HAWTHORN, L.P.
AGREEMENT OF PURCHASE AND SALE OF PARTNERSHIP INTEREST
By and Among
JMB GROUP TRUST I, an Illinois group trust,
as Seller 1,
HAWTHORN CENTER CORPORATION, an Illinois corporation,
As Seller 2,
and
URBAN SHOPPING CENTERS, L.P., an Illinois limited partnership,
as Purchaser 1, and
USC HAWTHORN, INC., a Delaware corporation,
as Purchaser 2
DATED: November 14, 1997
HAWTHORN, L.P.
AGREEMENT OF PURCHASE AND SALE OF PARTNERSHIP INTEREST
THIS AGREEMENT OF PURCHASE AND SALE OF PARTNERSHIP INTEREST
is made and entered into this 14th day of November, 1997 by and
between JMB GROUP TRUST I, an Illinois group trust ("SELLER 1")
and HAWTHORN CENTER CORPORATION, an Illinois corporation ("SELLER
2"), Seller 1 and Seller 2 each having an address of c/▇ ▇▇▇▇▇▇▇
Capital Management Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, URBAN SHOPPING CENTERS, L.P., an
Illinois limited partnership ("PURCHASER 1"), and USC HAWTHORN,
INC., a Delaware corporation ("PURCHASER 2"), Purchaser 1 and
Purchaser 2 each having an address of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ facsimile number (▇▇▇) ▇▇▇-▇▇▇▇. Seller 1 and Seller 2
are herein individually and collectively called "SELLER" and
Purchaser 1 and Purchaser 2 are herein individually and
collectively called "PURCHASER".
RECITALS
A. LA SALLE NATIONAL TRUST, N.A., as TRUSTEE UNDER TRUST
AGREEMENT dated March 1, 1971 And Known As TRUST NUMBER 41999, as
to Parcels 1, 2, 3, 4, and 5 (Parcels 4 and 5 being easements and
other matters benefiting the owner of Parcels 1, 2 and 3); LA
SALLE NATIONAL TRUST, N.A., as TRUSTEE UNDER TRUST AGREEMENT
dated April 27, 1978 And Known As TRUST NUMBER 54254, as to
Parcel 10; and LA SALLE NATIONAL TRUST, N.A., as TRUSTEE UNDER
TRUST AGREEMENT dated June 1, 1978 And Known As TRUST NUMBER
52472, as to Parcels 6, 7, 8, and 9 (Parcels 7, 8 and 9 being
easements and other matters benefiting the owner of Parcel 5)
(said three trusts collectively, the "TRUST") are the legal title
holders to the "Property" (as hereinafter defined) which is
legally described on EXHIBIT A attached hereto.
B. The beneficial owner of the Trust is Hawthorn, L.P., an
Illinois limited partnership (the "OWNER"). The sole partners of
Owner are "Prior Owner" (defined below) and Seller 2, the sole
owner of the entire "Seller 1 GP Interest" and "Seller 1 LP
Interest" (defined below) on the "Closing Date" (defined below)
will be Prior Owner, and the sole entity entitled to receive or
to direct a distribution of each of the entire Seller 1 GP
Interest and Seller 1 LP Interest on the Closing Date will be
Seller 1.
C. The Property is encumbered by a loan (the "LOAN")
pursuant to that certain Mortgage Agreement dated as of September
13, 1994, with an original principal indebtedness of Twenty-Five
Million Dollars ($25,000,000) as to which LASALLE NATIONAL BANK
("LNB") is trustee.
D. Owner will be on the Closing Date the beneficiary of
the Trust and as such is the beneficial owner of the Land and
Improvements, and Owner is also the owner of the other components
of the Property, which Property (including the Land and
Improvements) is commonly known as the Hawthorn Shopping Center.
The Property consists of an enclosed dual-level retail shopping
mall building containing approximately 503,480 gross leasable
square feet of in-line mall shops, a theater building outlot
containing approximately 4.299 acres and a health club building
outlot containing approximately 2.285 acres, situated on
underlying parcels collectively consisting of approximately
41.061 acres. The Property is anchored by department stores
owned by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Company ("FIELD"), ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ &
Co. ("▇▇▇▇▇▇"), Sears ▇▇▇▇▇▇▇ & Company ("SEARS") and ▇.▇. Penney
Properties, Inc. ("PENNEY") (collectively, The "ANCHOR STORES").
Each of the Department Stores or their affiliates own their respective
parcels. The Anchor Stores and the Partnership are parties to the "REA".
The "REA" is that certain amended operating agreement captioned
"AMENDED OPERATING AGREEMENT" dated as of November 27, 1973, by
and between Envion I, a joint venture consisting of Mapco, Inc.,
a Delaware corporation and Urban Investment and Development Co.,
a Delaware corporation ("ORIGINAL DEVELOPER"), Field, Sears and
Adcor Realty Corporation, a New York corporation ("ADCOR"),
recorded as Document 1648659, in the Recorder's Office of DuPage
County, Illinois, as amended by that certain first amendment to
amended operating agreement captioned "FIRST AMENDMENT TO AMENDED
OPERATING AGREEMENT" dated as of August 27, 1975, by and between
Original Developer, Field, Sears and Adcor, recorded as Document
1731032, in the Recorder's Office of DuPage County, Illinois, as
amended by that certain second amendment to amended operating
agreement captioned "SECOND AMENDMENT TO AMENDED OPERATING
AGREEMENT" dated as of April 28, 1989, by and between
Orland/Hawthorn Partnership, an Illinois general partnership, as
successor in interest to Original Developer ("SUCCESSOR
DEVELOPER"), Field, Sears, Adcor, CPS Realty Partnership, an
Illinois general partnership, by ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & Co., a
Delaware corporation, as its general partner ("CPS"), and LaSalle
National Bank, not personally but solely as Trustee under Trust
Agreement dated April 10, 1989, and known as Trust No. 114300
("TRUST 114300"), recorded as Document 3028678, in the Recorder's
Office of DuPage County, Illinois, as amended by that certain
third amendment to amended operating agreement captioned "THIRD
AMENDMENT TO AMENDED OPERATING AGREEMENT" dated as of January 31,
1997, by and among Owner, as successor in interest to Successor
Developer, LaSalle National Bank, not personally but solely as
Trustee under Trust Agreement dated March 1, 1971, and known as
Trust No. 41999 ("TRUST 41999"), Field, Sears, Carson, as
successor in interest CPS, and Penney, recorded as Document
3991226, in the Recorder's Office of DuPage County, Illinois.
E. Each of the Anchor Stores and Owner are parties to
"Supplemental Agreements. The "Supplemental Agreements" are as
follows: (I) with respect to Field and Sears, that certain
supplemental agreement captioned "SUPPLEMENTAL AGREEMENT" (the
"FIELD & SEARS SUPPLEMENTAL AGREEMENT") dated as of November 3,
1972, by and between Original Developer, Field and Sears; (ii)
with respect to ▇▇▇▇▇▇, that certain supplemental agreement
captioned "▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ - SUPPLEMENTAL AGREEMENT - HAWTHORN
CENTER" (the "▇▇▇▇▇▇ SUPPLEMENTAL AGREEMENT") dated as of January
31, 1997, by and between Owner and CPS; (iii) with respect to
Sears, that certain supplemental agreement captioned "SEARS -
SUPPLEMENTAL AGREEMENT - HAWTHORN CENTER" (the "SEARS
SUPPLEMENTAL AGREEMENT") dated as of January 31, 1997, by and
between Owner and Sears; and (iv) with respect to Penney, that
certain supplemental agreement captioned "PENNEY - SUPPLEMENTAL
AGREEMENT - HAWTHORN CENTER" (the "PENNEY SUPPLEMENTAL
AGREEMENT") dated as of June 26, 1997, by and between Developer
and ▇.▇. ▇▇▇▇▇▇ Properties, Inc., a Delaware corporation ("PENNEY").
Subject to and on the terms and provisions of and for the
considerations set forth in this Agreement, Seller has agreed to sell,
and Purchaser has agreed to buy, the entire interest of Seller in Owner.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
CLOSING DATE. As agreed between Seller and Purchaser
but no later than November 14, 1997.
DUE DILIGENCE PERIOD. The period commencing on the
date hereof and ending on November 14, 1997.
ESCROW COMPANY. Near North National Title Corporation.
TITLE COMPANY. First American Title Insurance Company.
KNOWLEDGE OF PURCHASER. The actual current knowledge
of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇. (The same definition shall apply when this
Agreement uses the phrase, "PURCHASER'S KNOWLEDGE," or similar phrase.)
KNOWLEDGE OF SELLER. The actual current knowledge of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇'▇▇▇▇▇. (The same definition shall apply when this Agreement
uses the phrase, "Seller's knowledge," or similar phrase.)
PARTNERSHIP INTEREST. The entire right, title and
interest of Prior Owner and Seller in, and claims against, Owner,
including, but not limited to, the entire interest of Prior Owner
and Seller in the profits and capital of Owner; said interest of
Prior Owner and Seller constitute 100% of all ownership interests
in Owner. The Partnership Interest is comprised of the Seller 2
GP Interest, the Seller 1 GP Interest and the Seller 1 LP
Interest, which Seller 1 GP Interest and Seller 1 LP Interest are
to be distributed at Closing to or at the direction of Seller 1.
PRIOR OWNER. Orland/Hawthorn Partnership, an Illinois
general partnership. The two general partners of Prior Owner are Seller 1
and Shopping Center Associates, a New York general partnership ("▇'▇▇▇▇▇▇").
PROPERTY. The following described property:
(1) The real property legally described on
EXHIBIT "A", together with all easements, covenants, agreements,
rights of way, rights, privileges, tenements, hereditaments,
appurtenances, gaps, gores, and other rights now or hereafter
belonging or pertaining thereto, including, but not limited to,
any development rights and air rights appurtenant thereto (collectively,
the "LAND");
(2) Any land owned by Owner lying in the bed
of any street, road or avenue opened or proposed, public or
private, in front of or adjoining the Land, (all of the foregoing
being included within the term "Land");
(3) All of the buildings, structures,
fixtures, facilities, installations and other improvements of
every kind and description (other than those owned by tenants
under Leases) now or hereafter in, on, over or under the Land
(collectively, the "IMPROVEMENTS");
(4) All furniture, furnishings, fixtures,
equipment, machinery, maintenance vehicles and equipment, tools,
parts, computer hardware and other items of tangible personalty
of every kind and description situated in, on, over and under the
Premises, which is owned by Owner or leased pursuant to the
leases listed on EXHIBIT B, together with all replacements and
substitutions therefor (collectively, the "TANGIBLE PERSONAL
PROPERTY"), an itemization of which has been prepared by Seller
and is attached to this Agreement as EXHIBIT B. The foregoing includes
all that owned by Prior Owner on the date on which the beneficial
interest in the Trust was assigned to Owner.
(5) All of Owner's interest in all existing
surveys, blue prints, drawings, plans and specifications and
other documentation for or with respect to the Property or any
part thereof, including, without limitation, all materials,
plans, specifications, drawings, renderings, models, permits,
applications, bid solicitations, budgets, market or income and
expense projections, feasibility or other studies and analyses,
books and records and all other material and data generated or
produced with respect to the Property; and all available tenant
lists and data, correspondence with present and prospective
tenants, vendors, suppliers, utility companies and other third
parties, booklets, manuals and promotional and advertising
materials concerning the Property or any part thereof; equipment
maintenance records, warranty information, sales and advertising
materials and accounting information, and such other existing
books, records and documents used in connection with the
operation of the Property or any part thereof (collectively, THE
"BOOKS AND RECORDS"). The Books and Records include all of the
foregoing that was owned by Prior Owner on the date on which the
beneficial interest in the Trust was assigned to Owner, except
for internal management books and records (the same having been
retained by Prior Owner and not contributed to Owner);
(6) All leases and other agreements for the use or
occupancy of space in the Property binding upon Owner (the "LEASES");
(7) All government permits, approvals,
authorizations, licenses and franchises that have been issued or
granted to Owner and/or the Prior Owner to the extent they relate
to the operation of the Property, or the ownership, use or
occupancy of the Property (the "LICENSES"); and
(8) Subject to the provisions of Article 5,
all prepaid advertising expenses, prepaid utility charges and
deposits and other prepaid items relating to the Property (the
"PREPAID EXPENSES"), all trade names, assumed names, trademarks,
copyrights and service marks with respect to the Property and all
goodwill associated therewith (the "TRADEMARKS"), and all other
intangible personal property used exclusively in connection with
or arising from the Property (the "INTANGIBLE PERSONAL
PROPERTY"), including, without limitation, contract rights and
telephone exchange numbers, but expressly excluding cash held by
Owner on the Closing Date and also expressly excluding
Miscellaneous Receivables of Owner on the Closing Date.
"MISCELLANEOUS RECEIVABLE" are receivables of Owner other than
(i) receivables owing by the Anchor Stores and (ii) receivables
owing under Leases and Service Contracts.
PURCHASER INDEMNIFIED PARTIES. Seller, Owner (as to Section
3.2(e) only) and Prior Owner and their respective partners,
trustees, beneficiaries, shareholders, members, managers,
advisors and other agents and their respective employees,
officers, directors and shareholders.
SELLER INDEMNIFIED PARTIES. Purchaser and Owner and their
respective partners, trustees, beneficiaries, shareholders,
members, managers, advisors and other agents and their respective
employees, officers, directors and shareholders.
SELLER 1 GP INTEREST. The entire right, title and interest
of each of Prior Owner (to be distributed to or at the direction
of Seller 1) and Seller 1 as a general partner, in, and claims
against, Owner, including, but not limited to, the entire interest
of each of Prior Owner and Seller 1, as a general partner, in the profits
and capital of Owner; said interest of Prior Owner and Seller 1
constitutes a .5% general partnership interest in Owner.
SELLER 1 LP INTEREST. The entire right, title and interest
of each of Prior Owner (to be distributed to or at the direction
of Seller 1) and Seller 1 as a limited partner, in, and claims
against, Owner, including, but not limited to, the entire
interest of each of Prior Owner and Seller 1, as a limited
partner, in the profits and capital of Owner; said interest of Prior
Owner and Seller 1 constitutes a 99% limited partnership interest in Owner.
SELLER 2 GP INTEREST. The entire right, title and interest
of Seller 2 as a general partner, in, and claims against, Owner,
including, but not limited to, the entire interest of Seller, as
a general partner, in the profits and capital of Owner; said interest
of Seller constitutes a .5% general partnership interest in Owner.
STRAY LIABILITIES. All obligations and liabilities of Owner
on the Closing Date, contingent or otherwise, and all claims made
at any time (whether before or after the Closing Date) asserting
an obligation or liability of Owner accruing on or before the
Closing Date, including, but not limited to, the Existing
Litigation. The foregoing Stray Liabilities do not include
obligations arising under the Swap Documents, Leases, Service
Contracts, REA, Supplemental Agreements and Permitted Exceptions
first accruing on or after the Closing Date or any express
matters for which Purchaser receives and accepts a proration
credit at Closing. Stray Liabilities include all obligations and
liabilities with respect to the Indenture dated September 13,
1994 between Owner and LaSalle National Bank, other than
obligations under Section 6.15 of the Indenture.
TORT CLAIMS. All claims and causes of actions seeking
damages on account of injury to persons or damage to property
occurring at the Property. Tort Claims will be treated as
accruing prior to the Closing Date if the injury to person or
damage to property occurred prior to the Closing Date; and Tort
Claims will be treated as accruing on or after the Closing Date
if the injury to person or damage to property occurred on or
after the Closing Date.
2. SALE; AGGREGATE PURCHASE PRICE.
2.1 Subject to the terms and provisions hereof, Seller 1
agrees to sell and convey to Purchaser 1, and Purchaser 1 agrees
to purchase from Seller 1, the Seller 1 LP Interest; Seller 1
agrees to sell and convey to Purchaser 2, and Purchaser 2 agrees
to purchase from Seller 1, the Seller 1 GP Interest; and Seller 2
agrees to sell and convey to Purchaser 2, and Purchaser 2 agrees
to purchase from Seller 2, the Seller 2 GP Interest. Such
purchase and sale shall occur on the Closing Date (the "CLOSING").
2.2 The total purchase price (hereinafter called THE
"SELLER 1 LP PURCHASE PRICE") to be paid by Purchaser 1 to Seller
1 for the Seller 1 LP Interest shall be One Hundred Twenty Eight
Million Seven Hundred Thousand Dollars ($128,700,000). The total
purchase price (hereinafter called the "SELLER 1 GP PURCHASE
PRICE") to be paid by Purchaser 2 to Seller 1 for the Seller 1 GP
Interest shall be Six Hundred Fifty Thousand Dollars ($650,000).
The total purchase price (hereinafter called the "SELLER 2 GP
PURCHASE PRICE") to be paid by Purchaser 2 to Seller 2 for the
Seller 2 GP Interest shall be Six Hundred Fifty Thousand Dollars
($650,000). Accordingly, the aggregate (the "AGGREGATE PURCHASE
PRICE") of the Seller 1 LP Purchase Price, the Seller 1 GP
Purchase Price and the Seller 2 GP Purchase Price is One Hundred
Thirty Million and no/100 Dollars ($130,000,000.00). The
Aggregate Purchase Price shall be payable in the following manner:
(1) ▇▇▇▇▇▇▇ MONEY. Purchaser shall, within three (3)
business days after the delivery of this Agreement to Seller,
deposit with the Escrow Company, as escrow agent, the amount of
Zero Dollars ($0) (hereinafter called the "▇▇▇▇▇▇▇ MONEY") which
▇▇▇▇▇▇▇ Money shall be in the form of a wire transfer of
immediately available United States of America funds. The
▇▇▇▇▇▇▇ Money shall become nonrefundable at the close of business
of the last day of the Due Diligence Period unless this Agreement
is terminated prior to the expiration of the Due Diligence
Period. The ▇▇▇▇▇▇▇ Money shall be held and disbursed by the
Escrow Company acting as escrow agent pursuant to the ▇▇▇▇▇▇▇
Money Escrow Agreement in the form of EXHIBIT C attached hereto
which the parties and Escrow Company have executed simultaneously
with this Agreement. The ▇▇▇▇▇▇▇ Money shall be invested in a
federally issued or insured interest bearing instrument with any
interest accruing thereon being deemed part of the ▇▇▇▇▇▇▇ Money
and shall be paid to the party to which the ▇▇▇▇▇▇▇ Money is paid
pursuant to the provisions hereof. If the sale hereunder is
consummated in accordance with the terms hereof, the ▇▇▇▇▇▇▇
Money and any interest thereon shall be applied to the Aggregate
Purchase Price to be paid by Purchaser at the Closing. In the
event of a default hereunder by Purchaser or Seller, the ▇▇▇▇▇▇▇
Money shall be applied as provided herein.
(2) CASH BALANCE. Purchaser shall pay the balance of
the Aggregate Purchase Price, subject to the prorations described
in Section 5 below, in cash (the "CASH BALANCE") by wire transfer
of immediately available United States of America funds to the
Title Company for payment to Seller, in accordance with the terms
and conditions of this Agreement no later than 11:00 am (New York
City, New York time) on the Closing Date. Said Cash Balance will
be paid on the Closing Date in two parts: the Cash Balance less
$77,364,951.61 shall be paid concurrently with the conveyance to
Purchaser of the Partnership Interest; and $77,364,951.61 shall
be paid immediately following such conveyance (the parties
acknowledge that said $77,364,951.61 represent funds to be
distributed by Owner to Purchaser from proceeds of a loan to
Owner which Purchaser is causing Owner to obtain on the Closing
Date). Notwithstanding the foregoing, Purchaser's obligations
hereunder and are not contingent upon Purchaser causing Owner to
obtain financing.
3. CONDITIONS PRECEDENT. In the event (a) any of the
conditions set forth in Sections 3.2(b), 3.3, 3.5, 3.6 or 3.7
below shall not have been fulfilled, accepted or deemed accepted
or waived as provided herein on or before the applicable dates
specified herein, Purchaser shall have the right to terminate
this Agreement by giving written notice thereof to Seller on or
before the respective dates specified herein, or (b) any of the
conditions set forth in Section 3.5 hereof shall not have been
fulfilled as provided herein on or before the applicable dates
specified herein, Seller shall have the right to terminate this
Agreement by giving written notice thereof to Purchaser on or
before the respective dates specified herein. In the event the
Agreement is terminated as provided in clause (a) or (b) above
then all ▇▇▇▇▇▇▇ Money shall be refunded to Purchaser and neither
party shall have any further rights or obligations hereunder,
except for the "Surviving Obligations" (as hereinafter defined).
3.1 SELLER'S DELIVERIES. Seller has delivered or made
available to Purchaser complete copies of the following items
which are in Seller's possession:
(1) all Leases;
(2) all Service Contracts;
(3) copies of the real estate tax bills for the
current year and two prior years, if available;
(4) any existing environmental reports, including any
Phase I environmental report;
(5) the existing owner's title policy;
(6) the existing survey (the "EXISTING SURVEY");
(7) annual operating statements for the Property for
the last three calendar years and monthly operating statements
for the months in the current year;
(8) existing plans and specifications; and
(9) copies of all Lease "Proposals" (as defined in
Section 15(b)) presently outstanding.
Seller shall provide to Purchaser any documents described in
this Section 3.1 and first coming into Seller's possession or
produced by Seller after the initial delivery and continue to
provide the same during the pendency of this Agreement.
In the event this Agreement terminates for any reason,
Purchaser shall immediately return to Seller all information
delivered by Seller or Seller's agent(s) to Purchaser or
Purchaser's agent(s). The foregoing provision shall survive
termination of this Agreement.
3.2 DUE DILIGENCE. Purchaser and its representatives shall
be permitted to enter upon the Property at any reasonable time
and from time to time before the Closing Date to examine, inspect
and investigate the Property as well as all records and other
documentation provided by Seller or located at the Property
(collectively, "Due Diligence"). The Due Diligence shall be
subject to the terms, conditions and limitations set forth in
this Section 3.2.
(1) Purchaser shall have the right to enter upon the
Property for the purpose of conducting its Due Diligence provided
that in each such instance Purchaser is in full compliance with
the insurance requirements set forth in Section 3.2(e) hereof.
Purchaser shall take all necessary actions to insure that neither
it nor any of its representatives interfere with the tenants or
ongoing operations occurring at the Property. Purchaser shall
not cause or permit any mechanic's liens, materialmen's liens or
other liens to be filed against the Property as a result of its
Due Diligence.
(2) Purchaser shall have through the last day of the
Due Diligence Period in which to conduct its Due Diligence and,
in Purchaser's sole and absolute discretion, to determine whether
the Property is acceptable to Purchaser. If during the Due
Diligence Period, Purchaser becomes aware of any problem or
defect in the Property or any other aspect of the Property which
Purchaser determines, in its sole and absolute discretion, makes
the Property unsuitable to Purchaser, Purchaser may terminate
this Agreement by giving written notice of termination to Seller
on or before the last day of the Due Diligence Period. If
Purchaser does not timely give notice of termination as aforesaid,
Purchaser shall be deemed to have accepted the Property and this Agreement
shall continue in full force and effect. In the event of such termination,
the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser and neither party shall
have any further obligations to the other party hereunder, except for the
Surviving Obligations.
(3) Purchaser shall have the right to conduct, at its
sole cost and expense, any inspections, studies or tests that
Purchaser deems appropriate in determining the condition of the
Property; provided, however, Purchaser is not permitted to
perform any intrusive testing, including, without limitation, a
Phase II environmental assessment or boring, without (i)
submitting to Seller the scope and inspections for such testing;
and (ii) obtaining the prior written consent of Seller.
(4) Purchaser agrees and covenants with Seller not to
disclose to any third party (other than lenders, accountants,
attorneys and other professionals and consultants in connection
with the transaction contemplated herein) without Seller's prior
written consent, unless Purchaser believes in good faith that
Purchaser is obligated by law to make such disclosure, any of the
reports or any other documentation or information obtained by
Purchaser which relates to the Property or Seller in any way, all
of which shall be used by Purchaser and its agents solely in
connection with the transaction contemplated hereby. In the
event that this Agreement is terminated, Purchaser agrees that
all such information will be held in strict confidence, subject
to the disclosures that Purchaser has made (or has a right to
make) pursuant to the previous sentence. In the event that the
sale hereunder is consummated, the prohibition on the Purchaser's
disclosure of information as set forth in this Section 3.2(d)
shall be of no further force or effect. Seller shall not
disclose to any third party (other than lenders, accountants,
attorneys and other professionals in connection with the
transaction contemplated herein) the existence or terms of this
Agreement without Purchaser's prior written consent, unless
Seller believes in good faith that Seller is obligated by law to
make such disclosure.
(5) Purchaser agrees to indemnify, defend and hold the
Purchaser Indemnified Parties harmless from and against any and
all claims, losses, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees and court costs)
suffered or incurred by any of the Purchaser Indemnified Parties
as a result of or in connection with any damage to property or
injury to persons or any mechanic's lien, which damage or injury
or lien arises from any activities of Purchaser (including
activities of any of Purchaser's employees, consultants,
contractors or other agents) relating to the Property; and in the
event that the Property is disturbed or altered in any way as a
result of such activities, Purchaser shall promptly restore the
Property to its condition existing prior to the commencement of
such activities which disturbed or altered the Property.
Furthermore, Purchaser agrees to maintain and cause any of its
representatives or agents conducting any Due Diligence to
maintain and have in effect workers' compensation insurance, with
statutory limits of coverage, and commercial general liability
insurance with (i) all risk coverage, (ii) waiver of subrogation,
and (iii) limits of not less than Three Million and 00/100
($3,000,000.00) for personal injury, including bodily injury and
death, and property damage. Such insurance shall name the
Purchaser Indemnified Parties and Heitman Capital Management
Corporation ("HCMC") as additional insured parties. Purchaser
shall deliver to Seller a copy of the certificate of insurance
effectuating the insurance required hereunder prior to the
commencement of such activities which certificate shall provide
that such insurance shall not be terminated or modified without
at least thirty (30) days' prior written notice to Seller.
(6) Purchaser acknowledges and agrees that it shall
have no right to review or inspect any of the following: (i)
internal memoranda, correspondence, analyses, documents or
reports prepared by or for Seller in connection with this
Agreement or in connection with the transaction contemplated by
this Agreement, (ii) communications between Seller and HCMC, and
(iii) appraisals, financial assessments or other valuations of
the Property in the possession of Seller or HCMC.
(7) Sections 3.2(d) and 3.2(e) and such other
designated provisions in this Agreement shall survive Closing or any
termination of this Agreement (collectively, the "Surviving Obligations").
3.3 TITLE AND SURVEY. Purchaser has obtained, at Seller's
cost and expense, for Purchaser's review a commitment for a
standard owner's policy of title insurance along with a copy of
each instrument listed as an exception thereon (the "TITLE
COMMITMENT") on the Land and Improvements issued by the Title
Company. Purchaser has delivered a copy of the title Commitment
to Seller. During the Due Diligence Period, Purchaser shall have
the right to obtain, at its sole cost and expense, any desired
endorsements to the Title Commitment which are available, if any.
Purchaser shall obtain at Seller's expense for Purchaser's review
an update to the Existing Survey (the "UPDATED SURVEY").
Purchaser shall deliver a copy of the Updated Survey to Seller in
a timely manner. As used herein, "PERMITTED EXCEPTIONS" means
the items listed on EXHIBIT D hereof. If prior to the Closing
Date there are additional title exceptions identified by the
Title Company, then Seller shall have the right, but not the
obligation, to cure such exceptions on or before the Closing
Date. Notwithstanding the foregoing, Seller shall be obligated
to remove each exception, if: (a) it can be removed by the
payment of a liquidated sum of money or by posting a bond; or (b)
it arises as a result of any willful or voluntary act of Seller
or Prior Owner or any affiliate of Seller after the date hereof,
regardless of the cost. In addition, Seller shall remove those
title mechanics lien exceptions, if any, listed on EXHIBIT E. If
the objections are not cured by Seller by the scheduled Closing
Date, then Purchaser may as its only option, elect to either:
(i) waive such objection and consummate the transaction
contemplated by this Agreement; or (ii) terminate this Agreement,
in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser
and neither party shall have any further obligations to the other
party except for the Surviving Obligations.
3.4 LOAN PAYOFF. At Closing, Seller shall cause the
"Hawthorn Swap" (as defined below) to be retained by Owner, and
Owner and Purchaser shall bear the cost of unwinding the same.
Notwithstanding the foregoing, however, at the Closing, Seller
shall cause the Hawthorn Swap to be released as security for the
Loan; a condition to Purchaser's obligations under this Agreement
is that Purchaser receive evidence reasonably satisfactory to
Purchaser that the Hawthorn Swap has been released as security
for the Loan and that Owner or Purchaser can unwind the Hawthorn
Swap on the Closing Date or such later date as Purchaser elects.
As used herein, "HAWTHORN SWAP" means the swap transaction
evidenced by that certain interest rate swap transaction
Reference Number NUUS409010010000A00, with a trade date of
September 2, 1994, an effective date of September 13, 1994 and a
termination date of September 1, 2001, in the notational amount
of $25,000,000, under which the fixed payer is Owner, governed by
the ISDA Master Agreement dated September 2, 1994, between GS
Financial Products U.S., Schedule to the Master Agreement dated
as of September 2, 1994 between said parties, and the Revised
Confirmation dated September 16, 1994 (collectively, the "SWAP
DOCUMENTS"). A copy of the Swap Documents is attached hereto as
EXHIBIT F. On the Closing Date, Seller shall cause Owner to
repay the Loan in full (Purchaser's only obligation in connection
therewith being the acceptance of the Hawthorn Swap being retained by
Owner). In addition, at the Closing, Seller shall cause the deeds of trust
and other security documents securing the same to be discharged
(or cause to be provided at Closing to the Title Company such
instruments and documents as the Title Company requires to insure
over said deeds of trust and security documents, with the Title
Company taking the entire risk of obtaining and recording full
releases thereof). Notwithstanding the foregoing, instead of
repaying the Loan in full on the Closing Date, Seller may instead
repay the Loan on December 1, 1997, but shall cause all liability
with respect to the Loan to be "defeased" such that, from and
after the Closing Date, Owner shall have no liability for the
Loan and all liens against the Property with respect to the Loan
are discharged; the documentation accomplishing the foregoing
shall be subject to the reasonable approval of Purchaser. The
costs of incurred in such defeasance shall be borne by Seller.
3.5 PARTNERSHIP TRANSACTION. The closing occurring under
the Withdrawal and Distribution Agreement dated November __, 1997
under which the Seller 1 LP Interest and the Seller 1 GP Interest
are each being distributed to or at the direction of Seller as a
distribution of capital by the Prior Owner.
3.6 ISSUANCE OF TITLE POLICY. On the Closing Date, the
Title Company shall issue (or irrevocably commit to issue) an
ALTA owner's title insurance policy in the form formerly known as
ALTA Form B 1970 (Rev. 10-17-70 and 10-17-84), or an equivalent
form acceptable to Purchaser, issued in the State of Illinois, in
the face amount of the Aggregate Purchase Price, which policy
shows good and marketable title to the Property to be vested of
record in the Trust (with Owner as an additional insured),
subject only to the Permitted Exceptions, and containing an
extended coverage endorsement over the so-called general or
standard exception items 1, 2, 3, 4 and 5 which are a part of the
printed form of policy, and containing the other endorsements
described on EXHIBIT G (the "TITLE POLICY").
3.7 ESTOPPELS. On or before the Closing Date, Purchaser
shall have obtained from Sears an estoppel certificate
substantially in the form attached hereto as EXHIBIT H (Purchaser
having already obtained estoppels from the other Anchors).
4. CLOSING; CONDITIONS; DELIVERIES.
4.1 TIME, PLACE AND MANNER OF CLOSING. The Closing shall
be held on the Closing Date in the offices of Altheimer & ▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
any other location mutually acceptable to the parties.
4.2 CONDITION TO PARTIES' OBLIGATION TO CLOSE. In addition
to all other conditions set forth herein, the obligation of
Seller, on the one hand, and Purchaser, on the other hand, to
consummate the transaction contemplated hereunder shall be
contingent upon the following:
(1) The other party's representations and warranties
contained herein shall be true and correct in all material
respects as of the date of this Agreement and the Closing Date;
(2) As of the Closing Date, the other party shall have
performed its obligations hereunder in all material respects and
all deliveries to be made at Closing have been tendered;
(3) As of the Closing Date, there shall exist no
pending action, suit or proceeding with respect to the other
party before or by any court or administrative agency which seeks
to restrain or prohibit, or to obtain damages or a discovery order
with respect to, this Agreement or the consummation of the transactions
contemplated hereby; and
(4) Simultaneously with the execution of this
Agreement, Purchaser and HCMC shall have each executed and
delivered to each other and to Seller a fully executed original
ERISA certificate in the form of EXHIBIT I attached hereto.
4.3 DELIVERIES. At Closing each party shall execute and
deliver to the other and/or Title Company the following documents
duly executed by the appropriate party or parties:
(1) Seller shall deliver or cause to be delivered to
Purchaser and/or Title Company:
(1) three assignments of the Partnership Interest
(the "ASSIGNMENTS OF PARTNERSHIP INTEREST"), one each with
respect to the Seller 1 LP Interest, the Seller 1 GP Interest and
the Seller 2 GP Interest, such assignments in the forms attached
hereto as EXHIBIT J.
(2) a non-foreign transferor certification
pursuant to Section 1445 of the Internal Revenue Code and any
similar provisions of applicable state law, in substantially the
same form as set forth on EXHIBIT K attached hereto (the "AFFIDAVIT");
(3) certified resolutions of HCMC (with respect
to Seller 1 as Seller 1's advisor) and Seller 2 certifying that
Seller 1 and Seller 2, as applicable, have the respective legal
power, right and authority to consummate the sale of the
Partnership Interest;
(4) a payoff letter in connection with the Loan;
(5) such other evidence of the authority of
Seller to consummate the transactions provided for in this
Agreement as may be reasonably requested by Purchaser (but not
including opinions of counsel);
(6) to the extent in the possession or control of
Seller, the original of all of the Leases, the REA, the
Supplemental Agreements, Service Contracts and the Partnership
Agreement, and, to the extent in the possession or control of
Seller, any and all building plans, surveys, site plans, engineering
plans and studies, utility plans, landscaping plans, development plans,
specifications, drawings and other Books and Records;
(7) counterparts of the Management and
Submanagement Termination Agreements, each dated as of the
Closing Date, duly executed by Owner and Agent 2. The
"MANAGEMENT AND SUBMANAGEMENT TERMINATION AGREEMENTS" are the two
agreements in the form attached as Exhibit L, one of which is
among Owner, JMB Institutional Realty Corporation, an Illinois
corporation ("AGENT 1"), and ▇'▇▇▇▇▇▇ Management, Inc., a
Delaware corporation ("AGENT 2") (collectively, the "AGENTS"),
and the other of which is among Owner, Agents and JMB Properties
Urban Company ("MANAGER"); and
(8) certified copies of each of the trust
agreement for each Trust, showing Owner as the beneficial owner thereof.
(2) Purchaser shall deliver to Seller or Title Company:
(1) the Cash Balance, by wire transfers, as
provided in Section 2.2(b) hereof;
(2) a copy of the Management and Submanagement
Termination Agreements, executed by Manager and Agent 1;
(3) a certified resolution of Purchaser
certifying that Purchaser has the legal power, right and
authority to consummate the purchase of the Partnership Interest; and
(4) such other evidence of the authority of
Purchaser to consummate the transactions provided for in this
Agreement as may be reasonably requested by Seller (but not
including opinions of counsel).
(3) Seller or the title holder as the case may be and
Purchaser shall jointly deliver to Title Company a closing statement.
(4) Title Company shall deliver to Purchaser an
initialed ▇▇▇▇-up of the Title Commitment (which will include
endorsements), extending the effective date to the Closing Date,
insuring the Trust as owner of the Land and Improvements (with
Owner as an additional insured), and removing all exceptions
other than Permitted Exceptions.
4.4 PERMITTED TERMINATION. So long as a party is not in
default hereunder, if any condition to such party's obligation to
proceed with the Closing hereunder has not been satisfied or
waived as of the Closing Date or such earlier date as provided
herein, such party may, in its sole discretion, terminate this
Agreement by delivering written notice to the other party before
the Closing Date (in which event the ▇▇▇▇▇▇▇ Money shall be
returned to Purchaser), or elect to close, notwithstanding the
non-satisfaction of such condition, in which event such party
shall be deemed to have waived any such condition.
50 PRORATIONS. All items of income and expense of shall be
paid, prorated or adjusted as of the close of business on the day
prior to the Closing Date (the "PRORATION DATE") in the manner
hereinafter set forth:
5.1 Purchaser shall be credited with (i) the amount of (A)
all rents and (B) all expense contributions, real estate tax
contributions, and other reimbursements from tenants ("TENANT
CONTRIBUTIONS") received by Seller, Owner or Prior Owner and
attributable to any month commencing after the Closing Date and
(ii) all unapplied cash security deposits which were made by
tenants under all leases of the Property in effect as of the
Closing Date (or, as to cash security deposits held by Manager,
Seller may, instead of crediting the same to Purchaser, instruct
said manager to pay over the same to Purchaser). The term Tenant
Contributions includes all amounts paid by the Anchor Stores
under the REA and Supplemental Agreements.
5.2 All rents and Tenant Contributions for the month of
Closing shall be prorated between Purchaser and Seller based upon
their respective days of ownership of the Partnership Interest
for such month in which the Closing occurs. Neither Purchaser
nor Seller shall receive credit at Closing for any payments of
rental obligations due but not paid as of the Proration Date. At
the time of the final calculation and collection from tenants of
Tenant Contributions for 1997, whether in the nature of a
reconciliation payment or full payment, in arrears, there shall
be a reproration between Purchaser and Seller as to the Tenant
Contributions. Such reproration shall not be made on the basis
of a per diem method of allocation, but shall instead be
apportioned between Seller and Purchaser on the basis of the
relative share of actual expenses in question incurred by (i)
Prior Owner and Owner (prior to the Closing Date) and by (ii)
Owner from and after the Closing Date during the lease year in
question. Seller covenants to provide Purchaser with any
information necessary to finalize such calculation. Purchaser
covenants to cause Owner to ▇▇▇▇ tenants for amounts due from
tenants attributable to periods prior to closing and diligently
pursue collections from tenants and, as collected, to timely
deliver to Seller reproration amounts due Seller. In connection
with the foregoing:
(1) If such final calculation as to Tenant
Contributions (other than real estate tax contributions) shows
that a tenant paid an amount greater than its share of actual
expenses, Seller shall pay Purchaser, within 10 days after
demand, the Seller's pro rata share of such excess amount, which
Purchaser shall cause Owner in turn to pay or credit to the
tenant in reimbursement of such excess payment (with the
intention that Seller will be responsible for such excess to the
extent that Seller, Owner and/or Prior Owner received payments in
excess of the actual expenses paid by Seller, Owner and/or Prior
Owner on which such reimbursements are calculated). If such
final calculation as to Tenant Contributions (other than real
estate tax contributions) shows that a tenant paid an amount less
than its share of actual expenses, and if Owner, after the
Closing Date, receives from such tenant the amount of such
shortfall, then, promptly after Owner's receipt thereof, Purchaser
shall pay over to Seller the Seller's prorata share of such payment.
(2) The parties acknowledge that (i) the tenants under
Leases are paying during 1997 estimated tax payments for taxes
for the 1997 tax year, which taxes are not themselves due and
payable until 1998, and (ii) the final calculation as to Tenant
Contributions for 1997 real estate taxes will not be complete
until the actual amount of the 1997 real estate taxes is known.
If such final calculation shows that a tenant paid an amount
greater than its share of actual 1997 real estate taxes, Seller
shall pay Purchaser, within 10 days after demand, the Seller's
prorata share of such excess amount, which Purchaser shall in
turn cause Owner to pay to the tenant in reimbursement of such
excess payment, or which Purchaser shall cause Owner to credit to
the tenant in reduction of such tenant's future obligations (with
the intention in either case that Seller will be responsible for
such excess to the extent that Seller, Owner and/or Prior Owner
received payments in excess of the actual real estate taxes paid
by or credited to Seller, Owner and/or Prior Owner on which such
reimbursements are calculated). If such final calculation shows
that a tenant paid an amount less than its share of actual 1997
real estate taxes, and if Owner, after the Closing Date, receives
from such tenant the amount of such shortfall, then Seller shall
be entitled to credit or payment for the same as provided in
Section 5.6 below.
5.3 Percentage rent shall be prorated between the Purchaser
and the Seller such that the Seller receives all percentage rent
in respect of sales occurring through the Closing Date and the
Purchaser receives all percentage rent in respect of sales
occurring after the Closing Date. Any break point or minimum
sales provision in any Lease shall be prorated as of the Closing
Date on a per diem basis and applied to the period before and
after the Closing in determining such percentage rent.
5.4 Any amounts received from tenants after Closing shall
be applied on a tenant by tenant basis in the following order:
(i) first on account of any amount due Owner from such tenant(s)
in respect of any period after the Closing Date; (ii) next, on
account of any amount due from such tenant for any period prior
to the Closing Date; and (iii) finally, any balance then
remaining to Owner (i.e., Seller shall have no interest therein).
If delinquent rents have not been collected by Owner and paid to
Seller within six (6) months after the Closing Date, Owner shall,
at Seller's request, assign to Seller or at Seller's direction,
to Prior Owner, the right to the pre-closing delinquency from such
tenant, in which event Seller may institute an action in damages
(but not seeking any other remedy) against such tenant to collect
such delinquency, all at the cost and expense of Seller or at
Seller's direction, Prior Owner.
5.5 Operating expenses, including, without limitation,
permits, licenses. membership dues, and any other prepaid
expenses, shall be prorated between Purchaser and Seller based
upon the actual days of their respective ownership of the Partnership
Interest utilizing the actual expenses or reasonable estimates.
5.6 Real estate taxes shall be prorated between Seller and
Purchaser based upon the actual days of ownership for the year in
which Closing occurs utilizing 100% of the most recent
ascertainable tax ▇▇▇▇(s). Seller and Purchaser agree to
reprorate said real estate taxes upon Owner's receipt of the
actual tax ▇▇▇▇ for the tax year in question. Any amount owing
by Seller to Purchaser on account of the increase reflected in
the actual tax ▇▇▇▇ shall be due 30 days prior to the date on
which Owner is required to make the tax payment reflecting such
increase; such payment by Seller to Purchaser will be reduced by
Seller's pro rata share of amounts, if any, theretofore collected
by Owner from tenants on account of such increase in the taxes
for 1997 (and as and when Owner thereafter receives payments from
tenants on account of such increase, Purchaser shall remit to
Owner Seller's pro rata share thereof, as part of the monthly
reconciliation process described below, up to the amount of the
increase already paid by Seller). Notwithstanding the foregoing,
if the actual tax ▇▇▇▇ is received prior to the first payment of
1997 taxes, Seller's payment required above as to the tax
increase shall be made 50% prior to such first installment, and
50% prior to the second installment, net of said tenant
reimbursements theretofore received on account of said increase.
After the actual tax bills are known, Purchaser shall cause Owner
promptly in accordance with Purchaser's customary practice to
▇▇▇▇ tenants for their share thereof. Purchaser, on behalf of
Owner, shall have the exclusive right to meet with governmental
officials and to contest any reassessment. Purchaser shall pay to
Seller an amount equal to any refund of taxes applicable to any
period prior to the Closing unless under the terms of the Leases
the tenants are entitled to the benefit of such refund.
5.7 Except for utilities billed directly to Tenants,
utilities shall be prorated as of the Proration Date based upon
either meter readings on the Proration Date or the prior month's
actual invoices. Seller shall be credited with any unapplied
utility deposit in effect as of the Closing Date to the extent
such deposit is assignable.
5.8 Owner shall be responsible for and pay for (and Seller
shall not be required to reimburse Purchaser for) both: (a) the
cost of all tenant improvements, and (b) all leasing commissions
due and payable as a result of leases made pursuant to (i)
Proposals listed on Schedule 4 attached hereto, (ii) any lease
entered into after the date hereof through the date which is five
(5) days prior to the expiration of the Due Diligence Period, and
(iii) any Proposal which Purchaser approved, or is deemed to have
approved as provided in Section 15. Purchaser shall receive a
credit from Seller for the amount of all unpaid tenant allowances
and leasing commissions shown on Exhibit M.
5.9 All insurance policies and property management agreements
shall be terminated at the cost of Seller as of the Closing Date and
there shall be no proration with respect to these items.
5.10 On the Closing Date, Owner shall, at Seller's sole cost
and expense, discharge all indebtedness of Owner for borrowed money,
including all indebtedness secured by the Property (subject to Seller's
right to defease the Loan as described in Section 3.4 above); provided,
however, Purchaser shall accept the Hawthorn Swap pursuant to Section
3.4 hereof; and, provided further, as to the equipment leasing
agreements listed in Exhibit B, the monthly payments thereunder will be
pro rated and the same shall not be paid off at Closing. At the Closing,
Purchaser shall be credited with (i.e., Seller shall be charged for) any
unpaid amounts owing by Owner under Hawthorn Swap for all periods through
the Closing Date. At the Closing Date, Owner shall distribute all cash on
hand to Seller. Seller is retaining all rights under the Withdrawal and
Distribution Agreement.
5.11 Seller shall be responsible for all payments due to the
Agents and Manager under the Management and Submanagement
Termination Agreements and the agreements terminated pursuant thereto.
All other items which are customarily prorated in transactions
similar to the transaction contemplated hereby and which were not
heretofore dealt with, will be prorated as of the Proration Date.
In the event any prorations or computations made under this
Section are based on estimates or prove to be incorrect, then
either party shall be entitled to an adjustment to correct the
same. Purchaser shall indemnify and hold Purchaser Indemnified
Parties harmless from and against any and all claims for which
Purchaser received credits pursuant to this Section 5. The
indemnity set forth in the immediately preceding sentence and the
covenants contained in this Section 5 shall survive Closing.
Purchaser and Seller hereby agree to reprorate all expense and
income items for which estimates were used to determine the
prorations (including, but not limited to, real estate taxes) on
May 1, 1998, with a final accounting to be completed no later than
thirty (30) days after final real estate tax bills have been issued for
the tax year 1997. On the date of each such final accounting, all sums
due from Seller to Purchaser, or Purchaser to Seller, shall be paid in
the same manner as they would have been paid as provided herein had the
final amounts been known as of the Closing Date.
5.12 Seller shall cause to be prepared and timely filed, at
Seller's cost and expense, a stub-period tax return for Owner for the
period from January 1, 1997 through the Closing Date (i.e., through
the date on which there is a termination for tax purposes of Owner by
reason of Purchaser's purchase of the Partnership Interest). Such tax
return shall make the election under 754 of the Internal Revenue Code.
60 SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller
hereby represents, warrants and covenants as follows:
6.1 POWER. Seller has the legal power, right and authority
to enter into this Agreement and the instruments referenced
herein and to consummate the transactions contemplated hereby.
6.2 REQUISITE ACTION. All requisite action (corporate,
trust, partnership or otherwise) has been taken by Seller in
connection with entering into this Agreement and the instruments
referenced herein and the consummation of the transactions
contemplated hereby. No consent of any partner, shareholder,
member, creditor, investor, judicial or administrative body,
authority or other party is required which has not been obtained
to permit Seller to enter into this Agreement and consummate the
transaction contemplated hereby.
6.3 AUTHORITY. The individuals executing this Agreement
and the instruments referenced herein on behalf of Seller have
the legal power, right and actual authority to bind Seller to the
terms and conditions hereof and thereof. Owner is a duly formed
validly existing limited partnership. On the Closing Date, (i) the
sole partners in Owner will be Prior Owner and Seller 2, (ii) the sole
owner of the entire Seller 1 GP Interest and the entire Seller 1 LP
Interest will be Prior Owner, and (iii) the sole entity entitled to
receive a distribution of each of the entire Seller 1 GP Interest
and the entire Seller 1 LP Interest from Prior Owner will be Seller 1.
6.4 VALIDITY. This Agreement and all documents required
hereby to be executed by Seller are and shall be valid, legally
binding obligations of and enforceable against Seller in
accordance with their terms.
6.5 CONFLICTS. None of the execution and delivery of this
Agreement and documents referenced herein, the incurrence of the
obligations set forth herein, the consummation of the
transactions herein contemplated or referenced herein conflicts
with or results in the material breach of any terms, conditions
or provisions of or constitutes a default under, any bond, note,
or other evidence of indebtedness or any contract, lease or other
agreements or instruments to which Seller is a party.
6.6 TITLE. On the Closing Date, (i) Prior Owner and Seller
2 will own the entire Partnership Interest, free and clear of all
claims, liens and encumbrances, (ii) Prior Owner will own the
entire Seller 1 GP Interest and the entire Seller 1 LP Interest,
free and clear of all claims, liens and encumbrances, and (iii)
Seller 1 will be solely entitled to receive a distribution of
each of the entire Seller 1 GP Interest and the entire Seller 1
LP Interest from Prior Owner, free and clear of all claims, liens
and encumbrances. On the Closing Date, Owner will own the entire
interest in the Property heretofore held by Prior Owner. On the
Closing Date, Owner will be the sole beneficiary of and have the
absolute power of direction over the Trust. On the Closing Date,
Owner will not be party to or bound by any agreements other than
the Swap Documents, Leases, Service Contracts, REA, Supplemental
Agreements and the Permitted Exceptions.
6.7 LEASES. Attached hereto as EXHIBIT N is a complete and
accurate list of all Leases, which EXHIBIT N shall be updated by
Seller prior to Closing, if necessary, by adding thereto any
Leases executed after the date of this Agreement through Closing
and all Proposals which are approved (or deemed approved) by
Purchaser as provided under Section 15 hereof.
6.8.1 SERVICE CONTRACTS. Attached hereto as EXHIBIT O
is a complete and accurate list of all service agreements
("SERVICE CONTRACTS") with respect to the Property, which EXHIBIT
O shall be updated by Seller prior to Closing, if necessary.
6.8.2 NOTICES. Neither Seller, nor, to Seller's
knowledge, Owner or Prior Owner, has received any written notice
that the Property, or any present uses and operations thereof,
are in violation of any applicable zoning, land-use, building,
fire, health and safety laws. The representations and warranties
set forth in this Section 6.8.2 shall be updated by Seller prior
to Closing, if necessary.
6.9 LITIGATION. Except as set forth on EXHIBIT P attached
hereto (the "EXISTING LITIGATION"), no litigation has been served
upon Seller, nor to Seller's knowledge has been filed, or
threatened in writing, affecting Owner or the Property. EXHIBIT
P shall be updated by Seller prior to Closing, if necessary.
6.10 ENVIRONMENTAL CONDITION. Seller has no knowledge of
any violation of Environmental Laws related to the Property or
the presence or release (other than as permitted by law) of Hazardous
Materials on or from the Property except as disclosed in the environmental
reports delivered by Seller to Purchaser or made available for Purchaser's
review. The term "Environmental Laws" includes, without limitation, the
Resource Conservation and Recovery Act and the Comprehensive Environmental
Response Compensation and Liability Act ("CERCLA") and other federal laws
governing the environment as in effect on the date of this Agreement
together with their implementing regulations and guidelines as of the date
of this Agreement, and all state, regional, county, municipal and
other local laws, regulations and ordinances that are equivalent
or similar to the federal laws recited above or that purport to regulate
Hazardous Materials in effect as of the date of this Agreement. "HAZARDOUS
MATERIALS" means any substance which is (i) designated, defined, classified
or regulated as a hazardous substance, hazardous material, hazardous
waste, pollutant or contaminant under any Environmental Law, as currently
in effect as of the date of this Agreement, (ii) petroleum hydrocarbon,
including crude oil or any fraction thereof and all petroleum products,
(iii) PCBs, (iv) lead, (v) friable asbestos, (vi) flammable explosives,
(vii) infectious materials, or (viii) radioactive materials.
6.11 INDEMNITY. Seller shall indemnify and hold Seller
Indemnified Parties harmless from and against any and all claims,
actions, judgments, liabilities, liens, damages, penalties,
fines, costs and reasonable attorneys' fees, foreseen or
unforeseen, asserted against, imposed on or suffered or incurred
by Seller Indemnified Parties directly or indirectly arising out
of or in connection with any breach of the warranties,
representations and covenants set forth in this Agreement. In
addition to, and not in limitation of, said indemnity, Seller
shall indemnify and hold Seller Indemnified Parties harmless from
and against any and all claims, actions, judgments, liabilities,
liens, damages, penalties, fines, costs and reasonable attorneys'
fees, foreseen or unforeseen, asserted against, imposed on or
suffered or incurred by Seller Indemnified Parties (unless
Purchaser receives and accepts a proration credit for such items)
(i) accruing with respect to the Swap Documents, Leases, Service
Contracts, REA, Supplemental Agreements and Permitted Exceptions
prior to the Closing Date, (ii) on account of Tort Claims
"accruing prior to the Closing Date" (as such phrase is defined
in the definition of Tort Claims in Section 1 hereof), or (iii)
on account of Stray Liabilities. The warranties and
representations set forth in this Section 6 shall be deemed
remade as of Closing, and said warranties and representations as
so remade, and the indemnity obligations set forth herein shall
survive Closing, provided that any claim by a Seller Indemnified
Party based upon a misrepresentation or breach of any warranty or
representation or indemnity obligation under this Section 6 shall
be deemed waived unless Purchaser has given Seller notice of such
claim prior to the date which is the sooner to occur of the
"SELLER LIQUIDATION DATE" or 18 months after the Closing Date;
provided, however, as to the indemnity for Stray Liabilities,
such notice by Purchaser may be given at any time until the
Seller Liquidation Date (even if later than the date which is 18
months after the Closing Date). "Seller Liquidation Date" means
the later to occur of (i) 60 days after Seller gives Purchaser
written notice stating that Seller intends to liquidate and
distribute all of its remaining assets or (ii) the date which is
30 days prior to the actual date of said liquidation of Seller.
Seller shall give Purchaser at least 75 days prior written notice
of Seller's liquidation (the purpose of which is to allow Seller
to have notice of claims at least 15 days prior to Seller's
liquidation). If the actual liquidation does not occur within
six (6) months after such notice is given, Seller shall give
Purchaser a new notice at least 75 days prior to Seller's liquidation.
Notwithstanding anything contained in this Agreement to the
contrary, Seller shall have no liability for breaches of any
representations, warranties and certifications (the "REPRESENTATIONS")
with respect to the Property which are made by Seller herein or in
any of the documents or instruments required to be delivered by Seller
hereunder to the extent that on the date immediately prior to the Closing
Date Purchaser knows of such breach (but the foregoing shall not
preclude Purchaser terminating this Agreement on account of such
breach, in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser).
6.12 UPDATE OF SCHEDULES. Prior to the Closing Date, Seller
may give written notice to Purchaser to make additions to, or
corrections to, Exhibits N (as to Leases), O (as to Service
Contracts) and P (as to litigation), and with respect to written
notices pursuant to Section 6.8.2. If Seller gives such notice,
(i) such new schedules shall be deemed to be part of this
Agreement, in lieu of the original schedules, and (ii) Purchaser
may terminate this Agreement and receive back the ▇▇▇▇▇▇▇ Money
(unless the only change is to add Service Contracts which have
been approved by Purchaser or to add additional Leases in
accordance with the Proposals listed on Exhibit Q or to add
additional Tort Claims which are fully insured).
70 PURCHASE AS-IS. EXCEPT FOR THE REPRESENTATIONS OF SELLER
EXPRESSLY SET FORTH IN SECTION 6 OF THIS AGREEMENT, PURCHASER
ACKNOWLEDGES TO AND AGREES WITH SELLER THAT, IN PURCHASING THE
PARTNERSHIP INTEREST, THE PURCHASER ACKNOWLEDGES THAT PROPERTY IS
OWNED BY OWNER IN ITS "AS-IS, WHERE IS" CONDITION "WITH ALL
FAULTS" AS OF THE CLOSING DATE AND SPECIFICALLY AND EXPRESSLY
WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER
EXPRESS OR IMPLIED, AS TO ITS CONDITION, FITNESS FOR ANY
PARTICULAR PURPOSE, MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY
KIND, NATURE, OR TYPE WHATSOEVER FROM OR ON BEHALF OF SELLER WITH
RESPECT TO THE PROPERTY. EXCEPT FOR THE REPRESENTATIONS OF
SELLER EXPRESSLY SET FORTH IN SECTION 6 OF THIS AGREEMENT, SELLER
SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING
(A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, STRUCTURAL INTEGRITY,
SOIL AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE PROPERTY;
(C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES
AND USES WHICH PURCHASER MAY CONDUCT THEREON, INCLUDING THE
POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (D) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS,
RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY; (E) THE HABITABILITY, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF THE PROPERTY; (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE
PROPERTY; (H) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT,
ON, UNDER, OR ADJACENT TO THE PROPERTY OR ANY OTHER ENVIRONMENTAL
MATTER OR CONDITION OF THE PROPERTY; OR (I) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED
IN SECTION 6 OF THIS AGREEMENT, ANY INFORMATION PROVIDED BY OR ON
BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A
VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO
REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY
ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION
PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED
BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH IN
SECTION 6 OF THIS AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT PURCHASER IS A SOPHISTICATED AND EXPERIENCED
PURCHASER OF PROPERTIES SUCH AS THE PROPERTY AND HAS BEEN DULY
REPRESENTED BY COUNSEL IN CONNECTION WITH THE NEGOTIATION OF THIS
AGREEMENT. EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN, SELLER
HAS MADE NO AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE PROPERTY.
80 PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Purchaser hereby represents, warrants and covenants as follows:
8.1 POWER. Purchaser has the legal power, right and
authority to enter into this Agreement and the instruments
referenced herein and to consummate the transactions contemplated hereby.
8.2 REQUISITE ACTION. All requisite action (corporate,
trust, partnership or otherwise) has been taken by Purchaser in
connection with entering into this Agreement and the instruments
referenced herein and the consummation of the transactions
contemplated hereby. No consent of any partner, shareholder,
member, creditor, investor, judicial or administrative body,
authority or other party is required which has not been obtained
to permit Purchaser to enter into this Agreement and consummate
the transaction contemplated hereby.
8.3 AUTHORITY. The individuals executing this Agreement
and the instruments referenced herein on behalf of Purchaser have
the legal power, right and actual authority to bind Purchaser to
the terms and conditions hereof and thereof.
8.4 VALIDITY. This Agreement and all documents required
hereby to be executed by Purchaser are and shall be valid,
legally binding obligations of and enforceable against Purchaser
in accordance with their terms.
8.5 CONFLICTS. Neither the execution and delivery of this
Agreement and documents referenced herein, nor the incurrence of
the obligations set forth herein, nor the consummation of the
transactions herein contemplated, nor referenced herein conflict
with or result in the material breach of any terms, conditions or
provisions of or constitute a default under, any bond, note, or
other evidence of indebtedness or any contract, lease or other
agreements or instruments to which Purchaser is a party.
8.6 INDEMNITIES. Purchaser shall indemnify and hold the
Purchaser Indemnified Parties harmless from and against any and
all claims, actions, judgments, liabilities, liens, damages,
penalties, fines, costs and reasonable attorneys' fees, foreseen
or unforeseen, asserted against, imposed on or suffered or
incurred by Seller directly or indirectly arising out of or in
connection with any breach of the warranties, representations and
covenants set forth in this Agreement. In addition to, and not
in limitation of, said indemnity, Purchaser shall indemnify and
hold Seller harmless from and against any and all claims,
actions, judgments, liabilities, liens, damages, penalties,
fines, costs and reasonable attorneys' fees, foreseen or
unforeseen, asserted against, imposed on or suffered or incurred
by Seller unless Seller receives and accepts an express proration
credit for such items (i) accruing after the Closing Date with
respect to the Swap Documents, Leases, those Service Contracts
approved by Purchaser, the REA, the Supplemental Agreements and
the Permitted Exceptions, or (ii) on account of Tort Claims
"accruing on or after the Closing Date" (as such phrase is
defined in the definition of Tort Claims in Section 1 hereof).
The warranties, representations and indemnities set forth in this
Section 8 shall be deemed remade as of Closing and shall survive
Closing, and said warranties and representations as so remade,
and the indemnity obligation set forth hereinabove shall be deemed
waived unless Seller has given Purchaser written notice of any such
claim prior to the date which is 18 months from the Closing Date.
90 CLOSING COSTS. Seller shall pay the following expenses:
(a) the title insurance premium for the Title Policy at a rate
not in excess of the standard issue rates; (b) the costs to
obtain the Updated Survey; (c) one-half of all closing escrow
fees, including "New York Style" closing fees; and (d) Seller's legal
fees incurred in connection with this Agreement. Purchaser shall pay
the following expenses: (a) the costs of all so-called "extended
coverage" in connection with, or endorsements to, the Title Policy,
together with the cost of any other title insurance coverage (such as
lender's insurance policies); (b) one-half of all closing escrow fees,
including "New York Style" closing fees; (c) all costs and expenses
associated with Purchaser's financing, if any; and (d)
Purchaser's legal fees and expenses. Also, as provided elsewhere
in this Agreement, Owner shall retain the Hawthorn Swap. The
parties do not believe that any conveyance fee, documentary,
stamp or transfer tax (a "TRANSFER TAX") is owing on account of
Purchaser's acquisition of the Partnership Interest or the
distribution of each of the entire Seller 1 GP Interest and the
entire Seller 1 LP Interest from Prior Owner to, or at the
direction of, Seller 1; however, if it is ever determined or
alleged by a governmental agency that a Transfer Tax is owing on
account of such acquisition of Partnership Interest or
distribution of each of the entire Seller 1 GP Interest and the
entire Seller 1 LP Interest from Prior Owner to, or at the
direction of, Seller 1, the same shall be the responsibility of
Purchaser and not Seller, and Purchaser shall indemnify, defend and
hold Purchaser Indemnified Parties harmless therefrom. Seller shall act
reasonably in cooperating in the defense of such claim. The provisions of
this Section 9 shall survive Closing or any termination of this Agreement.
100 [Intentionally Omitted]
110 NEW YORK STYLE CLOSING. It is contemplated that the
transaction shall be closed by means of a so-called New York
Style closing, with the concurrent delivery of the documents of
title, transfer of interest, delivery of the title policy or
marked-up title commitment described in Section 4.3(d) and the
payment of the Cash Balance. Seller and Purchaser shall each
provide any undertaking to the Title Company necessary to
accommodate the New York Style Closing. In no event shall
Purchaser be required to accept any "gap" risk. In no event
shall Purchaser or Owner be required to furnish any affidavits or
other indemnities to the Title Company
120 ATTORNEYS' FEES AND COSTS. In the event any suit or action
is instituted to interpret or enforce the terms of this
Agreement, or in connection with any arbitration or mediation of
any dispute, the prevailing party shall be entitled to recover
from the other party such sum as the court, arbitrator or
mediator may adjudge reasonable as such party's costs and
attorney's fees, including such costs and fees as are incurred in
any trial, on any appeal, in any bankruptcy proceeding (including
the adjudication of issues peculiar to bankruptcy law) and in any
petition for review. Each party shall also have the right to
recover its reasonable costs and attorneys' fees incurred in
collecting any sum or debt owed to it by the other party, with or
without litigation, if such sum or debt is not paid within
fifteen (15) days following written demand therefor. The
provisions of this Section 12 shall survive the Closing.
130 NOTICE. All notices, demands, deliveries and communications
(a "NOTICE") under this Agreement shall be delivered or sent by:
(i) first class, registered or certified mail, postage prepaid,
return receipt requested, (ii) nationally recognized overnight
carrier, or (iii) facsimile with original Notice sent via overnight
delivery addressed to the address of the party in question set forth
in the first paragraph of this Agreement and copies to the parties
designated below or to such other address as either party may designate
by Notice pursuant to this Section 13. Notices shall be deemed given
(x) three (3) business days after being mailed as provided in clause
(i) above, (y) one (1) business day after delivery to the overnight
carrier as provided in clause (ii) above, or (z) on the day of the
transmission of the facsimile so long as it is received in its entirety
by 5:00 pm (New York City, New York time) on such day and the original
of such Notice is received the next business day via overnight mail as
provided in clause (iii) above.
Notices to Seller, copy to: Altheimer & ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Purchaser, copy to: Urban Shopping Centers Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
General Counsel
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Pircher, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
1999 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Notices (PGN)
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
140 FIRE OR OTHER CASUALTY; CONDEMNATION.
14.1 If the Property or any part thereof is damaged by fire
or other casualty prior to the Closing Date which would cost in
excess of $500,000.00 to repair or takes longer than ninety (90)
days to repair (as determined by an insurance adjuster selected
by the insurance carriers), Purchaser may terminate this
Agreement by written notice to Seller given on or before Closing
Date. In the event of such termination, this Agreement shall be
of no further force and effect and, except for the Surviving
Obligations, neither party shall thereafter have any further
obligation under this Agreement, and Seller shall direct the
Escrow Company to promptly return all ▇▇▇▇▇▇▇ Money to Purchaser.
If Purchaser does not elect to terminate this Agreement or the
cost of repair is determined by said adjuster to be less than
$500,000.00, then the Closing shall take place as herein provided
without abatement of the Aggregate Purchase Price and Seller
shall assign and transfer to Owner on the Closing Date, without
warranty or recourse, all of Seller's and Prior Owner's right,
title and interest to the insurance proceeds paid or payable to
Seller or Prior Owner on account of such fire or casualty
remaining after reimbursement to Seller and Prior Owner for the
total amount of all costs and expenses incurred by Seller and
Prior Owner in connection therewith including but not limited to
making emergency repairs, securing the Property and complying
with applicable governmental requirements. Seller shall pay to
Purchaser the amount of the deductible of any of Seller's or
Prior Owner's applicable insurance policies.
14.2 If any portion of the Property is taken in eminent
domain proceedings prior to Closing, or is threatened in writing
to be taken, Purchaser may terminate this Agreement by notice to
Seller given on or before the Closing Date, and, in the event of
such termination, this Agreement shall be of no further force and
effect and, except for the Surviving Obligations, neither party
shall thereafter have any further obligation under this
Agreement, and Seller shall direct Escrow Company to promptly
return all ▇▇▇▇▇▇▇ Money to Purchaser. If Purchaser does not so
elect to terminate, then the Closing shall take place as herein
provided without abatement of the Aggregate Purchase Price, and
Seller shall deliver or assign to Purchaser on the Closing Date,
without warranty or recourse, all of Seller's right, title and
interest in and to all condemnation awards paid or payable to Seller.
150 OPERATIONS AFTER DATE OF THIS AGREEMENT. Seller covenants
and agrees with Purchaser that:
(1) after the date hereof through the Closing, Seller will
instruct Manager to, and Seller itself will (except as
specifically provided to the contrary herein):
(1) Refrain from transferring any of the Property or
creating on the Property any easements, liens, mortgages,
encumbrances, or other interests which will survive Closing or
permitting any changes to the zoning classification of the Land;
(2) Refrain from entering into or amending any
contracts, or other agreements (excluding leases) regarding the
Property (other than contracts in the ordinary and usual course
of business and which are cancelable by the owner of the Property
without penalty within thirty (30) days after giving notice thereof);
(3) Continue to operate, maintain, repair, and manage the
Leases for the Property in a manner consistent with Seller's current
practices;
(4) Refrain from offering the Property for sale or
marketing the same; and
(5) Continue to offer the Property for lease in the
same manner as prior hereto pursuant to its normal course of
business and, upon request, shall keep Purchaser reasonably
informed as to the status of leasing prior to the Closing Date,
and deliver to Purchaser not less than five (5) days prior to the
expiration of the Due Diligence Period copies of all leases
entered into after the date hereof through the date which is five
(5) days prior to the expiration of the Due Diligence Period and
copies of all Proposals with respect to which no lease has been
executed and which has not expired or been withdrawn, except as
provided otherwise in Section 15(b) below.
(2) after the date which is five (5) days prior to the
expiration of the Due Diligence Period through the Closing,
Seller will instruct Manager to, and Seller itself will (except
as specifically provided to the contrary herein), refrain from
(i) amending any Leases of any portion of the Property, (ii)
canceling any of such Leases, or (iii) executing any new leases
without the prior written consent of Purchaser (which consent
shall not be unreasonably withheld). As used herein, "PROPOSAL"
shall mean a description of the economic terms of any proposed
lease or amendment along with any financial information on the
tenant in Seller's possession. Purchaser shall be deemed to have
approved all Proposals listed on EXHIBIT Q attached hereto. Seller shall
have the right to execute lease documents and lease extensions
evidencing a Proposal approved or deemed approved by Purchaser.
160 ASSIGNMENT. Purchaser shall not assign this Agreement
without Seller's prior written consent which consent may be
withheld for any reason or no reason, provided, however,
Purchaser may assign its interest in this Agreement to a limited
liability company or to a limited partnership or to another
entity in which Purchaser or Urban Shopping Centers, Inc., a
Maryland corporation, directly or indirectly, controls and owns a
majority interest. Subject to the previous sentence, this
Agreement shall apply to, inure to the benefit of and be binding
upon and enforceable against the parties hereto and their respective
successors and assigns. Seller's consent to any such assignment
shall be conditioned upon Seller's receipt of the following not
less than five (5) business days prior to the Closing Date: (i) a
duly executed express assumption of all of the duties and
obligations of Purchaser by the proposed assignee in a form
acceptable to Seller, and (ii) an ERISA certificate, in the form
attached hereto as EXHIBIT I and the content of which is
satisfactory to Seller. Any assignment by Purchaser permitted
hereunder shall relieve Purchaser from all liability hereunder,
provided, however, Purchaser shall in no event be released from
liability under Section 3.2(e) above.
170 REMEDIES.
(1) IN THE EVENT THAT SELLER SHALL FAIL TO CONSUMMATE THIS
AGREEMENT AND SUCH FAILURE IS NOT A RESULT OF PURCHASER'S DEFAULT
OR A TERMINATION OF THIS AGREEMENT BY PURCHASER OR SELLER
PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS HEREOF,
PURCHASER, IN THE CASE WHERE SUCH FAILURE IS BASED UPON A BREACH
BY SELLER, SHALL ONLY BE ENTITLED TO SEEK AT ITS ELECTION,
EITHER: (i) THE REMEDY OF SPECIFIC PERFORMANCE, OR (ii) DAMAGES
AND RECEIVE A REFUND OF THE ▇▇▇▇▇▇▇ MONEY. IN NO EVENT SHALL
SELLER BE LIABLE TO PURCHASER FOR ANY PUNITIVE, OR CONSEQUENTIAL
DAMAGES. IN THE CASE WHERE SUCH FAILURE IS BASED UPON AN
INVOLUNTARY BREACH BY SELLER, PURCHASER, AS ITS SOLE AND
EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT AND RECEIVE A
REFUND OF THE ▇▇▇▇▇▇▇ MONEY. IN NO EVENT SHALL PURCHASER BE
ENTITLED TO RECORD A LIS PENDENS OR NOTICE OF PENDENCY OF ACTION
AGAINST THE PROPERTY FOR ANY REASON WHATSOEVER.
(2) IN THE EVENT THAT PURCHASER SHOULD FAIL TO CONSUMMATE
THIS AGREEMENT FOR ANY REASON, EXCEPT SELLER'S DEFAULT OR THE
TERMINATION OF THIS AGREEMENT BY PURCHASER OR SELLER PURSUANT TO
A RIGHT TO DO SO UNDER THE TERMS AND PROVISIONS HEREOF, THEN
SELLER, AS ITS SOLE AND EXCLUSIVE REMEDY MAY TERMINATE THIS
AGREEMENT BY NOTIFYING PURCHASER THEREOF AND RECEIVE OR RETAIN
THE ▇▇▇▇▇▇▇ MONEY AS LIQUIDATED DAMAGES, PROVIDED THAT THIS
PROVISION SHALL NOT LIMIT SELLER'S RIGHTS TO RECEIVE
REIMBURSEMENT FOR ATTORNEYS' FEES AND TO PURSUE AND RECOVER ON A
CLAIM WITH RESPECT TO ANY SURVIVING OBLIGATIONS. THE PARTIES
AGREE THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF PURCHASER'S
DEFAULT ON ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES
IS DIFFICULT OR IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE THAT
THE AMOUNT OF THE ▇▇▇▇▇▇▇ MONEY IS A REASONABLE ESTIMATE OF
SELLER'S LOSS IN THE EVENT OF PURCHASER'S DEFAULT. THUS, SELLER
SHALL ACCEPT AND RETAIN THE ▇▇▇▇▇▇▇ MONEY AS LIQUIDATED DAMAGES
BUT NOT AS A PENALTY. EXCEPT AS OTHERWISE SET FORTH IN THIS
SECTION 17(b), SUCH LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S
SOLE AND EXCLUSIVE REMEDY.
SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THE FOREGOING LIQUIDATED DAMAGES
PROVISION AND BY THEIR SIGNATURES IMMEDIATELY BELOW AGREE TO BE
BOUND BY ITS TERMS.
SELLER: PURCHASER:
JMB GROUP TRUST I, URBAN SHOPPING CENTERS, L.P.,
an Illinois group trust an Illinois limited partnership
By: ▇▇▇▇▇▇▇ Capital Management
Corporation, an Illinois
Corporation,
Investment Manager
By:__________________________ By:____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name:__________________________
Its: Executive Vice President Its:___________________________
HAWTHORN CENTER CORPORATION, USC HAWTHORN, INC.,
An Illinois corporation a Delaware corporation
By: _______________________________ By:____________________________
Name: _____________________________ Name:__________________________
Its: ______________________________ Its:___________________________
180 MISCELLANEOUS.
18.1 ENTIRE AGREEMENT. This Agreement, together with the
exhibits attached hereto, constitute the entire agreement of the
parties hereto regarding the purchase and sale of the Partnership
Interest, and all prior agreements, understandings,
representations and statements, oral or written, are hereby
merged herein. In the event of a conflict between the terms of
this Agreement and any prior written agreements, the terms of
this Agreement shall prevail. This Agreement may only be amended
or modified by an instrument in writing, signed by the party
intended to be bound thereby.
18.2 TIME. All parties hereto agree that time is of the
essence in this transaction. If the time for performance of any
obligation hereunder shall fall on a Saturday, Sunday or holiday
(national, in the State of Illinois or the state in which the
Property is located) such that the transaction contemplated
hereby cannot be performed, the time for performance shall be
extended to the next such succeeding day where performance is
possible.
18.3 COUNTERPART EXECUTION. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original.
18.4 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF ILLINOIS AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS.
18.5 PUBLICITY. Seller and Purchaser hereby covenant and
agree that, at all times after the date of execution hereof and
continuing after the Closing, unless consented to in writing by
the other party, no press release or other public disclosure
concerning this transaction shall be made, and each party agrees
to use best efforts to prevent disclosure of this transaction.
18.6 RECORDATION. Purchaser shall not record this Agreement
or a memorandum or other notice thereof in any public office
without the express written consent of Seller. A breach by
Purchaser of this covenant shall constitute a material default by
Purchaser under this Agreement.
18.7 BENEFIT. This Agreement is for the benefit of
Purchaser and Seller, and except as provided in the indemnities
granted by Purchaser under Articles 5 and 9 and Sections 3.2 and
8.6 with respect to the Purchaser Indemnified Parties and except
as provided in the indemnities granted by Seller under Section
6.11 with respect to the Seller Indemnified Parties, no other
person or entity will be entitled to rely on this Agreement,
receive any benefit from it or enforce any provisions of it
against Purchaser or Seller.
18.8 SECTION HEADINGS. The Section headings contained in
this Agreement are for convenience only and shall in no way
enlarge or limit the scope or meaning of the various and several
Sections hereof.
18.9 FURTHER ASSURANCES. Purchaser and Seller agree to
execute all documents and instruments reasonably required in
order to consummate the purchase and sale herein contemplated.
18.10 SEVERABILITY. If any portion of this Agreement is
held to be unenforceable by a court of competent jurisdiction,
the remainder of this Agreement shall remain in full force and effect.
18.11 WAIVER OF TRIAL BY JURY. Seller and Purchaser, to
the extent they may legally do so, hereby expressly waive any
right to trial by jury of any claim, demand, action, cause of
action, or proceeding arising under or with respect to this
Agreement, or in any way connected with, or related to, or
incidental to, the dealings of the parties hereto with respect to
this Agreement or the transactions related hereto or thereto, in
each case whether now existing or hereafter arising, and
irrespective of whether sounding in contract, tort, or otherwise.
To the extent they may legally do so, Seller and Purchaser hereby
agree that any such claim, demand, action, cause of action, or
proceeding shall be decided by a court trial without a jury and
that any party hereto may file an original counterpart or a copy
of this Section with any court as written evidence of the consent
of the other party or parties hereto to waiver of its or their
right to trial by jury.
18.12 INDEPENDENT COUNSEL. Purchaser and Seller each
acknowledges that: (a) it has been represented by independent
counsel in connection with this Agreement; (b) it has executed
this Agreement with the advice of such counsel; and (c) this
Agreement is the result of negotiations between the parties
hereto and the advice and assistance of its respective counsel.
The fact that this Agreement was prepared by a party's counsel as
a matter of convenience shall have no import or significance.
Any uncertainty or ambiguity in this Agreement shall not be
construed against a party because such party's counsel prepared
this Agreement in its final form.
18.13 GOVERNMENTAL APPROVALS. Nothing contained in this
Agreement shall be construed as authorizing Purchaser to apply
for a zoning change, variance, subdivision maps, lot line
adjustment, or other discretionary governmental act, approval or
permit with respect to the Property prior to the Closing, and
Purchaser agrees not to do so. Except as otherwise required by
law, Purchaser agrees not to submit any reports, studies or other
documents, including, without limitation, plans and specifica
tions, impact statements for water, sewage, drainage or traffic,
environmental review forms, or energy conservation checklists to
any governmental agency, or any amendment or modification to any
such instruments or documents prior to the Closing. Purchaser's
obligation to purchase the Property shall not be subject to or
conditioned upon Purchaser's obtaining any variances, zoning
amendments, subdivision maps, lot line adjustment or other
discretionary governmental act, approval or permit.
18.14 NO WAIVER; JOINT AND SEVERAL LIABILITY. No
covenant, term or condition of this Agreement other than as
expressly set forth herein shall be deemed to have been waived by
Seller or Purchaser unless such waiver is in writing and executed
by Seller or Purchaser, as the case may be. The obligations of
Purchaser 1 and Purchaser 2 hereunder shall be joint and several.
The obligations of Seller 1 and Seller 2 hereunder shall be joint
and several.
18.15 DISCHARGE AND SURVIVAL. The delivery of the
Assignment of Partnership Interest by Seller, and the acceptance
thereof by Purchaser, shall be deemed to be the full performance
and discharge of every covenant and obligation on the part of
Seller to be performed hereunder except the Surviving Obligations
and Seller's obligations under Article 5, 9, 12 and 15 and
Sections 3.4 and 6.11 of this Agreement. No action shall be
commenced after the Closing on any covenant or obligation except
the Surviving Obligations and Seller's obligations under Article
5, 9, 12 and 15 and Sections 3.4 and 6.11 of this Agreement.
19. EXCULPATION OF SELLER AND RELATED PARTIES. Notwithstanding
anything to the contrary contained in this Agreement or in any
exhibits attached hereto or in any documents executed in
connection herewith (collectively, including this Agreement, said
exhibits and any such document, the "PURCHASE DOCUMENTS"), it is
expressly understood and agreed by and between the parties hereto
that: (i) the recourse of Purchaser or its successors or assigns
against Seller with respect to the alleged breach by or on the
part of Seller of any representation, warranty, covenant,
undertaking, indemnity or agreement contained in any of the
Purchase Documents (collectively, "SELLER'S UNDERTAKINGS") shall
be limited to an amount not to exceed $500,000 in the aggregate;
and (ii) no personal liability or personal responsibility of any
sort with respect to any of Seller's Undertakings or any alleged
breach thereof is assumed by, or shall at any time be asserted or
enforceable against HCMC, or against any of HCMC's or Seller's
respective shareholders, directors, officers, employees, agents,
constituent partners, members, beneficiaries, trustees or
representatives except as provided in (i) above with respect to
Seller. Notwithstanding the foregoing, the liability limits
under clause (i) shall not apply to, or be reduced by, payments
owing with respect to Section 3.4 hereof, the prorations under
Section 5 hereof, or with respect to Seller's obligations to
Seller Indemnified Parties with respect to Stray Liabilities.
20. EXCULPATION OF PURCHASER AND RELATED PARTIES.
Notwithstanding anything to the contrary contained in this
Agreement or in the Purchase Documents, it is expressly
understood and agreed by and between the parties hereto that no
personal liability or personal responsibility of any sort with
respect to the alleged breach by or on the part of Purchaser (or
its successors and assigns with respect to this Agreement) of any
representation, warranty, covenant, undertaking, indemnity or
agreement contained in any of the Purchase Documents or any
alleged breach thereof is assumed by, or shall at any time be
asserted or enforceable against any of Purchaser's (or its
successors' and assigns') shareholders, partners, directors,
officers, employees, agents, constituent partners, members,
beneficiaries, trustees or representatives.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be made as of the day and year first above stated.
SELLER: PURCHASER:
JMB GROUP TRUST I, URBAN SHOPPING CENTERS, L.P.,
an Illinois group trust an Illinois limited partnership
By: ▇▇▇▇▇▇▇ Capital Management By:____________________________
Corporation, an Illinois, Name:__________________________
corporation Its:___________________________
Investment Manager
By: ________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ USC HAWTHORN, INC.,
Executive Vice President a Delaware corporation
HAWTHORN CENTER CORPORATION, By:____________________________
An Illinois corporation Name:__________________________
Its: __________________________
By: __________________________
Name: ________________________
Its: _________________________
