as Schedule 7.25.
8.09 BEST PRODUCTS SUBDIVISION. To the extent not executed by Seller prior to
the Closing Date, a plat of subdivision subdividing the Best Products Pad from
the rest of the Project. The plat of subdivision shall be in form and content
reasonably acceptable to Purchaser and Seller.
8.10 VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the location within the
Project of any space that is Vacant Space as of the Closing.
8.11 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the transaction contemplated by this Agreement.
9. CONDUCT OF BUSINESS PRIOR TO CLOSING.
9.01 AFFIRMATIVE AND NEGATIVE COVENANTS. Until Closing, Seller shall or cause
to:
(i) Subject to Casualty or any Taking (as those terms are
hereinafter defined), maintain the Real Property and Personal Property in good
condition and repair and not commit or permit waste;
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(ii) Carry on its business in respect to the Project in the
same manner as it has heretofore;
(iii) Keep in full force and effect all insurance coverage
required to be maintained by it pursuant to the Leases, applicable New Leases,
the Mortgages, the Permitted Exceptions, and any easement agreements or other
agreements or undertakings affecting the Project;
(iv) Perform all of its obligations under the Contracts,
Leases, applicable New Leases, Mortgages, Permitted Exceptions and any easement
agreements or other agreements or undertakings affecting the Project;
(v) Maintain and preserve its business organization intact;
(vi) Maintain and preserve its relations with the Tenants, New
Tenants under New Leases that are fully executed prior to the Closing, suppliers
and customers;
(vii) Except as provided in Paragraph 13.04 hereof, not
voluntarily terminate, amend, modify, extend, renew, waive or accept the
surrender of any Lease or New Lease or provision thereof, without Purchaser's
prior consent, which consent shall not be unreasonably withheld or delayed;
(viii) Not voluntarily terminate, amend, modify, extend,
renew, waive or accept the cancellation of any Contract, Permitted Exception or
any easement agreements or other agreements or undertakings affecting the
Project or any provision of any of them, without the Purchaser's prior consent,
which consent shall not be unreasonably withheld or delayed;
(ix) Except as provided in Paragraph 13.04 hereof, not
voluntarily enter into, accept or consent to any new (a) lease, occupancy
agreement, subtenancy agreement, license agreement, concession agreement, (b)
contract or agreement, personal property lease or agreement, and/or (c) lien,
encumbrance, or security interest (including without limitation, mortgage, deed
of trust, security agreement, assignment of leases or rents, collectively,
"Mortgage") or other title exception or defect (including without limitation,
easement, restriction, dedication), which shall not be terminated on or before
Closing without the Purchaser's prior consent, which consent shall not be
unreasonably withheld or delayed;
(x) Not commence any action or proceeding or petition, apply
for or consent to any action or proceeding, the effect of which may be to change
the zoning of the Project or its assessed valuation (except for entering into
New Leases);
(xi) Not sell, assign or transfer the Project or any part
hereof (except in the instance of New Leases as provided in Paragraph 13.04
hereof), including without limitation, the Intangible Property and the Personal
Property; provided, however, that Seller may remove
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Personal Property for the purpose of promptly effecting necessary repairs or
immediate replacement with Personal Property of like character and equal or
better quality;
(xii) Not demolish or materially alter the Improvements or any
part thereof or otherwise adversely affect the value of the Project, without
Purchaser's prior consent, which consent shall not be unreasonably withheld or
delayed, except for (1) curing Unacceptable Conditions, Title Defects and Survey
Defects, (2) completing Punchlist Work (as defined and provided in Paragraph
13.11 hereof), (3) constructing tenant improvements for Leases, (4) performing
Seller's New Lease Obligations (as defined and provided in Paragraph 13.10
hereof), and (5) completing, in accordance with the Plans, any incomplete work.
(xiii) Except as provided in Paragraph 9.01(xii) above, not
materially alter the Land or any part thereof, including without limitation, by
mining, excavating, removing topsoil, timbering or changing the grade, without
Purchaser's prior consent, which consent shall not be unreasonably withheld or
delayed.
9.02 PAYMENTS. As more fully set forth in Paragraph 16.01 hereof, (i) Punchlist
Work; (ii) curing Unacceptable Conditions; (iii) constructing tenant
improvements for Leases and New Leases; (iv) all other work to be performed and
all payments to be made by Seller pursuant to the provisions of the Leases, the
Contracts, the Permitted Exceptions, and any insurance policy maintained by
Seller providing coverage for the Project which pertain to obligations that
accrue prior to the Closing; and (v) Warranty Work shall be completely performed
and paid for when due (subject to the right to contest Liens as provided in
Paragraph 9.3 hereof) by Seller and the obligation thereof shall survive the
Closing.
9.03 LIEN REMOVAL. Except for (i) taxes not yet due and payable as of the
Closing, (ii) installments of special assessments due and payable after the
Closing, and (iii) Liens (as hereinafter defined and provided) that are either
bonded or insured over in a form reasonably satisfactory to Purchaser, all other
liens and encumbrances of ascertainable amounts incurred by Seller or by, for or
on behalf of Seller, except the Permitted Exceptions, shall be removed from the
record by Seller or Seller shall make arrangements satisfactory to the Title
Company for the removal of, or title insurance over (in form reasonably
satisfactory to Purchaser), such liens and encumbrances of record on the Closing
Date. Notwithstanding the foregoing, any liens or encumbrances attaching to the
title of the Real Property as a result of work performed on or material supplied
to the Project by Seller or on behalf of anyone claiming by, through or under
Seller (except Tenants and New Tenants under Qualified Leases, as hereinafter
defined) or as a result of Seller's failure to pay, when due, a Commission
(collectively, "Lien" or "Liens") may be contested by Seller as hereafter
provided. Within thirty (30) days after the recording of a Lien that is recorded
or filed after the Closing, Seller shall, at its election, either (i) bond over
the same, or (ii) cause the Title Company to insure over the same (in form and
substance reasonably satisfactory to Purchaser), in order, in the instances of
either clause (i) or (ii) above, to reasonably protect the Purchaser and the
Project (or any part thereof) from and against the subject Lien. Thereafter, in
the manner elected by Seller, Seller may contest such Lien provided that, within
thirty (30) days following the entry by a court of competent jurisdiction of a
final judgment or decree in favor of the claimant of such Lien, Seller shall pay
and satisfy such Lien and cause it to
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be released of record. In the event Seller fails to pay and satisfy any Lien
within thirty (30) days following the entry by a court of competent jurisdiction
of a final judgment or decree in favor of the claimant of such Lien or fails to
bond over or insure over a Lien as provided in this Paragraph 9.03, Purchaser
may offset so much of any Earn-Out Payment or Footage Payment subsequently
payable by Purchaser hereunder by the amount incurred by Purchaser for
effectuating the satisfaction and release of the subject Lien.
10. REPRESENTATIONS AND WARRANTIES.
10.01 SELLER'S REPRESENTATIONS AND WARRANTIES. Contractor represents and
warrants to Purchaser in respect to sub-paragraphs (viii), (ix), (xi), (xii),
(xiv), (xxii), and (xxvi) in this Paragraph 10.01, and Seller represents and
warrants to Purchaser in respect to all of the sub-paragraphs in this Paragraph
10.01, except sub-paragraph (xxvi), that:
(i) Seller is a Delaware limited liability company duly
created and validly existing pursuant to the laws of the jurisdiction of its
organization and is duly qualified to do business in the jurisdiction in which
the Project is situated.
(ii) Seller is authorized and empowered to enter into this
Agreement and to perform all of its obligations under this Agreement without any
qualification whatsoever, and no consent or approval of any third party
(including, without limitation, any governmental or quasi-governmental
authority) is or was required by Seller to execute and deliver this Agreement or
consummate this transaction.
(iii) Upon the signing and delivery of this Agreement, this
Agreement will be legally binding upon Seller in accordance with all of its
provisions, except as such provisions may be qualified or limited by bankruptcy,
creditor's rights and equitable principles.
(iv) The person signing this Agreement on behalf of Seller has
been duly authorized to sign and deliver this Agreement on behalf of Seller.
(v) To the best of its Knowledge (as hereinafter defined),
Seller has not committed any act or permitted any action to be taken which would
materially adversely affect its ability to fulfill all of its obligations under
this Agreement.
(vi) The execution and delivery of this Agreement, and the
performance of Seller's obligations under this Agreement, will not violate or
breach, or conflict with, the terms, covenants or provisions of any agreement,
contract, note, Mortgage, indenture or other document of any kind whatsoever to
which Seller is a party or to which the Project is subject.
(vii) Seller has received no written notice and Seller has no
Knowledge of any uncured Work Order, or unfulfilled requirements or
recommendations issued, imposed or made by any insurers concerning the Project
or any part thereof.
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(viii) To the best of its Knowledge, (i) Seller is not in
default of any obligation of Seller under any Mortgage, and (ii) Seller and/or
the Project is in compliance with all terms and conditions of the Permitted
Exceptions, including any easement agreement or other agreement or undertaking
affecting the Project.
(ix) To the best of Seller's Knowledge, the Project was
constructed, and is presently being operated, occupied and used in substantial
accordance with all applicable federal, state and local laws, rules, regulations
and ordinances governing the construction, operation, occupation and use of the
Project, and no variances to any applicable federal, state or local law, rule,
regulation or ordinance were granted in connection with the construction of the
Project.
(x) To the best of Seller's Knowledge, there is (i) no pending
or contemplated Taking affecting the Project or any part thereof, or (ii) no
pending or contemplated public improvement in or about the Real Property which
may in any manner affect access to or from the Project or increase the taxes
assessed against the Project.
(xi) To the best of Seller's Knowledge, except for the Vacant
Space (as hereinafter defined), Seller is in receipt of all Permits required by
all governmental authorities for the construction currently being prosecuted at
the Project and the operation, occupation and use of the Project as a shopping
center; all Permits are in full force and effect; and all Permits issued to the
Project are described on Schedule 10.01(xi) attached hereto and made a part
hereof.
(xii) Neither Seller, nor, to the best of Seller's Knowledge
(except as disclosed in the Environmental Reports), any prior owner of the
Project has: (a) caused or permitted the generation, manufacture, refinement,
transportation, treatment, storage, handling, installation, removal, disposal,
transfer, production or processing of Hazardous Substances (as hereinafter
defined) or other dangerous or toxic substances, or solid wastes, except in
strict compliance with all laws; (b) caused or permitted or received any written
notice or have any actual knowledge of the Release (as hereinafter defined) or
existence of any Hazardous Substances on or about the Project or property
surrounding the Project which might affect the Project; (c) caused or permitted
or received any written notice or have any actual knowledge of any substances or
conditions on or about the Project or on property surrounding the Project which
may support a claim or cause of action, whether by any governmental authority or
any other person, under any laws ("Environmental Laws") in effect as of the date
of this Agreement and all rules and regulations promulgated thereunder,
including, but not limited to: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq. (the
"Superfund Act"); the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6921 et seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601
et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Section 136; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et
seq.; the Federal Solid Waste Disposal Act, 42 U.S.C. Sections 6901 et seq.; the
Clean Air Act, 42 U.S.C. Sections 7401 et seq.; or any other law. For the
purposes of this Agreement the terms "Hazardous Substances" and "Release" shall
have the definitions used in the Superfund Act; provided, however, that the
definition of the term
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"Hazardous Substances" shall also include (if not included within the definition
contained in the Superfund Act), petroleum and related by products,
hydrocarbons, radon, asbestos, urea formaldehyde and polychlorinated biphenyl
compounds.
(xiii) Except for the Permitted Exceptions, Seller is the sole
owner of good, indefeasible and insurable fee simple title to the Land and the
Improvements, and Seller has not executed or entered into any other agreement to
purchase, sell, option, lease or otherwise dispose or alienate all or any
portion of the Project other than this Agreement, the Leases and New Leases.
(xiv) Subject to the right of Seller to contest Liens as
provided in Paragraph 9.03 hereof, all labor and services performed and material
furnished to the Project have been paid for or will be paid for in full by
Seller, and, to the best of Seller's Knowledge, there exists no valid basis for
which a Lien or similar lien can properly be claimed against the Project or any
part thereof.
(xv) As of the date hereof, Schedule 7.02(a) attached hereto
is a complete and correct list of all Leases, and the information disclosed on
Schedule 7.02(a) is accurate with respect to each of the Leases.
(xvi) Leasing commissions or fees that are payable in
connection with any leasing agreement or registration statement to which Seller
is a party or that Seller has accepted, in writing, that pertains to New Leases
(that will be paid by Seller as provided in Paragraph 13.11 hereof), and the
Leases described in Schedule 7.02(a), and commissions resulting from any other
agreement to which Seller is a party relating to the Project (collectively,
"Commissions") will be paid by Seller when due under the applicable leasing
agreement or registration statement.
(xvii) Except as set forth on Schedule 10.01(xvii) attached
hereto, as of the date hereof, (1) none of the Tenants or New Tenants of Leases
and New Leases that are Qualified Leases as of Closing have been granted any
economic or financial concession or inducement (collectively, "Tenant
Inducement") that will not be paid in full by Seller when required in accordance
with the applicable provisions of the subject Lease and New Lease, and (2) none
of the subject Tenants or New Tenants have deposited Security Deposits with
Seller, except those disclosed on Schedule 7.02(a) attached hereto.
(xviii) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xviii) attached hereto, as of the date hereof, no Tenant or
New Tenant of Leases or New Leases that are Qualified Leases as of the Closing
has alleged an event of default on the part of Seller which is presently
outstanding, or that Seller has not fulfilled all of its obligations under the
subject Leases or New Leases which are conditions of the obligations of such
Tenants and New Tenants to pay the Rents, including without limitation, all
work, repairs and improvements required to be furnished by Seller pursuant to
such Leases and New Leases.
(xix) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xix) attached hereto, as of the date hereof, (1) none of the
Tenants or New Tenants under
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Leases or New Leases that are Qualified Leases as of the Closing are in default
of any of their obligations under their respective Leases and New Leases, and
(2) no event has occurred which, with the giving of notice, the passage of time,
or both, would constitute an event of default by such Tenant or New Tenant.
(xx) Except as set forth on Schedule 10.01(xx) attached
hereto, as of the date hereof, Seller has no notice and to the best of Seller's
Knowledge, no Tenant or New Tenant under a New Lease that is fully executed
prior to Closing has advised Seller, orally or in writing, that any Tenant or
any subject New Tenant intends to give up physical or legal possession of its
demised premises, including without limitation: assigning its lease; subletting
all or part of its demised premises; vacating its demised premises;
discontinuing the operation of its business at its demised premises;
surrendering possession of its demised premises; or terminating its Lease or
subject New Lease.
(xxi) There are no employees of Seller that are assigned to
the Project for which Purchaser shall have any obligations after the Closing.
(xxii) A description of all Guaranties relating to the
construction and equipment of the Project received by Seller that, by their
terms, are in effect on or after the Closing Date are true, correct and
complete, and all Guaranties issued with respect to the Project that, by their
terms, are in effect on or after the Closing Date are described on Schedule
5.01(g) attached hereto.
(xxiii) Seller has not dealt with any broker, finder or other
person in connection with this transaction, who is entitled to any Commission,
finder's fee or similar payment as a result of the acts of Seller or its agents,
except (1) as pertains to New Leases, and in such event, all Commissions in
connection therewith shall be paid by Seller as provided in Paragraph 13.11
hereof, and (2) as pertains to Commissions not yet due and payable in respect to
Leases which shall be paid by Seller when required in respect to such Leases.
Seller acknowledges that it has conversed with Eugene Faigus and Chadwick &
Saylor in connection with this transaction, but that Seller has not agreed to be
obligated to pay any fee or other compensation to either or both of them.
(xxiv) Seller has no actual Knowledge that any of the written
information provided to Purchaser by Seller or on its behalf in connection with
this transaction (including without limitation, the warranties and
representations set forth in this Agreement), is inaccurate or incomplete or
contains any untrue statement of fact.
(xxv) To the best of Seller's Knowledge, copies of documents
furnished or to be furnished to Purchaser by Seller or on its behalf in
connection with this transaction are true and complete copies of the originals.
(xxvi) As of the Closing, Contractor's net worth, determined
in accordance with generally accepted accounting principals consistently
applied, is greater than $5,000,000.00, exclusive of goodwill.
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The term "Knowledge" when used in the context of "to the best of Seller's
Knowledge" (or any derivative form thereof) shall mean the actual (written or
oral), not imputed, knowledge of Keith Bednarowski, Dan F. Nicol, Anne E. Loff,
Harry DeMar (Seller's Project Manager) or Jim Hamm (Seller's Development
Manager).
10.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants to Seller that:
(i) Purchaser is an Ohio corporation, duly organized and
validly existing pursuant to the law of the jurisdiction of its organization.
(ii) Purchaser is authorized and empowered to enter into this
Agreement and perform all of its obligations under this Agreement without any
qualification whatsoever.
(iii) No consent or approval of any third party (including
without limitation, any governmental or quasi-governmental authority) is or was
required by Purchaser to execute and deliver this Agreement or consummate this
transaction.
(iv) Upon the signing and delivery of this Agreement, it will
be legally binding upon Purchaser in accordance with all of its provisions,
except as such provisions may be qualified or limited by bankruptcy, creditor's
rights and equitable principles.
(v) The person signing this Agreement on behalf of Purchaser
has been duly authorized to sign and deliver this Agreement on behalf of
Purchaser.
(vi) To the best of Purchaser's Knowledge (as hereinafter
defined), Purchaser has not committed any act or permitted any action to be
taken which would materially adversely affect its ability to perform all of its
obligations under this Agreement.
(vii) The execution and delivery of this Agreement by
Purchaser and Purchaser's performance of it obligations under this Agreement
shall not conflict with any law, statute, ordinance, regulation, order,
directive or decree of any governmental or quasi-governmental authority or any
contract, other agreement or obligation to which Purchaser is a party or is
otherwise bound.
(viii) Except for Eugene Faigus and Chadwick & Saylor, neither
Purchaser nor its agents have dealt with any broker, finder or other person in
connection with this transaction who is entitled to any Commission or similar
payment as a result of the acts of Purchaser or its agents.
(ix) All copies of documents furnished or to be furnished to
Seller by Purchaser or on its behalf in connection with this transaction are
true and complete copies of the originals.
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The term Purchaser's Knowledge, when used in the context of "to the best of
Purchaser's Knowledge" (or any derivative form thereof) shall mean the actual
(written or oral), not imputed, knowledge of Scott Wolstein, James A. Schoff or
Joan U. Allgood.
10.03 INTENTIONALLY DELETED
10.04 INDEMNIFICATION.
(a) Except as limited by the provisions of Paragraph 23
hereof, the Parties shall indemnify and hold each other harmless, from and
against all damages, costs, expenses, liabilities, penalties and fines,
including without limitation, attorneys fees, disbursements, expert witness
fees, paralegal fees, reporters fees, reproduction and printing costs, including
any of the foregoing which are incurred in connection with any appeal, and
amounts paid in settlement of claims (collectively, in respect to the foregoing
inclusion, "Litigation Expenses" ), paid or incurred by the other Party as a
result of any representation or warranty of the respective Party set forth in
this Agreement not being true and correct in all material respects when made. In
addition, the indemnity provisions of this Paragraph 10.04(a) on behalf of the
Purchaser shall pertain to any claims, demands, actions, causes of action,
judgments or decrees made against or entered against Seller in respect to any
Commissions or other compensation claimed or demanded by either Eugene Faigus or
Chadwick & Saylor in connection with the terms of this Agreement.
(b) Notwithstanding the foregoing, and except as provided in
Paragraph 24.17 hereof in respect to Warranty Work, Seller's and Purchaser's
right to seek or obtain indemnification, damages or other legal recourse against
the other Party hereto (or any successor thereto), or, in the instance of
Purchaser, against Contractor with respect to a breach of any warranty,
representation or covenant made in this Agreement or in any documents,
instruments or certificate executed and delivered pursuant hereto shall
terminate, and be of no further force or effect, unless (i) by the date which is
the last to occur of three hundred sixty five (365) days after the termination
of this Agreement and three hundred sixty five (365) days after the expiration
of the Earn-Out Period (as hereinafter defined), the aggrieved Party shall have
notified the other Party (or Contractor, in the instance of Purchaser), in
writing, that the aggrieved Party deems that any such warranty, representation
or covenant was breached in a material respect when made (as undated or deemed
updated) and states therein, with reasonable particularity, the nature of the
alleged breach and the section or provision of the relevant document which was
allegedly breached and (ii) by the date which is the last to occur of three
hundred ninety (390) days after the termination of this Agreement and three
hundred ninety (390) days after the expiration of the Earn-Out Period, the
aggrieved Party files suit against the other Party (or Contractor, in the
instance of Purchaser) seeking legal or equitable recourse as a consequence of
such breach. If the aggrieved Party timely notifies the other Party (or
Contractor, in the instance of Purchaser) as called for in the preceding clause
(i) and timely files suit against the other Party (or Contractor, in the
instance of Purchaser) as called for in the preceding clause (ii), then the
warranty, representation or covenant at issue shall not terminate, but rather
shall continue until the dispute is settled between Seller and Purchaser (or
Purchaser and Contractor) or a final, non-appealable judgment is issued by a
court of competent jurisdiction with respect thereto.
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(c) Within ten (10) days after receipt by an indemnified Party
of written notice of any claim or the commencement of any action under this
Paragraph 10.04 by a third party, the indemnified Party shall, if a demand in
respect thereof is to be made against the indemnifying Party (or Contractor)
pursuant to this Paragraph 10.04, notify the indemnifying Party (or Contractor)
in writing of the claim or the commencement of the action, provided the failure
to notify the indemnifying Party (or Contractor) shall not relieve the
indemnifying Party (or Contractor) from any liability which it may have to the
indemnified Party other than under this Paragraph 10.04. Each indemnitor shall
be entitled, at its cost and expense, to contest any such third party claim or
action by all appropriate legal proceedings, provided that the indemnitor shall
have first notified the indemnitee of the indemnitor's intention to do so within
ten (10) days after the indemnitor's receipt of such notice from the indemnitee.
If the indemnitee joins in any such contest, the indemnitor shall have full
authority to determine all action to be taken with respect thereto. If, after
such opportunity, the indemnitor elects not to contest any such claim or action,
the indemnitor shall be bound by the resolution of such claim or action obtained
by the indemnitee. If required by the indemnitor, the indemnitee shall cooperate
fully with the indemnitor and its counsel in contesting any such claim or action
or, if appropriate, in making any counterclaim or cross-claim against the
subject third party asserting the claim or bringing the action, but the
indemnitor will reimburse the indemnitee for any out-of-pocket costs and
expenses incurred by the indemnitee in so cooperating. The indemnitor shall pay
to the indemnitee, in cash, all amounts to which the indemnitee may become
entitled by reason of the provisions of this Agreement, such payment to be made
within thirty (30) days after such amounts are finally determined either by
mutual agreement or by judgment of a court of competent jurisdiction.
11. SHARED CLOSING COSTS AND OTHER EXPENSES.
11.01 EXPENSES.
(a) Seller shall pay any and all fees or costs required to be
paid by Seller to the holder of the Mortgages in connection with the sale of the
Project, including, but not limited to prepayment fees, lender's consent fees or
lender's counsel fees, if any.
(b) Purchaser shall pay the costs and expenses of all Test and
Studies including any environmental audit of the Project and any other
investigations of the Project undertaken by Purchaser and all costs and
expenses, if any, charged by a lender to Purchaser in connection with any
financing or joint venturing of this transaction.
(c) Each Party and Contractor shall pay its own attorney's
fees.
11.02 SHARED CLOSING COSTS.
(a) Except as set forth above in Paragraph 11.01, if Closing
occurs, Seller and Purchaser shall each pay fifty percent (50%) of all of the
cost of the Commitment, the Title Policy (including the Endorsements and the
reissuing or dating down and increasing the amount
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of coverage thereof as provided in Paragraph 6.04 hereof), updating the Survey,
transferring all Permits and Guaranties to Purchaser, all escrow fees, and all
transfer, conveyance, revenue, excise, documentary or other tax or stamps
payable as a result of the sale of the Project (collectively, the "Shared
Closing Costs").
(b) Except as provided otherwise in this Agreement, if Closing
does not occur because of the failure of a condition to either Party's or
Contractor's obligation to close this transaction (other than a default by a
Party or Contractor), Seller and Purchaser shall each pay fifty percent (50%) of
the Shared Closing Costs.
(c) If Closing does not occur because Seller or Contractor is
in default, Seller shall pay all of the Shared Closing Costs.
(d) If Closing does not occur and Purchaser is in default,
Purchaser shall pay all Shared Closing Costs.
12. CONDITIONS.
12.01 PURCHASER'S CONDITIONS. Purchaser shall not be obligated to close this
transaction unless and until:
(a) Seller has delivered to the Escrow Agent the pre-closing
and closing documents described in Paragraphs 5, 6 and 7 of this Agreement;
(b) Title to the Project is delivered in accordance with the
provisions of this Agreement and the Title Company issues the Title Policy to
the Purchaser on the Closing Date, in the amount of that portion of the Purchase
Price computed as of the Closing Date in accordance with Paragraph 13.02 hereof,
insuring that indefeasible fee simple title to the Project is vested in
Purchaser, free and clear of all liens and encumbrances, except for the
Permitted Exceptions;
(c) The Project is delivered in the physical condition
provided for in this Agreement, reasonable wear and tear excepted; and
(d) If Seller or Contractor is in default in the performance
of any of its obligations under this Agreement and such default has not been
cured prior to Closing or any of the representations or warranties of Seller are
untrue or inaccurate in any material respect when made or on the Closing Date.
12.02 SELLER'S CONDITIONS. Seller shall not be obligated to close this
transaction unless and until:
(a) Purchaser has delivered to the Escrow Agent that portion
of the Purchase Price computed as of the Closing Date in accordance with
Paragraph 13.02 hereof;
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(b) Purchaser has delivered the closing documents described in
Paragraph 8 of this Agreement; and
(c) If Purchaser is in default in the performance of any of
its obligations under this Agreement and such default has not been cured by
Purchaser prior to Closing or any of the representations or warranties of
Purchaser is untrue or inaccurate in any material respect when made or on the
Closing Date.
12.03 RIGHTS UPON FAILURE OF A CONDITION. Except in the case of a default by
Seller or Contractor under Paragraph 12.01(d) or by Purchaser under Paragraph
12.02(c), if a condition of Closing of either Party or Contractor is not
satisfied as of the Closing Date, the Party whose condition is not satisfied at
Closing shall have the right to (i) waive such condition and proceed with
Closing, (ii) extend the Closing Date to permit additional time to cause the
unsatisfied condition to be satisfied, or (iii) terminate this Agreement and
both Parties and Contractor shall be released of all rights and obligations
hereunder, except as otherwise specifically provided for herein. If the failure
of the condition is a default, the rights of the parties shall be governed by
Section 18 hereof.
13. EARN-OUT.
13.01 DEFINED TERMS. In addition to the other terms defined elsewhere in this
Agreement, the following terms shall have the following meaning:
(i) "Carry" shall mean the amount of the proportionate share
of real estate taxes and operating expenses for the Project that are (or would
have been) allocable to the premises that are the subject of a Lease or New
Lease that becomes a Qualified Lease for the period commencing on the Closing
Date and ending on the date on which the Earn-Out Payment for such Qualified
Lease is due and payable hereunder, reduced by the portion, if any, of such
proportionate share for the subject period that is paid to Purchaser by the
Tenant or New Tenant of such Qualified Lease. To the extent payable but not paid
by the subject Tenant or New Tenant, the portion of Rent from the such Tenant or
New Tenant that applies to the period prior the date the subject Earn-Out
Payment is due and payable shall be deemed Arrears (as hereinafter defined).
(ii) "Closing Payment" shall mean that amount that is equal to
(a) the aggregate sum of those capitalized Net Cash Flows for those Leases set
forth on the Rent Roll attached hereto as Schedule 3.01 that are Qualified
Leases as of the Closing Date (which aggregated sum, as of the date hereof based
on the presumption of which Leases will be Qualified Leases as of the Closing,
is $22,878,566.00); plus (b) the amount by which the annual Base Rent set forth
in said Schedule 3.01 for those Leases that are Qualified Leases as of the
Closing Date increases as verified by the applicable Tenant Estoppel, which
increase shall be capitalized using a rate of ten and 34/100ths percent
(10.34%); minus (c) the amount by which the annual Base Rent set forth in said
Schedule 3.01 for those Leases that are Qualified Leases as
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of the Closing Date decreases as verified by the applicable Tenant Estoppel,
which decrease shall be capitalized using a rate of ten and 34/100ths percent
(10.34%); and plus or minus (d) the adjustments provided in Section 14 hereof.
(iii) "Earn-Out Payment" shall mean the amount that is equal
to the Net Cash Flow from those Leases or New Leases that are Qualified Leases
on the date (other than the Closing Date) such Earn-Out Payment is due as
provided in this Section 13 capitalized using a rate of ten and 34/100ths
percent (10.34%), minus (1) the Carry, and minus (2) any unsatisfied right of
offset permitted Purchaser as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof that was not previously credited to Purchaser.
(iv) "Force Majeure" shall mean delays resulting from (a)
labor disputes, (b) material or labor shortages, (c) Casualty (as hereinafter
defined), (d) acts of God or the public enemy, (e) governmental embargo
restrictions, (f) actions or inactions of any governmental authority (including,
but not limited to, the failure to timely process or approve applications for
the issuance or transfer of Permits, licenses or approvals), (g) the adjustment
of insurance claims resulting from Casualty in excess of $1,000,000.00, (h) any
other cause beyond the reasonable control and reasonable anticipation of the
applicable Party, but excluding therefrom reasonable control resulting from
monetary deficiency.
(v) "Net Cash Flow" shall mean, in respect to the applicable
Qualified Leases, an amount equal to the aggregate amount of the so-called "base
rent" (but not operating expenses, tax reimbursements, escalations based on a
consumer price index, or other similar Rent adjustments) payable for the full
calendar year on and after the date the subject Qualified Lease became a
Qualified Lease (without reduction for "free" Rent or Rent abatements), less any
non-reimbursable operating expenses and taxes for such calendar year. Purchaser
acknowledges that for those Leases set forth on Schedule 7.02(a) attached
hereto, there are no non-reimbursable operating expenses or taxes that shall be
a deduction in the determination of Net Cash Flow.
(vi) "New Lease" shall mean any lease (other than the Leases)
that lets or demises space in the Project and that is entered into by (a) the
Seller subsequent to the date hereof, but prior to the Closing Date, or (b) by
Purchaser or its successor(s) subsequent to the Closing Date, but prior to the
expiration of the Earn-Out Period.
(viii) "New Tenant" shall mean the tenant or lessee under a
New Lease.
(viii) "Other Center" or "Other Centers" shall mean (a) Maple
Grove Crossing, located in Minneapolis, Minnesota, of which Opus Corporation is
the Other Seller; (b) Eastchase Market, located in Forth Worth, Texas, of which
Opus South Corporation is the Other Seller; (c) Highland Grove, located in
Highland, Indiana, of which Opus North Corporation is the Other Seller; and (d)
Arrowhead Crossing, located in Phoenix, Arizona, of which Opus Southwest
Corporation is the Other Seller.
(ix) "Other Sale Agreement" or "Other Sale Agreements" shall
mean, in respect to the Other Centers, those other four Agreements of Purchase
and Sale entered into,
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effective as of the date hereof, by and between Purchaser hereunder, as the
purchaser thereunder, and, in respect to each Other Sale Agreement, one of the
Other Sellers, as the seller thereunder.
(x) "Other Seller" or "Other Sellers" shall mean any one or
more of the following: Opus South Corporation, a Florida corporation; Opus
Southwest Corporation, a Minnesota corporation; Opus North Corporation, an
Illinois corporation; and Opus Corporation, a Minnesota corporation..
(xi) "Qualified Lease" shall mean, on the Closing Date or on
the dates during or after the Earn-Out Period on which an Earn-Out Payment is
required to be paid hereunder, any Lease or New Lease that, pursuant to the
terms thereof:
(a) has been fully executed by either Seller or
Purchaser (or its successor), as lessor, and by the Tenant or New
Tenant, as lessee;
(b) the Tenant or New Tenant (1) has taken possession
of the premises that is the subject of the Lease or New Lease; (2) has
commenced paying Rent thereunder, provided, however, if Seller pays to
Purchaser the amount of (y) any free Rent afforded such Tenant or New
Tenant, or (z) the amount of Rent that would have been payable by such
Tenant or New Tenant, but for a fitting-up or fixturing period afforded
to such Tenant or New Tenant, then the provisions of this clause (2)
shall not apply (provided that in the instance of clauses (y) and (z),
Seller shall not be permitted to pay such Rent for a period greater
than three (3) months); (3) has not terminated its Lease or New Lease
or been terminated by the landlord thereof as a result of a default
thereunder by such Tenant and New Tenant; (4) in the instance of the
Closing Date, if it occurs (i) on or before the fifteenth (15th) of a
month, the Rent payment obligations thereunder are not delinquent for a
period longer than the month preceding the month in which the Closing
Date occurred, or (ii) after the fifteenth (15th) of a month, the Rent
payment obligations thereunder are not delinquent for a period longer
than the month in which the Closing Date occurred; and (5) in the
instance of an Earn-Out Payment for the Earn-Out Period, the Rent
payment obligations thereunder are not delinquent for a period longer
than the month in which the Earn-Out Payment is due (in respect to
clauses (4) and/or (5), for any Rent that is past due longer than the
period set forth therein, "Monetary Default");
(c) the Tenant or New Tenant, as of the date an
Earn-Out Payment is required to be paid hereunder in respect thereto,
is not in voluntary or involuntary proceedings filed by or against it
under Section 365 of the U.S. Bankruptcy Code ("Bankruptcy
Proceeding"); and
(d) the Earn-Out Conditions (as hereinafter defined)
therefor have been satisfied.
(xii) "Vacant Space" shall mean space in the Project that is
rentable for commercial purposes and that is not the subject of a Lease, New
Lease or any other occupancy
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right as of the Closing Date. If a Lease, New Lease or any other occupancy right
that is fully executed prior to the expiration of the First Segment (as
hereinafter defined) is terminated prior to the expiration of the First Segment
(provided Purchaser consents, in its sole discretion, to such termination), no
Closing Payment or Earn-Out Payment has been paid in respect to such terminated
Lease, New Lease or any other occupancy right, and the subject space is not the
subject of a different Lease, New Lease or any other occupancy right at the
expiration of the First Segment, then such space shall also be deemed to be
"Vacant Space" at the expiration of the First Segment.
13.02 CLOSING DATE PURCHASE PRICE COMPUTATION. On the Closing Date, as part of
the Purchase Price, Purchaser shall pay to Seller the Closing Payment computed
in accordance with the provisions of Paragraph 13.01(ii) hereof and Seller shall
retain and be deemed to have earned the Lump Sum Payment.
13.03 LEASE ASSIGNMENT RESERVATION. Notwithstanding any provisions to the
contrary contained in this Agreement, Seller shall be entitled to reserve from
the Lease Assignment ("Assignment Reservation") all of the remedies (but
excluding any eviction actions or summary depossess actions) of the landlord
under the subject Leases or New Leases (that are executed by Seller) that
pertain to (i) an event(s) that occurred prior to the Closing Date, but the
obligation of indemnity by or performance of the subject Tenant or New Tenant in
respect to such event does not arise until on or subsequent to the Closing Date;
(ii) the recovery of Rent that is either due and payable prior to the Closing
Date or due prior to the Closing Date, but not payable until thereafter,
including Unknown Rents (as hereinafter defined); and (iii) the recovery of any
base rent portion of Rent that is due under Leases or New Leases prior to the
date ("Reserved Base Rent Date") that is the first to occur of (y) the date on
which the Earn-Out Payment in respect thereto is paid (if any is required as
hereafter provided), and (z) the date ("Lease Reservation Date") that is five
(5) months subsequent to the date (subject to Force Majeure) that is set forth
in the subject Lease or New Lease for the commencement of the term thereof.
Because Purchaser is to be the payee of Rent under Leases and New Leases due on
and after the Closing Date, the Lease Assignment shall not specifically reserve
the Assignment Reservation provisions provided in clause (iii), provided
Purchaser is not required to make any out-of-pocket expenditures to third
parties and Purchaser applies all Rents received after the Closing first to Rent
then due under the applicable Leases and New Leases as provided in Paragraph
14.02 hereof, Purchaser agrees to fully cooperate with Seller in prosecuting
against the applicable Tenant or New Tenants the rights reserved in the
Assignment Reservation, provided, further, however, that prior to the
commencement of any action or proceeding against such Tenant or New Tenant,
Seller notifies Purchaser of its intent to commence any such action or
proceeding and affords Purchaser a reasonable period of time to resolve the
matter with such Tenant or New Tenant before Seller commences any such action or
proceeding.
.
13.04 NEW LEASES. Except for New Leases presented to Purchaser by Seller as
hereafter provided, Purchaser and its successors, during the Earn-Out Period,
shall not enter into
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any lease, tenancy, occupancy agreement, rental agreement, option, license or
concession for space in the Project (collectively, "Rental Undertaking"),
without first obtaining Seller's prior written consent, which consent shall not
be unreasonably withheld or delayed. If Seller consents as aforesaid to a Rental
Undertaking, such approved Rental Undertaking shall be deemed a New Lease.
During the period commencing on the date hereof and ending on the expiration of
the Earn-Out Period, Seller shall have the exclusive right to negotiate
prospective New Leases, except in the instance of Rental Undertakings to which
Seller has consented as aforesaid. Purchaser agrees to bind its successors,
assigns and their successors and assigns to the provisions of this Paragraph
13.04.
Seller shall keep Purchaser reasonably advised of the terms,
provisions and conditions of such prospective New Leases as well as the identity
of and the available financial information pertaining to the lessee ("Prospect")
of a proposed New Lease. Purchaser agrees to reasonably cooperate with and
advise Seller whether the credit worthiness of the Prospect is acceptable to
Purchaser and of those terms, provisions and conditions proposed for prospective
New Leases that Purchaser approves or disapproves. Purchaser agrees not to
unreasonably withhold or delay its consent and approval of the credit worthiness
of the Prospect or of such terms, provisions and conditions, provided the same
are reasonably consistent with the Leases and New Leases (or does not violate
any provision thereof) in respect to (i) rental rates and proposed Tenant
Inducements for comparable space within the Project for Prospects of comparable
net worth, (ii) duration of lease term, and (iii) exclusive uses proposed for
the Prospect.
Under the provisions of a New Lease, (i) for the period prior
to the Closing Date, Seller shall be the landlord thereof, and (ii) for the
Earn-Out Period, Purchaser shall be the landlord thereof and Seller shall be a
party thereto, as contractor, for the limited purpose of performing the New
Lease Obligations (as hereinafter defined).
When and as a final draft of a New Lease is prepared, Seller
shall deliver a true and complete copy thereof to Purchaser along with all
financial information pertaining to the Prospect that is in Seller's possession
or under its control that was not theretofore delivered to Purchaser. Purchaser
shall advise Seller, in writing, within ten (10) business days after Purchaser's
receipt of the draft New Lease, whether Purchaser approves or disapproves the
same. If Purchaser notifies Seller as aforesaid of Purchaser's disapproval of a
draft New Lease ("Disapproved Lease"), such notice shall set forth, in
reasonable particularity, the reasons for Purchaser's disapproval. If Purchaser
fails to so notify Seller of whether the draft New Lease is approved or
disapproved as aforesaid, it shall act as notice to Seller that Purchaser has
approved the same. When a prospective New Lease has been approved or is deemed
to have been approved, (i) in the instance of prospective New Leases to be
executed prior to the Closing, Seller shall execute the same as landlord
thereunder, and (ii) in the instance of prospective New Leases to be executed
during the Earn-Out Period, Seller shall promptly thereafter deliver execution
originals of the same to Purchaser that have been executed by the subject
Prospect, as the New Tenant, and by the Seller and/or Contractor in respect to
the New Lease Obligations. Within five (5) business days following Purchaser's
receipt of execution originals as aforesaid in
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clause (ii), Purchaser shall execute and return the same to Seller. If Purchaser
fails to return, when required, said originals executed by Purchaser as
aforesaid, such New Lease ("Unsigned Lease") shall automatically be deemed a New
Lease that is fully executed during the Earn-Out Segment (as hereinafter
defined) in which Seller delivered it to Purchaser for execution, and shall be
deemed a Qualified Lease and the Earn-Out Conditions in respect thereto
satisfied on the sixth (6th) business day after it was delivered to Purchaser,
notwithstanding the provisions of Paragraph 13.01(xi) hereof. As a result,
subject to the provisions of the next sentence, Purchaser shall pay to Seller,
on the twenty-fifth (25th) day of the month first occurring thereafter, the
Earn-Out Payment computed in respect to such Unsigned Lease. However, in the
event, after the date an Unsigned Lease became a Qualified Lease as aforesaid
and prior to the date the Prospect thereof withdraws its signature thereto,
Purchaser executes and returns to Seller such Unsigned Lease, Seller agrees to
be bound by and to perform the New Lease Obligations for such Unsigned Lease.
In the event, at any time prior to the date that is three (3)
months subsequent to the expiration date of the Earn-Out Segment in which there
was a Disapproved Lease, Purchaser (or its successors or assigns) enters into
any Rental Undertaking with the Prospect of such Disapproved Lease, such Rental
Undertaking shall automatically, notwithstanding the provisions of Paragraph
13.01(xi) hereof, be deemed to be a Qualified Lease, and Purchaser shall pay to
Seller, on the twenty-fifth (25th) day of the month first occurring after such
Rental Undertaking was signed by Purchaser, an amount equal to (a) the Earn-Out
Payment computed in respect to the provisions of such Rental Undertaking as a
Qualified Lease, minus (b) the Footage Payment, if any, that was previously paid
by Purchaser in respect to the portion of the Project that is the subject of
such Rental Undertaking, minus (c) the costs incurred by Purchaser to unrelated
third parties for the construction and completion of tenant improvements and
broker's commissions for the subject Rental Undertaking, but in an amount, in
either instance, not greater than the cost of those tenant improvements and
Commissions provided in the Disapproved Lease, and minus (d) any unsatisfied
right of offset afforded Purchaser pursuant to Paragraphs 5.04, 9.03, 14.06,
14.07 and 16.01 hereof. The obligations of Purchaser under the provisions of
this grammatical paragraph shall survive the Closing and the later expiration of
the Earn-Out Period.
13.05 EARN-OUT PERIOD. The hereafter provided period of time subsequent to the
Closing Date shall be divided into two segments (respectively, "First Segment,"
and "Second Segment," and generally, "Earn-Out Segment,"). Each Earn-Out Segment
during which Seller has elected, as hereafter provided, to extend the term of
this Agreement shall be for a period of five (5) months or for such longer
period as provided in Section 13.06 hereof. The First Segment shall commence on
the day after the Closing Date, and the Second Segment (if Seller elected or is
deemed to have elected to extend the Earn-Out Period) shall commence on the day
after the expiration of the First Segment. Provided the Closing occurs, Seller
hereby elects to extend the term of this Agreement for the First Segment. Seller
may elect, in its sole discretion, to extend the term of this Agreement for the
Second Segment by delivering to Purchaser Seller's written notice of such
election ("Earn-Out Extension Notice") not less than thirty (30) days prior to
the expiration of the First Segment. If Seller fails to deliver, as aforesaid,
its Earn-Out Extension Notice, it shall act as notice to Purchaser that Seller
has elected not to extend the term of this
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Agreement for the Second Segment. The aggregate of the Earn-Out Segments for
which Seller has elected to extend the term hereof shall be referred to as the
"Earn-Out Period."
13.06 CASUALTY DURING EARN-OUT PERIOD. If, during the Earn-Out Period, there is
a Casualty to a Vacant Space, the Earn-Out Period and the applicable Earn-Out
Segment shall be tolled as to the damaged Vacant Space until such time as
Purchaser causes such damaged Vacant Space to be restored to a habitable
condition, exclusive of tenant's improvements. If, during the Earn-Out Period,
there is a Casualty to twenty five percent (25%) or more of the Square Footage
of the Improvements (exclusive of the Vacant Space), the Earn-Out Period and the
applicable Earn-Out Segment shall be tolled until such time as such damaged
Improvements are restored to a condition so that the Tenants or New Tenants
thereof are open and operating their respective businesses therein, except in
respect to those Tenants or New Tenants whose Leases or New Leases were
terminated as a result of the subject Casualty. Purchaser agrees to promptly
notify Seller, in writing, of the occurrence of a Casualty. Notwithstanding the
foregoing, in the event of such a Casualty, Seller shall deliver to Purchaser,
within ten (10) days following the date of Seller's receipt of Purchaser's
written notification, Seller's written notice ("Casualty Notice") of its good
faith determination that such Casualty is the proper basis for the tolling of
the applicable Earn-Out Segment. If Seller fails to deliver a Casualty Notice as
aforesaid, it shall act as notice to Purchaser that Seller is not claiming any
tolling of the applicable Earn-Out Segment in respect to such Casualty.
Regardless of a Casualty Notice, there will be no tolling of the Earn-Out Period
if Purchaser restores the applicable portion of the Improvements within thirty
(30) days following the date of such Casualty. However, if such restoration is
not completed within said thirty (30) days, the Earn-Out Period shall be tolled
commencing on the date of the Casualty and ending on the date provided in the
first two sentences of this Paragraph 13.06. During the Earn-Out Period, subject
to Force Majeure, Purchaser agrees to diligently undertake the restoration of
the applicable portion of the Improvements following a Casualty thereto.
13.07 EARN-OUT PAYMENTS. In respect to Leases or New Leases that are fully
executed prior to the expiration of the Earn-Out Period, on the twenty-fifth
(25th) day of each calendar month after the Closing Date, provided the subject
Lease or New Lease is a Qualified Lease prior to the Lease Reservation Date,
Purchaser shall pay to Seller the Earn-Out Payment computed in respect to those
Leases and New Leases that became, for the first time, Qualified Leases during
the preceding month and for which no Earn-Out Payment had been previously paid
to Seller. In the event a New Lease is executed during the First or Second
Segment, but it does not become a Qualified Lease until after the expiration of
the Earn-Out Period, but prior to the Lease Reservation Date, Purchaser, subject
to the satisfaction of the Earn-Out Conditions, shall pay to Seller at the time
aforesaid, an amount equal to the Earn-Out Payment computed in respect to such
subsequent Qualified Lease. Any Earn-Out Payment shall be subject to any
unsatisfied right of offset as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof.
Notwithstanding the foregoing, the Earn-Out Payment or Closing
Payment in respect to a particular Qualified Lease (excluding those that are
Qualified Leases in respect to an Unsigned Lease or a Rental Undertaking with
the Prospect of a Disapproved Lease as provided
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in each instance in Paragraph 13.04 hereof) shall not be due and payable by
Purchaser to Seller, unless and until, Seller, prior to the Lease Reservation
Date, has delivered or caused to be delivered to Purchaser, in respect to the
subject Qualified Lease, (i) a fully executed original thereof; (ii) a
certificate of occupancy from the applicable governmental authority authorizing
the uninterrupted occupancy by the subject Tenant or New Tenant of the subject
premises; (iii) the applicable Tenant Estoppel containing no material exceptions
or Seller's Estoppel, if in accordance with the provisions of Paragraph 7.15
hereof; (iv) Schedule 10.01(xvii) from Seller in respect to the subject Lease
or New Lease, updated to the date the Earn-Out Payment is due, setting forth any
unsatisfied Tenant Inducement in respect thereto; (v) evidence, in form and
content reasonably satisfactory to Purchaser, that the portion of Tenant
Inducements payable to the subject Tenant or New Tenant has been paid by Seller;
(vi) an original of the insurance certificates required from the subject New
Tenant under the Qualified Lease; (vii) the date down and increased coverage
endorsement for the Title Policy required pursuant to the provisions of
Paragraph 6.04 hereof, provided Purchaser pays fifty percent (50%) of the Shared
Closing Costs in respect thereto; and (viii) copies of the "as-built" plans and
specifications for the tenant improvements for the subject Qualified Lease
(collectively, in respect to clauses (i) through (viii) above, "Earn-Out
Conditions"). The Earn-Out Payment obligations of this Paragraph 13.07 shall
survive the Closing Date and the later termination of this Agreement. If the
Earn-Out Conditions are not satisfied for the subject Lease or New Lease on or
prior to the Lease Reservation Date therefor, then Purchaser shall have no
obligation to make any Earn-Out Payment in respect thereto.
13.08 FOOTAGE PAYMENT. In the event Seller elects not to extend the Earn-Out
Period for the Second Segment, Purchaser shall pay to Seller, when hereafter
provided, an amount ("Footage Payment") equal to the Square Footage (as
hereinafter defined) of the Vacant Space existing at the expiration of the First
Segment, multiplied by (i) $55.00 for that portion of the Vacant Space that is
not greater than one hundred feet in depth as measured from the front exterior
surface to the rear exterior surface, and (ii) $45.00 for that portion of the
Vacant Space that is greater than one hundred feet in depth measured as
aforesaid. If Seller elects or is deemed to have elected to extend the term of
the Earn-Out Period for the Second Segment, there will be no Footage Payment.
"Square Footage" shall mean the aggregate number of square feet of the Vacant
Space measured from the front exterior surface to the rear exterior surface and
from the middle of demising walls of such Vacant Space. Within forty-five (45)
days following the date Seller has elected or is deemed to have elected not to
extend the term of the Earn-Out Period for the Second Segment, Seller shall
deliver to Purchaser Seller's computation of the amount of the Footage Payment
("Footage Computation") which will set forth the identity of the Vacant Space,
the depth of the Vacant Space, and the amount of the Square Footage contained
therein. Unless Purchaser notifies Seller within ten (10) business days
following Purchaser's receipt of the Computation Notice that Purchaser disagrees
with the provisions thereof, Purchaser shall pay to Seller, within thirty (30)
days following Purchaser's receipt of the Computation Notice the amount of the
Footage Payment provided therein. If Purchaser does object to the Computation
Notice as aforesaid, Purchaser and Seller shall promptly confer, in good faith,
to resolve the disagreement. When the disagreement is resolved, within ten (10)
business days thereafter, Purchaser shall pay to Seller the resolved Footage
Payment. Any Footage Payment shall be
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subject to any unsatisfied right of offset as provided in Paragraphs 5.04, 9.03,
14.06, 14.07 and 16.01 hereof.
13.09 INTENTIONALLY DELETED
13.10 SELLER'S NEW LEASE OBLIGATIONS. Seller and Contractor, jointly and
severally, at their sole cost and expense, shall (i) apply for and obtain all
permits and licenses necessary to construct all tenant improvements required
under New Leases; (ii) subject to Force Majeure, construct and complete, when
required under the provisions of New Leases, all such tenant improvements; (iii)
pay, when due, all Commissions in respect to New Leases; (iv) provide and
undertake the required New Lease construction and warranty work ("Tenant
Warranty"); and (v) provide the builder's "all risk" and general liability
insurance coverage required by the subject New Lease in respect to such
construction (collectively in respect to clauses (i) through (v), "New Lease
Obligations").
13.11 PUNCHLIST. The portion of the Purchase Price payable at Closing as
computed pursuant to the provisions of Paragraph 13.02 hereof and the amount of
each Earn-Out Payment due hereunder shall be reduced by an amount which shall be
held by Purchaser and disbursed as hereafter provided, which amount shall equal
one hundred and twenty five percent (125%) of the reasonably estimated cost of
(i) completing all of the tenant improvements for work for Leases and New Leases
that are Qualified Leases as of the Closing Date, and/or Earn-Out date. The
amount of the Footage Payment payable hereunder shall be reduced by an amount
which shall be held by Purchaser and disbursed as hereafter provided, which
amount shall equal one hundred twenty-five percent (125%) of the reasonably
estimated cost of constructing and completing substantially to those standards
for the shell and core portion of those Improvements comprising the Project that
are each set forth on the Shell and Core List and Standard attached hereto as
Schedule 13.11 (collectively, in respect to the first and second sentences of
this Paragraph 13.11, "Punchlist Holdback"). The Punchlist Holdback shall be
compiled in a line item format in respect to major segments for completing such
incomplete items and shall set forth the reasonable cost of completing each such
line item. If Seller, Contractor and Purchaser, within fifteen (15) days prior
to the Closing Date, are unable to agree on the scope or amount of each
Punchlist Holdback line item, Seller, Contractor and Purchaser shall appoint a
third party contractor to make such determination, and the scope and amount so
determined by the third party contractor shall be binding upon the Parties and
Contractor. When the scope and amount of the Punchlist Holdback is determined as
aforesaid, it shall be attached to this Agreement, respectively, as Schedule
13.11(a)(1), 13.11(a)(2), etc. Thereafter, subject to Force Majeure, Seller and
Contractor, jointly and severally, at their sole cost and expense (regardless of
the amount of the Punchlist Holdback), agrees to diligently prosecute to
completion ("Punchlist Work") all of the items on each Schedule 13.11(a)
attached hereto. The obligation of Seller and Contractor to complete the
Punchlist Work is absolute and unconditional. Monthly, after the Closing Date,
when Punchlist Work pertaining to various line items on the Punchlist Holdback
is complete, Purchaser shall pay to Seller one hundred percent (100%) of that
portion of the Punchlist Holdback applicable to such completed Punchlist Work
(thereby retaining twenty-five percent (25%) thereof), provided Contractor has
delivered to
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Purchaser a Form G704 in the form attached to the Exhibit Agreement as Schedule
13.11(b), executed by Contractor setting forth that the subject line item of
Punchlist Work has been completed.
When all of the Punchlist Work has been completed and the
Forms G704 therefor have been delivered to Purchaser, Purchaser shall pay to
Seller the remaining twenty-five percent (25%) of the Punchlist Holdback,
provided Seller has delivered to Purchaser the following documents:
(a) Evidence that all payment in the manner required by the
applicable contract, agreement or undertaking is paid in full in respect to the
subject Punchlist Work;
(b) Lien waivers required by (and that are reasonably
satisfactory to) the Title Company from the Seller, Contractor and their
contractor and subcontractors that are necessary to insure over Liens in respect
to the Punchlist Work; and
(c) In respect to the portion(s) of Punchlist Work for
incomplete tenant improvements under a Lease or New Lease, an acknowledgment
from the subject Tenant or New Tenant, in form and substance reasonably
acceptable to Purchaser, setting forth the applicable Tenant's or New Tenant's
acceptance of completion of the subject tenant improvements.
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS.
All of the items of income and expense mentioned in this
Section 14 shall be apportioned or adjusted between Seller and Purchaser as of
12:01 A.M., local time of the Project, as of the Closing Date. Except as
provided in the instance of Unknown Rents as provided in Paragraph 14.03 hereof,
all apportionments and adjustments shall be made as of the Closing Date. To the
extent that the apportionments and adjustments, at the Closing, are based upon
any errors or omissions in the calculation or determination thereof, promptly
after notice of such errors or omissions, the Parties shall readjust or
reapportion and make the payment required as a result thereof.
14.01 RENTS. The fixed and minimum rents and all additional rents, escalation
charges, common area maintenance charges, imposition charges, heating and
cooling charges, insurance charges, charges for utilities, percentage rent, and
all other rents, charges and commissions (collectively, the "Rents") payable by
the Tenants under the Leases and New Leases that are Qualified Leases as of the
Closing Date, to the extent collected by Seller on or prior to the Closing Date
and which represent payments of Rents applicable to a period of time subsequent
to the Closing Date. Notwithstanding the foregoing, Seller shall be permitted
the rights against Tenants and New Tenants as provided in the Assignment
Reservation set forth in Paragraph 13.03 hereof.
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14.02 ARREARS. Any of the Rents that are due and payable by the Tenants and New
Tenants on or prior to the Closing Date, but which have not been collected by
the Seller on or prior to the Closing Date, or payment of which has been
deferred until after the Closing Date ("Arrears"), to the extent applicable to
any period of time on or prior to the Closing Date, and which are paid after the
Closing Date shall, subject to the terms below, be paid to Seller and be the
subject of the Assignment Reservation, and if the Arrears are received by
Purchaser, Purchaser shall pay the Arrears to Seller after collection by
Purchaser, provided, however, that if any Arrears exist on the Closing Date, all
Rents, received and collected by Purchaser after the Closing Date shall be
applied first to payment of all Rents due Purchaser and second to all Arrears
due Seller. Purchaser shall have no obligation to collect any Arrears or to
commence any action to enforce the obligation of Tenants to pay the Arrears, but
Purchaser agrees to cooperate with Seller in the collection of such Arrears, but
only as provided in Paragraph 13.03 hereof. In the event Purchaser elects to
commence any action or proceeding against any Tenant and as a result thereof
collects any Arrears which Purchaser is required to remit to Seller, Purchaser
shall be entitled to deduct and retain a portion of the amount collected which
is equal to the Pro Rata Share (as hereinafter defined) of the Litigation
Expenses incurred by Purchaser in connection with the collection of the Arrears.
Notwithstanding anything to the contrary, Seller, as a result of the Assignment
Reservation, shall have the right, after delivery of prior written notice to
Purchaser, to commence any action or proceeding, except a summary depossess or
any eviction actions, against any Tenant for Seller's portion of any Arrears.
14.03 UNKNOWN RENTS. Any Rents which have accrued but are not due and payable on
the Closing Date because the applicable Lease or New Lease year or other fiscal
period for which such Rents are to be computed has not yet expired (including by
way of example only, escalation charges and percentage rents) or if it has
expired but cannot for any other reason be calculated by the Parties on the
Closing Date ("Unknown Rents"), shall be apportioned promptly after (i) the
expiration of the applicable Lease or New Lease year or other fiscal period, and
(ii) the receipt and collection of the Unknown Rents. Purchaser shall make
reasonable efforts to ascertain the amount of the Unknown Rents (but, shall not
be obligated to commence any action or proceeding to collect Unknown Rents,
except that Purchaser shall reasonably cooperate with Seller in respect to the
Assignment Reservation as provided in Paragraph 13.03 hereof), and when the
amounts of the Unknown Rents are ascertained, received and collected by
Purchaser, Purchaser shall promptly pay to Seller a portion (the "Pro Rata
Share") of the Unknown Rents determined by multiplying the Unknown Rents
collected by a fraction, the numerator of which is the number of days in the
applicable Lease or New Lease year or other fiscal period up to but excluding
the Closing Date and the denominator of which is the number of days in the
applicable Lease or New Lease year or other fiscal period, less any monies
Seller has previously received on account of the Unknown Rents and Seller's Pro
Rata Share of the Litigation Expenses incurred by Purchaser in the collection of
the Unknown Rents. In the event it is determined after Closing that the amount
of the Unknown Rents received by Seller exceeds the Seller's Pro Rata Share,
Seller shall promptly pay such excess to Purchaser upon demand. Notwithstanding
anything to the contrary, Seller shall have the right to commence any action or
proceeding, except a summary depossess or an eviction action, against any Tenant
for Seller's portion of any Unknown Rents.
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14.04 UTILITIES. To the extent not payable by Tenants or New Tenants, the actual
or estimated charges for utilities accrued and payable by Seller prior to the
Closing Date, provided Purchaser is required by law or elects to assume Seller's
account. Deposits for utilities (the "Utility Deposits"), plus any interest on
the Utility Deposits to which Seller is or will be entitled, held by the
provider of the utilities and which are freely transferable to Purchaser, shall,
at the election of the Purchaser, be assigned by Seller to Purchaser and
Purchaser shall pay Seller the full amount thereof at Closing, in addition to
the applicable portion of the Purchase Price. Seller shall retain the right to
obtain a refund of any Utility Deposits which are not required to be assigned to
Purchaser and Purchaser will cooperate with Seller in obtaining any refund. With
respect to water, sewer, electric and gas charges, Seller shall make reasonable
efforts to obtain a reading of the meter or other consumption measuring device
as of the Closing Date. If the Seller is unable to obtain such a reading, Seller
shall furnish a reading as of a date not more than thirty (30) days prior to the
Closing Date and the unknown charges shall be apportioned on the basis of an
estimate computed by utilizing such reading and the most recent bill from the
utility provider, computed on an equal per diem basis.
14.05 CONTRACTS. Prepaid charges, payments and accrued charges under the
Contracts set forth in Schedule 7.05(a) attached hereto to the extent no paid by
Tenants or New Tenants. However, if paid by Tenants or New Tenants, Seller shall
credit Purchaser with the amount thereof received by Seller from such Tenants or
New Tenants, to the extent not applied to the payment obligations under the
Contracts.
14.06 TAXES. Real estate taxes are assessed, due and payable in the same fiscal
year which commences on July 1 of each year and ends on June 30 of the
succeeding year. Seller shall cause all real estate taxes for fiscal year
preceding the fiscal year in which the Closing occurs and prior fiscal years to
have been paid as of the Closing Date. The estate taxes for the Project for the
fiscal year in which the Closing occurs shall be pro-rated as of the Closing
Date. Seller's pro-rata share of such real estate taxes shall be calculated
based upon the number of days elapsing from July 1, to, but not including, the
Closing Date in relation to 365 days in such fiscal year. Purchaser shall be
responsible for the remaining portion of such real estate taxes, commencing with
the Closing Date and continuing through June 30. If the Closing Date occurs on
or before June 30, Purchaser shall pay to Seller Purchaser's pro-rata share of
real estate taxes for the fiscal year in which the Closing occurs, if any real
estate taxes for such fiscal year have then been paid by Seller and if the
portion so paid by Seller relates to Purchaser's pro-rata share. If the Closing
Date occurs on or after July 1, Seller shall credit to Purchaser Seller's
pro-rata share of real estate taxes for the fiscal year in which the Closing
occurs, minus any portion thereof theretofore paid by Seller. Notwithstanding
the foregoing, to the extent there are Tenants or New Tenants that pay their
Real Estate Tax Rent (as hereinafter defined) on a lump sum basis, Seller shall
not be required to credit Seller with that portion of the pro-rata share of the
fiscal year real estate taxes in which the Closing occurs for the period from
July 1 to the Closing Date for which such lump sum paying Tenants and New
Tenants are responsible ("Lump Sum Non-Credit"). However, if any such Tenant or
New Tenant fails to pay their respective lump sum portion of Real Estate Tax
Rent when due that is applicable to a Lump Sum Non-Credit, Purchaser shall
notify Seller of the same, in writing,
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and Seller shall pay such unpaid amount within five (5) business days and such
amount so paid by Seller shall be deemed Arrears. In the event Seller fails to
pay such amount, Purchaser shall be permitted to offset any Footage Payment,
Earn-Out Payment or other sum payable by Purchaser to Seller hereunder that is
thereafter due. To the extent there are insufficient future payments due Seller
from Purchaser against which to make such offset, Purchaser shall have the
remedy against Seller as provided in Paragraph 18.05 hereof. The Parties shall
make the pro-ration provided for herein on the basis of the most recently
available tax statement, and shall thereafter make such adjustments as may be
necessary at such time as the tax statement becomes available for the total real
estate taxes for fiscal year in which the Closing.
The portion of the Rent under Leases and New Leases that pertains to
the obligations of Tenants and New Tenants to pay their respective pro-rata
share of real estate taxes (or special assessments provided in Paragraph 14.07
hereof) shall be called "Real Estate Tax Rent." The portion of Real Estate Tax
Rent that pertains to the period prior to the Closing Date and which was paid to
Seller by those Tenants and New Tenants shall be retained by Seller. Any Real
Estate Tax Rent received by Seller prior to the Closing Date that pertains to
the period on or subsequent to the Closing Date shall be credited to Purchaser
at the Closing. Any Real Estate Tax Rent received by Purchaser after the Closing
that pertains to the period prior to the Closing Date shall be paid by Purchaser
to Seller. The Real Estate Tax Rent retained by Seller shall be subject to
adjustment (increases or decreases) at such time as Purchaser reconciles the
estimated payment of Real Estate Tax Rent with the amount of the actual real
estate taxes paid for the fiscal year in which the Closing occurs.
14.07 ASSESSMENT INSTALLMENTS. If, as of the Closing Date, the Project is
encumbered or otherwise affected by any assessment (whether or not a lien) which
becomes payable in installments, for the installment that is due and payable in
the fiscal year in which the Closing occurs, Seller shall credit Purchaser with
the pro-rata portion of such installment from July 1 of the fiscal year in which
the Closing occurs to the Closing Date, except for an amount that would be equal
to the Lump Sum Non-Credit. Such pro-ration shall be made on the basis that the
number of days from July 1 of the fiscal year in which Closing occurs to, but
excluding, the Closing Date bears to three hundred and sixty five (365) days.
The portion of Real Estate Tax Rent applicable to the installment of assessment
payable in the fiscal year in which the Closing occurs that pertains to the
period prior to the Closing and which was paid to Seller by Tenants or New
Tenants shall be retained by Seller. Any Real Estate Tax Rent applicable to such
installment or assessment that was received by Seller prior to the Closing Date
that pertains to the period on or subsequent to the Closing Date shall be
credited to Purchaser at the Closing. Any Real Estate Tax Rent applicable to
such installment of assessment received by Purchaser after the Closing Date that
pertains to the period prior to the Closing Date (except that which is a Lump
Sum Non-Credit) shall be paid by Purchaser to Seller. If any Tenant or New
Tenant who pays their respective Real Estate Tax Rent on a lump sum basis and
for whom a Lump Sum Non-Credit was provided, Seller shall remain responsible for
the Lump Sum Non-Credit as provided in Paragraph 14.06.
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14.08 PERMITS. The (i) Vault taxes and rents, if any, due and payable in 1996
(to the extent not the obligation of Tenants or New Tenants to pay), (ii) Permit
fees to the extent transferable, and (iii) government inspection fees shall be
apportioned as of the Closing Date.
14.09 SECURITY DEPOSITS/TENANT INDUCEMENTS. Purchaser shall receive a credit
against the portion of the Purchase Price payable on the Closing Date in an
amount equal to the sum of (i) the Security Deposits, if any, which Seller is
holding pursuant to the Leases and New Leases and as set forth in Schedule
7.02(a) attached hereto, plus (ii) all costs, expenses and losses (including
without limitation, reductions in Rent) which will be incurred by Purchaser
after the Closing as a result of all Tenant Inducements given on or before the
Closing Date which are not paid in full as of Closing in respect to Qualified
Leases as of the Closing Date.
14.10 CUSTOMARY ITEMS. Any other items of income and expense not specifically
mentioned in this Section 14 which are customarily apportioned in real property
transactions of the character contemplated by this Agreement.
15. CLOSING.
15.01 CLOSING CONTINGENCY AND CLOSING DATE. This Agreement is contingent
("Haggen Contingency") on Haggen, Inc. ("Haggen"), a Tenant under its Lease
("Haggen Lease"), (i) being open for business in its premises on or before
December 31, 1996 ("Outside Date"), and (ii) the Haggen Lease being a Qualified
Lease on or before the Outside Date. If the Haggen Contingency is satisfied
prior to the Outside Date, promptly thereafter, Seller shall advise Purchaser,
in writing, of the same, and the closing of this transaction ("Closing") shall
be held at the office of Opus Properties on the date ("Closing Date") that is
ten (10) business days subsequent to the date Purchaser receives Seller's
written notification that the Haggen Contingency has been satisfied.
Notwithstanding the foregoing, the Closing Date may be extended as provided in
Paragraphs 5.04, 6.03, 7.20 and 12.03. However, if the Haggen Contingency is not
satisfied prior to the Outside Date, this Agreement shall automatically
terminate, the Deposit shall be returned to Purchaser, the Lump Sum Payment
shall be retained and deemed earned by Seller, Purchaser and Seller shall each
pay 50% of the Shared Closing Costs incurred as of the termination date, and
neither Party shall have any further rights or obligations hereunder, except
those specifically provided herein that survive the termination of this
Agreement.
16. POSSESSION.
16.01 POSSESSION AND POST CLOSING WORK. Purchaser shall be entitled to
possession on the Closing Date, subject only to the Leases, New Leases,
Assignment Reservation and the Permitted Exceptions. Notwithstanding the
foregoing, subsequent to the Closing Date, Seller and Seller's agents,
contractors and subcontractors (including the Contractor) shall have access to
such portions of the Project necessary and convenient to commence and/or
complete (i) the Punchlist Work; (ii) Unacceptable Conditions; (iii) Seller's
New Lease Obligations; (iv) incomplete tenant improvement work under Leases; (v)
Warranty Work; and (vi) Tenant Inducements (collectively in respect to clauses
(i) through (vi), "Post Closing Work"). All Post
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Closing Work shall be done by Seller and Contractor, jointly and severally, (a)
at Seller's and Contractor's sole cost and expense, (b) in a fashion to
reasonably minimize, taking into account the scope and nature of the Post
Closing Work, the disruption to Tenants and New Tenants and to the operation and
management of the Project by Purchaser and Purchaser's agents, (c) in compliance
with Environmental Laws, and (d) in any event, subject to Force Majeure, with
diligence. The obligation of Seller and Contractor to complete the Post Closing
Work and of Seller to pay Commissions and pay all financial obligations of
Seller hereunder is absolute and unconditional, and Seller and Contractor,
jointly and severally, agree to indemnify, defend and hold Purchaser and its
successors and assigns and the Project harmless (including Litigation Expenses)
from and against any and all (except as provided in Paragraph 23 hereof) loss,
damage, claim, demand, liability, Lien, action, cause of action, judgment or
decree as a result of (A) damage or destruction to property, including title to
the Project, (B) personal injury, or (C) loss of Rent resulting from the
performance or non-performance of the Post Closing Work by Seller and Contractor
(except that which is caused, in whole or in part, by the negligence, willful
misconduct or breach of contract by Purchaser or its successors and assigns or
their respective agents, employees, contractors or subcontractors), and
resulting from Seller's failure to pay Commissions or to pay all financial
obligations of Seller hereunder. In the event Seller or Contractor fails to
perform the Post Closing Work, pay Commissions or pay all financial obligations
of Seller hereunder, Purchaser may deduct from the next succeeding Earn-Out
Payment payable hereunder after the event of Seller's failure as aforesaid, the
cost and expense incurred by Purchaser in completing such incomplete Post
Closing Work, paying such unpaid Commissions or paying all financial obligations
of Seller hereunder. During the performance of any Post Closing Work, Seller
shall maintain or cause Contractor to maintain commercial public liability
insurance in an amount and issued by carriers that are reasonably satisfactory
to Purchaser naming Purchaser and those other persons or entities reasonably
designated by Purchaser as additional insureds.
17. RISK OF LOSS.
17.01 RISK. Except as provided in Paragraphs 17.02 and 17.03, the risk of loss
or damage (the "Loss") to the Project by (i) condemnation, eminent domain or
similar actions or proceedings or threat thereof (collectively, "Taking"), or
(ii) fire or other casualty (collectively, a "Casualty") shall be borne by
Seller through the date and time that the applicable portion of the Purchase
Price payable on the Closing Date is paid to Seller and thereafter shall be
borne by Purchaser.
17.02 DAMAGE AND DESTRUCTION. In the event all or any portion of the Project is
materially damaged by any cause whatsoever prior to the Closing Date, Seller
shall so advise Purchaser and Purchaser shall have the right, at its sole
option, to either: (a) proceed with Closing with no reduction in the Purchase
Price, provided, however, Purchaser shall receive from Seller (i) all proceeds
of any casualty insurance maintained by Seller and payable with respect to such
damage, and (ii) an amount equal to the deductible on such casualty insurance;
or (b) terminate this Agreement by giving written notice of termination to
Seller within ten (10) business days of
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the date Purchaser is advised by Seller of such damage, in which event the
Deposit shall be refunded to Purchaser, the Lump Sum Payment shall be retained
and deemed earned by Seller, Seller and Purchaser shall each pay 50% of the
Shared Closing Costs as of the date this Agreement is terminated by Purchaser,
and Seller and Purchaser shall have no further rights or obligations under this
Agreement, except those rights and obligations specifically set forth herein as
surviving such termination. The Seller represents and warrants to Purchaser that
the Improvements (except any Tenant's or New Tenant's trade fixtures therein)
are insured to the full replacement value thereof with a deductible of not more
than $5,000.00, which insurance Seller agrees to keep in full force and effect
until the Closing.
17.03 CONDEMNATION AND EMINENT DOMAIN. If, prior to the Closing Date, the
Project shall be subjected to a Taking, either total or partial, or if any
notice of intent of Taking or sale in lieu of Taking that materially affects the
Project is received by Seller or Purchaser, Purchaser shall have the right to
either: (a) proceed with Closing, in which event Purchaser shall be entitled to
participate in any such condemnation or eminent domain proceedings and, after
payment to Seller of the cash portion of the Purchase Price payable on the
Closing Date, to receive all of the proceeds of such Taking, or (b) terminate
this Agreement by giving written notice of termination to Seller, in which event
the Deposit shall be returned to Purchaser, the Lump Sum Payment shall be
retained and deemed earned by Seller, Seller and Purchaser shall each pay 50% of
the Shared Closing Costs, and Purchaser and Seller shall have no further rights
or obligations under this Agreement, except those rights and obligations
specifically set forth herein as surviving such termination. Seller and
Purchaser each agree to promptly forward to the other any notice of intent
received pertaining to a Taking of all or a portion of the Project.
18. DEFAULTS AND REMEDIES.
18.01 SELLER'S/CONTRACTOR'S DEFAULTS.
(A) Seller's Defaults. In respect to the remedies afforded
Purchaser pursuant to Paragraph 18.04 hereof, Seller shall be deemed to be in
default under this Agreement in the event (i) Seller or Contractor fail, for any
reason (other than a default by Purchaser), to perform any of their material
obligations under this Agreement that arise on or prior to the Closing within
the time limits and in the manner provided for in this Agreement, (ii) any
representation or warranty made by Seller in this Agreement is untrue or
inaccurate in a material respect when made or as of the Closing Date, (iii) any
of the Other Sellers under the Other Sale Agreements fails, for any reason
(other than a default by Purchaser thereunder), to perform any of its material
obligations under the subject Other Sale Agreement that arise on or prior to the
closing for such Other Sale Agreement within the time limits and in the manner
provided for in such Other Sale Agreement, or (iv) any representation or
warranty made by any such Other Seller in the applicable Other Sale Agreement is
untrue or inaccurate in a material respect when made or as of the closing date
for such Other Sale Agreement. Notwithstanding the provisions of clauses (iii)
and (iv) above, if Purchaser closes this transaction, any default or any
inaccurate representation or warranty by any Other Seller under the terms of the
applicable Other Sale Agreement shall be deemed waived in respect to this
Agreement and it shall not be construed
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as a default by Seller hereunder. In respect to the remedies afforded Purchaser
pursuant to Paragraph 18.05 hereof, Seller shall be deemed to be in default
under this Agreement in the event Seller or Contractor fails, for any reason
(other than a default by Purchaser hereunder), to perform any of their material
obligations under this Agreement that arise subsequent to the Closing within the
time limits and in the manner provided for in this Agreement or any
representation or warranty made by Seller or Contractor in this Agreement is
untrue or inaccurate in a material respect when made or as of the Closing Date.
If Closing does not occur and Seller is in default, Seller shall pay all of the
Shared Closing Costs.
(B) Contractor's Default. Contractor shall be deemed to be in
default under this Agreement in the event Contractor fails, for any reason
(other than a default by Purchaser hereunder), to perform any of its material
obligations under this Agreement within the time limits and in the manner
provided for in this Agreement.
18.02 PURCHASER'S DEFAULTS. Purchaser shall be deemed to be in default under
this Agreement in the event Purchaser fails, for any reason (other than a
default by Seller or Contractor), to perform any of its material obligations
under this Agreement or any or all of the Other Sale Agreements within the time
limits and in the manner provided for, as applicable, in this Agreement and the
Other Sale Agreements, or any representation or warranty made by the Purchaser
in this Agreement or any or all of the Other Sale Agreements is untrue or
inaccurate in a material respect when made or as of the Closing Date. If Closing
does not occur and Purchaser is in default, Purchaser shall pay all of the
Shared Closing Costs.
18.03 SELLER'S REMEDIES. If Purchaser is in material default under this
Agreement of its obligation to close this transaction and Seller and Contractor
are not in material default, the sole and exclusive remedy of Seller shall be to
terminate this Agreement by notice given to Purchaser and in such event
Purchaser shall be liable to Seller for liquidated damages in the amount equal
to one percent (1%) of $22,878,566.00 plus Litigation Expenses incurred by
Seller in enforcing the collection of such liquidated damages. The Parties
recognize and agree that the foregoing remedy for liquidated damages is a
reasonable amount in the context of this transaction in which the accurate
measurement of damages is not feasible or convenient. Notwithstanding the
foregoing, if Purchaser (i) violates the Recording Restriction (as hereinafter
defined), (ii) fails to indemnify, defend or hold Seller and the Project
harmless in respect to Tests and Studies as provided in Paragraph 5.02 hereof,
or (iii) fails to bind its successors and assigns as provided in Paragraph 13.04
hereof, Seller, in addition to the aforesaid liquidated damages in respect to
Purchaser's failure to close this transaction, shall be entitled (subject to the
limitations contained in Paragraph 23 hereof) to recover from Purchaser monetary
damages in the amount actually suffered by Seller as a result of the events set
forth in clauses (i), (ii), or (iii). If Purchaser fails to pay, when due, the
Earn-Out Payments and/or Footage Payments required hereunder, Seller shall only
be entitled to recover from Purchaser such Earn-Out Payments or Footage
Payments, plus interest thereon as provided in Paragraph 24.16 hereof, plus
Litigation Expenses.
18.04 PRE-CLOSING PURCHASER'S REMEDIES. If Seller, in respect to its obligations
to close this transaction, is in material default under this Agreement on or
before the Closing Date
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and Purchaser is not in material default, Purchaser may, as Purchaser's sole and
exclusive remedies, elect to either (i) terminate this Agreement, in which event
the Deposit shall be refunded to Purchaser, the Lump Sum Payment shall be
retained and deemed earned by Seller, and neither Party shall have any further
rights or obligations hereunder, except those specifically provided herein as
surviving such termination, or (ii) seek and enforce the specific performance of
Seller's obligations hereunder in which event Purchaser shall also be permitted
to recover Litigation Expenses that it incurred as a result of such proceeding.
Notwithstanding the foregoing, in no instance shall Purchaser or anyone claiming
by, through or under Purchaser (over whom Purchaser has control) record or file
in the public records in the jurisdiction of the Project any memorandum or other
indicia of Purchaser's rights or Seller's obligations hereunder, except in the
single instance of a recording or filing that is concurrently done at the time
of the filing of a complaint by Purchaser, with a court of competent
jurisdiction, for the relief of specific performance of Seller's obligations
hereunder, but then only after Purchaser has given Seller three (3) business
days written notice prior to such recording or filing ("Recording Restriction").
18.05 POST CLOSING PURCHASER'S REMEDIES. If either Seller or Contractor is in
material default under this Agreement in respect to any of their respective
obligations hereunder that arise subsequent to the Closing Date, subject to the
limitation provided in Paragraph 23 hereof, Purchaser may recover from Seller or
Contractor all out-of-pocket monetary damages incurred by Purchaser that have
not been satisfied by the offset permitted Purchaser pursuant to Paragraphs
5.04, 9.03, 14.06, 14.07 and 16.01 hereof. In addition, Purchaser shall be
permitted to recover Litigation Expenses that it incurs as a result of enforcing
Purchaser's right to recover monetary damages as aforesaid. Notwithstanding the
foregoing, it is understood and agreed that Contractor shall not be liable to
Purchaser for any default by Seller of its obligations hereunder. Accordingly,
Purchaser shall not be permitted to recover any monetary damages from or enforce
any other rights against Contractor as a result of any default by Seller
hereunder.
19. CROSS PERFORMANCE OBLIGATION. If Purchaser or its
permitted successors and assigns elects to terminate any of the Other Sale
Agreements for any reason other than Casualty to or Taking in respect to any of
the Other Centers, it shall act as an election of Purchaser under this Agreement
to concurrently terminate this Agreement, and this Agreement thereupon shall
terminate, Purchaser and Seller shall each pay fifty percent (50%) of the Shared
Closing Costs, and neither Purchaser and Seller shall have any further rights or
obligations hereunder, except those specifically provided herein as surviving
such termination.
20. ASSIGNMENT
Seller shall not assign or transfer any of its rights under
this Agreement without first obtaining Purchaser's prior written consent which
consent shall not be unreasonably withheld or delayed. Prior to the Closing,
Purchaser shall not assign any of its rights under this Agreement without first
obtaining Seller's prior written consent which consent shall not be unreasonably
withheld or delayed. At or subsequent to the Closing, Purchaser may assign its
rights under this Agreement provided such assignee and Purchaser are jointly and
severally liable
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for the obligations of Purchaser hereunder and such assignee assumes such
obligations, in writing, in form and content reasonably acceptable to Seller.
21. NOTICES. Any notice, demand, request, approval, consent or
other communication (collectively, a "Notice") concerning this Agreement or the
Project or any matter arising in connection with this Agreement or the Project
shall be in writing. Seller and Contractor hereby appoints Opus Properties,
L.L.C., a Delaware limited liability company ("Opus Properties"), as Seller's
and Contractor's duly authorized and empowered agent to give and receive any and
all Notices required or permitted to be given by Purchaser, Seller, or
Contractor hereunder. Any Notice received by Opus Properties under the terms of
this Agreement shall be deemed received and binding on Seller and Contractor.
Any Notice given by Opus Properties to Purchaser shall be deemed a Notice given
by and binding on Seller and Contractor. All Notices shall be addressed as
follows:
If to Seller and/or Contractor to: Opus Properties, L.L.C.
700 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
ATTN: Anne E. Loff
Telecopier: (612) 936-9808
with a copy to: Opus, U.S., L.L.C.
700 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
ATTN: Dan F. Nicol, Esq.
Telecopier: (612) 936-9808
with a copy to: O'Brien, O'Rourke & Hogan
135 South LaSalle Street
Suite 830
Chicago, Illinois 60603
ATTN: Frederic G. Hogan
Telecopier: (312) 372-8029
with a copy to: Tousley Brain
700 Fifth Avenue
Seattle, Washington 98104
ATTN: Russell F. Tousley
Telecopier: (206) 682-2992
If to Purchaser to: DEVELOPERS DIVERSIFIED REALTY
CORPORATION
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
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ATTN: James A. Schoff
Executive Vice President
Telecopier: (216) 247-5076
with a copy to: Joan Allgood, Esq,
Developers Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Telecopier: (216) 247-5076
with copy to: Banker & Hostetler
3200 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
ATTN: Albert T. Adams
Telecopier: (216) 696-0740
If to Escrow Agent to: First American Title Insurance Company
1150 Metropolitan Centre
333 South 7th Street
Minneapolis, Minnesota 55402
ATTN: Rodney D. Ives
Telecopier: (612) 337-5249
Any Notice shall be given by either (i) personal delivery, in which event it
shall be deemed given on the date of delivery; (ii) certified mail return
receipt requested, in which event it shall be deemed given three (3) business
days after the date postmarked; or (iii) next or second business day delivery by
nationally recognized overnight courier, in which event it shall be deemed given
on the next or second (whichever is applicable) business day immediately
following receipt by the courier. Any Party and Contractor may change any
address for the delivery of Notice to such Party or Contractor, by giving Notice
in accordance with the provisions of this Paragraph 21.
22. ATTORNEYS' FEES AND DISBURSEMENTS.
In the event that any Party or Contractor shall engage an
attorney in connection with any action or proceeding to enforce or construe this
Agreement, the prevailing Party or Contractor in such action or proceeding shall
be entitled to recover its Litigation Expenses to the extent permitted by law.
In the event different Parties or Contractor are the prevailing parties on
different issues, the Litigation Expenses shall be apportioned in proportion to
the value of the issues decided for and against the Parties and Contractor.
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23. NO CONSEQUENTIAL DAMAGES.
Notwithstanding any term, provision or covenant contained in
this Agreement to the contrary, no Party hereto shall be entitled to recover
from the other Party or Contractor consequential, exemplary or punitive damages,
all such damages are hereby expressly waived and released.
24. MISCELLANEOUS.
24.01 SUCCESSORS. The rights and obligations of the Parties and Contractor under
this Agreement shall inure to the benefit of and be binding upon the Parties and
Contractor and all persons who are permitted hereunder to succeed to their
respective rights and obligations.
24.02 MODIFICATIONS/WAIVERS. This Agreement cannot be changed nor can any
provision of this Agreement, or any right or remedy of any Party or Contractor,
be waived orally. Changes and waivers can only be made in writing and the change
or waiver must be signed by the Party or Contractor against whom the change or
waiver is sought to be enforced. Any waiver of any provision of this Agreement,
or any right or remedy, given on any one or more occasions shall not be deemed a
waiver with respect to any other occasion.
24.03 ENTIRE AGREEMENT. This Agreement is signed by the Parties and Contractor
as a final expression of all of the terms, covenants and conditions of their
agreement and as a complete and exclusive statement of its terms, covenants and
conditions.
24.04 COUNTERPARTS. This Agreement may be signed in one or more counterparts or
duplicate signature pages with the same force and effect as if all required
signatures were contained in a single original instrument.
24.05 CAPTIONS. The captions contained in this Agreement were inserted for the
convenience of reference only. They do not in any manner define, limit or
describe the provisions of this Agreement or the intentions of the Parties and
Contractor.
24.06 GENDER/SINGULAR/PLURAL. Whenever masculine, feminine, neuter, singular,
plural, conjunctive or disjunctive terms are used in this Agreement, they shall
be construed to read in whatever form is appropriate to make this Agreement
applicable to all the Parties and Contractor and all circumstances, except where
the context of this Agreement clearly dictates otherwise.
24.07 EXHIBITS INCORPORATED. The exhibits attached to this Agreement are hereby
incorporated by reference in their entirety with the same force and effect as if
they were set forth at length in this Agreement. Concurrently with the execution
of this Agreement, Seller, Purchaser and all of the Other Sellers entered into
that certain Exhibit Agreement ("Exhibit Agreement") pursuant to the terms of
which the exhibits attached thereto are certain of the schedules referenced in
this Agreement that are also common to all of the Other Sale Agreements.
Therefore, the exhibits attached to the Exhibit Agreement are hereby
incorporated
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by reference in their entirety in this Agreement with the same force and effect
as if they were set forth at length in this Agreement.
24.08 GOVERNING LAW. In the event of any dispute concerning or arising out of
this Agreement, the laws of the State in which the Project is located shall
govern and control the construction and enforcement of this Agreement.
24.09 SEVERABILITY. If one or more provisions of this Agreement or the
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions or any
other application thereof shall in no way be affected or impaired.
24.10 DATE FOR PERFORMANCE. If the date for performance of any act under this
Agreement falls on a Saturday, Sunday or federal holiday, the date for such
performance shall automatically be extended to the first succeeding business
which is not a federal holiday.
24.11 FURTHER ACTION. The Parties and Contractor shall at any time, and from
time to time on and after the Closing Date, upon the request of the other Party
or Contractor, do, execute, acknowledge and deliver all such further acts,
deeds, assignments and other instruments as may be reasonably required for the
consummation of this transaction and are reasonably acceptable in scope, form
and content to the Party or Contractor whose act, signature, acknowledgment or
delivery is requested.
24.12 INTENTIONALLY DELETED
24.13 CONFIDENTIALITY. Without the prior written consent of Purchaser, neither
Seller nor any of Seller's representatives will disclose to any person any of
the terms, conditions or other facts with respect to this Agreement or the
Exhibit Agreement, including the status thereof, provided, that Seller or any of
Seller's representatives may make such disclosure if Seller has first received
the written opinion of counsel acceptable to Purchaser that such disclosure must
be made by Seller in order that Seller does not commit a violation of law.
Without the prior written consent of Seller, neither Purchaser nor any of
Purchaser's representatives will disclose to any person any of the terms,
conditions or other facts with respect to this Agreement or the Exhibit
Agreement, including the status thereof and any of the terms, provisions or
conditions of the Site Analysis Documents or of any of the Studies and Reports,
provided, that Purchaser or any of Purchaser's representatives may make such
disclosure if Purchaser has first received the written opinion of counsel
acceptable to Seller that such disclosure must be made by Purchaser in order
that Purchaser does not commit a violation of law. The obligation of Seller and
Purchaser pursuant to the provisions of this Paragraph 24.13 shall survive the
termination of this Agreement.
24.14 TIME OF THE ESSENCE. Time is of the essence in this transaction.
24.15 CONSTRUCTION. This Agreement shall not be construed more strictly against
one Party than against the other merely by virtue of the fact that it may have
been prepared by
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counsel for one of the Parties, it being recognized that both Seller and
Purchaser have contributed substantially and materially to the preparation of
this Agreement. The headings of various Section and Paragraphs in this Agreement
are for convenience only, and are not to be utilized in construing the content
or meaning of the substantive provisions hereof.
24.16 INTEREST. Any payment obligation of a Party hereto or Contractor to the
other Party (or Purchaser, in the instance of Contractor) shall bear interest at
the rate of two percent (2%) plus the corporate base rate of interest from time
to time charged by Citibank, N.A., commencing on the date that is five (5)
business days subsequent to the date such payment is due, until paid.
24.17 WARRANTY WORK. For the period ("Warranty Period") (i) that is provided in
each Lease or New Lease in respect to the applicable Tenant Warranty for tenant
improvements, and (ii) of one (1) year subsequent to the date each of the
Improvements (exclusive of tenant improvements that are the subject of the
applicable Tenant Warranty) is substantially complete in accordance with the
Plans, Seller and Contractor, jointly and severally, agree, at their sole cost
and expense, to promptly (subject to Force Majeure) correct any defects in the
tenant improvements or other Improvements due to (a) the failure thereof to
substantially comply with the plans for the subject tenant improvements or the
Plans in respect to the rest of the Improvements, or (b) faulty, improper or
inferior materials or workmanship (collectively, "Warranty Work"). If Warranty
Work is the subject of a Lease or New Lease, the provisions of such Lease or New
Lease shall control in the determination of the scope of the Warranty Work. If
Warranty Work is not the subject of a Lease or New Lease, then the provisions of
this Paragraph 24.17 shall control in the determination of the scope of the
Warranty Work. The Warranty Work shall not in any way include routine and
appropriate maintenance or Warranty Work directly resulting from (but only to
the extent resulting from) the failure to perform routine and appropriate
maintenance of the tenant improvements or other Improvements. Promptly during
the Warranty Period (but in any event prior to the expiration of the Warranty
Period), Purchaser shall give Seller and Contractor written notice ("Warranty
Notice") of any defect in the Project that Purchaser, in good faith, determines
to require Warranty Work. Except as hereafter provided, Seller or Contractor
shall promptly undertake and complete, subject to Force Majeure, the Warranty
Work that is the subject of the Warranty Notice. However, if Seller and
Contractor both (but not one or the other) object, in good faith, within ten
(10) business days following receipt of a Warranty Notice, Seller shall notify
Purchaser, in writing of the same. Thereafter, they shall promptly confer, in
good faith, to resolve any disagreement in respect to Warranty Work. If within
fifteen (15) days after conferring Purchaser, Seller and Contractor are unable
to agree on the scope of Warranty Work that is not the subject of a Lease or New
Lease, they shall appoint a third party contractor to make such determination,
and the scope so determined by the third party contractor shall be binding on
the Parties. When the Warranty Work is agreed to by the Parties or determined by
the third party contractor as aforesaid, such Warranty Work shall be undertaken
and completed as aforesaid. The Warranty Work obligation hereunder shall only
pertain to the Warranty Work for which a Warranty Notice was delivered to Seller
and Contractor prior to the expiration of the Warranty Period or that was
delivered by a Tenant or a New Tenant in accordance with the provisions of the
Tenant Warranty, and in such event the Warranty Work obligation of Seller in
respect thereto
47
53
shall not terminate at the expiration of the Warranty Period or the Tenant
Warranty, but rather shall continue until such Warranty Work is completed by
Seller.
48
54
IN WITNESS WHEREOF, the Parties and Contractor have signed
this Agreement as of the date set forth in the first paragraph of this
Agreement.
SELLER: PURCHASER:
BOLD, L.L.C., DEVELOPERS DIVERSIFIED
a Delaware limited liability company REALTY CORPORATION,
an Ohio corporation
By: /s/ [Signature Illegible] By: /s/ James A. Schoff
-------------------------------- ---------------------------------
Its: Vice President James A. Schoff
--------------------------- Executive Vice President
Seller's Federal Taxpayer Purchaser's Federal Taxpayer
Identification No.: Identification No.:
41-1811424 34-1723097
CONTRACTOR:
OPUS NORTHWEST, L.L.C.,
a Delaware limited liability company
By: /s/ [Signature Illegible]
--------------------------------
Its: Authorized Signatory
---------------------------
For purposes only of acting as the Escrow Agent as provided in this Agreement,
First American Title Insurance Company
By: /s/ [Signature Illegible]
--------------------------------
Its: Commercial Manager
----------------------------
55
SCHEDULES ATTACHED TO THIS AGREEMENT OR
THE EXHIBIT AGREEMENT
1.02 Legal Description
1.02(a) Site Plan
2.01(b) Personal Property
3.01 Rent Roll
5.01(b) Environmental Reports
5.01(g) Guaranties
6.01 Survey Requirements and Certifications
(attached to the Exhibit Agreement)
6.03 Permitted Exceptions
6.04 Endorsements
7.01 Deed (attached to the Exhibit Agreement)
7.02 Assignment of Leases (attached to the
Exhibit Agreement)
7.02(a) Description of Leases and Security Deposits
7.04 Bill of Sale (attached to the Exhibit
Agreement)
7.05 Assignment of Contracts (attached to the
Exhibit Agreement)
7.05(a) Description of Contracts to be Assigned at
Closing
7.06 Affidavit of Seller Concerning
Violations/Work Orders (attached to the
Exhibit Agreement)
7.10 FIRPTA Affidavit (attached to the Exhibit
Agreement)
7.13 Tenant Letter (attached to the Exhibit
Agreement)
7.15 Tenant Estoppel (attached to the Exhibit
Agreement)
7.20 Seller Date Down Certificate (attached to
the Exhibit Agreement)
7.21 Agreement Estoppel
7.25 Allocable Share Agreement
7.26 Assignment of Declaration
8.06 Purchaser Date Down Certificate (attached to
the Exhibit Agreement)
56
10.01(xi) Permits
10.01(xvii) Tenant Inducements
10.01(xviii) Alleged Seller Defaults Under the Leases
10.01(xix) Tenant Defaults Under the Leases
10.01(xx) Tenant's Notice of Vacating, Assigning or
Subletting
13.11 Shell and Core List and Standard
13.11(a)(1),etc. Punchlist Holdback
13.11(b) Form G704 Certificate of Completion
(attached to the Exhibit Agreement)
57
GLOSSARY OF TERMS
Term Where Defined
- ---- -------------
Agreement 1st Paragraph
Agreement Estoppel 7.21
Arrears 14.02
Assignment Reservation 13.03
Bankruptcy Proceeding 13.01(ix)(c)
Best Products Pad 1.02
Carry 13.01(i)
Casualty 17.01
Casualty Notice 13.06
Closing 15.01
Closing Date 15.01
Closing Payment 13.01(ii)
Commissions 10.01(xvi)
Condition Notice 5.04
Condition Response 5.04
Commitment 6.02
Contract Assignment 7.05
Contractor 1st Paragraph
Deed 7.01
Defects Notice 6.03
Deposit 3.02(c)
Disapproved Lease 13.04
Earn-Out Conditions 13.07
Earn-Out Extension Notice 13.05
Earn-Out Payment 13.01(iii)
Earn-Out Period 13.05
Earn-Out Segment 13.05
Endorsements 6.04
Environmental Laws 10.01(xii)
Environmental Reports 5.01(b)
Escrow Agent 4.01
Exhibit Agreement 24.07
FIRPTA Affidavit 7.10
First Segment 13.05
Footage Computation 13.08
i
58
GLOSSARY OF TERMS
Term Where Defined
- ---- -------------
Footage Payment 13.08
Force Majeure 13.01(iv)
Guaranties 5.01(g)
Haggen 15.01
Haggen Contingency 15.01
Haggen Lease 15.01
Hazardous Substances 10.01(xii)
Improvements 1.02
Initial Deposit 3.02(b)
Intangible Property 2.01(c)
Knowledge 10.01
Land 1.02
Lease Assignment 7.02
Lease Reservation Date 13.03
Leases 7.02
Lien(s) 9.03
Litigation Expenses 10.04(a)
Loss 17.01
Lump Sum Payment 3.02(a)
Lump Sum Non-Credit 14.07
Maple Grove Agreement 3.02(a)
Monetary Default 13.01(xi)(b)
Mortgage 10.01(ix)
Net Cash Flow 13.01(v)
New Lease 13.01(vi)
New Lease Obligations 13.10
New Tenant 13.01(vii)
Notice 21
Opus Properties 21
Other Center(s) 13.01(viii)
Other Sale Agreement(s) 13.01(ix)
Other Seller(s) 13.01(x)
Outside Date 15.01
Party(ies) 1st Paragraph
Permits 2.01(c)
Permitted Exceptions 6.03
Personal Property 2.01(b)
Plans 5.01(f)
Post Closing Work 16.01
Pro-Rata Share 14.03
Project 2.01
ii
59
GLOSSARY OF TERMS
Term Where Defined
- ---- -------------
Prospect 13.04
Punchlist Holdback 13.11
Punchlist Work 13.11
Purchase Price 3.01
Purchaser 1st Paragraph
Purchaser Date Down Certificate 8.06
Purchaser's Knowledge 10.02
Qualified Lease 13.01(xi)
Real Estate Broker 4.02
Real Estate Tax Rent 14.06
Real Property 1.03
Recording Restriction 18.04
Release 10.01(xii)
Rental Undertaking 13.04
Rents 14.01
Reserved Base Rent Date 13.03
Reserved Lots 1.02
Restoration Forgiveness 5.02
Second Deposit 3.02(c)
Second Segment 13.05
Security Deposits 7.02
Seller 1st Paragraph
Seller Date Down Certificate 7.20
Seller's Estoppel 7.15
Seller's Response 6.03
Shared Closing Costs 11.02(a)
Site Analysis Documents 5.01
Site Analysis Period 5.03
Square Footage 13.08
Superfund Act 10.01(xii)
Survey 6.01
Survey Defects 6.03
Taking 17.01
Tenant Estoppel 7.15
Tenant Inducement 10.01(xvii)
Tenant Letters 7.13
Tenant Warranty 13.10
Tenants 7.02
Termination Agreements 7.16
Tests and Studies 5.02
iii
60
GLOSSARY OF TERMS
Term Where Defined
- ---- -------------
Title Company 4.01
Title Defects 6.03
Title Policy 6.04
Unacceptable Conditions 5.04
Unknown Rents 14.03
Unassigned Lease 13.04
Utility Deposits 14.04
Vacant Space 13.01(xii)
Violations 7.06
Warranty Notice 24.17
Warranty Period 24.17
Warranty Work 24.17
Work Orders 7.06
iv