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EXHIBIT 2.1
AGREEMENT FOR PURCHASE OF
REAL ESTATE AND RELATED PROPERTY
Dated as of the 10th day of May 2001,
by and between
New Plan Excel Realty Trust, Inc., ("Seller") a Maryland corporation having
offices at 1120 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx, 00000
and
Xxxxxxxx-Koenmen LLC ("Purchaser"), a Delaware limited liability company,
having offices at c/o Xxxxxxxx-Xxxxxx Realtors, LLC, Xxx Xxxx Xxx Xxx Xxxx,
Xxxxx Xxxxxx, Xxx Xxxx, 00000
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TABLE OF CONTENTS
Page
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1. Purchase and Sale of Property................................................1
2. Purchase Price...............................................................3
3. Operation of Property through Closing........................................4
4. Status of Title of Property..................................................8
5. Closing.....................................................................12
6. Casualty Loss and Condemnation..............................................19
7. Representations and Warranties..............................................20
8. BOND FINANCINGS.............................................................27
9. Brokerage...................................................................29
10. Defaults and Remedies.......................................................29
11. Seller as Agent.............................................................33
12. Dropping of Properties due to a Material Default, Title Defect,
Failure to Obtain a Necessary Consent, Casualty or Condemnation
with Respect to a Property and Deferred Closings............................33
13. Miscellaneous...............................................................36
14. Indemnification Procedures..................................................43
15. Interest Transfers..........................................................44
16. Mezzanine Financing.........................................................48
17. No Shop/BOARD Approval......................................................50
18. Table of Defined Terms......................................................50
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Execution Copy
AGREEMENT FOR PURCHASE OF
REAL ESTATE AND RELATED PROPERTY
THIS AGREEMENT FOR PURCHASE OF REAL ESTATE AND RELATED
PROPERTY (this "Agreement") is made and entered into as of the 10th day of May
2001, by and among New Plan Excel Realty Trust, Inc. ("Seller"), a Maryland
corporation having offices at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, and Xxxxxxxx-Koenmen LLC ("Purchaser"), a Delaware limited liability
company, having offices at c/o Xxxxxxxx-Xxxxxx Realtors, LLC, Xxx Xxxx Xxx Xxx
Xxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
RECITALS
A. Seller or its wholly owned subsidiaries set forth
on Exhibit A (each an "Affiliate" and collectively "Affiliates") are the
owners of the Properties set forth opposite their names on Exhibit A.
B. Seller desires to sell or cause the Affiliates to
sell the Properties to Purchaser by deed conveyance of each Property or by
transfer of 100% of the direct ownership interests (the "Interests") in the
owner of such Property as indicated on Exhibit A to be transferred by an
interest transfer (each, a "Property Owner"), and Purchaser desires to so
purchase the Properties or said Interests in such Property Owner from Seller
or the Affiliates as applicable, each upon and subject to the terms and
conditions of this Agreement.
C . Section 18 contains a table of defined terms.
NOW THEREFORE, in consideration of the terms, covenants and
conditions contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:
1. PURCHASE AND SALE OF PROPERTY
Subject to the terms and conditions of this Agreement
(including, without limitation, Section 15), Seller shall or shall cause the
Affiliates to sell and convey and Purchaser shall purchase the following
described property (any of which with respect to an individual apartment
complex described on the attached Exhibit A, is referred to individually as a
"Property" and collectively as the "Properties") or the Interests in the owner
of such Property, as indicated on Exhibit A to be transferred by an interest
transfer (and therefore the Property owned by the applicable Property Owner):
(A) those certain tracts of real estate on which are
situated apartment complexes described on the attached Exhibit A, which real
estate is legally described in the attached Exhibit B, together with all and
singular easements, covenants, agreements, rights, privileges, tenements,
hereditaments and appurtenances thereunto now or hereafter belonging or
appertaining thereto (collectively the "Land"); and
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(B) all right, title and interest of Seller or the
Affiliates (whether now or hereafter existing) in and to any land lying in the
bed of any street, alley, road or avenue (whether open, closed or proposed)
adjoining the Land or any of it (all of the foregoing being included within
the term "Land"); and
(C) all right, title and interest of Seller or the
Affiliates in and to all of the buildings, structures, fixtures, facilities,
installations and other improvements of every kind and description now or
hereafter located on the Land, including, without limitation, any and all
plumbing, air conditioning, heating, ventilating, mechanical, electrical and
other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, swimming pools and other recreational facilities, security devices,
signs and light fixtures (collectively, the "Improvements") (the Land and
Improvements being collectively referred to as the "Premises"); and
(D) all right, title and interest of Seller or the
Affiliates in and to all furniture, furnishings, fixtures, equipment,
machinery, maintenance vehicles and equipment, tools, parts, recreational
equipment, carpeting, computers, computer hardware, window treatments,
stationery and other office supplies, and other tangible personal property of
every kind and description situated at the Premises, owned by Seller or the
Affiliates and which is not leased from third parties or owned by tenants
under the Leases, together with all replacements and substitutions therefor
(together with the intangible personal property hereinafter identified,
including without limitation any trade names used by Seller or an Affiliate
with respect to the Premises, collectively the "Personal Property"), the
Personal Property includes, without limitation, the items set forth on Exhibit
C attached to this Agreement; and
(E) all right, title and interest of Seller or the
Affiliates in and to all existing surveys, blue prints, drawings, plans and
specifications (including, without limitation, structural, HVAC, mechanical
and plumbing plans and specifications) and other documentation for or with
respect to the Property; all marketing artwork and construction drawings,
concerning the Property, in each case, to the extent in the possession or
control of Seller or the Affiliates; all tenant lists and data, correspondence
with past, present and prospective tenants, vendors, suppliers, utility
companies and other third parties, booklets, manuals and promotional and
advertising materials concerning the Property or any part thereof, in each
case, to the extent in the Seller's or an Affiliate's possession or control;
and such other existing books, records and documents (including, without
limitation, those relating to ad valorem taxes and leases) used solely in
connection with the operation of the Property to the extent in Seller's or an
Affiliate's possession or control; and
(F) all right, title and interest of Seller or the
Affiliates in and to the leases affecting each Premises (the "Leases") and the
other intangible personal property now or hereafter owned by Seller or the
Affiliates and relating to the Property, including, without limitation,
claims, choses in action, lease and other contract rights, names, and, if
available, telephone exchange numbers.
(G) Notwithstanding anything herein to the contrary,
but subject to Section 3(G), all computers, computer hardware, computer
programs, computer software license
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agreements or other computer software that is under license, lease or other
agreement that is not assignable shall not be part of the Property and shall
not be transferred to Purchaser.
2. PURCHASE PRICE
(A) Purchase Price.
The total consideration to be paid by Purchaser to Seller
and the Affiliates for the Properties is Three Hundred Eighty Million Dollars
($380,000,000) (the "Purchase Price"), which is allocated among the Properties
as indicated on the attached Exhibit A (the "Allocated Purchase Price").
Purchaser and Seller agree that no portion of the Purchase Price shall be
allocated to the Personal Property. The Purchase Price shall be paid as
follows:
(B) Xxxxxxx Money.
(i) Upon the execution of this Agreement by
Seller and Purchaser, Purchaser shall deliver to the New York City office of
the Title Insurer ("Escrowee") by wire transfer of immediately available funds
the sum of Seven Million Five Hundred Thousand Dollars ($7,500,000) (together
with any interest earned thereon, the "Xxxxxxx Money") to be held by Escrowee
pursuant to the Escrow Instructions in the form attached hereto as Exhibit E.
On the date that is (or the first business day after such date if such date is
not a business day) (i) 30 days from the date hereof, Purchaser shall deliver
to the New York City office of Escrowee by wire transfer of immediately
available funds the sum of Two Million Five Hundred Thousand Dollars
($2,500,000), which sum shall be added to and be a part of the Xxxxxxx Money,
(ii) 60 days from the date hereof, if the Closing has not occurred by such
date, Purchaser shall deliver to the New York City office of Escrowee by wire
transfer of immediately available funds the sum of Two Million Five Hundred
Thousand Dollars ($2,500,000), which sum shall be added to and be a part of
the Xxxxxxx Money and (iii) 90 days from the date hereof, if the Closing has
not occurred by such date, Purchaser shall deliver to the New York City office
of Escrowee by wire transfer of immediately available funds the sum of Two
Million Five Hundred Thousand Dollars ($2,500,000), which sum shall be added
to and be a part of the Xxxxxxx Money. The Escrowee shall invest the Xxxxxxx
Money in an interest bearing savings account at the Chase Manhattan Bank or,
if Purchaser and Seller jointly direct Escrowee, in short term U.S. Treasury
Bills or similar cash equivalent securities. Any and all interest earned on
the Xxxxxxx Money shall be reported to Purchaser's federal tax identification
number and shall become part of the Xxxxxxx Money. Failure of Purchaser to
deliver any such funds to Escrowee shall be a material default hereunder.
(ii) If this Agreement is terminated pursuant
to any provision of this Agreement other than Section 10(C), the Xxxxxxx Money
or Allocated Xxxxxxx Money, as the case may be, shall be delivered by the
Escrowee to Purchaser.
(iii) If this Agreement is terminated pursuant
to Section 10(C), the Xxxxxxx Money or Allocated Xxxxxxx Money, as the case
may be, shall be delivered by the Escrowee to Seller.
(iv) At the Closing, the portion of the Xxxxxxx
Money that is not the Allocated Xxxxxxx Money for any Dropped Property shall
be delivered by the Escrowee to Seller
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(subject to the next sentence) as payment toward the Purchase Price. For
convenience in determining the Cash Balance, only interest earned through the
fifth (5th) business day prior to the scheduled Closing Date (even if such
Closing Date should be adjourned) shall be delivered to Seller and taken into
account in determining the Cash Balance and the remaining interest with
respect to the portion of the Xxxxxxx Money that is not the Allocated Xxxxxxx
Money for any Dropped Property shall be delivered to Purchaser (i.e. the
interest earned on the Allocated Xxxxxxx Money shall stay in escrow with the
Allocated Xxxxxxx Money).
(C) Cash Balance.
At the Closing, Purchaser shall pay to Seller the Purchase
Price less the amount delivered to Seller under Section 2(B)(iv), such sum to
be paid by wire transfer of immediately available funds transferred to an
account or accounts designated by Seller in writing by notice received by
Purchaser not less than one (1) business day prior to the Closing Date,
subject, however, to such prorations and adjustments as are required by this
Agreement including under Section 12(A)(iii) (such amount to be paid to
Seller, as adjusted, being referred to as the "Cash Balance").
3. OPERATION OF PROPERTY THROUGH CLOSING
Through the Closing Date, Seller covenants that (and as
applicable Purchaser covenants that):
(A) Except as otherwise provided in this Section 3,
Seller shall or shall cause the Affiliates to manage, operate and maintain the
Properties in a manner consistent with Seller's past practices including,
without limitation, performing day to day routine repairs and maintenance at
Seller's sole cost and expense. Seller will not make any change in its normal
and customary billing practices, and shall not apply any security deposits
against rent delinquencies or other Lease defaults (other than for tenants who
vacate their apartments or if a tenant's Lease expired) without the prior
consent of Purchaser.
(B) Except as otherwise provided in this Section 3,
Seller shall not and shall cause the Affiliates not to sell, mortgage, pledge,
hypothecate or otherwise transfer or dispose of all or any part of the
Properties or any interest therein (except for such items of tangible Personal
Property as become obsolete, consumed or are disposed of in the ordinary
course of business or due to a Condemnation for which Section 6 shall govern
and except for the transfer of Charter Pointe Apartments to a wholly owned
subsidiary, which will then be an Affiliate).
(C) Without the prior consent of Purchaser, Seller
shall not and shall cause the Affiliates not to (i) terminate any Lease
(except in the case of (x) a default or to relocate a tenant and otherwise in
the ordinary course of business or (y) such Lease terminating by its terms) or
(ii) modify, extend, amend or renew any Lease or enter into any new Lease
(unless in each case, the term of such Lease is 13 months or less, the Lease
is with a third party, the terms and conditions of such Lease are consistent
with the then market conditions with respect to such Property as determined in
Seller's reasonable good faith judgment, and such Lease is otherwise in the
ordinary course of business). At Closing, Purchaser shall assume the
obligations of Seller and the Affiliates under all of the Leases that exist as
of the date hereof (other than those that
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were duly terminated) and such Leases that are entered into (modified or
renewed) after the date hereof not in violation of this Agreement, and the
parties shall indemnify each other as more particularly set forth in Section
13(I).
(D) Without the prior consent of Purchaser, Seller
shall not and shall cause the Affiliates not to terminate (except in the case
of (x) a default and otherwise in the ordinary course of business or (y) such
Service Contract terminating by its terms), modify, extend, amend or renew any
Service Contract or enter into any new Service Contract (except (i) any new,
renewed, modified, amended, or extended Service Contract that is terminable on
30 days notice without cost, (ii) for extensions or renewals that are
automatic and (iii) for contracts that are entered into in accordance with
Section 3(E)). However, as of Closing, Seller shall and shall cause the
Affiliates to terminate any management contracts and antenna agreements
affecting the Property. At Closing, Purchaser shall assume the obligations of
Seller and the Affiliates under all of the Service Contracts that exist as of
the date hereof (other than those that were duly terminated or required to be
terminated as aforesaid) and such Service Contracts that are entered into
(modified or renewed) after the date hereof not in violation of this
Agreement, and the parties shall indemnify each other as more particularly set
forth in Section 13(I).
(E) Seller shall and shall cause the Affiliates to
continue to have the construction and repair work performed that is set forth
on Exhibit H, and Purchaser shall receive, without duplication of any other
adjustment or credit, a credit against the Purchase Price for that portion of
the $2,379,980 not paid under the Service Contracts as of the Closing in
connection with such construction and repair work that is set forth on Exhibit
H, or if no fixed amount is set forth on page 3 of Exhibit H, the reasonable
estimate of the amount needed to complete such work as determined by Seller.
Notwithstanding anything herein to the contrary, Purchaser shall not receive a
credit for the amounts owed under the Service Contract at Sherwood Acres (183)
(Job #1590) for amounts that are due after 90 days from the date hereof. With
respect to any agreement entered into after the date hereof for construction
and repair work at any Property, Seller shall receive at the Closing for such
Property, without duplication of any other adjustment or credit, a credit
towards the Purchase Price for any amounts paid by Seller or an Affiliate
under such agreements and Purchaser shall assume the obligations under such
agreements, provided that Purchaser consented to such agreements; such consent
shall not to be unreasonably withheld or delayed (and shall be deemed given if
Purchaser does not object to Seller's written request for consent within three
(3) business days after receipt of such request, or such shorter time, even
without a written request, in the case of an emergency) if such agreement is
on commercially reasonable terms and the construction or work is necessary (a)
to comply with Seller's or an Affiliate's obligations under the provisions of
(i) this Agreement (other than in this Section 3(E), except to the extent it
is expressly stated herein that it is Seller's expense, (ii) any of the Leases
or (iii) any of the financing documents with respect to the financings set
forth on Exhibit I, (b) to protect the health, welfare or safety of
individuals at the Properties, (c) to protect the physical structure of the
Properties from imminent damage or destruction, (d) to otherwise to prevent
waste or avoid loss of a Property or (e) to comply with material legal
requirements. At Closing, Purchaser shall assume the obligations of Seller and
the Affiliates under all of the Service Contracts for construction and repair
work that exist as of the date hereof (other than those that were duly
terminated) and such Service Contracts for construction and repair work that
are entered into (modified or renewed) after the date hereof not in violation
of
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this Agreement) and each party shall indemnify the other as more particularly
set forth in Section 13(I).
(i) Seller will, at its sole cost and expense,
repair the damage to or rebuild the clubhouse at Deerhorn Village, based upon
plans that the parties reasonably agree to, provided, however, Seller shall
not be obligated to spend more than the amount that Seller and Purchaser
reasonably agree to spend on such project, after obtaining three bids for the
work based upon such plans. Purchaser shall receive a credit against the
Purchase Price for any portion of such agreed to amount that has not been so
spent by Seller prior to the Closing. Notwithstanding anything to the contrary
in this Agreement, if the parties can not reasonably agree upon the plans or
the costs with respect to the repair or rebuilding of the clubhouse, either
party may drop such Property pursuant to Section 12 of this Agreement,
however, either parties' exercise of its option to drop the Deerhorn Village
Apartments shall not count in the determination of whether seven (7) Dropped
Properties exist for purposes of termination of this Agreement in accordance
with its terms.
(F) Seller shall and shall cause the Affiliates to
maintain in full force and effect its existing insurance coverages as
disclosed to Purchaser on Exhibit K or replacement insurance with coverage
that is not materially less favorable.
(G) Upon the request of Purchaser with respect to any
specific license agreement, lease or other agreement for computer software or
hardware, Seller shall request that the licensors, lessees or other contract
parties consent to the transfer of such license, lease or other agreement to
Purchaser. Seller is under no obligation to obtain such consent, but it shall
use its reasonable efforts to work with Purchaser to obtain same. Seller shall
also cooperate with Purchaser in connection with coordinating the transfer to
Purchaser of copies of all data (and in electronic format, to the extent same
is not in a proprietary format of a computer program, other computer software
or under a licensing agreement that Seller is not transferring) that pertain
to any Property, to the extent in the Seller's or an Affiliate's possession or
control. All of the foregoing shall be at Purchaser's sole cost and expense
and Purchaser shall reimburse Seller for any such reasonable, out-of-pocket
costs it may have to implement same. This Section 3(G) shall survive the
Closing.
(H) For purposes of this Section 3, other than Sections
3(B), 3(F) and 3(G) (with respect to which this provision does not apply),
Purchaser shall not unreasonably withhold or delay its consent and such
consent shall be deemed given if Purchaser does not object to Seller's
requested written consent within 3 business days after receipt of such
request.
(I) This Section 3(I) shall apply only with respect to
the Property known as Mohawk Gardens in Rome, New York (the "Mohawk
Property"). Seller shall, at no cost or expense to Purchaser, cause the two
underground storage tanks identified in the EMG Environmental Phase I Report
on the Mohawk Property ("USTs") to be closed in accordance with all applicable
Environmental Laws and such closure shall not be considered construction or
repair for purposes of Section 3(E) of this Agreement. Closure of the USTs
shall entail removal of the USTs unless precluded by the proximity of
structures at the Mohawk Property, in which case the UST or USTs shall be
closed in place subject to approval by the applicable environmental regulatory
authority and in compliance with all applicable Environmental Laws.
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In addition, closure shall entail such sampling, soil removal, remediation,
and other environmental investigation or response, governmental approvals, and
final signoffs to the extent required under applicable Environmental Laws (all
of which are included in the term "closure"), provided, however, that if
Seller reasonably estimates that the costs to complete closure are likely to
exceed $1 million, Seller may, at its sole option and in its sole discretion,
elect either (x) to drop the Mohawk Property from this Agreement pursuant to
Section 12; however, Purchaser can void such drop if Purchaser is willing to
close on the Mohawk Property with the USTs in place or the closure incomplete,
and Seller shall transfer the Mohawk Property to Purchaser subject to a credit
against the Purchase Price in the amount of $1 million, in which case the
indemnity and Seller's obligations in this Section 3(I) shall be void or (y)
not drop the Mohawk Property and proceed to close. Seller shall make
commercially reasonable efforts to complete the closure prior to the Closing.
Notwithstanding anything to the contrary in this Agreement, Seller's exercise
of its option to drop the Mohawk Property shall not count in the determination
of whether seven (7) Dropped Properties exist for purposes of termination of
this Agreement in accordance with its terms and shall not count as one of the
three (3) Dropped Properties for which Seller may provide a Cure Election
Notice pursuant to Section 12(B)(i). To the extent closure has not been
completed prior to the Closing and the Mohawk Property has not been dropped
from this Agreement (or, if dropped, was the subject of a Cure Election
Notice), then on and after the Closing Date for the Mohawk Property: (a)
Purchaser shall grant, or cause to be granted to, Seller and its agents,
representatives, contractors and their subcontractors access rights to the
Mohawk Property equivalent to the access rights that Seller has granted to
Purchaser in Section 13(A)(i), (ii) and (iii) hereunder; (b) Purchaser shall
at Seller's sole cost cooperate, or cause its successors and assigns to
cooperate, with such parties in achieving closure; (c) Seller shall use
commercially reasonable efforts to achieve closure as soon as reasonably
practicable; and (d) in the event that Purchaser's lender requires funds to be
deposited in escrow for the purpose of completing closure, Seller shall
deposit such required funds promptly upon instruction from Purchaser's lender
so long as Purchaser's lender makes the funds available for the work. If
Seller fails to diligently pursue closure after the Closing, then Purchaser
shall have the right upon reasonable advance written notice to Seller to
assume responsibility for taking all actions required to achieve closure, and
Purchaser shall be entitled to reimbursement from Seller for all reasonable
costs and expenses incurred by Purchaser to comply with applicable
Environmental Laws. Further, if Seller does not elect to drop the Mohawk
Property from this Agreement (or, if dropped, was the subject of a Cure
Election Notice) and subject to Purchaser's performance of its obligations in
clauses (a) and (b) above after 30 days of Seller's notice to Purchaser
requesting such performance: from and after the Closing Date for the Mohawk
Property, and without regard to the Damage Cap or Deductible, Seller shall
indemnify, defend and hold Purchaser and its partners, members, and
shareholders, and their respective officers, directors, employees and agents
harmless from and against all Claims by third-parties under Environmental Laws
relating solely to the USTs. Nothing in this Section 3(I) shall apply against
Damage Cap or Deductible. Notwithstanding anything to the contrary contained
herein, Seller shall have no obligation or liability to Purchaser hereunder
for any Claims to the extent such arise from any negligence, willful
misconduct or violation of law attributable to Purchaser, its agents,
representatives, or successors or assigns. The obligations of Seller and
Purchaser under this subsection 3(I) shall survive Closing (unless the Mohawk
Property is dropped and not subject to a Cure Election Notice) until such time
as all applicable environmental regulatory agencies and other applicable
governmental authorities have issued a final closure letter relating
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the USTs or, if such agencies no longer routinely issues such letters, an
independent environmental consultant reasonably acceptable to the parties
determines that no further action is required with respect to the USTs.
(J) Upon request of Purchaser, from time to time,
Seller shall deliver an updated Rent Roll commencing for the month of April,
2001 and each month thereafter to and including the month in which the Closing
occurs. Such Rent Rolls shall be for informational purposes only and not as a
representation (but the foregoing shall not limit the provisions of Section
7(xi)).
(K) Upon the request of Purchaser, Seller shall forward
to Purchaser a current insurance loss run, which shall be for informational
purposes only.
4. STATUS OF TITLE OF PROPERTY
(A) State of Title.
At Closing, Purchaser shall accept title to the Premises
subject only to the following enumerated exceptions (collectively referred to
as the "Permitted Exceptions"):
(i) those agreements, covenants, conditions,
restrictions, encroachments and other matters that are shown on any Title
Commitment or Survey, except for the mortgages and other security with respect
to the financings set forth on Exhibit I;
(ii) those agreements, covenants, conditions,
restrictions and other matters which are not shown on any Title Commitment or
Survey that do not adversely affect in any material respect (x) the title to
such Premises or (y) the use of such Premises for residential purposes;
(iii) the lien of general real estate taxes,
personal property taxes and all water, sewer, utility, trash and other similar
charges and assessments which are not yet due and payable;
(iv) the Leases and Service Contracts that
exist as of the date hereof (other than those that were duly terminated or
required to be terminated) and such Leases and Service Contracts that are
entered into (modified or renewed) after the date hereof not in violation of
this Agreement;
(v) all notes or notices of violation of law
or municipal ordinances, orders or requirements that have been noted in or
issued by any federal, state or municipal department having jurisdiction over
the Property after the date hereof;
(vi) any liens, encumbrances or other defects
or exceptions to title insurance coverage caused by Purchaser, by any of
Purchaser's Representatives or by Seller or any of its representatives or
Affiliates at Purchaser's or any of Purchaser's Representative's prior written
request;
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(vii) any leases by which the Seller or the
Affiliates hold the right to possess and use any of the Personal Property (to
the extent assigned and assignable to Purchaser);
(viii) to the extent that Purchaser assumes the
Bonds pursuant to Section 8 of this Agreement, the notes, mortgages,
indentures and other documents relating to the bonds (the "Bonds") listed on
Exhibit Q attached hereto and the financing evidenced by the Bonds (the "Bond
Financing"), which are listed on Exhibit Q and, to the extent required by
Section 8 of this Agreement, any renewal or replacements thereof as may be
required for the Purchaser to assume the Bond Financings (collectively, the
"Bond Documents") and, if required under Section 8 of this Agreement, any
other mortgage for credit enhancement for the Bond Financings (the "Credit
Mortgage"); and
(ix) all laws, regulations and ordinances
including, without limitation, all environmental, building and zoning
restrictions affecting the Properties or the ownership, use or operation
thereof adopted by any governmental authority having jurisdiction over the
Properties or the ownership, use or operation thereof, and all amendments or
additions thereto now in effect or which may be in force and effect on the
Closing Date with respect to such Property.
(B) Preliminary Evidence of Title.
(i) Purchaser acknowledges that it has
received and approves of all matters shown on the commitments (each, a "Title
Commitment" and collectively, the "Title Commitments") listed on Exhibit N
proposing to insure Purchaser and committing to insure each Premises in the
allocated amount of the Purchase Price, issued by Commonwealth Land Title
Insurance Company (the "Title Insurer"). Purchaser has objected to the items
set forth on Exhibit N-1 as objections and such objections shall be treated as
duly objected to title defects under Section 4(C).
(ii) Purchaser acknowledges that it has
received copies of and approved of all documents referred to in the Title
Commitments, except for such matters set forth on Exhibit N that are stated as
missing.
(iii) Purchaser acknowledges that, except as
otherwise indicated on Exhibit N, it has received and approves of all matters
shown on the as-built survey (the "Survey") for each of the Premises as listed
on Exhibit N which will be certified to Purchaser and the Title Insurer (and
such other persons or entities as Purchaser may designate) by the surveyor as
indicated on Exhibit N as preparing the applicable Survey.
(C) Title Defects.
If any revision or update of any Title Commitment
and/or Survey and/or any document that was disclosed on Exhibit N as missing,
discloses exceptions to title other than Permitted Exceptions, Purchaser may
object to same at or prior to closing, but shall endeavor to provide Seller
with notice thereof as soon as practicable. If Seller has delivered written
notice to Purchaser of any title exception and Purchaser fails to object to
such new exception, on or before the fifth (5th) business day after receipt of
such notice from Seller, or at Closing, if less than five
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(5) business days remain from receipt of same and Closing (the "Objection Cut
Off Date"), time being of the essence, then same shall be deemed a Permitted
Exception. Any matter to which Purchaser fails to object by or at the Closing
shall be deemed a Permitted Exception (except as otherwise provided in Section
10(A)). Seller shall have until Closing (and may adjourn the Closing for such
reasonable periods, subject to the limitations in Section 5(A)) to have each
such exception that is not a Permitted Exception to title removed or to
correct each such other matter, in each case to the reasonable satisfaction of
Purchaser, but subject to Section 4(D). Nothing herein shall require Seller to
(i) bring any action or proceeding to remove any exception that is not a
Permitted Exception or (ii) take any steps, or otherwise incur any expense in
excess of $75,000 for any one Property (the "Individual Title Cap") and
$1,250,000 in the aggregate for all Properties (the "Aggregate Title Cap"), to
remove any exception that is not a Permitted Exception (except that Seller
shall be obligated to remove all of the following, without consideration of
the Aggregate Title Cap or the Individual Title Cap: (a) all exceptions
between Seller, the Affiliates or any affiliates of either or benefiting any
of the foregoing that will not benefit only the Purchaser upon Closing, (b)
all mortgages (other than the Club Apartments, and, if applicable, the Courts
at Waterford, unless not assumed per Section 8), (c) all documents and other
security with respect to the financings set forth on Exhibit I that Purchaser
does not assume, (d) any and all liens of a liquidated amount or any and all
liens voluntarily placed by Seller or any Affiliate against any Property after
the date of the applicable Title Commitment in violation of this Agreement,
except to the extent it is expressly stated herein that it is Seller's expense
and (e) all of the liens listed in Exhibit N-1 (to the extent such liens are
not pursuant to a Service Contract assumed at Closing by Purchaser and for
which Purchaser obtained a closing adjustment for) (collectively, "Non-Capped
Exceptions")). In addition, Seller shall remove any other exception that is
not a Permitted Exception, provided, however, Seller shall not be obligated to
spend any funds, incur any liability or take any actions that would cost in
excess of the Individual Title Cap and the Aggregate Title Cap, as applicable
to remove. If Seller fails to have each such exception that is not a Permitted
Exception removed or corrected, at or prior to Closing (as adjourned),
Purchaser may at its sole and exclusive option at Closing (as adjourned)
either (i) drop the Property it affects pursuant to Section 12, without
terminating any other obligations of Purchaser hereunder, (ii) exercise its
rights under Section 10(A)(iii) (but such rights are subject to and limited by
the Aggregate Title Cap and the Individual Title Cap, as applicable, except
for Non-Capped Exceptions), or (iii) elect to accept title to the Property as
it then is without any reduction in, abatement of, or credit against the
Purchase Price (except for the actual cost to cure such title exception up to
the Individual Title Cap (unless more than seven (7) Properties have been duly
dropped pursuant to this Agreement, in which case the Individual Title Cap
shall not be applicable) and the Aggregate Title Cap, as applicable) and such
exceptions shall be deemed Permitted Exceptions; if Purchaser fails to make
either such election, Purchaser shall be deemed to have elected option (i).
The credits and required payments under this Section are not subject to or
counted against the $7.5M Damage Cap defined in Section 10(E) and are not
subject to or counted against the Deductible.
For illustrative purposes only (and not an
exhaustive treatment of all possibilities) (I) if a Property had a $50,000
title defect and Seller did not cure same, Purchaser would be entitled to (a)
drop said Property under the default provisions as it would be in excess of
the Threshold Amount or (b) close over such title exception and receive a
credit against the Purchase Price in the amount of $50,000 (assuming the
Aggregate Title Cap was not used up or if used up shall not obtain the
credit); (II) if seven Properties were dropped and the total amount
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that Seller had spent on all of the Properties to clear title was $500,000
then if there was an eighth Property with a title defect in the amount of (a)
$700,000 (and Seller did not cure same) then Purchaser could drop such
Property or close over such title exception and obtain a credit against the
Purchase Price in the amount of $700,000 or (b) $1,000,000 (and Seller did not
cure same) then Purchaser could drop such Property or close over such title
exception and obtain a credit against the Purchase Price in the amount of
$750,000 and Seller shall not have liability or obligation to cure or remove
the remaining $250,000 of such title encumbrance; and (III) if a Property had
a $10,000 title defect and Seller did not cure same, Purchaser would not be
entitled to drop said Property under the default provisions as it would not be
in excess of the Threshold Amount, however Purchaser could close over such
title exception and receive a credit against the Purchase Price in the amount
of $10,000 (assuming the Aggregate Title Cap or the Individual Title Cap was
not used up) as the credits in this section are not subject to the Deductible
or the $7.5M Damage Cap and will not be counted against the Deductible or the
$7.5M Damage Cap.
In addition, for illustrative purposes only (and
not an exhaustive treatment of all possibilities), (X) if there was a title
defect that Seller failed to cure that was subject to the Aggregate Title Cap
(i.e. not a failure to remove an existing mortgage that is not being assumed
by Purchaser) then Purchaser could xxx for specific performance but not force
Seller to spend more than the Aggregate Title Cap (or Individual Title Cap, if
applicable) and (Y) if there was a title defect that Seller failed to cure
that was not subject to the Aggregate Title Cap (i.e. a failure to remove an
existing mortgage that is not being assumed by Purchaser) then Purchaser can
xxx for specific performance and force Seller to spend more than the $7.5M
Damage Cap, and in neither case would the Deductible apply.
(D) Discharge of Title Objections.
Notwithstanding anything herein to the contrary, Seller
shall be deemed to have removed or corrected each exception that is not a
Permitted Exception if, in Seller's discretion and at its sole cost and
expense, Seller either (a) takes such actions as are necessary to eliminate
(of record or otherwise, as appropriate) such exception that is not a
Permitted Exception, and the Title Insurer and at least one other nationally
recognized title insurance company(ies) that Purchaser may designate as
co-insurer or reinsurer (provided however, if Purchaser designates less than
two additional nationally recognized title insurance companies, Seller shall
have the option to require Purchaser to designate a second national title
insurance company), omits same from the title policy issued at Closing, (b)
causes the Title Insurer and at least one other nationally recognized title
insurance company(ies) that Purchaser may designate as co-insurer or reinsurer
(provided however, if Purchaser designates less than two additional nationally
recognized title insurance companies, Seller shall have the option to require
Purchaser to designate a second national title insurance company), if
applicable, to remove such exception that is not a Permitted Exception as an
exception to title in the title policy issued at Closing and affirmatively
insure against the same, in each case without any additional cost to
Purchaser, whether such insurance is made available in consideration of
payment, bonding, indemnity of Seller or otherwise, or (c) delivers (i) its
own funds (or directs that a portion of the Purchaser Price be delivered) in
an amount needed to fully discharge any such exception to the Title Insurer
with instructions for the Title Insurer to apply such funds to fully discharge
any such exception, and (ii) if required by the Title Insurer, such
instruments, in recordable form, as are necessary to enable the Title Insurer
and at least one other nationally recognized title insurance company, if
applicable, to discharge such exception of record and the Title Insurer and at
least one other
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nationally recognized title insurance company(ies) that Purchaser may
designate as co-insurer or reinsurer (provided however, if Purchaser
designates less than two additional nationally recognized title insurance
companies), Seller shall have the option to require Purchaser to designate a
second national title insurance company, omits same from the title policy
issued at Closing.
5. CLOSING
(A) Closing Date.
The "Closing" of the transaction contemplated by
this Agreement (that is, the payment of the Purchase Price, the transfer of
title to the Property or the Interests, and the satisfaction of all other
terms and conditions of this Agreement) shall occur at 9:00 a.m. on July 13,
2001, or as adjourned in accordance with the provisions of this Agreement (the
"Closing Date") at the offices of Seller's counsel or, if Purchaser requests,
Purchaser's lender's counsel in New York, New York, or at such other time and
place as Seller and Purchaser shall agree in writing, provided, however,
Section 12(B) shall govern deferred Closings with respect to any Dropped
Property. Five (5) business days prior to Closing the parties hereto will
begin pre-closing the transaction.
PURCHASER RECOGNIZES THAT IT IS A MATERIAL
CONDITION TO THE OBLIGATIONS OF SELLER UNDER THIS AGREEMENT THAT THE CLOSING
OCCUR NOT LATER THAN THE CLOSING DATE. ACCORDINGLY, PURCHASER AGREES THAT IT
SHALL NOT BE ENTITLED TO ANY ADJOURNMENT OF THE CLOSING EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE, TIME BEING OF THE ESSENCE AS TO THE PERFORMANCE OF THE
OBLIGATIONS OF PURCHASER HEREUNDER ON OR PRIOR TO SUCH DATE. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, PURCHASER SHALL HAVE THE RIGHT TO ADJOURN THE
CLOSING FROM TIME TO TIME, UNTIL A DATE THAT IS NOT LATER THAN 120 DAYS FROM
THE DATE HEREOF (SUBJECT TO PURCHASER'S RIGHT TO FURTHER EXTEND PER SECTION
10(A)(v))(TIME BEING OF THE ESSENCE WITH RESPECT TO SUCH DATE), PROVIDED AS A
CONDITION PRECEDENT TO SUCH ADJOURNMENT PURCHASER SHALL HAVE COMPLIED WITH ITS
OBLIGATIONS SET FORTH IN SECTION 2(B) WITH RESPECT TO THE DELIVERY OF FUNDS TO
THE ESCROWEE.
SELLER RECOGNIZES THAT IT IS A MATERIAL CONDITION
TO THE OBLIGATIONS OF PURCHASER UNDER THIS AGREEMENT THAT THE CLOSING OCCUR
NOT LATER THAN THE CLOSING DATE. ACCORDINGLY, SELLER AGREES THAT IT SHALL NOT
BE ENTITLED TO ANY ADJOURNMENT OF THE CLOSING EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE, TIME BEING OF THE ESSENCE AS TO THE PERFORMANCE OF THE
OBLIGATIONS OF SELLER HEREUNDER ON OR PRIOR TO SUCH DATE. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, SELLER SHALL HAVE THE RIGHT TO ADJOURN THE
CLOSING FROM TIME TO TIME UNTIL A DATE THAT IS NOT LATER THAN 30 DAYS FROM THE
LATER OF THE DATE OF THE ORIGINAL SCHEDULED CLOSING AND THE DATE THAT SUCH
CLOSING WAS ADJOURNED TO BY PURCHASER (TIME BEING OF THE ESSENCE WITH RESPECT
TO SUCH DATE).
(B) Closing Documents.
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(i) Seller. At the Closing, Seller shall
deliver or cause to be delivered with respect to each Property or all of the
Properties, as applicable:
(a) to Purchaser, a quit claim deed
substantially in the form attached hereto as Exhibit G-1, and to the Title
Insurer or the appropriate authority, a real estate excise or transfer tax
affidavit (or other required forms), as required by law and any environmental
disclosure forms, as required by law;
(b) to Purchaser, a lead paint
disclosure form in the form attached hereto as Exhibit G-5; -----------
(c) to Purchaser, an omnibus xxxx of
sale and assignment and assumption of leases, security deposits, service
contracts and general intangibles in the form attached hereto as Exhibit G-2;
(d) to Purchaser, a letter advising
tenants under the Leases of the change in management and ownership (if
applicable) of the Premises and where security deposits will be held, and
directing them to pay rent to Purchaser or as Purchaser may direct (the form
of same shall be prepared by Purchaser subject to Seller's reasonable
approval);
(e) to Purchaser, the owner's title
insurance policy (or marked-up commitment therefor) issued by the Title
Insurer (and at least one other nationally recognized title insurance
company(ies) that Purchaser may designate as co-insurer or reinsurer, provided
however, if Purchaser designates less than two additional nationally
recognized title insurance companies, Seller shall have the option to require
Purchaser to designate a second national title insurance company), insuring
fee simple title to the Premises in Purchaser (or Purchaser's designee, and
together with a non-imputation endorsement if applicable or the Property Owner
if the Interests are transferred) in the amount of the Allocated Purchase
Price subject only to the Permitted Exceptions, which shall be on the 1992
ALTA Extended Coverage Owner's Policy form in states where such form of title
insurance policy is available and otherwise on the form affording coverage
most similar to such 1992 ALTA Extended Coverage Owner's Policy form subject
to Purchaser paying not more than the standard premium for same (plus standard
endorsement fees, and any co-insurance or re-insurance fees and premiums);
(f) to Purchaser, all of the original
(or copies if only a copy is available) Leases and written Service Contracts,
and to the extent that the following are in the possession or control of
Seller or an Affiliate, any and all building plans, surveys, site plans,
engineering plans and studies, utility plans, landscaping plans, development
plans, specifications, drawings, marketing artwork, construction drawings,
complete warranty book including all contractors and subcontractors, any
tenant income certifications with respect to the Properties covered by Bond
Financings and other documentation concerning all or any part of the Property
(provided, however, Seller may keep copies of any of the foregoing), provided
however, at Purchaser's request, Seller will provide any of such information
in electronic format, if same is in the possession or control of Seller or an
Affiliate unless same is in a proprietary format of a computer program, other
computer software or under a licensing agreement that Seller is not
transferring;
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(g) to Purchaser, any transferable
bonds, warranties or guaranties which are in any way applicable to the
Property and in Seller's or the Affiliates' possession or control;
(h) to Purchaser, a corporate
resolution authorizing the sale and the execution of closing documents, and a
certificate of incumbency certifying the titles and signatures of the
corporate officers authorized to consummate the sale on behalf of Seller and
the Affiliates, or such other reasonable evidence of Seller's or Affiliates'
power and authority;
(i) to Purchaser, Seller's and the
Affiliates' affidavit in the form attached hereto as Exhibit G-3 stating,
under penalty of perjury, Seller's or the Affiliates' U.S. taxpayer
identification number and that Seller or the Affiliate is not a foreign person
within the meaning of Section 1445 of the Internal Revenue Code;
(j) to Purchaser or other entities,
as applicable, all other documents reasonably required by Purchaser in order
to perfect the conveyance, transfer and assignment of the Property or of the
Interests to Purchaser as contemplated by this Agreement, including without
limitation, any assignments of tax certiorari claims or Net Proceeds that are
required pursuant to this Agreement;
(k) to the extent a Property is
transferred subject to the Bonds, to Purchaser, Issuer and the Trustee, such
assignments related to the Bond Financing and the Bond Documents as shall be
required to transfer to Purchaser all of Seller's or the Affiliate's right,
title, interest and obligations with respect to the Bond Financing and the
Bond Documents, which shall be made without recourse, representation or
warranty (except as herein otherwise provided);
(l) a letter from EMG, regarding the
environmental and engineering reports they prepared in connection with this
transaction that were delivered to Purchaser prior to the Closing, expressly
allowing Purchaser and Purchaser's affiliates and lenders to rely on such
environmental and engineering reports or such reports shall be addressed to
such parties;
(m) notwithstanding the foregoing, to
the extent that a Property is transferred by an assignment of the Interests,
then instead of the deed and an omnibus xxxx of sale and assignment and
assumption of leases, security deposits, service contracts and general
intangibles in Sections 5(B)(i)(a) and 5(B)(i)(c), an assignment of membership
interests in the form attached hereto as Exhibit G-4; or delivery of the stock
certificate, endorsement and/or stock power for the shares in the Property
Owner, and if applicable, Seller shall have all of the directors, officers and
managers resign as of the Closing Date; and
(n) to Purchaser and, as applicable,
to any third party lender the mezzanine loan documents (the "Mezzanine Loan
Documents") substantially in the form as attached hereto as Exhibit S and, if
applicable, the letter of credit required to be delivered thereunder.
(ii) Purchaser. At Closing, Purchaser shall
deliver or cause to be delivered, with respect to each Property or all of the
Properties, as applicable:
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(a) to Seller, the Cash Balance as
required pursuant to Section 2(C) above;
(b) to Seller, executed counterparts
of any other documents listed in Section 5(B)(i) required to be signed by
Purchaser and other Mezzanine Loan Documents or cause the owners of the owners
of the Properties to execute and deliver the Mezzanine Loan Documents;
(c) if there is an assumption of the
Bond Financing, to Seller, releases (in form and substance reasonably
satisfactory to Seller) executed by the issuer (the "Issuer") of the Bonds and
the trustee (the "Trustee") of the Bonds releasing Seller, the Affiliates and
their affiliates from all liabilities and obligations with respect to the Bond
Financing and the Bond Documents from and after the Closing;
(d) if there is an assumption of the
Bond Financing, to the Trustee, any alternate security or credit and/or
liquidity enhancements required to be delivered in accordance with Section 8
with respect to the assignment of the Bond Documents to Purchaser to replace
the documents set forth on Exhibit Q attached hereto (such documents set forth
on Exhibit Q attached hereto, the "Credit Enhancement Documents") and all
other documents, certificates and opinions required to be delivered in
accordance with Section 8 with such alternate security or credit and/or
liquidity enhancements, all of which shall be in form and substance
satisfactory to the Issuer and the Trustee;
(e) if there is an assumption of the
Bond Financing, to Seller, Issuer and the Trustee, such assumption agreements
reasonably required by Seller, Issuer and/or the Trustee, in order to cause
the assumption by Purchaser of the Bond Documents and the Bond Financing and
all of Seller's rights and obligations under any other agreements related to
the Bond Documents and the Bond Financing (other than the Credit Enhancement
Documents), and the releases set forth in Section 5(B)(ii)(c) above, all of
which shall be in form and substance reasonably satisfactory to Seller, the
Trustee and Purchaser;
(f) if there is an assumption of the
Bond Financing, to Seller, the Credit Enhancement Documents (other than the
Credit Mortgage if assigned upon the order of Purchaser), releases or
satisfactions of the foregoing, all collateral pledged therefor by or on
behalf of Seller (other than collateral to be conveyed hereunder), and such
documents, instruments and evidence reasonably satisfactory to Seller
evidencing that Seller has no further obligations or liabilities with respect
to the Credit Enhancement Documents (including the Credit Mortgage) from and
after the Closing;
(g) if there is an assumption of the
Bond Financing, to Seller, Issuer and/or the Trustee, as applicable, the items
listed on Exhibit R attached hereto; and
(h) to Seller, all other documents
reasonably required by Seller in order to perfect the conveyance, transfer and
assignment of the Property or the Interests to Purchaser, as contemplated by
this Agreement, including without limitation any transfer tax documents and
IRS form 1099 and a paid receipt from Xxxxxx Xxxxxxx Real Estate.
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(iii) Seller shall, at no cost or expense to it
(and Purchaser shall pay all such costs or expenses), reasonably cooperate
with Purchaser in obtaining the items listed in Section 5(B)(ii)(c)-(g).
Notwithstanding anything herein to the contrary, if Purchaser failed to obtain
the items listed in Section 5(B)(ii)(c)-(g) after using its good faith
commercially reasonable efforts, such failure shall not be a default hereunder
but shall be treated as if the Consent was not obtained under Section 8 of
this Agreement.
(C) Closing Prorations and Adjustments.
(i) A statement of prorations and other
adjustments shall be prepared by Seller and Purchaser together in conformity
with the provisions of this Agreement not less than ten (10) business days
prior to the Closing Date. For purposes of prorations, Purchaser shall be
deemed the owner of the Property on the Closing Date. In addition to
prorations and other adjustments that may otherwise be provided for in this
Agreement, the following items are to be prorated or adjusted, as the case may
require, as of the Closing Date:
(a) real estate and personal property
taxes and assessments (initially prorated on the basis of the most recent
ascertainable xxxx, but subject to reproration upon issuance of the actual
xxxx therefor to effectuate the actual proration);
(b) the rent, utility and other
charges payable by tenants under the Leases; provided, however, that rent and
all other sums which are due and payable to Seller or the Affiliates by any
tenant but uncollected as of the Closing shall not be adjusted, but Purchaser
shall cause the rent and other sums for the period prior to Closing to be
remitted to Seller if, as and when collected. At Closing, Seller shall deliver
to Purchaser a schedule of all such past due but uncollected rent and other
sums owed by tenants. Purchaser shall promptly remit to Seller any such rent
or other sums paid by scheduled tenants, but only if a deficiency in the then
current rent and other sums due is not thereby created. Purchaser shall xxxx
tenants who owe rent, and utility and other charges for periods prior to the
Closing on a monthly basis for six consecutive months following the Closing
Date. For amounts due Seller not collected within six (6) months after
Closing, Seller or the Affiliates shall have the right to xxx to collect same,
but in no event may Seller or the Affiliates seek to evict any tenant or
terminate any Lease. Seller shall promptly remit to Purchaser any rent and
other sums that are delivered to it after Closing and that Purchaser is
entitled to under this provision;
(c) the full amount of security
deposits paid under the Leases, to the extent unapplied (provided that the
amount applied was as herein permitted), together with interest thereon if
required by law or otherwise;
(d) water, electric, telephone and
all other utility and fuel charges, fuel on hand (at cost plus sales tax), and
any assignable deposits with utility companies (to the extent possible,
utility prorations will be handled by meter readings on the Closing Date);
(e) subject to Section 3(E), amounts
due and prepayments under the Service Contracts;
(f) assignable license and permit
fees;
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(g) if a Property is sold subject to
the Bonds, all interest payments related to the Bond Financing, annual fees
required to be paid pursuant to the Bond Documents, and any trustee, agency or
remarketing fees or expenses that have accrued and remain unpaid or have been
paid as of the Closing Date. In addition, Seller shall receive a credit
towards the Purchase Price for any escrowed funds or funds in any reserve
account with respect to the Bonds (on a Property sold subject to the Bonds)
that are not returned to Seller or the Affiliate;
(h) if a Property is sold subject to
the Bonds, Purchaser shall receive a credit against the Purchase Price in an
amount equal to the outstanding indebtedness related to the Bonds; and
(i) other expenses of operation and
similar items, including without limitation, advertising expenses, provided,
however, all such expenses are prepaid expenses that were not incurred in
violation of this Agreement and are consistent with Seller's past practices.
(j) Purchaser shall receive a credit
against the Purchase Price in the amount of $650,000 in connection with
masonite at Willow Bend Lake Apartments and Forestwood Apartments.
Except with respect to general real estate and personal property taxes (which
shall be reprorated upon the issuance of the actual bills, if necessary), any
other proration which must be estimated at Closing shall be reprorated and
finally adjusted as soon as practicable after the Closing Date but no later
than one (1) year from the applicable Closing Date; otherwise all prorations
shall be final, absent manifest error.
(ii) Notwithstanding anything to the contrary
contained in this Agreement, Seller shall be responsible for (i) all amounts
due through Closing for employees' salaries, vacation pay, withholding and
payroll taxes, and (ii) all other amounts to which its employees shall have
become entitled on or prior to the Closing Date under employee benefit
arrangements maintained by the Seller or under applicable law. Seller shall be
responsible for any management fee affecting the Property prior to the Closing
Date. Purchaser shall be solely responsible for all liabilities to its
employees for benefits or other amounts to which such employees become
entitled after the Closing Date under employee benefit arrangements maintained
by Purchaser or under applicable law. This Section shall survive the Closing
until the period of the applicable statute of limitations has run.
(iii) Seller shall, subject to Seller's and any
Affiliate's right to contest by appropriate proceedings, be responsible for
and comply or remedy all notes or notices of violation of law or municipal
ordinances, orders or requirements that have been noted in or issued by any
federal, state or municipal department having jurisdiction over the Property
prior to the date hereof. If same has not been remedied or complied with at or
prior to Closing, Purchaser shall receive a credit for the reasonable cost to
complete same, as determined by Seller, subject to Seller's and any
Affiliate's right to contest by appropriate proceedings, provided that Seller
provides adequate security to Purchaser for such costs if such contest is not
successful. Purchaser shall be responsible for and shall reimburse Seller for
the costs to comply
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or remedy all notes or notices of violation of law or municipal ordinances,
orders or requirements that have been noted in or issued by any federal, state
or municipal department having jurisdiction over the Property after the date
hereof. Seller may agree to obtain such reimbursement by way of a closing
adjustment.
(iv) Certiorari. Purchaser acknowledges that
proceedings for certiorari or other proceedings to determine the assessed
value of the Premises or the real property taxes payable with respect to the
Property as indicated on Exhibit L have been or will be commenced prior to the
date hereof and may be continuing as of the Closing Date. Seller shall be
entitled to control the prosecution of any such proceeding or proceedings for
the years prior to but not including the year in which the Closing occurs to
completion and to settle or compromise any Claim therein. Purchaser, subject
to Seller's reasonable consent and approval, shall be entitled to control the
prosecution of any such proceeding or proceedings for the year in which the
Closing occurs to completion and to settle or compromise any Claim therein,
subject to the reasonable consent of Seller. Purchaser shall keep Seller
informed on a timely basis of all matters with respect to any such proceeding
and seek Seller's consent and approval as required hereunder. The parties
hereto agree to cooperate with each other and to execute any and all documents
reasonably requested by the other party in furtherance of the foregoing.
Seller shall be entitled to any awards for the years prior to the year in
which the Closing occurs. With respect to any awards for the year in which the
Closing occurs, Seller shall be entitled to first recover the reasonable cost
it has expended in obtaining such awards and Purchaser shall then be entitled
to recover the reasonable cost it has expended in obtaining any such awards
and then, Seller and Purchaser shall apportion the remainder of such awards
between the period prior to Closing and the period subsequent to Closing. In
connection with the foregoing, Seller agrees to assign, subject to the
provisions of this Section, to Purchaser at the Closing all of Seller's right,
title and interest to the foregoing certiorari proceedings that are for the
year in which the Closing occurs and all refunds relating thereto. Each party
shall promptly remit to the other monies received which are to be paid and/or
shared as provided herein. Neither party will settle or compromise any
proceeding that involves an impact to a tax year in which the other party has
the right to control, without the consent of such other party. The provisions
of this Section 5(C)(iv) shall survive Closing until all proceedings with
respect to the tax year of the Closing and prior years are resolved.
(v) The provisions of Section 5(C) shall
survive Closing for one (1) year, except if a longer time is stated.
(D) Closing Costs.
Seller shall be responsible for its own legal
counsel expenses, all costs incurred to repay any liens, any recording fees
and other expenses due from or incurred by Seller in connection with the
transaction (including prepayment fees or expenses, if any, regarding any
existing liens or mortgages on the property), except in connection with the
Bond Financing (unless otherwise stated in Section 8). Purchaser shall pay for
its own legal counsel expenses, owner's title insurance costs and premiums,
survey expenses, the cost and premiums of any lender's title insurance
policies, any fees or expenses of Purchaser's lender, UCC and violation search
fees, fees and expenses of the Issuer (other than annual fees which are to be
prorated
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hereunder), the Issuer's bond counsel and the Trustee, any fees required to be
paid to the Issuer for its consent to the assignment of the Bond Documents and
the Bond Financing (unless otherwise stated in Section 8), the costs and
expenses of obtaining alternate security or credit and/or liquidity
enhancement to replace the Credit Enhancement Documents, the transfer fees if
any with respect to the assignment and assumption Bonds Documents and the Bond
Financing and costs and expenses of Purchaser's own due diligence activities
including, without limitation engineering, environmental reports and lease and
expense audits. In addition to the foregoing, and without duplication,
Purchaser shall also be responsible for and shall reimburse Seller (or pay
directly at Seller's direction) at Closing for the costs of the EMG
Environmental Phase I Reports and EMG Physical Assessment Reports (each as
listed on Exhibit P) and the Surveys prepared in connection with this
transaction and for any fees or other charges of the Title Insurer or the
surveyors in connection with this transaction, including, without limitation,
termination or cancellation fees charged by the Title Insurer or surveyors
because Purchaser used another company. Purchaser and Seller shall split
equally any and all escrow fees and real estate excise or transfer taxes (or
reimburse the other if applicable) that were incurred in connection with the
transfer of the Properties or the Interests. The provisions of this Section
5(D) shall survive closing or any termination of this Agreement.
6. CASUALTY LOSS AND CONDEMNATION
(A) If, prior to Closing, any Property or any part
thereof shall be (x) subject to a taking by any public or quasi-public
authority through condemnation, eminent domain or otherwise (including, but
not limited to, any transfer made in lieu of or in anticipation of the
exercise of such taking) (collectively, "Condemnation") or (y) destroyed or
damaged by fire or other casualty and in either case the parties reasonably
estimate the proceeds from such Condemnation or the cost to repair the damage
or destruction to be in excess of 15% of the Allocated Purchase Price of such
Property (a "Major Event") (unless such Condemnation does not do any of the
following: reduce the number of residential units of the Property, eliminate
the pool or other major amenity, reduce the parking by more than 10%, and
materially impede the main access to the Property, in which case such
Condemnation would not be a Major Event), Purchaser shall have the option
exercisable within ten (10) days after Purchaser and Seller agree on such
estimate either (i) to drop the Property affected by such Major Event pursuant
to Section 12 without terminating any other obligations of Purchaser
hereunder, or (ii) to elect to take title to such affected Property without
any reduction in, abatement of, or credit against the Purchase Price,
notwithstanding such Condemnation, destruction or damage; if Purchaser fails
to make either such election, Purchaser shall be deemed to have elected option
(i). If Purchaser elects to consummate the transaction contemplated by this
Agreement, without dropping such Property, subject to the terms and provisions
of the Bond Documents, at the Closing, Seller shall or shall cause the
Affiliate to assign to Purchaser (without recourse) (x) the rights of Seller
or the Affiliate to the Condemnation proceeds (including without limitation,
the sale proceeds for the Club Apartments if sold prior to Closing in any
transfer made in lieu of or in anticipation of the exercise of a taking
(Seller shall endeavor to consummate a transaction and shall consult with
Purchaser in connection therewith with regard to the Club Apartments, but
Seller cannot sign any purchase contract without the consent of Purchaser and
Purchaser cannot force Seller to sell the Club Apartments) or insurance
proceeds with respect to such Major Event, net of the amount of Seller's
reasonable costs and expenses (including, but not limited to, reasonable legal
fees and closing costs under a sale in lieu of or in anticipation of the
exercise of a taking), if any in collecting
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same ("Net Proceeds"), including without duplication, giving Purchaser a
credit against the Purchase Price in the amount of the Net Proceeds received
by Seller or the Affiliate prior to Closing (provided, however, Seller or the
Affiliate shall receive without duplication, a credit toward the Purchase
Price for any such costs and expenses not recovered prior to Closing) and (y)
the rights to settle any Condemnation proceeding or the loss under all
policies of insurance applicable to the Major Event, and Seller shall or shall
cause the Affiliate, at Closing and thereafter, to execute and deliver to
Purchaser all required proofs of loss, assignments of claims and other similar
items (the provisions of this sentence shall survive the Closing). In any case
in which Seller or the Affiliate is assigning to Purchaser the Net Proceeds
under any insurance policy, Purchaser shall receive a credit against the
Purchase Price for the deductible associated with the underlying claim under
the applicable insurance policy.
(B) If, prior to Closing, any Property or any part
thereof shall be (x) subject to a Condemnation or (y) destroyed or damaged by
fire or other casualty and in either case it is not a Major Event, then the
transaction contemplated by this Agreement shall be consummated, without any
reduction in, abatement of, or credit against the Purchase Price and Seller
shall, at its option, subject to the terms and provisions of the Bond
Documents, either (i) repair such damage prior to Closing and Seller or the
Affiliate shall keep any insurance or Condemnation proceeds, (ii) allow
Purchaser a credit against the Purchase Price in an amount equal to the
reasonably estimated cost of repair and Seller or the Affiliate shall keep any
insurance or Condemnation proceeds or (iii) assign to Purchaser (without
recourse) the rights of Seller or the Affiliate to Net Proceeds, including
without duplication, giving Purchaser a credit against the Purchase Price in
the amount of the Net Proceeds received by Seller or the Affiliate prior to
Closing (provided, however, Seller or the Affiliate shall receive without
duplication, a credit toward the Purchase Price for any such costs and
expenses not recovered prior to Closing) and the rights to settle any
Condemnation proceeding or the loss under all policies of insurance applicable
to the Condemnation, destruction or damage, and Seller shall or shall cause
the Affiliate, at Closing and thereafter, to execute and deliver to Purchaser
all required proofs of loss, assignments of claims and other similar items
(the provisions of this sentence shall survive the Closing). In any case in
which Seller or the Affiliate is assigning to Purchaser the Net Proceeds under
any insurance policy, Purchaser shall receive a credit against the Purchase
Price for the deductible associated with the underlying claim under the
applicable insurance policy.
(C) Notwithstanding anything to the contrary contained
herein, if and only to the extent that Seller is obligated to deliver Net
Proceeds to Purchaser hereunder, then the Threshold Amount, the Deductible and
the Damage Cap shall not apply to such obligation.
7. REPRESENTATIONS AND WARRANTIES
(A) Seller represents and warrants to Purchaser that
the following are true, complete and correct as of the date of this Agreement:
(i) Neither Seller nor any Affiliate has
entered into any agreement to lease (except as shown on the Rent Roll and
except for certain leases to laundry room operators which are set forth in the
Service Contracts) or sell, or dispose of its interest in any Property or any
part thereof, except for this Agreement and the Permitted Exceptions.
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(ii) Except as provided on Exhibit J, to
Seller's knowledge, there is no action, proceeding or investigation pending
against Seller or an Affiliate with respect to any Property or any part
thereof before any court or governmental department, commission, board, agency
or instrumentality, including without limitation with respect to any
Condemnation.
(iii) Except as provided on Exhibit J, the
Environmental Reports and the EMG Physical Assessment Reports listed on
Exhibit P, to Seller's knowledge, Seller has not received from any
governmental authority written notice of any violation of any zoning,
building, fire or health code or any other statute, ordinance rule or
regulation applicable (or alleged to be applicable) to any Property which has
not been resolved.
(iv) Exhibit K contains a true and complete
list and description of all insurance policies owned by or on behalf of Seller
or an Affiliate with respect to the Properties or any part thereof. Such
policies are in full force and effect. No written notice has been received by
Seller or any Affiliate from any insurer with respect to any defects or
inadequacies of all or any part of the Properties or the use or operation
thereof.
(v) The service, maintenance and construction
agreements (the "Service Contracts") listed on Exhibit F attached hereto,
comprise every Service Contract which affects the Properties or to which
Seller or an Affiliate is a party and which will exist as of the Closing
(other than those that were duly terminated pursuant to this Agreement) and
such Service Contracts that are entered into (modified or renewed) after the
date hereof not in violation of this Agreement). Seller has not given or
received any written notice of an uncured default under the terms of any
Service Contract. Seller makes no representation as to the ability to assign
any Service Contract or that any such assignment will not be void under the
terms of any Service Contract.
(vi) Seller and the Affiliates have no patents,
trademarks or trade names which are used by Seller or an Affiliate with
respect to the Properties other than the names of the apartment complexes.
There is no claim pending or to Seller's knowledge, threatened in writing
against Seller with respect to any alleged infringement of any patent,
trademark or trade name owned by another.
(vii) Each of Seller and each Affiliate is duly
organized and validly existing under the laws of its jurisdiction of
organization and has the power and authority to carry on its business as now
being conducted.
(viii) Each of Seller and each Affiliate is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership and/or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure to be so qualified or licensed, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on its
business or operations as currently conducted or its ability to consummate the
transactions contemplated herein.
(ix) Each of Seller and each Affiliate has full
power and authority to enter into and fully perform and comply with the terms
of this Agreement.
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(x) Subject to compliance with the terms and
provisions of the Bond Documents and the Credit Enhancement Documents, neither
the execution and delivery of this Agreement nor its performance by Seller or
any Affiliate conflicts with or results in the breach of any material contract
(and except to the extent any Service Contract may be breached by assigning
same), agreement, law, rule or regulation to which Seller or any Affiliate is
a party or by which Seller or any Affiliate is bound. This Agreement is valid
and enforceable against Seller in accordance with its terms and each
instrument to be executed by Seller or any Affiliate pursuant to this
Agreement or in connection herewith, will, when executed and delivered, be
valid and enforceable against Seller or such Affiliate in accordance with its
terms.
(xi) A list of all current Leases affecting
each Premises, except for certain leases to laundry room operators which are
set forth in the list of Service Contracts (such list being referred to in
this Agreement as the "Rent Roll"), including each tenant's name, the space
leased, the current rental rate and the amount of any security deposit paid
(and currently on hand), and the term of each Lease, is attached to this
Agreement as Exhibit D. Each tenant under the Leases is a bona fide tenant in
possession or has a right to possession of the premises demised thereunder.
Each of the Leases is in effect, and, except as disclosed on the Rent Roll,
has not been assigned, modified, amended or rescinded, and the rights of each
lessee thereunder are as tenants only. No tenant under any Lease has any
ownership interest or option or right of first refusal to acquire any
ownership interest in the Properties, and none has any rights or option to
renew or extend the Lease term or to terminate the Lease, except as provided
in its Lease or by applicable law. No commissions to any broker or leasing
agent are due or will become due on account of any of the Leases. The Rent
Roll discloses all security and other deposits made by each of the tenants
under the Leases which have not been applied. Seller has not received any
advance payment of rent (other than for the current month) on account of any
of the Leases except as shown on the Rent Roll. There are no written or oral
leases or tenancies affecting the Properties other than those listed in Rent
Roll, except for subleases and licenses to which Seller or the Affiliates are
not a party to and for certain leases to laundry room operators which are set
forth in the list of Service Contracts. All of the Leases are assignable by
Seller as contemplated by this Agreement without the consent of any other
party. To Seller's knowledge, neither Seller nor any Affiliate is in violation
of any rent control laws pertaining to any Property. Notwithstanding the
forgoing, the Rent Rolls are dated as of the date set forth therein and there
are no material changes to information contained in the Rent Roll as of date
hereof.
(xii) To Seller's knowledge, Exhibit P contains
a list of all environmental and hazardous waste reports in the possession or
control of Seller or any Affiliate, relating to the Properties (collectively,
the "Environmental Reports"). Seller has delivered or made available a true,
correct and complete copy of each Environmental Report (other than the
Environmental Reports identified under the caption "New Environmental Reports"
which were commissioned by Seller and delivered directly to Purchaser) to
Purchaser. To Seller's knowledge, no Hazardous Materials are located at any of
the Properties other than (i) as may be disclosed in the Environmental Reports
or the executed lead paint disclosure form attached hereto, (ii) Hazardous
Materials used in the routine use, operation or maintenance of any of the
Properties and in accordance with the applicable laws, regulations, codes,
ordinances, licenses or permits, promulgated by any governmental authority for
the protection of the environment (including air, water, soil and natural
resources) (the "Environmental Law"), (iii) radon, asbestos-containing
materials, lead-containing materials or other Hazardous Materials used in the
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construction, renovation or repair of the Properties and in accordance with
Environmental Law, and/or (iv) Hazardous Materials present in amounts,
concentrations or conditions permissible under Environmental Law.
(xiii) The outstanding principal balance of the
Bonds as of the date hereof is $6,145,000.
(xiv) None of Seller's employees who are
employed at the Property are represented by a collective bargaining agent and
there are no collective bargaining agreements in effect for such employees.
Seller shall be solely responsible for compliance with the Worker Adjustment
and Retraining Notification Act ("WARN") and all similar laws as they relate
to the termination of employment of Seller's employees that occur on or prior
to the Closing.
(xv) To Seller's knowledge, there are no
requirements under the financing documents with respect to the financings
listed on Exhibit I that would require Seller or an Affiliate to perform
capital repairs.
(xvi) To Seller's knowledge, except as set forth
in the Environmental Reports, there has not been any spillage or leakage from
the USTs.
(B) Seller represents and warrants to Purchaser that,
as of the Closing, each of the warranties and representations set forth in
Section 7(A) above shall be true, complete and correct in all material
respects except for changes due to the operation of the Properties occurring
prior to Closing which are not prohibited by this Agreement, and that all
management contracts pertaining to the Properties shall have been terminated
effective as of Closing.
(C) The foregoing warranties and representations of
Seller shall survive the execution and delivery of this Agreement, the Closing
and delivery of all documents and any and all performances in accordance with
this Agreement for nine (9) months from the Closing (the "Representation
Survival Period"). Each representation and warranty of Seller in this
Agreement (except as set forth in Sections 9 and 15) shall automatically be
null and void and of no further force and effect on the expiration date of the
Representation Survival Period unless, on or before such expiration date,
Purchaser shall have provided written notice to Seller alleging that Seller
shall be in breach of such representation or warranty and that Purchaser shall
have suffered actual damages or has a reasonable belief that it will suffer
actual damages as a result thereof. Purchaser shall then have ninety (90) days
following delivery of such notice to commence a legal proceeding against
Seller. If Purchaser has not commenced a legal proceeding against Seller
within such ninety (90) day period following delivery of notice, then each
representation and warranty of Seller in this Agreement (except as set forth
in Sections 9 and 15) shall automatically be null and void and of no further
force and effect. Seller's liability for the breach of any such representation
and warranty during the Representation Survival Period (other than same in
Sections 9 and 15) shall be limited to the Damage Cap.
(D) Purchaser represents, warrants and covenants to
Seller as follows, and such representations and warranties are true on the
date hereof and shall be true on the Closing Date:
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(i) EXCEPT AS, AND SOLELY TO THE EXTENT,
OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT:
(a) PURCHASER IS PURCHASING EACH
PROPERTY "AS-IS, WHERE IS AND WITH ALL FAULTS" IN ITS PRESENT CONDITION,
SUBJECT TO REASONABLE USE, WEAR, TEAR AND NATURAL DETERIORATION OF EACH
PROPERTY BETWEEN THE DATE HEREOF AND THE CLOSING DATE AND FURTHER AGREES THAT
(i) SELLER SHALL NOT BE LIABLE FOR ANY LATENT OR PATENT DEFECTS IN EACH
PROPERTY AND (ii) NEITHER SELLER, ANY AFFILIATE NOR ANY AGENT, PARTNER,
EMPLOYEE OR REPRESENTATIVE OF EITHER HAS MADE ANY REPRESENTATION WHATSOEVER
REGARDING EACH PROPERTY OR ANY PART THEREOF, OR ANYTHING RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT, AND (iii) PURCHASER, IN EXECUTING,
DELIVERING AND PERFORMING THIS AGREEMENT, HAS NOT AND DOES NOT RELY UPON ANY
STATEMENT, INFORMATION, OR REPRESENTATION TO WHOMSOEVER MADE OR GIVEN, WHETHER
TO PURCHASER OR OTHERS, AND WHETHER DIRECTLY OR INDIRECTLY, VERBALLY OR IN
WRITING, MADE BY ANY PERSON, FIRM OR CORPORATION. IN ADDITION TO THE
FOREGOING, PURCHASER REPRESENTS THAT (I) PURCHASER HAS EXAMINED EACH PROPERTY,
THE ENVIRONMENTAL REPORTS, THE EMG PHYSICAL ASSESSMENT REPORTS LISTED ON
EXHIBIT P AND IS FAMILIAR WITH THE PHYSICAL AND ENVIRONMENTAL CONDITION
THEREOF AND HAS CONDUCTED SUCH INVESTIGATION OF THE AFFAIRS AND CONDITION OF
EACH PROPERTY AS PURCHASER HAS CONSIDERED APPROPRIATE, (II) NEITHER SELLER,
ANY AFFILIATE NOR ANY AGENT, PARTNER, EMPLOYEE OR REPRESENTATIVE OF EITHER
HAVE MADE OR WILL MAKE OR WILL BE ALLEGED TO HAVE MADE ANY VERBAL OR WRITTEN
REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES WHATSOEVER TO PURCHASER,
WHETHER EXPRESS OR IMPLIED, AND, IN PARTICULAR, THAT NO SUCH REPRESENTATIONS,
WARRANTIES, PROMISES OR GUARANTIES HAVE BEEN MADE OR WILL BE MADE OR WILL BE
ALLEGED TO HAVE BEEN MADE WITH RESPECT TO THE PHYSICAL CONDITION ENVIRONMENTAL
CONDITION OR OPERATION OF EACH PROPERTY, THE ACTUAL OR PROJECTED REVENUE AND
EXPENSES OF EACH PROPERTY, THE ZONING AND OTHER LAWS, REGULATIONS AND RULES
APPLICABLE TO EACH PROPERTY OR THE COMPLIANCE OF EACH PROPERTY THEREWITH, THE
QUANTITY, QUALITY OR CONDITION OF THE ARTICLES OF PERSONAL PROPERTY AND
FIXTURES INCLUDED IN THE TRANSACTIONS CONTEMPLATED HEREBY, THE USE OR
OCCUPANCY OF EACH PROPERTY OR ANY PART THEREOF OR ANY OTHER MATTER OR THING
AFFECTING OR RELATED TO EACH PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREBY,
(III) NEITHER SELLER, ANY AFFILIATE NOR ANY AGENT, PARTNER, EMPLOYEE OR
REPRESENTATIVE OF EITHER HAVE MADE OR WILL MAKE ANY VERBAL OR WRITTEN
REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES WHATSOEVER TO PURCHASER,
WHETHER EXPRESS OR IMPLIED, AND, IN PARTICULAR, THAT NO SUCH REPRESENTATIONS,
WARRANTIES, PROMISES OR GUARANTIES HAVE BEEN MADE OR WILL BE MADE WITH RESPECT
TO THE TRUTH, ACCURACY OR COMPLETENESS OF
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ANY MATERIALS, DATA OR OTHER INFORMATION, INCLUDING WITHOUT LIMITATION THE
CONTENTS OF SELLER'S BOOKS AND RECORDS, CONTRACTS, ENVIRONMENTAL REPORTS, THE
EMG PHYSICAL ASSESSMENT REPORTS LISTED ON EXHIBIT P, ENGINEERING REPORTS,
PHYSICAL CONDITION SURVEYS, INFORMATIONAL BROCHURE WITH RESPECT TO EACH
PROPERTY, RENT ROLLS OR INCOME AND EXPENSE STATEMENTS, WHICH SELLER OR ITS
REPRESENTATIVES MAY HAVE DELIVERED, MADE AVAILABLE OR FURNISHED TO PURCHASER
IN CONNECTION WITH EACH PROPERTY AND PURCHASER REPRESENTS, WARRANTS AND AGREES
THAT ANY SUCH MATERIALS, DATA AND OTHER INFORMATION DELIVERED, MADE AVAILABLE
OR FURNISHED TO PURCHASER ARE DELIVERED, MADE AVAILABLE OR FURNISHED TO
PURCHASER AS A CONVENIENCE AND ACCOMMODATION ONLY AND EXPRESSLY DISCLAIMS ANY
INTENT TO RELY ON ANY SUCH MATERIALS, DATA AND OTHER INFORMATION AND HAS
ENTERED INTO THIS AGREEMENT, AFTER HAVING MADE AND RELIED SOLELY ON ITS OWN
INDEPENDENT INVESTIGATION, INSPECTION, ANALYSIS, APPRAISAL, EXAMINATION AND
EVALUATION OF THE FACTS AND CIRCUMSTANCES, (IV) PURCHASER HAS NOT RELIED UPON
ANY SUCH REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES OR UPON ANY
STATEMENTS MADE IN ANY INFORMATIONAL BROCHURE WITH RESPECT TO EACH PROPERTY
AND HAS ENTERED INTO THIS AGREEMENT AFTER HAVING MADE AND RELIED SOLELY ON ITS
OWN INDEPENDENT INVESTIGATION, INSPECTION, ANALYSIS, APPRAISAL, EXAMINATION
AND EVALUATION OF THE FACTS AND CIRCUMSTANCES AND (V) PURCHASER ACKNOWLEDGES
THAT THE PROPERTIES MAY NOT BE IN COMPLIANCE WITH THE AMERICANS WITH
DISABILITIES ACT OF 1990, AS AMENDED AND THE SELLER MAKES NO REPRESENTATIONS
WITH RESPECT TO SAME. WITHOUT LIMITING THE FOREGOING, SELLER HAS MADE NO
REPRESENTATION OR WARRANTY WHATSOEVER REGARDING HAZARDOUS MATERIALS OF ANY
KIND OR NATURE ON, ABOUT OR WITHIN EACH PROPERTY OR THE PHYSICAL CONDITION OF
EACH PROPERTY AND PURCHASER AGREES TO ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING BUT NOT LIMITED TO, CONSTRUCTION OR MECHANICAL DEFECTS AND ADVERSE
PHYSICAL AND ENVIRONMENTAL CONDITIONS MAY NOT HAVE BEEN REVEALED BY
PURCHASER'S INVESTIGATIONS OR THE ENVIRONMENTAL REPORTS, OR THE EMG PHYSICAL
ASSESSMENT REPORTS LISTED ON EXHIBIT P.
(ii) Purchaser is duly organized and validly
existing under the laws of its jurisdiction of organization and has the power
and authority to carry on its business as now being conducted.
(iii) Purchaser is duly qualified to do business
and is in good standing in each jurisdiction in which the nature of its
business or the ownership and/or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the failure to
be so qualified or licensed, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on its business or
operations as currently conducted or its ability to consummate the
transactions contemplated herein.
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(iv) Purchaser has full power and authority to
enter into and fully perform and comply with the terms of this Agreement.
(v) Neither the execution and delivery of this
Agreement nor its performance by Purchaser conflicts with or results in the
breach of any material contract, agreement, law, rule or regulation to which
Purchaser is a party or by which Purchaser is bound. This Agreement is valid
and enforceable against Purchaser in accordance with its terms and each
instrument to be executed by Purchaser pursuant to this Agreement or in
connection herewith, will, when executed and delivered, be valid and
enforceable against Purchaser in accordance with its terms.
(vi) Purchaser has the financial resources
necessary to consummate the transactions contemplated under this Agreement.
(vii) Purchaser is, directly or indirectly,
owned and controlled by Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx, Xxxxx X. Xxxxxxxx,
Xxxxx X. Xxxxxxxx, Xxxx Xxxxxxxx, family members of any or all of the
foregoing, trusts created for the benefit of any or all of the foregoing
and/or any or all of the foregoing (or any combination of one or more of the
foregoing) shall all continue to own directly or indirectly more than 50% of
Purchaser and control Purchaser. The term "control" as used herein means, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management, policies or activities of a person or entity,
whether through ownership of voting securities, by contract or otherwise.
(viii) Purchaser further acknowledges that it has
inspected all of the documents referred to in this Agreement as having been
delivered, made available or furnished to Purchaser for inspection and that in
such inspection Purchaser has not discovered any matter which would form the
basis for a claim by Purchaser that Seller has breached any representation or
warranty of Seller made in this Agreement and has no actual knowledge of any
such matter. Notwithstanding anything to the contrary set forth in this
Agreement, if prior to the Closing Purchaser has or obtains actual knowledge
(without a duty of inquiry) that any of Seller's representations or warranties
set forth in Section 7(A) are untrue in any respect, and Purchaser
nevertheless proceeds with the Closing, then only the breach by Seller of the
representations and warranties as to which Purchaser shall have such actual
knowledge shall be waived by Purchaser (except to the extent notice of same is
given pursuant to Section 10(A)(iv)), only such representations and warranties
shall be deemed modified to conform them to the information that Purchaser
shall have actual knowledge of and Seller shall have no liability to Purchaser
or its successors or assigns in respect thereof.
(ix) Purchaser shall give Seller at least
fifteen (15) days advance written notice to Seller of the employees, if any,
whose employment will not be continued by Purchaser to enable Seller to notify
such employees of their termination effective as of the Closing Date.
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(E) The foregoing warranties and representations of
Purchaser shall survive the execution and delivery of this Agreement, the
Closing and delivery of all documents and any and all performances in
accordance with this Agreement for the Representation Survival Period. Each
representation and warranty of Purchaser in this Agreement (except as set
forth in Sections 9 and 15) shall automatically be null and void and of no
further force and effect on the expiration date of the Representation Survival
Period unless, on or before such expiration date, Seller shall have provided
written notice to Purchaser alleging that Purchaser shall be in breach of such
representation or warranty and that Seller shall have suffered actual damages
or has a reasonable belief that it will suffer actual damages as a result
thereof. Seller shall then have ninety (90) days following delivery of such
notice to commence a legal proceeding against Purchaser. If Seller has not
commenced a legal proceeding against Purchaser within such ninety (90) day
period following delivery of notice, then each representation and warranty of
Purchaser in this Agreement (except as set forth in Sections 9 and 15) shall
automatically be null and void and of no further force and effect. Purchaser's
liability for the breach of any such representation and warranty during the
Representation Survival Period (other than same in Sections 9 and 15) shall be
limited to the Damage Cap.
8. BOND FINANCINGS
(A) Purchaser, at its sole cost and expense (including
without limitation, any transfer fees), shall have until Closing, unless an
earlier date is set forth below (the "Bond Compliance Date"), to obtain with
respect to each of the Club Apartments and the Courts at Waterford (if the
Courts at Waterford is applicable), deliver:
(i) (a) the consent or authorization of all
necessary parties to the transfer of the Property from Seller or the Affiliate
to Purchaser (including without limitation, approval of any substitute letter
of credit, guaranties and/or other liquidity enhancement), which must be
obtained on or before the date which is 10 days prior to the Closing, (b) the
release (in form and substance acceptable to Seller) of Seller, the Affiliate
and their affiliates from liability in connection with the Bond Financings,
(c) the assumption of the obligations under the Bond Documents by Purchaser,
as required by the Bond Documents and (d) a rating agency confirmation that
the transaction will not cause a reduction in the ratings of the Bonds
(collectively, the "Consent"); and
(ii) an opinion of the Issuer's bond counsel
("Bond Counsel") to be delivered at Closing to the effect that the purchase of
the Property by Purchaser, the assumption of the Bond Financing and Seller's
obligations under the Bond Documents and the substitution of the alternate
security or credit and/or liquidity enhancements in accordance with the Bond
Documents will not (a) cause the Bonds to be viewed as having been
"refinanced" within the meaning of Treasury Regulations Section
1.150-1(d)(2)(v), (b) adversely affect the tax-exempt status of the interest
payable on the Bonds for federal income tax purposes, or (c) give rise to any
right to accelerate the maturity of the Bonds.
(iii) Purchaser shall use its commercially
reasonable efforts to obtain the Consent and the Bond Counsel's opinion and
shall, upon request of Seller, notify Seller in
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writing of the progress of its attempts to obtain the Consent and the Bond
Counsel's opinion. Purchaser shall provide any reasonable alternate security
or credit and/or liquidity enhancements for an entity with a credit rating
similar to that of the entity that is proposing to assume the Bond Documents
required by the Issuer or Trustee with respect to the assignment of the Bond
Documents to Purchaser. Seller shall not be responsible for obtaining the Bond
Counsel's opinion or the Consent. Seller shall, at no cost or expense to it,
reasonably cooperate with Purchaser in obtaining the Bond Counsel's opinion
and the Consent. Purchaser shall also use its commercially reasonable efforts
to obtain an estoppel from the Issuer with respect to (i) the outstanding
principal amount due under the Bond Documents, (ii) when interest was paid
through and (iii) that it has not sent or received any notice of default under
the Bond Documents. If Purchaser is unable to obtain such estoppel from the
Issuer on or prior to the Bond Compliance Date then Purchaser shall give
Seller notice of same and Seller may provide such estoppel to Purchaser.
Failure to obtain either such estoppel (from Issuer or Seller) shall be deemed
a failure to obtain the Consent.
(B) If Purchaser is unable to obtain the Consent or the
Bond Counsel's opinion on or before the Bond Compliance Date, Purchaser shall
provide Seller with written notice of same and Seller shall have the following
options, of which Seller may elect one or more from time to time prior to the
Closing by written notice to Purchaser; if Seller fails to make any such
election, Seller shall be deemed to have elected option (i):
(i) Seller may elect to drop the Property
pursuant to Section 12, without terminating any other obligations of Purchaser
hereunder, provided, however, notwithstanding anything herein to the contrary,
(a) such Dropped Property shall not count towards determining the number of
Properties needed to terminate this Agreement under any Section and (b) Seller
may require that Purchaser continue to comply with its requirements under this
Section 8 as if the Bond Compliance Date was extended for 90 days after the
Closing Date and close on such Dropped Property pursuant to Section 12 as a
deferred closing if and when, within such 90 day period, all conditions are
satisfied;
(ii) If Purchaser and Seller in their sole and
absolute discretion desire to close and have the Purchaser assume the Bond
Documents and obligations under the Bond Financing even though the Consent and
Bond Counsel's opinion shall not have been fully obtained, Seller may require
Purchaser and then Purchaser shall deliver to Seller at Closing an indemnity
in form and substance satisfactory to Seller indemnifying Seller from and
against any Claims suffered or incurred by Seller due to Purchaser's failure
to obtain the Consent and the Bond Counsel's opinion and in respect of the
Bonds, the Bond Financing and the Bond Documents; or
(iii) Seller may prior to Closing arrange for
the redemption of the Bonds and repayment of the Bond Financing, in which
event (a) if the failure to obtain the Consent or the Bond Counsel's opinion
was due to Purchaser's failure to use its good faith efforts or to provide or
execute any reasonably requested documents, the Purchase Price shall
automatically increase by the amount expended by Seller to redeem the Bonds
and repay the Bond Financing (excluding the principal amount of such
repayment) and Seller and Purchaser shall, at Closing, execute and deliver all
documents necessary to redeem the Bonds and repay the Bond Financing or (b) if
the failure to obtain the Consent or the Bond Counsel's opinion was not
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due to Purchaser's failure to use its good faith efforts or to provide or
execute any reasonably requested documents, then such expenses shall be
Seller's responsibility and sole cost. Purchaser, however, shall be
responsible for the costs and expenses that are not directly related to the
redemption of the Bonds, but are related to the assignment and assumption of
the Bonds and Bond Documents. At Closing, Seller may elect to drop the
Property pursuant to Section 12, without terminating any other obligations of
Purchaser hereunder, provided, however, notwithstanding anything herein to the
contrary, (a) such Dropped Property shall not count towards determining the
number of Properties needed to terminate this Agreement under any Section and
(b) this Paragraph (B)(iii) shall continue to apply to such Dropped Property
for ninety (90) days after the Closing Date and Seller may close on such
Dropped Property pursuant to Section 12 as a deferred closing if and when,
within such ninety (90) day period, Seller is able to cause a redemption of
the Bonds and repayment of the Bond Financing.
(C) As of the date hereof, the provisions of Section
8(A) and (B) and the other pertinent provisions of this Agreement (including
as set forth on the pertinent Exhibits and Schedules) relating to bond
financings/documents (collectively, the "Bond Provisions") only apply to the
Club Apartments. However, Purchaser shall have seven (7) business days from
the date hereof to elect for the Bond Provisions to apply also to the Courts
at Waterford. If Purchaser makes such election then it is agreed that the Bond
Provisions shall also apply to the Courts at Waterford as if the bond
financing affecting the Courts at Waterford was originally contemplated to be
assumed by Purchaser and thus governed by the Bond Provisions.
9. BROKERAGE
Each party represents to the other that they dealt with no
broker in connection with this transaction, other than Purchaser which dealt
with Xxxxxx Xxxxxxx Real Estate (who shall be paid by Purchaser pursuant to a
separate agreement). Seller shall indemnify and hold Purchaser harmless from
and against any and all Claims of all brokers and finders claiming by, through
or under Seller and in any way related to the sale and purchase of the
Property pursuant to this Agreement, including, without limitation, reasonable
attorneys fees and disbursements incurred by Purchaser in connection with such
Claims. Purchaser shall indemnify and hold Seller harmless from and against
any and all Claims of all brokers and finders claiming by, through or under
Purchaser and in any way related to the sale and purchase of the Property
pursuant to this Agreement, including, without limitation, reasonable
attorneys fees and disbursements incurred by Seller in connection with such
Claims. Xxxxxxx Xxxxx Barney, Inc. acted as Seller's financial advisor for the
transaction and any fees earned, if any, will be paid by Seller pursuant to a
separate agreement. Notwithstanding anything to the contrary contained in this
Agreement, Seller's and Purchaser's obligations in this Section 9 shall
survive Closing or any termination of this Agreement.
10. DEFAULTS AND REMEDIES
(A) Notwithstanding anything to the contrary contained
in this Agreement, if (I) Seller fails to perform or comply with in any
material respect any covenant of Seller's in accordance with the terms of this
Agreement or (II) any of Seller's representations or warranties set forth in
this Agreement shall not be true, correct and complete in any material respect
upon Closing (other than in Section 15(A)(i), as to which the materiality
standard and the Threshold
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Amount shall not apply); provided, however, that the following shall not be
deemed breaches of Seller's covenants, representations and warranties set
forth herein (other than in Section 15(A)(i)): (x) changes due to the
operation of the Properties occurring prior to Closing which are not
prohibited by this Agreement (therefore, there is no breach) or (y) if the
dollar amount of the damages resulting from any breach of such representation
or failure to perform any covenant together with all dollar amounts of all
other damages resulting from any such breach of representation or failure to
perform any other covenant is less than Twenty Five Thousand Dollars ($25,000)
per Property and One Million Two Hundred Fifty Thousand Dollars ($1,250,000)
for all Properties (in which case the breach is deemed waived by Purchaser and
no adjustment or abatement in or credit against the Purchase Price shall be
made, the "Threshold Amount") (provided, however, apportionment payments and
other payments that Seller must pay to Purchaser at Closing, if any, set forth
in this Agreement are not subject to the Threshold Amount), then Purchaser's
sole and exclusive remedy shall be either:
(i) drop the affected Property pursuant to
Section 12;
(ii) if and only if the total number of Dropped
Properties exceeds seven (7), then Purchaser may terminate this Agreement at
the Closing of the non-Dropped Properties (as it may be adjourned by Seller or
Purchaser under this Agreement subject to the limitations in Section 5(A)) in
which event this Agreement, without further action of the parties, shall
become null and void and neither party shall have any further rights or
obligations under this Agreement, except for the return of the Xxxxxxx Money
to the Purchaser and the provisions that are expressly stated to survive the
termination of this Agreement;
(iii) (A) if and only if the breach by Seller is
the willful failure to deliver any closing document set forth in Section
5(B)(i), xxx for specific performance with respect to the delivery of same,
subject to the limitations set forth in Section 10(E) and subject to the
limitations set forth in Section 4(C), and provided that delivery of same is
in the control of Seller or its Affiliates; or (B) xxx for specific
performance only with respect to a breach of covenant with respect to a
non-Permitted Exception, subject to the Aggregate Title Cap (and Individual
Title Cap), if applicable, set forth in Section 4(C), and provided that remedy
of such default is reasonably in the control of Seller or its Affiliates. For
clarification, Seller and its Affiliates shall never be required to incur any
expense in excess of such amounts of the Aggregate Title Cap or Individual
Title Cap as the case maybe, if such non-Permitted Exception is subject to the
Aggregate Title Cap (and Individual Title Cap) set forth in Section 4(C) (if,
pursuant to Section 4(C), the Aggregate Title Cap (or Individual Title Cap)
applies). Further, the remedy of specific performance set forth in (B) shall
not be available if the reasonable expected cost to Seller or an Affiliate
would exceed the Aggregate Title Cap (or Individual Title Cap), if applicable,
set forth in Section 4(C); or
(iv) waive such default (provided, however,
notwithstanding anything herein to the contrary, such default shall not be
waived or merged into the deeds, if Purchaser provides a notice at Closing
that sets forth with specificity any claimed breach, including if
quantifiable, Purchaser's reasonable estimate of the dollar amount to cure
same in excess of the Deductible, then such claimed breach shall not be waived
or merged into the deeds and Purchaser may pursue all of its rights and
remedies under this Agreement, at law or in equity post Closing, subject to
the terms and conditions of this Agreement, including, without
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limitation, the Deductible and the Damage Cap, if applicable) and proceed to
Closing without any reduction in, abatement of, or credit against the Purchase
Price (except with respect to a non-Permitted Exception and then subject to
the Aggregate Title Cap (and Individual Title Cap), if applicable, set forth
in Section 4(C));
(v) Notwithstanding the provisions of Section
10(A)(iii)(A) to the contrary, if Seller breaches its obligation under the
Mezzanine Loan Documents to deliver the letter of credit required thereunder
on the Closing Date, the Purchaser can xxx for specific performance to elect
and cause Purchaser to accept the mezzanine loan option and, in such event,
the interest rate on the mezzanine loan shall be only 9% per annum plus any
interest earned on the account in which the proceeds of the mezzanine loan
have been deposited minus all costs and expenses of the Purchaser incurred in
connection with having to accept the mezzanine loan option in lieu of the
letter of credit option and in obtaining a substitute letter of credit backed
by such funds including, without limitation, any letter of credit fees, and,
notwithstanding anything to the contrary herein, Purchaser shall have an
additional adjournment period of 30 days.
(vi) if Purchaser fails to make any such
election, Purchaser shall be deemed to have elected the remedy set forth in
Section 10(A)(i).
(vii) It is understood and agreed that Purchaser
shall always have the right of injunctive relief to enforce Seller's or an
Affiliate's covenants set forth in Section 3 of this Agreement.
(B) Purchaser shall endeavor to give Seller written
notice reasonably promptly upon having actual knowledge of and such notice
shall specify any failure to perform by Seller of any of Seller's covenants
hereunder or breach of any representation by Seller hereunder and Seller shall
have until Closing (and may adjourn the Closing for such reasonable periods,
subject to the limitations in Section 5(A)) to cure such breach or failure to
perform or any other matter set forth in a Drop Notice, including without
limitation transferring the affected Property by fee transfer if the breach is
related to the transfer of an Interest (assuming such fee transfer will cure
such problem). If quantifiable, such notice shall state Purchaser's reasonable
estimate of the dollar amount to cure same in excess of the Deductible. At
Seller's option it may cure such breach or failure to perform (other than for
non-Permitted Exceptions which shall be governed by Section 4(C)) by giving
Purchaser a credit against the Purchase Price at the Closing for the
reasonable estimate of the dollar amount to cure same if quantifiable in
excess of the Deductible.
(C) Notwithstanding anything to the contrary contained
in this Agreement, if Purchaser fails to perform in any material respect any
covenant of Purchaser's in accordance with the terms of this Agreement or if
any of Purchaser's representations or warranties contained in this Agreement
(provided, however, a breach of Section 15(B) or Section 5(B)(ii)(a) or any
other payment obligation of Purchaser under this Agreement, shall not be
subject to the materiality standard or subject to or counted against the
Threshold Amount), shall not be true, correct and complete in any material
respect upon Closing, except (x) if the dollar amount of the damages resulting
from any breach of such representation or failure to perform any covenant
together with all dollar amounts of all other damages resulting from any such
breach of representation or failure to perform any other covenant is less than
the Threshold Amount (in which case the breach is deemed waived by Seller and
no adjustment in or credit to the Purchase
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Price shall be made) or (y) if otherwise waived by Seller, then Seller's sole
and exclusive remedy shall be to terminate this Agreement and to receive the
Xxxxxxx Money as liquidated damages, notwithstanding the Damage Cap, at which
time this Agreement shall be null and void and neither party shall have any
rights or obligations under this Agreement, except for such provisions that
are expressly stated to survive the termination of this Agreement. Seller and
Purchaser acknowledge and agree that (i) the Xxxxxxx Money is a reasonable
estimate of and bears a reasonable relationship to the damages that would be
suffered and costs incurred by Seller as a result of having withdrawn the
Property from sale and the failure of Closing to occur due to a default of
Purchaser under this Agreement; (ii) the actual damages suffered and costs
incurred by Seller as a result of such withdrawal and failure to close due to
a default of Purchaser under this Agreement would be extremely difficult and
impractical to determine; (iii) Purchaser seeks to limit its liability under
this Agreement to the amount of the Xxxxxxx Money in the event this Agreement
is terminated and the transaction contemplated by this Agreement does not
close due to a default of Purchaser under this Agreement; and (iv) the Xxxxxxx
Money shall be and constitutes valid liquidated damages; provided, however,
Purchaser and Seller agree that the liquidated damages do not apply to any
indemnity obligation of the Purchaser under this Agreement that survives
termination of this Agreement. Seller shall endeavor to provide Purchaser
written notice reasonably promptly upon having actual knowledge of and such
notice shall specify any failure to perform by Purchaser of any of Purchaser's
covenants hereunder or breach of any representation by Purchaser hereunder and
Purchaser shall have until Closing (and may adjourn the Closing for such
reasonable periods, subject to the limitations in Section 5(A)) to cure such
breach or failure to perform.
(D) In the event either party hereto fails to perform
any of its obligations under this Agreement or in the event a dispute arises
concerning the meaning or interpretation of any provision of this Agreement,
the defaulting party or the party not prevailing in such dispute, as the case
may be, shall pay any and all costs and expenses reasonably incurred by the
other party in enforcing or establishing its rights hereunder, including,
without being limited to, court costs and reasonable attorneys' fees.
(E) Notwithstanding anything to the contrary contained
herein, except with respect to the following matters which are not subject to
the Damage Cap or Deductible: (i) the brokerage indemnities set forth in
Section 9, (ii) the obligations to pay prevailing party costs set forth in
Section 10(D) and the interest owed pursuant to Section 14(vii), (iii) the
obligations to pay prorations and adjustments set forth in Section 3(E) and
Section 5(C), (iv) the obligations to pay transfer taxes and other closing
costs set forth in Section 5(D), (v) indemnities for a 1031 Transaction, (vi)
the Purchaser's indemnities with respect to access set forth in Section 13(A),
(vii) Purchaser's obligation to pay the Cash Balance at Closing, (viii)
Purchaser's obligations under the Mezzanine Loan Documents, (ix) fraud, (x)
liabilities and obligations under Section 15 (which are subject to the Entity
Level Damage Cap, (xi) Claims by employees of Seller or Purchaser employed
with respect to the Properties that relate to their employment, (xii) Seller's
obligation to provide the letter of credit, if any, under the Mezzanine Loan
Documents and/or to execute and deliver into the Mezzanine Loan Documents,
(xiii) Seller's obligations to cure title defects (up to the Aggregate Title
Cap (or Individual Title Cap, if applicable), unless same are Non-Capped
Exceptions), (xiii) the Non-Capped Exceptions, and (xiv) the Seller's
obligations with respect to the USTs (collectively the "Carved Out Items"),
and subject to the limitation of remedies set forth in Section 10, each
party's maximum liability for any and all damages or
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Claims hereunder or in connection herewith, other than with respect to the
liquidated damages set forth in Section 10(C), including without limitation,
any Claims for indemnification hereunder and Claims under any documents
delivered in connection herewith, shall be Seven Million Five Hundred Thousand
Dollars ($7,500,000) (the "$7.5M Damage Cap") with respect to all matters
other than non-Permitted Exceptions that are subject to the Aggregate Title
Cap (and Individual Title Cap), set forth in Section 4(C), if applicable, in
which case Seller's liability with respect to such matters shall be the
respective Aggregate Title Cap and Individual Title Cap as set forth in
Section 4(C) (collectively, as applicable, the "Damage Cap"), provided,
however, that except for Carved Out Items, and as expressly set forth herein,
neither party shall have any liability for any such damages or Claims until
the aggregate amount of same is in excess of $250,000 (inclusive of the
Threshold Amount) per Property or $2,250,000 (inclusive of the Threshold
Amount) for all Properties (collectively, the "Deductible") and then only to
the extent that said amounts are exceeded up to the $7.5M Damage Cap (in which
case, if the amount or any portion thereof of said damages or Claims is less
then said amounts, such Claims or damages or portion thereof are deemed
waived) and provided further, that neither party shall be liable for any
consequential or indirect damages. The provisions of this Section 10(E) shall
survive Closing or earlier termination of this Agreement. For clarification,
the Threshold Amount is included in and not in addition to the Deductible,
however, for certain items, such as title defects, the Threshold Amount
applies but the Deductible does not and as such the amount associated with
such title defect would not be counted towards calculating the Deductible.
11. SELLER AS AGENT
Seller shall act as agent for the Affiliates for all matters
under or in connection with this Agreement, including without limitation, the
collection of the Purchase Price allocated to each Property.
12. DROPPING OF PROPERTIES DUE TO A MATERIAL DEFAULT, TITLE DEFECT,
FAILURE TO OBTAIN A NECESSARY CONSENT, CASUALTY OR
CONDEMNATION WITH RESPECT TO A PROPERTY AND DEFERRED
CLOSINGS
(A) If pursuant to this Agreement either party duly
elects to drop a Property, (and the Drop Notice is duly delivered), then such
Property shall be deemed a "Dropped Property" and collectively with all other
dropped Properties the "Dropped Properties". The party that elects to drop a
Property must do so by written notice to the other party and such notice must
include a detailed description as to the permitted reason and circumstances as
why such Property was dropped (the "Drop Notice"). This Agreement shall be
deemed amended, without any further action on any parties' part as follows
with respect to the Dropped Properties:
(i) The definition of Property or Properties
shall not include the Dropped Properties, except to the extent that any
provision that is stated to survive the termination of this Agreement would be
applicable to a Dropped Property and with respect to this Section 12 to the
extent necessary to implement this Section 12;
(ii) Subject to Section 12(B), neither
Purchaser, Seller nor any Affiliate that owns a Dropped Property shall have
any obligations with respect to such Dropped
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Property, nor shall any covenant, representation or warranty be deemed made
with respect to such Dropped Property, and Purchaser shall not have any rights
or obligations under this Agreement with respect to such Dropped Property,
unless and until the reasons for dropping such Property are cured at or prior
to Closing (although no party shall have any obligation to cure such matter)
or otherwise as set forth in this Section 12;
(iii) The Purchase Price shall be reduced by the
amount stated on Exhibit A as the Allocated Release Price (the "Release
Price") for each Dropped Property;
(iv) Subject to Section 12(B), the Allocated
Xxxxxxx Money for each Dropped Property shall continue to be held by the
Escrowee under the Escrow Agreement subject to the terms of this Agreement.
The "Allocated Xxxxxxx Money" shall for each Dropped Property be the greater
of (i) Two Hundred and Fifty Thousand Dollars ($250,000) and (ii) the amount
equal to the Xxxxxxx Money multiplied by the fraction of (x) Allocated
Purchase Price of such Dropped Property over (y) the Purchase Price
(unadjusted).
(v) Purchaser shall not be responsible for and
shall not reimburse Seller for the following closing costs unless and until
there is a Closing for such Dropped Property pursuant to this Agreement, with
respect to such Dropped Property: (a) EMG Environmental Phase I Report (as
listed on Exhibit P), (b) EMG Physical Assessment Report (as listed on Exhibit
P), (c) Survey (d) any amounts owed pursuant to Section 3(E) with respect to
such Dropped Property, (d) termination fees charged by the Title Insurer or
surveyor and (e) any other amounts that are specific to a Property that is a
Dropped Property.
(vi) The Allocated Purchase Price shall be
revised as follows for the remaining Properties that are not Dropped
Properties:
(a) Such Allocated Purchase Price for
each Property that is not a Dropped Property shall be either increased or
decreased pursuant to the following formula: The Net Change (which may be a
negative number) multiplied by the fraction the numerator of which is the
Applicable Numerator and the denominator of which is the New Denominator and
the resulting number shall be added (and thus subtracted if a negative number)
to the Allocated Purchase Price for each Property that is not a Dropped
Property. The following definitions shall apply:
(b) The "Net Change" shall mean the
sum of the results of the following formula for all Dropped Properties: its
original Allocated Purchase Price minus its Release Price;
(c) The "New Denominator" shall mean
the total Allocated Purchase Price for all Properties that are not a Dropped
Property; and
(d) The "Applicable Numerator" shall
mean the original Allocated Purchase Price for such Property that is not a
Dropped Property.
(B) Deferred Closings.
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(i) Seller shall have the right but not the
obligation to elect by written notice (the "Cure Election Notice") to
Purchaser on the Closing Date that it wishes to attempt to cure with respect
to any Dropped Property all of the events or circumstances that caused a
Property to become a Dropped Property (including without limitation, repayment
of the Bond Financings) as set forth in the Drop Notice for such Property. If
Seller delivers such Cure Election Notice, Seller shall have the right within
90 days after the Closing Date for the Properties that are not Dropped
Properties to cure with respect to any Dropped Property specified in such Cure
Election Notice all of the events or circumstances that caused such Property
to become a Dropped Property and upon such cure, Seller shall provide
Purchaser written notice of same (the "Cure Notice"). Provided, however, if
Seller does not duly deliver the Cure Election Notice, then this Agreement on
the day of the Closing, without further action of the parties, shall become
null and void with respect to any Dropped Property that a Cure Election Notice
was not duly given and neither party shall have any further rights or
obligations under this Agreement with respect to any such Dropped Property,
except for the return of the Allocated Xxxxxxx Money with respect to any such
Dropped Properties to the Purchaser and except to the extent that any
provision that is stated to survive the termination of this Agreement would be
applicable to a Dropped Property. Provided, further, if Seller does duly
deliver the Cure Election Notice but does not duly deliver the Cure Notice
within such 90 day period, then this Agreement on the 91st day after Closing,
without further action of the parties, shall become null and void with respect
to any Dropped Property that a Cure Election Notice was duly given but the
Cure Notice was not duly delivered within such 90 day period, and neither
party shall have any further rights or obligations under this Agreement with
respect to any such Dropped Property, except for the return of the Allocated
Xxxxxxx Money with respect to any such Dropped Properties to the Purchaser and
except to the extent that any provision that is stated to survive the
termination of this Agreement would be applicable to a Dropped Property.
Notwithstanding anything herein to the contrary, Seller shall only have the
right to deliver a Cure Election Notice for three (3) Dropped Properties (plus
the Club Apartments, if the reason for dropping same was the failure to have
the Bond Financing assumed and such issue has been cured, but, if the Bonds
are redeemed then the Club Apartments shall count as part of the three (3) and
Seller shall have to elect which of the four (4) Dropped Properties to rescind
its Cure Election Notice and as of such revision date it shall be deemed that
the Cure Election Notice was not given for such Dropped Property).
(ii) Seller and Purchaser shall set a new
Closing Date with respect to any Dropped Property that is the subject of the
Cure Election Notice, which new Closing Date shall be within thirty (30)
business days after receipt by Purchaser of the applicable Cure Notice but no
later than ninety (90) days after the Closing Date (for the non-Dropped
Properties).
(iii) Each such Dropped Property that is the
subject of the Cure Election Notice shall then be subject to all of the terms
and conditions of this Agreement as if it were a Property, and all obligations
and rights of Seller or any Affiliate that owns the Dropped Property that is
the subject of the Cure Election Notice and Purchaser with respect to such
Dropped Property that is the subject of the Cure Election Notice shall be
reinstated under this Agreement except that the Purchase Price for such
Dropped Property that is the subject of the Cure Election Notice shall be its
Release Price and the Closing Date shall be the Closing Date that is agreed to
as aforesaid and the liquidated damages pursuant to Section 10(C) shall be the
Allocated Xxxxxxx Money for all of the Dropped Properties that are the subject
of a Cure Election Notice.
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(C) Right to Terminate for too many Dropped Properties:
Notwithstanding any provision herein to the contrary, if and
only if the total number of Dropped Properties exceeds seven (7) (excluding
such Dropped Properties that are otherwise expressly stated not to count in
determining if seven (7) have dropped), then either party may terminate this
Agreement at the Closing (as it may be adjourned), in which event this
Agreement, without further action of the parties, shall become null and void
and neither party shall have any further rights or obligations under this
Agreement, except for the return of the Xxxxxxx Money to the Purchaser and
except for the provisions that are expressly stated herein to survive the
termination of this Agreement.
(D) The provisions of Section 12 shall survive the
Closing with respect to any Dropped Properties.
13. MISCELLANEOUS
(A) Access:
(i) From the date of this Agreement through
Closing, Purchaser and any of its agents, employees or contractors
(collectively, "Purchaser's Representatives") shall have the right to enter
upon the Property, subject to the rights of tenants under leases and
applicable law, to review and inspect the Properties, including without
limitation to appraise the Property and conduct personal interviews with the
onsite employees (collectively, "Inspections") and then only with the prior
consent of Seller, which shall not be unreasonably withheld or delayed.
Notwithstanding anything herein to the contrary, neither Purchaser nor
Purchaser's Representatives shall conduct any interviews for employment with
the employees of Seller or the Affiliates until 30 days after this Agreement
is approved by the board of directors of Seller and shall not inform any such
employee if Purchaser or its affiliates are planning to hire or fire such
employees until after Seller has had an opportunity to talk with such
employees about same. Notwithstanding the forgoing, neither Purchaser nor
Purchaser's Representatives shall perform any Inspection that is an
environmental Phase II without the prior consent of Seller, which Seller may
grant or deny in its sole discretion (except for the Mohawk Property which
Seller must be reasonable in granting or denying its consent), provided,
however, if Seller withheld such consent and the Purchaser's lender,
consistent with an institutional lender's practices, requires in writing such
Phase II, then Purchaser shall have the right to drop such Property pursuant
to Section 12, provided, further, if such Property is so dropped, it will not
count in the determination if seven (7) Dropped Properties exist for
termination of this Agreement pursuant to the terms of this Agreement. Also
during such time period, Seller shall make all of Seller's and any Affiliate's
books, files and records relating to any Property available for examination by
Purchaser or Purchaser's Representatives, at Seller's offices in New York,
provided, however, that such documentation shall not include any employee
medical records or any other employee records reasonably determined by Seller
to be of a confidential nature. Seller will instruct the Property managers to
reasonably cooperate with Purchaser's exercise of its rights under this
Section 13(A).
(ii) Purchaser shall give Seller reasonable
prior notice of each entry onto the Property, which notice shall include
sufficient information to permit Seller to review the
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scope of the proposed Inspections. Purchaser shall fully comply with all laws,
rules and regulations applicable to the Inspections and all other activities
undertaken in connection therewith and shall permit Seller to have a
representative present during all Inspections undertaken hereunder, including
without limitation, employee interviews.
(iii) Any entry upon any Property and all
Inspections shall be at the sole risk and expense of Purchaser and Purchaser's
Representatives, and shall not unreasonably interfere with the activities on
or about the Property of Seller, its tenants and their invitees.
(iv) Purchaser shall indemnify, defend and hold
harmless Seller and the Affiliates and their partners, shareholders and/or
members, and their respective officers, directors, employees, and agents,
contractors and tenants from and against any and all Claims suffered or
incurred by Seller or any of such other entities or persons and directly
arising out of or in connection with (i) Purchaser's and/or Purchaser's
Representatives' entry upon the Property, (ii) any Inspections or other
activities conducted thereon by Purchaser or Purchaser's Representatives, and
(iii) any liens or encumbrances filed or recorded against the Property as a
consequence of the acts of Purchaser or Purchaser's Representatives in
connection with the Inspections or any and all other activities undertaken by
Purchaser or Purchaser's Representatives at the Property.
(B) No Assignment: Except pursuant to Section 13(L),
neither this Agreement nor any interest hereunder shall be assigned or
transferred by Seller or Purchaser, however, Purchaser may designate any
entity directly or indirectly controlled by Purchaser or some or all of the
principals of Purchaser to take title to the Property or the Interests,
provided however, any such entity shall join in this Agreement and agree to be
bound by it as a "Purchaser." As used in this Agreement, the term "Purchaser"
shall be deemed to include the initial Purchaser and any permitted designee of
the initial Purchaser and all such Purchaser entities shall be jointly and
severally liable under this Agreement. Subject to the foregoing, this
Agreement shall inure to the benefit of and shall be binding upon Seller and
Purchaser and their respective successors and assigns.
(C) Entire Agreement/ Severability: This Agreement
constitutes the entire agreement between Seller and Purchaser with respect to
the Properties and shall not be modified or amended except in a written
document signed by Seller and Purchaser. Any prior agreement or understanding
between Seller and Purchaser concerning the Properties is hereby rendered null
and void. The provisions of this Agreement are severable, and if any provision
or part hereof or the application thereof to any person or circumstance shall
ever be held by any court of competent jurisdiction to be invalid or
unconstitutional for any reason, the remainder of this Agreement and the
application of such provision or part hereof to other persons or circumstances
shall not be affected thereby, unless the invalidation of such provision or
its application materially interferes with the intent of the parties hereto.
(D) Timing. In the computation of any period of time
provided for in this Agreement or by law, the day of the act or event from
which the period of time runs shall be excluded, and the last day of such
period shall be included, unless it is a Saturday, Sunday, or legal holiday,
in which case the period shall be deemed to run until the end of the next day
which is not a Saturday, Sunday, or legal holiday.
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(E) Notices: All notices, requests, demands or
other communications required or permitted under this Agreement shall be in
writing (and may be given by such party's attorney) and delivered personally
or by certified mail, return receipt requested, postage prepaid, or by Federal
Express or Airborne Express, addressed as follows:
1. If to Seller:
New Plan Excel Realty Trust, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, and
Attention: Xxxx Xxxxxxxxx
Phone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Phone: (212) -728-8000
Telecopier: (000) 000-0000
2. If to Purchaser:
c/o Xxxxxxxx-Xxxxxx Realtors, LLC
Xxx Xxxx Xxx Xxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Phone: (000) 000-0000
Telecopier: (000) 000-0000
And:
CLK Management
0 Xxxx Xxxxx
Xxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxxx
Phone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
Xxxxxxx, Xxxxxxxxx LLP
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
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Phone: (000) 000-0000
Telecopier: (000) 000-0000
All notices given in accordance with the terms hereof shall be deemed given
and received when delivered personally; the following business day if sent by
overnight courier; or the third business day if sent by certified mail. Either
party hereto may change the address for receiving notices, requests, demands
or other communication by notice sent in accordance with the terms of this
Section.
(F) Governing Law: This Agreement shall be governed and
interpreted in accordance with the laws of the State of New York, without
giving effect to the conflicts of laws principles thereof, except to the
extent the law of the State where the Property is located governs the transfer
of the Property. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. Any legal action or proceeding with respect
to this Agreement or any of the transactions contemplated herein may be
brought in the courts of the State of New York located in the County of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, each of the parties hereto
hereby accepts generally and unconditionally, the exclusive jurisdiction of
the aforesaid courts. Each of the parties hereto hereby irrevocably waives, in
connection with any such action or proceeding, any objection, including,
without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(G) Counterparts: This Agreement may be executed in any
number of identical counterparts, any or all of which may contain the
signatures of fewer than all of the parties but all of which shall be taken
together as a single instrument.
(H) No Offer: This Agreement does not constitute an
offer to sell or an offer to buy and shall not bind Seller or Purchaser unless
and until each such party elects to be bound hereby by executing and
delivering to the other party an executed original counterpart hereof and the
Escrowee receives the Xxxxxxx Money.
(I) Indemnities
(i) Subject to the Damage Cap and the
Deductible, if applicable, Seller shall defend, indemnify and hold Purchaser
and its partners, shareholders and/or members and their respective officers,
directors, employees, and agents harmless from all loss, cost, expense, damage
and liability (including, without limitation, reasonable attorneys' fees and
disbursements) resulting from (a) any Claims for injury to or death of persons
which are due to the negligent or otherwise tortious acts or omission of
Seller or its Affiliates prior to the Closing; (b) Claims by tenants under
Leases, including, without limitation, for the misapplication of the security
deposits, contractors under Service Contracts (except to the extent adjusted
for
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hereunder) or utility companies with respect to matters that occurred or
obligations that accrued (provided, however, for clarification, in the case of
an agreement, "accrued" shall not be deemed to mean at the time of entering
into such agreement, but as and when such service is provided or action is
taken under or in connection with such agreement) on or prior to the Closing
Date for the applicable Property; and (c) if the Bonds are assumed, Claims
made by any person or entity except Purchaser with respect to the Bonds, the
Bond Documents, the Bond Financing and any alternate security or credit and/or
liquidity enhancements provided or obtained by Seller with respect to the Bond
Financing that arise on or prior to the Closing Date with respect to the
applicable Property; provided, however, the indemnity in this Section
expressly excludes any matter relating to Hazardous Materials.
(ii) Subject to the Damage Cap and the
Deductible, Purchaser shall defend, indemnify and hold Seller and the
Affiliates and their partners, shareholders and/or members and their
respective officers, directors, employees, and agents, harmless from all loss,
cost, expense, damage and liability (including, without limitation, reasonable
attorneys' fees and disbursements) resulting from (a) any Claims for injury to
or death of persons which are due to the negligent or otherwise tortious acts
or omission of Purchaser from and after the Closing, (b) Claims by tenants
under Leases, including, without limitation, for the misapplication of the
security deposits, actually delivered to Purchaser, or for which Purchaser
received a credit for under this Agreement, contractors under Service
Contracts (except to the extent adjusted for hereunder) or utility companies
with respect to matters that occur or obligations that accrue (provided,
however, for clarification, in the case of an agreement, "accrue" shall not be
deemed to mean at the time of entering into such agreement, but as and when
such service is provided or action is taken under or in connection with such
agreement) after the Closing Date for the applicable Property and (c) if the
Bonds are assumed, Claims made by any person or entity except Seller or its
Affiliate, with respect to the Bonds, the Bond Documents, the Bond Financing
and any alternate security or credit and/or liquidity enhancements provided or
obtained by Purchaser with respect to the Bond Financing that arise after the
Closing Date with respect to the applicable Property, provided, however, the
indemnity in this Section expressly excludes any matter relating to Hazardous
Materials.
(J) Confidentiality: Notwithstanding anything herein to
the contrary, Purchaser confirms and ratifies all of its obligations set forth
in the Confidentiality Agreement executed by it and such obligations are
incorporated herein, an executed copy of same is attached hereto as Exhibit M.
Purchaser confirms that Seller is the intended beneficiary of such
Confidentiality Agreement and Seller has the right to enforce any provision
contained therein. Purchaser shall not make any press releases relating to
this Agreement without the prior consent of Seller, which consent may be
granted or denied in Seller's sole discretion. Seller may issue any press
release that it deems desirable or necessary with respect to this Agreement or
the transactions contemplated hereby without the consent of Purchaser,
however, Seller shall consult with Purchaser (which shall not be deemed to
require the Purchaser's consent therefor) prior to the issuance of any press
releases relating to this Agreement or the transactions contemplated hereby.
The provisions the Confidentiality Agreement shall expire with respect to any
particular Property after the Closing on such Property; however, with respect
to any information regarding a Property that does not close or information
with respect to the Seller independent of the Properties, such provisions
shall continue to be effective.
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(K) Knowledge: For purposes of this Agreement,
"knowledge" with respect to Seller shall mean matters as to which Xxxxxx X.
Xxxxxx, Xxxx Xxxxxxxxx, Xxxxx Wight or Xxxx Xxxxxxx have actual knowledge
without any duty or responsibility to make any inquiry, review or
investigation except to inquire of the regional managers for the Properties.
(L) 1031 Transaction: Notwithstanding anything to the
contrary set forth herein, Seller may take such steps as Seller shall deem
necessary or desirable to qualify the sale of each Property (or any portion
thereof) under Section 1031 of the Code (a "1031 Transaction"), including the
use of, and/or assignment of this Agreement to, a "qualified intermediary"
within the meaning of Treas. Regs. Section 1.1031(k)-(g)(4), or the use of any
other multiparty arrangement described in Treas. Regs. Section 1.1031(k)-1(g).
Purchaser shall cooperate (which cooperation shall be at Seller's expense) in
so structuring a 1031 Transaction, if so desired by Seller, provided that such
structuring shall not affect Purchaser's rights hereunder except to a de
minimis extent. Notwithstanding anything to the contrary contained herein, in
no event shall Purchaser be required to accept title to any property other
than the Property in connection with any such 1031 Transaction. Seller agrees
to indemnify Purchaser from and against all losses resulting from any claim
made against Purchaser in connection with such 1031 Transaction by Seller.
Seller shall cooperate (which cooperation shall be at Purchaser's expense) in
so structuring a 1031 Transaction, if so desired by Purchaser, provided that
such structuring shall not affect Seller's rights hereunder except to a de
minimis extent. Notwithstanding anything to the contrary contained herein, in
no event shall Seller be required to accept any property other than cash in
connection with any such 1031 Transaction from any entity in satisfaction of
Purchaser's obligation to pay the Cash Balance (subject, however, to the
provisions of Section 16). Purchaser agrees to indemnify Seller from and
against all losses resulting from any claim made against Seller in connection
with such 1031 Transaction of Purchaser.
(M) Satisfaction of Obligations: The acceptance of the
deeds to the Properties or assignments of the Interest by Purchaser shall be
deemed an acknowledgment by Purchaser that Seller has fully complied with all
of its obligations hereunder and that Seller is discharged therefrom and that
Seller shall have no further obligation or liability with respect to any of
the agreements made by Seller in this Agreement, except for those provisions
of this Agreement which expressly provide that any obligation of Seller shall
survive the Closing. The acceptance of the Cash Balance by Seller shall be
deemed an acknowledgment by Seller that Purchaser has fully complied with all
of its obligations hereunder and that Purchaser is discharged therefrom and
that Purchaser shall have no further obligation or liability with respect to
any of the agreements made by Purchaser in this Agreement, except for those
provisions of this Agreement which expressly provide that any obligation of
Purchaser shall survive the Closing.
(N) Release by Purchaser: Without limiting any
provision in this Agreement, Purchaser, for itself and any of its successors
and assigns and their affiliates, hereby irrevocably and absolutely waives its
right to recover from, and forever releases and discharges, and covenants not
to file or otherwise pursue any legal action (whether based on contract,
statutory rights, common law or otherwise) against, Seller, the Affiliates or
their affiliates or any direct or indirect partner, member, trustee, director,
shareholder, controlling person, affiliate officer, attorney, employee, agent
or broker of any of the foregoing, and any of their respective heirs,
successors, personal representatives and assigns (each a "Released Party" and
collectively, "Released Parties") with respect to any Claims that may arise on
account of or in any way be
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connected with any Property or any portion thereof, including, without
limitation, the physical, environmental and structural condition of any
Property or any law or regulation applicable thereto, or any other matter
relating to the use, presence, discharge or release of Hazardous Materials on,
under, in, above or about any of the Properties; provided, however, that
Purchaser does not waive its rights, if any, to recover from, or release or
discharge or covenant not to bring any action against (i) Seller or any
Released Party for any act that constitutes fraud, (ii) Seller for any breach
of the representations or warranties set forth in this Agreement, subject to
the limitations and conditions provided in the other provisions of this
Agreement or (iii) Seller for its covenants and obligations under this
Agreement, including, without limitation, Seller's indemnities. In connection
with this Section, Purchaser expressly waives the benefits of any provision or
principle of federal or state law or regulation that may limit the scope or
effect of the foregoing waiver and release. For purposes of this Agreement,
the term "Hazardous Materials" means any substance, chemical, compound,
product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or other
material that is hazardous, toxic, ignitable, corrosive, carcinogenic or
otherwise presents a risk of danger to human, plant or animal life or the
environment or that is defined, determined or identified as such in any
federal, state or local law, rule or regulation (whether now existing or
hereafter enacted or promulgated) and any judicial or administrative order or
judgment, in each case relating to the protection of human health, safety
and/or the environment, including, but not limited to, any materials, wastes
or substances that are included within the definition of (A) "hazardous waste"
in the federal Recourse Conservation and Recovery Act; (B) "hazardous
substances" in the federal Comprehensive Environmental Response, Comprehension
and Liability Act; (C) "pollutants" in the federal Clean Water Act; (D) "toxic
substances" in the federal Toxic Substances Control Act; and (E) "oil or
hazardous materials" in the laws or regulations of any State. "Claims" shall
mean any and all suits, actions, proceedings, investigations, demands, claims,
liabilities, obligations, fines, penalties, liens, judgments, losses,
injuries, damages, settlement expenses or costs of whatever kind or nature,
whether direct or indirect, known or unknown, contingent or otherwise
(including any action or proceeding brought or threatened or ordered by any
governmental authority), including, without limitation, attorneys' and
experts' fees and expenses, and investigation and remediation costs.
(O) Lead Paint Disclosure: Contemporaneously with the
execution of this Agreement, Purchaser and Seller shall duly fill out, execute
and deliver the lead paint disclosure form attached hereto as Exhibit G-5.
Notwithstanding anything herein or therein to the contrary, Seller's delivery
of any Lead Paint Disclosure Form delivered in connection with this
transaction shall not in any way constitute an exception to or otherwise
diminish the release set forth in Section 13(N) with respect to Hazardous
Materials.
(P) THE FOLLOWING RADON GAS NOTICE IS GIVEN PURSUANT TO
SECTION 404.056, FLORIDA STATUTES. RADON IS A NATURALLY OCCURRING RADIOACTIVE
GAS THAT, WHEN IT IS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY
PRESENT HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF
RADON THAT EXCEED FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN
FLORIDA. ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE
OBTAINED FROM THE COUNTY PUBLIC HEALTH DEPARTMENT IN FLORIDA.
(Q) Survival: The provisions of the foregoing Xxxxxxxx
(X)(xx), (X), (X), (X), (X), (X), (X), (X), (X) and (O) in this Section shall
survive the Closing or any termination of this Agreement. Notwithstanding
anything to the contrary contained in this Agreement, no provision
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hereof shall survive beyond the period of the applicable statute of
limitations, except the provisions governing the Damage Cap and Entity Level
Damage Cap, which shall survive as long as the pertinent provision or Claim
with respect to which the Damage Cap or Entity Level Damage Cap are invoked
survive.
(R) Exhibits: The Recitals to this Agreement and the
Exhibits attached hereto are hereby incorporated by reference into the body of
this Agreement and made a part hereof; provided, however, the main body of
this Agreement shall govern any inconsistencies with respect to any form
documents.
(S) Timing: Any notice or other actions required under
this Agreement must be performed by 5:00 p.m. on the date in which they are
required to be performed on.
14. INDEMNIFICATION PROCEDURES
(i) For purposes of this Section, the term
"Asserting Party" shall mean the party against whom a Claim is asserted and
who seeks indemnification under this Agreement, and the term "Defending Party"
shall mean the party from whom indemnification is sought under this Agreement.
(ii) If a Claim is made against the Asserting
Party which the Asserting Party believes to be covered by the Defending
Party's indemnification obligation under this Agreement, the Asserting Party
shall promptly notify the Defending Party of the Claim and, in such notice,
shall offer to the Defending Party the opportunity to assume the defense of
the Claim within 10 business days after receipt of the notice (with counsel
reasonably acceptable to the Asserting Party). If the Defending Party timely
elects to assume the defense of the Claim, the Defending Party shall do so on
behalf of both the Asserting Party and the Defending Party, unless both the
Asserting Party and the Defending Party are named in the same litigation and
representation of both of them by the same counsel would be inappropriate.
(iii) If the Defending Party timely elects to
assume the defense of the Claim, the Defending Party shall have the right to
settle the Claim on any terms it considers reasonable as long as the
settlement shall not require the Asserting Party to render any performance or
pay any consideration without its consent and provides for an unconditional
release from all liability with respect to such Claim of the Asserting Party.
(iv) If the Defending Party fails timely to
elect to assume the defense of the Claim, or if the Defending Party timely
elects to assume the defense of the Claim but thereafter fails to defend the
Claim with diligence and continuity, the Asserting Party shall have the right,
after giving prior written notice to the Defending Party, to take over the
defense of the Claim and to settle the Claim on any terms it considers
reasonable. Any such settlement shall be valid as against the Defending Party.
(v) If the Defending Party assumes the defense
of a Claim, the Asserting Party may employ its own counsel but such employment
shall be at the sole expense of the Asserting Party. If the Defending Party
assumes the defense of a Claim but the same counsel may not represent both the
Asserting Party and the Defending Party, or if the Defending Party fails
timely to assume the defense of the Claim or, after having elected to assume
the defense
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fails to defend the Claim with diligence and continuity, the Asserting Party
may employ its own counsel and such employment shall be at the sole expense of
the Defending Party.
(vi) Whether or not the Defending Party elects
to assume the defense of a Claim, the Defending Party shall cooperate with the
Asserting Party in the defense of the Claim. If the Defending Party elects to
assume the defense of a Claim, the Asserting Party will cooperate with the
Defending Party in such defense.
(vii) If the Asserting Party is obligated to pay
amounts for which it is entitled to be indemnified hereunder, then Defending
Party shall be obligated, unless such amounts shall be reimbursed to the
Asserting Party within ten (10) days of demand therefor, to pay interest on
such amounts thereafter until paid at a per annum rate equal to 2% above the
rate announced as its "prime rate" by Citibank, N.A. (or any successor bank
thereto).
(viii) If the Asserting Party is obligated to
perform repairs or other work in connection with any Claims for which it is
entitled to indemnification hereunder then, except in the case of any
emergency situation which involves immediate threat of damage or injury to
persons or property (as to which no such notice shall be required to be given
until the earliest practicable opportunity), the Asserting Party shall give a
written notice to Defending Party setting forth the general nature of such
repairs or other work and, if the Defending Party fails to commence or, in the
case of the foregoing emergency situation assume the continuation of such
repairs or other work within ten (10) days after such written notice or,
having commenced such repairs or other work, fails to diligently prosecute
such repairs or other work to completion, then such Asserting Party shall be
entitled to (and shall at all times) perform such repair or other work in a
manner which a reasonable and prudent owner of apartment buildings similar to
the Property located where the Property is located would cause such work to be
performed.
(ix) The provisions of this Section shall
survive the Closing or termination of this Agreement for so long as and be
applicable to any indemnity herein that survives the Closing or termination of
this Agreement.
15. INTEREST TRANSFERS
(A) Seller shall convey the Interests in a Property
Owner that Seller or an Affiliate owns instead of transferring the Property
directly if such Property is so noted on Exhibit A, and with respect to such
Property and Property Owner, the following shall also apply:
(i) Seller represents and covenants that as of
the Closing Date:
(a) Seller or an Affiliate owns or
will own as of the Closing Date legal and beneficial title in and to the
Interests in each Property Owner. As of the Closing Date the Interests will be
held free of liens, encumbrances, judgments, adverse interests, pledges or
security interests, other than Permitted Exceptions, to the extent applicable,
and shall not be subject to any right or option of any person to purchase or
otherwise obtain title to or an interest in the Property Owner. Seller or an
Affiliate has the full right, power, capacity and authority to validly convey
its Interest in the applicable Property Owner;
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(b) The outstanding Interests in the
Property Owners have been duly authorized and validly issued in accordance
with the Property Owner's organizational documents;
(c) Each Property Owner is duly
organized and validly existing under the laws of its jurisdiction of
organization and has the power and authority to carry on its business as now
being conducted;
(d) Each Property Owner is or shall
be as of the Closing Date duly qualified to do business and is or shall be as
of the Closing Date in good standing in each jurisdiction in which the nature
of its business or the ownership and/or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the failure to
be so qualified or licensed, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the entity's
business or operations as currently conducted;
(e) None of the Property Owners has
conducted or currently conducts any business or has owned or owns any assets
other than cash and investment securities and direct or indirect interests in
a Property and assets relating thereto;
(f) Exhibit O attached hereto
identifies for each Property Owner the relevant certificate of limited
partnership or certificate of formation or incorporation, as applicable, the
relevant partnership or operating agreement or other organizational documents,
as applicable, and in each case all amendments thereto through the date of
this Agreement, and Seller has delivered to Purchaser complete and correct
copies of each of such instruments, agreements and amendments;
(g) Except for such matters as,
individually or in the aggregate with other such matters, would not have a
material adverse effect on the Property Owner, (A) all tax returns required to
be filed on or before the date hereof (including any valid extensions of time
to file such tax returns) by or on behalf of each Property Owner have been
filed through the date hereof or will be filed on or before the Closing Date
with respect to its related Property in accordance with all applicable laws;
(B) there is no action, suit or proceeding pending against, or with respect
to, any of the Property Owners for any taxes, nor has any claim for additional
taxes been asserted by any such authority; and (C) all taxes reflected upon or
required to be reflected upon a tax return so filed or so to be filed on or
before the applicable Closing Date have been paid or will be paid on or before
such Closing Date, unless such taxes are being contested in good faith and
adequate reserves for the payment of such taxes have been established by the
applicable Property Owner;
(h) Except as set forth on Exhibit J
hereto, there is no pending or, to Seller's knowledge, threatened tax audit of
any tax return filed by or on behalf of any Property Owner or with respect to
any Property Owner's income, operations, properties or assets or any tax
return by or on behalf of any other Person as to which any Property Owner may
have liability for any such Person's taxes (whether by operation of law or by
contract);
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(i) Except as provided on Exhibit J,
there is no action or proceeding or, investigation pending against any
Property Owner (but not its Property) before any court or governmental
department, commission, board, agency or instrumentality;
(j) None of the Property Owners is in
breach of, or default under, the constituent organizational documents of such
Property Owner, no partner or member of any Property Owner is in breach of, or
default under, the organizational documents of such Property Owner and no
event has occurred that, with the giving of notice or the passage of time, or
both, would constitute a default under the constituent organizational
documents of any of the Property Owners;
(k) As of the Closing Date, no
Property Owner will have any liabilities other than those that are being
apportioned pursuant to this Agreement or which Purchaser would have otherwise
been assumed under this Agreement if the Property was transferred by deed; and
(l) Seller will cause the Property
Owner to liquidate and close each and every account, safe deposit box, trust
account or other custodial account if the Property Owner has any, and
distribute such funds to the Seller or an Affiliate that owns the equity
interest in the Property Owner as of the day prior to Closing.
(ii) The foregoing warranties and
representations in Section 15(A)(i) of Seller shall survive the execution and
delivery of this Agreement, the Closing and delivery of all documents and any
and all performances in accordance with this Agreement until the applicable
statute of limitations runs.
(iii) Subject to the Entity Level Damage Cap, if
applicable, but not the Deductible, Seller agrees to indemnify, defend and
save harmless Purchaser and its partners, shareholders and/or members, and
their respective officers, directors, employees, and agents from and against
all Claims arising as a result of (a) the sale of the Interest in the Property
Owner pursuant to the terms and conditions hereof (that Purchaser would not
have had if Purchaser acquired the Property pursuant to the terms and
conditions of this Agreement and not the Interest in the Property Owner) (the
"Entity Level Liability") or (b) a material breach of the representations
contained in this Section 15 by Seller. The provisions of this Section
15(A)(iii) shall survive until the applicable statute of limitations runs.
(iv) Subject to the Entity Level Damage Cap, if
applicable, but not the Deductible, Purchaser agrees to indemnify, defend and
save harmless Seller and the Affiliates and their partners, shareholders
and/or members, and their respective officers, directors, employees, and
agents, from and against all Claims arising as a result of (a) the purchase of
the Interest in the Property Owner pursuant to the terms and conditions hereof
(that Seller would not have had if Purchaser acquired the Property pursuant to
the terms and conditions of this Agreement and not the Interest in the
Property Owner) and (b) a material breach of any representation in Section
15(B). The provisions of this Section 15(A)(iv) shall survive until the
applicable statute of limitations runs.
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(B) Purchaser represents and warrants that Purchaser is
an "accredited investor" as such term is defined in Section 501(a) of the
Securities Act of 1933 (the "Securities Act"). Purchaser, for itself, and for
each partner, member or other equity holder of Purchaser, hereby acknowledges
that it (i) has been given full and complete access to the Seller and the
Affiliates and its management in connection with this Agreement and the
transactions contemplated hereby, (ii) has had the opportunity to review all
documents relevant to its decision to enter into this Agreement and to request
other documents to review, and (iii) has had the opportunity to ask questions
of the Seller and the Affiliates and its management concerning its investment
in the Property Owners and the transactions contemplated hereby. Purchaser,
for itself and for each partner, member or other equity holder of Purchaser,
acknowledges that it understands that the Interests to be purchased or
received by it hereunder will not be registered under the Securities Act in
reliance upon the exemption afforded by Section 4(2) thereof for transactions
by an issuer not involving any public offering and will not be registered or
qualified under any applicable state securities laws. Purchaser, for itself
and for each partner, member or other equity holder of Purchaser, represents
that (i) it is acquiring such Interests for investment only and without any
view toward distribution thereof in violation of any applicable securities or
other laws, and it will not sell or otherwise dispose of such Interests except
in compliance with the registration requirements or exemption provisions of
any applicable federal or state securities laws, (ii) its economic
circumstances are such that it is able to bear all risks of the investment in
the Interests for an indefinite period of time, including the risk of a
complete loss of its investment in the Interests, (iii) it has knowledge and
experience in financial and business matters sufficient to evaluate the risks
of investment in the Interests, and (iv) it has consulted with its own counsel
and tax advisor, to the extent deemed necessary by it, as to all legal and
taxation matters covered by this Agreement and has not relied upon the Seller
or any Affiliate for any explanation of the application of the various federal
or state securities laws or tax laws with regard to its acquisition of the
Interests. Purchaser, for itself and for each partner, member or other equity
holder of Purchaser, further acknowledges and represents that it has made its
own independent investigation of each Property Owner and the business proposed
to be conducted by each Property Owner and Purchaser, has not and does not
rely upon any statement, information, or representation to whomsoever made or
given, whether to purchaser or others, and whether directly or indirectly,
verbally or in writing, made by any person, firm or corporation, except as
expressly set forth herein. The provisions of this Section 15(B) shall survive
until the applicable statute of limitations runs. The foregoing provisions of
this Section 15(B) shall not diminish any rights of Purchaser under the other
applicable provisions of this Agreement.
(C) Apportionments and prorations shall, to the extent
required to be made under this Agreement in connection with a Property
transfer, be made in connection with Interest transfers, as if the Seller or
Affiliate that transferred the Interest transferred the Property.
(D) Notwithstanding anything herein to the contrary,
Seller shall have the right to transfer Charter Pointe Apartments to a wholly
owned (directly or indirectly) entity prior to Closing, at which time such
entity shall become an Affiliate.
(E) Notwithstanding anything herein to the contrary,
Purchaser shall have the option, which must be exercised by notice to Seller,
not later than five (5) business days prior to Closing, to require that any or
all of the Properties be conveyed by deed and not by Interest transfer under
this Section 15. If Purchaser duly exercises such option, then Purchaser shall
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reimburse Seller at the Closing for the transfer tax that Seller is obligated
to pay hereunder with respect to such Properties that are identified by
Purchaser when it exercises its option under this Section 15.
(F) Notwithstanding anything to the contrary contained
herein, defaults and indemnities under this Section 15 are not subject to the
Damage Cap, Threshold Amount or Deductible (except with respect to the
following matters: (i) fraud, (ii) breach of the tax representations in
Sections 15(A)(i)(g) and (h), and (iii) the first sentence of Section
15(A)(i)(a) (collectively the "Carved Out Entity Level Items"), which Carved
Out Entity Level Items are not subject to any liability cap including, without
limitation, the Entity Level Damage Cap)), but each party's maximum liability
for any and all damages or Claims for Entity Level Liabilities hereunder or in
connection herewith, other than with respect to the liquidated damages set
forth in Section 10(C), including without limitation, any Claims for
indemnification under this Section 15 shall be Seven Million Five Hundred
Thousand Dollars ($7,500,000) (the "Entity Level Damage Cap"), provided,
however, that neither party shall be liable for any consequential or indirect
damages. The provisions of this Section 15(F) shall survive Closing or earlier
termination of this Agreement. For clarification, the Entity Level Damage Cap
is in addition to the Damage Cap, each of which apply to different Claims.
16. MEZZANINE FINANCING
(A) Within 45 days from the date hereof Purchaser shall
elect one of the following two options: (i) to have Seller provide a letter of
credit in the amount of $40,000,000, which may be reduced if so specified in
such notice to not less than $35,000,000, as additional collateral for the
loan to the owners of the Properties at the Closing, as more particularly
provided in the Mezzanine Loan Documents or (ii) to have Seller provide a
mezzanine loan to the owners of the Properties in the amount of $40,000,000,
which may be reduced if so specified in such notice to not less than
$35,000,000, as more particularly provided in the Mezzanine Loan Documents; if
Purchaser fails to make such election, Purchaser shall be deemed to have
elected the letter of credit option at $40,000,000. If Purchaser elects option
(ii) to obtain a mezzanine loan from Seller, notwithstanding anything herein
to the contrary, the Cash Balance shall be reduced by the amount of such loan.
In no event will the letter of credit amount or the mezzanine loan amount
exceed Purchaser's equity in the Properties as more particularly provided in
the Mezzanine Loan Documents.
(B) As a condition precedent to Seller's obligation to
close, Purchaser shall satisfy all of the conditions set forth in the
Mezzanine Loan Documents (forms of which are attached hereto), including the
payment of points, delivery of opinions and confirming that no default will
exist under such documents at the time of Closing (such failure by Purchaser
shall be a material default). Purchaser agrees and acknowledges that as a
material inducement for Seller to enter into this Agreement, Purchaser has
agreed to fulfill its obligations under this Section 16 and to elect either of
the two options set forth in Section 16(A).
(C) Purchaser and Seller agree to make any commercially
reasonable changes to the Mezzanine Loan Documents, reasonably requested by
the third party lender (the "Senior Lender") to the owners of the Property,
provided, however, no modification shall be required if such modification or
amendment would (i) change the interest rate, the stated maturity, the
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amortization of principal, the fees payable or the reimbursement obligations
set forth in the Mezzanine Loan Documents, (ii) modify or amend any other
material economic terms, or (iii) otherwise materially increase the
obligations or materially decrease the rights (including without limitation
the transferability by Seller, the collateral of Seller, or the value of the
Mezzanine Loan) of Seller, including without limitation, require that there be
multiple loans that are not cross collateralized and cross defaulted as such
cross default and collateralization is a condition to the Mezzanine Loan. In
addition, it is agreed that the Mezzanine Loan Documents executed at Closing
will reflect (x) the option that Purchaser has exercised or is deemed to have
exercised and (y) the entity and type of entity assuming the obligations
thereunder (the "Mezzanine Borrower"), so long as such entity fulfills the
requirements set forth therein (even if there are multiple Mezzanine Borrowers
that are joint and severally liable).
(D) If Seller and the Senior Lender are not able to
agree on the final form of the Mezzanine Loan Documents to be entered into at
Closing and execute and deliver same, if applicable, and Seller is using its
good faith efforts and acting in a commercially reasonable manner (provided,
however, Seller shall be deemed to be acting commercially reasonable and in
good faith if Seller does not agree to any changes to the forms of the
Mezzanine Loan Documents that are not required in Section 16(C) and shall not
be required to make any changes to the forms of the Mezzanine Loan Documents
that are not required in Section 16(C)), then such failure will be deemed a
material default by Purchaser under this Agreement.
(E) Notwithstanding anything to the contrary, Purchaser
may require that the financing provided by Seller under this Section 16 be
divided into two separate loans that are cross defaulted but not cross
collateralized, provided that each of the following conditions are met: (a)
the Mezzanine Borrower under each portion of the financing provided by Seller
under this Section 16(E) must be the same entity; (b) the collateral and the
loan amount for each portion of the financing provided by Seller under this
Section 16(E) must be allocated in substantially the same proportions as the
Release Price is allocated under this Agreement; (c) in the event of the sale
or refinancing of a Property, either (i) the Property Owners shall agree to
deliver to the Senior Lender and, if delivered to the Senior Lender, the
Senior Lender agrees to deliver to the Seller, to be held a segregated escrow
account for the benefit of Mezzanine Borrower (the "Escrow Account") but as
collateral for the financing provided by Seller under this Section 16(E), the
amount received by such Senior Lender as the net proceeds of the sale or
refinancing of such Property minus any amounts that such Senior Lender is
permitted under its loan documents to apply or retain, up to an aggregate
maximum amount of $40 million to be held in escrow (collectively, the
"Excess") or (ii) the individual principals (the "Principals") of the
Mezzanine Borrower who own or control no less than fifty-one percent (51%) of
the Mezzanine Borrower as identified in the Pledge Agreement shall execute a
joint and several personal guaranty in an amount equal to the portion of the
Excess that is distributed or paid to any, direct or indirect, member, partner
or other owner of interests in the Mezzanine Borrower or any of their
Affiliates in violation of the Mezzanine Loan Documents; (d) each of the
members, partners, or other owner, as the case may be, of the Mezzanine
Borrower shall pledge to Seller all of its interests in the Mezzanine Borrower
as security for the financing provided by Seller under this Section 16(E) and
all covenants, representations and restrictions applicable to the collateral
in the Pledge Agreement shall apply thereto; (e) the Principals shall jointly
and severally guaranty to Seller the financing provided by Seller under this
Section 16(E), up to an aggregate
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maximum amount equal to the lesser of $4,000,000 and the amount of any loss
incurred by Seller as a result of not having the entire financing provided by
Seller under this Section 16(E) fully cross-collateralized, including additional
enforcement costs; (f) a cash management agreement shall be executed by the
Mezzanine Borrower and Seller requiring the Mezzanine Borrower to cause the
Property Owners to deliver the Excess to the Escrow Account; and (g) the
documents necessary to provide for the terms of this Section 16(E), including
additional counsel opinions on such matters as Seller reasonably requires, must
be satisfactory to Seller, in its sole discretion. In the event the Seller's
financing is structured as provided in this Section 16(E), financial statements
on each of the guarantors shall be provided to Seller prior to the closing and
shall be updated annually for as long as such financing is outstanding. If any
of the foregoing conditions are not satisfied, Purchaser shall not be permitted
to divide the Seller's financing into two parts and the Purchaser shall be
required to close the transactions provided for herein with Seller's financing
in the form originally contemplated by this Agreement.
17. NO SHOP/BOARD APPROVAL/TERMINATION FEE
(A) Seller agrees that from the date hereof until the
board of directors of Seller meets and votes on this Agreement, it or its
authorized agents will not negotiate or otherwise pursue, solicit or discuss
any additional offer for the sale of any or all of the Properties or any
interest therein. In addition, Seller agrees to continue to instruct Xxxxxxx
Xxxxx Xxxxxx not to take any of such actions on Seller's behalf.
(B) Notwithstanding anything herein to the contrary,
this Agreement is subject to the approval of the board of directors of Seller.
If the board of directors does not approve this Agreement, in its sole and
absolute discretion, on or before May 18, 2001 then this Agreement shall
immediately terminate in which event this Agreement, without further action of
the parties, shall become null and void and neither party shall have any
further rights or obligations under this Agreement, except for (i) the return
of the Xxxxxxx Money to Purchaser, (ii) the payment by Seller to Purchaser of
all Purchaser's actual out of pocket expenses (including reasonable legal
fees) incurred to third parties after the date hereof in connection with the
transactions contemplated hereunder, and (iii) the provisions that are
expressly stated herein to survive the termination of this Agreement. Seller
shall present this Agreement for approval at the next meeting of the board of
directors which is scheduled on May 16, 2001.
18. TABLE OF DEFINED TERMS
The terms set forth below are defined on the following
Sections of this Agreement:
Defined Term Section
------------ -------
$7.5M Damage Cap Section 10(E)
1031 Transaction Section 13(L)
Affiliate and Affiliates Recitals
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Defined Term Section
------------ -------
Aggregate Title Cap Section 4(C)
Agreement Preamble
Allocated Xxxxxxx Money Section 12(A)(iv)
Allocated Purchase Price Section 2(A)
Applicable Numerator Section 12(A)(vi)(d)
Asserting Party Section 14(i)
Bond Compliance Date Section 8(A)
Bond Counsel Section 8(A)
Bond Documents Section 4(A)(viii)
Bond Financing Section 4(A)(viii)
Bonds Section 4(A)(viii)
Carved Out Entity Level Items Section 15(F)
Carved Out Items Section 10(E)
Cash Balance Section 2(C)
Claims Section 13(N)
Closing Section 5(A)
Closing Date Section 5(A)
Condemnation Section 3(B)
Consent Section 8(A)
Credit Enhancement Documents Section 5(B)(ii)(d)
Credit Mortgage Section 4(A)(viii)
Cure Election Notice Section 12(B)(i)
Cure Notice Section 12(B)(i)
Damage Cap Section 10(E)
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Defined Term Section
------------ -------
Deductible Section 10(E)
Defending Party Section 14(i)
Drop Notice Section 12(A)
Dropped Property and Dropped Properties Section 12(A)
Xxxxxxx Money Section 2(B)(i)
Entity Level Damage Cap Section 15(F)
Entity Level Liability Section 15(A)(ii)
Environmental Law Section 7(A)(xii)
Environmental Report Section 7(A)(xii)
Escrowee Section 2(B)(i)
Hazardous Materials Section 13(N)
Improvements Section 1(C)
Individual Title Cap Section 4(C)
Inspections Section 13(A)(i)
Interests Preamble
Issuer Section 5(B)(ii)(c)
Knowledge Section 13(K)
Land Section 1(A)
Leases Section 1(F)
Major Event Section 6(A)
Mezzanine Loan Documents Section 5(B)(i)(n)
Net Change Section 12(A)(vi)(b)
Net Proceeds Section 6(A)
New Denominator Section 12(A)(vi)(c)
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Defined Term Section
------------ -------
New Environmental Reports Section 7(A)(xii)
Non-Capped Exceptions Section 4(C)
Objection Cut Off Date Section 4(C)
Permitted Exceptions Section 4(A)
Personal Property Section 1(D)
Premises Section 1(C)
Property and Properties Section 1
Property Owner Preamble
Purchase Price Section 2(A)
Purchaser Preamble and Section 13(B)
Purchaser's Representatives Section 13(A)(i)
Release Price Section 12(A)(iii)
Released Party and Released Parties Section 13(N)
Rent Roll Section 7(A)(xi)
Representation Survival Period Section 7(C)
Securities Act Section 15(B)
Seller Preamble
Senior Lender Section 16(C)
Service Contracts Section 7(A)(iv)
Survey Section 4(B)(iii)
Threshold Amount Section 10(A)
Title Commitment Section 4(B)(i)
Title Insurer Section 4(B)(i)
Trustee Section 5(B)(ii)(c)
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SELLER:
NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ XXXXXX XXXXXX
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
Date:
PURCHASER:
XXXXXXXX-KOENMEN LLC
By: /s/ XXXX XXXXX
-----------------------------
Name: Xxxx Xxxxx
Title: Manager
Date:
By: /s/ XXXXX XXXXXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Manager
Date:
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EXHIBITS
A - Description of Properties
B - Legal Description
C - Personal Property
D - Rent Roll
E - Escrow Instructions
F - Service Contracts
G -1 Form - Deed
G -2 Form - Omnibus Xxxx of Sale and Assignment and Assumption of Leases,
Security Deposits, Service Contracts and General Intangibles
G -3 FIRPTA Certificate (for any entity)
G -4 Form - Interest Assignments
G -5 Form - Lead Paint Disclosure
H- List of Capital Improvement Work to be Performed
I - Existing Financings
J - Miscellaneous Matters
K - Insurance
L - Tax Certiorari
M - Confidentiality Agreement
N - List of Title Commitments and Surveys
N-1 List of Purchaser's Objections
O - Schedule of Property Owner's Organizational Documents
P - List of Environmental and Engineering Reports
Q - Bond Documents and Credit Enhancement Documents
R - Other Documents that Purchaser Needs to Deliver in connection with
the Bond Financings
S - Mezzanine Loan Documents
- Reimbursement Agreement
- Note
- Pledge Agreement
- Intercreditor Agreement
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