<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 30, 1999
NEW VALLEY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-2493 13-5482050
(Commission File Number) (I.R.S. Employer Identification No.)
100 S.E. SECOND STREET, MIAMI, FLORIDA 33131
(Address of principal executive offices) (Zip Code)
(305) 579-8000
(Registrant's telephone number, including area code)
(NOT APPLICABLE)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 30, 1999, New Valley Corporation (the "Company") completed
the sale to entities affiliated with P.O'B. Montgomery & Company of five
shopping centers for an aggregate purchase price of $46.1 million. The Company
received approximately $11 million in cash from the transaction before closing
adjustments and expenses. The shopping centers were subject to approximately
$35.1 million of mortgage financing, which was assumed by the purchasers at
closing.
The shopping centers were located in Richland, Washington, Santa Fe,
New Mexico, Milwaukie, Oregon, Marysville, Washington and Lincoln, Nebraska.
The sale of the shopping centers was effected pursuant to a Purchase
and Sale Agreement, dated as of June 23, 1999, as amended as of August 9, 1999
and August 16, 1999, between the Company and P.O'B. Montgomery. The sale was
negotiated on an arm's length basis between the Company and P.O'B. Montgomery.
None of the purchasers is affiliated with the Company or any of its affiliates,
or any director or officer of the Company, or any affiliate or associate of any
such director or officer.
In connection with the sale of the shopping centers, the Company
refinanced the notes payable on its two remaining shopping centers in Royal
Palm Beach, Florida and Kanawha, West Virginia and transferred the Kanawha
shopping center to a 99.0% owned limited liability company. The Royal Palm
Beach, Florida shopping center is now subject to a $6.95 million senior
mortgage note due September 2016 which is callable by the lender after March
2001 and bears interest at 7.5% per annum and a $1.56 million junior mortgage
note due on the earlier of September 2002 or the due date of the senior loan
which bears interest at 9.0% per annum. The Kanawha, West Virginia shopping
center is now subject to a $7.0 million senior mortgage note due September 2024
which bears interest at 9.03% per annum for the first seven years and at
floating rates thereafter (or 11.03% per annum if the loan is still in a
securitization) and a $4.2 million subordinated note due September 2006 which
bears interest at 9.0% per annum. The financing on the two remaining shopping
centers is non-recourse to the Company, except for misappropriations of
insurance and certain other proceeds, failures to apply rent and other income
to required maintenance and taxes, environmental liabilities and certain other
matters.
The foregoing summary of the sale of the shopping centers is qualified
in its entirety by reference to the text of the Purchase and Sale Agreement, as
amended, and the Company's Press Release dated August 30, 1999, which are
attached hereto as exhibits and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(b) Pro Forma Financial Information.
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The Pro Forma Condensed Consolidated Statements of Operations for the
year ended December 31, 1998 and the six months ended June 30, 1999 have been
prepared giving effect to the sale of the five shopping centers, the
recapitalization of the Company's capital stock which occurred on June 4, 1999,
the Company's sale of its four office buildings in Troy, Michigan and Bernards
Township, New Jersey which occurred on September 28, 1998, and the sale by
Thinking Machines, the Company's 73%-owned subsidiary, of its Darwin(R)
software and services business which occurred on June 2, 1999. The Pro Forma
Condensed Consolidated Balance Sheet as of June 30, 1999 has been prepared
giving effect to the sale of the shopping centers. The pro forma financial
information should be read in conjunction with the Company's historical
Consolidated Financial Statements and the related notes thereto contained in
the Company's 1998 Annual Report on Form 10-K and the quarterly reports on Form
10-Q for the quarters ended March 31, 1999 and June 30, 1999.
The Pro Forma Condensed Consolidated Statements of Operations were
prepared as if the sale of the shopping centers, the recapitalization, the sale
of the office buildings and the Thinking Machines sale had occurred at the
beginning of the period presented. The Pro Forma Condensed Consolidated Balance
Sheet as of June 30, 1999 was prepared as if the sale of the shopping centers
had occurred on June 30, 1999.
The pro forma financial information does not purport to show the
results, which would actually have occurred had such transactions been
completed as of the date and for the period presented or which may occur in the
future.
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NEW VALLEY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
---------------------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS
-----------------------------------------------------------
OFFICE THINKING SHOPPING
BUILDINGS MACHINES CENTERS
HISTORICAL SALE SALE RECAPITALIZATION SALE PRO FORMA
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Principal transactions, net.......... $ 11,430 $ 11,430
Commissions.......................... 28,284 28,284
Corporate finance fees............... 14,733 14,733
Gain on sale of investments, net..... 11,768 11,768
Loss in joint venture................ (4,976) -- (4,976)
Real estate leasing.................. 20,577 $(10,222) (a) $ (5,329) (d) 5,026
Gain on sale of real estate.......... 4,682 (4,682) (a) --
Computer sales and service........... 794 $ (794) (b) --
Interest and dividends............... 8,808 (71) (a) 8,737
Other income......................... 5,987 -- -- -- 5,987
----------- -------- ------- -------- ----------
Total revenues............... 102,087 (14,975) (794) (5,329) 80,989
----------- -------- ------- -------- ----------
Costs and expenses:
Selling, general and administrative.. 110,375 (4,914) (a) (6,837) (b) (2,786) (d) 95,838
Interest............................. 13,939 (5,494) (a) (87) (b) (3,020) (d) 5,338
Provision for loss on long-term
investments....................... 3,185 -- -- -- 3,185
----------- -------- ------- -------- ----------
Total costs and expenses..... 127,499 (10,408) (6,924) (5,806) 104,361
----------- -------- ------- -------- ----------
Loss from continuing operations before
income taxes and minority interests.. (25,412) (4,567) 6,130 477 (23,372)
Income tax provision................... 6 6
Minority interests in loss from
continuing operations of consolidated
subsidiaries...................... 2,089 -- (1,644) (b) -- 445
----------- -------- ------- -------- ----------
Loss from continuing operations........ (23,329) (4,567) 4,486 477 (22,933)
Discontinued operations:
Gain on disposal of discontinued
operations......................... 7,740 -- -- -- 7,740
----------- -------- ------- -------- ----------
Income from discontinued
operations......................... 7,740 -- -- -- 7,740
----------- -------- ------- -------- ----------
Net loss............................... (15,589) (4,567) 4,486 477 (15,193)
Dividend requirements on preferred
shares............................... (80,964) -- -- $ 80,964 (c) -- --
----------- -------- ------- ---------- -------- ----------
Net loss applicable to Common Shares... $ (96,553) (4,567) $4,486 $ 80,964 (c) $ 477 $ (15,193)
=========== ======== ======= ========== ======== ==========
Loss per Common Share (basic and
diluted):
Continuing operations................ $ (10.89) $ (0.98)
Discontinued operations.............. .81 .33
----------- ----------
Net loss per Common Share............ $ (10.08) $ (0.65)
=========== ==========
Number of shares used in computation... 9,577,624 13,739,637 (c) 23,317,261
=========== ========== ==========
</TABLE>
- ----------
(a) To eliminate the operations of the office buildings.
(b) To eliminate the operations of Thinking Machines.
(c) To adjust for the conversion of outstanding Preferred Shares and
Common Shares to new Common Shares and Warrants.
(d) To eliminate the operations of the five shopping centers.
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NEW VALLEY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
---------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS
----------------------------------------------
THINKING SHOPPING
MACHINES CENTERS
HISTORICAL SALE RECAPITALIZATION SALE PRO FORMA
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Principal transactions, net................. $ 11,813 $ 11,813
Commissions................................. 21,821 21,821
Corporate finance fees...................... 4,040 4,040
Gain on sale of investments, net............ 1,959 1,959
Loss in joint venture....................... (4,197) (4,197)
Real estate leasing......................... 4,424 $ (2,589) (c) 1,835
Computer sales and service.................. 317 $ (317) (a) --
Interest and dividends...................... 2,884 2,884
Gain on sale of assets...................... 4,028 (3,801) (a) 227
Other income................................ 2,611 -- -- 2,611
----------- -------- -------- ----------
Total revenues.......................... 49,700 (4,118) (a) (2,589) 42,993
----------- -------- -------- ----------
Costs and expenses:
Selling, general and administrative ........ 54,124 (3,150) (a) (1,484) (c) 49,490
Interest.................................... 4,711 (201) (a) (1,473) (c) 3,037
----------- -------- -------- ----------
Total costs and expenses................ 58,835 (3,351) (2,957) 52,527
----------- -------- -------- ----------
Loss from continuing operations before income
taxes and minority interests................ (9,135) (767) 368 (9,534)
Income tax provision............................. 60 60
Minority interests in income from continuing
operations of consolidated subsidiaries..... (252) 330 (a) -- 78
----------- -------- -------- ----------
Loss from continuing operations.................. (9,447) (437) 368 (9,516)
Discontinued operations:
Gain on disposal of discontinued operations. 4,100 -- -- 4,100
----------- -------- -------- ----------
Income from discontinued operations......... 4,100 -- 368 4,100
----------- -------- ----------
Net loss ........................................ (5,347) (437) (5,416)
Dividend requirements on Preferred Shares........ (32,878) -- $ 32,878 (b) -- --
----------- -------- ---------- -------- ----------
Net loss applicable to Common Shares............. $ (38,225) $ (437) $ 32,878 (b) $ 368 $ (5,416)
=========== ======== ========== ======== ==========
Loss per Common Share (basic and diluted):
Continuing operations....................... $ $
(3.57) (0.40)
Discontinued operations..................... .35 .17
----------- ----------
Net loss per Common Share................... $ (3.22) $ (0.23)
=========== ==========
Number of shares used in computation............. 11,867,564 11,449,697 (b) 23,317,261
=========== ========== ==========
</TABLE>
- ----------
(a) To eliminate the operations and gain of Thinking Machines.
(b) To adjust for the conversion of outstanding Preferred Shares and
Common Shares to new Common Shares and Warrants.
(c) To eliminate the operations of the five shopping centers.
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<PAGE> 6
NEW VALLEY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, 1999
----------------------------------------------
PRO FORMA ADJUSTMENTS
---------------------
SHOPPING
CENTERS
HISTORICAL SALE PRO FORMA
----------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 4,033 $ 10,118 (b) $ 14,151
Investment securities available for sale............. 48,114 48,114
Trading securities owned............................. 11,695 11,695
Restricted assets.................................... 3,266 (238) (a) 3,028
Receivable from clearing brokers..................... 13,427 13,427
Other current assets................................. 2,942 (733) 2,209
------- ------ -------
Total current assets........................ 83,477 9,147 92,624
------- ------ -------
Investment in real estate, net............................ 92,887 (41,604) (b) 51,283
Furniture and equipment, net.............................. 8,762 8,762
Restricted assets......................................... 8,310 8,310
Long-term investments, net................................ 5,762 5,762
Investment in joint venture............................... 60,996 60,996
Other assets.............................................. 5,371 (495) (a) 4,876
------- ------ -------
Total assets................................ $265,565 $(32,952) $232,613
======= ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Margin loan payable.................................. $ 4,852 $ 4,852
Current portion of notes payable and other
long-term obligations............................ 2,672 2,672
Accounts payable and accrued liabilities............. 31,135 $ (513) (a) 30,622
Prepetition claims and restructuring accruals........ 12,388 12,388
Income taxes......................................... 18,365 18,365
Securities sold, not yet purchased................... 2,979 2,979
------- ------ -------
Total current liabilities................... 72,391 (513) 71,878
------- ------ -------
Notes payable ............................................ 54,801 (35,023) (b) 19,778
Other long-term obligations............................... 29,773 (71) (a) 29,702
Commitments and contingencies.............................
Stockholders' equity:
Preferred stock......................................
Common stock......................................... 233 233
Additional paid-in capital........................... 866,955 866,955
Accumulated deficit.................................. (763,363) 2,655 (c) (760,708)
Unearned compensation on stock options............... (251) (251)
Accumulated other comprehensive income............... 5,026 5,026
------- ------ -------
Total stockholders' equity.................. 108,600 2,655 111,255
------- ------ -------
Total liabilities and stockholders' equity.. $265,565 $(32,952) $232,613
======= ====== =======
</TABLE>
- ----------
(a) To eliminate the operations of the five shopping centers, net of
closing costs.
(b) To record the sale of the five shopping centers' assets.
(c) Represents the gain realized on the sale of the five shopping centers'
assets.
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(c) The following Exhibits are provided in accordance with the
provisions of Item 601 of Regulation S-K and are filed herewith unless
otherwise noted.
EXHIBIT INDEX
<TABLE>
<S> <C>
2.1 Purchase and Sale Agreement (the "Purchase Agreement") dated as of
June 23, 1999 between the Company and P.O'B Montgomery & Company.
2.2 Amendment to Purchase Agreement dated as of August 9, 1999.
2.3 Amendment to Purchase Agreement dated as of August 16, 1999.
99.1 Press Release of the Company dated August 30, 1999.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NEW VALLEY CORPORATION
By: /s/ J. Bryant Kirkland III
------------------------------------------
J. Bryant Kirkland III
Vice President and Chief Financial Officer
Date: September 7, 1999
-8-
<PAGE> 1
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
NEW VALLEY CORPORATION,
SELLER
WITH
P.O'B. MONTGOMERY & COMPANY,
PURCHASER
As of June 23, 1999
Properties:
Washington Plaza, Richland, Washington
Coronado Center, Santa Fe, New Mexico
Holly Farm Shopping Center, Milwaukie, Oregon
Marysville Towne Center, Marysville, Washington
University Place, Lincoln, Nebraska
<PAGE> 2
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), dated as of the
23rd day of June, 1999 by and between NEW VALLEY CORPORATION, a Delaware
corporation, having an office at 100 S.E. Second Street, 32nd Floor, Miami,
Florida 33131 ("SELLER") and P.O'B. MONTGOMERY & COMPANY, a Texas corporation,
having an office at 5550 LBJ Freeway, Suite 380, Dallas, Texas 75240
("PURCHASER").
STATEMENT OF FACTS
Seller is the owner of the Properties (as hereinafter defined).
Purchaser desires to purchase the Properties from Seller, and Seller desires to
sell the Properties to Purchaser. This Agreement sets forth the terms and
conditions agreed to between Purchaser and Seller with respect thereto.
NOW, THEREFORE, in consideration of ten ($10.00) dollars and the
mutual covenants and agreements hereinafter set forth, and intending to be
legally bound hereby, it is hereby agreed as follows:
1
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ARTICLE 1
SALE OF PROPERTIES
1.1 Seller agrees to sell and convey to Purchaser, and Purchaser
agrees to purchase from Seller, at the price and upon the terms and conditions
set forth in this Agreement:
(A) all those certain plots, pieces and parcels of land
located in the City of Richland, County of Benton and State of
Washington, as more particularly described in SCHEDULE 1-A annexed
hereto and made a part hereof (the "WASHINGTON PLAZA LAND"), together
with:
(I) all buildings, structures and other
improvements situated on the Washington Plaza Land
(collectively, the "WASHINGTON PLAZA BUILDINGS");
(II) all easements, rights of way, reservations,
privileges, appurtenances, and other estates and rights of
Seller pertaining to the Washington Plaza Land and the
Washington Plaza Buildings;
(III) all right, title and interest of Seller in
and to all fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to the
Washington Plaza Land or the Washington Plaza Buildings, or
used in connection therewith (collectively, the "WASHINGTON
PLAZA PERSONAL PROPERTY");
(IV) all oil, gas and mineral rights of Seller,
if any, in and to the Washington Plaza Land;
(V) all right, title and interest of Seller, if
any, in and to the trade names or logos of the Washington
Plaza Buildings;
(VI) all right, title and interest of Seller, if
any, in and to all strips and gores with respect to the
Washington Plaza Land, all alleys adjoining the Washington
Plaza Land and the land lying in the bed of any street, road,
or avenue, opened or proposed, in front of, or adjoining, the
Washington Plaza Land to the center line thereof;
(VII) all right, title and interest of Seller, if
any, in and to any unpaid condemnation award made, or to be
made, with respect to the Washington Plaza Land or the
Washington Plaza Buildings
2
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by reason of a change of grade of any street, road, or
avenue, opened or proposed, in front of, or adjoining, the
same, together with any unpaid damages awarded, or to be
awarded, in connection with any such change of grade;
(VIII) all leases, lease deposits and lease
guaranties with respect to the Washington Plaza Land or the
Washington Plaza Buildings;
(IX) all of the Licenses (as hereinafter
defined) with respect to the Washington Plaza Land or the
Washington Plaza Buildings;
(X) all assignable purchase orders, equipment
leases, advertising agreements, franchise agreements, license
agreements, management agreements, leasing and brokerage
agreements and other service contracts (to the extent
Purchaser has agreed to assume same) relating to the
operation of the Washington Plaza Land and the Washington
Plaza Buildings; and
(XI) all building plans and specifications and
guarantees and warranties with respect to the Washington
Plaza Buildings or the Washington Plaza Property,
the Washington Plaza Land, together with all of the foregoing items
listed in subsections (i) - (xi) above, being herein sometimes
collectively called the "WASHINGTON PLAZA PROPERTY";
(B) all those certain plots, pieces and parcels of land
located in the City of Santa Fe, County of Santa Fe and State of New
Mexico as more particularly described in SCHEDULE 1-B annexed hereto
and made a part hereof (the "CORONADO CENTER LAND"), together with:
(I) all buildings, structures and other improvements
situated on the Coronado Center Land (collectively, the "CORONADO
CENTER BUILDINGS");
(II) all easements, rights of way, reservations,
privileges, appurtenances, and other estates and rights of Seller
pertaining to the Coronado Center Land and the Coronado Center
Buildings;
(III) all right, title and interest of Seller in and to
all
3
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fixtures, machinery, equipment, supplies and other articles of
personal property attached or appurtenant to the Coronado Center Land
or the Coronado Center Buildings, or used in connection therewith
(collectively, the "CORONADO CENTER PERSONAL PROPERTY");
(IV) all oil, gas and mineral rights of Seller, if any,
in and to the Coronado Center Land;
(V) all right, title and interest of Seller, if any, in
and to the trade names or logos of the Coronado Center Buildings;
(VI) all right, title and interest of Seller, if any, in
and to all strips and gores with respect to the Coronado Center Land,
all alleys adjoining the Coronado Center Land and the land lying in
the bed of any street, road, or avenue, opened or proposed, in front
of, or adjoining, the Coronado Center Land to the center line thereof;
(VII) all right, title and interest of Seller, if any, in
and to any unpaid condemnation award made, or to be made, with respect
to the Coronado Center Land or the Coronado Center Buildings by reason
of a change of grade of any street, road, or avenue, opened or
proposed, in front of, or adjoining, the same, together with any
unpaid damages awarded, or to be awarded, in connection with any such
change of grade;
(VIII) all leases, lease deposits and lease guaranties with
respect to the Coronado Center Land or the Coronado Center Buildings;
(IX) all of the Licenses with respect to the Coronado
Center Land or the Coronado Center Buildings;
(X) all assignable purchase orders, equipment leases,
advertising agreements, franchise agreements, license agreements,
management agreements, leasing and brokerage agreements and other
service contracts (to the extent Purchaser has agreed to assume same)
relating to the operation of the Coronado Center Land and the Coronado
Center Buildings; and
(XI) all building plans and specifications and guarantees
and warranties with respect to the Coronado Center Buildings or the
Coronado Center Property,
4
<PAGE> 6
the Coronado Center Land, together with all of the foregoing items
listed in subsections (i) - (xi) above, being herein sometimes
collectively called the "CORONADO CENTER PROPERTY";
(C) all those certain plots, pieces and parcels of land
located in the City of Milwaukie, County of Clackareas and State of
Oregon as more particularly described in SCHEDULE 1-C annexed hereto
and made a part hereof (the "HOLLY FARM SHOPPING CENTER LAND"),
together with:
(I) all buildings, structures and other
improvements situated on the Holly Farm Shopping Center Land
(collectively, the "HOLLY FARM SHOPPING CENTER BUILDINGS");
(II) all easements, rights of way, reservations,
privileges, appurtenances, and other estates and rights of
Seller pertaining to the Holly Farm Shopping Center Land and
the Holly Farm Shopping Center Buildings;
(III) all right, title and interest of Seller in
and to all fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to the
Holly Farm Shopping Center Land or the Holly Farm Shopping
Center Buildings, or used in connection therewith
(collectively, the "HOLLY FARM SHOPPING CENTER PERSONAL
PROPERTY");
(IV) all oil, gas and mineral rights of Seller,
if any, in and to the Holly Farm Shopping Center Land;
(V) all right, title and interest of Seller, if
any, in and to the trade names or logos of the Holly Farm
Shopping Center Buildings;
(VI) all right, title and interest of Seller, if
any, in and to all strips and gores with respect to the Holly
Farm Shopping Center Land, all alleys adjoining the Holly
Farm Shopping Center Land and the land lying in the bed of
any street, road, or avenue, opened or proposed, in front of,
or adjoining, the Holly Farm Shopping Center Land to the
center line thereof; and
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(VII) all right, title and interest of Seller, if
any, in and to any unpaid condemnation award made, or to be
made, with respect to the Holly Farm Shopping Center Land or
the Holly Farm Shopping Center Buildings by reason of a
change of grade of any street, road, or avenue, opened or
proposed, in front of, or adjoining, the same, together with
any unpaid damages awarded, or to be awarded, in connection
with any such change of grade;
(VIII) all leases, lease deposits and lease
guaranties with respect to the Holly Farm Shopping Center
Land or the Holly Farm Shopping Center Buildings;
(IX) all of the Licenses with respect to the
Holly Farm Shopping Center Land or the Holly Farm Shopping
Center Buildings;
(X) all assignable purchase orders, equipment
leases, advertising agreements, franchise agreements, license
agreements, management agreements, leasing and brokerage
agreements and other service contracts (to the extent
Purchaser has agreed to assume same) relating to the
operation of the Holly Farm Shopping Center Land and the
Holly Farm Shopping Center Buildings; and
(XI) all building plans and specifications and
guarantees and warranties with respect to the Holly Farm
Shopping Center Buildings or the Holly Farm Shopping Center
Personal Property,
the Holly Farm Shopping Center Land, together with all of the
foregoing items listed in subsections (i) - (xi) above, being herein
sometimes collectively called the "HOLLY FARM SHOPPING CENTER
PROPERTY";
(D) all those certain plots, pieces and parcels of land
located in the City of Marysville, County of Snohomish and State of
Washington, as more particularly described in SCHEDULE 1-D annexed
hereto and made a part hereof (the "MARYSVILLE TOWNE CENTER LAND"),
together with:
(I) all buildings, structures and other
improvements situated on the Marysville Towne Center Land
(collectively, the "MARYSVILLE TOWNE CENTER BUILDINGS");
(II) all easements, rights of way, reservations,
privileges, appurtenances, and other estates and rights of
Seller
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<PAGE> 8
pertaining to the Marysville Towne Center Land and the
Marysville Towne Center Buildings;
(III) all right, title and interest of Seller in
and to all fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to the
Marysville Towne Center Land or the Marysville Towne Center
Buildings, or used in connection therewith (collectively, the
"MARYSVILLE TOWNE CENTER PERSONAL PROPERTY");
(IV) all oil, gas and mineral rights of Seller,
if any, in and to the Marysville Towne Center Land;
(V) all right, title and interest of Seller, if
any, in and to the trade names or logos of the Marysville
Towne Center Buildings;
(VI) all right, title and interest of Seller, if
any, in and to all strips and gores with respect to the
Marysville Towne Center Land, all alleys adjoining the
Marysville Towne Center Land and the land lying in the bed of
any street, road, or avenue, opened or proposed, in front of,
or adjoining, the Marysville Towne Center Land to the center
line thereof;
(VII) all right, title and interest of Seller, if
any, in and to any unpaid condemnation award made, or to be
made, with respect to the Marysville Towne Center Land or the
Marysville Towne Center Buildings by reason of a change of
grade of any street, road, or avenue, opened or proposed, in
front of, or adjoining, the same, together with any unpaid
damages awarded, or to be awarded, in connection with any
such change of grade;
(VIII) all leases, lease deposits and lease
guaranties with respect to the Marysville Towne Center Land
or the Marysville Towne Center Buildings;
(IX) all of the Licenses with respect to the
Marysville Towne Center Land or the Marysville Towne Center
Buildings;
(X) all assignable purchase orders, equipment
leases, advertising agreements, franchise agreements, license
agreements, management agreements, leasing and brokerage
agreements and other service contracts (to the extent
Purchaser has agreed to
7
<PAGE> 9
assume same) relating to the operation of the Marysville
Towne Center Land and the Marysville Towne Center Buildings;
and
(XI) all building plans and specifications and
guarantees and warranties with respect to the Marysville
Towne Center Buildings or the Marysville Towne Center
Personal Property,
the Marysville Towne Center Land, together with all of the foregoing
items listed in subsections (i) - (xi) above, being herein sometimes
collectively called the "MARYSVILLE TOWNE CENTER PROPERTY"; and
(E) all those certain plots, pieces and parcels of land
located in the City of Lincoln, County of Lancaster and State of
Nebraska, as more particularly described in SCHEDULE 1-E annexed
hereto and made a part hereof (the "UNIVERSITY PLACE LAND"), together
with:
(I) all buildings, structures and other
improvements situated on the University Place Land
(collectively, the "UNIVERSITY PLACE BUILDINGS");
(II) all easements, rights of way, reservations,
privileges, appurtenances, and other estates and rights of
Seller pertaining to the University Place Land and the
University Place Buildings;
(III) all right, title and interest of Seller in
and to all fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to the
University Place Land or the University Place Buildings, or
used in connection therewith (collectively, the "UNIVERSITY
PLACE PERSONAL PROPERTY");
(IV) all oil, gas and mineral rights of Seller,
if any, in and to the University Place Land;
(V) all right, title and interest of Seller, if
any, in and to the trade names or logos of the University
Place Buildings;
(VI) all right, title and interest of Seller, if
any, in and to all strips and gores with respect to the
University Place Land, all alleys adjoining the University
Place Land and the land lying in the bed of any street, road,
or avenue, opened or proposed, in front of, or adjoining, the
University Place Land to the center line thereof;
(VII) all right, title and interest of Seller, if
any, in and to
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any unpaid condemnation award made, or to be made, with
respect to the University Place Land or the University Place
Buildings by reason of a change of grade of any street, road,
or avenue, opened or proposed, in front of, or adjoining, the
same, together with any unpaid damages awarded, or to be
awarded, in connection with any such change of grade;
(VIII) all leases, lease deposits and lease
guaranties with respect to the University Place Land or the
University Place Buildings;
(IX) all of the Licenses with respect to the
University Place Land or the University Place Buildings;
(X) all assignable purchase orders, equipment
leases, advertising agreements, franchise agreements, license
brokerage agreements and other service contracts (to the
extent Purchaser has agreed to assume same) relating to the
operation of the University Place Land and the University
Place Buildings; and
(XI) all building plans and specifications and
guarantees and warranties with respect to the University
Place Buildings or the University Place Personal Property,
the University Place Land, together with all of the foregoing items
listed in subsections (i) - (xi) above, being herein sometimes
collectively called the "UNIVERSITY PLACE PROPERTY".
The Washington Plaza Personal Property, the Coronado Center Personal Property,
the Holly Farm Shopping Center Personal Property, the Marysville Towne Center
Personal Property and the University Place Personal Property are herein
sometimes collectively called the "PERSONAL PROPERTY". The Washington Plaza
Property, the Coronado Center Property, the Holly Farm Shopping Center
Property, the Marysville Towne Center Property and the University Place
Property are herein sometimes collectively called the "PROPERTIES".
ARTICLE 2
PURCHASE PRICE
2.1 The purchase price to be paid by Purchaser to Seller for the
Properties (the "PURCHASE PRICE") is FORTY-SIX MILLION ONE HUNDRED TWENTY-FIVE
THOUSAND & 00/100 ($46,125,000.00) DOLLARS, payable as follows:
(a) FOUR HUNDRED SIXTY-ONE THOUSAND TWO HUNDRED FIFTY &
00/100 ($461,250.00) DOLLARS (the "DOWNPAYMENT"),
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simultaneously with the execution and delivery of this Agreement, by a
bank wire transfer of immediately available funds to an account
designated by SAFECO Land Title of Dallas ("ESCROW AGENT"). The
Downpayment shall be held by Escrow Agent in accordance with the terms
of Article 20. If the Closing (as hereinafter defined) shall occur,
Seller shall be entitled to receive the Downpayment and all interest
accrued thereon, if any, and such interest shall not be credited
against the portion of the Purchase Price payable pursuant to Section
2.1(h);
(b) FIVE MILLION THREE HUNDRED SEVENTY-ONE THOUSAND ONE
HUNDRED SEVENTY-ONE & 05/100 ($5,371,171.05) DOLLARS by taking title
to the Washington Plaza Property subject to a first mortgage lien in
that amount (the "WASHINGTON PLAZA FIRST MORTGAGE") now held by Aid
Association for Lutherans ("AAL") and having an unpaid principal
balance of approximately $5,371,171.05 as of the date hereof. To the
extent the unpaid principal balance of the Washington Plaza First
Mortgage is less than $5,371,171.05 as of the Closing, the cash
balance of the Purchase Price payable pursuant to Section 2.1(h) shall
be increased by a corresponding amount;
(c) FIVE HUNDRED THOUSAND FOUR HUNDRED FIFTY-NINE &
77/100 ($500,459.77) DOLLARS by taking title to the Washington Plaza
Property subject to a wraparound second mortgage lien in that amount
(exclusive of the Washington Plaza First Mortgage) (the "WASHINGTON
PLAZA WRAPAROUND MORTGAGE") now held by AP Century I, L.P. ("AP-I")
and having an unpaid principal balance of approximately $500,459.77 as
of the date hereof. Seller does not intend to make any principal
payments on account of the Washington Plaza Wraparound Mortgage
between the date hereof and the date of Closing;
(d) EIGHT MILLION THREE HUNDRED THIRTY-ONE THOUSAND ONE
HUNDRED SIXTY-SIX & 00/100 ($8,331,166.00) DOLLARS by taking title to
the Coronado Center Property subject to aggregate senior mortgage
liens in that amount (the "CORONADO CENTER MORTGAGE") now held by
Credit Suisse First Boston Mortgage Capital LLC ("CS FIRST BOSTON")
and having an aggregate unpaid principal balance of approximately
$8,331,166.00 as of the date hereof. Seller does not intend to make
any principal payments on account of the Coronado Center Mortgage
between the date hereof and the date of Closing;
(e) FOUR MILLION EIGHT HUNDRED SEVENTY-FOUR THOUSAND TWO
HUNDRED SEVENTY-TWO & 00/100 ($4,874,272.00) DOLLARS by taking title
to the Holly Farm Shopping Center Property subject to aggregate senior
and subordinate mortgage liens in that amount (the "HOLLY FARM
SHOPPING CENTER MORTGAGE") now held by CS First Boston and having an
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aggregate unpaid principal balance of approximately $4,874,272.00 as
of the date hereof. Seller does not intend to make any principal
payments on account of the Holly Farm Shopping Center Mortgage between
the date hereof and the date of Closing;
(f) TEN MILLION SEVEN HUNDRED SEVENTEEN THOUSAND SIX
HUNDRED NINETY-NINE & 00/100 ($10,717,699.00) DOLLARS by taking title
to the Marysville Towne Center Property subject to aggregate senior
and subordinate mortgage liens in that amount (the "MARYSVILLE TOWNE
CENTER MORTGAGE") now held by CS First Boston and having an aggregate
unpaid principal balance of approximately $10,717,699.00 as of the
date hereof. Seller does not intend to make any principal payments on
account of the Marysville Towne Center Mortgage between the date
hereof and the date of Closing;
(g) FIVE MILLION ONE HUNDRED EIGHTY THOUSAND NINE
HUNDRED FORTY-FIVE & 00/100 ($5,180,945.00) DOLLARS by taking title to
the University Place Property subject to aggregate senior mortgage
liens in that amount (the "UNIVERSITY PLACE MORTGAGE") now held by CS
First Boston and having an aggregate unpaid principal balance of
approximately $5,180,945.00 as of the date hereof. Seller does not
intend to make any principal payments on account of the University
Place Mortgage between the date hereof and the date of Closing; and
(h) TEN MILLION SIX HUNDRED EIGHTY-EIGHT THOUSAND
THIRTY-SEVEN & 18/100 ($10,688,037.18) DOLLARS (the "CASH BALANCE")
(plus an amount equal to the amount of any reduction in the unpaid
principal balance of the Washington Plaza First Mortgage on account of
regular monthly amortization payments thereon between the date hereof
and the date of Closing) at the Closing by bank wire transfer of
immediately available federal funds to the Title Company (as
hereinafter defined), to be disbursed to Seller's account (or to the
account or accounts of such other party or parties as may be
designated by Seller upon notice to the Title Company prior to the
Closing) upon consummation of the transaction under this Agreement.
Seller and Purchaser agree that Seller must convey, and Purchaser must
purchase, all of the Properties in accordance with the terms and conditions of
this Agreement.
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ARTICLE 3
APPORTIONMENTS
3.1 The following shall be apportioned between Seller and
Purchaser at the Closing, as of 12:01 A.M. on the Closing Date (as hereinafter
defined):
(A) prepaid rents and Additional Rents (as hereinafter
defined) and other amounts payable by tenants, in accordance with
Sections 3.3 and 3.4 hereof;
(B) real estate taxes, water charges, sewer rents and
vault charges, if any, on the basis of the fiscal years, respectively,
for which same have been assessed;
(C) value of fuel stored on the Properties, at Seller's
cost (including any taxes), on the basis of a statement from Seller's
supplier;
(D) charges and payments under Contracts (as hereinafter
defined) that Purchaser elects to assume;
(E) any prepaid items for operating expenses relating to
the Properties incurred in the normal course of business (including,
but not limited to, fees for licenses that are transferred to
Purchaser at the Closing and annual permit and inspection fees);
(F) utilities (including, but not limited to, water,
steam, electricity and gas) on the basis of the most recently issued
bills therefor, subject to adjustment within sixty (60) days after the
Closing when the next bills are available, or, if current meter
readings are available at the Closing, on the basis of such readings;
(G) transferable deposits with telephone and other
utility companies, and any other persons or entities who supply goods
or services in connection with the Properties, if Purchaser elects to
assume the contracts and/or accounts to which said deposits are
applicable and the same are assigned to Purchaser at the Closing,
which shall be credited in their entirety to Seller;
(H) personal property taxes, if any, on the basis of the
fiscal year for which assessed;
(I) Seller's share, if any, of all revenues from the
operation of the Properties other than rents and Additional Rents
(including, but not limited to, parking charges, and telephone booth
and vending machine revenues), if, as and when received;
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(J) permitted administrative charges, if any, on those
tenants' security deposits transferred by Seller pursuant to Section
11.1(e); and
(K) as to each Property, such other items as are
customarily apportioned between sellers and purchasers of real
properties of a type similar to such Property and located in the city
and state where the same is located.
3.2 If the Closing shall occur before a new real estate or
personal property tax rate is fixed, the apportionment of taxes at the Closing
shall be made on the basis of the old tax rate for the preceding fiscal year
applied to the latest assessed valuation. Within sixty (60) days after the new
tax rate is fixed, the apportionment of taxes shall be recomputed, and any
discrepancy resulting from such recomputation shall be promptly corrected and
the proper party reimbursed.
3.3 If, on the Closing Date, any tenant is in arrears in the
payment of rent (other than Additional Rents for the periods January 1, 1998 to
December 31, 1998 and January 1, 1999 to the Closing Date), or has not paid the
rent payable by it for the month in which the Closing occurs (whether or not it
is in arrears for such month on the Closing Date), any rents received by
Purchaser or Seller from such tenant after the Closing shall be applied to
rents due and payable by such tenant in the following order of priority:
(A) first, to all rent due and payable by such tenant
during the month in which the Closing Date occurred;
(B) second, to all rents due and payable by such tenant
for the months immediately following the month in which the Closing
Date occurred, to the month in which such payment is received;
(C) third, to all rents due and payable by such tenant
for the month immediately preceding the month in which the Closing
Date occurred; and
(D) fourth, to all remaining rent arrearages of such
tenant.
Tenant arrears as of June 23, 1999 are set forth on SCHEDULE 2-A annexed hereto
and made a part hereof (to be updated as of the Closing) and, except as
otherwise provided in Section 3.4 hereof with respect to Additional Rents
(defined below) for the periods January 1, 1998 to December 31, 1998 and
January 1, 1999 to the Closing Date, the application of rent monies collected
after the Closing shall be governed by the provisions of this Section 3.3.
If rents, or any portion thereof, received by Seller or Purchaser after the
Closing are due and payable to the other party by reason of the foregoing
allocation, the appropriate sum, less a proportionate share of any reasonable
attorneys' fees and other costs and expenses incurred in connection with the
collection thereof, shall be promptly paid to the other party.
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3.4 If, on the Closing Date, pursuant to the 1998 Additional Rent
Reconciliation set forth on SCHEDULE 2-B annexed hereto and made a part hereof
(to be updated as of the Closing), any tenant is in arrears or was undercharged
(whether in its monthly obligations or in an end of year reconciliation) in the
payment of percentage rent, escalation charges for real estate taxes, parking
charges, operating expenses and maintenance escalation rents or charges,
cost-of-living increases, or other charges of a similar nature ("ADDITIONAL
RENTS") for the period January 1, 1998 to December 31, 1998, any Additional
Rents received by Purchaser or Seller from such tenant after the Closing Date
and reasonably identifiable or ascertainable by reference to the 1998
Additional Rent Reconciliation (as updated) shall first be applied (net of all
reimbursements to tenants for overpayment of Additional Rent for the period
January 1, 1998 to December 31, 1998) to all Additional Rent arrearages of such
tenant for the period January 1, 1998 to December 31, 1998 as shown on SCHEDULE
2-B (as updated). With respect to Additional Rents for the period January 1,
1999 to the Closing Date, SCHEDULE 2-C annexed hereto and made a part hereof
sets forth monthly (except where otherwise indicated) billings to tenants for
1999 based upon estimated expenses. If, on the Closing Date, there are any
Additional Rent arrearages for the period January 1, 1999 to the Closing Date
(net of all reimbursements to tenants for overpayment of Additional Rent for
the period January 1, 1999 to the Closing Date), then, provided first that such
tenant is current in all of its rent and Additional Rent obligations for the
period commencing with the Closing Date, the next Additional Rents received by
Purchaser or Seller from such tenant after the Closing Date shall be applied to
all remaining Additional Rent arrearages of such tenant for the period January
1, 1999 to the Closing Date. If Additional Rents or any portion thereof
received by Seller or Purchaser after the Closing Date are due and payable to
the other party by reason of the foregoing allocation, the appropriate sum,
less a proportionate share of any reasonable attorneys' fees and costs and
expenses expended in connection with the collection thereof, shall be promptly
paid to the other party. "1999 ADDITIONAL RENT RECONCILIATION" means an
accounting to be prepared by Purchaser in calendar year 2000 and delivered to
Seller by no later than March 31, 2000 to determine if Seller's estimated
Additional Rent calculation for calendar year 1999 was greater or less than the
actual Additional Rent calculation as determined by Purchaser. Seller and its
property manager shall, in good faith, assist Purchaser:
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(A) in the preparation of the 1999 Additional Rent
Reconciliation; and
(B) subject to Section 3.5, in the billing for, and
collecting of, the Additional Rent arrearages (including, without
limitation, adding such Additional Rent arrearages to Purchaser's
monthly billing of tenants for rent and Additional Rent).
Notwithstanding anything herein contained to the contrary, if at the
Closing Date Seller is awaiting sales reports from any tenant to
determine percentage rent due Seller for the period prior to the
Closing Date, any Additional Rents on account of such percentage rent
received by Purchaser or Seller from such tenant after the Closing
Date shall be applied to the Additional Rent obligations of such
tenant on account of such percentage rent due Seller for the period
prior to the Closing Date. Estimated 1999 percentage rent for certain
tenants is set forth on SCHEDULE 2-D annexed hereto and made a part
hereof (to be updated as of the Closing) and does not reflect tenants
who have percentage rent obligations but have not yet reached their
respective sales breakpoint.
If the 1999 Additional Rent Reconciliation determines that any tenants have
overpaid Seller their Additional Rent obligations for the period January 1,
1999 to the Closing Date (net of all arrearages for any such tenant for such
period), then Seller shall pay such amounts promptly to Purchaser. Purchaser
agrees to promptly forward such sums to the applicable tenants (or to grant
such tenants credits against rents next due), and, to the extent of any such
funds received by Purchaser from Seller, indemnify and hold Seller harmless in
connection with any losses, costs, expenses, or liabilities in connection with
Purchaser's failure to remit such sums (or grant such credits) to such tenants.
In order to assist Seller in the appropriate adjustment and allocation of rents
and Additional Rents following the Closing, Purchaser agrees to provide Seller
with the following: (i) activity reconciliation reports for each of the
Properties for calendar year 1999 by March 31, 2000; and (ii) activity
reconciliation reports for the period January 1, 2000 through March 31, 2000 by
April 30, 2000 with respect to tenants having outstanding rent or Additional
Rent arrears to which Seller is entitled or percentage rent obligations which
have resulted or will result in percentage rent owing to Seller.
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3.5 After the Closing, Seller shall continue to have the right,
in its own name, to demand payment of, and to collect rent and Additional Rent
arrearages owed to Seller by, any tenant, which right shall include the right
to continue or commence legal actions or proceedings against any tenant for the
payment of such arrearages (PROVIDED, HOWEVER, that Seller shall not commence
or continue any legal action or proceeding to terminate a tenant's tenancy or
to dispossess such tenant or otherwise disturb such tenant's occupancy), and
delivery of the Lease Assignment (as hereinafter defined) shall not constitute
a waiver by Seller of such right. At no cost to Purchaser (or, if Purchaser
incurs any reasonable cost, Seller shall reimburse Purchaser for same),
Purchaser agrees reasonably to cooperate with Seller in connection with all
reasonable and proper efforts by Seller to collect such rents and Additional
Rents and to take all reasonable steps (including, but not limited to, adding
the rent arrearages to Purchaser's bills to tenants for current rent
obligations and testifying on behalf of Seller), whether before or after the
Closing Date, as may be reasonably necessary to carry out the intention of the
foregoing (including, but not limited to, the delivery to Seller, upon demand
and to the extent then in Purchaser's possession, of any relevant books and
records (including, but not limited to, any rent or Additional Rent statements,
receipted bills and copies of tenant checks used in payment of such rent or
Additional Rent), the execution of any and all consents or other documents, and
the undertaking of any other reasonable act necessary for the collection of
such rents and Additional Rents by Seller). If a tenant, in response to
Seller's legal actions or proceedings to recover rent and Additional Rent
arrearages, commences its own legal action against Seller, or files a
counterclaim to Seller's legal action or proceeding, and such tenant's legal
action or counterclaim names Purchaser as a defendant, then, in such event,
Seller hereby indemnifies and agrees to hold harmless and defend Purchaser
against all such claims and counterclaims and against all losses, costs,
expenses and liabilities that Purchaser may suffer, or be subject to, by reason
thereof. Any such defense by Seller may, at Seller's election, be conducted by
counsel of Seller's choice, provided that such counsel is reasonably acceptable
to Purchaser. Purchaser shall promptly notify Seller in writing if Purchaser is
named as a defendant as a result of Seller's legal action or proceeding.
3.6 If there is a water meter on one or more of the Properties,
Seller shall furnish a reading for each such Property to a date not more than
thirty (30) days prior to the Closing Date, and the unfixed water charges and
sewer rent, if any, based thereon for the intervening time shall be apportioned
on the basis of such last reading.
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3.7 If any of the items subject to apportionment under the
foregoing provisions of this Article 3 cannot be apportioned at the Closing
because of the unavailability of the information necessary to compute such
apportionment, then such item shall be apportioned as soon as practicable after
the Closing Date and the proper party reimbursed, which obligation shall
survive the Closing for a period of one hundred eighty (180) days after the
Closing Date as hereinafter provided (or such longer period as may be necessary
as a result of the 1999 Additional Rent Reconciliation or sales reports
received from tenants after the Closing Date to determine percentage rent due
Seller for the period prior to the Closing Date). Neither party hereto shall
have the right to require any apportionment after the Closing, unless, within
the aforestated one hundred eighty (180) day period (or such longer period as
may be necessary as a result of the 1999 Additional Rent Reconciliation or
sales reports received from tenants after the Closing Date to determine
percentage rent due Seller for the period prior to the Closing Date), either of
the parties hereto:
(A) has obtained the previously unavailable information,
and
(B) has given notice thereof to the other party together
with a copy of its good faith computation of the apportionment and
copies of all substantiating information used in such computation.
The failure of a party to obtain any previously unavailable information with
respect to an item subject to apportionment hereunder and to give notice
thereof as provided above within one hundred eighty (180) days after the
Closing Date (or such longer period as may be necessary as a result of the 1999
Additional Rent Reconciliation or sales reports received from tenants after the
Closing Date to determine percentage rent due Seller for the period prior to
the Closing Date) shall be deemed a waiver of its right to cause a computation
with respect to such item after the Closing Date.
3.8 If, on the date of this Agreement, the Properties or any part
thereof shall be affected by any assessment or assessments that are, or may
become, payable in installments, of which the first installment is now a charge
or lien, or has been paid, then:
(A) Seller shall be obligated to pay all installments of
any such assessment that are due and payable prior to the Closing
Date; and
(B) for the purposes of this Agreement, all of the
unpaid installments of any such assessment that are to become due and
payable on or after the Closing Date shall not be deemed to be liens
upon the Properties, and Purchaser shall acquire the Properties on the
Closing Date subject to any such assessment without abatement of the
Purchase Price.
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If, subsequent to the date hereof, the Properties or any part thereof shall
become affected by an assessment or assessments, said assessments shall not be
deemed to be liens upon the Properties, and Purchaser shall acquire the
Properties on the Closing Date subject to any such assessment without abatement
of the Purchase Price. If an assessment may be paid alternatively, at Seller
election, in installments or in lump sum, and such election must be made prior
to the Closing Date, Seller shall make an election to have same payable in
installments. In the event that any such assessment or assessments, whether
payable in lump sum or in installments, is due and payable prior to the
Closing, and has been paid by Seller, Purchaser shall reimburse Seller for same
at the Closing.
3.9 The provisions of this Article 3 shall survive the Closing,
but the provisions of Section 3.2 and 3.7 shall survive the Closing only for a
period of one hundred and eighty (180) days following the Closing Date (or such
longer period as may be necessary as a result of the 1999 Additional Rent
Reconciliation or sales reports received from tenants after the Closing Date to
determine percentage rent due Seller for the period prior to the Closing Date).
ARTICLE 4
SELLER'S ASSUMPTION OF CERTAIN LEASE EXPENSES
4.1 The parties acknowledge their understanding that Seller has
completed leases with the following tenants for premises at the below-listed
Properties:
(A) Cafeteria Operators, L.P. d/b/a Furr's Family Dining
("FURR'S") for 9,270 square feet of gross leasable floor area at the
Coronado Center Property; and
(B) Serendipity Entertainment Corporation
("SERENDIPITY"), a Blockbuster Video franchisee, for 2,000 square feet
of gross leasable floor area at the Coronado Center Property
(including a right of first refusal with respect to an additional
3,000 square feet of gross leasable floor area).
4.2 With respect to the leases with Furr's and Serendipity,
Seller represents that there are no tenant improvements to be paid for by
landlord and Seller shall pay all brokerage commissions relating to such
leasing transactions and the legal fees and expenses incurred by Seller in
connection with the execution and delivery of said leases.
ARTICLE 5
CLOSING DATE
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5.1 The delivery of the Deeds, and the consummation of the
transactions contemplated by this Agreement (the "CLOSING"), shall take place
at 10:00 AM on August 2, 1999 (the "CLOSING DATE"), at the offices of the Title
Company. Notwithstanding the foregoing, Seller or Purchaser may, upon not less
than five (5) days prior notice to the other party, adjourn the Closing to
August 10, 1999 and, Seller or Purchaser may, upon not less than three (3) days
prior notice to the other party, further adjourn the Closing to a date no later
than August 20, 1999 (time of the essence). Notwithstanding anything contained
in this Agreement to the contrary, if the Closing has not occurred by August
20, 1999 (time of the essence) for any reason other than Purchaser's or
Seller's default under this Agreement, either of said non-defaulting parties
may terminate this Agreement upon notice to the other party and this Agreement
shall thereupon become null, void and of no further force or effect, Purchaser
shall be entitled to the return of the Fund (as hereinafter defined) if
Purchaser is a non-defaulting party, and neither party hereto shall have any
further rights and/or liabilities against or to the other arising from or out
of this Agreement.
ARTICLE 6
QUALITY OF TITLE
6.1 Seller shall convey, and Purchaser shall accept, title to
each of the Properties subject only to those liens, encumbrances, or other
defects in, exceptions to, or matters related to title to the Properties (as
the case may be, "ENCUMBRANCES") that are marked "permitted encumbrances"
(collectively, the "PERMITTED ENCUMBRANCES") in the respective marked-up
commitments for owners' fee title insurance policies with respect to the
Properties, issued by Cascade Title Company with respect to the Washington
Plaza Property, Stewart Title Insurance Company with respect to the Coronado
Center Property, Oregon Title Insurance Company (as agent for Lawyers Title
Insurance Corporation) with respect to the Holly Farm Shopping Center Property,
Evergreen Title Company, Inc. with respect to the Marysville Towne Center
Property and Lawyers Title Insurance Corporation with respect to the University
Place Property (collectively, the "TITLE COMPANIES"), listed on SCHEDULE 3
annexed hereto and made a part hereof (collectively, the "TITLE COMMITMENTS").
SAFECO Land Title of Dallas shall act as agent on behalf of the Title Companies
and, in so acting, is referred to in this Agreement as the "TITLE Company". In
the event that any of the Title Commitments shall recite affirmative title
insurance (including, without limitation, insurance against enforcement or
collection against the applicable Properties) in conjunction with any of such
Encumbrances, the same (the "INSURED ENCUMBRANCES") shall constitute Permitted
Encumbrances only if, at Closing, the Title Company shall bind itself to issue
such affirmative title insurance to Purchaser. Any Encumbrances that shall be
other than the Permitted Encumbrances are herein collectively called
"UNACCEPTABLE ENCUMBRANCES".
6.2 Purchaser acknowledges that it has heretofore received copies
of the Title
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Commitments, as well as copies of all instruments reported therein giving rise
to any defects or exceptions to title to the Properties (including, without
limitation, the Permitted Encumbrances). Not more than twenty (20) days, nor
less than five (5) business days, prior to the Closing Date, Purchaser shall:
(A) order, at Seller's sole cost and expense, a
continuation report with respect to each of the Title Commitments
(collectively, the "TITLE CONTINUATIONS") from the Title Company; and
(B) request that the Title Company deliver copies of the
Title Continuations to Purchaser's and Seller's attorneys, together
with true and complete copies of all instruments set forth therein
(and not in the Title Commitments) giving rise to any defects or
exceptions to title to the Properties.
Seller has furnished or will furnish, at its sole cost and expense, updated
surveys for each of the Properties to Purchaser and the Title Company.
ARTICLE 7
DEFECTS IN TITLE
7.1 If, subject to Section 7.2, Seller is unable to eliminate any
Unacceptable Encumbrances that are not waived in writing by Purchaser, and
shall be unable to arrange for affirmative title insurance reasonably
acceptable to Purchaser insuring against the enforcement of such Unacceptable
Encumbrances against, or the collection of the same out of, the Properties as
of the Closing Date, and to convey title in accordance with the terms of this
Agreement on such date, Purchaser's sole right and remedy with respect thereto
shall be to elect to either:
(A) waive such Unacceptable Encumbrance(s) and
consummate the transactions contemplated hereby without any reduction
of, or credit against, the Purchase Price; or
(B) terminate this Agreement, in which event Escrow
Agent shall, subject to Section 20.4, promptly disburse the Fund to
Purchaser, provided that Purchaser is not otherwise in default
hereunder, and neither party shall have any further rights,
obligations, or liabilities hereunder except as otherwise specifically
set forth herein.
7.2 Notwithstanding anything to the contrary set forth in Article
6, in this Article 7, or elsewhere in this Agreement, Seller shall not be
obligated to bring any action or proceeding, to make any payment, or otherwise
to incur any expense in order to eliminate any Unacceptable
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Encumbrances that are not waived in writing by Purchaser, or to arrange for
affirmative title insurance with respect to the same, except that:
(A) Seller shall, at or before the Closing, satisfy any
mortgages (other than those as to which title is being conveyed
subject to), real estate taxes, assessments and/or monetary judgments
against Seller, as well as any other liens that are liquidated in
amount, that are secured by, or affecting, the Properties, that are
Unacceptable Encumbrances and that can be satisfied by payment of
liquidated amounts (collectively, "QUALIFIED LIENS"), unless Seller
shall otherwise arrange for such Unacceptable Encumbrances to be
omitted from Purchaser's fee title insurance policy at no additional
cost to Purchaser;
(B) with respect to any Insured Encumbrances, Seller
shall cause the Title Company to bind itself to issue the applicable
affirmative title insurance (at no additional cost to Purchaser) at
the Closing; and
(C) Seller shall use reasonable efforts to cure title
objections raised by Purchaser but in no event shall Seller be
obligated to bring any action or proceeding, to make any payment, or
otherwise to incur any expense in order to eliminate any Unacceptable
Encumbrances that are not waived in writing by Purchaser, or to
arrange for affirmative title insurance with respect to the same.
Without limiting the generality of the preceding provisions of this Section
7.2, for the purposes of this Agreement (including, without limitation,
Sections 7.1 and 17.1), Seller's failure or refusal to bring any action or
proceeding, to make any payments, or to otherwise incur any expense, except
for:
(I) Seller's failure or refusal to satisfy any
Qualified Liens at or before the Closing; and/or
(II) Seller's failure or refusal to cause the
Title Company to issue the applicable affirmative title
insurance (at no additional cost to Purchaser) at the Closing
with respect to any Insured Encumbrance(s),
shall be deemed an inability of Seller to eliminate such Unacceptable
Encumbrances and shall not be a default by Seller hereunder (willful or
otherwise).
7.3 If, on the Closing Date, there are any Liens that Seller must
pay or discharge, and/or any other Encumbrances that Seller shall elect to pay
or discharge, in order to convey to Purchaser such title as is herein provided
to be conveyed, Seller may use any part of the Cash Balance to satisfy the
same, provided that:
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(A) Seller shall deliver to Purchaser or the Title
Company, at the Closing, instruments in recordable form and sufficient
to satisfy such Liens or other Encumbrances of record, and to induce
the Title Company to omit the same from Purchaser's fee title
insurance policy without additional cost to Purchaser, together with
the cost of recording or filing said instruments; or
(B) Seller, having made arrangements with the Title Company,
shall deposit therewith sufficient moneys, acceptable to the Title
Company, to obtain the satisfaction of such Liens or other
Encumbrances and to record such satisfactions, as well as to induce
the Title Company to omit the same from Purchaser's fee title
insurance policy without additional cost to Purchaser.
The existence of any such Liens or other Encumbrances shall not be deemed
objections to title if Seller shall comply with the foregoing requirements.
7.4 Purchaser, if request is made by Seller at least two (2)
business days prior to the Closing, agrees to instruct the Title Company to
provide at the Closing separate unendorsed certified or official bank checks,
payable to the order of such parties as are designated by Seller and drawn on
or by a Clearing House Bank, in an aggregate amount that is not in excess of
the Cash Balance, plus any net balance of the closing apportionments provided
for in Article 3 above that is in favor of Seller, in order to facilitate the
satisfaction or release of any Liens or other encumbrances. Similarly, at
Seller's election, unpaid Liens for taxes, water and sewer charges and
assessments, that are the obligation of Seller to satisfy and discharge, shall
not be objections to title if the same are omitted from Purchaser's fee title
insurance policy, but the amount thereof, plus interest and penalties thereon,
if any, computed to the third (3rd) business day after the Closing Date, shall
be deducted from the Cash Balance and shall be allowed to Purchaser, subject to
the provisions for apportionment of taxes, water and sewer charges and
assessments contained herein.
7.5 If, on the Closing Date, there shall be conditional bills of
sale, chattel mortgages, or security interests filed against any of the
Properties, the same shall not constitute objections to title provided that the
Title Company omits the same from Purchaser's fee title insurance policy and
Seller executes and delivers an affidavit on the Closing Date to the effect
that either:
(A) the personal property covered by said conditional
bills of sale, chattel mortgages, or security interests is no longer
in or on such Properties;
(B) if such personal property is still in or on such
Properties, it has been fully paid for (and Seller provides reasonable
proof thereof to Purchaser); or
(C) such personal property is the property of a tenant
of such
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Properties.
7.6 Any franchise or corporate tax that is open, levied, or
imposed against Seller or other owners in the chain of title that may be a Lien
on the Closing Date, shall not be an objection to title if the Title Company
omits the same from the title policies issued pursuant to the Title
Commitments.
7.7 If a search of title discloses judgments, bankruptcies, or
other returns against other persons or entities having names the same as or
similar to that of Seller, Seller will deliver to Purchaser and the Title
Company an affidavit stating that such judgments, bankruptcies, or other
returns are not against Seller, whereupon, provided that the Title Company
omits such returns as exceptions to title or provides affirmative title
insurance insuring against the collection of the same out of the Properties,
such returns shall not be deemed an objection to title.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 SELLER'S REPRESENTATIONS AND WARRANTIES.
(A) Seller represents and warrants to Purchaser as follows:
(I) Seller is a duly formed and validly existing
corporation organized under the laws of the State of Delaware, and is
qualified under the laws of the States where Seller is required by law
to be qualified.
(II) Seller has the full legal right, power and authority
to execute and deliver this Agreement and all documents now or
hereafter to be executed by Seller pursuant to this Agreement
(collectively, "SELLER'S DOCUMENTS"), to consummate the transactions
contemplated in this Agreement and to perform its obligations
hereunder and under Seller's Documents.
(III) This Agreement, and Seller's Documents, do not, and
will not, contravene any provision of the certificate of incorporation
or by-laws of Seller, any judgment, order, decree, writ or injunction
issued against Seller, or any provision of any laws or governmental
ordinances, rules, regulations, orders, or requirements (collectively,
"LAWS") applicable to Seller. The consummation of the transactions
contemplated in this Agreement will not result in a breach, or
constitute a default or an event of default, by Seller under any
agreement to which Seller, or any of its assets, are subject or bound,
and will not result in a violation of any Laws applicable to Seller.
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<PAGE> 25
(IV) There are no leases, licenses, or other occupancy
agreements affecting any portion of the Properties on the date of this
Agreement, except for the leases listed in SCHEDULE 4 annexed hereto
and made a part hereof (collectively, the "LEASES"). Except as set
forth in SCHEDULE 4, there are no other material written agreements
with any of the tenants.
(V) Except as set forth on SCHEDULE 5, there are no
pending actions, arbitrations, mediations, suits, proceedings, or
investigations to which Seller is a party before any court or other
governmental authority having jurisdiction with respect to the
Properties or, to Seller's knowledge, any other pending actions,
arbitrations, mediations, suits, or proceedings against or with
respect to the Properties that shall have commenced on or after the
date Seller acquired title to the Properties ("SELLER'S ACQUISITION
DATE").
(VI) Seller has received no written notice that any of
the certificates of occupancy heretofore issued for the Properties
have been suspended or revoked, or will not be renewed.
(VII) To Seller's knowledge, there are no pending
assessment or assessments due and payable prior, or subsequent, to
Closing, other than as reflected in the Title Commitments.
(VIII) Attached hereto as SCHEDULE 6 (the "RENT ROLL") is a
true, complete and accurate listing of:
(X) the correct tenant (and any subtenants);
(Y) the rental amounts (including Additional
Rent) being billed on the date appearing on the Rent Roll by
the property manager, which rents are the rents currently
being collected except to the extent of arrearages shown on
SCHEDULE 2-A; and
(Z) the security deposits plus accrued interest
being held by Seller.
(IX) Seller has no knowledge of any offset, defense,
claim, or counterclaim to payment of the rents currently being
collected except for the rent disputes set forth in SCHEDULE 24
annexed hereto and made a part hereof and, except as set forth in
SCHEDULE 7 and the Rent Roll, Seller has not granted any abatements or
concessions to rent under the Leases.
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<PAGE> 26
(X) To Seller's actual knowledge (without the limitation
that Seller's "knowledge" is limited to the person(s) described at the
end of this Section 8.1(a)), Seller owns the fee simple title to the
Properties, it being understood and agreed that notwithstanding such
representation and warranty, Seller, except as otherwise set forth in
this Agreement and the Deeds, is conveying the Properties to Purchaser
without representation, warranty, or recourse as to the state of
title.
(XI) Except as set forth in the Leases, none of the
Properties is subject to:
(X) Any option or right of first refusal pursuant to
which any other party has any right to purchase any
interest in the Properties; or
(Y) Any extension, renewal, expansion, right of first
refusal or cancellation option with respect to such
Leases.
(XII) To Seller's knowledge, none of the tenants are
subject to a bankruptcy filing other than those listed on SCHEDULE 8
annexed hereto and made a part hereof. Purchaser hereby recognizes
that 99 Cents and More, Inc., a tenant at the Holly Farm Shopping
Center Property, is subject to bankruptcy proceedings, and agrees that
it shall accept title to such Property subject to such proceedings
without any adjustment in the Purchase Price.
(XIII) There are no employees employed by Seller at the
Properties.
(XIV) Except as set forth in SCHEDULE 9, there are no
material service contracts, including brokerage and management
agreements, benefiting or burdening the Properties (collectively, the
"CONTRACTS") on the date hereof and, except as set forth in SCHEDULE
9, there are no leasing commissions due or payable in respect of the
Leases. True and complete copies of the Contracts have been delivered
to Purchaser. Except as set forth in SCHEDULE 10, Seller has neither
given nor received any written notice of default under the Contracts,
and Seller has no knowledge of any material defaults under any such
Contracts.
(XV) To Seller's knowledge, Seller has received no
written notice that any of the tenants intend to vacate the Properties
other than those listed on SCHEDULE 11 annexed hereto and made a part
hereof.
(XVI) There are no condemnation proceedings pending
against all or part of the Properties, and Seller has not received any
written notice of any threatened condemnation of all or part of the
Properties.
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<PAGE> 27
(XVII) Except as set forth in SCHEDULE 12, Seller has
neither given nor received any written notices of default under the
Leases, and Seller has no knowledge of any monetary default or of any
non-monetary default (other than of a de minimus nature) under the
Leases.
(XVIII) True and complete copies of the Leases have been
delivered to Purchaser.
(XIX) Attached hereto as SCHEDULE 13 is a listing of the
casualty insurance that Seller currently maintains for the Properties
(the "INSURANCE"). To Seller's knowledge, the Insurance is in full
force and effect, and Seller has received no written notice of
termination of the Insurance.
(XX) Seller has delivered to Purchaser copies of the
environmental and engineering reports listed on SCHEDULES 14A and 14B
attached hereto (collectively, "SELLER'S REPORTS"). Seller has
received no written notice that the Properties violate any federal,
state or local law other than those violations, if any, reflected in
Seller's Reports and/or in Purchaser's environmental and engineering
reports delivered to Seller and listed on attached SCHEDULES 14A and
14B (collectively, "PURCHASER'S REPORTS").
(XXI) Except as set forth on SCHEDULE 15, there are no tax
certiorari proceedings pending with respect to the Properties.
(XXII) Seller has not, as of the date of this Agreement,
received any written notice by any governmental authority, by the
United States government, or by any other entity on or after Seller's
Acquisition Date that the Properties violate any Environmental Laws
(as defined below) other than as reflected in Purchaser's Reports
and/or Seller's Reports, excluding, however, any such violations that
shall apply to the Washington Plaza Property or the Coronado Center
Property (and Purchaser shall accept title to the Washington Plaza
Property and the Coronado Center Property in each such Property's "as
is" environmental condition, notwithstanding anything else to the
contrary contained in this Agreement). Except with respect to the
Washington Plaza Property and the Coronado Center Property, Seller has
no knowledge, as of the date of this Agreement, of any environmental
contamination or Hazardous Materials (as defined below) arising or
continuing after Seller's Acquisition Date other than as reflected in
Purchaser's Reports and/or Seller's Reports. The term "ENVIRONMENTAL
LAWS" shall mean all statutes specifically described in the
immediately following sentence and all applicable federal, state and
local environmental health and safety statutes, ordinances, codes,
rules, regulations, orders and decrees regulating, relating to, or
imposing liability or standards concerning or in connection with
Hazardous Materials (as
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defined below). The term "HAZARDOUS MATERIALS" shall mean with respect
to any Property any substance, material, waste, gas, or particulate
matter that is regulated by any local governmental authority where the
applicable Property is located, the State where the applicable
Property is located, or the United States Government, including any
material or substance that is:
(S) defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous
waste," or "restricted hazardous waste" under any provision
of applicable state or local law;
(T) petroleum;
(U) asbestos;
(V) polychlorinated biphenyl;
(W) radioactive material;
(X) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
1251 et seq. (33 U.S.C. 1317);
(Y) defined as a "hazardous waste" pursuant to
Section 1004 of the Resource Conservation and Recovery Act,
42 U.S.C. 6901 et seq. (42 U.S.C. 6903); or
(Z) defined as a "hazardous substance" pursuant
to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et seq. (42
U.S.C. 9601).
(XXIII) Seller will maintain its corporate existence for a
period of at least one (1) year following the Closing Date.
(XXIV) The April 1999 operating statements heretofore
delivered to Purchaser for each of the Properties were prepared by
Insignia/ESG, Inc., Seller's property manager, and, to the best of
Seller's knowledge, are true, correct and complete in all material
respects.
The Leases and certain other Property Information (as hereinafter defined) have
been delivered or otherwise made available to Purchaser and, by accepting the
Deeds, Purchaser acknowledges its receipt and acceptance (or the availability
to it) thereof, as well as that Purchaser has reviewed the same to its
satisfaction. To the extent that the copies of the Leases delivered by Seller
to Purchaser contain provisions or information that are inconsistent with the
information contained
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on the Schedule of Leases (attached as SCHEDULE 4), such information shall be
deemed modified to the extent necessary to eliminate such inconsistencies and
to conform the information contained in such Schedule to the provisions or
information set forth in the Leases. As used in this Agreement, the words
"SELLER'S KNOWLEDGE", or words of similar import, shall be deemed to mean, and
shall be limited to, the actual (as distinguished from implied, imputed or
constructive) knowledge of Seller after, and based solely upon, making inquiry
only of Seller's executive level personnel and the following current or former
personnel of Insignia/ESG, Inc., Seller's property manager: Linda Walker and
Russell Rogers (as to the Washington Plaza Property and the Marysville Towne
Center Property), Elliot Stedman and Paul Holland (as to the Coronado Center
Property), Suzanne Milat, Mary Ann Kolen and Russell Rogers (as to the Holly
Farm Shopping Center Property), Chris Nelson, Stefanie Hall, William Richards
and George O'Conner (as to the University Place Property) and Todd Kolba
(Director of Property Management); without such executive level personnel of
Seller or such personnel of Seller's property manager having any obligation to
make any independent inquiry or investigation.
(B) If, at or prior to the Closing:
(I) Purchaser shall acquire actual knowledge (whether
through its own efforts, by notice from Seller or otherwise) that any
of the representations or warranties made herein by Seller are untrue,
inaccurate, or incorrect and shall give Seller notice thereof at or
prior to the Closing; or
(II) Seller shall notify Purchaser that a representation
or warranty made herein by Seller is untrue, inaccurate or incorrect,
then, and in either such event, Purchaser's sole right and remedy with
respect thereto shall be to elect to either:
(X) waive misrepresentation or breach of
warranty and consummate the transactions contemplated hereby
without any reduction of, or credit against, the Purchase
Price; or
(Y) terminate this Agreement if the
representation or warranty involved is both material and
materially untrue or incorrect and such untruth or
incorrectness is not cured or corrected by Seller on or
before the Closing Date, in which event Escrow Agent shall,
subject to Section 20.4, promptly disburse the Fund to
Purchaser provided that Purchaser is not otherwise in default
hereunder, and neither party shall have any further rights,
obligations, or liabilities hereunder except as otherwise
specifically set forth herein.
(C) In the event that the Closing occurs:
(I) Notwithstanding anything contained in Section 8.1(b)
or elsewhere
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in this Agreement to the contrary (except in the case or cases where
Purchaser notified Seller or Seller notified Purchaser in writing
prior to Closing of any untrue, inaccurate, or incorrect information,
representation or warranty and Purchaser either elected or was
required to close, in which case or cases the remedies of Section
8.1(b) shall apply), Purchaser hereby expressly waives, relinquishes
and releases any right or remedy available to it at law, in equity or
under this Agreement to make a claim against Seller for damages that
Purchaser may incur, or to rescind this Agreement and the transactions
contemplated hereby, as the result of any of Seller's representations
or warranties being untrue, inaccurate, or incorrect if:
(X) Purchaser had actual knowledge that such
representation or warranty was untrue, inaccurate, or
incorrect at the time of the Closing and Purchaser
nevertheless closed title hereunder; or
(Y) the damage or loss sustained by Purchaser
as a result of such representation or warranty being untrue,
inaccurate, or incorrect is less than $25,000.00 in the
aggregate.
(II) Notwithstanding anything contained herein to the
contrary, to the extent Purchaser shall not, under the immediately
preceding subparagraph (i), have waived, relinquished and released all
rights or remedies available to it at law, in equity or otherwise as
provided hereunder, the aggregate liability of Seller to Purchaser for
the damage or loss sustained by Purchaser by reason, or as a result,
of the untruth, inaccuracy, or incorrectness of any of the
representations and warranties of Seller in this Agreement, and/or by
reason of any bona fide tenant offset rights, claims, or defenses
disclosed in tenant estoppel letters delivered after the date hereof
shall not exceed $25,000.00.
(III) The representations and warranties of Seller set
forth in Section 8.1(a) and elsewhere in this Agreement shall be true,
accurate and correct in all material respects upon the execution of
this Agreement and shall be deemed to be repeated on, and as of, the
Closing Date (except as they relate only to an earlier date). The
representations and warranties (whether express or implied) of Seller
set forth in Section 8.1(a) and elsewhere in this Agreement and/or the
Seller's Documents (including the Deeds and the Assignment Agreement)
shall remain operative and shall survive the Closing and the execution
and delivery of the Deed for a period of one (1) year following the
Closing Date (except for the representations and warranties of Seller
set forth in Section 8.1(a)(i), (ii) and (iii), which shall survive
without limitation except as provided by statute of limitation
periods). No action or claim based thereon shall be commenced or
submitted after such period, and any attempt to do so shall be null
and void.
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8.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller as follows:
(I) Purchaser is a duly formed and validly existing
corporation organized under the laws of the State of Texas, and is in
good standing under the laws of the States where Purchaser is required
by law to be qualified.
(II) Purchaser has the full legal right, power, authority
and financial ability to execute and deliver this Agreement and all
documents now or hereafter to be executed by it pursuant to this
Agreement (collectively, the "PURCHASER'S DOCUMENTS"), to consummate
the transactions contemplated hereby, and to perform its obligations
hereunder and under Purchaser's Documents.
(III) This Agreement and Purchaser's Documents do not, and
will not, contravene any provision of the certificate of incorporation
or by-laws of Purchaser, any judgment, order, decree, writ or
injunction issued against Purchaser, or any provision of any Laws
applicable to Purchaser. The consummation of the transactions
contemplated hereby will not result in a breach, or constitute a
default or event of default, by Purchaser under any agreement to which
Purchaser or any of its assets are subject or bound, and will not
result in a violation of any Laws applicable to Purchaser.
(IV) There are no pending actions, suits, proceedings, or
investigations to which Purchaser is a party before any court or other
governmental authority that may have an adverse impact on Purchaser's
ability to consummate the transactions contemplated hereby.
As used in this Agreement, the words "PURCHASER'S ACTUAL KNOWLEDGE" or words of
similar import shall be deemed to mean, and shall be limited to, the actual (as
distinguished from implied, imported or constructive) knowledge of Purchaser
after, and based solely upon, making inquiry of Purchaser's principal(s),
without such person(s) having any obligation to make an independent inquiry or
investigation. The representations and warranties of Purchaser set forth in
this Section 8.2 and elsewhere in this Agreement shall be true, accurate and
correct in all material respects upon the execution of this Agreement, shall be
deemed to be repeated on, and as of, the Closing Date (except as they relate
only to an earlier date) and shall survive the Closing without limitation
except for statutory limitation periods.
ARTICLE 9
COSTS OF TRANSACTION
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9.1 Seller shall be responsible for:
(A) Seller's legal fees attributable to the transfer of
the Properties to Purchaser (including preparation and negotiation of
this Agreement and the consummation of the transactions contemplated
herein);
(B) any transfer or sales taxes imposed by the states
where each of the Properties is located in connection with the
transfer of the Properties to Purchaser;
(C) Purchaser's fee title insurance premiums for the
Properties based upon the standard form of title policy approved by
the state in which the Property is located; and
(D) survey updates for each of the Properties.
9.2 Purchaser shall be responsible for:
(A) engineering, inspection, preparation of due
diligence reports and other due diligence expenses;
(B) recording fees (exclusive of transfer taxes);
(C) except as set forth in Sections 9.1(c) and 9.1(d),
Purchaser's title insurance fees and expenses, and the cost of
affirmative insurance and endorsements for the state in which the
Property is located; and
(D) Purchaser's legal fees attributable to the
acquisition of the Properties.
ARTICLE 10
CONDITIONS PRECEDENT TO CLOSING
10.1 Purchaser's obligation under this Agreement to purchase the
Properties is subject to the fulfillment of each of the following conditions:
(A) the representations and warranties of Seller
contained herein shall be materially true, accurate and correct as of
the Closing Date (except to the extent they relate only to an earlier
date), subject to the provisions of Section 8.1(b), in all material
respects (as hereinafter defined). If any of such representations or
warranties shall prove to be inaccurate or breached in "MATERIAL
RESPECTS", that is, the effect of such inaccuracies or breaches
(individually or in
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the aggregate) shall be materially to diminish the value of the
Property affected thereby, and if Seller shall be unwilling or unable
to correct the same, it being agreed that Seller shall be entitled to
a reasonable adjournment of the Closing for up to 60 days (the
"REPRESENTATION CURE PERIOD") if Seller shall elect to remedy the
same, then Purchaser shall have the option only of closing
notwithstanding the same, or of canceling this Agreement as is
provided herein in the case of a defect in title which is not cured or
elected to be cured by Seller. If Seller shall elect to correct or
remedy such inaccuracies or breaches, then Purchaser's obligation to
close under this Agreement shall remain in full force and effect
during the representation cure period, provided, however, that if
Purchaser's financing arrangements with Protective Life Insurance
Company ("PROTECTIVE LIFE") shall expire during the representation
cure period, Purchaser shall remain obligated to so close only until
the expiration of Purchaser's financing arrangements with Protective
Life, the parties hereto agreeing to use reasonable efforts to extend
their respective financing arrangements.
(B) Seller shall be ready, willing and able to deliver
title to the Properties in accordance with the terms and conditions of
this Agreement;
(C) the Title Company is ready, willing and able to
issue fee title insurance to Purchaser in accordance with the terms
and conditions of this Agreement;
(D) Seller shall have delivered all of the documents and
other items required pursuant to Article 11, and shall have performed
all other covenants, undertakings and obligations, and complied with
all conditions required by this Agreement to be performed or complied
with by the Seller at or prior to the Closing;
(E) Receipt by Purchaser of (I) tenant estoppel
certificates for all anchor tenants at the Properties (as set forth in
SCHEDULE 16 annexed hereto and made a part hereof), (II) tenant
estoppel certificates for sixty percent (60%) of the other tenants at
the Properties, and (III) landlord estoppel certificates for twenty
percent (20%) of the other tenants at the Properties (provided Seller
shall have made reasonable efforts to obtain tenant estoppel
certificates from such other tenants); and
(F) on or prior to Closing Date:
(I) Seller shall not have applied for, or
consented to, the appointment of a receiver, trustee or
liquidator for itself or any of its assets unless the same
shall have been discharged prior to the
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Closing Date, and no such receiver, liquidator or trustee
shall have otherwise been appointed, unless same shall have
been discharged prior to the Closing Date;
(II) Seller shall not have admitted in writing
an inability to pay its debts as they mature;
(III) Seller shall not have made a general
assignment for the benefit of creditors;
(IV) Seller shall not have been adjudicated a
bankrupt or insolvent, or had a petition for reorganization
granted with respect to Seller; or
(V) Seller shall not have filed a voluntary
petition seeking reorganization or an arrangement with
creditors or taken advantage of any bankruptcy,
reorganization, insolvency, readjustment or debt, dissolution
or liquidation law or statute, or filed an answer admitting
the material allegations of a petition filed against it in
any proceedings under any such law, or had any petition filed
against it in any proceeding under any of the foregoing laws,
unless the same shall have been dismissed, canceled, or
terminated prior to the Closing Date.
In the event that any condition contained in this Section 10.1 or in Section
10.2(d) is not satisfied, subject to Section 7.1(b), Section 7.2, Section
8.1(b), Section 16.1, Section 16.2 and Section 17.1, Purchaser shall have, as
its sole remedy hereunder, the right to elect either to:
(I) waive such unsatisfied condition and consummate the
transactions contemplated hereby without any reduction of, or credit
against, the Purchase Price; or
(II) terminate this Agreement, in which event Escrow
Agent shall promptly disburse the Fund (subject to Section 20.4) to
Purchaser provided that Purchaser is not otherwise in default
hereunder, and neither party shall have any further rights,
obligations, or liabilities hereunder except as otherwise specifically
set forth herein.
10.2 Seller's obligation under this Agreement to sell the
Properties to Purchaser is subject to the fulfillment of each of the following
conditions:
(A) the representations and warranties of Purchaser
contained herein
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shall be materially true, accurate and correct as of the Closing Date;
(B) Purchaser shall have delivered to the Title Company
and the Title Company shall have disbursed to Seller the funds
required hereunder;
(C) Purchaser shall have delivered to the Title Company
all the documents to be executed by Purchaser set forth in Article 12
and shall have performed all other covenants, undertakings and
obligations, and complied with all conditions required by this
Agreement to be performed or complied with by Purchaser at or prior to
the Closing;
(D) on or prior to Closing Date:
(I) CS First Boston, the holder of certain
mortgage debt with respect to certain of the Properties and
other properties owned by Seller, shall have agreed to
accept, and CS First Boston shall accept at Closing, as its
sole consideration for releasing such Properties from the
lien of its mortgage(s), the share of the total indebtedness
of Seller to CS First Boston attributable to each of the
Properties allocated as set forth in the mortgage held by CS
First Boston, without any premium of any nature whatsoever
(including, without limitation, any premium or other charge
that CS First Boston might otherwise levy pursuant to any of
the provisions of its mortgage);
(II) CS First Boston and Apollo Real Estate
Advisors, L.P. or its affiliates ("APOLLO"), the holder of
certain mortgage debt with respect to certain of the
Properties and other properties owned by Seller, shall have
agreed to refinance, and CS First Boston and Apollo shall
refinance, on or prior to the Closing, an aggregate mortgage
indebtedness of Seller to CS First Boston and Apollo in the
principal sum of $11,308,236.00 covering certain property
owned by Seller known as Kanawha Mall Center in Charleston,
West Virginia (the "KANAWHA MORTGAGES"), such refinancing of
the Kanawha Mortgages to be on terms and conditions
satisfactory to Seller in all respects; and
(III) Protective Life and Apollo shall have
agreed to refinance, and Protective Life and Apollo shall
refinance, on or prior to the Closing, an aggregate mortgage
indebtedness of Seller to CS First Boston and Apollo in the
principal sum of $8,592,513.00 covering certain property
owned by Seller known as
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Village Royale Shopping Center in Royal Palm Beach, Florida
(the "VILLAGE ROYALE MORTGAGES"), such refinancing of the
Village Royale Mortgages to be on terms and conditions
satisfactory to Seller in all respects; and
(IV) AAL shall have consented to the conveyance
of the Washington Plaza Property subject to the Washington
Plaza First Mortgage and Washington Plaza Wraparound Mortgage
on terms and conditions satisfactory to Seller and Purchaser
in all respects.
(E) on or prior to Closing Date:
(I) Purchaser shall not have applied for, or
consented to, the appointment of a receiver, trustee or
liquidator for itself or any of its assets unless the same
shall have been discharged prior to the Closing Date, and no
such receiver, liquidator or trustee shall have otherwise
been appointed, unless same shall have been discharged prior
to the Closing Date;
(II) Purchaser shall not have admired in writing
an inability to pay its debts as they mature;
(III) Purchaser shall not have made a general h
assignment for the benefit of creditors;
(IV) Purchaser shall not have been adjudicated a
bankrupt or insolvent, or had a petition for reorganization
granted with respect to Purchaser; or
(V) Purchaser shall not have filed a voluntary
petition seeking reorganization or an arrangement with
creditors or taken advantage of any bankruptcy,
reorganization, insolvency, readjustment or debt, dissolution
or liquidation law or statute, or filed an answer admitting
the material allegations of a petition filed against it in
any proceedings under any such law, or had any petition filed
against it in any proceeding under any of the foregoing laws,
unless the same shall have been dismissed, canceled, or
terminated prior to the Closing Date.
In the event that any condition in Section 10.2 is not satisfied, Seller shall
have, as its sole remedy hereunder, the right to elect either to:
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(I) waive such unsatisfied condition, whereupon title
shall close as provided in this Agreement; or
(II) terminate this Agreement and retain or recover the
Fund as liquidated damages (unless any condition in 10.2(d) is not
satisfied and Purchaser is not in default under this Agreement, in
which event the Fund shall be disbursed to Purchaser), and neither
party shall have any further rights, obligations, or liabilities
hereunder, except as otherwise set forth herein.
10.3 Nothing contained in Section 10.1 or 10.2 shall be construed
so as to grant any party any right to terminate this Agreement, unless such
party is expressly granted such right thereunder.
ARTICLE 11
DOCUMENTS TO BE DELIVERED BY SELLER AT CLOSING
11.1 At the Closing, Seller shall execute, acknowledge and/or
deliver (or cause to be delivered), as applicable, the following to the Title
Company:
(A) special warranty deeds (collectively the "DEEDS")
conveying title to the Properties in the respective forms of EXHIBITS
A-1, A-2 , A-3 , A-4 AND A-5, annexed hereto and made a part hereof,
but with such changes as are required by the laws of the applicable
jurisdiction;
(B) an Assignment and Assumption of Leases and Security
Deposits in the form of EXHIBIT B annexed hereto and made a part
hereof assigning without warranty or representation Seller's right,
title and interest in and to the Leases, all guarantees thereof and
the security deposits thereunder in Seller's possession (the "LEASE
ASSIGNMENT").
(C) an Assignment and Assumption of Contracts, Licenses
and Building Plans in the form of EXHIBIT C annexed hereto and made a
part hereof (the "CONTRACT AND LICENSE ASSIGNMENT"), assigning
Seller's right, title and interest in and to:
(I) all of the assignable licenses, permits,
certificates, approvals, authorizations and variances issued
for or with respect to each Property by any governmental
authority (collectively, the "LICENSES");
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(II) all assignable purchase orders, equipment
leases, advertising agreements, franchise agreements, license
agreements, management agreements, leasing and brokerage
agreements and other service contracts relating to the
operation of each Property to the extent Purchaser has agreed
to assume same; and
(III) all building plans and specifications and
guarantees and warranties for any real or personal property
being transferred pursuant to this Agreement;
(D) the Assignment and Assumption of Intangible Property
in the form of EXHIBIT D annexed hereto and made part hereof assigning
all of Seller's right, title and interest, if any, in and to all
intangible property owned by Seller with respect to the operation of
the Properties listed on SCHEDULE 17 annexed hereto and made a part
hereof, including any trade name and logo for the Properties (the
"INTANGIBLE PROPERTY ASSIGNMENT") (the Lease Assignment, the Contract
and License Assignment and the Intangible Property Assignment are
herein referred to collectively as the "ASSIGNMENT AGREEMENT");
(E) a wire transfer to the Title Company (for the
account of Purchaser), or a credit to Purchaser against the Purchase
Price, in the aggregate amount of such security deposits and accrued
interest thereon payable to tenants that are in the possession of, or
received by, Seller. With respect to any lease securities that are
other than cash, Seller shall execute and deliver to Purchaser at the
Closing or thereafter on request of Purchaser any appropriate
instruments of assignment or transfer (and Seller shall pay or credit
Purchaser for any necessary transfer fees in connection therewith)
without warranty or representation that such security may be converted
to cash;
(F) a bill of sale in the form of EXHIBIT E annexed
hereto and made a part hereof (the "BILL OF SALE") conveying,
transferring and selling to Purchaser all right, title and interest of
Seller in and to all Personal Property (including certain Personal
Property at the Marysville Towne Center Property listed on SCHEDULE 18
annexed hereto and made a part hereof) (it is agreed that no portion
of the Purchase Price has been allocated to, or is otherwise
attributable to, the Personal Property);
(G) notices to the tenants of the Properties in the form
of EXHIBIT F annexed hereto and made a part hereof, advising the
tenants of the sale of the Properties to Purchaser (and the amount of
their security deposit) and directing that rents and other payments
thereafter be sent to Purchaser or as Purchaser may direct;
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(H) copies of the resolutions of Seller authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement to be
undertaken by Seller, certified as true and correct by the Secretary
or Assistant Secretary of Seller;
(I) possession of the Properties, subject only to the
Permitted Encumbrances, Leases and any Unacceptable Encumbrances
waived in writing by Purchaser, and, to the extent in Seller's
possession and not already located at the Properties, keys to all
entrance doors to, and equipment and utility rooms located in, the
Properties;
(J) to the extent in Seller's possession and not already
located at the Properties, all Licenses;
(K) any applicable transfer tax returns;
(L) a "FIRPTA" affidavit sworn to by Seller in the form
of EXHIBIT G annexed hereto and made a part hereof. Purchaser
acknowledges and agrees that, upon Seller's delivery of such
affidavits, Purchaser shall not withhold any portion of the Purchase
Price pursuant to Section 1445 of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder;
(M) all files, records, plans and specifications in
Seller's possession, relating to the construction, maintenance,
operation and leasing of the Properties and not previously delivered
to Purchaser;
(N) (I) tenant estoppel certificates for all anchor
tenants listed on SCHEDULE 16, (II) tenant estoppel certificates for
sixty percent (60%) of the other tenants at the Properties, and (III)
landlord estoppel certificates for twenty percent (20%) of the other
tenants at the Properties (provided Seller shall have made reasonable
efforts to obtain tenant estoppel certificates from such other
tenants); said tenant estoppel certificates to be substantially in the
form of EXHIBIT H annexed hereto PROVIDED, HOWEVER, that failure of
Seller to obtain said tenant estoppels substantially in the form
annexed hereto or otherwise shall not be a default hereunder;
(O) copies of the Leases and, to the extent in Seller's
possession, original, executed counterparts of such Lease;
(P) copies of the Contracts that Purchaser agrees to
assume (and to the extent in Seller's possession, originals of such
Contracts);
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(Q) all other documents that Seller is required to
deliver pursuant to the provisions of this Agreement; and
(R) a current rent roll in a form similar to that
attached to this Agreement certified by Seller's property manager and
dated the Closing Date.
11.2 To the extent that the copies of the Leases delivered to
Purchaser pursuant to Section 11.1(p) were not executed counterparts, Seller,
on or before thirty (30) days after the Closing, shall deliver to Purchaser:
(A) for each such Lease that it entered into, a
certificate duly acknowledged, representing that Seller has been
unable to locate the original and that annexed is a true and complete
copy; and
(B) for each such Lease that Seller's predecessor
entered into, a certificate, duly acknowledged, representing to
Seller's knowledge, that Seller has been unable to locate the original
and that annexed is a true and complete copy.
ARTICLE 12
DOCUMENTS TO BE DELIVERED BY PURCHASER AT CLOSING
12.1 At the Closing, Purchaser shall execute, acknowledge and/or
deliver, as applicable, the following to the Title Company:
(A) the Cash Balance, subject to apportionments, credits
and adjustments as provided in this Agreement, for disbursement by the
Title Company in accordance with Seller's instructions;
(B) the Bills of Sale;
(C) if Purchaser is a corporation:
(I) copies of the certificate of incorporation
and by-laws of Purchaser and of the resolutions of the board
of directors of Purchaser authorizing the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement certified as true
and correct by the Secretary or Assistant Secretary of
Purchaser;
(II) a good standing certificate issued by the
state of
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incorporation of Purchaser, dated within thirty (30) days of
the Closing Date;
(III) a good standing certificate issued in all
jurisdictions where Purchaser is required by law to be in
good standing in order to hold title to a Property, dated
within thirty (30) days of the Closing Date; and
(IV) an incumbency certificate executed by the
Secretary or Assistant Secretary of Purchaser with respect to
those officers of Purchaser executing any documents or
instruments in connection with the transactions contemplated
herein;
(D) The Assignment Agreement;
(E) any applicable Transfer Tax Returns; and
(F) all other documents Purchaser is required to deliver
pursuant to the provisions of this Agreement.
ARTICLE 13
OPERATION OF THE PROPERTIES
13.1 Between the date hereof and the Closing Date, Seller agrees
to continue to operate and manage the Properties in substantially the same
manner as it did prior to the execution and delivery of this Agreement,
including preserving the good will of all suppliers and tenants. In connection
therewith:
(A) Seller may not modify, extend, renew, cancel,
terminate, or permit the expiration of any Lease (other than on the
expiration date provided in the same), or enter into any proposed
lease of all or any portion of the Properties, without Purchaser's
consent, and, if such consent is requested, such consent shall not be
unreasonably withheld and shall be given or denied, with the reasons
for any such denial, within the applicable period specified in this
Section 13.1(a). If Seller enters into any permitted new Leases, or if
there is any permitted extension or renewal of any Leases, whether or
not such Leases provide for their extension or renewal, or any
expansion or modification of any Leases (each, a "NEW LEASE"), Seller
shall keep accurate records of all expenses (collectively, "NEW LEASE
EXPENSES") incurred in connection with each New Lease. The New Lease
Expenses for each New Lease allocable to and payable by Seller shall
be determined by multiplying the amount of such New Lease Expenses by
a fraction,
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the numerator of which shall be the number of days contained in that
portion, if any, of the term of such New Lease commencing on the date
on which the tenant thereunder shall have commenced to pay fixed rent
("RENT COMMENCEMENT DATE") and expiring on the date immediately
preceding the Closing Date, and the denominator of which shall be the
total number of days contained in the period commencing on the Rent
Commencement Date and expiring on the date of the scheduled expiration
of the term of such New Lease, and the remaining balance of the New
Lease Expenses for each New Lease shall be allocable to and payable by
Purchaser. For purposes of this Section 13.1(a), the Rent Commencement
Date under a renewal, extension, expansion or modification of a Lease
shall be deemed to be:
(X) in the case of a renewal or extension
(whether effective prior to or after the Closing, or in the
form of an option exercisable in the future), the first date
during such renewal or extension period after the originally
scheduled expiration of the term of such Lease on which the
tenant under such Lease commences to pay fixed rent;
(Y) in the case of an expansion (whether
effective prior to or after the Closing, or in the form of an
option exercisable in the future), the date on which the
tenant under such Lease commences to pay fixed rent for the
additional space; and
(Z) in the case of a modification not also
involving a renewal, extension or expansion of such Lease,
the effective date of such modification agreement. At the
Closing, Purchaser shall reimburse Seller for all New Lease
Expenses theretofore paid by Seller, if any, in excess of the
portion of the New Lease Expenses allocated to Seller
pursuant to the provisions of the preceding sentence.
The provisions of this Section 13.1(a) shall survive the Closing. With respect
to any request for consent by Seller to be submitted to Purchaser for its
consent pursuant to Section 13.1(a) (which consent shall be accompanied by
related term sheets and other supporting information in reasonable detail
relating to the requested action), Purchaser shall consent or deny its consent,
with the reasons for any such denial, within the following ten (10) business
days. If notice of any denied consent is not received, Purchaser's consent
shall be deemed to have been granted.
(B) Subject to obtaining Purchaser's required consent
under Section 13.1(a), Seller reserves the right, but is not
obligated, to institute summary proceedings against any tenant or to
terminate any Lease as a result of a default by
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the tenant thereunder prior to the Closing Date. Seller make no
representations and assumes no responsibility with respect to the
continued occupancy of the Properties or any part thereof by any
tenant, subject, however, to the provisions of Section 10.1(e) hereof.
The permitted removal of a tenant, whether by summary proceedings or
otherwise, prior to the Closing Date shall not give rise to any claim
on the part of Purchaser. Further, Purchaser agrees that it shall not
be grounds for Purchaser's refusal to close this transaction that any
tenant is a holdover tenant or in default under its Lease on the
Closing Date, and Purchaser shall accept title subject to such holding
over or default without credit against, or reduction of, the Purchase
Price.
(C) Seller shall not modify, extend, renew, or cancel
(except as a result of a default by the other party thereunder) any
Contracts, or enter into any new Contract without Purchaser's prior
consent in each instance, which consent shall not be unreasonably
withheld or delayed, and if withheld, Purchaser shall promptly give
Seller a notice stating the reasons therefor; provided, however, that
Purchaser's consent shall not be required to the aforestated actions
with the exception of cancellation if such Contract may be terminated
at any time on not more than thirty (30) days' prior notice by Seller,
or its successor, without the payment of a penalty. Unless Purchaser
indicates in writing to Seller that Purchaser will be assuming a
Contract, Seller shall promptly take steps to terminate said Contract
as of the Closing Date or as soon thereafter as possible.
(D) Seller will keep in force and effect with respect to
the Properties the casualty insurance policies currently carried by
Seller listed on SCHEDULE 13 or policies providing similar coverage.
(E) From the date hereof until the Closing, Seller shall
not withdraw, settle or otherwise compromise any protest or reduction
proceedings relating to the assessed valuation of the Properties for
any tax year subsequent to the tax year in which the Closing occurs or
the tax year in which the Closing occurs, without Purchaser's prior
consent in each instance. Seller shall, at Closing, assign to
Purchaser, without representation, warranty or recourse of any kind
all of Seller's right, title and interest (if any) in and to any then
pending protests or reduction proceedings relating to the assessed
valuation of the Properties for any fiscal tax year(s) in which the
Closing occurs or subsequent to the respective tax years in which the
Closing occurs, whereupon Purchaser shall be authorized to continue
and control the progress of, and to make all decisions with respect
to, any such proceedings. All net tax refunds and credits attributable
to any tax year prior to the tax year in which the Closing occurs
shall belong to and be the property of Seller. All net tax refunds and
credits attributable to any tax year subsequent to the tax year in
which the Closing occurs shall belong to and be the property of
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Purchaser. All net tax refunds and credits attributable to the tax
year in which the Closing occurs shall be divided between Seller and
Purchaser in accordance with the apportionment of taxes pursuant to
the provisions of this Agreement, after deducting therefrom a pro rata
share of all expenses, including, without limitation, counsel fees and
disbursements and consultant's fees, incurred in obtaining such
refund, the allocation of such expenses to be based upon the total
refund obtained in such proceeding and in any other proceeding
simultaneously involved in the trial or settlement. Each party agrees
to cooperate reasonably with the other party in connection with the
prosecution of any such proceedings and to take all steps, whether
before or after the Closing Date, as may be necessary to carry out the
intention of the foregoing, including, without limitation, the
delivery to the other party, upon demand, of any relevant books and
records, including receipted tax bills and canceled checks used in
payment of such taxes in possession or control of the requesting
party, the execution of any and all consents or other documents, and
the undertaking of any act reasonably necessary for the collection of
such refund by the requesting party. All tax refunds to be paid to
either party after the Closing as contemplated under this Section
13(e) shall be net of any amounts due tenants at the Properties on
account of any such tax refunds, and Seller and Purchaser shall
jointly determine such amount(s) (if any) due tenants and direct the
Seller's tax protest or certiorari counsel to deduct such amounts from
the gross tax refund and forward the same to the appropriate tenant(s)
prior to making any payment to Seller or Purchaser (as the case may
be). The provisions of this Section 13.1(e) shall survive the Closing.
(F) Seller has advised Purchaser and Purchaser is aware
that Seller is currently involved in negotiations for a new lease with
McDonald's Corporation ("MCDONALD'S") for a 20,000 square foot site pad at the
Holly Farm Shopping Center Property. Seller has furnished Purchaser with copies
of the latest draft lease for McDonald's and Seller shall not enter into a
final lease with McDonald's without Purchaser's consent, such consent not to be
unreasonably withheld or delayed. Subject to execution and delivery of a final
lease with McDonald's, Seller shall pay all leasing commissions in connection
therewith and site demolition expenses (up to $50,000.00) to be paid by
landlord under said lease. Seller shall also pay all legal expenses incurred by
Seller through the Closing Date in connection with said pending lease with
McDonald's. The provisions of this Section 13.1(f) shall survive the Closing.
13.2 With respect to the costs and expenses of work (including
tenant improvement work) performed or to be performed to leased space that is
to be either paid by landlord or reimbursed by landlord to tenants pursuant to
any Lease (other than any pending Lease that is set forth on SCHEDULE 19
attached hereto), Seller shall be responsible for such work and agrees to
perform and/or complete such work, or to cause such work to be performed and/or
completed through Seller's manager (i.e., Insignia/ESG, Inc.) or replacement
manager if Seller's current manager is terminated, in accordance with the
requirements of the applicable Leases. With
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respect to the above-described work, Seller, as to each Property, shall carry
insurance for liability, bodily and personal injury (including death) and
property damage and workers compensation in form and amounts reasonably
satisfactory to Purchaser. Seller shall indemnify Purchaser for any losses
caused by Seller's failure to complete such tenant improvement work in
accordance with such tenant's Lease and free of liens and all claims for unpaid
charges. Seller shall also remain responsible for all brokerage and leasing
commissions relating to the Leases that are listed in SCHEDULES 20 and 21
attached hereto, provided, however, Seller shall not be responsible for
brokerage and leasing commissions for options, extensions, renewals or
expansions not exercised prior to the Closing Date. In connection with Seller
performing the above-described work, Purchaser shall reasonably cooperate with
Seller in providing Seller with reasonable access to the Properties for purpose
of carrying out such work. With respect to the above-described work, all such
work shall be performed and completed in compliance with applicable Lease
requirements and without unreasonable interference to the other tenants of the
Properties (including their employees and invitees) and free of liens and
unpaid claims. Any liens resulting from such work will be discharged by Seller
by payment or bonding within 45 days unless sooner action is necessary to avert
lien foreclosure. The provisions of this Section 13.2 shall survive Closing.
ARTICLE 14
AS IS
14.1 Purchaser expressly acknowledges and agrees to accept title
to the Properties on an "as-is-where-is and with all faults" basis except as
otherwise provided in this Agreement.
14.2 Except for separate agreement(s) entered in writing by the
parties hereto contemporaneously herewith or at Closing, this Agreement, as
written, contains all the terms of the agreement entered into between the
parties as of the date hereof, and Purchaser acknowledges, that neither Seller
nor any of Seller's Affiliates (as hereinafter defined), nor any of their
agents or representatives, has made any representations or held out any
inducements to Purchaser, and Seller hereby specifically disclaims any
representation, oral or written, past, present or future, other than those
specifically set forth in Sections 8.1 and 15.1, or elsewhere in this
Agreement. Without limiting the generality of the foregoing, Purchaser has not
relied on any representations or warranties, and neither Seller nor any of
Seller's Affiliates, nor any of their agents or representatives has or is
willing to make any representations or warranties, express or implied, other
than as may be expressly set forth in this Agreement, as to:
(A) the status of title to the Properties;
(B) the Leases;
(C) the Contracts;
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(D) the Licenses;
(E) the current or future real estate tax liability,
assessment or valuation of the Properties;
(F) the potential qualification of the Properties for
any and all benefits conferred by any Laws whether for subsidies,
special real estate tax treatment, insurance, mortgages or any other
benefits, whether similar or dissimilar to those enumerated;
(G) the compliance of the Properties in its current or
any future state with applicable Laws or any violations thereof,
including, without limitation, those relating to access for the
handicapped, environmental or zoning matters, and the ability to
obtain a change in the zoning or a variance in respect to the
Properties' non-compliance, if any, with zoning Laws;
(H) the nature and extent of any right-of-way, lease,
possession, lien, encumbrance, license, reservation, condition or
otherwise;
(I) the availability of any financing for the purchase,
alteration, rehabilitation or operation of the Properties from any
source, including, without limitation, any government authority or any
lender;
(J) the current or future use of the Properties;
(K) the present and future condition and operating state
of any Personal Property and the present or future structural and
physical condition of any of the Buildings, their suitability for
rehabilitation or renovation, or the need for expenditures for capital
improvements, repairs or replacements thereto;
(L) the viability or financial condition of any tenant;
(M) the status of the leasing market in which the
Properties is located; and/or
(N) the actual or projected income or operating expenses
of the Properties.
14.3 Purchaser acknowledges that Seller has afforded Purchaser the
opportunity for full and complete investigations, examinations and inspections
of the Properties and all Property Information. Purchaser acknowledges and
agrees that:
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(A) the Property Information delivered or made available
to Purchaser and Purchaser's Representatives (as hereinafter defined)
by Seller or Seller's Affiliates, or any of their agents or
representatives may have been prepared by third parties and may not be
the work product of Seller and/or any of Seller's Affiliates;
(B) neither Seller nor any of Seller's Affiliates has
made any independent investigation or verification of, or has any
knowledge of, the accuracy or completeness of, the Property
Information, except for those items specifically covered by Seller
representations in Article 8;
(C) except for those items specifically referenced in
the schedules referred to in Article 8, the Property Information
delivered or made available to Purchaser and Purchaser's
Representatives is furnished to each of them at the request, and for
the convenience of, Purchaser;
(D) Purchaser is relying solely on its own
investigations, examinations and inspections of the Properties and
those of Purchaser's Representatives and is not relying in any way on
the Property Information furnished by Seller or any of Seller's
Affiliates, or any of their agents or representatives (except those
items specifically covered by Seller representations in Article 8);
(E) Seller expressly disclaims any representations or
warranties with respect to the accuracy or completeness of the
Property Information (except those items specifically covered by
Seller representations in Article 8) and Purchaser releases Seller and
Seller's Affiliates, and their agents and representatives, from any
and all liability with respect thereto (except those items
specifically covered by Seller representations in Article 8); and
(F) any further distribution of the Property Information
is subject to Article 24.
14.4 Purchaser or anyone claiming by, through or under Purchaser,
hereby fully and irrevocably releases Seller and Seller's Affiliates, and their
agents and representatives, from any and all claims that it may now have or
hereafter acquire against Seller or Seller's Affiliates, or their agents or
representatives for any cost, loss, liability, damage, expense, action or cause
of action, whether foreseen or unforeseen, arising from or related to any
construction defects, construction errors or omissions on or in the Properties,
or any other construction related conditions (whether patent, latent or
otherwise) affecting the Properties, except for:
(A) claims against Seller based upon any
representations, warranties,
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obligations or liabilities of Seller expressly provided in this
Agreement; and
(B) obligations that Seller or Seller's Affiliates have
expressly retained or undertaken pursuant to separate agreement(s)
entered in writing by the parties hereto contemporaneously herewith.
As a material covenant and condition of this Agreement, Purchaser agrees that
in the event of any such construction defects, errors or omissions, or any
other construction related conditions affecting the Properties, Purchaser shall
look solely to Seller's predecessors in interest or to such contractors and
consultants as may have contracted for work in connection with the Properties
for any redress or relief, except for claims against Seller based upon any
representations, warranties, obligations or liabilities of Seller expressly
provided in this Agreement. Purchaser further understands that some of Seller's
predecessors in interest or such contractors and consultants may have filed
petitions under the bankruptcy code and Purchaser may have no remedy against
such predecessors, contractors or consultants.
14.5 Purchaser acknowledges that it has inspected the Properties,
is acquainted with and accepts their condition, and has reviewed, to the extent
necessary in its discretion, all the Property Information. Seller shall not be
liable or bound in any manner by any oral or written "setups" or information
pertaining to the Properties or the rents furnished by Seller (except as
represented herein), Seller's Affiliates, their agents or representatives, any
real estate broker, or other person.
14.6 The provisions of this Article 14 shall survive the
termination of this Agreement and the Closing.
ARTICLE 15
BROKER
15.1 Purchaser and Seller represent and warrant to the other that
it or they, as the case may be, have not dealt with any broker in connection
with the Property and the transactions described herein. Each party hereto
agrees to indemnify, defend and hold the other harmless from and against any
and all claims, causes of action, losses, costs, expenses, damages or
liabilities, including reasonable attorneys' fees and disbursements, which the
other may sustain, incur or be exposed to, by reason of any claim or claims by
any broker, finder or other person, for fees, commissions or other compensation
arising out of the transactions contemplated in this Agreement if such claim or
claims are based in whole or in part on dealings or agreements with the
indemnifying party.
15.2 The obligations and representations and warranties contained
in this Article 15 shall survive the termination of this Agreement and the
Closing.
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ARTICLE 16
CASUALTY; CONDEMNATION
16.1 If a material part (as hereinafter defined) of any Property
is damaged or destroyed by fire or other casualty, Seller shall notify
Purchaser of such fact and, except as hereinafter provided, Purchaser shall
have the option to terminate this Agreement, in which event Escrow Agent shall
promptly disburse the Fund (subject to Section 24.4) to Purchaser provided that
Purchaser is not otherwise in default hereunder, and neither party shall have
any further rights, obligations, or liabilities hereunder except as otherwise
specifically set forth herein. If Purchaser elects to waive its aforementioned
option, or there is damage to or destruction of an immaterial part
("IMMATERIAL" is herein deemed to be any damage or destruction that is not
material, as such term is hereinafter defined) of a Property, Purchaser shall
close title as provided in this Agreement and, at the Closing, Seller shall,
unless Seller has repaired such damage or destruction prior to the Closing:
(A) pay over to Purchaser the proceeds of any insurance
collected by Seller less the amount of all costs incurred by Seller in
connection with the repair of such damage or destruction; and
(B) assign and transfer to Purchaser all right, title
and interest of Seller in and to any uncollected insurance proceeds
that Seller may be entitled to receive from such damage or destruction
(Seller shall bear the cost of any applicable insurance deductible).
A "MATERIAL" part of a Property shall be deemed to have been damaged or
destroyed if:
(I) the cost of repair or replacement shall be
10% or more of the allocated Purchase Price of such Property,
as such cost is reasonably estimated by an independent
engineer selected by Seller and reasonably approved by
Purchaser; or
(II) one or both of the two largest tenants at
the damaged Property irrevocably terminates or is entitled to
terminate their lease.
16.2 If, prior to the Closing Date, all or any significant portion
(as hereinafter defined) of any Property is taken by eminent domain or
condemnation (or is the subject of a pending taking which has not been
consummated), Seller shall notify Purchaser of such fact and the Purchaser
shall have the option to terminate this Agreement, in which event Escrow Agent
shall promptly disburse the Fund (subject to Section 20.4) to Purchaser
provided that Purchaser is not
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otherwise in default hereunder, and neither party shall have any further
rights, obligations, or liabilities hereunder except as otherwise specifically
set forth herein. If Purchaser elects to waive its aforementioned option, or if
an insignificant portion ("INSIGNIFICANT" is herein deemed to be any taking
that is not significant, as such term is herein defined) of a Property is taken
by eminent domain or condemnation, at the Closing Seller shall assign and
turnover, and Purchaser shall be entitled to receive and keep, all awards or
other proceeds for such taking by eminent domain or condemnation. A
"SIGNIFICANT" portion of a Property means:
(A) any portion of the shopping center building;
(B) a portion of the parking areas if the taking thereof
reduces the remaining available number of parking spaces below the
minimum legally required or the minimum required by the leases of one
or both of the two largest tenants; or
(C) such taking materially interferes with ingress
thereto or egress therefrom.
16.3 Notwithstanding anything contained in Sections 16.1 and 16.2
to the contrary, if Purchaser elects not to terminate this Agreement as
provided in Section 16.1 or 16.2, and the insurance, eminent domain, or
condemnation proceeds payable with respect to the Properties as a result of any
casualty or taking exceeds the Purchase Price, Seller's obligation to pay over
to Purchaser those proceeds paid to Seller prior to the Closing shall be
limited to the amount of the Purchase Price plus 50% of the remainder of such
proceeds (net of Seller's reasonable costs and expenses in obtaining such
proceeds). To the extent that payment of all or any portion of such proceeds
does not occur prior to the Closing, the parties agree that Seller shall be
entitled to such portion of the proceeds in excess of the Purchase Price, which
agreement shall survive the Closing.
ARTICLE 17
REMEDIES
17.1 If the Closing fails to occur by reason of Seller's inability
(subject to Section 7.2) to perform its obligations under this Agreement, then
Purchaser, as its sole remedy for such inability of Seller, may by notice to
Seller terminate this Agreement, in which event Escrow Agent shall promptly
disburse the Fund (subject to Section 20.4) to Purchaser provided that
Purchaser is not otherwise in default hereunder, and neither party shall have
any further rights, obligations, or liabilities hereunder except as otherwise
specifically set forth herein. Except as set forth in this Section 17.1,
Purchaser hereby expressly waives, relinquishes and releases any other right or
remedy available to it at law, in equity or otherwise by reason of Seller's
inability to perform its obligations hereunder.
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17.2 If the Closing fails to occur by reason of Purchaser's
failure or refusal to perform its obligations hereunder, then Seller sole
remedy shall be to terminate this Agreement by notice to Purchaser and to
retain or recover the Fund as liquidated damages for all loss, damage and
expenses suffered by Seller, it being agreed that Seller's damages are
impossible to ascertain, and neither party shall have any further rights,
obligations or liabilities hereunder except as otherwise set forth herein.
17.3 If the Closing fails to occur by reason of Seller's failure
or refusal to perform its obligations hereunder, then Purchaser, as its sole
remedy hereunder, may:
(A) terminate this Agreement by notice to Seller, in
which event Escrow Agent shall promptly disburse the Fund to Purchaser
provided that Purchaser is not otherwise in default hereunder; or
(B) seek specific performance from Seller.
As a condition precedent to Purchaser exercising any right it may have to bring
an action for specific performance as the result of Seller's failure or refusal
to perform its obligations hereunder, Purchaser must commence such an action
within one hundred eighty (180) days after the occurrence of such default.
Purchaser agrees that its failure to timely commence such an action for
specific performance within such one hundred eighty (180) day period shall be
deemed a waiver by it of its right to commence such an action.
ARTICLE 18
PURCHASER'S ACCESS TO THE PROPERTIES
18.1 Purchaser and Purchaser's Representatives shall have the
right to enter upon the Properties for the sole purpose of inspecting the
Properties and making surveys, soil borings, engineering tests and other
investigations, inspections and tests (collectively, "INVESTIGATIONS"),
provided:
(A) Purchaser shall give Seller not less than five (5)
days' prior notice before the first such entry and one (1) day's prior
notice before each subsequent entry;
(B) the first such notice shall include sufficient
information to permit Seller to review the scope of the proposed
Investigations; and
(C) neither Purchaser nor Purchaser's Representatives
shall permit any borings, drillings or samplings to be done on any of
the Properties without Seller's
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prior written consent.
Any entry upon the Properties and all Investigations shall be during Seller's
normal business hours and at the sole risk and expense of Purchaser and
Purchaser's Representatives, and shall not unreasonably interfere with the
activities on or about the Properties of Seller, its tenants and their
employees and invitees. Purchaser shall:
(I) promptly repair any damage to the
Properties resulting from any such Investigations and
replace, refill and regrade any holes made in, or excavations
of, any portion of the Properties used for such
Investigations so that the Properties shall be in the same
condition that it existed in prior to such Investigations;
(II) fully comply with all Laws applicable to
the Investigations and all other activities undertaken in
connection therewith;
(III) permit Seller to have a representative
present during all Investigations undertaken hereunder;
(IV) take all actions and implement all
protections necessary to ensure that all actions taken in
connection with the Investigations, and the equipment,
materials, and substances generated, used or brought onto the
Properties pose no threat to the safety or health of persons
or the environment, and cause no damage to the Properties or
other property of Seller or other persons;
(V) furnish to Seller, at no cost or expense to
Seller, copies of all surveys, soil test results,
engineering, asbestos, environmental and other studies and
reports relating to the Investigations which Purchaser shall
obtain with respect to the Properties promptly after
Purchaser' s receipt of same;
(VI) maintain or cause to be maintained, at
Purchaser's expense, a policy of commercial general liability
insurance, and with a combined single limit of not less than
$1,000,000 per occurrence for bodily injury and property
damage, automobile liability coverage including owned and
hired vehicles with a combined single limit of $1,000,000 per
occurrence for bodily injury and property damage, and an
excess umbrella liability policy
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for bodily injury and property damage in the amount of
$5,000,000, insuring Purchaser and Seller and Seller's
Affiliates, as additional insureds, against any injuries or
damages to persons or property that may result from or are
related to:
(X) Purchaser's and/or Purchaser's
Representatives' entry upon the Properties;
(Y) any Investigations or other
activities conducted thereon; and
(Z) any and all other activities
undertaken by Purchaser and/or Purchaser's
Representatives with respect to the Properties,
all of which insurance shall be on an "occurrence form" and otherwise
in such forms and with an insurance company reasonably acceptable to
Seller, and deliver a copy of such insurance policy to Seller prior to
the first entry on the Properties;
(VII) not allow the Investigations or any and all
other activities undertaken by Purchaser or Purchaser's
Representatives to result in any liens, judgments or other
encumbrances being filed or recorded against the Properties,
and Purchaser shall, at its sole cost and expense, promptly
discharge of record any such liens or encumbrances that are
so filed or recorded (including liens for services, labor or
materials furnished); and
(VIII) indemnify Seller and Seller's Affiliates
and hold Seller and Seller's Affiliates harmless from and
against any and all claims, demands, causes of action,
losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees and disbursements), suffered or
incurred by Seller or any of Seller's Affiliates and arising
out of or in connection with:
(W) Purchaser's and/or Purchaser's
Representatives' entry upon the Properties;
(X) any Investigations or other
activities conducted thereon by Purchaser or
Purchaser's Representatives;
(Y) any Liens or other encumbrances
filed or
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recorded against the Properties as a consequence of
the Investigations or any and all other activities
undertaken by Purchaser or Purchaser' s
Representatives; and/or
(Z) any and all other activities
undertaken by Purchaser or Purchaser's
Representatives with respect to the Properties.
18.2 The provisions of this Article 18 shall survive the
termination of this Agreement and the Closing.
ARTICLE 19
INDEMNITIES
19.1 Seller shall indemnify and hold Purchaser harmless from and
against all suits, actions, proceedings, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements) that may be
instituted or asserted against or incurred by Purchaser in connection with the
litigations set forth on SCHEDULE 22 attached hereto, provided, that, Seller
shall have the right to prosecute and defend the same with counsel selected by
Seller. This Section 19.1 shall survive the closing.
19.2 Seller shall indemnify and hold Purchaser harmless from and
against any pre-closing non-contractual claims arising with respect to any of
the Properties which are not covered by insurance during its ownership of the
Properties. This Section 19.2 shall survive the Closing.
19.3 Purchaser shall indemnify and hold Seller harmless from and
against any post-closing non-contractual claims arising with respect to any of
the Properties which are not covered by insurance during its ownership of the
Properties. This Section 19.3 shall survive the Closing.
ARTICLE 20
ESCROW
20.1 Escrow Agent shall hold the Downpayment and all interest
accrued thereon, if any (collectively, the "FUND") in escrow and shall dispose
of the Fund only in accordance with the provisions of this Article 20.
20.2 Escrow Agent shall deliver the Fund to Seller or Purchaser,
as the case may be, as follows:
(A) to Seller, upon completion of the Closing; or
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(B) to Seller, after receipt of Seller's demand in which
Seller certifies either that:
(I) Purchaser has defaulted under this
Agreement; or
(II) this Agreement has been otherwise
terminated or canceled,
and Seller is thereby entitled to receive the Fund; but Escrow Agent
shall not honor Seller's demand until more than ten (10) days after
Escrow Agent has given a copy of Seller's demand to Purchaser in
accordance with Section 20.3(a), nor thereafter if Escrow Agent
receives a Notice of Objection from Purchaser within such ten (10) day
period; or
(C) to Purchaser, after receipt of Purchaser's demand in
which Purchaser certifies either that:
(I) Seller has defaulted under this Agreement;
or
(II) this Agreement has been otherwise
terminated or canceled,
and Purchaser is thereby entitled to receive the Fund; but Escrow
Agent shall not honor Purchaser' s demand until more than ten (10)
days after Escrow Agent has given a copy of Purchaser's demand to
Seller in accordance with Section 20.3(a), nor thereafter if Escrow
Agent receives a Notice of Objection from Seller within such ten (10)
day period.
Upon delivery of the Fund, Escrow Agent shall be relieved of all liability
hereunder and with respect to the Fund. Escrow Agent shall deliver the Fund, at
the election of the party entitled to receive the same, by:
(X) a good, unendorsed certified check of
Escrow Agent payable to the order of such party;
(Y) an unendorsed official bank or cashier's
check payable to the order of such party; or
(Z) a bank wire transfer of immediately
available funds to an account designated by such party.
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20.3 Upon receipt of a written demand from Seller or Purchaser
under Section 20.2(b) or (c), Escrow Agent shall send a copy of such demand to
the other party. Within ten (10) days after the date of receiving same, but not
thereafter, the other party may object to delivery of the Fund to the party
making such demand by giving a notice of objection (a "NOTICE OF OBJECTION") to
Escrow Agent. After receiving a Notice of Objection, Escrow Agent shall send a
copy of such Notice of Objection to the party who made the demand; and
thereafter, in its sole and absolute discretion, Escrow Agent may elect either:
(A) to continue to hold the Fund until Escrow Agent
receives a written agreement of Purchaser and Seller directing the
disbursement of the Fund, in which event Escrow Agent shall disburse
the Fund in accordance with such agreement;
(B) to take any and all actions as Escrow Agent deems
necessary or desirable, in its sole and absolute discretion, to
discharge and terminate its duties under this Agreement, including,
without limitation, depositing the Fund into any court of competent
jurisdiction and bringing any action of interpleader or any other
proceeding; and/or
(C) in the event of any litigation between Seller and
Purchaser, to deposit the Fund with the clerk of the court in which
such litigation is pending.
If Escrow Agent is uncertain for any reason whatsoever as to its duties or
rights hereunder (and whether or not Escrow Agent has received any written
demand under Section 20.2(b) or (c), or Notice of Objection under Section
20.3), notwithstanding anything to the contrary herein, Escrow Agent may hold
and apply the Fund pursuant to Section 20.3(a), (b), or (c) and may decline to
take any other action whatsoever. In the event the Fund is deposited in a court
by Escrow Agent pursuant to Section 20.3(b) or (c), Escrow Agent shall be
entitled to rely upon the decision of such court. In the event of any dispute
whatsoever among the parties with respect to disposition of the Fund, Purchaser
and Seller shall pay the reasonable attorney's fees and costs incurred by
Escrow Agent (which said parties shall share equally, but for which said
parties shall be jointly and severally liable) for any litigation in which
Escrow Agent is named as, or becomes, a party.
20.4 Notwithstanding anything to the contrary in this Agreement,
within one (1) business day after the date of this Agreement, Escrow Agent
shall place the Downpayment in an Approved Investment. The interest, if any,
which accrues on such Approved Investment shall be deemed part of the Fund; and
Escrow Agent shall dispose of such interest as and with the Fund pursuant to
this Agreement. Escrow Agent may not commingle the Fund with any other funds
held by Escrow Agent. Escrow Agent may convert the Fund from the Approved
Investment into cash or a non-interest-bearing demand account at an Approved
Institution as follows:
(A) at any time within seven (7) days prior to the
Closing Date; or
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(B) if the Closing Date is accelerated or extended, at
any time within seven (7) days prior to the accelerated or extended
Closing Date (provided, however, that Seller and Purchaser shall give
Escrow Agent timely notice of any such acceleration or extension and
that Escrow Agent may hold the Fund in cash or a non-interest-bearing
deposit account if Seller and Purchaser do not give Escrow Agent
timely notice of any such adjournment).
20.5 As used herein, the term "APPROVED INVESTMENT" means:
(A) any interest-bearing demand account or money market
fund in Chase Bank of Texas, N.A. located in the City of Dallas or in
any other institution otherwise approved by both Seller and Purchaser
(collectively, an "APPROVED INSTITUTION"); or
(B) any other investment approved by both Seller and
Purchaser.
The rate of interest or yield need not be the maximum available and deposits,
withdrawals, purchases, reinvestment of any matured investment and sales shall
be made in the sole discretion of Escrow Agent, which shall have no liability
whatsoever therefor. Discounts earned shall be deemed interest for the purpose
hereof.
20.6 Escrow Agent shall have no duties or responsibilities except
those set forth herein, which the parties hereto agree are ministerial in
nature. Seller and Purchaser acknowledge that Escrow Agent is serving without
compensation, solely as an accommodation to the parties hereto, and except for
Escrow Agent's own willful default, misconduct or gross negligence, Escrow
Agent shall have no liability of any kind whatsoever arising out of or in
connection with its activity as Escrow Agent. Seller and Purchaser jointly and
severally agree to and do hereby indemnify and hold harmless Escrow Agent from
all loss, cost, claim, damage, liability, and expense (including reasonable
attorney's fees and disbursements) which may be incurred by reason of its
acting as Escrow Agent provided the same is not the result of Escrow Agent's
willful default, misconduct or gross negligence. Escrow Agent may charge
against the Fund any amounts owed to it under the foregoing indemnity or may
withhold the delivery of the Fund as security for any unliquidated claim, or
both.
20.7 Any Notice of Objection, demand or other notice or
communication which may or must be sent, given or made under this Agreement to
or by Escrow Agent shall be sent in accordance with the provisions of Article
23.
20.8 Simultaneously with their execution and delivery of this
Agreement, Purchaser and Seller shall furnish Escrow Agent with their true
Federal Taxpayer Identification Numbers so that Escrow Agent may file
appropriate income tax information returns with respect to any
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interest in the Fund or other income from the Approved Investment. The party
ultimately entitled to any accrued interest in the Fund shall be the party
responsible for the payment of any tax due thereon.
20.9 Seller and Purchaser waive any claim of conflict of interest
by reason of Escrow Agent's actions in that capacity under this Agreement.
20.10 Any amendment of this Agreement which could alter or
otherwise affect Escrow Agent's obligations hereunder will not be effective
against or binding upon Escrow Agent without Escrow Agent's prior consent,
which consent may be withheld in Escrow Agent's sole and absolute discretion.
20.11 Notwithstanding anything contained herein to the contrary,
Escrow Agent shall not release the Fund without written authorization from both
Seller and Purchaser.
20.12 The provisions of this Article 20 shall survive the
termination of this Agreement and the Closing.
ARTICLE 21
ASSIGNMENT
21.1 Purchaser shall not assign all or any portion of its rights
under this Agreement to any person or entity without the prior written consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion. Any assignment or attempted assignment by Purchaser shall
constitute a default by Purchaser hereunder and shall be null and void.
Notwithstanding the foregoing, Purchaser may assign its rights under this
Agreement to an entity or entities controlled by Purchaser and Apollo.
ARTICLE 22
ACCESS TO RECORDS
22.1 For a period of three (3) years subsequent to the Closing
Date, Seller, Seller's Affiliates and their employees, agents and
representatives shall be entitled to access during business hours to all
documents, books and records given to Purchaser by Seller at the Closing for
tax and audit purposes, regulatory compliance, and cooperation with
governmental investigations upon reasonable prior notice to Purchaser, and
shall have the right, at their sole cost and expense, to make copies of such
documents, books and records to extent such records are still in Purchaser's
possession.
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ARTICLE 23
NOTICES
23.1 All notices, elections, consents, approvals, demands,
designations objections, requests or other communications which Seller,
Purchaser or Escrow Agent may be required or desire to give pursuant to, under
or by virtue of this Agreement must be in writing and sent by:
(A) first class U.S. certified or registered mail,
return receipt requested, with postage prepaid;
(B) by depositing the same into the custody of a
nationally recognized overnight delivery service such as Federal
Express Corporation, Airborne Express, Emery or Purolator;
(C) by hand delivery with proof of service endorsed
thereon; or
(D) by telecopier provided it is also delivered by
express mail or courier (within the next 2 business days).
All such notices, elections, consents, approvals, demands, objections, requests
or other communications sent in compliance with the provisions hereof shall be
deemed given and received on:
(I) the second business day following the date
it is deposited in the U.S. mail;
(II) the date it is delivered to the other party
if sent by U.S. Express Mail, overnight delivery or hand
delivery; or
(III) the date it is delivered to the other party
if sent by telecopier provided it is confirmed by express
mail or courier (for next business day delivery).
From time to time either party may designate another address or addresses for
all purposes of this Agreement by a notice given to all other parties in
accordance with the provisions hereof. For purposes of this Section 23.1, the
addresses of the parties shall be as follows:
If to Seller:
New Valley Corporation
590 Madison Avenue
New York, New York 10022
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Attention: Mr. Bennett P. Borko
Telecopy No.: (212) 409-2069
with a copy to:
Fischbein-Badillo-Wagner-Harding
909 Third Avenue
New York, New York 10022
Attention: Stephen V. Campo, Esq.
Telecopy No.: (212) 644-7485
If to Purchaser:
P.O'B. Montgomery & Company
5550 LBJ Freeway, Suite 380
Dallas, Texas 75240
Attention: Mr. Philip O'B. Montgomery, III
Telecopy No.: (972) 455-4900
with a copy to:
Jenkins & Gilchrist
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
Attention: Laurie A. Carroll, Esq.
Telecopy No.: (214) 855-4300
If to Escrow Agent:
SAFECO Land Title of Dallas
8080 N. Central Expwy., Suite 500
Dallas, Texas 75206
Attention: Maggie Fielding, Executive Vice President
Telecopy No.: (214) 360-3696
23.2 Seller, Purchaser or Escrow Agent may designate another
addressee or change its address for notices and other communications hereunder
by a notice given to the other parties in the manner provided in this Section
23.
23.3 Notices and other communications given by the attorneys,
respectively, for Seller or Purchaser shall be deemed given by, respectively,
Seller or Purchaser.
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ARTICLE 24
PROPERTY INFORMATION AND CONFIDENTIALITY
24.1 Purchaser agrees that, prior to the Closing, all Property
Information shall be kept strictly confidential and shall not, without the
prior consent of Seller, be disclosed by Purchaser or Purchaser's
Representatives, in any manner whatsoever, in whole or in part, and will not be
used by Purchaser or Purchaser's Representatives, directly or indirectly, for
any purpose other than evaluating the Properties. Moreover, Purchaser agrees
that, prior to the Closing, the Property Information will be transmitted only
to Purchaser's Representatives who need to know the Property Information for
the purpose of evaluating the Properties, and who are informed by the Purchaser
of the confidential nature of the Property Information. The provisions of this
Section 24 shall in no event apply to Property Information which is a matter of
public record and shall not prevent Purchaser from complying with Laws or
subpoenas or order of any court, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements.
24.2 Purchaser and Seller, for the benefit of each other, hereby
agree that between the date hereof and the Closing Date, they will not release
or cause or permit to be released any press notices, publicity (oral or
written) or advertising promotion relating to, or otherwise announce or
disclose or cause or permit to be announced or disclosed, in any manner
whatsoever, the terms, conditions or substance of this Agreement or the
transactions contemplated herein, without first obtaining the written consent
of the other party hereto. It is understood that the foregoing shall not
preclude either party from discussing the substance or any relevant details of
the transactions contemplated in this Agreement, subject to the terms of
Section 24.1, with any of its attorneys, accountants, professional consultants
or potential lenders, as the case may be, or prevent either party hereto from
complying with Laws, including, without limitation, governmental regulatory,
disclosure, tax and reporting requirements.
24.3 In the event this Agreement is terminated, Purchaser and
Purchaser's Representatives shall promptly deliver to Seller all originals and
copies of the Property Information referred to in clause (a) of Section 24.5 in
the possession of Purchaser and Purchaser's Representatives.
24.4 As used in this Agreement, the term "PROPERTY INFORMATION"
shall mean:
(A) all information and documents in any way relating to
the Properties, the operation thereof or the sale thereof (including,
without limitation, Leases, Contracts and Licenses) furnished to, or
otherwise made available for review by, Purchaser or its directors,
officers, employees, affiliates, partners, brokers, agents or other
representatives, including attorneys, accountants,
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contractors, consultants, engineers and financial advisors
(collectively, "PURCHASER'S REPRESENTATIVES"), by Seller or any of
Seller's Affiliates, or their agents or representatives, including
their contractors, engineers, attorneys, accountants, consultants,
brokers or advisors; and
(B) all analyses, compilations, data, studies, reports
or other information or documents prepared or obtained by Purchaser or
Purchaser's Representatives containing or based, in whole or in part,
on the information or documents described in the preceding clause (a),
or the Investigations, or otherwise reflecting their review or
investigation of the Properties.
24.5 In addition to any other remedies available to Seller, Seller
shall have the right to seek equitable relief, including injunctive relief or
specific performance, against Purchaser or Purchaser's Representatives in order
to enforce the provisions of this Article 24.
24.6 The provisions of this Article 24 shall survive the
termination of this Agreement.
ARTICLE 25
MISCELLANEOUS
25.1 This Agreement shall not be altered, amended, changed,
waived, terminated or otherwise modified in any respect or particular, and no
consent or approval required pursuant to this Agreement shall be effective,
unless the same shall be in writing and signed by or on behalf of the party to
be charged.
25.2 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and to their respective heirs, executors,
administrators, successors and permitted assigns.
25.3 All prior statements, understandings, representations and
agreements between the parties, oral or written, are superseded by and merged
in this Agreement, which alone fully and completely expresses the agreement
between them in connection with this transaction and which is entered into
after full investigation, neither party relying upon any statement,
understanding, representation or agreement made by the other not embodied in
this Agreement. This Agreement shall be given a fair and reasonable
construction in accordance with the intentions of the parties hereto, and
without regard to or aid of canons requiring construction against Seller or the
party drafting this Agreement.
25.4 Except as otherwise expressly provided herein, Purchaser's
acceptance of the Deed shall be deemed a discharge of all of the obligations of
Seller hereunder and all of Seller's representations, warranties, covenants and
agreements herein shall merge in the documents and agreements executed at the
Closing and shall not survive the Closing.
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25.5 Purchaser agrees that it does not have, and will not have,
any claims or causes of action against any disclosed or undisclosed officer,
director, employee, trustee, shareholder, partner, principal, parent,
subsidiary or other affiliate of Seller (collectively, "SELLER'S AFFILIATES"),
arising out of or in connection with this Agreement or the transactions
contemplated hereby, except for separate agreements entered into
contemporaneously. Purchaser agrees to look solely to Seller and its assets for
the satisfaction of any liability or obligation arising under this Agreement or
the transactions contemplated hereby, or for the performance of any of the
covenants, warranties or other agreements contained herein, and further agrees
not to sue or otherwise seek to enforce any personal obligation against any of
Seller's Affiliates with respect to any matters arising out of or in connection
with this Agreement or the transactions contemplated hereby, except for
separate agreements entered into contemporaneously. Without limiting the
generality of the foregoing provisions of this Section 25.5, Purchaser hereby
unconditionally and irrevocably waives any and all claims and causes of action
of any nature whatsoever it may now or hereafter have against Seller's
Affiliates, and hereby unconditionally and irrevocably releases and discharges
Seller's Affiliates from any and all liability whatsoever which may now or
hereafter accrue in favor of Purchaser against Seller's Affiliates, in
connection with or arising out of this Agreement or the transactions
contemplated hereby, except pursuant to this Section 25.5 and except for
separate agreements entered into contemporaneously. The provisions of this
Section 25.5 shall survive the termination of this Agreement and the Closing.
25.6 Purchaser agrees that, wherever this Agreement provides that
Purchaser must send or give any notice, make an election or take some other
action within a specific time period in order to exercise a right or remedy it
may have hereunder, time shall be of the essence with respect to the taking of
such action, and Purchaser's failure to take such action within the applicable
time period shall be deemed to be an irrevocable waiver by Purchaser of such
right or remedy.
25.7 Seller agrees that it does not have, and will not have, any
claims or causes of action against any disclosed or undisclosed officer,
director, employee, trustee, shareholder, partner, principal, parent,
subsidiary or other affiliate of Purchaser (collectively, "PURCHASER'S
AFFILIATES"), arising out of or in connection with this Agreement or the
transactions contemplated hereby, except for separate agreements entered into
contemporaneously. Seller agrees to look solely to Purchaser and its assets for
the satisfaction of any liability or obligation arising under this Agreement or
the transactions contemplated hereby, or for the performance of any of the
covenants, warranties or other agreements contained herein, and further agrees
not to sue or otherwise seek to enforce any personal obligation against any of
Purchaser's Affiliates with respect to any matters arising out of or in
connection with this Agreement or the transactions contemplated hereby, except
for separate agreements entered into contemporaneously. Without limiting the
generality of the foregoing provisions of this Section 25.7, Seller hereby
unconditionally and irrevocably waives any and all claims and causes of action
of any nature whatsoever it may now or hereafter have against Purchaser's
Affiliates, and hereby
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unconditionally and irrevocably releases and discharges Purchaser's Affiliates
from any and all liability whatsoever which may now or hereafter accrue in
favor of Seller against Purchaser's Affiliates, in connection with or arising
out of this Agreement or the transactions contemplated hereby, except pursuant
to this Section 25.7 and except for separate agreements entered into
contemporaneously. The provisions of this Section 25.7 shall survive the
termination of this Agreement and the Closing.
25.8 Seller agrees that, wherever this Agreement provides that
Seller must send or give any notice, make an election or take some other action
within a specific time period in order to exercise a right or remedy it may
have hereunder, time shall be of the essence with respect to the taking of such
action, and Seller's failure to take such action within the applicable time
period shall be deemed to be an irrevocable waiver by Seller of such right or
remedy.
25.9 No failure or delay of either party in the exercise of any
right or remedy given to such party hereunder or the waiver by any party of any
condition hereunder for its benefit (unless the time specified herein for
exercise of such right or remedy has expired) shall constitute a waiver of any
other or further right or remedy nor shall any single or partial exercise of
any right or remedy preclude other or further exercise thereof or any other
right or remedy. No waiver by either party of any breach hereunder or failure
or refusal by the other party to comply with its obligations shall be deemed a
waiver of any other or subsequent breach, failure or refusal to so comply.
25.10 Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void and shall
constitute a default.
25.11 This Agreement may be executed in one or more counterparts,
each of which so executed and delivered shall be deemed an original, but all of
which taken together shall constitute but one and the same instrument.
25.12 Each of the exhibits and schedules referred to herein and
attached hereto is incorporated herein by this reference.
25.13 The caption headings in this Agreement are for convenience
only and are not intended to be a part of this Agreement and shall not be
construed to modify, explain or alter any of the terms, covenants or conditions
herein contained.
25.14 This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York without reference to
principles of conflicts of laws.
25.15 If the last day of the period prescribed herein for the
giving of any notice, election, consent, approval, demand, objection or request
or the submission of any documents by any party hereunder shall fall on a
Saturday, Sunday or any day observed as a public holiday by
63
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the federal government or the state in which the Property is situated, then
such period shall be deemed to be extended to the immediately following day
which is not a Saturday, Sunday or such public holiday. The term "BUSINESS DAY"
as used in this Agreement shall mean any day other than Saturday, Sunday or any
day observed as a public holiday by the federal government or the state in
which the Property is situated.
25.16 Unless otherwise specified herein:
(A) references to persons or parties include their
permitted successors and assigns;
(B) references to modifications or amendments shall in
all events mean modifications and amendments;
(C) references to statutes are to be construed as
including all rules and regulations adopted pursuant to the statute
referred to and all statutory provisions consolidating, amending or
replacing the statute referred to;
(D) references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto entered into from time to time after the
date hereof to satisfy the requirements of this Agreement or otherwise
with Seller's prior written consent;
(E) references to a mortgage shall be deemed to mean or
include a deed of trust, depending on the jurisdiction in which the
Property is located;
(F) the words "INCLUDE" or "INCLUDING", and words of
similar import, shall be deemed to be followed by the words "but not
limited to" or "without limitation";
(G) the words "HERETO", "HEREIN", "HEREOF" and
"HEREUNDER", and words of similar import, refer to this Agreement in
its entirety; and
(H) unless otherwise specified herein, all references to
Articles, Sections and subsections are to Articles, Sections and
subsections of this Agreement.
Terms defined herein may be used in the singular or the plural; when used in
the singular and preceded by "a", "an" or "any", such term shall be taken to
indicate one or more members of the relevant class; and when used in the
plural, such term shall be taken to indicate all members of the relevant class.
Any disclosure on any Schedule attached hereto shall be deemed a disclosure on
any other Schedule attached hereto.
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<PAGE> 66
25.17 If any provision of this Agreement shall be unenforceable or
invalid, the same shall not affect the remaining provisions of this Agreement
and to this end the provisions of this Agreement are intended to be and shall
be severable. Notwithstanding the foregoing sentence, if:
(A) any provision of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable or
invalid in whole or in part;
(B) the opportunity for all appeals of such
determination have expired; and
(C) such unenforceability or invalidity alters the
substance of this Agreement (taken as a whole) so as to deny either
party, in a material way, the realization of the intended benefit of
its bargain,
such party may terminate this Agreement within thirty (30) days after the final
determination by notice to the other. If such party so elects to terminate this
Agreement, then this Agreement shall be terminated and neither party shall have
any further rights, obligations or liabilities hereunder, except for the
surviving obligations, and except that Purchaser shall be entitled to a return
of the Fund subject to Section 24.4 and provided Purchaser is not otherwise in
default hereunder.
25.18 SELLER AND PURCHASER HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT)
BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT.
25.19 Seller and Purchaser each hereby agree that each shall, upon
the request of the other, execute and deliver such further documents and do
such other acts and things as are reasonably necessary and appropriate to
effectuate the terms and conditions of this Agreement and the out-of pocket
reasonable cost of such further acts shall be paid for by the party requesting
such further acts unless imposed on or required to be performed by the
requested party under the other terms of this Agreement or other agreements
being entered into or delivered contemporaneously herewith. The provisions of
this Section shall survive the closing.
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<PAGE> 67
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
NEW VALLEY CORPORATION
By: /s/ Bennett Borko
-----------------------------------
Name: Bennett Borko
Title: Assistant Secretary
P.O'B. MONTGOMERY & COMPANY
By: /s/ Randy Twist
-----------------------------------
Name: Randy Twist
Title: Executive Vice President
SAFECO LAND TITLE OF DALLAS
(As to Articles 17, 20 and 23 only)
By: /s/ Cindy N. Mier
-------------------------------
Name: Cindy N. Mier
Title: Vice President
66
<PAGE> 1
EXHIBIT 2.2
-----------
AMENDMENT TO
PURCHASE AND SALE AGREEMENT
NEW VALLEY CORPORATION,
SELLER
WITH
P.O'B. MONTGOMERY & COMPANY,
PURCHASER
As of August 9, 1999
Properties:
Washington Plaza, Richland, Washington
Coronado Center, Santa Fe, New Mexico
Holly Farm Shopping Center, Milwaukie, Oregon
Marysville Towne Center, Marysville, Washington
University Place, Lincoln, Nebraska
<PAGE> 2
AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment"),
dated as of the 9th day of August, 1999 by and between NEW VALLEY CORPORATION,
a Delaware corporation, having an office at 100 S.E. Second Street, 32nd Floor,
Miami, Florida 33131 ("SELLER") and P.O'B. MONTGOMERY & COMPANY, a Texas
corporation, having an office at 5550 LBJ Freeway, Suite 380, Dallas, Texas
75240 ("PURCHASER").
STATEMENT OF FACTS
Seller and Purchaser have entered into a Purchase and Sale Agreement
dated as of June 23, 1999 ("Agreement"). Seller and Purchaser desire to amend
the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of ten ($10.00) dollars and the
mutual covenants and agreements hereinafter set forth, and intending to be
legally bound hereby, it is hereby agreed as follows:
1. Article 2 of the Agreement is hereby amended and restated in
its entirety as follows:
"ARTICLE 2
PURCHASE PRICE
2.1 The purchase price to be paid by Purchaser to Seller for the
Properties (the "PURCHASE PRICE") is $46,125,000.00, payable as follows:
(a) $461,250.00 (the "DOWNPAYMENT"), simultaneously with
the execution and delivery of this Agreement, by a bank wire transfer
of immediately available funds to an account designated by SAFECO Land
Title of Dallas ("ESCROW AGENT"). The Downpayment shall be held by
Escrow Agent in accordance with the terms of Article 20. If the
Closing (as hereinafter defined) shall occur, Seller shall be entitled
to receive the Downpayment and all interest accrued thereon, if any,
and such interest shall not be credited against the portion of the
Purchase Price payable pursuant to Section 2.1(g);
(b) $5,956,236.00 by taking title to the Washington
Plaza Property subject to aggregate mortgage liens in that amount (the
"WASHINGTON PLAZA MORTGAGE") now held by Aid Association for Lutherans
("AAL") and AP Century I, L.P. ("AP-I");
(c) $8,382,939.00 by taking title to the Coronado Center
Property subject to aggregate mortgage liens in that amount (the
"CORONADO CENTER
1
<PAGE> 3
MORTGAGE") now held by Credit Suisse First Boston Mortgage Capital LLC
("CS FIRST BOSTON") and Apollo (as hereinafter defined) or its
affiliates;
(d) $4,857,631.00 by taking title to the Holly Farm
Shopping Center Property subject to aggregate mortgage liens in that
amount (the "HOLLY FARM SHOPPING CENTER MORTGAGE") now held by CS
First Boston and Apollo or its affiliates;
(e) $10,681,108.00 by taking title to the Marysville
Towne Center Property subject to aggregate mortgage liens in that
amount (the "MARYSVILLE TOWNE CENTER MORTGAGE") now held by CS First
Boston and Apollo or its affiliates;
(f) $5,213,141.00 by taking title to the University
Place Property subject to aggregate mortgage liens in that amount (the
"UNIVERSITY PLACE MORTGAGE") now held by CS First Boston and Apollo or
its affiliates; and
(g) $10,572,695.00 (the "CASH BALANCE") at the Closing by
bank wire transfer of immediately available federal funds to the Title
Company (as hereinafter defined), to be disbursed to Seller?s account
(or to the account or accounts of such other party or parties as may
be designated by Seller upon notice to the Title Company prior to the
Closing) upon consummation of the transaction under this Agreement.
Seller and Purchaser agree that Seller must convey, and Purchaser must
purchase, all of the Properties in accordance with the terms and conditions of
this Agreement and that the Purchase Price is allocated as follows:
$10,150,000.00 to the Washington Plaza Property, $8,775,000.00 to the Coronado
Center Property, $7,675,000.00 to the Holly Farm Shopping Center Property,
$12,815,000.00 to the Marysville Towne Center Property and $6,710,000.00 to the
University Place Property."
2. The reference in Section 10.2 (d)(iv) of the Agreement to the
Washington Plaza First Mortgage and Washington Plaza Wraparound Mortgage shall
be deemed to mean, collectively, the Washington Plaza Mortgage.
3. The Closing Date referred to in Section 5.1 of the Agreement
is adjourned to August 25, 1999, time of the essence.
4. Except as modified and amended hereby, the terms, covenants,
conditions and provisions of the Agreement shall remain in full force and
effect.
2
<PAGE> 4
IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment
as of the day and year first above written.
NEW VALLEY CORPORATION
By: /s/ Bennett P. Borko
---------------------------------
Name: Bennett P. Borko
Title: Assistant Secretary
P.O'B. MONTGOMERY & COMPANY
By: /s/ Randy Twist
---------------------------------
Name: Randy Twist
Title: Executive Vice President
3
<PAGE> 1
EXHIBIT 2.3
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
NEW VALLEY CORPORATION,
SELLER
WITH
P.O'B. MONTGOMERY & COMPANY,
PURCHASER
As of August 16, 1999
Properties:
Washington Plaza, Richland, Washington
Coronado Center, Santa Fe, New Mexico
Holly Farm Shopping Center, Milwaukie, Oregon
Marysville Towne Center, Marysville, Washington
University Place, Lincoln, Nebraska
<PAGE> 2
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this
"Amendment"), dated as of the 16th day of August, 1999 by and between NEW
VALLEY CORPORATION, a Delaware corporation, having an office at 100 S.E. Second
Street, 32nd Floor, Miami, Florida 33131 ("SELLER") and P.O'B. MONTGOMERY &
COMPANY, a Texas corporation, having an office at 5550 LBJ Freeway, Suite 380,
Dallas, Texas 75240 ("PURCHASER").
STATEMENT OF FACTS
Seller and Purchaser have entered into a Purchase and Sale Agreement
dated as of June 23, 1999 and an amendment thereto dated as of August 9, 1999
(said agreement, as heretofore amended, the "Agreement"). Seller and Purchaser
desire to further amend the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of ten ($10.00) dollars and the
mutual covenants and agreements hereinafter set forth, and intending to be
legally bound hereby, it is hereby agreed as follows:
1. Supplementing Sections 3.1 and 3.7 of the Agreement, Seller
and Purchaser shall compute apportionments as of August 26, 1999 with a
post-closing reconciliation based on the actual Closing Date and the proper
party reimbursed as soon as practicable following the Closing Date.
2. The Closing Date referred to in Section 5.1 of the Agreement
is adjourned to August 31, 1999, time of the essence.
3. This Amendment may be executed in fax counterparts.
4. Except as modified and amended hereby, the terms, covenants,
conditions and provisions of the Agreement shall remain in full force and
effect.
<PAGE> 3
IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment
as of the day and year first above written.
NEW VALLEY CORPORATION
By: /s/ Bennett P. Borko
------------------------------------
Name: Bennett P. Borko
Title: Assistant Secretary
P.O'B. MONTGOMERY & COMPANY
By: /s/ Randy Twist
------------------------------------
Name: Randy Twist
Title: Executive Vice President
2
<PAGE> 1
EXHIBIT 99.1
S A R D V E R B I N N E N & C O NEWS
FOR IMMEDIATE RELEASE Contact: George Sard/Anna Cordasco/Paul Caminiti
Sard Verbinnen & Co.
212/687 - 8080
NEW VALLEY CORPORATION SELLS
FIVE SHOPPING CENTERS FOR $46.1 MILLION
MIAMI, FL, AUGUST 30, 1999 -- New Valley Corporation (OTC: NVAL) today
announced that its New Valley Realty division has completed the sale of five
shopping centers to entities affiliated with P.O'B. Montgomery & Company for an
aggregate purchase price of $46.1 million.
New Valley received approximately $11 million in cash from the
transaction before closing adjustments and expenses. The shopping centers were
subject to approximately $35.1 million of mortgage financing which was assumed
by the purchasers at closing.
The shopping centers were located in Richland, Washington, Santa Fe,
New Mexico, Milwaukie, Oregon, Marysville, Washington and Lincoln, Nebraska.
New Valley is principally engaged in investment banking and brokerage
through Ladenburg, Thalmann & Co. Inc., in real estate development in Russia
through BrookeMil Ltd., and in ownership and management of commercial real
estate in the U.S. through its New Valley Realty division.
# # #
SARD VERBINNEN & CO., INC. 630 THIRD AVENUE NEW YORK, NY 10017
TEL: 212-687-8080 FAX: 212-687-8344
