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EXHIBIT 2.2
AGREEMENT OF PURCHASE AND SALE
(Baybrook Mall)
GENERAL GROWTH PROPERTIES, INC., a Delaware corporation, hereinafter
referred to as "Purchaser," agrees to purchase, and RREEF USA FUND-III, a
California group trust, hereinafter referred to as "Seller," agrees to sell, the
"Property" (as hereinafter defined).
1. Property; Purchase Price.
1.1 As used herein, the term "Property" shall mean (a) the Real
Property, (b) the Personalty, (c) the rights and interests of Seller in, to and
under all Leases, (d) the rights and interests of Seller in, to and under the
REA, and (e) the rights and interests of Seller in, to and under the Contracts
to the extent assignable.
1.1.1 As used herein, the term "Land" shall mean those certain
parcels of real estate described on EXHIBIT A, situated in the City of Houston,
County of Xxxxxx, State of Texas, aggregating approximately 29.6 acres.
1.1.2 As used herein, the term "Improvements" shall mean
improvements, structures, fixtures, facilities, installations, machinery and
equipment, in, on, over or under the Land, including the foundations and
footings therefor, elevators, plumbing, air conditioning, heating, ventilating,
mechanical, electrical and utility systems (except to the extent owned by a
utility company), signs and light fixtures (except to the extent of trade
fixtures and equipment owned by tenants under the Leases), doors, windows,
fences, parking lots, walks and walkways and each and every other type of
physical improvement to the extent owned, in whole or in part, by Seller,
located at, on or affixed to the Land, to the full extent such items constitute
or are or can or may be construed as realty under the laws of the State of
Texas.
1.1.3 As used herein, the term "Real Property" shall mean the
Land and the Improvements, together with all of the estate, right, title and
interest of Seller therein, and in and to (a) any land lying in the beds of any
streets, roads or avenues, open or proposed, public or private, in front of or
adjoining the Land to the center lines thereof, and in and to any awards to be
made in lieu thereof and in and to any unpaid awards for damage to the foregoing
by reason of the change of grade of any such streets, roads or avenues; (b) all
easements, rights, licenses, privileges, rights-of-way, strips and gores,
hereditaments and such other real property rights and interests appurtenant to
the foregoing (including all rights of Seller under the REA); and (c) all
mineral rights, development rights, air rights and the like.
1.1.4 As used herein, the term "Leases" shall mean those leases,
tenancies, concessions, licenses and occupancy agreements currently in effect
and to which Seller or any of its predecessors in title is a party affecting or
relating to the Property which are listed on the Disclosure Schedule (as defined
in Section 5.1 hereof) together with any additions thereto, modifications
thereof or substitutions therefor hereafter entered into in accordance with the
provisions of this Agreement.
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1.1.5 As used herein, the term "Contracts" shall mean the
service, maintenance and other contracts and concessions that are currently in
effect and to which Seller is a party respecting the use, maintenance,
development, sale or operation of the Property or any portion thereof (but
excluding this Agreement, the Leases and the REA) which are listed on the
Disclosure Schedule, together with any additions thereto, modifications thereof
or substitutions therefor hereafter entered into in accordance with the
provisions of this Agreement.
1.1.6 As used herein, the term "Personalty" shall mean all of
the personal property, both tangible and intangible, owned by Seller (but not
RREEF Management Company) and located in or upon or used in connection with the
operation and maintenance of the Property, including machinery; equipment;
building supplies and materials; consumables; inventories; names, logos,
trademarks, trade names and copyrights (but not the name "RREEF"); all
assignable licenses, permits and certificates of occupancy; all assignable
guarantees or warranties (including performance bonds obtained by, or for the
benefit of, Seller, pertaining to the ownership, construction or development of
the Real Property or any part thereof); the Books and Records; computer and
peripheral equipment; computer software and data contained in hard drives and on
diskette; advertising materials; and telephone exchange numbers.
1.1.7 As used herein, the term "Books and Records" shall mean
all records, books of account and papers of Seller (other than Seller's internal
correspondence and memos) relating to the construction, ownership and operations
of the Property, including architect's drawings, blue prints and as-built plans,
maintenance logs, copies of warranties and guaranties, licenses and permits,
instruction books, employee manuals, records and correspondence relating to
insurance claims, financial statements, operating budgets, paper and electronic
media copies of data and other information relating to the Property available
from personal computers, structural, mechanical, geotechnical or other
engineering studies, soil test reports, environmental reports, underground
storage tank reports, feasibility studies, appraisals, ADA surveys or reports,
OSHA asbestos surveys, marketing studies, mall documents and compilations, lease
summaries and originals and/or copies of Leases, the REA and the Contracts and
correspondence related thereto, located either at the Property or the office of
Seller's property manager.
1.1.8 As used herein, the term "REA" shall mean that certain
Construction, Operation and Reciprocal Easement Agreement dated September 28,
1976 by and between Homart Development Co., Sears, Xxxxxxx and Co., Xxxxxxxxxx
Xxxx Development Corporation, Allied Stores of Teas, Inc., and Alstores Realty
Corporation as amended and restated by that certain Restate Construction,
Operation and Reciprocal Easement Agreement dated May 21, 1985 among Homart
Development Co. ("Homart"), Sears, Xxxxxxx and Co., Gabeward Properties
Corporation, Xxxxxxxxxx Xxxx & Co. Incorporated, Mervyn's, X.X. Xxxx & Co.,
Allied Stores East Inc. and Alstores Realty Corporation as supplemented and/or
amended by that certain Supplement to Operating Agreement by and between Homart
Development Co. and Mervyn's dated May 21, 1985, that certain Supplement to
Operating Agreement by and between Homart Development Co. and Xxxxxxxxxx Xxxx
Development Corporation dated September 28, 1976, that certain Supplement to
Restated REA by and between Homart Development Co. and
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Alstores Realty Corporation and Allied Stores of Texas, Inc. dated September 28,
1976, that certain Supplement to Restated REA by and between Homart Development
Co. and X.X. Xxxx & Co. Inc. dated May 21, 1985, and that certain Agreement by
and between Homart Development Co. and Sears, Xxxxxxx & Co. dated September 28,
1976, as amended by that certain Amendment to Supplement to Operating Agreement
by and between Homart Development Co. and Sears, Xxxxxxx & Co. dated October 1,
1985, together with any additions thereto, modifications thereof or
substitutions therefor hereafter entered into in accordance with the provisions
of this Agreement.
1.2 The purchase price for the Property ("Purchase Price") shall be
One Hundred Thirty Three Million and No/100 Dollars ($133,000,000.00), payable
by wire transfer of current funds at Closing as defined in Paragraph 7.1 and
subject to prorations and adjustments hereinafter set forth.
1.3 Assumption of Liabilities.
1.3.1 At the Closing, Purchaser shall assume (a) the liabilities
and obligations of Seller arising from and after the Closing Date under or in
respect of the Leases (including any obligation to refund any Security
Deposits), the REA and the assignable Contracts (with the liability of Purchaser
being limited to the same extent, if any, as Seller's liability is limited
thereunder) but only to the extent such liabilities and obligations do not arise
out of any transaction, event, circumstance, action, failure to act or
occurrence of any sort or type which occurred, existed or was taken prior to the
Closing Date and (b) other liabilities and obligations herein described to the
extent Purchaser has received proration credit therefor. All of the obligations
to be assumed by Purchaser pursuant to this Paragraph 1.3.1 are hereinafter
referred to as the "Assumed Liabilities".
1.3.2 Except as otherwise herein expressly provided, Purchaser
is not assuming and shall not by virtue of the consummation of the transactions
set forth herein be deemed to have assumed any liabilities or obligations of
Seller existing as of or accruing prior to the Closing Date, whether or not the
same relate to the Property or were incurred in connection with the ownership,
use, management or operation thereof by Seller or by its agents (collectively,
"Seller's Liabilities"). Without limiting the foregoing, Seller's Liabilities
shall include all federal, state and local taxes of whatever kind and nature
(other than real estate taxes and assessments on real property to the extent
Purchaser has received credit hereunder), liabilities relating to any employees,
employee benefit plans or collective bargaining agreements of Seller, including
severance pay obligations.
2. Deposit.
2.1 Within one (1) business day after the expiration of the Review
Period (as defined in Paragraph 3.3), provided this Agreement has not been
terminated, Purchaser will deposit the amount of Three Million and No/100
Dollars ($3,000,000.00) (the "Deposit") with Chicago Title Insurance Company
("Escrow Holder") as xxxxxxx money to secure Purchaser's
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performance hereunder. The Deposit may be invested at the direction of Purchaser
in United States Treasury Obligations with the approval of Seller, which
approval shall not be unreasonably withheld. All investment income earned from
the investment of the Deposit, less investment fees, if any, will be added to
and become a part of the Deposit and will be applied toward the Purchase Price
if Closing is completed in accordance with this Agreement; otherwise all
interest will be paid to the party entitled to the Deposit. The escrow
instructions to Escrow Holder will be in the form of Schedule 2.1 attached
hereto (the "Escrow Instructions").
2.2 Concurrently with the execution hereof, Purchaser shall pay to
Seller an amount equal to One Hundred and No/100 Dollars ($100.00) which shall
be deemed "non-refundable option money" given by Purchaser to Seller as good and
valuable consideration for the rights and obligations of the parties under this
Agreement. At Closing, such amount shall be credited against the Purchase Price.
3. Review of the Property.
3.1 From and after the Effective Date (as defined in Paragraph
8.23), Seller agrees to provide Purchaser and its agents or consultants with
access to the Property to inspect each and every part thereof to determine its
present condition and to conduct such physical and environmental studies
(including a mechanical and roof study and environmental assessment) as it deems
appropriate.
3.2 Within the three (3) business days after the Effective Date
Seller will deliver to Purchaser, or make copies available to Purchaser at the
Property, all to the extent in the possession of Seller or its managing agent:
3.2.1 a copy of any existing occupancy and equipment leases,
service contracts and maintenance or other contracts pertaining to the
operations of the Property that will survive Closing, copies of Seller's
insurance policies with respect to the Property, copies of all real estate tax
bills for the years 1997, 1998, and year-to-date for 1999, and unaudited
financial statements for the Property for the years 1997, 1998, and unaudited
financial statements for the Property for the year-to-date for 1999.
3.2.2 a copy of any environmental reports relating to the
Property prepared by third party consultants.
3.2.3 a copy of all current franchises, business or other
licenses, bonds, permits, certificates, authorizations and other evidences of
consent, approval, authorization or permission relating to or affecting the
Property of or from any person, including any governmental authority, held by
Seller, including any pending applications.
3.2.4 a copy of all material third party warranties and
guaranties, if any, which are in effect with respect to the Property.
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3.2.5 all other Books and Records that Purchaser requests.
3.3 Purchaser has until the close of business on August 9, 1999 (the
"Review Period"), to determine in its sole discretion whether all matters
relating to the Property (including, without limitation, title and survey, which
are governed by Paragraph 4), are acceptable. If Purchaser concludes that any
matter relating to the Property is not acceptable, Purchaser will so notify
Seller (the "Termination Notice") prior to the expiration of the Review Period
(which notice shall contain a copy of Purchaser's roof/structural report and
other reports or studies obtained in connection with Purchaser's due diligence
and a statement as to the matters found unacceptable to Purchaser in its sole
discretion). However, the foregoing will not be construed to limit or qualify
Purchaser's absolute right to terminate this Agreement if it determines that all
matters relating to the Property are not acceptable by the end of the Review
Period. Upon timely delivery of the Termination Notice, this Agreement will
terminate without liability on the part of Seller or Purchaser, other than
Purchaser's indemnity contained in Paragraph 8.14 hereof and the obligation to
deliver to Seller a copy of any environmental report obtained by Purchaser if
requested by Seller within ten (10) days after receipt of the Termination
Notice. In the event that Purchaser does not timely so notify Seller, Purchaser
will be deemed to have concluded that all matters relating to the Property are
acceptable and to have elected to proceed with the transaction upon the terms
and conditions contained herein without regard to this Paragraph 3.3. Prior to
the expiration of the Review Period, Purchaser shall notify Seller which, if
any, Contracts it does not desire to assume and at Closing, such Contracts shall
not be assigned to Purchaser.
3.4 Purchaser agrees that any information obtained by Purchaser or
its authorized agents in the conduct of its due diligence will be treated as
confidential pursuant to Paragraph 8.16.
4. Title and Survey. Upon its execution of this Agreement, Seller agrees
to order at Seller's sole cost and expense (and upon receipt, to promptly
deliver copies to Purchaser): (i) a commitment for a Texas Land Title
Association Owner's title insurance policy with respect to the Property from
Chicago Title Insurance Company (the "Title Insurer") in the amount of the
Purchase Price; (ii) copies of all documents relating to title exceptions
referred to therein; and (iii) a plat of survey of the Property made in
accordance with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys (1997) pursuant to the accuracy standards of an Urban Survey and which
survey shall contain Table A Optional Survey Responsibilities and Specifications
1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9, 10, 11 and 13; shall show the
boundaries of each of the Land parcels; shall disclose whether or not the Land
comprises a single parcel of land with no strips, gores or gaps within its
boundaries; shall disclose any encroachments of any Improvements located
primarily on the Land onto adjoining premises and public ways (and whether or
not a valid easement for the benefit of the Real Property exists and is in place
with respect to each such encroachment) or onto or over setback or building
lines located on the Real Property or of improvements located primarily on
adjoining premises onto any portion of the Land (and whether or not a valid
easement for the benefit of the adjoining premises shall exist and be in place
with respect to each such encroachment); shall locate all easements created by
recorded instruments (to the extent plottable) or visible on the Real Property
and shall disclose
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any encroachment by any of the Improvements, or any other structures located on
the Land, in violation of any such easements; shall contain a legal description
of the Land; shall show the location of any adjacent public streets, disclosing
access, if any, to the Land therefrom; shall show building line(s) and side yard
line(s), if any; shall show the configuration and number of parking spaces on
the Land; shall show the area of the Land; shall state whether the Land is
located in an area designated by HUD as having special flood risks; and shall
contain a certificate of the surveyor attesting to the accuracy of the survey
and its conformity to the requirements of the aforesaid Minimum Standard Detail
Requirements, which certificate shall be directed to Seller, Purchaser and the
Title Insurer, and to such other persons having an interest in the Property
which Purchaser may designate. Within ten (10) business days following
Purchaser's receipt of the last of said commitment, documents and survey,
Purchaser agrees to notify Seller in writing of any objection Purchaser may have
to any exceptions reported in the title report or any matter shown on the plat
of survey (the "Unacceptable Exceptions"). All other exceptions and survey
matters raised therein will be deemed acceptable to Purchaser. If Purchaser
fails to give such notice to Seller, the survey and all of the exceptions in the
title commitment will be deemed acceptable to Purchaser. Seller will have ten
(10) days after receipt of Purchaser's notice within which to notify Purchaser
whether Seller elects to either (a) eliminate or induce the Title Insurer to
insure around (subject to Purchaser's consent, not to be unreasonably withheld)
the Unacceptable Exceptions or (b) terminate this Agreement. If Seller agrees to
eliminate or induce to the Title Insurer to insure around (with Purchaser's
consent) all of the Unacceptable Exceptions, Seller will be obligated to do so
at its cost on or prior to Closing. If Seller elects to terminate this
Agreement, neither party will have any further rights or obligations hereunder,
except as provided in Paragraph 8.14 and the Deposit shall be returned to
Purchaser. If Seller fails to give any timely notice, Seller will be deemed to
have elected to terminate this Agreement. If any other recorded exception to
title is discovered after the commitment is delivered to Purchaser, and
Purchaser does not elect to waive such exception upon the first to occur of (a)
the Closing or (b) seven (7) days after being notified of such exception and to
proceed with the consummation of the Closing, Seller will have fifteen (15) days
after the expiration of said seven (7) day period (and Closing will be delayed
if necessary, so that it occurs not earlier than twenty-two (22) days after
Purchaser is notified of such exception) after notifying Purchaser of such
discovery in which to use commercially reasonable efforts to eliminate or to
induce the Title Insurer to insure around (subject to Purchaser's approval, not
to be unreasonably withheld) such exception, and if such exception is not
eliminated or insured around as aforesaid within said 15-day period, Purchaser
may either: (1) terminate this Agreement, in which event the Deposit will be
returned to Purchaser and neither party will have any further rights or
obligations hereunder except as provided in Paragraph 8.14, or (2) close the
sale subject to such exception without deduction or setoff as to the Purchase
Price. Seller agrees that it will pay off at Closing (and not induce the Title
Insurer to insure around) title exceptions representing monetary liens of a
definite or ascertainable amount voluntarily granted by Seller. In using
commercially reasonable efforts to eliminate or to induce the Title Insurer to
insure around Unacceptable Exceptions, Seller will not be required to litigate
or to expend more than $25,000 in the aggregate. Ad valorem real estate taxes
not yet due and payable and all title and survey matters which are not
Unacceptable Exceptions are hereinafter referred to as Acceptable Exceptions.
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5. Representations and Warranties.
5.1 Representations and Warranties of Seller. As used in this
Paragraph 5.1 and elsewhere in this Agreement, the phrase "to the knowledge of
Seller" or phrases of similar import mean and are limited to the actual
knowledge of Seller's disposition manager (Mr. Xxxx Xxxxxxx), Seller's asset
manager having responsibility for the Property (Xx. Xxx Xxxxx) and Seller's
local manager having ongoing management responsibility with respect to the
Property (Xx. Xxxx Xxx), and not to any constructive knowledge of any of the
foregoing individuals or of Seller or any investment advisor to Seller, any
entity that is a partner in such investment advisor, or any affiliates of any
thereof, or to any officer, agent, representative, or employee of Seller or such
investment advisor, any such constituent partner, or any such affiliate. In
addition, as used in this Paragraph 5.1 and elsewhere in this Agreement,
Seller's receipt of any written notice shall mean the actual receipt of any
written notice by Xx. Xxxxxxx, Xx. Xxx, or Xx. Xxxxx. Seller hereby warrants and
represents to Purchaser (with such representations and warranties to be re-made
as of Closing pursuant to Paragraph 7.15.9) as follows:
5.1.1 Pending Proceedings. With the exception of the items set
forth in Schedule 5.1 (the "Disclosure Schedule"), Seller has received no
written notice of special assessments, condemnation, real estate tax,
environmental, zoning or other land use regulation proceedings, either pending
or planned to be instituted, with respect to the Property or any part thereof.
For purposes of the foregoing, Seller shall have knowledge of any pending
proceeding only if Seller has been served in connection therewith; Seller shall
have knowledge of any proceeding "planned to be instituted" only if Seller has
received written notice of such fact.
5.1.2 Status of Seller and Closing Documents. Subject to
Paragraph 8.13, this Agreement has been, and all the documents to be delivered
by Seller to Purchaser at Closing are or will be, duly authorized, executed, and
delivered by Seller, will be sufficient to convey insurable title, are legal,
valid, and binding obligations of Seller, are enforceable in accordance with
their respective terms, and do not violate any provisions of any agreement to
which Seller or the Property is subject or bound. Seller is duly organized and
validly existing or duly qualified to transact business in the State in which
the Property is located, with full power and authority to execute, deliver and
perform this Agreement.
5.1.3 Non-Foreign Status. Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended, and that Seller will furnish to Purchaser, prior to Closing, an
affidavit in form satisfactory to Purchaser confirming the same.
5.1.4 Compliance with Laws. With the exception of the items set
forth in the Disclosure Schedule, Seller has received no governmental notice,
not heretofore corrected, alleging, that the Property or its current uses are in
violation of any zoning, building, health, traffic, environmental, flood control
or all other applicable rules, regulations, codes, ordinances, or statutes of
any local, state and federal authorities and any other governmental authority
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(collectively, the "Laws") asserting jurisdiction over the Property, including
without limitation the Americans with Disabilities Act.
5.1.5 Service Contracts. The Disclosure Schedule contains a
true and complete list of all Contracts, including all modifications thereof. To
Seller's knowledge, (i) there have been no material defaults by any party to a
Contract which have not heretofore been cured and (ii) there has been no
material default (without giving effect to any notice and cure rights) by Seller
under any Contract or any written claim received by Seller of any such default
by any party thereto, which has not heretofore been cured except as set forth on
the Disclosure Schedule. A true and complete copy of each Contract, together
with any amendments or supplements thereto, has been delivered or made available
to Purchaser. Such documents constitute the entire agreement between Seller and
each party to the Contracts and Seller has not entered into any oral promises or
agreements amending or modifying the same.
5.1.6 No Default. The execution and delivery of this Agreement,
and consummation of the transaction described in this Agreement, does not and
will not constitute a default under any contract, lease, or agreement to which
Seller is a party or by which Seller is bound.
5.1.7 No Suits. Except as set forth in the Disclosure Schedule
and except for personal injury or property damage actions for which there is
adequate insurance coverage and where the insurance carrier has accepted the
tender of the defense without reservation, to Seller's knowledge, there is no
action, suit, investigation, arbitration or proceeding pending or threatened
against or affecting the Property or any portion thereof, or relating to or
arising out of the ownership, management or operation of the Property, in any
court or before or by any federal, state, or municipal department, commission,
board, bureau or agency or other governmental instrumentality.
5.1.8 Environmental Condition. Each of the following
representations contained in this Paragraph 5.1.8 is wholly qualified and
limited by (a) any matters disclosed in any materials made available or
delivered to Purchaser by Seller pursuant to Paragraph 3 above or otherwise, (b)
any matters disclosed in any environmental reports or studies obtained by
Purchaser, and (c) any other matters of which Purchaser has actual knowledge.
Subject to the foregoing, Seller represents:
5.1.8.1 With the exception of items listed in the
Disclosure Schedule, and except (i) in amounts customarily found in retail uses
and in the other uses for which the Property is used and (ii) in compliance with
applicable law, to Seller's knowledge, Seller has not released, generated or
handled Hazardous Materials on the Property and Seller has no knowledge of any
release, generation or handling of Hazardous Materials on the Property by any
tenants or prior owners of such property or the incorporation of Hazardous
Materials by the tenants in any improvements on the Property during the xxxx
Xxxxxx owned the Property or the existence of any underground storage tanks on
the Property. For the purposes hereof, "Hazardous Material" means any substance,
chemical, waste or other material which is listed, defined or
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otherwise identified as "hazardous" or "toxic" under any federal, state, local
or administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
xx.xx. 9601 et seq. and the Resource Conservation and Recovery Act, 42 U.S.C.
xx.xx. 6901 et seq., or any regulation, order, rule or requirement adopted
hereunder, as well as any formaldehyde, urea, polychlorinated biphenyls,
petroleum, petroleum product or by-product, crude oil, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture
thereof, radon, asbestos, and "source", "special nuclear" and "by-product"
material as defined in the Atomic Energy Act of 1985, 42 U.S.C. xx.xx. 3011 et
seq.
5.1.8.2 With the exception of items listed in the
Disclosure Schedule, to Seller's knowledge, Seller has not received any summons,
citation, directive, letter or other communication, written or oral, from the
United States Environmental Protection Agency or the State environmental
protection agency having jurisdiction over the Property.
5.1.9 Options. Seller has granted no options or rights of first
refusal to acquire any interest in the Property not set forth in the Leases
delivered to Purchaser or in documents of record disclosed in the title
commitment.
5.1.10 Leases.
(a) The Disclosure Schedule contains a rent roll of the
Property (the "Rent Roll") as of July 31, 1999 showing the
identification of each rentable space in the Property, whether leased
or not, and for each such space, the name of the Tenant, the
expiration date of the current term of the Lease, the minimum or fixed
monthly rent payable, space location number, commencement date, square
footage, percentage rent rate and sales breakpoint for computing
percentage rent. Seller shall deliver an updated Rent Roll to
Purchaser fifteen (15) days prior to the Closing Date. To Seller's
knowledge, all information therein is accurate in all material
respects as of its date. Except as set forth to the contrary on the
Disclosure Schedule, no Tenant has paid any rent in advance except for
the current month.
(b) The Disclosure Schedule contains a schedule of Fixed and
Other Tenant Charge Arrearages, together with any other delinquencies
in Rent, showing amounts payable as of the Effective Date by each
party, which schedule sets forth separately and certifies the items of
Rents with respect to which each such party is in arrears, the amount
of each item and the period of such arrearage.
(c) The Disclosure Schedule contains a complete and
correct list of all existing Leases and modifications thereof and
supplements thereto regardless of whether the terms thereof have
commenced, setting forth with respect to each (i) the date thereof and
of each modification thereof and supplement thereto and (ii) the names
of the parties thereto (including the name of the current assignee, if
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any, but only if and to the extent Seller has actual notice of any
such assignment). A true and complete copy of each Lease, together
with each written modification thereof and supplement thereto, has
heretofore been furnished to Purchaser for inspection. Each such Lease
constitutes the entire agreement between Seller and each party
thereto, and Seller has not made any oral promises or agreements
amending or modifying the same.
(d) To Seller's knowledge, each of the Leases is valid and
subsisting and in full force and effect, and no Rents or other
payments or deposits are held by Seller or Seller's agent, except any
security deposits and Rents prepaid for the current month. As of the
Closing Date, no Rents due under, or any other interest in, any of the
Leases will be assigned to any party other than Purchaser, or
otherwise pledged or encumbered in any way.
(e) Except as set forth on the Disclosure Schedule, no
Tenant has made any written claim which has been received by Seller
or, to Seller's knowledge, has any other claim, whether or not in
writing (i) that Seller has defaulted in performing any of its
obligations under any of the Leases which has not heretofore been
cured, (ii) that any condition exists which with the passage of time
or giving of notice, or both, would constitute any such default, (iii)
that such Tenant is entitled to any reduction in, refund of, or
counterclaim or offset against, or is otherwise disputing, any Rents
or other charges paid, payable or to become payable by such Tenant, or
(iv) that such Tenant is entitled to cancel its Lease or to be
relieved of its operating covenants thereunder.
(f) With the exception of delinquencies in the payment of
Rents which are set forth on the Disclosure Schedule, to Seller's
knowledge no material default exists under any of the Leases on the
part of the Tenant thereto.
(g) There are no rent abatements or other tenant
concessions or inducements, including lease assumptions or buy-outs,
applicable to any of the Leases or any rights to extend or renew any
of such Leases except as set forth on the Disclosure Schedule. There
are no options or rights to renew, extend or terminate the Leases,
except as set forth on the Disclosure Schedule. Seller has not granted
any rights, options or rights of first refusal of any kind to any
Tenant, which are currently in effect, to purchase or to otherwise
acquire the Property or any part thereof or interest therein. To
Seller's knowledge, all of the improvements to be constructed by the
landlord under each of the Leases, or as required under any collateral
agreement, plans or specifications related to the Leases, have been
fully completed and paid for.
5.1.11 Leasing Commissions. To Seller's knowledge, all leasing
commissions due and payable as of the date hereof by Seller have been paid or
will have been paid on or before Closing.
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5.1.12 Deferred Taxes. Seller has received no written notice of
any so-called "greenbelt," "roll-back" or other deferred taxes, the payment of
which become retroactive to any period of Seller's ownership of the Property or
any time prior thereto, pursuant to a change in zoning, use or ownership.
5.1.13 REA. The REA constitutes the only reciprocal easement
agreements or operating agreements encumbering the Property. A true and complete
copy of the REA has heretofore been furnished to Purchaser, together with each
written modification thereof and supplement thereto. The REA constitutes the
entire agreement between Seller and each party thereto, and Seller has not made
any oral promises or agreements amending or modifying the same.
5.1.13.1 To Seller's knowledge, the REA is valid and in
full force and effect, and no Rents or other payments or deposits are held by
Seller or Seller's agent, except the Rents prepaid for the current month. As of
the Closing Date, no Rents due to Seller under, or any other interest of Seller
in, the REA will be assigned to any party other than Purchaser, or otherwise
pledged or encumbered in any way.
5.1.13.2 Except as set forth on the Disclosure Schedule,
none of the parties to the REA has made any written claim which has been
received by Seller nor, to Seller's knowledge, has any other claim, whether or
not in writing (a) that Seller has defaulted in performing any of its
obligations under any of the REAs which has not heretofore been cured, (b) that
any condition exists which with the passage of time or giving of notice, or
both, would constitute any such default, (c) that such party is entitled to any
reduction in, refund of, or counterclaim or offset against, or is otherwise
disputing, any charges paid, payable or to become payable by such party, (d)
that such party is entitled to cancel its REA or to be relieved of its operating
covenants thereunder, or (e) that there is a violation of any of the covenants,
conditions or restrictions contained in such REA.
5.1.13.3 With the exception of delinquencies in the
payments which are set forth on the Disclosure Schedule, to Seller's knowledge,
no material default exists under the REA on the part of the parties thereto.
Seller is not in default under the REA.
5.1.14 Permits. Seller has not received any written notice of
violation from any federal, state or municipal entity that has not been cured or
otherwise resolved to the satisfaction of such governmental entity.
5.1.15 Promotional Fund. Except as set forth on the Disclosure
Schedule, Seller is under no obligation to make contributions or otherwise
provide assistance to any promotional association or promotional fund.
5.1.16 Taxes. Copies of current real estate tax bills with
respect to the Property, other than tax bills sent to Tenants who have the
obligation to pay such taxes to the collecting authority, have been delivered or
made available to Purchaser. No portion of the
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Property comprises part of a tax parcel which includes property other than
property comprising all or a portion of the Property.
5.1.17 Violation of Agreement. Seller has not received written
notice that there is any uncured violation of any restriction, condition or
agreement contained in any easement, restrictive covenant or any similar
instrument or agreement affecting the Property or any portion thereof.
5.1.18 Approvals. No approval, consent, waiver, filing,
registration or qualification with any third party, including any governmental
bodies, agencies or instrumentalities is required to be made, obtained or given
for the execution, delivery and performance of this Agreement or any of the
closing documents by Seller.
5.1.19 Insurance. To Seller's knowledge, Seller has not
performed, permitted or suffered any act or omission which would cause the
insurance coverage provided in Seller's policies of insurance to be reduced,
cancelled, denied or disputed and Seller has not received any written notice or
request from any insurance company or Board of Fire Underwriters (or
organization exercising functions similar thereto) cancelling or threatening to
cancel any of said policies or denying or disputing coverage thereunder.
5.1.20 Bankruptcy. Except as set forth in the Disclosure
Schedule, Seller has received no written notice that any of the Tenants now
occupying any of the Property or having a current Lease affecting the Property
or any Party to the REA is the subject of any bankruptcy, reorganization,
insolvency or similar proceedings or has ceased or reduced or intends to cease
or reduce operations at the Property (other than temporarily due to casualty,
remodeling, renovation or similar cause).
5.1.21 Cessation. Except as set forth in the Disclosure
Schedule, Seller has received no written notice that any of the Tenants now
occupying any of the Property or having a current Lease affecting the Property,
or any Party to any REA has ceased or reduced or intends to cease or reduce
operations at the Property.
5.1.22 Employees. Seller has no employees. There are no
collective bargaining or union agreements with respect to the employees at
Property. Seller does not maintain or sponsor any employee benefit plan,
including any plans subject to the Employer Retirement Income Security Act of
1974, as amended. There are no pending claims or, to Seller's knowledge, any
threatened claim against Seller by any employee whose employment related to the
Property.
5.1.23 Documents. All of the Books and Records that have been
delivered or made available to Purchaser by or on behalf of Seller, are true,
correct and complete copies of what they purport to be and have not been
modified or amended, except as specifically noted therein.
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5.1.24 Brokerage. To Seller's knowledge, there are no lease
brokerage agreements, leasing commission agreements or other agreements
providing for payments of any amounts for leasing activities or procuring
tenants with respect to the Property other than as disclosed in the Leases, the
Contracts or the Disclosure Schedule.
5.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
5.2.1 Status of Purchaser and Closing Documents. This Agreement
has been, and all the documents to be delivered by Purchaser to Seller at
Closing will be duly authorized, executed, and are or will be legal, valid, and
binding obligations of Purchaser, are or will be enforceable in accordance with
their respective terms, and do not and will not at Closing violate any
provisions of any agreement to which Purchaser is subject.
5.2.2 ERISA. The following representations and warranties with
respect to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Internal Revenue Code of 1986, as amended ("Code") are
required to ensure that the purchase of the Property by Purchaser from Seller
will not, in and of itself, violate either Section 406(a)(1)(A) through (F) of
ERISA or Section 4975(c)(1)(A) through (E) of the Code. Notwithstanding anything
contained herein to the contrary, the representations and warranties contained
in this Paragraph 5.2.2 shall survive the Closing. Accordingly, Purchaser hereby
represents and warrants the following:
5.2.2.1 Following the sale of the Property, the Property
will not be a "plan asset", within the meaning of Department of Labor Regulation
Section 2510.3-101, with respect to any "employee benefit plan", within the
meaning of Section 3(3) of ERISA, which is subject to ERISA.
5.2.2.2 The Purchaser, or a Parent of the Purchaser, is
not an administrator, officer, trustee, custodian or other fiduciary with
respect to any employee benefit plans, counsel to any employee benefit plans, or
an employee of any employee benefit plans. "Parent" means a person who, directly
or indirectly, owns 50% or more of the (i) combined voting power of all classes
of stock entitled to vote or the total value of shares of all classes of stock,
in the case of a corporation, (ii) capital interests or profits interests, in
the case of a partnership, or (iii) beneficial interests, in the case of a trust
or unincorporated enterprise.
5.2.2.3 The Purchaser or a Parent of the Purchaser is not
providing any services to any employee benefit plans.
5.2.2.4 The Purchaser or a Parent or a Subsidiary of the
Purchaser is not an employer any of whose employees are covered under any
employee benefit plans. "Subsidiary" means an entity in which a person owns,
directly or indirectly, 50% or more of (i) the combined voting power of all
classes of stock entitled to vote or the total value of shares of all classes of
stock, in the case of a corporation, (ii) the capital interest or profits
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interests, in the case of a partnership, or (iii) the beneficial interests, in
the case of a trust or estate.
5.2.2.5 The Purchaser, or a Parent or a Subsidiary of the
Purchaser, is not an employee organization, any of whose members are covered by
any employee benefit plans.
5.2.2.6 The Purchaser is not a 10% shareholder, partner
or joint venturer, directly or indirectly, of any employee benefit plans or of
(i) a service provider to any employee benefit plans, (ii) an employer any of
whose employees are covered under any employee benefit plans, (iii) an employee
organization any of whose members are covered by any employee benefit plans,
(iv) the Parent of an entity described in clauses (ii) or (iii) of this
paragraph, or (v) a Subsidiary of a fiduciary with respect to any employee
benefit plans, or a Subsidiary of an entity described in clauses (i), (ii),
(iii) or (iv) of this paragraph.
5.3 Limitations. Each of the representations and warranties of
Seller contained in Section 5.1: (i) is made as of the date of this Agreement;
(ii) will be deemed to be remade by Seller, and to be true in all material
respects, as of the date of Closing, subject to other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Purchaser; and (iii) will survive for a period of twelve (12) months after the
Closing Date, as defined in Paragraph 7.1. Any claim that Purchaser may have at
any time against Seller for a breach of any such representation or warranty,
whether known or unknown, which is not asserted by notice from Purchaser to
Seller within such twelve (12) month period will not be valid or effective, and
Seller will have no liability with respect thereto, nor will Seller have any
liability to Purchaser for a breach of any representation or warranty unless the
valid claims for all such breaches collectively aggregate more than One Hundred
Fifty and No/100 Dollars ($150,000.00), in which event the full amount of such
valid claims shall be actionable, up to the aggregate amount of $3,000,000.00.
Seller hereby covenants that until the later of (A) twelve (12) months following
the Closing Date, or (B) the date that any breach of a representation or
warranty properly raised by Purchaser within such twelve (12) month period is
resolved, Seller shall at all times retain not less than $3,000,000 of the
Purchase Price in reserve to satisfy its post-Closing obligations hereunder. The
continued accuracy in all material respects of the aforesaid representations and
warranties is a condition precedent to Purchaser's obligation to close. If any
of said representations and warranties is not correct in all material respects
at the time the same is made or as of Closing, and Seller had no knowledge of
such inaccuracy when the representation or warranty was made, or when remade at
Closing, or if such warranty or representation becomes inaccurate on or prior to
Closing other than by reason of Seller's default hereunder, Purchaser may, upon
being notified of such occurrence on or prior to Closing either (a) terminate
this Agreement without liability on the part of Seller or Purchaser, other than
Purchaser's indemnity contained in Paragraph 8.14 and the Deposit will be
returned to Purchaser, or (b) waive such matter and proceed to Closing, by
notice to Seller given within ten (10) days after Purchaser is notified of such
occurrence, but in no event later than Closing. If Purchaser fails to give any
notice within the required time period, Purchaser will be deemed to have elected
to waive such matter and to proceed to Closing. If any of said representations
and warranties are not correct
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in all material respects at the time the same is made or as of Closing, and
Seller had knowledge of such inaccuracy when the representation or warranty was
made, or, by its default hereunder caused the representation or warranty to be
inaccurate when remade at Closing, Purchaser may either (x) terminate this
Agreement subject to its obligations under Paragraph 8.14, receive a return of
the Deposit and recover from Seller all of Purchaser's actual, reasonable
out-of-pocket costs incurred in connection with its review of the Property and
negotiation of this transaction or (y) waive the breach and its rights under
clause (x) and proceed to Closing, by notice to Seller given within ten (10)
days after Purchaser is notified of such occurrence, but in no event later than
Closing. If Purchaser fails to give any notice within the required time period,
Purchaser will be deemed to have elected to waive such matter and to proceed to
Closing.
5.4 Condition of Property. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, SELLER HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATIONS,
WARRANTIES OR OTHER STATEMENTS AS TO THE CONDITION OF THE PROPERTY AND PURCHASER
ACKNOWLEDGES THAT AT CLOSING IT IS PURCHASING THE PROPERTY ON AN "AS IS, WHERE
IS" BASIS AND WITHOUT RELYING ON ANY REPRESENTATIONS AND WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS OR BROKERS AS TO ANY
MATTERS CONCERNING THE PROPERTY, EXCEPT AS SET FORTH IN THIS AGREEMENT. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES HAVE
BEEN MADE OR ARE MADE AND NO RESPONSIBILITY HAS BEEN OR IS ASSUMED BY SELLER OR
BY ANY PARTNER, OFFICER, PERSON, FIRM, AGENT OR REPRESENTATIVE ACTING OR
PURPORTING TO ACT ON BEHALF OF SELLER AS TO THE CONDITION OR REPAIR OF THE
PROPERTY OR THE VALUE, EXPENSE OF OPERATION, OR INCOME POTENTIAL THEREOF OR AS
TO ANY OTHER FACT OR CONDITION WHICH HAS OR MIGHT AFFECT THE PROPERTY OR THE
CONDITION, REPAIR, VALUE, EXPENSE OF OPERATION OR INCOME POTENTIAL OF THE
PROPERTY OR ANY PORTION THEREOF. THE PARTIES AGREE THAT ALL UNDERSTANDINGS AND
AGREEMENTS HERETOFORE MADE BETWEEN THEM OR THEIR RESPECTIVE AGENTS OR
REPRESENTATIVES WITH RESPECT TO THE SALE OF THE PROPERTY ARE MERGED IN THIS
AGREEMENT AND THE SCHEDULES AND EXHIBITS HERETO ANNEXED, WHICH ALONE FULLY AND
COMPLETELY EXPRESS THEIR AGREEMENT, AND THAT THIS AGREEMENT HAS BEEN ENTERED
INTO AFTER FULL INVESTIGATION, OR WITH THE PARTIES SATISFIED WITH THE
OPPORTUNITY AFFORDED FOR INVESTIGATION, NEITHER PARTY RELYING UPON ANY STATEMENT
OR REPRESENTATION BY THE OTHER UNLESS SUCH STATEMENT OR REPRESENTATION IS
SPECIFICALLY EMBODIED IN THIS AGREEMENT OR THE EXHIBITS ANNEXED HERETO.
PURCHASER ACKNOWLEDGES THAT SELLER HAS REQUESTED PURCHASER TO INSPECT FULLY THE
PROPERTY AND INVESTIGATE ALL MATTERS RELEVANT THERETO AND, WITH RESPECT TO THE
CONDITION OF THE PROPERTY, TO RELY SOLELY UPON THE RESULTS OF PURCHASER'S OWN
INSPECTIONS OR OTHER INFORMATION OBTAINED OR OTHERWISE AVAILABLE TO PURCHASER,
RATHER THAN ANY INFORMATION THAT MAY HAVE BEEN PROVIDED BY SELLER TO PURCHASER.
6. Closing Conditions. Purchaser's obligation to proceed to Closing is
conditioned upon Seller's performance of the following obligations and
satisfaction of the following conditions, in addition to all of its other
obligations and conditions contained in this Agreement, provided that Purchaser
may in its sole discretion elect to waive failure by Seller to perform any
particular obligation.
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6.1 The Title Insurer is prepared to issue at Closing a policy of
title insurance dated the Closing Date insuring Purchaser as holding fee simple
title to the Property being conveyed, subject only to Acceptable Exceptions, and
affirmatively insuring as a part of Schedule A to such title policy Purchaser's
rights under the REA or other appurtenant easements that benefit the Real
Property and containing such endorsements requested by Purchaser which are
available in the State of Texas.
6.2 Seller has delivered to Purchaser not later than the date of
Closing, estoppel letters substantially in the form of Schedule 6.2 ("Required
Estoppel Form") or in form otherwise reasonably acceptable to Purchaser,
prepared by Seller and addressed to Purchaser, from at least 85% of the tenants
of the Property, measured by square footage. All estoppel letters must be dated
not more than forty-five (45) days prior to the date of Closing. An estoppel
letter form, even though not in the Required Estoppel Form, will be deemed
reasonably acceptable to Purchaser if said letter is in favor of Purchaser and
its lender and contains the following information: confirming rent, security
deposit, square footage and termination date; that no rent has been paid more
than one month in advance; that the lease is in full force and effect and that a
true and correct copy of the lease with all amendments and modifications is
attached; and that all work to be performed by Landlord has been performed and
that the tenant has no knowledge of any Landlord default.
6.2.1 Seller has delivered to Purchaser not later than the date
of Closing, estoppel letters substantially in the form of Schedule 6.2.1 ("REA
Estoppel Form") or in form otherwise reasonably acceptable to Purchaser, or the
form, if any, provided in the REA, prepared by Seller and addressed to
Purchaser, from all parties to the REA. All estoppel letters must be dated not
more than forty-five (45) days prior to the date of Closing.
6.2.2 If Seller is unable to obtain the requisite estoppel
letters as described above, Seller may (but is not required to) substitute for
any unsigned tenant (but not an REA) estoppel letter an estoppel letter in the
Required Estoppel Form, which may be completed, executed and delivered by Seller
and warranted and represented by Seller, provided that such substituted estoppel
letters will not collectively represent in excess of 15% of all of the tenants,
measured by square footage. Seller's representations and warranties in the
certificates will survive the Closing subject to the limitations of Paragraph
5.3. In the event that, following the Closing Date, Seller obtains an estoppel
letter complying with the requirements of Paragraph 6.2 with respect to any
Lease for which Seller delivered a substituted estoppel letter, Seller will
deliver such estoppel letter to Purchaser and, upon such delivery, Seller will
be automatically released from any liability or obligation under the substituted
estoppel letter previously delivered by Seller with respect to such Lease.
6.2.3 If Seller is unable to obtain and deliver sufficient
estoppel certificates as required under Paragraphs 6.2 or 6.2.1, or if the
letters received under Paragraphs 6.2 or 6.2.1 or substituted estoppels
permitted under Paragraph 6.2.2 contain information or omissions unacceptable to
Purchaser in its reasonable discretion, then Seller will not be in default by
reason thereof, but Purchaser shall, by notice given to Seller before the
Closing, elect either
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(i) to waive said conditions and proceed with the Closing or (ii) to terminate
this Agreement, and receive a refund of the Deposit. If Purchaser elects to
terminate this Agreement, neither party will have any further rights or
obligations hereunder except as provided in Paragraph 8.14.
6.3 All of Seller's representations and warranties made pursuant to
Paragraph 5.1 remain true and correct in all material respects.
6.4 Seller has delivered all of the documents and other items
required pursuant to Paragraph 7.15 and has performed all other covenants,
undertakings and obligations required by this Agreement, to be performed or
complied with by Seller at or prior to Closing.
6.5 At Closing, there shall be no litigation, including any
arbitration, investigation or other proceeding, pending by or before any court,
arbitrator or governmental or regulatory official, body or authority nor any
decree, order or injunction issued by any such court, arbitrator or governmental
or regulatory official, body or authority and remaining in effect which does or
is likely to prevent or hinder the timely consummation of the Closing or
materially adversely affect the Property which is not fully covered by insurance
or which seeks to enjoin the Closing of this transaction.
6.6 The Board of Directors of Purchaser shall have approved this
Agreement and the transaction set forth herein on or before the expiration of
the Review Period. In the event Purchaser does not provide Seller with written
notice prior to the expiration of the Review Period that such Board of Directors
has not approved this Agreement and the transaction set forth herein, such Board
of Directors shall be deemed to have approved the same and this contingency
shall be waived.
6.7 Seller shall have obtained from each of the parties to the
Contracts whose consent to the assignment of their Contract is required a
consent to the transfer or assignment of such Contract from Seller to Purchaser.
6.8 If, under applicable law, any notification may be required to be
given to, or a clearance may be required to be obtained from, any state or local
taxing authorities in order to permit the transfer of the Property as herein
contemplated without a Lien attaching to the assets transferred or liability
being incurred by Purchaser for any state or local taxes required to be paid or
collected by Seller relating to periods prior to the Closing Date, Seller shall
have obtained appropriate clearances or releases (and/or statements that no
clearances or releases are required) from the applicable taxing authorities or,
if not available, Seller shall deposit with Purchaser the amount as directed by
the applicable taxing authorities (such clearances or releases or directions,
the "Releases/Directions"), and Purchaser shall hold such amount until it
receives the release or clearance therefor, whereupon Purchaser shall pay to
Seller such amount; provided, however, if the delivery of a clearance or release
is subject to a demand for payment of all or a portion of the amount held to any
taxing authority, Purchaser shall be authorized and directed to pay such sums in
accordance with the demand and to pay the balance, if any, to Seller. Seller
shall be responsible for payment of all rental, transaction privilege, business
privilege, and similar
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taxes, imposed by any state or local taxing authority upon Seller's receipt of
Rents prior to Closing. Purchaser shall be responsible for payment of all such
taxes based on Rents which it receives after Closing.
7. Closing.
7.1 Closing of Sale. Subject to the satisfaction of all Closing
conditions, the purchase and sale contemplated herein shall close (herein
referred to as the "Closing") at the office of the Title Insurer, or as
otherwise mutually agreed, not later than September 8, 1999 (the "Closing
Date"), time being of the essence. At Closing, Seller will deliver to Purchaser
a Special Warranty Deed ("Deed") in the form of Schedule 7.15.1 and other
closing documents required hereunder and Purchaser will cause payment of the
Purchase Price, plus or minus prorations and adjustments, to be made to Seller
by wire transfer. The sale (payment of the Purchase Price and delivery of the
Deed) may, at Purchaser's option to be exercised by notice to Seller at least
five (5) days prior to the Closing Date, be closed through a "New York Style"
escrow with the Title Insurer in accordance with the general provisions of the
usual form of escrow agreement used in similar transactions by such Title
Insurer with special provisions inserted as may be required to conform with this
Agreement. Seller will provide the Title Insurer with a form of "Gap Indemnity"
required by the Title Insurer to effectuate such Closing.
7.2 Prorations. Subject to the other provisions of Paragraphs 7.3
through 7.12, the items pertaining to the Property that are identified in
Paragraphs 7.2 through 7.12 shall be prorated between the parties on a per diem
basis (employing the actual number of calendar days in the period involved and a
365-day year) so that credits and charges with respect to such items for all
days preceding the Closing Date shall be allocated to Seller, and credits and
charges with respect to such items for all days including and after the Closing
Date shall be allocated to Purchaser; provided, however, that Seller shall
receive the Purchase Price in good funds by 2:00 p.m. Chicago time on the day of
Closing, failing which all prorations shall be made as of the next business day.
Each payment received shall be attributed to the most recent period for which
such a payment is due. The parties shall make final adjusting payments as
provided in Paragraph 7.11 hereof. All prorations not specifically agreed to
herein shall be made in accordance with customary industry practice. The
provisions of Paragraphs 7.2 through 7.12 shall survive the Closing for a period
of twelve (12) months.
7.3 Items to be Prorated 7.3 Items to be Prorated. The
following items shall be prorated between Purchaser and Seller as of 11:59 p.m.
Central Standard Time on the day immediately preceding the Closing Date:
7.3.1 real property taxes and assessments (or installments
thereof) based on the most recent tax bills except those required to be paid
directly to the entity imposing the same by those Tenants who are not more than
30 days' delinquent in all of their Lease payment obligations on the Closing
Date;
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7.3.2 water rents and charges, if any, except those required to
be paid directly to the entity imposing the same by Tenants (who are not more
than 30 days' delinquent in all of their Lease payment obligations on the
Closing Date);
7.3.3 sewer taxes and rents, if any, except those required to
be paid directly to the entity imposing the same by Tenants (who are not more
than 30 days' delinquent in all of their Lease payment obligations on the
Closing Date);
7.3.4 actually accrued interest, if any, required to be paid to
a Party on Security Deposits;
7.3.5 amounts, if any, payable by Seller or owed to Seller
under the REA;
7.3.6 annual permit, license and inspection fees, memberships,
subscriptions, and dues, if any, on the basis of the fiscal year for which
levied, if the rights with respect thereto continue for the benefit of Purchaser
following the Closing;
7.3.7 fuel oil and liquid propane gas, if any, at the cost per
gallon or cubic foot most recently charged to Seller with respect to the
Property, based on the supplier's measurements thereof, plus sales taxes
thereon;
7.3.8 deposits, if any, on account with any utility company
servicing the Property;
7.3.9 deposits on account with any municipality having
jurisdiction over the Property (other than deposits which are in the nature of
security for the performance of work);
7.3.10 amounts paid or payable by or to Seller to or from
merchants and other associations for promotional funds and other similar
contributions or payments;
7.3.11 Rents in the amounts currently payable to the extent any
items of Rents are not already prorated pursuant to this Paragraph 7.3;
7.3.12 amounts paid or payable by Seller under the Contracts to
be assumed by Purchaser;
7.3.13 Purchaser shall receive a credit from Seller at Closing
for the funds held by Seller with respect to outstanding gift certificates or,
to the extent required by law, the accounts holding the proceeds of such
certificates shall be assigned to Purchaser (provided, in each instance, the
amount of the credit or balance in the accounts shall equal or exceed the
outstanding balance of all unredeemed gift certificates); and
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7.3.14 all other items customarily apportioned in connection
with the sale of similar properties similarly located.
Seller shall cooperate with Purchaser in the transfer of electricity,
gas, water and other utility services from Seller's name to the name of
Purchaser as of the Closing Date.
7.4 Installment Payment of Assessments. In furtherance of
Section 7.3, if any real property assessment affects the Property at the Closing
and such real property assessment is payable in installments (whether at the
election of Seller or otherwise), the installment relating to, or payable over,
the Applicable Closing Fiscal Period shall be apportioned between Seller and
Purchaser as of 11:59 p.m. Central Standard Time on the day immediately
preceding the Closing Date, and the remaining installments shall be the
obligation of Purchaser.
7.5 Adjustable Tenant Charges
7.5.1 Notwithstanding anything to the contrary contained
herein, no adjustments or apportionments shall be made with respect to the
expense items listed in Section 7.3 hereof (other than real estate taxes and
assessments, as to which adjustment shall be made as set forth in Section 7.3)
for the Applicable Closing Fiscal Period or any prior fiscal period to the
extent such expense items are payable or reimbursable from funds collected as
Adjustable Tenant Charges. Seller shall be responsible for the payment of all
such expenses incurred by it, and Purchaser shall be responsible for the payment
of all such expenses incurred by it (including real estate taxes and assessments
for which Purchaser has received credit under Section 7.3).
7.5.2 At the Closing, Seller shall assign to Purchaser any
amounts required to be paid as Adjustable Tenant Charges by Tenants which were
actually received by Seller and were unapplied and due and payable on or before,
but remain unpaid on, the Closing Date, and there shall be no adjustment
hereunder with respect thereto. At the Closing, Seller shall deliver to
Purchaser a true and correct statement setting forth in reasonable detail and
certifying the amount of Adjustable Tenant Charges collected and expenditures
for such items of expense (and any credits for real estate taxes) made by Seller
for the portion of the Applicable Closing Fiscal Period which precedes the
Closing Date and for any prior fiscal period.
7.5.3 Any amounts collected by Purchaser after the Closing
Date which relate to Adjustable Tenant Charges payable with respect to any
fiscal period ending prior to the Applicable Closing Fiscal Period shall be
remitted to Seller. Within one hundred eighty (180) days following the end of
the Applicable Closing Fiscal Period and from time to time thereafter as amounts
are received by Purchaser from Parties, the aggregate amount of Adjustable
Tenant Charges, if any, collected and retained by Purchaser and Seller with
respect to the Applicable Closing Fiscal Period shall be apportioned and
adjusted such that the total amount of such Adjustable Tenant Charges received
by Purchaser, on the one hand, and Seller, on the other hand, shall be in the
same proportion as the amount of the expense items to which such Adjustable
Tenant Charges relate which each has borne (including real estate taxes or
assessments for which either party has received credit under Section 7.3), and,
to the extent that either shall have
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received a greater share of the payments with respect to Adjustable Tenant
Charges, such party or parties shall promptly settle such excess with the other.
7.6 Fixed and Other Tenant Charge Arrearages Subject to
the provisions of Section 7.8.3, Fixed and Other Tenant Charge Arrearages
(which, for purposes of this Section 7.6, shall include any real estate taxes or
special assessments or other amounts otherwise required to be paid by a Party
directly to the taxing authority but actually paid by Seller to the taxing
authority with respect to the amount of the taxes or special assessments
actually paid), if and when collected, shall be paid to Purchaser as to Fixed
and Other Tenant Charge Arrearages which relate to periods from and after the
Closing Date, and to Seller with respect to all other Fixed and Other Tenant
Charge Arrearages.
7.7 Sales Based Tenant Charges 7.7 Sales Based Tenant Charges.
Sales Based Tenant Charges which are payable with respect to any period prior to
the Closing Date or which have been accrued prior to the Closing Date shall not
be apportioned as of the Closing Date. In lieu thereof, such amounts shall be
apportioned, after the Closing Date, so that the amount thereof under each of
the Leases to which Seller shall be entitled, as finally determined, shall be
the entire amount thereof with respect to any fiscal period ending prior to the
Closing Date, and, for the Applicable Closing Fiscal Period, an amount which
bears the same ratio to the total Sales Based Tenant Charges as the number of
days in the Applicable Closing Fiscal Period which have elapsed prior to the
Closing Date bears to the total number of days in the Applicable Closing Fiscal
Period.
7.8 Application of Rent Receipts. Notwithstanding anything to
the contrary contained herein, in determining the adjustments and apportionments
pursuant to Sections 7.5, 7.6 and 7.7, the following shall apply:
7.8.1 Payments of Rents (other than Rents collected
pursuant to Section 7.10.2) shall be deemed to have been made by a Party first
to the payment of Fixed and Other Tenant Charges (other than charges for Tenant
Services), second to the payment of Sales Based Tenant Charges, third to the
payment of charges for Tenant Services (and designated as such in the Lease),
fourth to the payment of Adjustable Tenant Charges, and last to the payment of
all other items of Rent payable by such Party.
7.8.2 Any amounts collected by Purchaser as Sales Based
Tenant Charges and Adjustable Tenant Charges, within each category, shall be
deemed to have been paid by the Party, first, on account of amounts then due
Purchaser for periods after the Applicable Closing Fiscal Period, next, on
account of amounts then due for the Applicable Closing Fiscal Period and, next,
on account of amounts then due for all fiscal years prior to the Applicable
Closing Fiscal Period.
7.8.3 If Purchaser shall receive any Fixed and Other
Tenant Charges after the Closing Date from a Party who is delinquent as of the
Closing Date in the payment of Fixed and Other Tenant Charges payable under its
Lease or the REA, as the case may be, such Fixed and Other Tenant Charges shall
be deemed to have been paid by the Party, first, on account of
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amounts owing to Purchaser, next, on account of Fixed and Other Tenant Charge
Arrearages due to Seller (after reduction for amounts collected pursuant to
Section 7.10.2), and the balance remaining thereafter shall be retained by
Purchaser.
7.8.4 Notwithstanding anything to the contrary contained
in this Section 7.8, a payment of Rent shall be applied to the payment of the
item or items of Rent designated by the party making such payment or to which
such payment otherwise clearly relates in the good faith judgment of Purchaser.
7.9 Security and Utility Deposits 7.9 Security and Utility
Deposits. At the Closing, Seller shall furnish Purchaser with a schedule setting
forth and certifying, as of the Closing Date, the unapplied and unreturned
portion of any security deposits which have been deposited with Seller or its
agents by any existing Tenants (the "Security Deposits") and the amount of any
deposits on account with any utility company servicing the Property that will
continue for the benefit of Purchaser following Closing ("Utility Deposits")
(currently $0), and Purchaser shall receive a credit against the Purchase Price
payable at Closing in the amount of the Security Deposits, together with all
interest, if any, accrued thereon and required to be paid to Tenants. Purchaser
shall reimburse Seller at Closing for the amount of the Utility Deposits.
7.10 Collection of Rents.
7.10.1 Purchaser shall use reasonable efforts to collect
the Fixed and Other Tenant Charge Arrearages, Adjustable Tenant Charges, Sales
Based Tenant Charges and other Rents which are payable with respect to the
Applicable Closing Fiscal Period and any prior fiscal period for a period of six
(6) months after Closing, but Purchaser shall not be required to retain a
collection agency, commence litigation or file proofs of claim or commence an
adversary proceeding in a bankruptcy case, or terminate Leases or the REA in
connection with such collection efforts. Purchaser shall not waive or settle any
claims for any such amounts in whole or in part to the extent such amounts, if
collected, would be payable to Seller hereunder other than in accordance with
the policies of Purchaser from time to time as to Rent delinquencies generally.
Collection costs shall be charged against amounts collected and charged to the
parties hereto in the proportion in which each is entitled to the proceeds of
such collection. Purchaser shall provide to Seller semi-annual reports after
Closing with respect to the collection by Purchaser after Closing of any such
amounts which are payable with respect to the Applicable Closing Fiscal Period
and any prior fiscal year.
7.10.2 Seller shall have the right to seek collection
of any Fixed and Other Tenant Charge Arrearages owed to it and not collected by
or on behalf of it within six months following the Closing Date; provided,
however, that in seeking to collect any such Fixed and Other Tenant Charge
Arrearages, Seller shall not be entitled to terminate any Lease or either of the
REA or otherwise seek any remedy which could materially affect or impact the
Property or the ownership or operation thereof other than a money judgment
against the delinquent Party. Purchaser shall not be required to join in any
such actions or proceedings commenced by Seller unless the provisions of any
law, rule or regulation at the time in effect shall require that such actions or
proceedings be brought by and/or in the name of Purchaser, in which event
Purchaser shall join and cooperate in such
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actions or proceedings or permit the same to be brought by Seller in Purchaser's
name but Seller shall pay all costs and expenses relating thereto, including
Purchaser's reasonable legal fees in reviewing pleadings and other materials
filed in connection with such litigation.
7.10.3 Notwithstanding anything to the contrary contained
herein, Purchaser shall have the right at any time on or after the Closing, and
whether or not its joinder shall be required as a matter of law, to join in, or
to be substituted for Seller in, any proceedings for the eviction of Tenants
and/or the collection of Rent which may have been instituted by Seller either
prior to or after the Closing, if the Tenant in question is still in possession
of the premises covered by its Lease and if, in connection therewith, Purchaser
intends to seek eviction of such Tenant, cancellation of the Lease or
repossession of the premises. If Purchaser joins in, or is substituted for
Seller as plaintiff in any such litigation, Purchaser shall, thereafter, assume
sole liability for all costs and expenses of such litigation, including legal
fees and expenses, as may thereafter be incurred (except as provided below) and
shall thereafter control all aspects of such proceedings, except that Purchaser
shall not be entitled to waive, reduce or otherwise compromise any claims for
Rent relating to any period prior to Closing other than in accordance with the
policies of Purchaser from time to time as to Rent deficiencies generally.
Seller in any event may, at its option, continue to participate in such
litigation. In any event, Seller shall reimburse Purchaser for a pro rata
portion of its costs and expenses of such collection in proportion to, but in no
event in an amount greater than, the amount, if any, actually received by Seller
after Closing as a result of such proceedings; provided, however, Seller shall
be entitled to a credit for legal fees and expenses incurred by Seller prior to
the intervention by Purchaser in connection with the proceedings previously
instituted by Seller in connection with such collection efforts.
7.11 Settlement of Adjustments
7.11.1 Seller and Purchaser acknowledge that it may be
difficult to calculate, as of the day immediately preceding the Closing Date,
certain of the adjustments, apportionments and payments to be made pursuant to
Paragraphs 7.2 through 7.12 hereof. Accordingly, Seller and Purchaser hereby
agree that any adjustments, apportionments and payments otherwise required to be
made as of the Closing Date may to the extent necessary or desirable be
estimated by Purchaser and Seller based on the most recent available data, and,
as soon as practicable and if necessary from time to time after the Closing
Date, additional adjustments, apportionments and payments shall be made to
adjust for any differences between the actual apportionment or adjustment and
the amount thereof estimated as of the Closing Date. Any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after their
discovery. An adjustment shall be made after Closing in favor of Seller for real
estate taxes credited to Purchaser pursuant to Section 7.3 upon the payment of
such real estate taxes by a Tenant or Tenants who are required to pay such taxes
directly to the entity imposing the same.
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7.11.2 Except for amounts expressly required to be settled
by assignment of accounts or deposits pursuant to the above provisions, net
prorations and adjustments made pursuant to Paragraphs 7.2 through 7.12 as of
the Closing Date and determined as provided in subsection (a) above shall be
settled in cash. From time to time after the Closing as further adjustments are
made as herein provided, settlement thereon between Seller and Purchaser shall
be made in cash.
7.11.3 Purchaser, upon reasonable advance notice, shall
provide Seller with access to its books and records, including back-up
calculations and information, relating to the calculation of the adjustments
required to be made pursuant to Paragraphs 7.2 through 7.12.
7.11.4 Notwithstanding anything to the contrary contained
herein, a final determination of the amounts owing under Paragraphs 7.2 through
7.12 shall be made as of the date that is twelve (12) months after the Closing
Date, and the amounts determined as of such date to be owing settled in cash no
later than ten (10) days thereafter. No further adjustments or payments shall be
required to be made under Paragraphs 7.2 through 7.12 thereafter (except with
respect to legal proceedings for or bankruptcy claims in respect of the
collection of Rent which are pending on such date or legal proceedings or
bankruptcy claims brought by Seller under Section 7.10.2).
7.12 Definitions. As used herein, the following terms shall
have the following meanings:
"Adjustable Tenant Charges" shall mean common or mall area maintenance
(exterior and interior) charges, real estate taxes and assessments, property
insurance charges and HVAC charges to the extent denominated as such in the
Leases and the REA.
"Applicable Closing Fiscal Period" shall mean, with respect to any item
which is prorated hereunder, the calendar year (or other fiscal period for which
such item is determined or assessed) during which the Closing Date occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Fixed and Other Tenant Charges" shall mean Rent other than Adjustable
Tenant Charges, Sales Based Tenant Charges and Advertising and Promotional
Contributions.
"Fixed and Other Tenant Charge Arrearages" shall mean Fixed and Other
Tenant Charges due and payable prior to but unpaid as of the Closing Date.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated
by the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
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"Party" shall mean a party to the REA or a Contract (or the successor
or assignee thereof) or a Tenant under a Lease, in each case other than Seller
or its predecessors in title with respect to the Property.
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Rents" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and other taxes, and other amounts payable by any Party
under the Leases and the REA.
"Sales Based Tenant Charges" shall mean Rent consisting of overage or
percentage rent.
"Security Deposits" shall have the meaning set forth in Paragraph 7.9.
"Tenants" shall mean tenants, concessionaires, licensees and/or
occupants under the Leases.
"Tenant Services" shall mean all services supplied by or on behalf of
Seller to Tenants for which Tenants are separately charged, other than services
in the nature of common area maintenance.
"Utility Deposits" shall have the meaning set forth in Paragraph 7.9.
7.13 Closing Costs. Purchaser agrees to pay (i) one-half (1/2)
of the Title Insurer's escrow and/or closing fees (including any payment to the
closing officer of the Title Insurer as may be the local custom at the Closing),
and (ii) all costs of Purchaser's physical inspections of the Property
(environmental, engineering) and other due diligence activities. Seller agrees
to pay (i) one-half (1/2) of the Title Insurer's escrow and/or closing fees
(including any payment to the closing officer of the Title Insurer as may be the
local custom at the closing), (ii) all recording fees with respect to clearing
Seller's title, (iii) the cost of any endorsements to the title policy required
by Purchaser, including extended coverage, (iv) all recording fees and taxes
with respect to the Deed, (v) the cost of the title commitment and policy and
(vi) the cost of the survey. Except as otherwise provided in Paragraph 8.9, each
party is responsible for its own attorneys' and other professional fees. All
other closing costs shall be allocated in accordance with the prevailing local
custom.
7.14 Possession. Subject to the rights of Tenants pursuant to
Leases of the Property delivered to Purchaser, Seller will deliver possession of
the Property and of any conveyed personal property to the Purchaser on the date
of Closing and Seller will thereupon deliver to Purchaser the originals of all
Leases and the REA, all correspondence with tenants,
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tenant/lease files, operating statements, plans and specifications, supplies and
advertising materials, booklets, keys, and other items used in connection with
operation of the Property and all other Books and Records.
7.15 Seller's Closing Documents. As part of the Closing,
Seller will deliver to Purchaser:
7.15.1 the Deed, in the form of Schedule 7.15.1;
7.15.2 an affidavit in customary form that Seller is not
a "foreign person" within the meaning of Section 1445(e) of the Internal Revenue
Code of 1986, in the form of Schedule 7.15.2;
7.15.3 such affidavits as are customarily required by
Title Insurer in connection with issuance of the owner's title insurance policy,
including a mechanics' lien and judgment affidavit;
7.15.4 an assignment of Leases in the form of Schedule
7.15.4 ("Lease Assignment");
7.15.5 an assignment of Contracts (except with respect
to those Contracts which Purchaser has elected not to assume pursuant to
Paragraph 3.3) and warranties in the form of Schedule 7.15.5 ("Contracts
Assignment");
7.15.6 an assignment of intangibles in the form of
Schedule 7.15.6 ("Intangibles Assignment");
7.15.7 letters, in form to be supplied by Purchaser, to
the Tenants at the Property, instructing the Tenants to pay rent to Purchaser
and to recognize Purchaser as landlord under their leases;
7.15.8 a xxxx of sale conveying all Personalty, if any,
in the form of Schedule 7.15.8;
7.15.9 a "bring down certificate" stating that Seller's
representations and warranties are true and correct as of the Closing Date, in
the form of Schedule 7.15.9 (it being expressly agreed that Seller shall not be
deemed to be in default under this Agreement if Seller is unable to deliver the
"bring down certificate" by reason of a change in facts or circumstances for
which Seller is not at fault, provided that such failure to be in default shall
not affect Purchaser's right to terminate this Agreement);
7.15.10 estoppel certificates, to the extent obtained
pursuant to Paragraphs 6.2 and 6.2.1 hereof;
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7.15.11 an assignment of the REA in the form of Schedule
7.15.11 (the "REA Assignment");
7.15.12 an updated Rent Roll;
7.15.13 written notices (a) to the Parties to the REA
advising the of the change of ownership and directing them to pay all charges
under the REA as directed by Purchaser; and (b) to each party to each of the
Contracts advising of the transfer and assignment of Seller's interest in the
Contracts to Purchaser and directing that future inquiries be made directly to
Purchaser;
7.15.14 the Releases/Directions;
7.15.15 a search report dated not more than ten (10)days
before Closing of the Secretary of State records, county recorder records, local
court records (federal, state, county and municipal) and such other official
public records with respect to the Property that would disclose the present of
any liens, bankruptcy proceedings, lis pendens or other matters affecting the
Property or Seller showing no matters other than Acceptable Exceptions or
matters to be released at Closing;
7.15.16 a signed termination agreement with any manager or
leasing agent for the Property, together with appropriate lien waivers;
7.15.17 evidence as Title Insurer may reasonably request of
Seller's organization and authority to enter into and consummate all of the
transactions contemplated in this Agreement; and
7.15.18 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
7.16 Purchaser's Closing Documents. As part of the Closing,
Purchaser will deliver to Seller:
7.16.1 good federal funds in an amount equal to the
Purchase Price, less the Deposit and interest thereon and plus or minus
prorations as provided herein and plus funds sufficient to pay Purchaser's
closing costs hereunder;
7.16.2 such affidavits as are customarily required by Title
Insurer in connection with issuance of the owner's title insurance policy;
7.16.3 executed counterpart of the Lease Assignment;
7.16.4 executed counterpart of the Contracts Assignment;
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7.16.5 executed counterpart of the Intangibles Assignment;
7.16.6 executed counterpart of the REA Assignment; and
7.16.7 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
7.17 Joint Deliveries. At the Closing, Seller and Purchaser
will execute and deliver to each other the following documents in proper form:
7.17.1 Closing Statement;
7.17.2 City, county and state transfer tax declarations or
similar instruments; and
7.17.3 All other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
8. Miscellaneous.
8.1 Modifications. This Agreement can be amended only in writing
signed by both of the parties.
8.2 Casualty and Condemnation. Seller agrees to keep its
customary replacement cost insurance covering the Property in effect until the
Closing. If between the Effective Date and the Closing a "Substantial Taking" or
a "Substantial Casualty" occurs, Purchaser may (i) terminate this Agreement or
(ii) elect to accept the Property in its then condition, in which event Seller
will pay or assign to Purchaser at Closing all proceeds of insurance (plus the
applicable deductible) or condemnation awards payable to Seller by reason of
such damage or condemnation. In the event Purchaser makes neither election by
the earlier of (a) Closing or (b) ten (10) days after being advised of such
casualty or condemnation, Purchaser will be deemed to have elected to accept the
Property in its then condition. In the event of any other damage to the
Property, Seller may either repair the damage or give Purchaser a reduction in
the Purchase Price equal to the cost of repairing such damage, as certified by
an architect or contractor selected by Seller and reasonably acceptable to
Purchaser. In the event of any damage where Purchaser does not have the right to
terminate and Seller elects to repair such damage, the Closing Date shall be
delayed for the number of days (not to exceed 60 days) required to repair the
damage, which Seller agrees to do promptly in accordance with all Laws and in a
good and workmanlike manner. "Substantial Casualty" or "Substantial Taking"
shall mean a casualty or taking, as the case may be, where: (a) the condemnation
award, or the proceeds payable under the applicable policy or policies of
casualty insurance maintained by Seller, are insufficient by more than $100,000
to fully repair the damage caused by such casualty or taking, unless Seller
shall (at its sole option and without any obligation to do so) grant to
Purchaser a credit equal to such deficiency; or (b) a REA party shall, by reason
of such casualty
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or taking, either terminate its obligations under the REA, or cease operating
at the Property (other than temporarily due to such damage and destruction,
remodeling, renovation or any similar cause), or cease operating at the Property
under the name under which it was operating immediately prior to such taking and
casualty (as permitted by the provisions of such REA) or have the right to do
any of the foregoing (unless such right shall have expired or been waived); or
(c) the estimated time for repair or restoration shall exceed three (3) months;
or (d) in the case of a taking, a taking with respect to such portion of the
Real Property as, when so taken would, in the reasonable opinion of Purchaser,
leave remaining a balance of the Real Property, which, due either to the area
taken or the location of the part taken would not, under applicable zoning laws,
building regulations and economic conditions then prevailing or otherwise,
readily accommodate a new or restructured building or buildings of a type and
size generally similar to the building or buildings existing on the date hereof,
or would result in inadequate parking or lack of reasonable access to public
roads.
8.3 Time of Essence. Time (including, without limitation, the
date specified as the Closing Date) is of the essence of this Agreement.
8.4 Notices. All notices required or permitted hereunder must be
in writing and shall be served on the parties at the following address:
If to Purchaser: General Growth Properties, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx Xxxxx
Telephone: 312/000-0000
Facsimile: 312/960-5475
with a copy to: Xxxx, Xxxxxx & Xxxxxxxxx
Two Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn:Xxxxxxxx X. Xxxxxxxxx,
Esq.
Telephone: 312/000-0000
Facsimile: 312/269-1747
If to Seller: RREEF USA Fund-III
c/o The RREEF Funds
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxx Xxxxxxx
Telephone: 415/000-0000
Facsimile: 415/391-9015
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with a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: 312/000-0000
Facsimile: 312/527-9285
Any such notices may be sent by (a) certified mail, return receipt requested, in
which case notice will be deemed delivered three (3) business days after
deposit, postage prepaid in the U.S. mail or (b) a nationally recognized
overnight courier, in which case notice will be deemed delivered one business
day after deposit with such courier if overnight courier is specified or (c)
facsimile transmission, in which case notice will be deemed delivered upon
electronic verification that transmission to recipient was completed, provided
that notices sent by facsimile transmission on a day other than a business day
shall be deemed given on the first business day following the date of
transmission or (d) personal delivery. The above addresses and facsimile numbers
may be changed by notice to the other party; provided that no notice of a change
of address or facsimile number will be effective until actual receipt of such
notice.
8.5 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited
assignment shall be void; provided that Purchaser may assign this Agreement
without Seller's consent to an Affiliate; provided that the assignee satisfies
the representations and warranties set forth in Paragraph 5.2.2. Subject to the
foregoing, this Agreement is binding upon and inures to the benefit of the
respective legal representatives, successors, assigns, heirs, and devisees of
the parties. For the purposes of this Paragraph, the term "Affiliate" means (a)
an entity that directly or indirectly controls, is controlled by or is under
common control with the Purchaser or (b) an entity at least a majority of whose
economic interest is owned by Purchaser; and the term "control" means the power
to direct the management of such entity through voting rights, ownership or
contractual obligations.
8.6 Governing Law. The performance and interpretation of
this Agreement is controlled by the law of the State in which the Property is
located.
8.7 Continuation Until Closing, Leasing.
8.7.1 Between the Effective Date and the Closing, Seller
agrees to keep and perform all of the obligations to be performed by landlord
under any Leases and Laws. Seller agrees to operate the Property in the same
manner as before the making of this Agreement, the same as though Seller were
retaining the Property. Seller agrees not to convey any of the Property, nor to
grant any liens or easements with respect thereto.
8.7.2 From and after the date hereof, Seller agrees not to
permit or consent to any new leases, amendments, extensions, renewals (other
than pursuant to tenant
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renewal options, if any), assignments of Leases or subleases without first
submitting them to Purchaser for Purchaser's approval, which approval Purchaser
agrees not to unreasonably withhold. Purchaser will have five (5) days to notify
Seller of its disapproval of such leases, amendments, extensions, renewals,
assignments or subleases, and in the event that Purchaser does not so notify
Seller, the leases, amendments, extensions, renewals, or subleases, as the case
may be, will be deemed approved. Notwithstanding the foregoing, Seller may
continue its ongoing operations with respect to seasonal cart and kiosk rentals
and promotions without Purchaser's approval.
8.7.3 With respect to any new Lease or Lease modification
entered into by Seller after the Effective Date, other than those set forth on
Schedule 8.7.3 (which schedule sets forth pending Leases, the rents from which
have been underwritten by Purchaser in the calculation of the Purchase Price),
by the terms of which Seller obligates itself to perform or performs or pays or
contracts for any tenant improvement work or additional landlord work required
pursuant to such Lease, or pays or contracts for any leasing commissions or
grants any free rent period or other financial concessions, then such expenses
and/or free rent or other concessions, and all other third-party costs incurred
(including reasonable attorneys' fees) in connection with such Lease, will be a
credit to Seller at Closing to the extent Seller paid such amounts prior to
Closing, but only to the extent Purchaser pre-approved such amounts; otherwise
Purchaser agrees to assume liability for the payment and performance of such
obligations in accordance with the terms thereof, but only to the extent
Purchaser pre-approved such amounts.
8.7.4 From the date hereof until the Closing, Seller shall
(a) use reasonable best efforts to maintain, for the benefit of Purchaser
following the Closing, the goodwill of Tenants, prospective tenants, vendors and
other parties having business relations with Seller; (b) pay its debts (or in
good faith contest the same) and perform its obligations as they become due; (c)
maintain the Property in the same manner and condition that exists on the date
hereof, as such condition shall be altered by reason of casualty, taking and/or
normal wear and tear; and (d) without the express written consent of Purchaser,
not (i) enter into a new reciprocal easement or similar agreement or amend or
modify, consent to the assignment of or waive any material right under the REA,
(ii) make any alterations to the Property or enter into any new contracts or
extend or renew or cancel any Contract relating to capital expenditures, (iii)
enter into any other new contracts or extend, renew or cancel, consent to the
assignment of or waive any material right under any other Contract, except for
contracts executed in the ordinary and usual course and business and in
accordance with part practices and policies which can be terminated without
penalty or payment upon not more than thirty (30) days prior notice, and (iv)
otherwise take any action which could or would render inaccurate any of the
representations or warranties made by Seller in this Agreement.
8.8 Brokers. Seller and Purchaser each (i) represents and
warrants to the other that it has not dealt with any broker or finder in
connection with the transaction contemplated by this Agreement other than the
parties, if any, to be paid a commission as specified in Paragraph 8.11, and
(ii) agrees to defend, indemnify and hold the other harmless from and against
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any losses, damages, costs, or expenses (including reasonable attorneys' fees)
incurred by such other party due to a breach of the foregoing warranty by the
indemnifying party.
8.9 Attorneys' Fees. Notwithstanding any limitation on
remedies or amounts recoverable set forth elsewhere herein, if any action is
brought by either party against the other party, the party in whose favor final
judgment is entered will be entitled to recover court costs incurred and
reasonable attorneys' fees at trial, upon appeal and on any petition for review.
8.10 Remedies for Non-Performance. Purchaser's remedies
regarding breach of warranty or representation by Seller are governed by
Paragraph 5.3 hereof. In the event of any other default by Seller hereunder,
Purchaser may either (i) terminate this Agreement without liability to either
party, subject to performance of Purchaser's indemnities set forth in Paragraph
8.14 and elsewhere in this Agreement, and receive back the Deposit together with
Purchaser's actual out-of-pocket costs incurred in investigating the Property
and negotiating this transaction, or (ii) xxx for specific performance. If said
sale is not consummated because of a default under this Agreement on the part of
Purchaser, the Deposit will be paid to and retained by Seller as Seller's sole
and exclusive remedy. Seller and Purchaser acknowledge that the Deposit is a
reasonable forecast of just compensation for the harm that could be caused by
Purchaser's default and that the harm suffered by Seller is difficult or
impossible to accurately ascertain or predict.
8.11 Brokers Commission. Seller agrees to pay the brokerage
commission due Xxxxxxx & Wakefield, Inc. pursuant to a separate agreement.
8.12 Survival of Representations and Warranties, Covenants.
Seller's representations and warranties contained herein and not specifically
described in Paragraph 5.1 and claims, damages or injury for the breach thereof
will survive the Closing for a period of twelve (12) months. Purchaser must give
Seller notice of any claim it may have against Seller for any such breach within
twelve (12) months after the date of Closing. Any claim which Purchaser may have
which is not asserted within the twelve (12) month period will not be valid or
effective and Seller will have no liability with respect thereto. All covenants
hereunder which, by their terms, are intended to survive Closing will survive
Closing hereunder.
8.13 Seller's Investment Committee Approval. Seller will
have fourteen (14) days after the Effective Date to obtain approval of this
transaction by its investment committee. If such approval is not obtained and
Seller notifies Purchaser within an additional three (3) days, this Agreement
will terminate without further liability except as described in Paragraph 8.14;
otherwise, this Agreement will continue in full force and effect and Seller will
be deemed to have waived this provision.
8.14 Entry and Indemnity. In connection with any entry by
Purchaser, or its agents, employees or contractors (collectively "Purchaser's
Agents") onto the Property, Purchaser shall give Seller reasonable advance
notice of such entry and shall conduct such entry and any inspections in
connection therewith so as to minimize, to the greatest extent possible,
interference with Seller's business and the business of Seller's tenants and
otherwise in a manner reasonably
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acceptable to Seller. Without limiting the foregoing, prior to any entry to
perform any on-site testing, Purchaser shall give Seller notice thereof,
including the identity of the company or persons who will perform such testing
and the proposed scope of the testing. Seller shall approve or disapprove the
scope and methodology of such proposed testing within two (2) business days
after receipt of such notice, such approval not to be unreasonably withheld;
Seller's failure to notify Purchaser of its approval or disapproval shall be
deemed to be Seller's disapproval thereof. If Purchaser or Purchaser's Agents
take any sample from the Property in connection with any such approved testing,
upon Seller's request, Purchaser shall provide to Seller a portion of such
sample being tested to allow Seller, if it so chooses, to perform its own
testing. Seller or its representative may be present to observe any testing or
other inspection performed on the Property. Upon Seller's request, Purchaser
shall promptly deliver to Seller copies of any reports relating to any testing
or other inspection of the Property performed by Purchaser or Purchaser's
Agents. Purchaser shall maintain, and shall assure that its contractors
maintain, public liability and property damage insurance in amounts (public
liability in a combined single limit of not less than $5,000,000.00) and in form
and substance adequate to insure against all liability of Purchaser and
Purchaser's Agents arising out of any entry or inspections of the Property
pursuant to the provisions hereof, and Purchaser shall provide Seller with
evidence of such insurance coverage upon request by Seller including evidence
that Seller is an additional insured on the public liability policy. Purchaser
shall indemnify, defend and hold Seller harmless from and against any costs,
damages, liabilities, losses, expenses, liens or claims (including, without
limitation, reasonable attorney's fees) arising out of or relating to any entry
on the Property by Purchaser and Purchaser's Agents in the course of performing
the inspections, testings or inquiries provided for in this Agreement, including
without limitation damage to the Property or release of hazardous substances or
materials onto the Property, excluding, however, any costs incurred by Seller in
supervising Purchaser's testing or any matters relating to Purchaser's discovery
of Hazardous Materials on the Property. The foregoing indemnity shall survive
beyond the Closing, or if the sale is not consummated, beyond the termination of
this Agreement. Nothing in this Paragraph 8.14 shall be construed to limit or
impair Purchaser's absolute right to terminate under Paragraph 3.
8.15 Release. Except to the extent of the representations
and warranties of Seller expressly set forth in this Agreement, but otherwise
notwithstanding any other provision of this Agreement to the contrary,
Purchaser, on behalf of itself and its successors and assigns, waives its right
to recover from, and forever releases and discharges, Seller, Seller's
affiliates, Seller's investment manager, the partners, trustees, shareholders,
directors, officers, employees and agents of each of them, and their respective
heirs, successors, personal representatives and assigns (collectively, the
"Seller Related Parties"), from any and all demands, claims, legal or
administrative proceedings, losses, liabilities, damages, penalties, fines,
liens, judgments, costs or expenses whatsoever (including, without limitation,
attorneys' fees and costs), whether direct or indirect, known or unknown,
foreseen or unforeseen, which may arise on account of or in any way be connected
with the physical condition of the Property or any law or regulation applicable
thereto, including any environmental law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601 et seq.), the Resources Conservation and
Recovery Act of 1976 (42 U.S.C. Section
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6901 et seq.), the Clean Water Act (33 U.S.C. Section 466 et seq.), the Safe
Drinking Water Act (14 U.S.C. Sections 1401-1450), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), and the Toxic Substance
Control Act (15 U.S.C. Sections 2601-2629).
8.16 Confidential Information. Purchaser hereby
acknowledges and agrees that all information furnished by Seller to Purchaser or
obtained by Purchaser in the course of Purchaser's investigation of the
Property, or in any way arising from or relating to any and all studies or
entries upon the Property or in any way relating to Seller and the transactions
contemplated by the parties shall be treated as confidential by Purchaser and
Purchaser's Agents, exclusive of information known to Purchaser prior to the
date hereof or in the public domain. Purchaser understands, acknowledges and
agrees not to disclose, prior to the Closing, any of the contents or information
contained in any information provided by Seller, exclusive of information known
to Purchaser prior to the date hereof or in the public domain, any reports or
studies made in connection with Purchaser's investigation of the Property or
results thereof, in any form whatsoever (including, but not limited to, any oral
information received by Purchaser during the course of Purchaser's inspection of
the Property), to any party other than Seller, Seller's agents or
representatives, Purchaser's Agents (inclusive for purposes of this paragraph of
Purchaser's members, directors, officers, employees, representatives, attorneys,
consultants, partners or potential equity investors or lenders) Purchaser's
assignees or the agents of such assignees, without the prior express written
consent of Seller (which consent shall not be unreasonably withheld or delayed),
except as may be required by law or court order. If such publication or
disclosure is arguably or allegedly required by law, but an exemption from such
requirement may be available (as for example, in connection with certain SEC
filings), the parties seeking to make such publication or disclosure shall use
all reasonable efforts to obtain such exemption or otherwise avoid the necessity
of such publication or disclosure. Without limiting the generality of the
foregoing, any press release or other public disclosure regarding this Agreement
or any transactions contemplated herein, other than those required by law (as to
which the parties shall cooperate in good faith), and the wording of same, must
be approved in advance by both parties, such approval not to be unreasonably
withheld or delayed, Seller acknowledging that Purchaser shall issue a press
release with respect to this transaction concurrently with the execution hereof.
The parties acknowledge that the transaction described herein is of a
confidential nature and shall not be disclosed prior to Closing except to
consultants, investors, lenders, advisors, and affiliates, or as required by
law. No party will make any public disclosure of the specific terms of this
Agreement prior to Closing, except as required by law. In connection with the
negotiation of this Agreement and the preparation for the consummation of the
transactions contemplated hereby, each party acknowledges that it will have
access to confidential information relating to the other party. Each party shall
treat such information as confidential, preserve the confidentiality thereof,
and not duplicate or use such information, except to advisors, consultants,
investors, lenders and affiliates in connection with the transactions
contemplated hereby, exclusive of information known to Purchaser prior to the
date hereof or in the public domain. In the event of the termination of this
Agreement for any reason whatsoever, Purchaser will return to Seller, at
Seller's request, all documents, work papers, and other material (including all
copies thereof) obtained from Seller in connection with the transactions
contemplated hereby, and each party shall use its best efforts, including
instructing its employees and others who have had access to
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such information, to keep confidential and not to use any such information,
exclusive of information known to Purchaser prior to the date hereof or in the
public domain. The provisions of this Paragraph 8.16 will survive the Closing
or, if the purchase and sale is not consummated, any termination of this
Agreement, and will not be subject to the limitation set forth in Paragraph
8.12.
8.17 Indemnification.
8.17.1 From and after the Closing, Seller shall indemnify,
defend and hold harmless Purchaser and its shareholders, directors, officers,
members, partners, employees, representatives and agents, and their respective
successors and assigns (collectively, the "Indemnified Purchaser Persons") from
and against any Losses incurred or suffered by any Indemnified Purchaser Person
that results from, relates to or arises out of (a) the breach or inaccuracy of
any representation or warranty made by Seller in this Agreement or the Seller
Closing Documents, subject to the limitations set forth in Paragraph 5.3, (b)
the breach or non-fulfillment by Seller of any of the covenants or agreements of
Seller under this Agreement or the closing documents executed by Seller, (c)
claims made by any Tenant under any Lease, any Party to the REA under the REA,
or by any Party under those Contracts assigned to Purchaser, that relate to any
actions or events first occurring, or obligations first accruing, prior to the
Closing Date, (d) any event, occurrence or accident at any time prior to the
Closing Date relating to the Property, or (e) Seller's Liabilities. As used
herein, the term "Losses" shall mean with respect to any obligation to indemnify
Seller, the Indemnified Seller Persons, Purchaser or the Indemnified Purchaser
Persons, any and all claims, actions, suits, demands, losses, damages,
liabilities, obligations, judgments, settlements, awards, penalties, costs or
expenses, including reasonable attorneys' fees and expenses. Any recovery for
claims that Purchaser may have against Seller pursuant to this Paragraph 8.17.1
shall be limited to the aggregate amount of $3,000,000.00. Any claim that
Purchaser may have at any time against Seller pursuant to this Paragraph 8.17.1,
whether known or unknown, which is not asserted by notice from Purchaser to
Seller within twelve (12) months after the Closing Date will not be valid or
effective, and Seller will have no liability with respect thereto.
8.17.2 From and after the Closing, Purchaser shall
indemnify, defend and hold harmless Seller and its shareholders, directors,
officers, members, partners employees and agents, and their respective
successors and assigns (collectively the "Indemnified Seller Persons") from and
against any Losses incurred or suffered by any Indemnified Seller Person that
results from, relates to or arises out of (a) the breach or inaccuracy of any
representation or warranty made by Purchaser in this Agreement or the closing
documents executed by Purchaser, (b) the breach or non-fulfillment by Purchaser
of any of the covenants or agreements of Purchaser under this Agreement or the
Purchaser Closing Documents, or (c) the Assumed Liabilities.
8.17.3 The indemnified party (the "Indemnified Party")
shall give the indemnifying party (the "Indemnifying Party") prompt notice of
any Losses incurred (or likely to be incurred) by the Indemnified Party with
respect to any claim or assertion of claims by a third party ("Third Party
Claim") for which indemnification is available hereunder and the
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Indemnifying Party may (a) prior to the commencement of any proceedings in
connection with such Losses, undertake the negotiation of any resolution of the
dispute relating to such Losses, including any settlement or release, or (b)
undertake the defense of any proceeding (including any alternative dispute
resolution proceeding) regarding such Losses by selecting legal counsel who
shall be reasonably acceptable to the Indemnified Party.
8.17.4 Provided the Indemnifying Party shall have
undertaken the Indemnified Party's defense of a Third Party Claim with legal
counsel reasonably acceptable to the Indemnified Party, and shall have so
notified the Indemnified Party, the Indemnified Party shall be entitled to
participate at its own expense in the aforesaid negotiation or defense of any
claim relating to such Losses (subject to reimbursement to the limited extent
provided in Paragraph 8.17.7), but such negotiations or defense shall be
controlled by counsel to the Indemnifying Party.
8.17.5 The Indemnifying Party shall not be liable for
payments relating to the resolution of any dispute or any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld. The
Indemnifying Party shall not, without the Indemnified Party's written consent,
resolve any dispute or settle or compromise any claim regarding Losses from a
Third Party Claim or consent to entry of any judgment which would impose an
injunction or other equitable relief upon the Indemnified Party or which does
not include as an unconditional term thereof the release by the claimant or the
plaintiff of the Indemnified Party from all liability in respect of any such
Losses.
8.17.6 Each party hereto agrees to give the other party
prompt notice of any Losses (or possible Losses) asserted against it which might
be Losses for which indemnity could be sought against the other party, but the
failure to give such notice shall not release the Indemnifying Party of its
obligations under this Paragraph 8.17, expect to the extent of the actual harm
suffered thereby.
8.17.7 In the event the Indemnifying Party fails to timely
undertake negotiation of any dispute or defend, contest or otherwise protect
against any claim or suit with respect to a Third Party Claim, and to so notify
the Indemnified Party, the Indemnified Party may, but will not be obligated to,
defend, contest or otherwise protect against the same, and make any compromise
or settlement thereof and recover the entire costs thereof from the Indemnifying
Party, including reasonable attorneys' and experts' fees, disbursements and all
amounts paid as a result of such claim or suit or the compromise or settlement
thereof; provided, however, that if the Indemnifying Party undertakes
negotiation of any dispute and the defense of such matter in accordance with and
subject to the above terms of this Paragraph 8.17, the Indemnified Party shall
not be entitled to recover from the Indemnifying Party for its costs incurred
thereafter in connection therewith other than the reasonable costs of
investigation undertaken by the Indemnified Party and reasonable costs of
providing assistance. The Indemnified Party shall cooperate and provide such
assistance as the Indemnifying Party may reasonably request in connection with
the negotiation of any dispute and the defense of the matter subject to
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indemnification and the Indemnifying Party shall reimburse the Indemnified
Party's reasonable costs incurred thereafter in connection with such cooperation
and assistance.
8.18 Calculation of Time Periods. Unless otherwise
specified, in computing any period of time described herein, the day of the act
or event, after which the designated period of time begins to run, is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday, in which event the period
shall run until the end of the next day which is neither a Saturday, Sunday, or
legal holiday (i.e., a day on which federally chartered banks are not open for
business in Chicago, Illinois). The last day of any period of time described
herein shall be deemed to end at 5 p.m. Chicago, Illinois time on the last day
of such period of time. All days other than Saturdays, Sundays and legal
holidays in which national banks are closed in Chicago, Illinois are business
days hereunder.
8.19 Entire Agreement. This Agreement and any other
document to be furnished pursuant to the provisions hereof embody the entire
agreement and understanding of the parties hereto as to the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings other than those expressly set forth or
referred to in such documents. This Agreement and such documents supersede all
prior agreements and understandings among the parties with respect to the
subject matter hereof.
8.20 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement, or affecting the validity or enforceability of
any of the remaining terms or provisions of this Agreement.
8.21 Facsimile Signatures. Executed facsimile copies of
this Agreement or any amendments hereto shall be binding upon the parties, and
facsimile signatures appearing hereon or on any amendments hereto shall be
deemed to be original signatures.
8.22 Further Assurances. In addition to the acts and deeds
recited herein and contemplated to be performed, executed and/or delivered by
Seller to Purchaser at Closing, Seller agrees to perform, execute and deliver,
but without any obligation to incur any additional material liability or
expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to
further perfect the conveyance, transfer and assignment of the Property to
Purchaser.
8.23 Effective Date. Delivery by a party of a copy of the
fully-executed Agreement by facsimile transmission, followed by a
manually-signed copy thereof delivered the next business day after transmission
of such copy, shall constitute acceptance by such party as of the date of the
facsimile transmission. The date on which a fully-executed copy of this
Agreement is delivered by both Seller and Purchaser as provided in the preceding
sentence is referred to herein as the "Effective Date".
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8.24 Exculpation Clause. The obligations of Seller
contained herein are intended to be binding only on the property of the trust
party to this Agreement of Purchase and Sale and the proceeds thereof and shall
not be personally binding upon, nor shall any resort be had to the private
properties of, any of the shareholders, directors, officers, employees or agents
of Seller or any affiliates thereof, or any trustees, investment managers, any
general partners thereof, or any employees or agents of the trustees or
investment managers. All documents to be executed by Seller shall also contain
the foregoing exculpation.
8.25 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
8.26 Assistance Following Closing. From and after the
Closing, Seller shall provide reasonable assistance to Purchaser in connection
with the preparation of financial statements and bills and the adjustment of
losses and claims and the enforcement or settlement of any such claims. Without
limiting the foregoing, Seller shall, upon the request of Purchaser from time to
time, provide signed representation letters with respect to revenues and
expenses of Seller if required under GAAS to enable Purchaser's accountants to
render an opinion on Purchaser's financial statements.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER:
RREEF USA FUND-III, a California group trust
By: RREEF AMERICA L.L.C., a Delaware limited liability company
Its: Investment Manager
By: /s/ A. XXX XXXXX
----------------------------------------
Name: A. Xxx Xxxxx
Title: Vice President
Dated: July 22, 1999
-------------------------------------------
PURCHASER:
GENERAL GROWTH PROPERTIES, INC., a Delaware corporation
By: /s/ XXXX XXXXX
----------------------------------------
Name: Xxxx Xxxxx
--------------------------------
Title: Senior V.P.
-------------------------------
Dated: July 22, 1999
-------------------------------------------
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