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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES ACT OF
1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
DECEMBER 6, 1996
GENERAL GROWTH PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-11656 42-1283895
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION
INCORPORATION) NUMBER)
55 WEST MONROE - SUITE 3100, CHICAGO, ILLINOIS 60603
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 551-5000
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ITEM 5. OTHER EVENTS.
On December 6, 1996 (the "Closing Date"), GGP Limited Partnership, a
Delaware limited partnership (the "Partnership"), in which General Growth
Properties, Inc. (the "Company"), is the general partner and currently owns a
62.9451% interest, acquired in a negotiated transaction all of the partnership
interests in three general partnerships (the "Acquired Partnerships") from
Forbes/Cohen Properties, Lakeview Square Associates and Jackson Properties,
each a Michigan general partnership (collectively, the "Michigan
Contributors"), in exchange for the issuance of 1,445,000 redeemable units of
limited partnership interests in the Partnership (the "Units"). The sole
assets owned by the Acquired Partnerships on the Closing Date were the real and
personal property comprising the Lakeview Square Mall in Battle Creek,
Michigan, the Lansing Mall in Lansing, Michigan and the Westwood Mall in
Jackson, Michigan (collectively, the "Michigan Malls") which were subject to
approximately $92 million of debt. The acquisition of the Michigan Malls, when
taken together with the other unrelated acquisitions of real property made by
the Partnership and the Company during 1996 and described briefly below, is
required to be reported hereunder.
On November 27, 1996, Oklahoma Mall L.L.C., a limited liability
company in which the Partnership and a wholly-owned subsidiary of the Company
are the only members ("OMLLC"), acquired in a negotiated transaction from The
Equitable Life Assurance Society of the United States ("Equitable"), Sooner
Fashion Mall in Norman, Oklahoma for 895,928 shares of common stock of the
Company and $2,250,000 in cash. OMLLC also acquired a 49.9% partnership
interest in Dayjay Associates, an Oklahoma general partnership ("Dayjay"), for
$24,700,500 in cash. Dayjay owns Quail Springs Mall in Oklahoma City, Oklahoma
(together with the Sooner Fashion Mall, the "Oklahoma Malls").
During the past three years, General Growth Management, Inc., a
corporation related to the Company ("GGMI"), has provided management, leasing
and development services for malls in which Equitable has an interest. During
1995, GGMI provided such services to 28 such malls and received approximately
$8,380,000 in fees from Equitable. As of September 30, 1996, GGMI was
providing these services to 21 such malls and, for the nine months then ended,
received approximately $5,281,000 in fees from Equitable.
On October 4, 1996, the Partnership acquired in a negotiated
transaction Park Mall in Tucson, Arizona (the "Arizona Mall") from K-GAM
Limited Partnership, an Arizona limited partnership (the "Arizona Seller"), for
$49,950,000. The purchase price was paid by delivery of 1,000,000 shares of
the Company's common stock and
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$25,000,000 in cash.
The purchase price in each of these transactions was subject to
certain prorations and adjustments and is exclusive of closing and other costs
incurred in connection with the respective acquisition. It is currently
contemplated that the Michigan Malls, the Oklahoma Malls and the Arizona Mall
will continue to be used in the shopping mall business.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a), (b) The requisite financial information will be filed under
cover of Form 8-K/A as soon as practicable, and in any event not later
than 60 days after the date by which this Form 8-K is required to be filed.
(c) See Exhibit Index attached hereto and incorporated herein
by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
GENERAL GROWTH PROPERTIES, INC.
By: Bernard Freibaum
--------------------------------
Its: Executive Vice President and
-----------------------------
Chief Financial Officer
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Date: December 19, 1996
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
EXHIBIT NAME* PAGE
------- ---- ----
NUMBER NUMBER
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<S> <C>
2.1 Contribution Agreement dated December 6, 1996, between Forbes/Cohen
Properties, a Michigan general partnership, and GGP Limited
Partnership, a Delaware limited partnership.
2.2 Contribution Agreement dated December 6, 1996, between Lakeview
Square Associates, a Michigan general partnership, and GGP Limited
Partnership, a Delaware limited partnership.
2.3 Contribution Agreement dated December 6, 1996, between Jackson
Properties, a Michigan general partnership, and GGP Limited
Partnership, a Delaware limited partnership.
4 Redemption Rights Agreement dated December 6, 1996, among GGP Limited
Partnership, a Delaware limited partnership, General Growth
Properties, Inc., a Delaware corporation, Forbes/Cohen Properties, a
Michigan general partnership, Lakeview Square Associates, a Michigan
general partnership, and Jackson Properties, a Michigan general
partnership.
</TABLE>
____________________
* In accordance with Rule 601(b)(2) of Regulation S-K, the exhibits to these
documents and the disclosure schedules to the Amended and Restated Stock
Purchase Agreement have not been filed. The Company agrees to furnish
supplementally a copy of any such omitted exhibit or disclosure schedule to the
Commission upon request.
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Exhibit 2.1
CONTRIBUTION AGREEMENT
AMONG
FORBES/COHEN PROPERTIES,
a Michigan general partnership
and
GGP LIMITED PARTNERSHIP
a Delaware limited partnership
December 6, 1996
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CONTRIBUTION AGREEMENT
Contribution Agreement, dated December 6, 1996, among FORBES/COHEN
PROPERTIES, a Michigan general partnership ("Contributor"), and GGP LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Partnership").
R E C I T A L S
WHEREAS, Contributor is the developer of a regional shopping center
commonly known as Lansing Mall, Lansing, Michigan, including without limitation
the free-standing buildings west of Mall Drive West and north of Saginaw
Highway (the "Mall"); and
WHEREAS, Contributor desires to contribute to the capital of the
Partnership or cause to be contributed to the capital of the Partnership all of
the partnership interests in a partnership owning the Mall (other than the
property owned, if any, by the department stores or others at the Mall), and
the Partnership desires to accept such contributions to capital, upon the terms
and subject to the conditions contained herein.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
"Acquired Partnership" shall have the meaning set forth in Section 2.3(a).
"ADA" shall mean the Americans With Disabilities Act, as amended.
"Adjustment Date" shall have the meaning set forth in Section 4.1.
"Adjustable Tenant Charges" shall mean common or mall area maintenance
(exterior and interior) charges, real estate taxes and assessments, single
business taxes, property insurance charges and HVAC charges (except to the
extent that such HVAC charges are separately metered, in which event they shall
be treated as Fixed and Other Tenant Charges) to the extent denominated as such
in the Leases and the Reciprocal Easement Agreements.
"Affiliates" shall mean, with respect to the Partnership, any Person
controlling, controlled by or under common control with the Partnership and, in
the case of Contributor, Maurice Cohen or Sidney Forbes, any members of the
family of either of them or any Person controlled by either or both of them.
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"Agreement" shall mean this Contribution Agreement, as amended or modified
from time to time hereafter in accordance with the terms hereof.
"Anchor" shall mean each Person identified in Schedule 1.1.
"Annual Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Applicable Closing Fiscal Period" shall mean, with respect to any item
which is prorated under Article V, the calendar year (or other fiscal period
for which such item is determined or assessed) during which the Closing Date
occurs.
"Assumed Unit Price" shall mean $25.00.
"Audited Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Books and Records" shall mean all records, books of account and papers of
Contributor relating to the Interests, the Acquired Partnership and the
construction, ownership and operation of the Property, including without
limitation architect's drawings, blue prints and as-built plans, maintenance
logs, instruction books, employee manuals, records and correspondence relating
to insurance claims, copies of guarantees and warranties, originals and/or
copies of the Leases, the Reciprocal Easement Agreements and the Contracts and
correspondence related thereto.
"Casualty" shall mean any damage to or destruction of the Mall or any
portion thereof caused by fire or other casualty, whether or not insured.
"Circuit City" shall mean Circuit City Stores, Inc.
"Circuit City Agreement" shall have the meaning set forth in Section 2.9.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Closing Documents" shall mean the Contributor Closing Documents and
Partnership Closing Documents, collectively.
"Closing Price" shall have the meaning set forth in the Partnership
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Common Stock" shall mean the common stock, $.10 par value per share, of
the General Partner.
"Consultant" shall have the meaning set forth in Section 8.3.
"Contract Party Consents" shall have the meaning set forth in Section
11.5.
"Contracts" shall mean the service, maintenance and other contracts and
concessions that are currently in effect with respect to the Mall respecting
the use, maintenance, development, sale or operation thereof or any portion
thereof (but excluding this Agreement, the Leases, the Permitted Exceptions and
the Reciprocal Easement Agreements) which are listed on Schedule 7.2(n),
together with any additions thereto, modifications thereof or substitutions
therefor hereafter entered into in accordance with the provisions of this
Agreement. "Contracts" also shall include any Circuit City Agreement.
"Contributor Property Liabilities" shall mean the Existing Indebtedness,
any mortgage indebtedness secured by the Real Property (alone or in conjunction
with any other properties) incurred to refinance the Existing Indebtedness and
any indebtedness guaranteed by Contributor pursuant to Section 11.13.
"Contributor's Liabilities" shall have the meaning set forth in Section
2.4.
"Drop-Down" shall mean the transactions contemplated by Section 2.3.
"Drop-Down Documents" shall have the meaning set forth in Section 2.3.
"Environmental Laws" shall mean the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.); the Toxic Substance
Control Act (15 U.S.C. Section 2601 et seq.; Clean Air Act (42 U.S.C. Section
9402 et seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
seq.); and all other applicable federal, state and local environmental laws,
including obligations under the common law, ordinances, rules and regulations,
as any of the foregoing may have been amended, supplemented or supplanted prior
to the date hereof, relating to regulation or control of hazardous, toxic or
dangerous substances or wastes, or their handling, storage or disposal or to
environmental health and safety.
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"Environmental Report" shall have the meaning set forth in Section 8.3.
"Estoppels" shall mean the estoppel certificates to be obtained pursuant
to Section 11.7.
"Excluded Anchor Parcels" shall mean those certain parcels of land legally
described in Exhibit A and the improvements thereon owned by certain of the
Anchors or other Persons other than Contributor.
"Excluded Personalty" shall mean the personal items belonging to employees
of Contributor, the computer equipment located at the offices of Contributor in
Southfield, Michigan and the cash, cash accounts (including any cash or cash
accounts constituting the Security Deposits) and, except as provided in Article
V, receivables of Contributor or, following the Drop-Down, the Acquired
Partnership.
"Existing Indebtedness" shall mean the loans listed on Schedule 7.2(x).
"Existing Indebtedness Documents" shall have the meaning set forth in
Schedule 7.2(x).
"Existing Indebtedness Consent Documents" shall have the meaning set forth
in Section 2.5.
"Existing Lenders" shall mean the holders of the Existing Indebtedness as
specified on Schedule 7.2(x).
"Financial Statements" shall have the meaning set forth in Section 7.2(k).
"Fixed and Other Tenant Charges" shall mean Rent other than Adjustable
Tenant Charges, Sales Based Tenant Charges and Advertising and Promotional
Contributions.
"Fixed and Other Tenant Charge Arrearages" shall mean Fixed and Other
Tenant Charges due and payable prior to but unpaid as of the Adjustment Date.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated by
the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"General Partner" shall mean General Growth Properties, Inc., a Delaware
corporation and the general partner of the Partnership.
"Gross Asset Value" shall mean, with respect to the Property as of
Closing, the sum of (a) the principal amount of Existing Indebtedness as of the
Adjustment Date and (b) the product of the
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number of Units issued to Contributor pursuant to the Supplemental
Agreement and the Assumed Unit Price.
"Guaranty" shall have the meaning set forth in Section 2.8(b).
"Hazardous Materials" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including
without limitation asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof) and any material the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, disposal, abatement, cleanup, removal, remediation or
handling of which, is prohibited, controlled or regulated by any Environmental
Law.
"Hudson Oil Parcel" shall mean the parcel of real estate legally described
on Exhibit B-1.
"Hudson Oil Agreement" shall have the meaning set forth in Section 2.12.
"Improvements" shall mean all buildings, structures (surface and
subsurface) and other improvements located on the Land, including any fixtures
as shall constitute real property under applicable provisions of law.
"Indemnified Partnership Persons" shall have the meaning set forth in
Section 11.1(a).
"Intellectual Property" shall have the meaning set forth in Section
7.2(l).
"Interests" shall mean all of the general and/or limited partnership
interests in the Acquired Partnership, together with all rights and powers in
respect of such interests as a general and/or limited partner in the Acquired
Partnership and all property, real or personal, relating to such interests
and/or the Acquired Partnership.
"Interim Financial Statements" shall have the meaning set forth in Section
7.2(k).
"JP" shall mean Jackson Properties, a Michigan general partnership.
"Lakeview Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between the Partnership and
LSA.
"Land" shall mean those certain parcels of real estate described on
Exhibit B.
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"Leases" shall mean those leases, tenancies, concessions, licenses and
occupancy agreements currently in effect affecting or relating to the Mall
which are listed on Schedule 7.2(h), together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered into in
accordance with the provisions of this Agreement.
"Liens" shall mean mortgages, liens, pledges, security interests, charges,
claims, restrictions or other encumbrances of any nature whatsoever.
"Loss" shall have the meaning set forth in Section 11.1(a).
"LSA" shall mean Lakeview Square Associates, a Michigan general
partnership.
"Mall" shall have the meaning set forth in the recitals.
"Major Tenant" shall mean a Tenant who occupies space at a Mall consisting
of more than 5,000 square feet.
"Memorandum" shall mean that certain Private Placement Memorandum dated
November 18, 1996 relating to the issuance of Units pursuant hereto, among
other things.
"Missing Tenants" shall have the meaning set forth in Section 9.2(c).
"Net Operating Cash Flow" shall have the meaning set forth in the
Partnership Agreement.
"Offer Notice" shall have the meaning set forth in Section 11.12(b).
"Other Deposits" shall have the meaning set forth in Section 5.8.
"Other Contributors" shall mean LSA and JP, collectively.
"Other Contribution Agreements" shall mean the Lakeview Contribution
Agreement and the Westwood Contribution Agreement, collectively.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of July 27, 1993, as amended by
that certain First Amendment thereto dated May 23, 1995, that certain Second
Amendment thereto dated June 13, 1995, that certain Third Amendment thereto
dated as of May 21, 1996, that certain Fourth Amendment thereto dated as of
August 30, 1996, that certain Fifth Amendment thereto dated as of October 4,
1996, that certain Sixth Amendment thereto dated as of November 27, 1996 and as
the same may be further amended hereafter.
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"Partnership Liabilities" shall have the meaning set forth in Section 2.4.
"Party" shall mean a party to the Reciprocal Easement Agreements or a
Contract (or the successor or assignee thereof) or a Tenant under a Lease, in
each case other than Contributor (or, following the Drop-Down, the Acquired
Partnership) or any predecessor thereof.
"Permitted Exceptions" shall have the meaning set forth in Article III.
"Person" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity
of any type.
"Personalty" shall mean all Seller's right, title and interest in and to
the personal property, both tangible and intangible, located in or upon or used
in connection with the operation and maintenance of the Mall, including without
limitation fixtures; machinery; equipment; building supplies and materials;
consumables; inventories; names, logos, trademarks, trade names and copyrights;
all assignable licenses, permits and certificates of occupancy; all assignable
guarantees or warranties (including performance bonds obtained by, or for the
benefit of, Contributor, pertaining to the ownership, construction or
development of the Real Property or any part thereof); the Intellectual
Property; the Books and Records; advertising materials and telephone exchange
numbers. Without limiting the foregoing, "Personalty" shall include the
computer and peripheral equipment located at the Mall and the property listed
on Schedule 1.1(a) but shall not include the rights of Contributor or,
following the Drop-Down, the Acquired Partnership in or under the Leases,
Contracts or Excluded Personalty.
"Pledge Agreement" shall have the meaning set forth in Section 2.8(a).
"Promotional Association" shall have the meaning set forth in Section
7.2(af).
"Promotional Association Waiver" shall have the meaning set forth in
Section 2.10.
"Property" shall mean (a) the Real Property, (b) the Personalty, (c) the
rights of Contributor under all Leases and (d) the rights and interests of
Contributor under, in and to the Contracts to the extent assignable.
"Real Property" shall mean the parcels of Land and the Improvements,
together with all of the estate, right, title and interest of the Contributor
therein, and in and to (a) any land lying in the beds of any streets, roads or
avenues, open or
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proposed, public or private, in front of or adjoining the Land to the
center lines thereof, and in and to any awards to be made in lieu thereof and
in and to any unpaid awards for damage to the foregoing by reason of the change
of grade of any such streets, roads or avenues; and (b) all easements, rights,
licenses, privileges, rights-of-way, strips and gores, hereditaments and such
other real property rights and interests appurtenant to the foregoing
(including, without limitation, all rights of Contributor under the Reciprocal
Easement Agreements).
"Reciprocal Easement Agreements" shall have the meaning set forth in
Section 7.2(h).
"Recourse Liabilities" shall have the meaning set forth in Section 2.5(a).
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Release of Property Management Liens" shall have the meaning set forth in
Section 2.6.
"Rents" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and other taxes, and other amounts payable by the
Parties under the Leases and the Reciprocal Easement Agreements.
"Response Date" shall have the meaning set forth in Section 11.12(b).
"Sales Based Tenant Charges" shall mean Rent consisting of overage or
percentage rent.
"Security Deposits" shall have the meaning set forth in Section 5.8.
"Share Price" shall mean the average of the Closing Price for the twenty
(20) Trading Days preceding the third Trading Day prior to the Closing Date.
"Substantial Casualty" or "Substantial Taking" shall mean, a Casualty or
Taking, as the case may be, where:
(a) the condemnation award, or the proceeds payable under the
applicable policy or policies of casualty insurance maintained by
Contributor, are insufficient by more than $100,000 to fully repair the
damage caused by such Casualty or
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Taking, unless Contributor shall (at its sole option and without any
obligation to do so) grant to the Partnership a credit equal to such
deficiency; or
(b) an Anchor shall, by reason of such Casualty or Taking, either
terminate its Lease or its obligations under either Reciprocal Easement
Agreement, or permanently cease operating at the Mall (other than
temporarily due to such damage and destruction, remodeling, renovation or
any similar cause), or cease operating at the Mall under the name under
which it was operating immediately prior to such Taking or Casualty (as
permitted by the provisions of such Lease or Reciprocal Easement
Agreement) or have the right to do any of the foregoing (unless such
right shall have expired or been waived); or
(c) the estimated time for repair or restoration shall exceed six
(6) months; or
(d) in the case of a Taking, a Taking with respect to such portion
of the Real Property as, when so taken would, in the reasonable opinion
of the Partnership, leave remaining a balance of the Real Property,
which, due either to the area taken or the location of the part taken
would not, under applicable zoning laws, building regulations and
economic conditions then prevailing or otherwise, readily accommodate a
new or restructured building or buildings of a type and size generally
similar to the building or buildings existing on the date hereof, or
would result in inadequate parking or lack of reasonable access to public
roads.
"Supplemental Agreement" shall mean that certain Supplemental Agreement
dated the date hereof, among the Partnership, Contributor, LSA and JP.
"Survey" shall mean have the meaning set forth in Section 6.3.
"Taking" shall mean a taking of all or any portion of the Real Property in
condemnation or by exercise of the power of eminent domain or by an agreement
in lieu thereof.
"Tenants" shall mean tenants, concessionaires, licensees and/or occupants
under the Leases.
"Tenant Services" shall mean all services supplied by or on behalf of
Contributor (or, following the Drop-Down, the Acquired Partnership) to Tenants
for which Tenants are separately charged, other than services in the nature of
common area maintenance.
"Title Commitment" shall have the meaning set forth in Section 6.1.
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"Title Company" shall mean Near North National Title Corporation as
issuing agent for First American Title Insurance Company or as escrow agent, as
the case may be.
"Title Policy" shall have the meaning set forth in Section 9.2(e).
"Trading Day" shall mean a day on which the New York Stock Exchange is
open for business.
"Transactions" shall mean the transactions contemplated by this Agreement.
"Units" shall mean units of limited partnership interest in the
Partnership.
"Vacant Ward Parcel" shall mean that certain parcel of real estate legally
described on Exhibit B-2.
"Westwood Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between Partnership and JP.
1.2 References. All references in this Agreement to particular sections or
articles shall, unless expressly otherwise provided, or unless the context
otherwise requires, be deemed to refer to the specific sections or articles in
this Agreement, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the exhibits annexed hereto and, by such reference,
be made a part hereof. The words "herein", "hereof", "hereunder",
"hereinafter", "hereinabove" and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection or article
hereof.
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution. Upon the terms and subject to the conditions contained
herein, at the Closing, Contributor shall contribute, or cause to be
contributed, to the capital of the Partnership, and the Partnership shall
accept, the Interests, free and clear of all Liens.
2.2 Issuance of Units; Etc.
(a) In exchange for the contribution of the Interests, at the
Closing and subject to adjustment as hereinafter provided, the
Partnership shall issue to Contributor the number of Units specified
pursuant to the Supplemental Agreement.
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(b) In the event that the Share Price is less than $22.50, the
number of Units issuable at Closing by the Partnership to Contributor
shall be increased by an amount equal to the quotient of (i) the product
of (A) the excess of $22.50 over the Share Price and (B) the number of
Units issued pursuant to Section 2.2(a) (without giving effect to this
subsection) divided by (ii) the Share Price.
(c) In the event that the Share Price is more than $27.50, the
number of Units issuable at Closing by the Partnership to Contributors
shall be decreased by an amount equal to the quotient of (i) the product
of (A) the excess of the Share Price over $27.50 and (B) the number of
Units issued pursuant to Section 2.2(a) (without giving effect to this
subsection) divided by (ii) the Share Price.
(d) Contributor shall not, and shall cause its Affiliates not to,
buy or sell (including without limitation short sell) any shares of
Common Stock during the twenty-five (25) Trading Days prior to the
Closing whether in the open market or in a negotiated transaction.
(e) Notwithstanding anything contained herein to the contrary,
fractional Units shall not be issued hereunder; instead, the number of
Units to be issued hereunder shall be the number of Units issuable
pursuant to the other provisions of this Agreement rounded up to the
nearest whole Unit.
2.3 Drop-Down.
(a) Prior to the Closing, Contributor has, pursuant to instruments
and agreements in form and substance acceptable to the Partnership, (i)
conveyed to a newly-formed partnership (the "Acquired Partnership"),
which is a general partnership, all of the Property, subject to the Liens
created pursuant to the Existing Indebtedness Documents, and (ii) caused
the Acquired Partnership to assume all of the Partnership Liabilities
(other than liabilities under Existing Indebtedness Documents) as of the
date of the Drop-Down (assuming the date of the Drop-Down were the
Closing Date) and no other liabilities.
(b) The documents referred to in Section 2.3(a) (the "Drop-Down
Documents") include, but are not limited to, covenant deeds in proper
statutory form for recording so as to convey the entire fee simple estate
of Contributor in the Real Property; assignment or assignments of all of
Contributor's right, title and interest under the Leases and the
Reciprocal Easement Agreements, all of which, to the extent the same
relate to Leases or memoranda thereof which have been recorded in
appropriate land records or the Reciprocal Easement Agreements, are in
form suitable for recording; assignment or
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assignments of all of Contributor's right, title and interest in and to
the Contracts to the extent assignable; and bills of sale so as to
transfer Contributor's right, title and interest in and to the
Personalty.
(c) Prior to the Closing, Contributor may cause the Acquired
Partnership to distribute to the partners of the Acquired Partnership any
and all items of Excluded Personalty.
2.4 Liabilities.
(a) From and after the Closing, the Partnership shall cause the
Acquired Partnership to pay and otherwise satisfy from the assets of the
Acquired Partnership only (unless applicable law imposes liability upon
the general partners thereof) (i) the obligations of Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Existing
Indebtedness Documents, as modified pursuant hereto (including the
obligation to repay the principal owing thereunder and accrued and unpaid
interest thereon but excluding liabilities and obligations that arise out
of any facts or circumstances that exist or existed on or prior to the
Closing Date and that constitute a breach of a representation, warranty
or covenant contained in such Existing Indebtedness Documents or
otherwise require the indemnification of or other payment to the Existing
Lenders other than regularly scheduled payments of principal and
interest) (and the Partnership also shall assume the liabilities referred
to in this clause (i) to the extent they are Recourse Liabilities), (ii)
the liabilities and obligations of Contributor (or, following the
Drop-Down, the Acquired Partnership) arising from and after the Closing
Date under or in respect of the Leases, the Reciprocal Easement
Agreements and the assignable Contracts (with such liabilities being
limited to the same extent, if any, as the liability of Contributor and
its partners is limited thereunder) but only to the extent that such
liabilities and obligations do not arise out of any transaction, event,
circumstance, action, failure to act or occurrence of any sort or type
which occurred, existed or was taken prior to the Closing Date (other
than the execution and delivery of any Lease, Reciprocal Easement
Agreement or Contract by itself), and (iii) other liabilities and
obligations herein described to the extent the Partnership has received
proration credit therefor. All of the foregoing obligations are herein
referred to as the "Partnership Liabilities".
(b) Except as expressly provided in Section 2.4(a) and
notwithstanding the assumption of liabilities pursuant to Section 2.3 or
otherwise, from and after the Closing, neither the Partnership nor the
Acquired Partnership shall be responsible for any liabilities or
obligations of Contributor (or, following the Drop-Down, the Acquired
Partnership),
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whether or not the same relate to the Property or were
incurred in connection with the ownership, use, management or operation
thereof by Contributor (or, following the Drop-Down, the Acquired
Partnership) or by its agents (such liabilities exclusive of the
Partnership Liabilities, collectively, the collectively, "Contributor's
Liabilities") and Contributor shall pay Contributor's Liabilities as and
when due. Without limiting the foregoing, Contributor's Liabilities
shall include (a) all federal, state and local taxes of whatever kind and
nature (other than real estate taxes and assessments on real property for
which the Partnership has received credit under Article V); (b)
liabilities relating to the asserted Lease and other defaults described
on Schedule 7.2(j) (other than the cost of repairs to the Mall to the
extent that they may be charged to Tenants as Adjustable Tenant Charges,
which shall constitute Partnership Liabilities), and (c) liabilities
relating to any employees, employee benefit plans or collective
bargaining agreements of Contributor, including without limitation
severance pay and accrued vacation pay obligations and other liabilities
of Contributor or others relating to the termination of such employees as
the result of the consummation of the Transactions (but not the
termination by the Partnership or any Affiliate thereof of any such
employees who are employed by the Partnership or such Affiliate following
Closing).
2.5 Matters Relating to Existing Indebtedness.
(a) Contributor shall use reasonable best efforts (including, without
limitation but subject to the provisions of Section 2.5(b), the payment of the
transfer fees or other fees or costs imposed or required to be paid by any
Existing Lender) to obtain, at or prior to Closing and at no cost to the
Partnership, (i) the unconditional consent of the Existing Lenders specified on
Schedule 2.5 to the consummation of the Transactions (including without
limitation the Drop-Down and, if necessary, the matters described in Sections
2.5(b) and 2.12) and (ii) a confirmation by the Existing Lenders that they
shall have no recourse to the Partnership, the General Partner or other
Affiliates of the Partnership or the assets of any of them or the assets of the
Acquired Partnership other than the Property except that an Existing Lender may
have recourse to the Partnership and the other assets of the Acquired
Partnership in those instances where such Existing Lender has recourse (without
giving effect to the Transactions) to Messrs. Maurice Cohen and Sidney Forbes
in their capacities as general partners of Contributor or otherwise (the
liabilities for which such recourse against Messrs. Forbes and Cohen exists,
the "Recourse Liabilities").
(b) Notwithstanding anything to the contrary contained in this Section
2.5, the Partnership shall pay the amount of the 1% loan transfer fee payable
to Northwestern Mutual on account of the
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Transactions, but Contributor shall use reasonable best efforts to
obtain the approval of Northwestern Mutual to adding the loan transfer fee to
the principal amount of the Existing Indebtedness held by it without any change
in the other terms of such indebtedness. In the event that Contributor,
despite using its reasonable best efforts, is unable to obtain such approval,
the Partnership shall cause such loan transfer fee to be paid in cash.
(c) The documents referred to in this Section are hereinafter referred to
as the "Existing Indebtedness Consent Documents."
2.6 Release of Property Management Liens. At the Closing, Contributor
shall deliver to the Partnership a release of Liens against the Property with
respect to the property management services performed by it in respect of the
Property. The document effecting such release is hereinafter referred to as the
"Release of Property Management Liens".
2.7 Admission to Partnership; Redemption Rights; Etc.
(a) At the Closing, Contributor and the General Partner shall execute and
deliver an amendment to the Partnership Agreement substantially in the form of
Exhibit C (the "Amendment to Partnership Agreement"), pursuant to which the
Partnership issues to Contributor the number of Units to be issued to
Contributor in accordance with this Agreement and Contributor is admitted as
limited partner of the Partnership and agrees to be bound by the terms of the
Partnership Agreement, as amended by the Amendment.
(b) At the Closing, the General Partner and Contributor shall execute and
deliver a Redemption Rights Agreement substantially in the form of Exhibit D
(the "Redemption Rights Agreement"), pursuant to which Contributor and the
Other Contributors are granted the right to require the Partnership to redeem
its Units from time to time as provided therein.
(c) Contributor acknowledges that the Partnership intends to distribute
prior to Closing the Net Operating Cash Flow for the portion of the calendar
quarter during which the Closing occurs through the day prior to the Adjustment
Date and that, if such distribution is not made for any reason and the Closing
occurs, Contributor will be entitled to receive as a distribution only a pro
rata portion of the Net Operating Cash Flow which is distributed for such
quarter based on the number of Units issued to it pursuant hereto relative to
the total number of issued and outstanding Units and the number of days in such
quarter from and following the Adjustment Date relative to the total number of
days in such quarter.
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2.8 Pledge Agreement; Guaranty.
(a) At the Closing, Contributor shall execute and deliver to the
Partnership a Pledge Agreement substantially in the form of Exhibit E (the
"Pledge Agreement").
(b) At the Closing, Contributor shall execute and deliver, and cause
Messrs. Maurice Cohen and Sidney Forbes, to execute and deliver to the
Partnership a guaranty in the form of Exhibit F (the "Guaranty").
2.9 Tenant Allowances and Leasing Commissions. Contributor shall pay the
cost of the tenant allowances identified on Schedule 7.2(g) and leasing
commissions that are owing or become owing under Leases entered into prior to
the date hereof, and, with respect to such amounts that have not been paid in
full or otherwise satisfied prior to the Closing Date, Contributor shall pay
the same to the Partnership within five business days following the giving of
written notice by the Partnership that they are due to Tenants but in any event
not later than December 31, 1997. In addition, the Partnership shall receive a
credit at Closing for the amount of the outstanding rent concessions as of the
Adjustment Date that have been granted to Gymboree and Bombay Company under
their Leases at the Mall.
2.10 Matters Relating to Vacant Ward Parcel. Contributor shall, from the
date hereof and for 120 days following the Closing, have the non-exclusive
right to continue its efforts to arrange a sale of the Vacant Ward Parcel to
Circuit City. Contributor may consent to any such sale if such consent is
required prior to Closing and the Partnership shall cause the Acquired
Partnership to consent to any such sale if such consent is required following
Closing as long as the terms of any such sale, including without limitation the
rights of Contributor (or, following the Drop-Down, the Acquired Partnership)
to approve the plans and specifications for the building to be constructed by
Circuit City, are reasonably satisfactory to the Partnership. In the event
that a purchase agreement, letter of intent or other similar written document
for the sale of the Vacant Ward Parcel (a "Circuit City Agreement") is entered
into between Montgomery Ward and Circuit City no later than 120 days following
the Closing and the transaction contemplated thereby closes within 210 days
following Closing, the proceeds received by Contributor or, following the
Drop-Down, the Acquired Partnership (net of reasonable third party costs) shall
be shared equally by Contributor and the Partnership, and the party receiving
such proceeds shall pay, or cause to be paid, such share to the other on the
later of the date of receipt and the Closing Date. In the event that a Circuit
City Agreement is not entered into on or before the one hundred twentieth day
following Closing and the transaction contemplated thereby closes within 210
days following Closing, Contributor shall have no right to receive the proceeds
in respect of any such sale or any portion thereof and the Acquired
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Partnership shall be entitled to receive and retain all of such
proceeds.
2.11 Matters Relating to Promotional Association. At Closing, Contributor
shall deliver to the Partnership a written waiver in form reasonably
satisfactory to the Partnership (the "Promotional Association Waiver") pursuant
to which Contributor waives and releases, and causes its Affiliates to waive
and release, any claims or indebtedness of Contributor or its Affiliates
against or owing by the Promotional Association.
2.12 Matters Relating to Hudson Oil Parcel. Notwithstanding the provisions
of Section 11.2, Contributor shall, pursuant to documents reasonably acceptable
to the Partnership and in recordable form (the "Hudson Oil Agreement"), (a)
make the Hudson Oil Parcel subject to the Reciprocal Easement Agreement
described on Schedule 7.2(h) that relates to the land surrounding the Hudson
Oil Parcel and the restrictions contained therein and (b) agree that, following
Closing and in the event that there is ingress and egress from the Hudson Oil
Parcel to the Land or any Excluded Anchor Parcel, Contributor shall pay to the
owner of the Mall a fee of $100 per month (increased annually based on changes
in the consumer price index) for maintenance and other upkeep of the roadways
located thereon.
2.13 Matters Relating to Right of First Refusal Relating to Mountain Jack's.
Prior to Closing, Contributor shall deliver to Ralston Purina Company, which
is currently operating a Mountain Jack's restaurant in premises constituting
part of the Mall, a notice pursuant to Section 37A of the Lease for such
premises on account of the Transactions (the "Mountain Jack's Notice"), which
notice shall be in form and substance reasonably satisfactory to the
Partnership.
ARTICLE III
Title
The Real Property shall be, on the Closing Date, subject only to the
following (collectively, the "Permitted Exceptions"):
(a) those title exceptions, defects and other matters that are shown
on Exhibit G;
(b) the terms, covenants and conditions of the Reciprocal Easement
Agreements;
(c) provided that there is no violation thereof, zoning,
subdivision, environmental, municipal building and all other laws, rules,
regulations, ordinances, codes, restrictions or legal requirements
applicable to the ownership, use, occupancy or development of, or the
right to maintain or operate
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(including the construction of improvements on), the Real Property and
any other lawful action of any duly constituted public authority or other
body having or exercising jurisdiction over the Real Property presently
existing;
(d) the state of facts shown on the Survey;
(e) Liens for unpaid real property taxes and assessments, water
rates and charges, sewer taxes and rents and other governmental charges
which are not yet due and payable;
(f) all Leases or such of them as shall be in effect on the Closing
Date, and the rights of the Tenants thereunder;
(g) mechanics' liens, lis pendens and notices of commencement of
action against Contributor in respect of the Real Property (or which
affect Contributor's [or, following the Drop-Down, the Acquired
Partnership] interest in the Real Property) provided that the same do not
exceed $25,000 in the aggregate and provided further that the Title
Company shall provide affirmative insurance with respect thereto insuring
the Acquired Partnership from loss with respect thereto in form and
substance acceptable to the Partnership in its sole discretion; and
(h) all other Liens and title exceptions the Partnership may accept
under Section 6.2.
No agreement to take title to the Real Property subject to Permitted Exceptions
shall be deemed a waiver of any representation or warranty of Contributor set
forth in Section 7.2 or the rights of the Partnership contained in Section 6.2,
it being understood and agreed that the Partnership's agreements regarding
Permitted Exceptions assume the truth and accuracy of all such representations
and warranties.
ARTICLE IV
Closing
4.1 Closing. The closing of the Transactions (the "Closing") shall take
place at the offices of Neal, Gerber & Eisenberg, Two North LaSalle Street,
Chicago, Illinois 60602, commencing at 10:00 a.m., local time, on December 2,
1996 (as the same may be extended in accordance with this Section 4.1, the
"Closing Date"). Time shall be of the essence with respect to the Closing
Date; provided, however, in the event that as of December 2, 1996 Contributor
has not, despite the use by it of reasonable best efforts, obtained the
Estoppels, the consent of the Existing Lenders pursuant to Section 2.5, the
Releases/Directions or the Contract Party Consents or cured any title or survey
defects specified pursuant to Article VI, either Contributor or the
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Partnership shall have the right, exercisable by delivering written
notice to the other on or before December 2, 1996, to extend the Closing Date
until not later than December 9, 1996. Unless otherwise provided herein, the
prorations and adjustments pursuant to this Agreement shall be computed as of
11:59 p.m. on October 31, 1996 (the "Adjustment Date") and the Units issued
pursuant to this Agreement shall be deemed to have been issued as of such date.
In addition to but not in duplication of any other prorations and adjustments
pursuant to this Agreement, Contributor shall pay or cause to be paid to the
Partnership in cash at, and subject to the occurrence of, Closing all Rents and
other amounts collected by Contributor (or, following the Drop-Down, the
Acquired Partnership) for November 1996 and the month of Closing (net of
expenses paid by Contributor or, following the Drop-Down, the Acquired
Partnership relating to the operation of the Mall during such period in the
ordinary course of business and consistent with past practice other than salary
and other compensation paid to Contributor or Affiliates thereof [other than an
amount for management fees equal to the product of $1,633, the number of days
in such period prior to Closing and a fraction the numerator of which is the
Gross Asset Value of the Property and the denominator of which is equal to the
"Gross Asset Values" of the Property and the properties conveyed pursuant to
the Other Contributor Agreements], amounts paid pursuant to Section 2.9,
amounts paid or incurred in connection with the Transactions or by reason of
this Agreement and the principal payments on Existing Indebtedness that were
due on November 1, 1996).
4.2 Contributor Closing Documents. At or prior to the Closing, Contributor
shall deliver, or cause to be delivered, to the Partnership (either directly or
through an escrow with the Title Company) the following documents
(collectively, the "Contributor Closing Documents"), duly executed by
Contributor and the other parties thereto (other than the Partnership) and in
form and substance reasonably acceptable to the Partnership and to Contributor
unless the form thereof is attached hereto:
(a) Assignments of the Interests so as to convey the Interests to
the Partnership and/or one or more of its designees.
(b) The Release of Property Management Liens.
(c) Searches conducted by an independent firm reasonably
satisfactory to the Partnership showing any Uniform Commercial Code,
judgment, bankruptcy, pending suit or tax lien filings against
Contributor and the Acquired Partnership in the jurisdictions designated
by the Partnership no earlier than twenty (20) days prior to the Closing
Date but in any event in the state and county or counties in which the
Mall and the principal offices of Contributor are located, which searches
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shall be dated not more than ten days prior to the Closing Date.
(d) The instruments, documents or certificates as are customarily
required by the Title Company to be executed or provided by Contributor
as a condition to the issuance of its title insurance policies pursuant
to the Title Commitment.
(e) An affidavit of Contributor stating its U.S. taxpayer
identification number and that it is a "United States person", as defined
by Sections 1445(f)(3) and 7701(b) of the Code.
(f) The Estoppels.
(g) The Drop-Down Documents.
(h) A written certificate executed on behalf of Contributor and
addressed to the Partnership to the effect that all of the
representations and warranties of Contributor herein contained in Section
7.2 are true and correct in all material respects as of the Closing Date
(as supplemented in accordance with Section 11.3) with the same force and
effect as though remade and repeated in full on and as of the Closing
Date (except for actions taken in accordance with or as contemplated by
this Agreement and except for matters approved in writing or consented to
in writing by the Partnership) or stating the specific respects, if any,
in which any of the representations and warranties is untrue.
(i) Written notices (i) to the Parties to the Reciprocal Easement
Agreements advising them of the change of ownership and directing them to
pay all charges under the Reciprocal Easement Agreements as directed by
the Partnership; (ii) to the Tenants advising them of the change of
ownership and directing them to pay Rent and other charges under their
respective Leases as directed by the Partnership; and (iii) to each Party
to the Contracts advising of the transfer and assignment of the Contracts
to the Acquired Partnership and directing that future inquiries be made
directly to the Acquired Partnership.
(j) Such documents and instruments as shall be reasonably required
to substitute the Acquired Partnership for the Contributor as the
plaintiff in legal actions contemplated by Section 5.9.
(k) With a respect to each of the Acquired Partnership, Contributor
or a general partner of Contributor or the Acquired Partnership that is a
corporation or limited partnership, a certificate issued by the Michigan
Secretary of State, dated not more than ten days prior to the Closing
Date,
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certifying the good standing of such limited partnership or
corporation.
(l) With respect to each of the Acquired Partnership, Contributor or
a general partner of Contributor or the Acquired Partnership that is
limited partnership, copies of the certificate of limited partnership of
such limited partnership and any amendments thereto, certified by the
Secretary of State of the state of formation as of a date not more than
30 days prior to the Closing Date, together with a certificate of the
general partner(s) of such limited partnership to the effect that the
certificate of limited partnership of such limited partnership, as
certified by the Secretary of State aforesaid has not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copy of the partnership agreement
of such limited partnership and amendments thereto is true, accurate and
complete and has not been further amended, revised, restated, cancelled
or rescinded up to and including the Closing Date.
(m) With respect to each general partner of Contributor or the
Acquired Partnership that is a corporation, copies of the articles or
certificate of incorporation of such corporation and any amendments
thereto, certified by the Secretary of State of the state of formation
thereof as of a date not more than 30 days prior to the Closing Date,
together with a certificate of the secretary of such corporation to the
effect that the articles or certificate of incorporation thereof, as
certified by the Secretary of State aforesaid, has not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copy of the by-laws thereof and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(n) A copy of the partnership agreement of each of Contributor, the
Acquired Partnership or a general partner of Contributor or the Acquired
Partnership that is a general partnership, together with a certification
by the general partners of such general partnership that the attached
copy of the partnership agreement of such general partnership and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(o) Such certificates as the Partnership may reasonably request as
to the authorization on the part of Contributor and its general partners
of the execution, delivery and performance of this Agreement and the
authority of the Persons executing and delivering this Agreement and the
Contributor
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Closing Documents on behalf of Contributor and its general
partners.
(p) An opinion or opinions of counsel for Contributor dated as of
the Closing Date, in form and substance reasonably acceptable to the
Partnership.
(q) All Books and Records.
(r) Keys and combinations to locked compartments within the Mall.
(s) Schedule of Fixed and Other Tenant Charge Arrearages payable as
of the Closing Date or a date not more than 10 days prior thereto by each
Party which schedule shall set forth separately and certify the items of
Rents with respect to which each such Party is in arrears, the amount of
each item and the period of such arrearage.
(t) The schedules referred to in Section 5.3 and 5.6.
(u) The Contract Party Consents.
(v) [Intentionally Deleted].
(w) The Guaranty.
(x) The Pledge Agreement.
(y) The Amendment to Partnership Agreement.
(z) The Redemption Rights Agreement.
(aa) The Existing Indebtedness Consent Documents.
(ab) The Promotional Association Waiver.
(ac) The Hudson Oil Agreement and the Mountain Jack Notice.
(ad) Such other documents, instruments or agreements which
Contributor is required to deliver to the Partnership pursuant to the
other provisions of this Agreement or which the Partnership reasonably
may deem necessary or desirable in order to consummate the Transactions
or to better vest in the Partnership or the Acquired Partnership title to
the Interests or the Property; provided, however, that any such other
documents, instruments or agreements which the Partnership reasonably
deems necessary or desirable shall not impose upon Contributor any
obligation or liability other than an obligation or liability expressly
imposed upon Contributor pursuant to the terms of this Agreement or
pursuant to the
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terms of the other Contributor Closing Documents specified in this
Section 4.2.
Notwithstanding any provision to the contrary set forth elsewhere in this
Agreement, if after the use of reasonable best efforts Contributor is unable to
deliver to the Partnership at Closing (subject to the extensions set forth in
Section 4.1) the Contract Party Consents, the Estoppels, the consent of the
Existing Lenders pursuant to Section 2.5, the Partnership shall have the
option, as the Partnership's sole and exclusive right and remedy either (a) to
terminate this Agreement by giving written notice of such termination to
Contributor on or before the Closing or (b) to complete Closing without the
delivery of such item or items and waive the requirement for the delivery of
such item or items. If the Partnership shall terminate this Agreement pursuant
to the provisions of this Section, this Agreement shall be null and void and no
party shall have any further rights or obligations under this Agreement (other
than any right or obligation that expressly survives the termination of this
Agreement).
4.3 Partnership Closing Documents. At or prior to the Closing, the
Partnership shall deliver to Contributor (either directly or through an escrow
with the Title Company) the following documents (herein referred to
collectively as the "Partnership Closing Documents"), duly executed by an
authorized officer of the General Partner and the other parties thereto (other
than Contributor) and in form and substance reasonably acceptable to
Contributor and the Partnership unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which the Partnership and
its designee or designees accept the Interests conveyed to them.
(b) A duly executed and acknowledged secretary's certificate,
certifying that the Board of Directors of the General Partner or
committee thereof has duly adopted resolutions authorizing the
consummation of the Transactions and certifying the authority of the
officers of the General Partner executing and delivering this Agreement
and the Partnership Closing Documents in their capacities as officers of
the General Partner.
(c) A certificate issued by the Secretary of State of Delaware dated
not earlier than ten days prior to the Closing Date certifying the good
standing of the Partnership as of the date of such certificate.
(d) Copies of the certificate of limited partnership of the
Partnership and certificate of incorporation of the General Partner and
any amendments thereto, certified by the Secretary of State of the State
of Delaware as of a date not
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more than 30 days prior to the Closing Date, together with a
certificate of the secretary of the General Partner to the effect that
such certificate of limited partnership and certificate of incorporation,
as certified by the Secretary of State of Delaware, have not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copies of the partnership
agreement of the Partnership and by-laws of the General Partner and
amendments thereto are true, accurate and complete and have not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(e) An opinion of counsel for the Partnership dated as of the
Closing Date, in form and substance reasonably satisfactory to
Contributor, including without limitation an opinion that the
consummation of the Transactions by the Partnership does not violate the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (provided that any opinion as to the
enforceability of the Agreement or any Partnership Closing Documents
shall be based on the assumption that the enforceability of the such
document is governed by the laws of the State of Illinois without regard
to its conflicts of law rules).
(f) A written certificate addressed to Contributor to the effect
that all of the representations and warranties of the Partnership
contained in Section 7.1 are true and correct in all material respects on
and as of the Closing Date (as supplemented in accordance with Section
11.3) with the same force and effect as though remade and repeated in
full on and as of the Closing Date (except for actions taken in
accordance with or as contemplated by this Agreement and except for
matters approved in writing or consented to in writing by Contributor) or
stating the specific respects, if any, in which any of the
representations and warranties is untrue.
(g) The Amendment to Partnership Agreement.
(h) The Pledge Agreement.
(i) The Redemption Rights Agreement.
(j) The Hudson Oil Agreement.
(k) Such other documents, instruments or agreements which the
Partnership may be required to deliver to Contributor pursuant to the
other provisions of this Agreement or which Contributor reasonably may
deem necessary or desirable to consummate the Transactions; provided,
however, that any such other document, instrument or agreement which
Contributor reasonably deems necessary or desirable shall not impose upon
the Partnership any obligation or liability other
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than an obligation or liability expressly imposed upon the
Partnership pursuant to the terms of this Agreement or pursuant to the
terms of the other Partnership Closing Documents specified in this
Section 4.3.
ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated. Subject to the other provisions of this
Article and this Agreement, the following shall be apportioned or adjusted
between Contributor and the Partnership at the Closing as of the date specified
in Section 4.1 and the net amount thereof shall be settled as hereinafter
provided:
(a) real property taxes and assessments (or installments thereof)
based on the most recent tax bills except those required to be paid
directly to the entity imposing the same by those Tenants who are current
in all of their Lease payment obligations on the Closing Date (such
proration shall be computed based on the assumption that the real estate
taxes due in July 1996 and December 1996 (and payable without penalty in
September 1996 and February 1997, respectively) relate to calendar year
1996 and accrued ratably throughout such year);
(b) water rents and charges, if any, except those required to be
paid directly to the entity imposing the same by Tenants who are current
in all of their Lease payment obligations on the Closing Date;
(c) sewer taxes and rents, if any, except those required to be paid
directly to the entity imposing the same by Tenants who are current in
all of their Lease payment obligations on the Closing Date;
(d) actually accrued interest, if any, required to be paid to a
Party on Security Deposits;
(e) amounts, if any, payable by or owed to Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Reciprocal
Easement Agreements;
(f) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied, if the rights with respect thereto
continue for the benefit of the Acquired Partnership following the
Closing;
(g) fuel oil and liquid propane gas, if any, at the cost or costs
per gallon or cubic foot most recently charged with respect to the Mall,
based on the supplier's measurements thereof, plus sales taxes thereon;
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(h) deposits, if any, on account with any utility company servicing
the Mall;
(i) deposits on account with any municipality having jurisdiction
over the Mall (other than deposits which are in the nature of security
for the performance of work);
(j) amounts paid or payable by the owner of the Mall to the
Promotional Association;
(k) Rents (subject to the other provisions of this Article V);
(l) amounts paid or payable under the Contracts relating to the Mall
to the extent the same constitute Partnership Liabilities;
(m) interest on the Existing Indebtedness; and
(n) all other items customarily apportioned in connection with the
sale of properties that are similar to the Property and similarly
located.
Contributor shall cooperate with the Partnership in the transfer of
electricity, gas, water and other utility services from Contributor's name to
the name of the Acquired Partnership as of the Closing Date if not previously
transferred in connection with the Drop-Down.
5.2 Installment Payment of Assessments. In furtherance of Section 5.1(a),
if any real property assessment affects the Mall at the Adjustment Date and
such real property assessment is payable in installments (whether at the
election of the Mall owner or otherwise), the installment relating to, or
payable over, the Applicable Closing Fiscal Period shall be apportioned between
Contributor and the Partnership as of 11:59 p.m. Eastern Standard time on the
day immediately preceding the Adjustment Date, and the remaining installments
shall be the obligation of the Partnership.
5.3 Adjustable Tenant Charges.
(a) Notwithstanding anything to the contrary contained herein, no
adjustments or apportionments shall be made with respect to the expense
items listed in Section 5.1 hereof (other than real estate taxes and
assessments, as to which adjustment shall be made as set forth in Section
5.1) for the Applicable Closing Fiscal Period or any prior fiscal period
to the extent such expense items are payable or reimbursable from funds
collected as Adjustable Tenant Charges. Contributor shall be responsible
for the payment of all such expenses incurred by it or the Acquired
Partnership prior to Closing (which shall be deemed to have been incurred
by Contributor
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for the purposes of this Section 5.3), and the Partnership
shall cause the Acquired Partnership to pay or otherwise satisfy out of
the assets of the Acquired Partnership only (unless applicable law
imposes liability upon the general partners thereof) all such expenses
incurred by it following Closing (including without limitation real
estate taxes and assessments for which the Partnership has received
credit under Section 5.1).
(b) At the Closing, Contributor shall assign to the Acquired
Partnership (to the extent not assigned in connection with the Drop-Down)
any amounts required to be paid as Adjustable Tenant Charges by Tenants
which were due and payable on or before, but remain unpaid on, the
Closing Date, and there shall be no adjustment hereunder with respect
thereto. At the Closing, Contributor shall deliver to the Partnership a
true and correct statement setting forth in reasonable detail and
certifying the amount of Adjustable Tenant Charges collected and
expenditures for such items of expense (and any credits for real estate
taxes) made by Contributor or the Acquired Partnership for the portion of
the Applicable Closing Fiscal Period through a date not more than 30 days
prior to the Closing Date and for any prior fiscal period and a good
faith estimate of such amounts through the Closing Date.
(c) The Partnership shall cause any amounts collected by the
Acquired Partnership after the Closing Date which relate to Adjustable
Tenant Charges payable with respect to any fiscal period ending prior to
the Applicable Closing Fiscal Period to be remitted to Contributor.
Within 90 days following the end of the Applicable Closing Fiscal Period
and from time to time thereafter as amounts are received by the Acquired
Partnership from Parties, the aggregate amount of Adjustable Tenant
Charges, if any, collected and retained by the Acquired Partnership and
Contributor with respect to the Applicable Closing Fiscal Period shall be
apportioned and adjusted such that the total amount of such Adjustable
Tenant Charges received by the Acquired Partnership (excluding amounts
received prior to Closing), on the one hand, and Contributor (including
amounts received by the Acquired Partnership prior to Closing), on the
other hand, shall be in the same proportion as the amount of the expense
items to which such Adjustable Tenant Charges relate which each has borne
(including without limitation real estate taxes or assessments for which
either party has received credit under Section 5.1), and, to the extent
that either shall have received a greater share of the payments with
respect to Adjustable Tenant Charges, such party or parties shall
promptly settle such excess with the other.
5.4 [Intentionally Omitted].
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5.5 Fixed and Other Tenant Charge Arrearages. Subject to the provisions of
Section 5.7(c), Fixed and Other Tenant Charge Arrearages (which, for purposes
of this Section 5.5, shall include, without limitation, any real estate taxes
or special assessments or other amounts otherwise required to be paid by a
Party directly to the taxing authority but actually paid by Contributor to the
taxing authority with respect to the amount of the taxes or special assessments
actually paid), if and when collected, shall be paid to the Acquired
Partnership as to Fixed and Other Tenant Charge Arrearages which relate to
periods from and after the Adjustment Date, and to Contributor with respect to
all other Fixed and Other Tenant Charge Arrearages.
5.6 Sales Based Tenant Charges. Sales Based Tenant Charges which are
payable with respect to any period prior to the Adjustment Date or which have
been accrued prior to the Adjustment Date shall not be apportioned as of the
Adjustment Date. In lieu thereof, such amounts shall be apportioned, after the
Closing Date and after final determination thereof, so that the amount thereof
to which Contributor shall be entitled shall be the entire amount thereof with
respect to any fiscal period ending prior to the Adjustment Date, and, for the
Applicable Closing Fiscal Period, an amount which bears the same ratio to the
total Sales Based Tenant Charges as the number of days in the Applicable
Closing Fiscal Period which have elapsed prior to the Adjustment Date bears to
the total number of days in the Applicable Closing Fiscal Period. At the
Closing, Contributor shall deliver to the Partnership a true and correct
statement setting forth in reasonable detail and certifying the amount of Sales
Based Tenant Charges collected for the portion of the Applicable Closing Fiscal
Period through a date not more than 30 days prior to the Closing Date and a
good faith estimate of such amounts collected through the Closing Date.
5.7 Application of Rent Receipts. Notwithstanding anything to the contrary
contained herein, in determining the adjustments and apportionments pursuant to
Sections 5.3, 5.4, 5.5 and 5.6, the following shall apply:
(a) Payments of Rents (other than Rents collected pursuant to
Section 5.9(b)) shall be deemed to have been made by a Party first to the
payment of Fixed and Other Tenant Charges (other than charges for Tenant
Services), second to the payment of Sales Based Tenant Charges, third to
the payment of charges for Tenant Services (and designated as such in the
Lease), fourth to the payment of Adjustable Tenant Charges, and last to
the payment of all other items of Rent payable by such Party.
(b) Any amounts collected as Sales Based Tenant Charges, and
Adjustable Tenant Charges, within each category, shall be deemed to have
been paid by the Party, first, on account of amounts then due for periods
after the Applicable Closing
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Fiscal Period, next, on account of amounts then due for the Applicable
Closing Fiscal Period and, next, on account of amounts then due for
all fiscal years prior to the Applicable Closing Fiscal Period.
(c) If the Acquired Partnership shall receive any Fixed and Other
Tenant Charges after the Closing Date from a Party who is delinquent as
of the Adjustment Date in the payment of Fixed and Other Tenant Charges
payable under its Lease or either Reciprocal Easement Agreement, as the
case may be, such Fixed and Other Tenant Charges shall be deemed to have
been paid by the Party, first, on account of amounts owing to Acquired
Partnership, next, on account of Fixed and Other Tenant Charge Arrearages
due to the Contributor (after reduction for amounts collected pursuant to
Section 5.9(b) and 5.7(d)), and the balance remaining thereafter shall be
retained by the Acquired Partnership.
(d) Notwithstanding anything to the contrary contained in this
Section 5.7, a payment of Rent shall be applied to the payment of the
item or items of Rent designated by the Party making such payment or to
which such payment otherwise clearly relates in the good faith judgment
of the Partnership.
5.8 Security and Utility Deposits. At the Closing, Contributor shall
furnish the Partnership with a schedule setting forth and certifying, as
of the Closing Date, the unapplied and unreturned portion of any security
deposits which have been deposited with Contributor (or, following the
Drop-Down, the Acquired Partnership) or its agents (or with any
predecessor-in-interest thereto) by any Tenants through the Closing Date
(the "Security Deposits") and the amount of any deposits on account with
any utility company servicing the Mall or Existing Lender that will
continue for the benefit of the Acquired Partnership following Closing
("Other Deposits"), and Contributor shall pay to the Partnership at
Closing in cash the amount of the Security Deposits, together with all
interest, if any, accrued thereon and required to be paid to Tenants or
actually paid in accordance with past practices) to Tenants. Contributor
shall receive a credit at Closing for the amount of the Other Deposits.
5.9 Collection of Rents.
(a) The Partnership shall cause the Acquired Partnership to use its
best efforts to collect the Fixed and Other Tenant Charge Arrearages,
Adjustable Tenant Charges, Sales Based Tenant Charges and other Rents
which are payable with respect to the Applicable Closing Fiscal Period
and any prior fiscal period, but the Acquired Partnership shall not be
required to retain a collection agency, commence litigation or file
proofs of claim or commence an adversary proceeding in a bankruptcy case,
or terminate Leases or either Reciprocal Easement
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Agreement in connection with such collection efforts. The Partnership
shall not permit the Acquired Partnership to waive or settle any
claims for any such amounts in whole or in part to the extent such
amounts, if collected, would be payable to Contributor hereunder other
than in accordance with the policies of the Partnership from time to time
as to Rent delinquencies generally. Out-of-pocket collection costs shall
be charged against amounts collected and charged to the parties hereto in
the proportion in which each is entitled to the proceeds of such
collection. The Partnership shall provide to Contributor semi-annual
reports after Closing with respect to the collection by the Acquired
Partnership after Closing of any such amounts which are payable with
respect to the Applicable Closing Fiscal Period and any prior fiscal
year.
(b) Contributor shall have the right to seek collection of any Fixed
and Other Tenant Charge Arrearages owed to it and not collected by or on
behalf of it within six months following the Closing Date; provided,
however, that in seeking to collect any such Fixed and Other Tenant
Charge Arrearages, Contributor shall not be entitled to terminate any
Lease or Reciprocal Easement Agreement or otherwise seek any remedy which
could materially affect or impact the Mall or the ownership or operation
thereof other than a money judgment against the delinquent Party. The
Acquired Partnership shall not be required to join in any such actions or
proceedings commenced by Contributor unless the provisions of any law,
rule or regulation at the time in effect shall require that such actions
or proceedings be brought by and/or in the name of the Acquired
Partnership, in which event the Partnership shall cause the Acquired
Partnership to join and cooperate in such actions or proceedings or
permit the same to be brought by such Contributor in the Acquired
Partnership's name but such Contributor shall pay all costs and expenses
relating thereto, including without limitation the Acquired Partnership's
reasonable legal fees in reviewing pleadings and other materials filed in
connection with such litigation.
(c) Notwithstanding anything to the contrary contained herein, the
Acquired Partnership shall have the right at any time on or after the
Closing, and whether or not its joinder shall be required as a matter of
law, to join in, or to be substituted for Contributor in, any proceedings
for the eviction of Tenants and/or the collection of Rent which may have
been instituted by Contributor either prior to or after the Closing, if
the Tenant in question is still in possession of the premises covered by
its Lease and if, in connection therewith, the Acquired Partnership
intends to seek eviction of such Tenant, cancellation of the Lease or
repossession of the premises. If the Acquired Partnership joins in, or
is substituted for Contributor as plaintiff in any such
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litigation, the Partnership shall cause the Acquired Partnership to,
thereafter, assume sole liability for all costs and expenses of such
litigation, including legal fees and expenses, as may thereafter be
incurred (except as provided below) and shall thereafter control all
aspects of such proceedings, except that the Partnership shall not permit
the Acquired Partnership to waive, reduce or otherwise compromise any
claims for Rent relating to any period prior to the Adjustment Date other
than in accordance with the policies of the Partnership from time to time
as to Rent deficiencies generally. Contributor in any event may, at its
option, continue to participate in such litigation. In any event,
Contributor shall reimburse the Partnership for a pro rata portion of its
out-of-pocket costs and expenses of such collection in proportion to, but
in no event in an amount greater than, the amount, if any, actually
received by Contributor after Closing as a result of such proceedings;
provided, however, Contributor shall be entitled to a credit for legal
fees and expenses incurred by Contributor prior to the intervention by
the Acquired Partnership in connection with the proceedings previously
instituted by Contributor in connection with such collection efforts.
5.10 Settlement of Adjustments.
(a) Contributor and the Partnership acknowledge that it may be
difficult to calculate, as of the day immediately preceding the
Adjustment Date, certain of the adjustments, apportionments and payments
to be made pursuant to this Article V. Accordingly, Contributor and the
Partnership hereby agree that any adjustments, apportionments and
payments otherwise required to be made as of the Adjustment Date may to
the extent necessary or desirable be estimated by Partnership and
Contributor based on the most recent available data, and, additional
adjustments, apportionments and payments shall be made to adjust for any
differences between the actual apportionment or adjustment and the amount
thereof estimated on the Closing Date. Any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after
their discovery.
(b) Except as otherwise provided herein, net prorations and
adjustments made pursuant to this Article V on the Closing Date and
determined as provided in subsection (a) above shall be settled in cash.
From time to time after the Closing as further adjustments are made as
herein provided, settlement thereon between Contributor and the
Partnership shall be made in cash.
(c) The Partnership, upon reasonable advance notice, shall cause the
Acquired Partnership to provide Contributor with access to its books and
records, including back-up
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calculations and information, relating to the calculation of the
adjustments required to be made pursuant to this Article V.
(d) Any Rents that are payable to Contributor hereunder shall be
paid from time to time following the Closing as determined by the
Partnership but no less frequently than quarterly.
(e) Notwithstanding anything to the contrary contained herein, a
final adjustment shall be made with respect to the amounts owing under
this Article V as of December 31, 1997, and the amounts owing settled in
cash no later than 10 days thereafter. No further adjustments or
payments shall be required to be made under this Article V thereafter
(except with respect to legal proceedings for or bankruptcy claims in
respect of the collection of Rent which are pending on such date or legal
proceedings or bankruptcy claims brought by Contributor under Section
5.9(b)).
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment. Contributor shall cause the Title Company to deliver
to the Partnership, not later than seven (7) days prior to the Closing Date, a
commitment of the Title Company (the "Title Commitment") to issue, at Closing,
its ALTA Form B Owners Title Insurance Policy as to the Real Property in the
aggregate amount of the Gross Asset Value with coverage against matters
relating to federal bankruptcy, state insolvency or similar creditors' rights
laws and with the following special endorsements:
(a) Full extended coverage over all general exceptions;
(b) Location endorsement insuring the accuracy of the Survey for the
Real Property;
(c) An endorsement insuring legal access to the Real Property from
each of the streets bordering thereon, and insuring that all such streets
are dedicated public streets;
(d) An endorsement insuring against loss of title to the Real
Property or the inability of the owner thereof to maintain the
improvements now located thereon by reason of a violation of a covenant,
condition or restriction of record affecting such property;
(e) Utility facility endorsement;
(f) Zoning endorsement (ALTA 3.1) (with parking);
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(g) Tax parcel endorsement;
(h) Contiguity endorsement;
(i) Non-imputation endorsement insuring the Acquired
Partnership against any denial of coverage in the event of
loss or damage insured under the terms of the Title Policy by
virtue of a defect, lien, encumbrance, adverse claim or other
matter not known to the Title Company and not known to the
Partnership which were not shown by the public records but
were known to representatives of Contributor or the Acquired
Partnership prior to Closing; and
(j) "Fairway" endorsement.
The Partnership also may require the issuance at the Closing of such
additional endorsements as it deems appropriate, but the issuance thereof shall
not be a condition to the Partnership's obligations hereunder and the costs of
such additional endorsements shall be paid by the Partnership except as set
forth in Sections 3.1 and 6.2.
The Title Company shall reinsure portions of the risk covered by its title
insurance policies with reinsurance companies reasonably satisfactory to the
Partnership under standard reinsurance agreements providing, at a minimum, for
direct access and enforcement of rights by the insured party to and against the
reinsurer.
6.2 Title Defects. If the Title Commitment for the Real Property discloses
exceptions to title other than Permitted Exceptions or if the Partnership
determines, in its sole and absolute discretion, that such Permitted Exceptions
shall interfere with the current or the Partnership's anticipated use of such
property or materially and adversely affects the value of such property, the
Partnership shall notify Contributor in writing thereof and Contributor shall
(a) cause any such exceptions which are monetary liens of a fixed and
ascertainable amount that may be removed solely by the payment of money,
including without limitation, judgment and mechanics' liens, to be removed at
or prior to the Closing and shall deposit with the Title Company releases or
other appropriate instruments, in recordable form, sufficient to cause the
removal of such items from the title; and (b) use reasonable best efforts to
cause all other such title exceptions to be so released and removed from title
and waived from the Title Commitment, or insured over at its cost by the Title
Company by an endorsement reasonably satisfactory to the Partnership. Nothing
contained herein shall limit the rights of the Partnership in respect of a
breach by Contributor of Section 11.2. All premiums and other charges in
connection with the
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issuance of the owner's title policies and endorsements complying with
the requirements of Section 6.1 shall be borne by Contributor and Contributor
shall cause the same to be paid in full at or prior to Closing. If title is not
insurable at Closing as required by Section 3.1, Section 6.1 and this Section
6.2 (including causing the removal of or issuance of insurance over, the
matters specified in the above notice), then the Partnership may, as its sole
remedy, (i) accept title subject to all Liens and other title exceptions
(without any abatement or reduction of the consideration hereunder) or (ii)
terminate this Agreement by giving written notice of such termination to
Contributor. In the event that this Agreement is terminated in its entirety,
this Agreement shall be null and void the parties shall be released from all
further rights and obligations under this Agreement (other than any right or
obligation that expressly survives the termination of this Agreement).
6.3 Survey.
(a) Contributor shall cause a survey for the Real Property, dated
not earlier than 90 days prior to the Closing Date, to be prepared by a
licensed or registered professional surveyor in the jurisdiction in which
such property is located and delivered to the Partnership not later than
seven (7) days prior to the Closing Date (such survey, the "Survey").
The Survey shall be an Urban ALTA/ACSM Land Title Survey made in
compliance with and meeting the accuracy standards under the "Minimum
Standard Detail Requirements for ALTA/ACSM Land Surveys" jointly
established by the American Land Title Association and American Congress
on Surveying and Mapping then in effect; shall show the boundaries of the
Land; shall disclose whether or not the Land comprises a single parcel of
land with no strips, gores or gaps within its boundaries; shall disclose
any encroachments of any Improvements located primarily on the Land onto
adjoining premises and public ways (and whether or not a valid easement
for the benefit of such property exists and is in place with respect to
each such encroachment) or onto or over setback or building lines located
on the Land or of improvements located primarily on adjoining premises
onto any portion of the Land (and whether or not a valid easement for the
benefit of the adjoining premises shall exist and be in place with
respect to each such encroachment); shall locate all easements created by
recorded instruments (to the extent plottable) or visible on the Land and
shall disclose any encroachment by any of the Improvements located
thereon, or any other structures located on the Land, in violation of any
such easements; shall contain a legal description of the Land; shall show
the location of any adjacent public streets, disclosing access, if any,
to the Land therefrom; shall contain a certificate of the surveyor
attesting to the accuracy of the Survey and its conformity to the
requirements of the aforesaid Minimum Standard Detail
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Requirements, which certificate shall be directed to the Partnership,
the Acquired Partnership and the Title Company. The costs of the Survey
shall be borne by Contributor.
(b) If the Survey discloses that the Land does not comprise a single
parcel of land with no strips, gores or gaps within its boundaries (other
than land parcels owned by a Party to either Reciprocal Easement
Agreement and outlots, if any, which are located on a portion of the Land
but which contain free-standing improvements not otherwise physically
connected to other Improvements), discloses any encroachments of
Improvements located primarily on the Land onto adjoining premises or
public ways (except to the extent a valid easement for the benefit of
such property exists and is in place with respect to each such
encroachment, the Title Company has insured the Acquired Partnership
against loss by reason thereof, or the encroachments may be removed or
abated without material cost or expense or material damage to such
property or the conduct or business therefrom) or of improvements located
primarily on adjoining premises onto any portion of the Land (except to
the extent a valid easement for the benefit of the adjoining premises
shall exist and be in place with respect to each such encroachment and
each such encroachment does not interfere with the present or reasonably
anticipated future use or operation of such property for its intended
purposes and does not materially and adversely affect the market value of
such property), discloses any encroachment by any of the Improvements
located thereon, or any other structures located on the Land in violation
of any recorded setback lines or boundaries or easements created by
recorded instrument (to the extent plottable) or visible on such property
(unless the Title Company has insured the Acquired Partnership against
loss by reason of such encroachment or the encroachment may be removed or
abated without material cost or expense or material damage to such
property or the conduct of business therefrom), if the legal description
of the Land shown by the Survey does not conform to the legal description
thereof contained herein or if the boundaries of the Land as depicted on
the Survey do not conform in a material manner to those depicted on
Exhibit D-1, the Partnership shall have the option to terminate this
Agreement prior to Closing by giving written notice of such termination
to Contributor. If the Partnership shall terminate this Agreement
pursuant to the provisions of this Section 6.3(b), this Agreement shall
be null and void, and no party shall have any further rights or
obligations under this Agreement with respect thereto (other than any
right or obligation that expressly survives the termination of this
Agreement).
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ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties. The Partnership represents
and warrants to Contributor as follows:
(a) The Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Partnership of
this Agreement have been duly and validly authorized by all requisite
action on the part of the Partnership. This Agreement has been, and the
Partnership Closing Documents will be, duly executed and delivered by the
Partnership. This Agreement constitutes, and when so executed and
delivered the Partnership Closing Documents will constitute, the legal,
valid and binding obligations of the Partnership, enforceable against it
in accordance with their terms.
(c) None of the execution, delivery or performance of this Agreement
or the Partnership Closing Documents by the Partnership or the
consummation of the Transactions does or will, with or without the giving
of notice, lapse of time or both, violate, conflict with, constitute a
default or result in a loss of rights under or require the approval or
waiver of or filing with any Person (including without limitation any
governmental body, agency or instrumentality) under (i) the
organizational documents of the Partnership or any material agreement,
instrument or other document to which the Partnership is a party or by
which the Partnership is bound or (ii) any judgment, decree, order,
statute, injunction, rule, regulation or the like of a governmental unit
applicable to the Partnership, including without limitation applicable
securities laws.
(d) No broker, finder, investment banker or other person is entitled
to any brokerage, finder's or other fee or commission in connection with
the Transactions based upon arrangements made by or on behalf of the
Partnership.
7.2 Contributor's Representations and Warranties. Contributor represents
and warrants to the Partnership as follows:
(a) Contributor is a general partnership duly formed and validly
existing under the laws of the State of Michigan with full power and
authority to execute, deliver and perform this Agreement.
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(b) The execution, delivery and performance of this Agreement by
Contributor have been duly and validly authorized by all necessary action
on the part of Contributor. This Agreement has been, and the Contributor
Closing Documents delivered by Contributor will be, duly executed and
delivered by Contributor to the extent it is a party hereto and thereto.
This Agreement constitutes, and when so executed and delivered the
Contributor Closing Documents will constitute, the legal, valid and
binding obligations of Contributor, enforceable against Contributor in
accordance with their terms.
(c) Except as set forth on Schedule 7.2(c), none of the execution,
delivery or performance of this Agreement by Contributor or the
consummation of the Transactions does or will, with or without the giving
of notice, lapse of time or both, violate, conflict with, constitute a
default, result in a loss of rights, acceleration of payments due or
creation of any Lien upon the property of Contributor or, following the
Drop-Down, the Acquired Partnership or require the approval or waiver of
or filing with any Person (including without limitation any governmental
body, agency or instrumentality) under (i) the organizational documents
of Contributor or the Acquired Partnership or its general partners or,
subject to obtaining the consents of the Existing Lenders specified on
Schedule 2.5, any agreement, instrument or other document to which
Contributor or the Acquired Partnership or its general partners is a
party or by which it is bound or (ii) any judgment, decree, order,
statute, injunction, rule, regulation or the like of a governmental unit
applicable to any of Contributor or the Acquired Partnership or its
general partners.
(d) At Closing, Contributor will have good and marketable title to
the Interests, free and clear of all Liens; upon execution and delivery
of the Contributor Closing Documents, the Partnership and its designees
will have good and marketable title to the Interests, free and clear of
all Liens other than Liens created by, under or through the Partnership
or such designee(s); and, at Closing, the Interests shall constitute all
of the partnership interests in the Partnership (except for the 1%
interest owned by Lansing Mall, Inc.) and no other Person shall have any
other equity or income interest therein or right or option to acquire the
same. Contributor has good and marketable title to the Property (other
than the Land, the improvements and the other Real Property to extent
covered by the Title Policy), free and clear of all Liens other than the
Permitted Exceptions and, at Closing, the Acquired Partnership will have
good and marketable title to the Property free and clear of all Liens
other than the Permitted Exceptions.
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(e) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received any notice of violation from any federal, state
or municipal entity that has not been cured or otherwise resolved to the
satisfaction of such governmental entity.
(f) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received any notice
from any governmental unit or other person (including without limitation
any consultant or engineer engaged by Contributor or other person) that
it or the Real Property or any occupant thereof is not in compliance with
any Environmental Law, that the Real Property or any portion thereof has
been used as a storage or disposal site for Hazardous Materials (other
than the storage of substances commonly present at or used in the
operation and maintenance of shopping centers in quantities commonly
present at shopping centers and in compliance with applicable laws) or
that it has any liability with respect thereto, and there are no
administrative, regulatory or judicial proceedings pending or, to the
knowledge of Contributor, threatened with respect thereto pursuant to, or
alleging any violation of, or liability under any Environmental Law. To
Contributor's knowledge and except as set forth on Schedule 7.2(f), no
underground or above-ground storage tanks are located on, under or about
the Real Property and there is no facility located on or at the Real
Property that is subject to the reporting requirements of Section 312 of
the Federal Emergency Planning and Community Right to Know Act of 1986
and the federal regulations promulgated thereunder (42 U.S.C. Section
11022).
(g) Schedule 7.2(g) contains a rent roll for the Mall as of
December 5, 1996 showing the identification of each rentable space in
the Mall, whether leased or not, and for each such space, the name of the
Tenant, the expiration date of the current term of the Lease, the minimum
or fixed annual rent payable, the unapplied amount of any security
deposit held, all delinquencies in Rent and all outstanding rent
abatements and tenant fit-out allowances or other tenant concessions.
All information therein is accurate as of its date. No Tenant has paid
any rent in advance except for the current month.
(h) Schedule 7.2(h) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto
(including without limitation side letters) regardless of whether the
terms thereof have commenced, setting forth with respect to each (i) the
date thereof and of each modification thereof and supplement thereto and
(ii) the names of the parties thereto (including the name of the current
assignee, if any, but only if and to the extent Contributor has actual
notice of any such assignment). The documents listed on Schedule 7.2(h)
and
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marked with an "R" constitute a complete and correct list of the
reciprocal easement agreements relating to the Real Property and
modifications thereof and supplements thereto (including without
limitation side letters) (the "Reciprocal Easement Agreements") setting
forth with respect to each (i) the date thereof and of each modification
thereof and supplement thereto and (ii) the names of the parties thereto.
True and complete copies of the Reciprocal Easement Agreements and
Leases, including each written modification thereof and supplement
thereto and, to Contributor's knowledge, all material correspondence
between Contributor (or, following the Drop-Down, the Acquired
Partnership) and the Parties thereto bearing a date on or after January
1, 1994, have heretofore been furnished to the Partnership for
inspection. Each Reciprocal Easement Agreement and Lease constitutes the
entire agreement between the parties thereto and there are no oral
promises or agreements amending or modifying the same.
(i) There are no leases or other rights of occupancy or use relating
to the Real Property other than the Leases and the Reciprocal Easement
Agreements and other rights of persons arising under instruments or
agreements which comprise Permitted Exceptions and/or the Contracts,
except subleases, concessions or license agreements which may have been
entered into by Tenants or by subtenants of Tenants. Each of the Leases
and Reciprocal Easement Agreements is valid and subsisting and in full
force and effect, and Contributor has received no notice of the
termination of any easement granted therein.
(j) (i) No Party to any Reciprocal Easement Agreement or Lease has
made any written claim or, to Contributor's knowledge, has any other
claim, whether or not in writing, (A) that Contributor (or, following the
Drop-Down, the Acquired Partnership) has defaulted in any extent in
performing any of its obligations under such Reciprocal Easement
Agreement or Lease which has not heretofore been cured, (B) that any
condition exists which with the passage of time would constitute any such
default, or (C) that such Party is entitled to any reduction in, refund
of, or counterclaim or offset against, or is otherwise disputing, any
Rents or other charges paid, payable or to become payable by such Party,
to cancel such Reciprocal Easement Agreement or Lease or to be relieved
of its operating covenants thereunder.
(ii) Except as set forth on Schedule 7.2(v), no Tenant or other Party
has pending any action, proceeding or arbitration against Contributor
(or, following the Drop-Down, the Acquired Partnership) based on any
claims of the nature described in Section 7.2(j)(i).
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(iii) With the exception of delinquencies in the payment of Rents
under Leases and except as shown on Schedule 7.1(j), to Contributor's
knowledge, no material default exists under any Reciprocal Easement
Agreement or Lease on the part of the Party or Parties thereto. To
Contributor's knowledge, neither Contributor nor, following the
Drop-Down, the Acquired Partnership is in default (without giving effect
to any applicable notice and cure rights) in any respect with respect to
any Lease or Reciprocal Easement Agreement.
(iv) There are no unsatisfied rent abatements or other tenant
concessions or inducements, including, without limitation, lease
assumptions or buy-outs, applicable to any of the Leases or any rights to
extend or renew any of the Leases except as set forth in the rent roll
referred to in Section 7.2(g) and the Leases.
(v) No Party to a Lease or Reciprocal Easement Agreement has any
rights, options or rights of first refusal of any kind which are
currently in effect, to purchase or to otherwise acquire the Real
Property or any part thereof or interest therein other than the rights of
such Tenant (as tenants only) under its Lease or such Party to the
applicable Reciprocal Easement Agreement (with respect to easements
only).
(k) Contributor has furnished the Partnership with its audited
financial statements (consisting of balance sheets and income statements)
relating to the Mall as of, and for the calendar years ended, December
31, 1993, 1994 and 1995 (the "Annual Financial Statements") and its
unaudited financial statements (consisting of balance sheets and income
statements) as of and for the seven-month period ended July 31, 1996 (the
"Interim Financial Statements" and, together with the Annual Financial
Statements, the "Financial Statements"). The Financial Statements are
consistent with the books and records and accounts of Contributor
relating to the Mall and fairly present the financial condition and
results of operations of Contributor relating to the Mall as of the dates
thereof and for the periods referred to therein, and, except for the
absence of footnotes and subject to normal year-end accruals as to the
Interim Financial Statements, the Financial Statements have been prepared
on a tax basis and otherwise in accordance with generally accepted
accounting principles, consistently applied throughout the periods
indicated. Since December 31, 1995, each of Contributor and, following
the Drop-Down, the Acquired Partnership has conducted its business
relating to the Mall in the ordinary course consistent with past
practice.
(l) Schedule 7.2(l) lists the patents, trademarks (including
registrations thereof), and trade names which are
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used by each of Contributor and, following the Drop-Down, the Acquired
Partnership in connection with the operation of the Mall (the
"Intellectual Property"). The conduct of the business of each of
Contributor and, following the Drop-Down, the Acquired Partnership
relating to the Mall and the use of the Intellectual Property do not
infringe upon the patents, trademarks, copyrights or other
intellectual property rights of any third party, and, to Contributor's
knowledge, no third parties are currently infringing upon the patents,
copyrights, trademarks or other intellectual property rights of
Contributor (or, following the Drop-Down, the Acquired Partnership)
relating to the Mall. Neither Contributor nor, following the Drop-Down,
the Acquired Partnership has granted to any Person or Persons the right
to use the Intellectual Property or any portion thereof.
(m) Neither Contributor (nor, following the Drop-Down, the Acquired
Partnership) is a party to any collective bargaining or union agreements
with respect to the Mall. Contributor has not encountered any labor
union organizing activity or experienced any actual or threatened
employee strikes, work-stoppages, slow-downs or lockouts. Except as set
forth on Schedule 7.2(m), neither Contributor nor, following the
Drop-Down, the Acquired Partnership maintains or sponsors any employee
benefit plan, including, without limitation, any plans subject to the
Employer Retirement Income Security Act of 1974, as amended. There are
no pending claims or, to Contributor's knowledge, any threatened claim
against Contributor (or, following the Drop-Down, the Acquired
Partnership) by any employee whose employment relates or related to the
Mall.
(n) Schedule 7.2(n) contains a true and complete list of all
Contracts with respect to the Mall, including all modifications thereof.
To Contributor's knowledge, there has been no default (without giving
effect to any notice and cure rights) by Contributor (or, following the
Drop-Down, the Acquired Partnership) any Party under any Contract which
has not heretofore been cured. Contributor has received no notice of any
claim by a Party of any such default, which has not heretofore been
cured. A true and complete copy of each Contract, including any
amendments or supplements thereto, has been delivered or made available
to the Partnership. Such documents constitute the entire agreement
between the parties thereto and there are no oral promises or agreements
amending or modifying the same.
(o) No condemnation proceeding is pending with respect to all or any
part of the Real Property, and, to Contributor's knowledge, no
condemnation proceeding is pending with respect to any property owned by
a Party to any Reciprocal Easement Agreement which is the subject of such
Reciprocal Easement
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Agreement and no Taking is threatened with respect to all or any part of
the Real Property, or any property owned by a Party to any Reciprocal
Easement Agreement which is the subject of such Reciprocal Easement
Agreement.
(p) The Real Property is an independent unit which does not now rely
on any facilities (other than facilities covered by Permitted Exceptions
[including, without limitation, the Reciprocal Easement Agreements] or
facilities of municipalities or public utility and water companies and
other than parking areas which the Real Property makes use of under the
Reciprocal Easement Agreements) located on any property not included in
the Real Property to fulfill any municipal or governmental requirement or
for the furnishing to the Real Property of any essential building systems
or utilities, including but not limited to, water, electrical, plumbing,
mechanical and heating, ventilating and air conditioning systems,
drainage facilities, catch basins and retention ponds, sewage treatment
facilities and the like, unless recorded easements or other rights are in
effect for the benefit of the Real Property (which run with the land) for
the continued use and benefit thereof. Except as may be covered by the
Permitted Exceptions (including, without limitation, the Reciprocal
Easement Agreements), no building or other improvement not included in
any part of the Real Property relies on any part of the Real Property to
fulfill any governmental or municipal requirement or to provide
facilities to such building or improvement for any essential building
systems or utilities, including, without limitation, electrical,
plumbing, mechanical, sewage treatment or heating, ventilating and air
conditioning facilities or services.
(q) Copies of current real estate tax bills with respect to the Real
Property, other than tax bills sent to Tenants who have the obligation to
pay such taxes to the collecting authority, have been delivered to the
Partnership. No portion of the Real Property comprises part of a tax
parcel which includes property other than property comprising all or a
portion of Real Property. No application or proceeding is pending with
respect to a reduction or an increase of such taxes. There are no tax
refund proceedings relating to the Real Property which are currently
pending. Contributor has no knowledge of any special tax or assessment
to be levied against the Real Property or any change in the tax
assessment of the Real Property.
(r) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received notice that there is, and to Contributor's
knowledge there does not now exist, any violation of any restriction,
condition or agreement contained in any easement, restrictive covenant or
any similar
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instrument or agreement affecting the Real Property or any
portion thereof.
(s) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received (i) any
written notice from any governmental authority having jurisdiction over
the Real Property or the Mall or from any other person (including without
limitation a consultant or engineer or any insurance company or Board of
Fire Underwriters) (A) of any violation of any law, ordinance, order or
regulation (including without limitation the ADA) by Contributor (or,
following the Drop-Down, the Acquired Partnership) relating to the Mall
which has not heretofore been complied with or (B) requiring any
alterations, improvements or changes at the Mall or any portion thereof
which have not been completed. Contributor has no obligation to any
governmental authority for the performance of any capital improvements or
other work to be performed by Contributor (or, following the Drop-Down,
the Acquired Partnership) in or about the Real Property or donations of
monies or land (other than general real property taxes) which has not
been completely performed and paid for.
(t) Except as provided in Schedule 7.2(t), there is no litigation,
including any arbitration, investigation or other proceeding by or before
any court, arbitrator or governmental or regulatory official, body or
authority which is pending or, to Contributor's knowledge, threatened
against Contributor (or, following the Drop-Down, the Acquired
Partnership) relating to the Mall or the Transactions and there are no
unsatisfied arbitration awards or judicial orders against Contributor
(or, following the Drop-Down, the Acquired Partnership). Copies of all
pleadings and other documents with respect to the litigation described on
Schedule 7.2(t) have been furnished to the Partnership and are true,
accurate and complete in all respects.
(u) Schedule 7.2(u) contains a true and accurate list of all
policies of insurance relating to the Mall, which policies are and will
be kept in full force to and including the Closing Date. All premiums
for such insurance have been paid in full. Neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received (and
Contributor has no knowledge of) any notice or request from (or
organization exercising functions similar thereto) cancelling or
threatening to cancel any of said policies or denying or disputing
coverage thereunder.
(v) Except as set forth in Schedule 7.2(v), to Contributor's
knowledge, none of the Tenants or Anchors is the subject of any
bankruptcy, reorganization, insolvency or similar proceedings or has
ceased or reduced operations at the
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Mall other than temporarily due to casualty, remodeling, renovation or
similar cause). Except as set forth in Schedule 7.2(v), Contributor has
received no written notice that any Tenant or Anchor intends to cease or
reduce operations at the Mall other than temporarily as described above.
(w) [Intentionally deleted]
(x) Schedule 7.2(x) accurately sets forth (i) a list of all
instruments, agreements and other documents relating to the Existing
Indebtedness and all modifications or amendments thereof and supplements
thereto (including without limitation side letters) (the "Existing
Indebtedness Documents"), (ii) the date of the Existing Indebtedness
Documents and of each modification or amendment thereof and supplement
thereto, (iii) the name of the holders of the Existing Indebtedness as of
the date hereof, (iv) the unpaid balances thereof as of the date hereof,
(v) the security therefor as of the date hereof and (vi) the amount of
any deposits or escrows held or established in connection therewith. The
Existing Indebtedness Documents are in full force and effect, neither
Contributor nor, following the Drop-Down, the Acquired Partnership has
received any notice of default under any Existing Indebtedness Document,
and no default on the part of Contributor (or, following the Drop-Down,
the Acquired Partnership) or, or to the knowledge of Contributor, any
other Party thereto exists thereunder (without regard to notice and cure
provisions). A true and complete copy of the Existing Indebtedness
Documents, including each written modification thereof and supplement
thereto, have heretofore been furnished to the Partnership. Such
documents constitute the entire agreement between Contributor (or
following the Drop-Down, the Acquired Partnership) and each Party
thereto, and there are no oral promises or agreements amending or
modifying the same.
(y) Contributor is aware that the Units to be issued to it hereunder
shall not be registered under the 1933 Act or under the securities laws
of any state or other jurisdiction; that the Partnership shall not have
any obligation to register the same in connection with the offering, sale
or issuance thereof to it pursuant hereto or at any time thereafter; that
the Units are subject to restrictions on transfer contained in the
Partnership Agreement and the Pledge Agreement and herein and, in any
event, cannot be sold unless they are subsequently registered under the
1933 Act or an exemption from such registration is available; and that
the Partnership, in issuing its Units in accordance with the provisions
hereof, is relying upon the representations and warranties of Contributor
contained in Sections 7.2(y), (z), (aa), (ab) and (ac).
(z) Contributor has received a copy of, has been advised to read,
and has read the Memorandum, including its exhibits,
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has become familiar with the Memorandum's terms and provisions, and has
been advised to consult, and has consulted, with independent tax counsel
regarding the tax consequences of the Transactions.
(aa) Contributor has been provided with such other information
regarding the Partnership as Contributor has requested and has had an
opportunity to meet with and ask questions of representatives of the
Partnership.
(ab) Contributor, each of the partners of Contributor and each of
the partners, if any, of each such partner is an "accredited investor"
within the meaning of Regulation D under the 1933 Act and has knowledge
and experience in financial and business matters such that it is capable
of evaluating the merits and risks of receiving and owning the Units to
be issued to it pursuant hereto, and Contributor is able to bear the
economic risk of such ownership.
(ac) The Units to be acquired by Contributor pursuant to this
Agreement are being acquired by Contributor for its own, if any, account
for investment purposes only and not with a view to, and with no present
intention of, selling or distributing the same (other than a distribution
of such Units to the partners of Contributor or the partners, if any, of
such partners).
(ad) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements made by or on
behalf of Contributor.
(ae) Except as set forth on Schedule 7.2(ae), neither Contributor
(or, following the Drop-Down, the Acquired Partnership) nor any
predecessor in title is under obligation to make contributions or
otherwise provide assistance to any promotional association or
promotional fund or has customarily in the past made or provided any such
contributions or assistance. The promotional association established
with respect to the Property (the "Promotional Association") is an
independent association established by and on behalf of the Tenants,
neither Contributor nor, following the Drop-Down, the Acquired
Partnership having no ownership, fiduciary or monetary interest of any
kind therein. Each of Contributor and, following the Drop-Down, the
Acquired Partnership has remitted to the Promotional Association any
amounts received by it from Tenants and other Parties that constitute
contributions to the Promotional Association.
(af) At Closing, the Acquired Partnership will be a partnership duly
formed and validly existing under the laws of the state of its formation
with full power and authority to
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execute, deliver and perform the Contributor's Closing Documents to
which it is a party, the execution, delivery and performance of such
Contributor Closing Documents will have been duly and validly authorized
by all necessary action on the part of the Acquired Partnership, such
Contributor Closing Documents will be duly executed and delivered by the
Acquired Partnership, such Contributor Closing Documents will constitute
the legal, valid and binding obligations of the Acquired Partnership,
enforceable against the Acquired Partnership in accordance with their
terms and there shall be no indebtedness or other obligations of the
Acquired Partnership to Contributor or any of its Affiliates.
(ag) To best of Contributor's knowledge, Contributor has delivered
to the Partnership true and complete copies of all environmental reports
(including without limitation asbestos surveys), engineering reports, ADA
surveys and other material reports or studies relating to the Mall or the
Property that were prepared at the request of or otherwise are in the
possession of Contributor or any Affiliate of Contributor.
Any reference herein to the "best knowledge of Contributor" or other
phrases of similar import shall mean the knowledge of Sidney Forbes,
Maurice Cohen, Nate Forbes, G. Thomas York, Michael N. Hartz, David
Forbes and Rebecca Macrardini after a review of the files of Contributor
at the offices of Contributor in Southfield, Michigan and inquiry of the
general manager and the operations manager (or the equivalent), if any,
of the Mall.
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access.
(a) From the date hereof until the Closing, Contributor shall give
the Partnership and its representatives and consultants, during normal
business hours, upon reasonable notice and in a manner that does not
unreasonably interfere with the operation of Contributor's business,
access to and the right to inspect the Mall and the Property (including
without limitation for purposes of conducting environmental testing).
From the date hereof until Closing and upon request by the Partnership,
Contributor promptly shall provide the Partnership with other material
information and data with respect to the Mall and the Property which is
in Contributor's possession, including without limitation copies of
Leases, the Reciprocal Easement Agreements and the Contracts and such
financial and other information as the Partnership reasonably requests
with respect thereto. The Partnership may contact
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Parties as the Partnership deems appropriate in connection with its due
diligence examination.
(b) From the date hereof until the Closing, the Partnership shall
provide to Contributor such public information and data with respect to
the Partnership and the General Partner which is in the Partnership's
possession and which Contributor may request.
(c) The Partnership shall indemnify, defend and hold harmless
Contributor, its successors and assigns and their respective partners,
shareholders, officers, directors, employees and agents from and against
any Loss proximately caused by the exercise by the Partnership of its
rights of access and inspection pursuant to the provisions of this
Section 8.1. The indemnification obligations of the Partnership under
this Section 8.1(c) shall survive the Closing or termination of this
Agreement.
8.2 [INTENTIONALLY DELETED]
8.3 Environmental Report. Contributor, at its sole cost and expense, shall
(a) cause an environmental consultant approved in writing by the Partnership
(the "Consultant") to conduct a Phase I environmental audit and asbestos survey
of the Real Property (and any additional testing recommended by the Consultant)
and (b) deliver a report (which may not be dated prior to the date hereof) (the
"Environmental Report") thereof (including without limitation the results of
such additional testing) to the Partnership no less than seven (7) days prior
to Closing. If the contents of the Environmental Report are unsatisfactory to
the Partnership, in its sole and absolute discretion, the Partnership may
terminate this Agreement within thirty (30) days following receipt of the
Environmental Report. In the event of the termination of this Agreement, this
Agreement shall be null and void and all parties shall be released from all
further rights and obligations under this Agreement (other than any right or
obligation that expressly survives the termination of this Agreement).
Following Closing, Contributor shall authorize the Consultant to make available
to the Partnership the samples, the results of, and other information obtained
in connection with the environmental testing of the Consultant pursuant hereto.
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations. Contributor's obligation to
close is subject to satisfaction of each of the following conditions (any of
which may be waived by Contributor in its sole discretion):
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(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by the
Partnership under this Agreement on or before the Closing shall have been
complied with or performed in all material respects.
(b) Accuracy of Representations and Warranties. The representations
and warranties made by the Partnership in this Agreement (without regard
to materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to events or
developments permitted hereunder or as to which Contributor have
otherwise consented in writing).
(c) No Other Termination. No termination of this Agreement by
Contributor or the Partnership shall have occurred pursuant to any other
provision hereof.
(d) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing.
(e) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
(f) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
9.2 Conditions to Partnership's Obligations. The Partnership's obligation
to close is subject to satisfaction of each of the following conditions (any of
which may be waived by the Partnership in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by Contributor
under this Agreement on or before the Closing shall have been complied
with or performed in all material respects.
(b) Accuracy of Representation and Warranties. The representations
and warranties made by Contributor in this Agreement (without regard to
materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to the
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bankruptcy or default of any Anchor or Tenant that occurred following
the date hereof and events or developments permitted hereunder or as to
which the Partnership has otherwise consented in writing).
(c) Estoppels Obtained. The Estoppels shall have been obtained in
accordance with Section 11.7. Notwithstanding any provision in this
Agreement to the contrary, if Contributor has not obtained Estoppels from
all Tenants but have obtained Estoppels from all Anchors, 70% of all
Major Tenants, and 60% of all other Tenants (the Tenants from whom
Estoppels have not been obtained being herein called the "Missing
Tenants"), Contributor in its own capacity shall have the right, at
Contributor's sole option (but without having any obligation to do so) to
satisfy the condition of this Section 9.2(c) with respect to the Estoppel
from each Missing Tenant by executing and delivering to the Partnership
at Closing an Estoppel for such Missing Tenant in the form prescribed by
Section 11.7 (with appropriate changes to such form to reflect that
Contributor and not such Missing Tenant are signing such Estoppel), which
Estoppel will be released upon delivery of an Estoppel from such Missing
Tenant.
(d) Consents and Releases/Directions Obtained. The Contract Party
Consents, the Releases/Directions and the consent of the Existing Lenders
pursuant to Section 2.5 shall have been obtained.
(e) Issuance of Title Policy. The Title Company shall have issued,
or be irrevocably committed to issue, with respect to the Real Property
its owners' title insurance policy pursuant to the Title Commitment as
herein contemplated subject only to the Permitted Exceptions with respect
thereto (the "Title Policy").
(f) No Other Termination. No termination of this Agreement by the
Partnership or Contributor shall have occurred pursuant to any other
provision hereof.
(g) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing or materially adversely affect the
Mall or the operation thereof.
(h) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
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(i) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General.
(a) If prior to the Closing Date the Property shall be the subject
of a Taking or Casualty, Contributor shall promptly inform the
Partnership of same.
(b) If prior to the Closing Date the Property shall be the subject
of a Substantial Taking or a Substantial Casualty, the Partnership may by
written notice delivered to Contributor on or before the Closing Date,
elect as its sole remedy on account thereof, either (i) to terminate this
Agreement, and the rights of the parties hereto, in which event this
Agreement (other than any right or obligation that expressly survives the
termination of this Agreement) shall terminate as of the date of delivery
of such notice; or (ii) to continue this Agreement in effect, in which
event Contributor (A) shall transfer and assign to the Acquired
Partnership, at the Closing, its full right, title and interest in and to
any insurance proceeds (and shall pay in cash to the Acquired Partnership
all deductibles owing in respect thereof) or condemnation awards with
respect thereto, and shall cooperate in all reasonable respects with the
Acquired Partnership, at the Acquired Partnership's sole cost and
expense, in connection with the collection thereof, to the extent not
collected at the Closing, and (B) to the extent any insurance proceeds or
condemnation awards shall have been received by Contributor prior to the
Closing, remit to the Acquired Partnership the full amount thereof so
collected, less, in each such case, (i) reasonable costs of collection
thereof (other than the cost of deductibles), and (ii) amounts, if any,
applied by Contributor or, following the Drop-Down, the Acquired
Partnership prior to Closing to preservation, repair or restoration.
(c) If prior to the Closing Date, the Property or any portion
thereof is (i) the subject of a Taking (other than a Substantial Taking)
or (ii) the subject of a Casualty (other than a Substantial Casualty),
this Agreement shall nevertheless remain in full force and effect with no
abatement of the consideration to be delivered to Contributor on account
thereof and the Transactions shall be consummated as provided herein. In
such event, any insurance proceeds or condemnation awards shall be
applied and paid in the same manner and subject to the same provisions
set forth above as are
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applicable in a case of a Substantial Casualty or a Substantial Taking
as to which the Partnership has elected nevertheless to continue this
Agreement in effect.
10.2 Adjustment of Claims and Condemnation Proceedings. If a Taking or
Casualty shall occur, Contributor shall initiate or cause to be initiated all
actions required to adjust, compromise and collect the awards payable by the
condemning authority or the proceeds payable under the applicable policy or
policies of casualty insurance. The Partnership shall have the right (but not
the obligation) to participate with Contributor or, following the Drop-Down,
the Acquired Partnership in the initiation of all such actions and, in any
event, Contributor shall consult with, and keep the Partnership advised of,
Contributor's progress in connection therewith. Contributor shall not agree
(and shall not permit the Acquired Partnership to agree) to any settlement of
the awards or insurance proceeds payable in connection with any such Taking or
Casualty (or enter into any agreement in lieu of a Taking) without the
Partnership's approval, which approval shall not be unreasonably withheld or
delayed.
ARTICLE XI
Additional Covenants
11.1 Indemnification.
(a) Indemnification by Contributor. From and after the Closing and
subject to the provisions of Section 12.1, Contributor shall indemnify,
defend and hold harmless the Partnership and the Acquired Partnership,
their successors and assigns and their partners, employees and agents
(the "Indemnified Partnership Persons") from and against any claim,
action, demand, loss, cost, expense, liability, penalty or damages,
including, without limitation, reasonable attorneys' fees and expenses (a
"Loss"), incurred or suffered by any Indemnified Partnership Person that
results from, relates to or arises out of (i) the breach or inaccuracy of
any representation or warranty made by Contributor in this Agreement or
the Contributor Closing Documents, (ii) the breach or non-fulfillment by
Contributor of any of the covenants or agreements of Contributor under
this Agreement or the Contributor Closing Documents, (iii) the
Contributor's Liabilities, or (iv) the operation of the Mall prior to the
Closing Date.
(b) Indemnification by Partnership. From and after the Closing, the
Partnership shall indemnify, defend and hold harmless Contributor and
their partners, their successors and assigns and their respective
partners, shareholders, directors, officers, employees and agents (the
"Indemnified Contributor Persons") from and against any Loss incurred or
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suffered by any Indemnified Contributor Person that results from, relates
to or arises out of (i) the breach or inaccuracy of any representation or
warranty made by the Partnership in this Agreement or the Partnership
Closing Documents, (ii) the breach or non-fulfillment by the Partnership
of any of the covenants or agreements of the Partnership under this
Agreement or the Partnership Closing Documents, or (iii) the Partnership
Liabilities.
(c) Joint Cooperation. Upon obtaining knowledge of the institution
of any action or proceeding or other event which could give rise to a
claim for indemnity hereunder, the person seeking indemnification shall
promptly give written notice thereof to the party from whom
indemnification may be sought. If such claim or demand relates to a claim
or demand asserted by a third party, the indemnifying party shall have
the right, at its expense, to employ counsel to defend such claim or
demand and the indemnified person shall have the right, but not the
obligation, to participate in the defense of any such claim or demand at
its own cost; provided, however, that counsel to be utilized in defense
of the matter by the indemnifying party shall be reasonably approved by
the indemnified person, and provided further that the indemnifying party
shall not assume the defense for matters as to which there is a conflict
of interest or separate and inconsistent defenses, in which case the
indemnified person will utilize counsel reasonably approved by the
indemnifying party and the indemnifying party will reimburse the
indemnified person for any legal and other expenses reasonably incurred
in connection with investigating, preparing or defending any such claim,
loss, damage, liability or action. The indemnified person will not
settle any claim or demand for which indemnity is sought hereunder
without the indemnifying party's written consent (which consent shall not
be unreasonably withheld or delayed), and the indemnifying party may
settle such claim or demand with the written consent of the indemnified
person, which consent may not be unreasonably withheld or delayed so long
as the indemnified person receives an unconditional release. The
indemnified person shall make available to the indemnifying party all
records and other materials reasonably required by it in contesting a
claim or demand asserted by a third party against the indemnified person
and shall cooperate in the defense thereof.
(d) Waiver of Certain Claims Known at Closing. Notwithstanding
anything to the contrary contained herein, (a) the Partnership may not
assert a claim for damages or indemnity hereunder following the Closing
for a breach of representation, warranty or covenant existing on the
Closing Date to the extent that representatives of the Partnership have
conscious, actual knowledge of such breach and the scope thereof as of
the Closing Date and (b) Contributor may not
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assert a claim for damages or indemnity hereunder following the Closing
for a breach of representation, warranty or covenant existing on the
Closing Date to the extent that representatives of Contributor have
conscious, actual knowledge of such breach and the scope thereof as of
the Closing Date.
11.2 Conduct of Business Pending Closing. From the date hereof until the
Closing, Contributor shall (a) use reasonable best efforts to maintain, for the
benefit of the Partnership and the Acquired Partnership following the Closing,
the goodwill of Tenants, prospective tenants, vendors and other parties having
business relations with Contributor; (b) pay its debts (or in good faith
contest the same) and perform its obligations as they become due (or, following
the Drop-Down, the debts and obligations of the Acquired Partnership); (c)
maintain the Mall in the same manner and condition that exists on the date
hereof, as such condition shall be altered by reason of Casualty, Taking and/or
normal wear and tear; (d) without the express written consent of the
Partnership, not (i) enter into any new or additional Lease, or extend, renew
or modify, consent to any assignment of or sublease in respect of, or waive any
material right under any Lease, other than renewals or extensions resulting
from the exercise by a Tenant of a currently existing renewal or extension
option, (ii) cancel or terminate any Lease or take any action to enforce any
Lease which would have the effect of cancelling or terminating the same, (iii)
enter into a new reciprocal easement or similar agreement or amend or modify,
consent to the assignment of or waive any material right under either
Reciprocal Easement Agreement, (iv) make any alterations to the Mall or enter
into any new contracts or extend or renew or cancel any Contract relating to
capital expenditures, (v) subject to the provisions of Section 2.10, enter into
any other new contracts or extend, renew or cancel, consent to the assignment
of or waive any material right under any other Contract, except in the ordinary
and usual course and business and in accordance with past practices and
policies, or amend, supplement or grant any waivers under a Circuit City
Agreement, (vi) except as permitted under (i) above and Section 2.10, sell,
transfer, exchange, further encumber or grant interests (including easements)
in the Property or the Interests or any part thereof or engage in negotiations
or discussions with, or otherwise solicit or assist, any third party relating
to the acquisition by such third party of the Property or the equity interests
in Contributor or other Person owning the Property, (vii) extend, modify or
amend any of Existing Indebtedness Documents or borrow additional funds
thereunder (viii) permit the Acquired Partnership to have employees and (ix)
otherwise take any action which could or would render inaccurate any of the
representations or warranties made by Contributor in this Agreement; and (e)
otherwise operate the Mall in the ordinary course consistent with current
practice. The consent of the Partnership shall not be unreasonably withheld or
delayed as to the matters set forth in clause (d)(i) of this Section 11.2; and,
in
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the event that the Partnership shall fail to notify Contributor in writing
of its disapproval of any proposed matter described in clause (d)(i) within
five (5) business days after it receives a written request for approval
therefor (which request shall contain a statement as to the consequences of a
failure to respond), such failure shall be deemed to constitute Contributor's
approval thereto.
11.3 Supplemental Disclosure. From the date hereof through Closing,
Contributor and the Partnership shall have the continuing obligation to
promptly supplement or amend the Schedules with respect to the representations
and warranties made by them or it to reflect any matter hereafter arising or
discovered which, if existing or known at the date hereof, would have been
required to be set forth herein or described thereon. Without limiting the
foregoing, if any Leases or Contracts, or amendments thereto, are hereafter
entered into, Contributor shall give the Partnership prompt written notice
thereof and the appropriate exhibits or schedules hereto shall be updated and
amended accordingly.
11.4 [INTENTIONALLY DELETED]
11.5 Cooperation. The Partnership shall cooperate with Contributor in
seeking to obtain all approvals, consents and estoppels of third parties
required by this Agreement (but shall not be obligated to pay money or grant
concessions therefor), including any Contract Party Consents, and shall furnish
to Contributor or to any Party such information as to the Partnership, its
capabilities, its experience in the ownership and management of real property
and as to such other matters as Contributor or any Party shall reasonably
request in connection therewith. Contributor shall use reasonable best efforts
to obtain the Releases/Directions and a consent of the Parties to the Contracts
marked with a "1" on Schedule 7.2(n) (the "Contract Party Consents").
11.6 Transfer and Other Taxes; Etc. Contributor shall pay the real property
transfer taxes, documentary stamps and other taxes, fees or charges, if any,
imposed by the state, county or municipality in which the Mall is located as
the result of the prior transfer of the Real Property as described in Section
2.3, the contribution of the Interests pursuant to Section 2.1 and the
conversion of the Acquired Partnership to a limited partnership following
Closing. Contributor shall pay all recording fees and charges and any personal
property sales or use taxes in connection with the transfer of the Personalty
and/or the Interests pursuant hereto.
11.7 Estoppel Certificates. Contributor shall request, and shall use
reasonable best efforts to obtain from each Party to the Reciprocal Easement
Agreements and each Tenant or other Party under a Lease estoppel certificates,
dated not more than 70 days prior to
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the Closing Date, in form reasonably acceptable to the Partnership, and
an estoppel certificate, dated not more than 30 days prior to the Closing Date,
from each Existing Lender in form reasonably satisfactory to the Partnership;
provided, however, that if any Reciprocal Easement Agreement or Lease shall, by
its terms, prescribe the form or content of an estoppel certificate,
Contributor only shall be required to attempt to obtain estoppel certificates
from the Party thereto in the form prescribed by the relevant document and
containing only such information as is required to be delivered thereunder.
11.8 Record Retention. After the Closing, the Partnership shall provide
Contributor with reasonable access to the Books and Records and, at
Contributor's cost, copies of all or any portion thereof. The Partnership
either shall retain the Books and Records until the fifth anniversary of the
date hereof or notify Contributor of its desire to dispose of the Books and
Records and turn them over to Contributor if Contributor so request.
11.9 Publicity. In no event shall either Contributor or the Partnership
issue any press release or otherwise disclose any non-public information
regarding this Agreement or the Transactions (including without limitation the
Environmental Report or information contained therein) unless the other party
or parties have consented thereto in writing (and Contributor and the
Partnership agree not unreasonably to withhold or delay such consent) and to
the form and substance of any such statement or disclosure; provided, however,
that nothing herein shall be deemed to limit or impair in any way any party's
ability to disclose the details of or information concerning this Agreement,
the Transactions or the Property to such party's attorneys, accountants or
other advisors or to the extent such party reasonably deems necessary or
desirable pursuant to any court or governmental order or applicable securities
or other laws or regulations or financial reporting requirements, to obtain the
Contract Party Consents, the consent of the Existing Lenders, Estoppels or
financing for the acquisition of the Mall and to assess the Property in
connection with the Partnership's due diligence examination (including without
limitation contacting Tenants and other Parties). Further, either party may
disclose any information regarding this Agreement or the Transactions to its
direct or indirect constituent partners or shareholders, as the case may be
(and to counsel for such constituent partners and shareholders) and as
otherwise necessary to comply with the terms of this Agreement. Any disclosure
by a party's advisors or direct or indirect constituent partners or
shareholders or their advisors shall be deemed a breach hereof by such party.
If for any reason any Transaction is not consummated, the Partnership promptly
shall return to Contributor all originals and copies of documents, reports and
financial and other information relating to the Property and to Contributor
which Contributor has furnished to the Partnership. The obligations of
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Contributor and the Partnership under this Section 11.9 shall survive the
termination hereof, however caused.
11.10 Assistance Following Closing. From and after the Closing,
Contributor, at the Partnership's sole cost and expense, shall provide
reasonable assistance to the Partnership in connection with the preparation of
financial statements and bills and the adjustment of losses and claims and the
enforcement or settlement of any such claims. Without limiting the foregoing
and upon the request of the Partnership from time to time, Contributor shall
(a) subject to applicable law and contractual requirements, permit its lease
and property management databases relating to the Mall to be loaded onto the
computer systems of the Partnership or its designee or provide disks containing
such databases and (b) provide signed representation letters with respect to
revenues and expenses relating to the Mall if required under GAAS to enable the
Partnership's certified public accountants to render an opinion on the
Partnership's financial statements.
11.11 Further Assurances. Each of Contributor and the Partnership
agree, at any time and from time to time after the Closing, to execute,
acknowledge where appropriate and deliver such further instruments and other
documents (and to bear its own costs and expenses incidental thereto) and to
take such other actions as the other of them may reasonably request in order to
carry out the intents and purposes of this Agreement; provided, however, that
neither Contributor nor the Partnership shall be obligated, pursuant to this
Section 11.11 to incur any expense of a material nature and/or to incur any
material obligations in addition to those set forth in or contemplated by this
Agreement and/or its respective Closing Documents.
11.12 Restrictions on Certain Dispositions of Real Property.
(a) Without the written consent of Contributor, the Partnership
shall not, and shall cause the Acquired Partnership not to, voluntarily
dispose of all or substantially all of the Real Property prior to January
1, 2002 (the "Permitted Disposition Date").
(b) If at any time after the Permitted Disposition Date and prior to
the fifteenth anniversary of the Closing Date, the Partnership shall
desire to sell all or substantially all of the Real Property, the
Partnership shall deliver to Contributor a written notice stating the
price and other material economic terms upon which the Partnership
proposes to dispose of such Real Property (the "Offer Notice").
Contributor shall have the right, exercisable by delivery of written
notice to the Partnership no later than thirty (30) days after the Offer
Notice is given (the "Response Date") along with evidence reasonably
satisfactory to the Partnership
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of sufficient financial wherewithal of Contributor at such time, to
purchase such Real Property on the terms and conditions set forth in the
Offer Notice, in which event Contributor shall purchase, and the
Partnership shall cause to be sold, such Real Property within 60 days.
In the event that Contributor does not elect to purchase such Real
Property within such thirty (30) day period, Contributor shall be deemed
to have waived its rights contained in this Section 11.12(b) and the
Partnership may thereafter sell the Real Property on terms substantially
no more favorable to the purchaser than those set forth in the Offer
Notice (that is, at a price that is not less than 90% of the price
contained in the Offer Notice and that does not result in a reduction of
more than 25% in the excess of the price paid by such purchaser over the
amount of indebtedness to be assumed by such purchaser). In the event
that such Real Property is not sold within one year following the
Response Date, such Real Property may not thereafter be sold without
again delivering an Offer Notice and complying with the provisions of
this Section 11.12. Notwithstanding anything to the contrary contained
herein, in the event that Contributor shall default in the purchase of
such Real Property pursuant hereto, Contributor shall have no further
right to purchase the Real Property pursuant to this Section 11.12(b).
Upon the written request of Contributor given no later than ten days
following the giving of the Offer Notice, the Partnership will consider
(and inform Contributor of its determination within ten days but the
Partnership shall have no liability for failure to respond) whether it
will distribute the Real Property to Contributor in redemption of Units
by accepting Units as consideration for the Real Property so as to
accomplish the transaction in a manner which would not result in
recognition of income and gain to Contributor for federal income tax
purposes; however, the Partnership shall not be obligated and shall have
no duty, (fiduciary or otherwise) to accept Units as the consideration or
to structure the proposed transaction in such manner, and the decision as
to whether to accept Units or so structure the transaction shall be
within the sole discretion of the Partnership. In the event that the
Mall and one or both of the malls acquired pursuant to the Other
Contribution Agreements are proposed to be sold as part of the same
transaction, Contributor may not exercise the rights pursuant to this
Section 11.12(b) or purchase the Mall pursuant to this Section 11.12(b)
unless the rights under Section 11.12(b) of such Other Contribution
Agreements also are exercised and such other malls also are acquired
pursuant thereto.
(c) The provisions of this Section 11.12 shall not apply to (i)
transactions, such as like-kind exchanges, which would not result in the
recognition of income or gain to Contributor for federal income tax
purposes by reason of the application
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of Section 704(c) or Section 737 of the Code (but, in the event of any
disposition permitted by the preceding clause, the disposition of any
carryover basis real property or other successor real property shall be
subject to the provisions of this Section 11.12), (ii) the mortgage or
the granting of security interests in any and all property of the
Partnership provided the same is not a sale or exchange for federal
income tax purposes (and the conveyance of such property in connection
with foreclosure of any such mortgage or security interest or by deed in
lieu thereof), (iii) the sale, exchange or other disposition of all or
substantially all of the properties of the Partnership and its
subsidiaries, including all or part of the Real Property, (iv) the grant
of easements or rights-of-way, (v) the sale to any occupant or
prospective occupant of the portion of the Real Property occupied or
proposed to be occupied by it (including parking area and other
surrounding area), (vi) the lease of the Real Property or portions
thereof provided the same is not a sale or exchange for federal income
tax purposes, (vii) the exercise of all other rights of an owner with
respect to the Real Property provided the same is not a sale or exchange
for federal income tax purposes or (viii) a sale of the premises referred
to in Section 2.13 pursuant to the right of first refusal under Section
37A of the Lease referred to in such Section 2.13. In addition, the
provisions of Section 11.12(a) shall not apply to the sale, conveyance or
disposition of the Real Property when, in the reasonable judgment of the
Partnership, dire, immediate circumstances exist which require the
disposition of the Real Property. Although the Partnership shall not be
required to obtain an opinion of counsel with respect to the matters set
forth in clause (i) of the first sentence of this Section 11.12(c), the
requirements of such clause will be conclusively deemed to have been
satisfied if the Partnership shall have obtained an opinion of counsel to
the effect that a particular transaction will not result in the
recognition of income or gain for federal income tax purposes by
Contributor. Upon the written request of Contributor, the Partnership
promptly shall furnish to Contributor a copy of any such opinion.
(d) For purposes of this Section 11.12 and Section 11.13, the term
"Contributors" shall include the partners of Contributor and the
partners, if any, of such partners who hold Units at the time of
reference thereto.
11.13 Repayment or Refinancing of Contributor Property Indebtedness. The
Partnership shall notify Contributor prior to the repayment or refinancing of
any Contributor Property Indebtedness and provide a good faith estimate of the
amount by which the amount of Partnership liabilities that Contributor may
include in the tax basis of its Units pursuant to Section 1.752 of the Treasury
Regulations shall be reduced as the result thereof
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(the "Refinancing Notice"). In the event that such repayment or
refinancing shall reduce the amount of the Partnership liabilities that
Contributor may include in the tax basis of its Units pursuant to Section 1.752
of the Treasury Regulations (after giving effect to the allocations specified
in Section 11.16(c)) and upon written notice from Contributor delivered within
ten (10) days after the Refinancing Notice is given, the Partnership shall use
reasonable best efforts to make provision for Contributor to guaranty
indebtedness of the Partnership (but the Partnership shall not be obligated to
incur additional indebtedness or to permit such guarantees if such guarantees
shall have an adverse effect on the Partnership or the other partners thereof)
so as to enable Contributor to increase its "economic risk of loss" (within the
meaning of Section 1.752-2 of the Treasury Regulations) with respect to
liabilities of the Partnership but minimize the real economic risk of such
guarantees to Contributor to the extent practicable (by, for example,
guarantying the "bottom" portion). No other person may incur the "economic
risk of loss" (within the meaning of section 1.752-2 of the Treasury
Regulations) with respect to any Contributor Property Indebtedness without the
consent of Contributor.
11.14 Delivery of Certain Information. The Partnership shall transmit to
Contributor (a) all periodic reports or statements furnished to the public
shareholders of the General Partner simultaneously with the transmission
thereof to such public shareholders, (b) promptly following request by
Contributor or its successors or assigns, copies of all amendments to the
Partnership Agreement and (c) promptly following written request by Contributor
or its successors or assigns (but no more frequently than once each calendar
year), a list of the names and addresses of all partners of the Partnership.
11.15 Record Owners of Units. The Units issued pursuant hereto may not be
sold, conveyed, pledged or otherwise transferred until the first anniversary of
the Closing Date (except for transfers to the partners of Contributor and/or
the partners, if any, of such partners). There may be no more than twelve
record owners of all of the Units issued pursuant hereto and the Other
Contribution Agreements at any time hereafter to the extent that such Units are
then owned directly or indirectly by the individuals who are the beneficial
owners of Contributor and/or the Other Contributors on the date hereof or
members of the families thereof.
11.16 Method of Allocation; Allocation of CenterMark Gain; Etc.
Notwithstanding anything to the contrary contained in the Partnership
Agreement:
(a) The Partnership shall allocate income, gain, loss and deduction
with respect to the Property, to the extent the adjusted basis thereof
differs from the Gross Asset Value, among the partners of the Partnership
(including Contributor)
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on a property by property basis, subject to the application of
"ceiling" limitation, in accordance with the traditional method set forth
in Section 1.704-3(b) of the Regulations or any successor provision.
(b) The Partnership shall specially allocate any and all gain on the
sale by the Partnership of stock of CenterMark Properties, Inc. only to
the other partners of the Partnership to the maximum extent permitted by
Section 704(c) of the Code and the Regulations promulgated thereunder.
(c) In accordance with paragraph (3)(a) under the heading "Analysis"
in Revenue Ruling 95-41, 1995-23 I.R.B. 5, "excess nonrecourse
liabilities" of the Partnership shall be allocated among the partners of
the Partnership by taking into account the share of Section 704(c)
built-in gain of Contributor and/or its partners with respect to the Real
Property to the extent such gain is not taken into account in making an
allocation of nonrecourse liabilities to them under Treasury Regs.
Section 1.752-3(a)(2). It is the parties' intent that an allocation
pursuant to the preceding sentence of this Agreement and the Other
Contribution Agreements will cause the total share of nonrecourse
liabilities of Contributor and/or its partners to at least equal the
excess of the debt encumbering the Real Property over the adjusted tax
basis of such property at the time of such contribution. This treatment
shall not be binding on the Partnership in the event that the Internal
Revenue Service (the "IRS") revokes, amends or modifies Rev. Rul. 95-41
or in the event that the IRS issues guidance which indicates that Rev.
Rul. 95-41 cannot be interpreted consistently with this Section 11.16(c).
ARTICLE XII
Miscellaneous
12.1 Survival. The representations, warranties and agreements of
Contributor and the Partnership set forth herein and in the Closing Documents
or an Estoppel for a Missing Tenant shall survive Closing indefinitely.
Notwithstanding the foregoing, the representations and warranties contained
herein or the Closing Documents (other than in Sections 7.2(a), (b), (c), (d)
and (af)), including the indemnities to the extent that they are derived
therefrom (but nothing contained in this sentence shall affect or limit other
indemnities or covenants contained herein or in the Closing Documents), shall
survive Closing only for a period of fifteen (15) months after the Closing Date
except as to Losses of which written notice has been given prior to the
expiration of such fifteen (15) month period in accordance with Section 12.2
and the other provisions of this Agreement.
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12.2 Notices. Notices must be in writing and sent to the party to whom or
to which such notice is being sent, by certified or registered mail, return
receipt requested, commercial overnight delivery service or facsimile, or
delivered by hand with receipt acknowledged in writing, as follows:
(a) To Partnership:
55 West Monroe Street, Suite 3100
Chicago, Illinois 60603
Attention: Matthew Bucksbaum
with a copy thereof to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg
(b) To Contributor:
Forbes/Cohen Properties
100 Galleria Officentre
Suite 427
Southfield, Michigan 48037
with a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attention: Maurice S. Binkow
Except as otherwise set forth herein, all notices (a) shall be deemed given
when received or, if mailed as described above with appropriate postage, after
5 business days or, if sent by facsimile, upon receipt of confirmed answerback
and (b) may be given either by a party or by such party's attorneys. The cost
of delivery shall be borne by the party delivering the notice.
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single document when at least one counterpart has
been executed and delivered by each party hereto.
12.4 Amendments. Except as otherwise provided herein, this Agreement may
not be changed, modified, supplemented or terminated, except by an instrument
executed by the party hereto which is or will be affected by the terms of such
change, modification, supplement or termination without the need for the
consent of any third party beneficiary hereof.
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12.5 Waiver. Each party shall have the right, exercisable in its sole and
absolute discretion, but under no circumstances shall be obligated, to waive or
defer compliance by any other party with its obligations hereunder or to waive
satisfaction of any conditions contained herein for its benefit. No waiver by
any party of a breach of any covenant or a failure to satisfy any condition
shall be deemed a waiver of any other or subsequent breach or failure to
satisfy any other condition. All waivers of any term, breach or condition
hereof must be in writing.
12.6 Successors and Assigns. Subject to the provisions of Section 12.10,
the terms, covenants, agreements, conditions, representations and warranties
contained in this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
12.7 Third Party Beneficiaries. The provisions of this Agreement are made
for the benefit of the parties hereto (and the Indemnified Partnership Persons
and the Indemnified Contributor Persons with respect to Section 11.1 and the
Acquired Partnership, but none of such Persons that are not parties hereto or
successors and assigns of such parties hereto shall have any right to approve
any amendment, addition or waiver hereto or hereof), and their respective
successors in interest and assigns and are not intended for, and may not be
enforced by, any other person or entity.
12.8 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
12.9 Governing Law. This Agreement has been made pursuant to and shall be
governed by the laws of the State of Michigan (without regard to conflicts of
law rules).
12.10 Assignment. This Agreement may not be assigned or delegated by any
party without the written consent of the other party except that the
Partnership may assign this Agreement to an Affiliate of the Partnership, it
being acknowledged and agreed by the Partnership that no such assignment shall
relieve the Partnership of its obligations under this Agreement.
12.11 Headings; Exhibits. The headings of the various Articles and
Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of
this Agreement.
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12.12 Gender and Number. Words of any gender shall include the other
gender and the neuter. Whenever the singular is used, the same shall include
the plural wherever appropriate, and whenever the plural is used, the same
also shall include the singular where appropriate.
12.13 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any prior written or oral understandings and/or agreement among them with
respect thereto.
12.14 Costs of Enforcement. In the event that any action is brought by any
party or parties to this Agreement or any Closing Document against any other
party or parties to enforce rights under this Agreement or any Closing
Document, the prevailing party's or parties' costs in such action, including
reasonable attorneys' fees, shall be paid by the other party or parties. Any
amounts owing hereunder or thereunder which are not paid when due shall bear
interest at the per annum rate equal to the prime rate of Bank of America
Illinois, N.A. (or any successor), as the same may change from time to time,
plus four percent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
CONTRIBUTOR:
FORBES/COHEN PROPERTIES, a
Michigan general partnership
By: /s/ Maurice Cohen
------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
------------------------
Sidney Forbes, partner
PARTNERSHIP:
GGP LIMITED PARTNERSHIP, a
Delaware limited partnership
By: GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Joel Bayer
----------------------
Its: Vice President
<PAGE> 65
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 Definitions .................................... 1
1.2 References .................................... 10
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution ................................... 10
2.2 Issuance of Units; Etc. ........................ 10
2.3 Drop-Down ...................................... 11
2.4 Liabilities .................................... 12
2.5 Matters Relating to Existing Indebtedness ...... 13
2.6 Release of Property Management Liens ........... 14
2.7 Admission to Partnership; Redemption Rights; Etc. 14
2.8 Pledge Agreement; Guaranty ..................... 15
2.9 Tenant Allowances and Leasing Commissions ...... 15
2.10 Matters Relating to Vacant Ward Parcel.......... 15
2.11 Matters Relating to Promotional Association .... 16
2.12 Matters Relating to Hudson Oil Parcel .......... 16
2.13 Matters Relating to Right of First Refusal
Relating to Mountain Jack's .................... 16
ARTICLE III
Title
ARTICLE IV
Closing
4.1 Closing ........................................ 17
4.2 Contributor Closing Documents .................. 18
4.3 Partnership Closing Documents .................. 22
ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated ........................... 24
5.2 Installment Payment of Assessments ............. 25
5.3 Adjustable Tenant Charges ...................... 25
5.4 [Intentionally Omitted] ........................ 26
5.5 Fixed and Other Tenant Charge Arrearages ....... 27
5.6 Sales Based Tenant Charges ..................... 27
5.7 Application of Rent Receipts ................... 27
5.8 Security and Utility Deposits .................. 28
5.9 Collection of Rents ............................ 28
5.10 Settlement of Adjustments ...................... 30
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment ............................... 31
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6.2 Title Defects ..................................... 32
6.3 Survey ............................................ 33
ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties ......... 35
7.2 Contributor's Representations and Warranties ....... 35
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access ........................... 45
8.2 [INTENTIONALLY DELETED] ............................ 46
8.3 Environmental Report. .............................. 46
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations ............ 46
9.2 Conditions to Partnership's Obligations ............ 57
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General ................. 49
10.2 Adjustment of Claims and Condemnation Proceedings ... 50
ARTICLE XI
Additional Covenants
11.1 Indemnification ..................................... 50
11.2 Conduct of Business Pending Closing ................. 52
11.3 Supplemental Disclosure ............................. 53
11.4 [INTENTIONALLY DELETED] ............................. 53
11.5 Cooperation ......................................... 53
11.6 Transfer and Other Taxes; Etc. ...................... 53
11.7 Estoppel Certificates ............................... 53
11.8 Record Retention .................................... 54
11.9 Publicity ........................................... 54
11.10 Assistance Following Closing ........................ 55
11.11 Further Assurances .................................. 55
11.12 Restrictions on Certain Dispositions of Real Property 55
11.13 Repayment or Refinancing of Contributor Property
Indebtedness ........................................ 57
11.14 Delivery of Certain Information ......................58
11.15 Record Owners of Units ...............................58
11.16 Method of Allocation; Allocation of CenterMark Gain;
Etc. ................................................ 58
ARTICLE XII
Miscellaneous
12.1 Survival ............................................ 59
12.2 Notices ............................................. 60
12.3 Counterparts .........................................60
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<PAGE> 67
12.4 Amendments ...........................................60
12.5 Waiver ..............................................61
12.6 Successors and Assigns ...............................61
12.7 Third Party Beneficiaries .......................... 61
12.8 Partial Invalidity .................................. 61
12.9 Governing Law ....................................... 61
12.10 Assignment .......................................... 61
12.11 Headings; Exhibits .................................. 62
12.12 Gender and Number ................................... 62
12.13 Entire Agreement .................................... 62
12.14 Costs of Enforcement ................................ 62
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<PAGE> 1
Exhibit 2.2
CONTRIBUTION AGREEMENT
AMONG
LAKEVIEW SQUARE ASSOCIATES
a Michigan general partnership
and
GGP LIMITED PARTNERSHIP
a Delaware limited partnership
December 6, 1996
<PAGE> 2
CONTRIBUTION AGREEMENT
Contribution Agreement, dated December 6, 1996, among LAKEVIEW SQUARE
ASSOCIATES, a Michigan general partnership ("Contributor"), and GGP LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Partnership").
R E C I T A L S
WHEREAS, Contributor is the developer of a regional shopping center
commonly known as Lakeview Square Mall, Battle Creek, Michigan (the "Mall");
and
WHEREAS, Contributor desires to contribute to the capital of the
Partnership or cause to be contributed to the capital of the Partnership all of
the partnership interests in a partnership owning the Mall (other than the
property owned, if any, by the department stores or others at the Mall), and
the Partnership desires to accept such contributions to capital, upon the terms
and subject to the conditions contained herein.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
"Acquired Partnership" shall have the meaning set forth in Section 2.3(a).
"ADA" shall mean the Americans With Disabilities Act, as amended.
"Adjustment Date" shall have the meaning set forth in Section 4.1.
"Adjustable Tenant Charges" shall mean common or mall area maintenance
(exterior and interior) charges, real estate taxes and assessments, single
business taxes, property insurance charges and HVAC charges (except to the
extent that such HVAC charges are separately metered, in which event they shall
be treated as Fixed and Other Tenant Charges) to the extent denominated as such
in the Leases and the Reciprocal Easement Agreements.
"Affiliates" shall mean, with respect to the Partnership, any Person
controlling, controlled by or under common control with the Partnership and, in
the case of Contributor, Maurice Cohen, Sidney Forbes, Michael N. Hartz and/or
G. Thomas York and/or any members of the family of any of them or any Person
controlled by any of them.
<PAGE> 3
"Agreement" shall mean this Contribution Agreement, as amended or modified
from time to time hereafter in accordance with the terms hereof.
"Anchor" shall mean each Person identified in Schedule 1.1.
"Annual Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Applicable Closing Fiscal Period" shall mean, with respect to any item
which is prorated under Article V, the calendar year (or other fiscal period
for which such item is determined or assessed) during which the Closing Date
occurs.
"Assumed Unit Price" shall mean $25.00.
"Audited Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Books and Records" shall mean all records, books of account and papers of
Contributor and Existing Manager relating to the Interests, the Acquired
Partnership and the construction, ownership and operation of the Property,
including without limitation architect's drawings, blue prints and as-built
plans, maintenance logs, instruction books, employee manuals, records and
correspondence relating to insurance claims, copies of guarantees and
warranties, originals and/or copies of the Leases, the Reciprocal Easement
Agreements and the Contracts and correspondence related thereto.
"Casualty" shall mean any damage to or destruction of the Mall or any
portion thereof caused by fire or other casualty, whether or not insured.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Closing Documents" shall mean the Contributor Closing Documents and
Partnership Closing Documents, collectively.
"Closing Price" shall have the meaning set forth in the Partnership
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the common stock, $.10 par value per share, of
the General Partner.
"Consultant" shall have the meaning set forth in Section 8.3.
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<PAGE> 4
"Contract Party Consents" shall have the meaning set forth in Section
11.5.
"Contracts" shall mean the service, maintenance and other contracts and
concessions that are currently in effect with respect to the Mall respecting
the use, maintenance, development, sale or operation thereof or any portion
thereof (but excluding this Agreement, the Leases, the Permitted Exceptions and
the Reciprocal Easement Agreements) which are listed on Schedule 7.2(n),
together with any additions thereto, modifications thereof or substitutions
therefor hereafter entered into in accordance with the provisions of this
Agreement.
"Contributor Property Liabilities" shall mean the Existing Indebtedness,
any mortgage indebtedness secured by the Real Property (alone or in conjunction
with any other properties) incurred to refinance the Existing Indebtedness and
any indebtedness guaranteed by Contributor pursuant to Section 11.13.
"Contributor's Liabilities" shall have the meaning set forth in Section
2.4.
"Drop-Down" shall mean the transactions contemplated by Section 2.3.
"Drop-Down Documents" shall have the meaning set forth in Section 2.3.
"Environmental Laws" shall mean the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.); the Toxic Substance
Control Act (15 U.S.C. Section 2601 et seq.; Clean Air Act (42 U.S.C. Section
9402 et seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
seq.); and all other applicable federal, state and local environmental laws,
including obligations under the common law, ordinances, rules and regulations,
as any of the foregoing may have been amended, supplemented or supplanted prior
to the date hereof, relating to regulation or control of hazardous, toxic or
dangerous substances or wastes, or their handling, storage or disposal or to
environmental health and safety.
"Environmental Report" shall have the meaning set forth in Section 8.3.
"Estoppels" shall mean the estoppel certificates to be obtained pursuant
to Section 11.7.
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<PAGE> 5
"Excluded Anchor Parcels" shall mean those certain parcels of land legally
described in Exhibit A and the improvements thereon owned by certain of the
Anchors or other Persons other than Contributor.
"Excluded Personalty" shall mean the personal items belonging to employees
of Contributor and the cash, cash accounts (including any cash or cash accounts
constituting the Security Deposits) and, except as provided in Article V,
receivables of Contributor or, following the Drop-Down, the Acquired
Partnership.
"Existing Indebtedness" shall mean the loans listed on Schedule 7.2(x).
"Existing Indebtedness Documents" shall have the meaning set forth in
Schedule 7.2(x).
"Existing Indebtedness Consent Documents" shall have the meaning set forth
in Section 2.5.
"Existing Lenders" shall mean the holders of the Existing Indebtedness as
specified on Schedule 7.2(x).
"Existing Manager" shall mean FCP.
"Existing Management Agreement" shall mean any agreement or agreements
between FCP or any of its affiliates and Contributor relating to provision of
property management services by FCP or such affiliate for the Mall.
"FCP" shall mean Forbes/Cohen Properties, a Michigan general partnership.
"Financial Statements" shall have the meaning set forth in Section 7.2(k).
"Fixed and Other Tenant Charges" shall mean Rent other than Adjustable
Tenant Charges, Sales Based Tenant Charges and Advertising and Promotional
Contributions.
"Fixed and Other Tenant Charge Arrearages" shall mean Fixed and Other
Tenant Charges due and payable prior to but unpaid as of the Adjustment Date.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated by
the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"General Partner" shall mean General Growth Properties, Inc., a Delaware
corporation and the general partner of the Partnership.
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<PAGE> 6
"Gross Asset Value" shall mean, with respect to the Property as of
Closing, the sum of (a) the principal amount of Existing Indebtedness as of the
Adjustment Date and (b) the product of the number of Units issued to
Contributor pursuant to the Supplemental Agreement and the Assumed Unit Price.
"Guaranty" shall have the meaning set forth in Section 2.8(b).
"Hazardous Materials" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including
without limitation asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof) and any material the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, disposal, abatement, cleanup, removal, remediation or
handling of which, is prohibited, controlled or regulated by any Environmental
Law.
"Improvements" shall mean all buildings, structures (surface and
subsurface) and other improvements located on the Land, including any fixtures
as shall constitute real property under applicable provisions of law.
"Indemnified Partnership Persons" shall have the meaning set forth in
Section 11.1(a).
"Intellectual Property" shall have the meaning set forth in Section
7.2(l).
"Interests" shall mean all of the general and/or limited partnership
interests in the Acquired Partnership, together with all rights and powers in
respect of such interests as a general and/or limited partner in the Acquired
Partnership and all property, real or personal, relating to such interests
and/or the Acquired Partnership.
"Interim Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Jackson Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between the Partnership and JP.
"JP" shall mean Jackson Properties, a Michigan general partnership.
"Land" shall mean those certain parcels of real estate described on
Exhibit B.
"Lansing Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between Partnership and FCP.
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<PAGE> 7
"Leases" shall mean those leases, tenancies, concessions, licenses and
occupancy agreements currently in effect affecting or relating to the Mall
which are listed on Schedule 7.2(h), together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered into in
accordance with the provisions of this Agreement.
"Liens" shall mean mortgages, liens, pledges, security interests, charges,
claims, restrictions or other encumbrances of any nature whatsoever.
"Loss" shall have the meaning set forth in Section 11.1(a).
"Mall" shall have the meaning set forth in the recitals.
"Major Tenant" shall mean a Tenant who occupies space at a Mall consisting
of more than 5,000 square feet.
"Memorandum" shall mean that certain Private Placement Memorandum dated
November 18, 1996 relating to the issuance of Units pursuant hereto, among
other things.
"Missing Tenants" shall have the meaning set forth in Section 9.2(c).
"Net Operating Cash Flow" shall have the meaning set forth in the
Partnership Agreement.
"Offer Notice" shall have the meaning set forth in Section 11.12(b).
"Other Deposits" shall have the meaning set forth in Section 5.8.
"Other Contributors" shall mean JP and FCP, collectively.
"Other Contribution Agreements" shall mean the Jackson Contribution
Agreement and the Lansing Contribution Agreement, collectively.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of July 27, 1993, as amended by
that certain First Amendment thereto dated May 23, 1995, that certain Second
Amendment thereto dated June 13, 1995, that certain Third Amendment thereto
dated as of May 21, 1996, that certain Fourth Amendment thereto dated as of
August 30, 1996, that certain Fifth Amendment thereto dated as of October 4,
1996, that certain Sixth Amendment thereto dated as of November 27, 1996 and as
the same may be further amended hereafter.
"Partnership Liabilities" shall have the meaning set forth in Section 2.4.
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<PAGE> 8
"Party" shall mean a party to the Reciprocal Easement Agreements or a
Contract (or the successor or assignee thereof) or a Tenant under a Lease, in
each case other than Contributor (or, following the Drop-Down, the Acquired
Partnership) or any predecessor thereof.
"Permitted Exceptions" shall have the meaning set forth in Article III.
"Person" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity
of any type.
"Personalty" shall mean all Seller's right, title and interest in and to
the personal property, both tangible and intangible, located in or upon or used
in connection with the operation and maintenance of the Mall, including without
limitation fixtures; machinery; equipment; building supplies and materials;
consumables; inventories; names, logos, trademarks, trade names and copyrights;
all assignable licenses, permits and certificates of occupancy; all assignable
guarantees or warranties (including performance bonds obtained by, or for the
benefit of, Contributor, pertaining to the ownership, construction or
development of the Real Property or any part thereof); the Intellectual
Property; the Books and Records; advertising materials and telephone exchange
numbers. Without limiting the foregoing, "Personalty" shall include the
computer and peripheral equipment located at the Mall and the property listed
on Schedule 1.1(a) but shall not include the rights of Contributor or,
following the Drop-Down, the Acquired Partnership in or under the Leases,
Contracts or Excluded Personalty.
"Pledge Agreement" shall have the meaning set forth in Section 2.8(a).
"Promotional Association" shall have the meaning set forth in Section
7.2(af).
"Promotional Association Waiver" shall have the meaning set forth in
Section 2.10.
"Property" shall mean (a) the Real Property, (b) the Personalty, (c) the
rights of Contributor under all Leases and (d) the rights and interests of
Contributor under, in and to the Contracts to the extent assignable.
"Real Property" shall mean the parcels of Land and the Improvements,
together with all of the estate, right, title and interest of the Contributor
therein, and in and to (a) any land lying in the beds of any streets, roads or
avenues, open or proposed, public or private, in front of or adjoining the Land
to the center lines thereof, and in and to any awards to be made in lieu
thereof and in and to any unpaid awards for damage to the
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<PAGE> 9
foregoing by reason of the change of grade of any such streets, roads
or avenues; and (b) all easements, rights, licenses, privileges, rights-of-way,
strips and gores, hereditaments and such other real property rights and
interests appurtenant to the foregoing (including, without limitation, all
rights of Contributor under the Reciprocal Easement Agreements).
"Reciprocal Easement Agreements" shall have the meaning set forth in
Section 7.2(h).
"Recourse Liabilities" shall have the meaning set forth in Section 2.5(a).
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Rents" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and other taxes, and other amounts payable by the
Parties under the Leases and the Reciprocal Easement Agreements.
"Response Date" shall have the meaning set forth in Section 11.12(b).
"Sales Based Tenant Charges" shall mean Rent consisting of overage or
percentage rent.
"Security Deposits" shall have the meaning set forth in Section 5.8.
"Share Price" shall mean the average of the Closing Price for the twenty
(20) Trading Days preceding the third Trading Day prior to the Closing Date.
"Substantial Casualty" or "Substantial Taking" shall mean, a Casualty or
Taking, as the case may be, where:
(a) the condemnation award, or the proceeds payable under the
applicable policy or policies of casualty insurance maintained by
Contributor, are insufficient by more than $100,000 to fully repair the
damage caused by such Casualty or Taking, unless Contributor shall (at
its sole option and without any obligation to do so) grant to the
Partnership a credit equal to such deficiency; or
(b) an Anchor shall, by reason of such Casualty or Taking, either
terminate its Lease or its obligations under
-8-
<PAGE> 10
either Reciprocal Easement Agreement, or permanently cease operating at
the Mall (other than temporarily due to such damage and destruction,
remodeling, renovation or any similar cause), or cease operating at the
Mall under the name under which it was operating immediately prior to
such Taking or Casualty (as permitted by the provisions of such Lease or
Reciprocal Easement Agreement) or have the right to do any of the
foregoing (unless such right shall have expired or been waived); or
(c) the estimated time for repair or restoration shall exceed six
(6) months; or
(d) in the case of a Taking, a Taking with respect to such portion
of the Real Property as, when so taken would, in the reasonable opinion
of the Partnership, leave remaining a balance of the Real Property,
which, due either to the area taken or the location of the part taken
would not, under applicable zoning laws, building regulations and
economic conditions then prevailing or otherwise, readily accommodate a
new or restructured building or buildings of a type and size generally
similar to the building or buildings existing on the date hereof, or
would result in inadequate parking or lack of reasonable access to public
roads.
"Supplemental Agreement" shall mean that certain Supplemental Agreement
dated the date hereof, among the Partnership, Contributor, JP and FCP.
"Survey" shall mean have the meaning set forth in Section 6.3.
"Taking" shall mean a taking of all or any portion of the Real Property in
condemnation or by exercise of the power of eminent domain or by an agreement
in lieu thereof.
"Tenants" shall mean tenants, concessionaires, licensees and/or occupants
under the Leases.
"Tenant Services" shall mean all services supplied by or on behalf of
Contributor (or, following the Drop-Down, the Acquired Partnership) to Tenants
for which Tenants are separately charged, other than services in the nature of
common area maintenance.
"Termination of Existing Management Agreement Documents" shall have the
meaning set forth in Section 2.6.
"Title Commitment" shall have the meaning set forth in Section 6.1.
"Title Company" shall mean Near North National Title Corporation as
issuing agent for First American Title Insurance Company or as escrow agent, as
the case may be.
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<PAGE> 11
"Title Policy" shall have the meaning set forth in Section 9.2(e).
"Trading Day" shall mean a day on which the New York Stock Exchange is
open for business.
"Transactions" shall mean the transactions contemplated by this Agreement.
"Units" shall mean units of limited partnership interest in the
Partnership.
1.2 References. All references in this Agreement to particular sections or
articles shall, unless expressly otherwise provided, or unless the context
otherwise requires, be deemed to refer to the specific sections or articles in
this Agreement, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the exhibits annexed hereto and, by such reference,
be made a part hereof. The words "herein", "hereof", "hereunder",
"hereinafter", "hereinabove" and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection or article
hereof.
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution. Upon the terms and subject to the conditions contained
herein, at the Closing, Contributor shall contribute, or cause to be
contributed, to the capital of the Partnership, and the Partnership shall
accept, the Interests, free and clear of all Liens.
2.2 Issuance of Units; Etc.
(a) In exchange for the contribution of the Interests, at the
Closing and subject to adjustment as hereinafter provided, the
Partnership shall issue to Contributor the number of Units specified
pursuant to the Supplemental Agreement.
(b) In the event that the Share Price is less than $22.50, the
number of Units issuable at Closing by the Partnership to Contributor
shall be increased by an amount equal to the quotient of (i) the product
of (A) the excess of $22.50 over the Share Price and (B) the number of
Units issued pursuant to Section 2.2(a) (without giving effect to this
subsection) divided by (ii) the Share Price.
(c) In the event that the Share Price is more than $27.50, the
number of Units issuable at Closing by the Partnership to Contributors
shall be decreased by an amount
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<PAGE> 12
equal to the quotient of (i) the product of (A) the excess of the Share
Price over $27.50 and (B) the number of Units issued pursuant to Section
2.2(a) (without giving effect to this subsection) divided by (ii) the
Share Price.
(d) Contributor shall not, and shall cause its Affiliates not to,
buy or sell (including without limitation short sell) any shares of
Common Stock during the twenty-five (25) Trading Days prior to the
Closing whether in the open market or in a negotiated transaction.
(e) Notwithstanding anything contained herein to the contrary,
fractional Units shall not be issued hereunder; instead, the number of
Units to be issued hereunder shall be the number of Units issuable
pursuant to the other provisions of this Agreement rounded up to the
nearest whole Unit.
2.3 Drop-Down.
(a) Prior to the Closing, Contributor has, pursuant to instruments
and agreements in form and substance acceptable to the Partnership, (i)
conveyed to a newly-formed partnership (the "Acquired Partnership"),
which is a general partnership, all of the Property subject to the Liens
created pursuant to the Existing Indebtedness Documents, and (ii) caused
the Acquired Partnership to assume all of the Partnership Liabilities
(other than liabilities under Existing Indebtedness Documents) as of the
date of the Drop-Down (assuming the date of the Drop-Down were the
Closing Date) and no other liabilities.
(b) The documents referred to in Section 2.3(a) (the "Drop-Down
Documents") include, but are not limited to, covenant deeds in proper
statutory form for recording so as to convey the entire fee simple estate
of Contributor in the Real Property; assignment or assignments of all of
Contributor's right, title and interest under the Leases and the
Reciprocal Easement Agreements, all of which, to the extent the same
relate to Leases or memoranda thereof which have been recorded in
appropriate land records or the Reciprocal Easement Agreements, are in
form suitable for recording; assignment or assignments of all of
Contributor's right, title and interest in and to the Contracts to the
extent assignable; and bills of sale so as to transfer Contributor's
right, title and interest in and to the Personalty.
(c) Prior to the Closing, Contributor may cause the Acquired
Partnership to distribute to the partners of the Acquired Partnership any
and all items of Excluded Personalty.
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<PAGE> 13
2.4 Liabilities.
(a) From and after the Closing, the Partnership shall cause the
Acquired Partnership to pay and otherwise satisfy from the assets of the
Acquired Partnership only (unless applicable law imposes liability upon
the general partners thereof) (i) the obligations of Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Existing
Indebtedness Documents, as modified pursuant hereto (including the
obligation to repay the principal owing thereunder and accrued and unpaid
interest thereon but excluding liabilities and obligations that arise out
of any existing or past facts or circumstances that exist or existed on
or prior to the Closing Date that constitute a breach of a
representation, warranty or covenant contained in such Existing
Indebtedness Documents or otherwise require the indemnification of or
other payment to the Existing Lenders other than regularly scheduled
payments of principal and interest) (and the Partnership also shall
assume the liabilities referred to in this clause (i) to the extent they
are Recourse Liabilities), (ii) the liabilities and obligations of
Contributor (or, following the Drop-Down, the Acquired Partnership)
arising from and after the Closing Date under or in respect of the
Leases, the Reciprocal Easement Agreements and the assignable Contracts
(with such liabilities being limited to the same extent, if any, as the
liability of Contributor and its partners is limited thereunder) but only
to the extent that such liabilities and obligations do not arise out of
any transaction, event, circumstance, action, failure to act or
occurrence of any sort or type which occurred, existed or was taken prior
to the Closing Date (other than the execution and delivery of any Lease,
Reciprocal Easement Agreement or Contract by itself), and (iii) other
liabilities and obligations herein described to the extent the
Partnership has received proration credit therefor. All of the foregoing
obligations are herein referred to as the "Partnership Liabilities".
(b) Except as expressly provided in Section 2.4(a) and
notwithstanding the assumption of liabilities pursuant to Section 2.3 or
otherwise, from and after the Closing, neither the Partnership nor the
Acquired Partnership shall be responsible for any liabilities or
obligations (whether recourse or non-recourse) of Contributor (or,
following the Drop-Down, the Acquired Partnership), whether or not the
same relate to the Property or were incurred in connection with the
ownership, use, management or operation thereof by Contributor (or,
following the Drop-Down, the Acquired Partnership) or by its agents (such
liabilities exclusive of the Partnership Liabilities, collectively, the
"Contributor's Liabilities") and Contributor shall pay Contributor's
Liabilities as and when due. Without limiting the foregoing,
Contributor's
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<PAGE> 14
Liabilities shall include (a) all federal, state and local
taxes of whatever kind and nature (other than real estate taxes and
assessments on real property for which the Partnership has received
credit under Article V); (b) liabilities relating to the asserted Lease
and other defaults described on Schedule 7.2(j) (other than the cost of
repairs to the Mall to the extent that they may be charged to Tenants as
Adjustable Tenant Charges, which shall constitute Partnership
Liabilities); and (c) liabilities relating to any employees, employee
benefit plans or collective bargaining agreements of Contributor or the
Existing Manager, including without limitation severance pay and accrued
vacation pay obligations and other liabilities of Contributor or others
relating to the termination of such employees as the result of the
consummation of the Transactions (but not the termination by the
Partnership or any Affiliate thereof of any such employees who are
employed by the Partnership or such Affiliate following Closing).
2.5 Matters Relating to Existing Indebtedness.
(a) Contributor shall use reasonable best efforts (including without
limitation the payment of the transfer fees or other fees or costs imposed or
required to be paid by any Existing Lender) to obtain, at or prior to Closing
and at no cost to the Partnership, (i) the unconditional consent of the
Existing Lenders specified on Schedule 2.5 to the consummation of the
Transactions (including without limitation the Drop-Down) and (ii) a
confirmation by such Existing Lenders that they shall have no recourse to the
Partnership, the General Partner or other Affiliates of the Partnership or the
assets of any of them or the assets of the Acquired Partnership other than the
Property except that an Existing Lender may have recourse to the Partnership
and the other assets the Acquired Partnership in those instances where such
Existing Lender has recourse (without giving effect to the Transactions) to
Messrs. Maurice Cohen and Sidney Forbes in their capacities as general partners
of Contributor or otherwise (the liabilities for which such recourse against
Messrs. Forbes and Cohen exists, the "Recourse Liabilities").
(b) Notwithstanding anything to the contrary contained in this Section
2.5, the Partnership shall pay the amount of the 2% loan transfer fee payable
to Northwestern Mutual on account of the Transactions, but Contributor shall
use reasonable best efforts to obtain the approval of Northwestern Mutual to
adding the loan transfer fee to the principal amount of the Existing
Indebtedness held by it without any change in the other terms of such
indebtedness. In the event that Contributor, despite using its reasonable best
efforts, is unable to obtain such approval, the Partnership shall cause such
loan transfer fee to be paid in cash.
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<PAGE> 15
(c) The documents referred to in this Section are hereinafter referred to
as the "Existing Indebtedness Consent Documents."
2.6 Termination of Existing Management Agreement. On or prior to the
Closing Date, Contributor shall cause the termination of the Existing
Management Agreement and obtain from the Existing Manager a release of Liens
against the Property with respect to the services performed by the Existing
Manager under the Existing Management Agreement. The documents effecting such
termination and release are hereinafter referred to as the "Termination of
Existing Management Agreement Documents".
2.7 Admission to Partnership; Redemption Rights; Etc.
(a) At the Closing, Contributor and the General Partner shall execute and
deliver an amendment to the Partnership Agreement substantially in the form of
Exhibit C (the "Amendment to Partnership Agreement"), pursuant to which the
Partnership issues to Contributor the number of Units to be issued to
Contributor in accordance with this Agreement and Contributor is admitted as
limited partner of the Partnership and agrees to be bound by the terms of the
Partnership Agreement, as amended by the Amendment.
(b) At the Closing, the General Partner and Contributor shall execute and
deliver a Redemption Rights Agreement substantially in the form of Exhibit D
(the "Redemption Rights Agreement"), pursuant to which Contributor and the
Other Contributors are granted the right to require the Partnership to redeem
its Units from time to time as provided therein.
(c) Contributor acknowledges that the Partnership intends to distribute
prior to Closing the Net Operating Cash Flow for the portion of the calendar
quarter during which the Closing occurs through the day prior to the Adjustment
Date and that, if such distribution is not made for any reason and the Closing
occurs, Contributor will be entitled to receive as a distribution only a pro
rata portion of the Net Operating Cash Flow which is distributed for such
quarter based on the number of Units issued to it pursuant hereto relative to
the total number of issued and outstanding Units and the number of days in such
quarter from and following the Adjustment Date relative to the total number of
days in such quarter.
2.8 Pledge Agreement; Guaranty.
(a) At the Closing, Contributor shall execute and deliver to the
Partnership a Pledge Agreement substantially in the form of Exhibit E (the
"Pledge Agreement").
(b) At the Closing, Contributor shall execute and deliver, and cause
Messrs. Maurice Cohen and Sidney Forbes, to execute and
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deliver to the Partnership a guaranty in the form of Exhibit F (the
"Guaranty").
2.9 Tenant Allowances and Leasing Commissions. Contributor shall pay the
cost of the tenant allowances identified on Schedule 7.2(g) and leasing
commissions that are owing or become owing under Leases entered into prior to
the date hereof, and, with respect to such amounts that have not been paid in
full or otherwise satisfied prior to the Closing Date, Contributor shall pay
the same to the Partnership within five business days following the giving of
written notice by the Partnership that they are due to Tenants but in any event
not later than December 31, 1997.
2.10 [INTENTIONALLY OMITTED].
2.11 Matters Relating to Promotional Association. At Closing, Contributor
shall deliver to the Partnership a written waiver in form reasonably
satisfactory to the Partnership (the "Promotional Association Waiver") pursuant
to which Contributor waives and releases, and causes its Affiliates to waive
and release, any claims or indebtedness of Contributor or its Affiliates
against or owing by the Promotional Association.
ARTICLE III
Title
The Real Property shall be, on the Closing Date, subject only to the
following (collectively, the "Permitted Exceptions"):
(a) those title exceptions, defects and other matters that are shown
on Exhibit G;
(b) the terms, covenants and conditions of the Reciprocal Easement
Agreements;
(c) provided that there is no violation thereof, zoning,
subdivision, environmental, municipal building and all other laws, rules,
regulations, ordinances, codes, restrictions or legal requirements
applicable to the ownership, use, occupancy or development of, or the
right to maintain or operate (including the construction of improvements
on), the Real Property and any other lawful action of any duly
constituted public authority or other body having or exercising
jurisdiction over the Real Property presently existing;
(d) the state of facts shown on the Survey;
(e) Liens for unpaid real property taxes and assessments, water
rates and charges, sewer taxes and rents and other governmental charges
which are not yet due and payable;
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(f) all Leases or such of them as shall be in effect on the Closing
Date, and the rights of the Tenants thereunder;
(g) mechanics' liens, lis pendens and notices of commencement of
action against Contributor in respect of the Real Property (or which
affect Contributor's [or, following the Drop-Down, the Acquired
Partnership] interest in the Real Property) provided that the same do not
exceed $25,000 in the aggregate and provided further that the Title
Company shall provide affirmative insurance with respect thereto insuring
the Acquired Partnership from loss with respect thereto in form and
substance acceptable to the Partnership in its sole discretion; and
(h) all other Liens and title exceptions the Partnership may accept
under Section 6.2.
No agreement to take title to the Real Property subject to Permitted Exceptions
shall be deemed a waiver of any representation or warranty of Contributor set
forth in Section 7.2 or the rights of the Partnership contained in Section 6.2,
it being understood and agreed that the Partnership's agreements regarding
Permitted Exceptions assume the truth and accuracy of all such representations
and warranties.
ARTICLE IV
Closing
4.1 Closing. The closing of the Transactions (the "Closing") shall take
place at the offices of Neal, Gerber & Eisenberg, Two North LaSalle Street,
Chicago, Illinois 60602, commencing at 10:00 a.m., local time, on December 2,
1996 (as the same may be extended in accordance with this Section 4.1, the
"Closing Date"). Time shall be of the essence with respect to the Closing
Date; provided, however, in the event that as of December 2, 1996 Contributor
has not, despite the use by it of reasonable best efforts, obtained the
Estoppels, the consent of the Existing Lenders pursuant to Section 2.5, the
Releases/Directions or the Contract Party Consents or cured any title or survey
defects specified pursuant to Article VI, either Contributor or the Partnership
shall have the right, exercisable by delivering written notice to the other on
or before December 2, 1996, to extend the Closing Date until not later than
December 9, 1996. Unless otherwise provided herein, the prorations and
adjustments pursuant to this Agreement shall be computed as of 11:59 p.m. on
October 31, 1996 (the "Adjustment Date") and the Units issued pursuant to this
Agreement shall be deemed to have been issued as of such date. In addition to
but not in duplication of any other prorations and adjustments pursuant to this
Agreement, Contributor shall pay or cause to be paid to the Partnership in cash
at, and subject to the occurrence of, Closing all Rents and other amounts
collected by
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Contributor (or, following the Drop-Down, the Acquired Partnership) for
November 1996 and the month of Closing (net of expenses paid by Contributor or,
following the Drop-Down, the Acquired Partnership relating to the operation of
the Mall during such period in the ordinary course of business and consistent
with past practice other than salary and other compensation paid to
Contributors or Affiliates thereof [other than an amount for management fees
equal to the product of $1,633, the number of days in such period prior to
Closing and a fraction the numerator of which is the Gross Asset Value of the
Property and the denominator of which is equal to the "Gross Asset Values" of
the Property and the properties conveyed pursuant to the Other Contributor
Agreements], amounts paid pursuant to Section 2.9, and amounts paid or incurred
in connection with the Transactions or by reason of this Agreement).
4.2 Contributor Closing Documents. At or prior to the Closing, Contributor
shall deliver, or cause to be delivered, to the Partnership (either directly or
through an escrow with the Title Company) the following documents
(collectively, the "Contributor Closing Documents"), duly executed by
Contributor and the other parties thereto (other than the Partnership) and in
form and substance reasonably acceptable to the Partnership and to Contributor
unless the form thereof is attached hereto:
(a) Assignments of the Interests so as to convey the Interests to
the Partnership and/or one or more of its designees.
(b) The Termination of Existing Management Agreement Documents.
(c) Searches conducted by an independent firm reasonably
satisfactory to the Partnership showing any Uniform Commercial Code,
judgment, bankruptcy, pending suit or tax lien filings against
Contributor and the Acquired Partnership in the jurisdictions designated
by the Partnership no earlier than twenty (20) days prior to the Closing
Date but in any event in the state and county or counties in which the
Mall and the principal offices of Contributor are located, which searches
shall be dated not more than ten days prior to the Closing Date.
(d) The instruments, documents or certificates as are customarily
required by the Title Company to be executed or provided by Contributor
as a condition to the issuance of its title insurance policies pursuant
to the Title Commitment.
(e) An affidavit of Contributor stating its U.S. taxpayer
identification number and that it is a "United States person", as defined
by Sections 1445(f)(3) and 7701(b) of the Code.
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(f) The Estoppels.
(g) The Drop-Down Documents.
(h) A written certificate executed on behalf of Contributor and
addressed to the Partnership to the effect that all of the
representations and warranties of Contributor herein contained in Section
7.2 are true and correct in all material respects as of the Closing Date
(as supplemented in accordance with Section 11.3) with the same force and
effect as though remade and repeated in full on and as of the Closing
Date (except for actions taken in accordance with or as contemplated by
this Agreement and except for matters approved in writing or consented to
in writing by the Partnership) or stating the specific respects, if any,
in which any of the representations and warranties is untrue.
(i) Written notices (i) to the Parties to the Reciprocal Easement
Agreements advising them of the change of ownership and directing them to
pay all charges under the Reciprocal Easement Agreements as directed by
the Partnership; (ii) to the Tenants advising them of the change of
ownership and directing them to pay Rent and other charges under their
respective Leases as directed by the Partnership; and (iii) to each Party
to the Contracts advising of the transfer and assignment of the Contracts
to the Acquired Partnership and directing that future inquiries be made
directly to the Acquired Partnership.
(j) Such documents and instruments as shall be reasonably required
to substitute the Acquired Partnership for the Contributor as the
plaintiff in legal actions contemplated by Section 5.9.
(k) With a respect to each of the Acquired Partnership, Contributor
or a general partner of Contributor or the Acquired Partnership that is a
corporation or limited partnership, a certificate issued by the Michigan
Secretary of State, dated not more than ten days prior to the Closing
Date, certifying the good standing of such limited partnership or
corporation.
(l) With respect to each of the Acquired Partnership, Contributor or
a general partner of Contributor or the Acquired Partnership that is
limited partnership, copies of the certificate of limited partnership of
such limited partnership and any amendments thereto, certified by the
Secretary of State of the state of formation as of a date not more than
30 days prior to the Closing Date, together with a certificate of the
general partner(s) of such limited partnership to the effect that the
certificate of limited partnership of such limited partnership, as
certified by the
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Secretary of State aforesaid has not been further amended, revised,
restated, cancelled or rescinded up to and including the Closing Date and
that the attached copy of the partnership agreement of such limited
partnership and amendments thereto is true, accurate and complete and has
not been further amended, revised, restated, cancelled or rescinded up to
and including the Closing Date.
(m) With respect to each general partner of Contributor or the
Acquired Partnership that is a corporation, copies of the articles or
certificate of incorporation of such corporation and any amendments
thereto, certified by the Secretary of State of the state of formation
thereof as of a date not more than 30 days prior to the Closing Date,
together with a certificate of the secretary of such corporation to the
effect that the articles or certificate of incorporation thereof, as
certified by the Secretary of State aforesaid, has not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copy of the by-laws thereof and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(n) A copy of the partnership agreement of each of Contributor, the
Acquired Partnership or a general partner of Contributor or the Acquired
Partnership that is a general partnership, together with a certification
by the general partners of such general partnership that the attached
copy of the partnership agreement of such general partnership and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(o) Such certificates as the Partnership may reasonably request as
to the authorization on the part of Contributor and its general partners
of the execution, delivery and performance of this Agreement and the
authority of the Persons executing and delivering this Agreement and the
Contributor Closing Documents on behalf of Contributor and its general
partners.
(p) An opinion or opinions of counsel for Contributor dated as of
the Closing Date, in form and substance reasonably acceptable to the
Partnership.
(q) All Books and Records.
(r) Keys and combinations to locked compartments within the Mall.
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(s) Schedule of Fixed and Other Tenant Charge Arrearages payable as
of the Closing Date or a date not more than 10 days prior thereto by each
Party which schedule shall set forth separately and certify the items of
Rents with respect to which each such Party is in arrears, the amount of
each item and the period of such arrearage.
(t) The schedules referred to in Section 5.3 and 5.6.
(u) The Contract Party Consents.
(v) [Intentionally Deleted].
(w) The Guaranty.
(x) The Pledge Agreement.
(y) The Amendment to Partnership Agreement.
(z) The Redemption Rights Agreement.
(aa) The Existing Indebtedness Consent Documents.
(ab) The Promotional Association Waiver.
(ac) [Intentionally Omitted]
(ad) [Intentionally Omitted]
(ae) Such other documents, instruments or agreements which
Contributor is required to deliver to the Partnership pursuant to the
other provisions of this Agreement or which the Partnership reasonably
may deem necessary or desirable in order to consummate the Transactions
or to better vest in the Partnership or the Acquired Partnership title to
the Interests or the Property; provided, however, that any such other
documents, instruments or agreements which the Partnership reasonably
deems necessary or desirable shall not impose upon Contributor any
obligation or liability other than an obligation or liability expressly
imposed upon Contributor pursuant to the terms of this Agreement or
pursuant to the terms of the other Contributor Closing Documents
specified in this Section 4.2.
Notwithstanding any provision to the contrary set forth elsewhere in this
Agreement, if after the use of reasonable best efforts Contributor is unable to
deliver to the Partnership at Closing (subject to the extensions set forth in
Section 4.1) the Contract Party Consents, the Estoppels, the consent of the
Existing Lenders pursuant to Section 2.5, the Partnership shall have the
option, as the Partnership's sole and exclusive right and remedy either (a) to
terminate this Agreement by giving written notice of
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such termination to Contributor on or before the Closing or (b) to
complete Closing without the delivery of such item or items and waive the
requirement for the delivery of such item or items. If the Partnership shall
terminate this Agreement pursuant to the provisions of this Section, this
Agreement shall be null and void and no party shall have any further rights or
obligations under this Agreement (other than any right or obligation that
expressly survives the termination of this Agreement).
4.3 Partnership Closing Documents. At or prior to the Closing, the
Partnership shall deliver to Contributor (either directly or through an escrow
with the Title Company) the following documents (herein referred to
collectively as the "Partnership Closing Documents"), duly executed by an
authorized officer of the General Partner and the other parties thereto (other
than Contributor) and in form and substance reasonably acceptable to
Contributor and the Partnership unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which the Partnership and
its designee or designees accept the Interests conveyed to them.
(b) A duly executed and acknowledged secretary's certificate,
certifying that the Board of Directors of the General Partner or
committee thereof has duly adopted resolutions authorizing the
consummation of the Transactions and certifying the authority of the
officers of the General Partner executing and delivering this Agreement
and the Partnership Closing Documents in their capacities as officers of
the General Partner.
(c) A certificate issued by the Secretary of State of Delaware dated
not earlier than ten days prior to the Closing Date certifying the good
standing of the Partnership as of the date of such certificate.
(d) Copies of the certificate of limited partnership of the
Partnership and certificate of incorporation of the General Partner and
any amendments thereto, certified by the Secretary of State of the State
of Delaware as of a date not more than 30 days prior to the Closing Date,
together with a certificate of the secretary of the General Partner to
the effect that such certificate of limited partnership and certificate
of incorporation, as certified by the Secretary of State of Delaware,
have not been further amended, revised, restated, cancelled or rescinded
up to and including the Closing Date and that the attached copies of the
partnership agreement of the Partnership and by-laws of the General
Partner and amendments thereto are true, accurate and complete and have
not been further amended, revised, restated, cancelled or rescinded up to
and including the Closing Date.
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(e) An opinion of counsel for the Partnership dated as of the
Closing Date, in form and substance reasonably satisfactory to
Contributor, including without limitation an opinion that the
consummation of the Transactions by the Partnership does not violate the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (provided that any opinion as to the
enforceability of the Agreement or any Partnership Closing Documents
shall be based on the assumption that the enforceability of the such
document is governed by the laws of the State of Illinois without regard
to its conflicts of law rules).
(f) A written certificate addressed to Contributor to the effect
that all of the representations and warranties of the Partnership
contained in Section 7.1 are true and correct in all material respects on
and as of the Closing Date (as supplemented in accordance with Section
11.3) with the same force and effect as though remade and repeated in
full on and as of the Closing Date (except for actions taken in
accordance with or as contemplated by this Agreement and except for
matters approved in writing or consented to in writing by Contributor) or
stating the specific respects, if any, in which any of the
representations and warranties is untrue.
(g) The Amendment to Partnership Agreement.
(h) The Pledge Agreement.
(i) The Redemption Rights Agreement.
(j) [Intentionally Omitted]
(k) Such other documents, instruments or agreements which the
Partnership may be required to deliver to Contributor pursuant to the
other provisions of this Agreement or which Contributor reasonably may
deem necessary or desirable to consummate the Transactions; provided,
however, that any such other document, instrument or agreement which
Contributor reasonably deems necessary or desirable shall not impose upon
the Partnership any obligation or liability other than an obligation or
liability expressly imposed upon the Partnership pursuant to the terms of
this Agreement or pursuant to the terms of the other Partnership Closing
Documents specified in this Section 4.3.
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ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated. Subject to the other provisions of this
Article and this Agreement, the following shall be apportioned or adjusted
between Contributor and the Partnership at the Closing as of the date specified
in Section 4.1 and the net amount thereof shall be settled as hereinafter
provided:
(a) real property taxes and assessments (or installments thereof)
based on the most recent tax bills except those required to be paid
directly to the entity imposing the same by those Tenants who are current
in all of their Lease payment obligations on the Closing Date (such
proration shall be computed based on the assumption that the real estate
taxes due in July 1996 and December 1996 (and payable without penalty in
September 1996 and February 1997, respectively) relate to calendar year
1996 and accrued ratably throughout such year);
(b) water rents and charges, if any, except those required to be
paid directly to the entity imposing the same by Tenants who are current
in all of their Lease payment obligations on the Closing Date;
(c) sewer taxes and rents, if any, except those required to be paid
directly to the entity imposing the same by Tenants who are current in
all of their Lease payment obligations on the Closing Date;
(d) actually accrued interest, if any, required to be paid to a
Party on Security Deposits;
(e) amounts, if any, payable by or owed to Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Reciprocal
Easement Agreements;
(f) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied, if the rights with respect thereto
continue for the benefit of the Acquired Partnership following the
Closing;
(g) fuel oil and liquid propane gas, if any, at the cost or costs
per gallon or cubic foot most recently charged with respect to the Mall,
based on the supplier's measurements thereof, plus sales taxes thereon;
(h) deposits, if any, on account with any utility company servicing
the Mall;
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(i) deposits on account with any municipality having jurisdiction
over the Mall (other than deposits which are in the nature of security
for the performance of work);
(j) amounts paid or payable by the owner of the Mall to the
Promotional Association;
(k) Rents (subject to the other provisions of this Article V);
(l) amounts paid or payable under the Contracts relating to the Mall
to the extent the same constitute Partnership Liabilities;
(m) interest on the Existing Indebtedness; and
(n) all other items customarily apportioned in connection with the
sale of properties that are similar to the Property and similarly
located.
Contributor shall cooperate with the Partnership in the transfer of
electricity, gas, water and other utility services from Contributor's name to
the name of the Acquired Partnership as of the Closing Date if not previously
transferred in connection with the Drop-Down.
5.2 Installment Payment of Assessments. In furtherance of Section 5.1(a),
if any real property assessment affects the Mall at the Adjustment Date and
such real property assessment is payable in installments (whether at the
election of the Mall owner or otherwise), the installment relating to, or
payable over, the Applicable Closing Fiscal Period shall be apportioned between
Contributor and the Partnership as of 11:59 p.m. Eastern Standard time on the
day immediately preceding the Adjustment Date, and the remaining installments
shall be the obligation of the Partnership.
5.3 Adjustable Tenant Charges.
(a) Notwithstanding anything to the contrary contained herein, no
adjustments or apportionments shall be made with respect to the expense
items listed in Section 5.1 hereof (other than real estate taxes and
assessments, as to which adjustment shall be made as set forth in Section
5.1) for the Applicable Closing Fiscal Period or any prior fiscal period
to the extent such expense items are payable or reimbursable from funds
collected as Adjustable Tenant Charges. Contributor shall be responsible
for the payment of all such expenses incurred by it or the Acquired
Partnership prior to Closing (which shall be deemed to have been incurred
by Contributor for the purposes of this Section 5.3), and the Partnership
shall cause the Acquired Partnership to pay or otherwise satisfy out of
the assets of the Acquired Partnership only
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unless applicable law imposes liability upon the general partners
thereof) all such expenses incurred by it following Closing (including
without limitation real estate taxes and assessments for which the
Partnership has received credit under Section 5.1).
(b) At the Closing, Contributor shall assign to the Acquired
Partnership (to the extent not assigned in connection with the Drop-Down)
any amounts required to be paid as Adjustable Tenant Charges by Tenants
which were due and payable on or before, but remain unpaid on, the
Closing Date, and there shall be no adjustment hereunder with respect
thereto. At the Closing, Contributor shall deliver to the Partnership a
true and correct statement setting forth in reasonable detail and
certifying the amount of Adjustable Tenant Charges collected and
expenditures for such items of expense (and any credits for real estate
taxes) made by Contributor or the Acquired Partnership for the portion of
the Applicable Closing Fiscal Period through a date not more than 30 days
prior to the Closing Date and for any prior fiscal period and a good
faith estimate of such amounts through the Closing Date.
(c) The Partnership shall cause any amounts collected by the
Acquired Partnership after the Closing Date which relate to Adjustable
Tenant Charges payable with respect to any fiscal period ending prior to
the Applicable Closing Fiscal Period to be remitted to Contributor.
Within 90 days following the end of the Applicable Closing Fiscal Period
and from time to time thereafter as amounts are received by the Acquired
Partnership from Parties, the aggregate amount of Adjustable Tenant
Charges, if any, collected and retained by the Acquired Partnership and
Contributor with respect to the Applicable Closing Fiscal Period shall be
apportioned and adjusted such that the total amount of such Adjustable
Tenant Charges received by the Acquired Partnership (excluding amounts
received prior to Closing), on the one hand, and Contributor (including
amounts received by the Acquired Partnership prior to Closing), on the
other hand, shall be in the same proportion as the amount of the expense
items to which such Adjustable Tenant Charges relate which each has borne
(including without limitation real estate taxes or assessments for which
either party has received credit under Section 5.1), and, to the extent
that either shall have received a greater share of the payments with
respect to Adjustable Tenant Charges, such party or parties shall
promptly settle such excess with the other.
5.4 [Intentionally Omitted].
5.5 Fixed and Other Tenant Charge Arrearages. Subject to the provisions of
Section 5.7(c), Fixed and Other Tenant Charge
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Arrearages (which, for purposes of this Section 5.5, shall include,
without limitation, any real estate taxes or special assessments or other
amounts otherwise required to be paid by a Party directly to the taxing
authority but actually paid by Contributor to the taxing authority with respect
to the amount of the taxes or special assessments actually paid), if and when
collected, shall be paid to the Acquired Partnership as to Fixed and Other
Tenant Charge Arrearages which relate to periods from and after the Adjustment
Date, and to Contributor with respect to all other Fixed and Other Tenant
Charge Arrearages.
5.6 Sales Based Tenant Charges. Sales Based Tenant Charges which are
payable with respect to any period prior to the Adjustment Date or which have
been accrued prior to the Adjustment Date shall not be apportioned as of the
Adjustment Date. In lieu thereof, such amounts shall be apportioned, after the
Closing Date and after final determination thereof, so that the amount thereof
to which Contributor shall be entitled shall be the entire amount thereof with
respect to any fiscal period ending prior to the Closing Date, and, for the
Applicable Closing Fiscal Period, an amount which bears the same ratio to the
total Sales Based Tenant Charges as the number of days in the Applicable
Closing Fiscal Period which have elapsed prior to the Adjustment Date bears to
the total number of days in the Applicable Closing Fiscal Period. At the
Closing, Contributor shall deliver to the Partnership a true and correct
statement setting forth in reasonable detail and certifying the amount of Sales
Based Tenant Charges collected for the portion of the Applicable Closing Fiscal
Period through a date not more than 30 days prior to the Closing Date and a
good faith estimate of such amounts collected through the Closing Date.
5.7 Application of Rent Receipts. Notwithstanding anything to the contrary
contained herein, in determining the adjustments and apportionments pursuant to
Sections 5.3, 5.4, 5.5 and 5.6, the following shall apply:
(a) Payments of Rents (other than Rents collected pursuant to
Section 5.9(b)) shall be deemed to have been made by a Party first to the
payment of Fixed and Other Tenant Charges (other than charges for Tenant
Services), second to the payment of Sales Based Tenant Charges, third to
the payment of charges for Tenant Services (and designated as such in the
Lease), fourth to the payment of Adjustable Tenant Charges, and last to
the payment of all other items of Rent payable by such Party.
(b) Any amounts collected as Sales Based Tenant Charges, and
Adjustable Tenant Charges, within each category, shall be deemed to have
been paid by the Party, first, on account of amounts then due for periods
after the Applicable Closing Fiscal Period, next, on account of amounts
then due for the Applicable Closing Fiscal Period and, next, on account
of
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amounts then due for all fiscal years prior to the Applicable Closing
Fiscal Period.
(c) If the Acquired Partnership shall receive any Fixed and Other
Tenant Charges after the Closing Date from a Party who is delinquent as
of the Adjustment Date in the payment of Fixed and Other Tenant Charges
payable under its Lease or either Reciprocal Easement Agreement, as the
case may be, such Fixed and Other Tenant Charges shall be deemed to have
been paid by the Party, first, on account of amounts owing to Acquired
Partnership, next, on account of Fixed and Other Tenant Charge Arrearages
due to the Contributor (after reduction for amounts collected pursuant to
Section 5.9(b) and 5.7(d)), and the balance remaining thereafter shall be
retained by the Acquired Partnership.
(d) Notwithstanding anything to the contrary contained in this
Section 5.7, a payment of Rent shall be applied to the payment of the
item or items of Rent designated by the Party making such payment or to
which such payment otherwise clearly relates in the good faith judgment
of the Partnership.
5.8 Security and Utility Deposits. At the Closing, Contributor shall
furnish the Partnership with a schedule setting forth and certifying, as of the
Closing Date, the unapplied and unreturned portion of any security deposits
which have been deposited with Contributor (or, following the Drop-Down, the
Acquired Partnership) or its agents (or with any predecessor-in-interest
thereto) by any Tenants through the Closing Date (the "Security Deposits") and
the amount of any deposits on account with any utility company servicing the
Mall or Existing Lender that will continue for the benefit of the Acquired
Partnership following Closing ("Other Deposits"), and Contributor shall pay to
the Partnership at Closing in cash the amount of the Security Deposits,
together with all interest, if any, accrued thereon and required to be paid to
Tenants or actually paid in accordance with past practices) to Tenants.
Contributor shall receive a credit at Closing for the amount of the Other
Deposits.
5.9 Collection of Rents.
(a) The Partnership shall cause the Acquired Partnership to use its
best efforts to collect the Fixed and Other Tenant Charge Arrearages,
Adjustable Tenant Charges, Sales Based Tenant Charges and other Rents
which are payable with respect to the Applicable Closing Fiscal Period
and any prior fiscal period, but the Acquired Partnership shall not be
required to retain a collection agency, commence litigation or file
proofs of claim or commence an adversary proceeding in a bankruptcy case,
or terminate Leases or either Reciprocal Easement Agreement in connection
with such collection efforts. The Partnership shall not permit the
Acquired Partnership to waive
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or settle any claims for any such amounts in whole or in part to the
extent such amounts, if collected, would be payable to Contributor
hereunder other than in accordance with the policies of the Partnership
from time to time as to Rent delinquencies generally. Out-of-pocket
collection costs shall be charged against amounts collected and charged
to the parties hereto in the proportion in which each is entitled to the
proceeds of such collection. The Partnership shall provide to
Contributor semi-annual reports after Closing with respect to the
collection by the Acquired Partnership after Closing of any such amounts
which are payable with respect to the Applicable Closing Fiscal Period
and any prior fiscal year.
(b) Contributor shall have the right to seek collection of any Fixed
and Other Tenant Charge Arrearages owed to it and not collected by or on
behalf of it within six months following the Closing Date; provided,
however, that in seeking to collect any such Fixed and Other Tenant
Charge Arrearages, Contributor shall not be entitled to terminate any
Lease or Reciprocal Easement Agreement or otherwise seek any remedy which
could materially affect or impact the Mall or the ownership or operation
thereof other than a money judgment against the delinquent Party. The
Acquired Partnership shall not be required to join in any such actions or
proceedings commenced by Contributor unless the provisions of any law,
rule or regulation at the time in effect shall require that such actions
or proceedings be brought by and/or in the name of the Acquired
Partnership, in which event the Partnership shall cause the Acquired
Partnership to join and cooperate in such actions or proceedings or
permit the same to be brought by such Contributor in the Acquired
Partnership's name but such Contributor shall pay all costs and expenses
relating thereto, including without limitation the Acquired Partnership's
reasonable legal fees in reviewing pleadings and other materials filed in
connection with such litigation.
(c) Notwithstanding anything to the contrary contained herein, the
Acquired Partnership shall have the right at any time on or after the
Closing, and whether or not its joinder shall be required as a matter of
law, to join in, or to be substituted for Contributor in, any proceedings
for the eviction of Tenants and/or the collection of Rent which may have
been instituted by Contributor either prior to or after the Closing, if
the Tenant in question is still in possession of the premises covered by
its Lease and if, in connection therewith, the Acquired Partnership
intends to seek eviction of such Tenant, cancellation of the Lease or
repossession of the premises. If the Acquired Partnership joins in, or
is substituted for Contributor as plaintiff in any such litigation, the
Partnership shall cause the Acquired Partnership to, thereafter, assume
sole liability for all
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costs and expenses of such litigation, including legal fees and
expenses, as may thereafter be incurred (except as provided below) and
shall thereafter control all aspects of such proceedings, except that
the Partnership shall not permit the Acquired Partnership to waive,
reduce or otherwise compromise any claims for Rent relating to any
period prior to the Adjustment Date other than in accordance with the
policies of the Partnership from time to time as to Rent deficiencies
generally. Contributor in any event may, at its option, continue to
participate in such litigation. In any event, Contributor shall
reimburse the Partnership for a pro rata portion of its out-of-pocket
costs and expenses of such collection in proportion to, but in no event
in an amount greater than, the amount, if any, actually received by
Contributor after Closing as a result of such proceedings; provided,
however, Contributor shall be entitled to a credit for legal fees and
expenses incurred by Contributor prior to the intervention by the
Acquired Partnership in connection with the proceedings previously
instituted by Contributor in connection with such collection efforts.
5.10 Settlement of Adjustments.
(a) Contributor and the Partnership acknowledge that it may be
difficult to calculate, as of the day immediately preceding the
Adjustment Date, certain of the adjustments, apportionments and payments
to be made pursuant to this Article V. Accordingly, Contributor and the
Partnership hereby agree that any adjustments, apportionments and
payments otherwise required to be made as of the Adjustment Date may to
the extent necessary or desirable be estimated by Partnership and
Contributor based on the most recent available data, and, additional
adjustments, apportionments and payments shall be made to adjust for any
differences between the actual apportionment or adjustment and the amount
thereof estimated on the Closing Date. Any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after
their discovery.
(b) Except as otherwise provided herein, net prorations and
adjustments made pursuant to this Article V on the Closing Date and
determined as provided in subsection (a) above shall be settled in cash.
From time to time after the Closing as further adjustments are made as
herein provided, settlement thereon between Contributor and the
Partnership shall be made in cash.
(c) The Partnership, upon reasonable advance notice, shall cause the
Acquired Partnership to provide Contributor with access to its books and
records, including back-up calculations and information, relating to the
calculation of
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the adjustments required to be made pursuant to this Article V.
(d) Any Rents that are payable to Contributor hereunder shall be
paid from time to time following the Closing as determined by the
Partnership but no less frequently than quarterly.
(e) Notwithstanding anything to the contrary contained herein, a
final adjustment shall be made with respect to the amounts owing under
this Article V as of December 31, 1997, and the amounts owing settled in
cash no later than 10 days thereafter. No further adjustments or
payments shall be required to be made under this Article V thereafter
(except with respect to legal proceedings for or bankruptcy claims in
respect of the collection of Rent which are pending on such date or legal
proceedings or bankruptcy claims brought by Contributor under Section
5.9(b)).
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment. Contributor shall cause the Title Company to deliver
to the Partnership, not later than seven (7) days prior to the Closing Date, a
commitment of the Title Company (the "Title Commitment") to issue, at Closing,
its ALTA Form B Owners Title Insurance Policy as to the Real Property in the
aggregate amount of the Gross Asset Value with coverage against matters
relating to federal bankruptcy, state insolvency or similar creditors' rights
laws and with the following special endorsements:
(a) Full extended coverage over all general exceptions;
(b) Location endorsement insuring the accuracy of the Survey for the
Real Property;
(c) An endorsement insuring legal access to the Real Property from
each of the streets bordering thereon, and insuring that all such streets
are dedicated public streets;
(d) An endorsement insuring against loss of title to the Real
Property or the inability of the owner thereof to maintain the
improvements now located thereon by reason of a violation of a covenant,
condition or restriction of record affecting such property;
(e) Utility facility endorsement;
(f) Zoning endorsement (ALTA 3.1) (with parking);
(g) Tax parcel endorsement;
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(h) Contiguity endorsement;
(i) Non-imputation endorsement insuring the Acquired
Partnership against any denial of coverage in the event of
loss or damage insured under the terms of the Title Policy by
virtue of a defect, lien, encumbrance, adverse claim or other
matter not known to the Title Company and not known to the
Partnership which were not shown by the public records but
were known to representatives of Contributor or the Acquired
Partnership prior to Closing; and
(j) "Fairway" endorsement.
The Partnership also may require the issuance at the Closing of such
additional endorsements as it deems appropriate, but the issuance thereof shall
not be a condition to the Partnership's obligations hereunder and the costs of
such additional endorsements shall be paid by the Partnership except as set
forth in Sections 3.1 and 6.2.
The Title Company shall reinsure portions of the risk covered by its title
insurance policies with reinsurance companies reasonably satisfactory to the
Partnership under standard reinsurance agreements providing, at a minimum, for
direct access and enforcement of rights by the insured party to and against the
reinsurer.
6.2 Title Defects. If the Title Commitment for the Real Property discloses
exceptions to title other than Permitted Exceptions or if the Partnership
determines, in its sole and absolute discretion, that such Permitted Exceptions
shall interfere with the current or the Partnership's anticipated use of such
property or materially and adversely affects the value of such property, the
Partnership shall notify Contributor in writing thereof and Contributor shall
(a) cause any such exceptions which are monetary liens of a fixed and
ascertainable amount that may be removed solely by the payment of money,
including without limitation, judgment and mechanics' liens, to be removed at
or prior to the Closing and shall deposit with the Title Company releases or
other appropriate instruments, in recordable form, sufficient to cause the
removal of such items from the title; and (b) use reasonable best efforts to
cause all other such title exceptions to be so released and removed from title
and waived from the Title Commitment, or insured over at its cost by the Title
Company by an endorsement reasonably satisfactory to the Partnership. Nothing
contained herein shall limit the rights of the Partnership in respect of a
breach by Contributor of Section 11.2. All premiums and other charges in
connection with the issuance of the owner's title policies and endorsements
complying with the requirements of Section 6.1 shall be borne by Contributor
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and Contributor shall cause the same to be paid in full at or prior to Closing.
If title is not insurable at Closing as required by Section 3.1, Section 6.1
and this Section 6.2 (including causing the removal of or issuance of insurance
over, the matters specified in the above notice), then the Partnership may, as
its sole remedy, (i) accept title subject to all Liens and other title
exceptions (without any abatement or reduction of the consideration hereunder)
or (ii) terminate this Agreement by giving written notice of such termination
to Contributor. In the event that this Agreement is terminated in its
entirety, this Agreement shall be null and void the parties shall be released
from all further rights and obligations under this Agreement (other than any
right or obligation that expressly survives the termination of this Agreement).
6.3 Survey.
(a) Contributor shall cause a survey for the Real Property, dated
not earlier than 90 days prior to the Closing Date, to be prepared by a
licensed or registered professional surveyor in the jurisdiction in which
such property is located and delivered to the Partnership not later than
seven (7) days prior to the Closing Date (such survey, the "Survey").
The Survey shall be an Urban ALTA/ACSM Land Title Survey made in
compliance with and meeting the accuracy standards under the "Minimum
Standard Detail Requirements for ALTA/ACSM Land Surveys" jointly
established by the American Land Title Association and American Congress
on Surveying and Mapping then in effect; shall show the boundaries of the
Land; shall disclose whether or not the Land comprises a single parcel of
land with no strips, gores or gaps within its boundaries; shall disclose
any encroachments of any Improvements located primarily on the Land onto
adjoining premises and public ways (and whether or not a valid easement
for the benefit of such property exists and is in place with respect to
each such encroachment) or onto or over setback or building lines located
on the Land or of improvements located primarily on adjoining premises
onto any portion of the Land (and whether or not a valid easement for the
benefit of the adjoining premises shall exist and be in place with
respect to each such encroachment); shall locate all easements created by
recorded instruments (to the extent plottable) or visible on the Land and
shall disclose any encroachment by any of the Improvements located
thereon, or any other structures located on the Land, in violation of any
such easements; shall contain a legal description of the Land; shall show
the location of any adjacent public streets, disclosing access, if any,
to the Land therefrom; shall contain a certificate of the surveyor
attesting to the accuracy of the Survey and its conformity to the
requirements of the aforesaid Minimum Standard Detail Requirements, which
certificate shall be directed to the
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the Acquired Partnership and the Title Company. The costs of the
Survey shall be borne by Contributor.
(b) If the Survey discloses that the Land does not comprise a single
parcel of land with no strips, gores or gaps within its boundaries (other
than land parcels owned by a Party to either Reciprocal Easement
Agreement and outlots, if any, which are located on a portion of the Land
but which contain free-standing improvements not otherwise physically
connected to other Improvements), discloses any encroachments of
Improvements located primarily on the Land onto adjoining premises or
public ways (except to the extent a valid easement for the benefit of
such property exists and is in place with respect to each such
encroachment, the Title Company has insured the Acquired Partnership
against loss by reason thereof, or the encroachments may be removed or
abated without material cost or expense or material damage to such
property or the conduct or business therefrom) or of improvements located
primarily on adjoining premises onto any portion of the Land (except to
the extent a valid easement for the benefit of the adjoining premises
shall exist and be in place with respect to each such encroachment and
each such encroachment does not interfere with the present or reasonably
anticipated future use or operation of such property for its intended
purposes and does not materially and adversely affect the market value of
such property), discloses any encroachment by any of the Improvements
located thereon, or any other structures located on the Land in violation
of any recorded setback lines or boundaries or easements created by
recorded instrument (to the extent plottable) or visible on such property
(unless the Title Company has insured the Acquired Partnership against
loss by reason of such encroachment or the encroachment may be removed or
abated without material cost or expense or material damage to such
property or the conduct of business therefrom), if the legal description
of the Land shown by the Survey does not conform to the legal description
thereof contained herein or if the boundaries of the Land as depicted on
the Survey do not conform in a material manner to those depicted on
Exhibit D-1, the Partnership shall have the option to terminate this
Agreement prior to Closing by giving written notice of such termination
to Contributor. If the Partnership shall terminate this Agreement
pursuant to the provisions of this Section 6.3(b), this Agreement shall
be null and void, and no party shall have any further rights or
obligations under this Agreement with respect thereto (other than any
right or obligation that expressly survives the termination of this
Agreement).
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ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties. The Partnership represents
and warrants to Contributor as follows:
(a) The Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Partnership of
this Agreement have been duly and validly authorized by all requisite
action on the part of the Partnership. This Agreement has been, and the
Partnership Closing Documents will be, duly executed and delivered by the
Partnership. This Agreement constitutes, and when so executed and
delivered the Partnership Closing Documents will constitute, the legal,
valid and binding obligations of the Partnership, enforceable against it
in accordance with their terms.
(c) Except as set forth on Schedule 7.2(c), none of the execution,
delivery or performance of this Agreement or the Partnership Closing
Documents by the Partnership or the consummation of the Transactions does
or will, with or without the giving of notice, lapse of time or both,
violate, conflict with, constitute a default or result in a loss of
rights under or require the approval or waiver of or filing with any
Person (including without limitation any governmental body, agency or
instrumentality) under (i) the organizational documents of the
Partnership or any material agreement, instrument or other document to
which the Partnership is a party or by which the Partnership is bound or
(ii) any judgment, decree, order, statute, injunction, rule, regulation
or the like of a governmental unit applicable to the Partnership,
including without limitation applicable securities laws.
(d) No broker, finder, investment banker or other person is entitled
to any brokerage, finder's or other fee or commission in connection with
the Transactions based upon arrangements made by or on behalf of the
Partnership.
7.2 Contributor's Representations and Warranties. Contributor represents
and warrants to the Partnership as follows:
(a) Contributor is a general partnership duly formed and validly
existing under the laws of the State of Michigan with full power and
authority to execute, deliver and perform this Agreement.
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(b) The execution, delivery and performance of this Agreement by
Contributor have been duly and validly authorized by all necessary action
on the part of Contributor. This Agreement has been, and the Contributor
Closing Documents delivered by Contributor will be, duly executed and
delivered by Contributor to the extent it is a party hereto and thereto.
This Agreement constitutes, and when so executed and delivered the
Contributor Closing Documents will constitute, the legal, valid and
binding obligations of Contributor, enforceable against Contributor in
accordance with their terms.
(c) None of the execution, delivery or performance of this Agreement
by Contributor or the consummation of the Transactions does or will, with
or without the giving of notice, lapse of time or both, violate, conflict
with, constitute a default, result in a loss of rights, acceleration of
payments due or creation of any Lien upon the property of Contributor or,
following the Drop-Down, the Acquired Partnership or require the approval
or waiver of or filing with any Person (including without limitation any
governmental body, agency or instrumentality) under (i) the
organizational documents of Contributor or the Acquired Partnership or
its general partners or, subject to obtaining the consents of the
Existing Lenders specified on Schedule 2.5, any agreement, instrument or
other document to which Contributor or the Acquired Partnership or its
general partners is a party or by which it is bound or (ii) any judgment,
decree, order, statute, injunction, rule, regulation or the like of a
governmental unit applicable to any of Contributor or the Acquired
Partnership or its general partners.
(d) At Closing, Contributor will have good and marketable title to
the Interests, free and clear of all Liens; and, upon execution and
delivery of the Contributor Closing Documents, the Partnership and its
designees will have good and marketable title to the Interests, free and
clear of all Liens other than Liens created by, under or through the
Partnership or such designee(s); and, at Closing, the Interests shall
constitute all of the partnership interests in the Partnership and (other
than the 1% interest of Lakeview Square, Inc.) no other Person shall have
any other equity or income interest therein or right or option to acquire
the same. Contributor has good and marketable title to the Property
(other than the Land, the improvements and the other Real Property to
extent covered by the Title Policy), free and clear of all Liens other
than the Permitted Exceptions and, at Closing, the Acquired Partnership
will have good and marketable title to the Property free and clear of all
Liens other than the Permitted Exceptions.
(e) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received any notice of violation
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from any federal, state or municipal entity that has not been cured or
otherwise resolved to the satisfaction of such governmental entity.
(f) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received any notice
from any governmental unit or other person (including without limitation
any consultant or engineer engaged by Contributor or other person) that
it or the Real Property or any occupant thereof is not in compliance with
any Environmental Law, that the Real Property or any portion thereof has
been used as a storage or disposal site for Hazardous Materials (other
than the storage of substances commonly present at or used in the
operation and maintenance of shopping centers in quantities commonly
present at shopping centers and in compliance with applicable laws) or
that it has any liability with respect thereto, and there are no
administrative, regulatory or judicial proceedings pending or, to the
knowledge of Contributor, threatened with respect thereto pursuant to, or
alleging any violation of, or liability under any Environmental Law. To
Contributor's knowledge and except as set forth on Schedule 7.2(f), no
underground or above-ground storage tanks are located on, under or about
the Real Property and there is no facility located on or at the Real
Property that is subject to the reporting requirements of Section 312 of
the Federal Emergency Planning and Community Right to Know Act of 1986
and the federal regulations promulgated thereunder (42 U.S.C. Section
11022).
(g) Schedule 7.2(g) contains a rent roll for the Mall as of
December 5, 1996 showing the identification of each rentable space in
the Mall, whether leased or not, and for each such space, the name of the
Tenant, the expiration date of the current term of the Lease, the minimum
or fixed annual rent payable, the unapplied amount of any security
deposit held, all delinquencies in Rent and all outstanding rent
abatements and tenant fit-out allowances or other tenant concessions.
All information therein is accurate as of its date. No Tenant has paid
any rent in advance except for the current month.
(h) Schedule 7.2(h) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto
(including without limitation side letters) regardless of whether the
terms thereof have commenced, setting forth with respect to each (i) the
date thereof and of each modification thereof and supplement thereto and
(ii) the names of the parties thereto (including the name of the current
assignee, if any, but only if and to the extent Contributor has actual
notice of any such assignment). The documents listed on Schedule 7.2(h)
and marked with an "R" constitute a complete and correct list of the
reciprocal easement agreements relating to the Real
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Property and modifications thereof and supplements thereto (including
without limitation side letters) (the "Reciprocal Easement Agreements")
setting forth with respect to each (i) the date thereof and of each
modification thereof and supplement thereto and (ii) the names of the
parties thereto. True and complete copies of the Reciprocal Easement
Agreements and Leases, including each written modification thereof and
supplement thereto and, to Contributor's knowledge, all material
correspondence between Contributor (or, following the Drop-Down, the
Acquired Partnership) and the Parties thereto bearing a date on or after
January 1, 1993, have heretofore been furnished to the Partnership for
inspection. Each Reciprocal Easement Agreement and Lease constitutes
the entire agreement between the parties thereto and there are no oral
promises or agreements amending or modifying the same.
(i) There are no leases or other rights of occupancy or use relating
to the Real Property other than the Leases and the Reciprocal Easement
Agreements and other rights of persons arising under instruments or
agreements which comprise Permitted Exceptions and/or the Contracts,
except subleases, concessions or license agreements which may have been
entered into by Tenants or by subtenants of Tenants. Each of the Leases
and Reciprocal Easement Agreements is valid and subsisting and in full
force and effect, and Contributor has received no notice of the
termination of any easement granted therein.
(j) (i) No Party to any Reciprocal Easement Agreement or Lease has
made any written claim or, to Contributor's knowledge, has any other
claim, whether or not in writing, (A) that Contributor (or, following the
Drop-Down, the Acquired Partnership) has defaulted in any extent in
performing any of its obligations under such Reciprocal Easement
Agreement or Lease which has not heretofore been cured, (B) that any
condition exists which with the passage of time would constitute any such
default, or (C) that such Party is entitled to any reduction in, refund
of, or counterclaim or offset against, or is otherwise disputing, any
Rents or other charges paid, payable or to become payable by such Party,
to cancel such Reciprocal Easement Agreement or Lease or to be relieved
of its operating covenants thereunder.
(ii) Except as set forth on Schedule 7.2(v), no Tenant or other Party
has pending any action, proceeding or arbitration against Contributor
(or, following the Drop-Down, the Acquired Partnership) based on any
claims of the nature described in Section 7.2(j)(i).
(iii) With the exception of delinquencies in the payment of Rents
under Leases and except as shown on Schedule 7.1(j), to Contributor's
knowledge, no material default exists
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under any Reciprocal Easement Agreement or Lease on the part of the
Party or Parties thereto. To Contributor's knowledge, neither
Contributor nor, following the Drop-Down, the Acquired Partnership is in
default (without giving effect to any applicable notice and cure rights)
in any respect with respect to any Lease or Reciprocal Easement
Agreement.
(iv) There are no unsatisfied rent abatements or other tenant
concessions or inducements, including, without limitation, lease
assumptions or buy-outs, applicable to any of the Leases or any rights to
extend or renew any of the Leases except as set forth in the rent roll
referred to in Section 7.2(g) and the Leases.
(v) No Party to a Lease or Reciprocal Easement Agreement has any
rights, options or rights of first refusal of any kind which are
currently in effect, to purchase or to otherwise acquire the Real
Property or any part thereof or interest therein other than the rights of
such Tenant (as tenants only) under its Lease or such Party to the
applicable Reciprocal Easement Agreement (with respect to easements
only).
(k) Contributor has furnished the Partnership with its audited
financial statements (consisting of balance sheets and income statements)
relating to the Mall as of, and for the calendar years ended, December
31, 1993, 1994 and 1995 (the "Annual Financial Statements") and its
unaudited financial statements (consisting of balance sheets and income
statements) as of and for the seven-month period ended July 31, 1996 (the
"Interim Financial Statements" and, together with the Annual Financial
Statements, the "Financial Statements"). The Financial Statements are
consistent with the books and records and accounts of Contributor
relating to the Mall and fairly present the financial condition and
results of operations of Contributor relating to the Mall as of the dates
thereof and for the periods referred to therein, and, except for the
absence of footnotes and subject to normal year-end accruals as to the
Interim Financial Statements, the Financial Statements have been prepared
on a tax basis and otherwise in accordance with generally accepted
accounting principles, consistently applied throughout the periods
indicated. Since December 31, 1995, each of Contributor and, following
the Drop-Down, the Acquired Partnership has conducted its business
relating to the Mall in the ordinary course consistent with past
practice.
(l) Schedule 7.2(l) lists the patents, trademarks (including
registrations thereof), and trade names which are used by each of
Contributor and, following the Drop-Down, the Acquired Partnership in
connection with the operation of the Mall (the "Intellectual Property").
The conduct of the
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business of each of Contributor and, following the Drop-Down, the
Acquired Partnership relating to the Mall and the use of the Intellectual
Property do not infringe upon the patents, trademarks, copyrights or
other intellectual property rights of any third party, and, to
Contributor's knowledge, no third parties are currently infringing upon
the patents, copyrights, trademarks or other intellectual property rights
of Contributor (or, following the Drop-Down, the Acquired Partnership)
relating to the Mall. Neither Contributor nor, following the Drop-Down,
the Acquired Partnership has granted to any Person or Persons the right
to use the Intellectual Property or any portion thereof.
(m) Neither Contributor (or, following the Drop-Down, the Acquired
Partnership) nor the Existing Manager is a party to any collective
bargaining or union agreements with respect to the Mall. Contributor has
not encountered any labor union organizing activity or experienced any
actual or threatened employee strikes, work-stoppages, slow-downs or
lockouts. Except as set forth on Schedule 7.2(m), neither Contributor
nor, following the Drop-Down, the Acquired Partnership maintains or
sponsors any employee benefit plan, including, without limitation, any
plans subject to the Employer Retirement Income Security Act of 1974, as
amended. There are no pending claims or, to Contributor's knowledge, any
threatened claim against Contributor (or, following the Drop-Down, the
Acquired Partnership) by any employee whose employment relates or related
to the Mall.
(n) Schedule 7.2(n) contains a true and complete list of all
Contracts with respect to the Mall, including all modifications thereof.
To Contributor's knowledge, there has been no default (without giving
effect to any notice and cure rights) by Contributor (or, following the
Drop-Down, the Acquired Partnership) any Party under any Contract which
has not heretofore been cured. Contributor has received no notice of any
claim by a Party of any such default, which has not heretofore been
cured. A true and complete copy of each Contract, including any
amendments or supplements thereto, has been delivered or made available
to the Partnership. Such documents constitute the entire agreement
between the parties thereto and there are no oral promises or agreements
amending or modifying the same.
(o) No condemnation proceeding is pending with respect to all or any
part of the Real Property, and, to Contributor's knowledge, no
condemnation proceeding is pending with respect to any property owned by
a Party to any Reciprocal Easement Agreement which is the subject of such
Reciprocal Easement Agreement and no Taking is threatened with respect to
all or any part of the Real Property, or any property owned by a
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Party to any Reciprocal Easement Agreement which is the subject of such
Reciprocal Easement Agreement.
(p) The Real Property is an independent unit which does not now rely
on any facilities (other than facilities covered by Permitted Exceptions
[including, without limitation, the Reciprocal Easement Agreements] or
facilities of municipalities or public utility and water companies and
other than parking areas which the Real Property makes use of under the
Reciprocal Easement Agreements) located on any property not included in
the Real Property to fulfill any municipal or governmental requirement or
for the furnishing to the Real Property of any essential building systems
or utilities, including but not limited to, water, electrical, plumbing,
mechanical and heating, ventilating and air conditioning systems,
drainage facilities, catch basins and retention ponds, sewage treatment
facilities and the like, unless recorded easements or other rights are in
effect for the benefit of the Real Property (which run with the land) for
the continued use and benefit thereof. Except as may be covered by the
Permitted Exceptions (including, without limitation, the Reciprocal
Easement Agreements), no building or other improvement not included in
any part of the Real Property relies on any part of the Real Property to
fulfill any governmental or municipal requirement or to provide
facilities to such building or improvement for any essential building
systems or utilities, including, without limitation, electrical,
plumbing, mechanical, sewage treatment or heating, ventilating and air
conditioning facilities or services.
(q) Copies of current real estate tax bills with respect to the Real
Property, other than tax bills sent to Tenants who have the obligation to
pay such taxes to the collecting authority, have been delivered to the
Partnership. No portion of the Real Property comprises part of a tax
parcel which includes property other than property comprising all or a
portion of Real Property. No application or proceeding is pending with
respect to a reduction or an increase of such taxes. There are no tax
refund proceedings relating to the Real Property which are currently
pending. Contributor has no knowledge of any special tax or assessment
to be levied against the Real Property or any change in the tax
assessment of the Real Property.
(r) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received notice that there is, and to Contributor's
knowledge there does not now exist, any violation of any restriction,
condition or agreement contained in any easement, restrictive covenant or
any similar instrument or agreement affecting the Real Property or any
portion thereof.
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(s) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received (i) any
written notice from any governmental authority having jurisdiction over
the Real Property or the Mall or from any other person (including without
limitation a consultant or engineer or any insurance company or Board of
Fire Underwriters) (A) of any violation of any law, ordinance, order or
regulation (including without limitation the ADA) by Contributor (or,
following the Drop-Down, the Acquired Partnership) relating to the Mall
which has not heretofore been complied with or (B) requiring any
alterations, improvements or changes at the Mall or any portion thereof
which have not been completed. Contributor has no obligation to any
governmental authority for the performance of any capital improvements or
other work to be performed by Contributor (or, following the Drop-Down,
the Acquired Partnership) in or about the Real Property or donations of
monies or land (other than general real property taxes) which has not
been completely performed and paid for.
(t) Except as provided in Schedule 7.2(t), there is no litigation,
including any arbitration, investigation or other proceeding by or before
any court, arbitrator or governmental or regulatory official, body or
authority which is pending or, to Contributor's knowledge, threatened
against Contributor (or, following the Drop-Down, the Acquired
Partnership) relating to the Mall or the Transactions and there are no
unsatisfied arbitration awards or judicial orders against Contributor
(or, following the Drop-Down, the Acquired Partnership). Copies of all
pleadings and other documents with respect to the litigation described on
Schedule 7.2(t) have been furnished to the Partnership and are true,
accurate and complete in all respects.
(u) Schedule 7.2(u) contains a true and accurate list of all
policies of insurance relating to the Mall, which policies are and will
be kept in full force to and including the Closing Date. All premiums
for such insurance have been paid in full. Neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received (and
Contributor has no knowledge of) any notice or request from (or
organization exercising functions similar thereto) cancelling or
threatening to cancel any of said policies or denying or disputing
coverage thereunder.
(v) Except as set forth in Schedule 7.2(v), to Contributor's
knowledge, none of the Tenants or Anchors is the subject of any
bankruptcy, reorganization, insolvency or similar proceedings or has
ceased or reduced operations at the Mall other than temporarily due to
casualty, remodeling, renovation or similar cause). Except as set forth
in Schedule 7.2(v), Contributor has received no written notice that any
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Tenant or Anchor intends to cease or reduce operations at the Mall other
than temporarily as described above.
(w) [Intentionally deleted]
(x) Schedule 7.2(x) accurately sets forth (i) a list of all
instruments, agreements and other documents relating to the Existing
Indebtedness and all modifications or amendments thereof and supplements
thereto (including without limitation side letters) (the "Existing
Indebtedness Documents"), (ii) the date of the Existing Indebtedness
Documents and of each modification or amendment thereof and supplement
thereto, (iii) the name of the holders of the Existing Indebtedness as of
the date hereof, (iv) the unpaid balances thereof as of the date hereof,
(v) the security therefor as of the date hereof and (vi) the amount of
any deposits or escrows held or established in connection therewith. The
Existing Indebtedness Documents are in full force and effect, neither
Contributor nor, following the Drop-Down, the Acquired Partnership has
received any notice of default under any Existing Indebtedness Document,
and no default on the part of Contributor (or, following the Drop-Down,
the Acquired Partnership) or, or to the knowledge of Contributor, any
other Party thereto exists thereunder (without regard to notice and cure
provisions). A true and complete copy of the Existing Indebtedness
Documents, including each written modification thereof and supplement
thereto, have heretofore been furnished to the Partnership. Such
documents constitute the entire agreement between Contributor (or
following the Drop-Down, the Acquired Partnership) and each Party
thereto, and there are no oral promises or agreements amending or
modifying the same.
(y) Contributor is aware that the Units to be issued to it hereunder
shall not be registered under the 1933 Act or under the securities laws
of any state or other jurisdiction; that the Partnership shall not have
any obligation to register the same in connection with the offering, sale
or issuance thereof to it pursuant hereto or at any time thereafter; that
the Units are subject to restrictions on transfer contained in the
Partnership Agreement and the Pledge Agreement and herein and, in any
event, cannot be sold unless they are subsequently registered under the
1933 Act or an exemption from such registration is available; and that
the Partnership, in issuing its Units in accordance with the provisions
hereof, is relying upon the representations and warranties of Contributor
contained in Sections 7.2(y), (z), (aa), (ab) and (ac).
(z) Contributor has received a copy of, has been advised to read,
and has read the Memorandum, including its exhibits, has become familiar
with the Memorandum's terms and provisions, and has been advised to
consult, and has
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consulted, independent tax counsel regarding the tax consequences of the
Transactions.
(aa) Contributor has been provided with such other information
regarding the Partnership as Contributor has requested and has had an
opportunity to meet with and ask questions of representatives of the
Partnership.
(ab) Contributor, each of the partners of Contributor and each of
the partners, if any, of each such partner is an "accredited investor"
within the meaning of Regulation D under the 1933 Act and has knowledge
and experience in financial and business matters such that it is capable
of evaluating the merits and risks of receiving and owning the Units to
be issued to it pursuant hereto, and Contributor is able to bear the
economic risk of such ownership.
(ac) The Units to be acquired by Contributor pursuant to this
Agreement are being acquired by Contributor for its own, if any, account
for investment purposes only and not with a view to, and with no present
intention of, selling or distributing the same (other than a distribution
of such Units to the partners of Contributor or the partners, if any, of
such partners).
(ad) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements made by or on
behalf of Contributor.
(ae) Except as set forth on Schedule 7.2(ae), neither Contributor
(or, following the Drop-Down, the Acquired Partnership) nor any
predecessor in title is under obligation to make contributions or
otherwise provide assistance to any promotional association or
promotional fund or has customarily in the past made or provided any such
contributions or assistance. The promotional association established
with respect to the Property (the "Promotional Association") is an
independent association established by and on behalf of the Tenants,
neither Contributor nor, following the Drop-Down, the Acquired
Partnership having no ownership, fiduciary or monetary interest of any
kind therein. Each of Contributor and, following the Drop-Down, the
Acquired Partnership has remitted to the Promotional Association any
amounts received by it from Tenants and other Parties that constitute
contributions to the Promotional Association.
(af) At Closing, the Acquired Partnership will be a partnership duly
formed and validly existing under the laws of the state of its formation
with full power and authority to execute, deliver and perform the
Contributor's Closing Documents to which it is a party, the execution,
delivery and
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performance of such Contributor Closing Documents will have
been duly and validly authorized by all necessary action on the part of
the Acquired Partnership, such Contributor Closing Documents will be duly
executed and delivered by the Acquired Partnership, such Contributor
Closing Documents will constitute the legal, valid and binding
obligations of the Acquired Partnership, enforceable against the Acquired
Partnership in accordance with their terms and there shall be no
indebtedness or other obligations of the Acquired Partnership to
Contributor or any of its Affiliates.
(ag) To best of Contributor's knowledge, Contributor has delivered
to the Partnership true and complete copies of all environmental reports
(including without limitation asbestos surveys), engineering reports, ADA
surveys and other material reports or studies relating to the Mall or the
Property that were prepared at the request of or otherwise are in the
possession of Contributor or any Affiliate of Contributor.
Any reference herein to the "best knowledge of Contributor" or other
phrases of similar import shall mean the knowledge of Sidney Forbes,
Maurice Cohen, Nate Forbes, G. Thomas York, Michael N. Hartz, David
Forbes and Rebecca Macrardini after a review of the files of Contributor
at the offices of FCP in Southfield, Michigan and inquiry of the general
manager and the operations manager (or the equivalent), if any, of the
Mall.
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access.
(a) From the date hereof until the Closing, Contributor shall give
the Partnership and its representatives and consultants, during normal
business hours, upon reasonable notice and in a manner that does not
unreasonably interfere with the operation of Contributor's business,
access to and the right to inspect the Mall and the Property (including
without limitation for purposes of conducting environmental testing).
From the date hereof until Closing and upon request by the Partnership,
Contributor promptly shall provide the Partnership with other material
information and data with respect to the Mall and the Property which is
in Contributor's possession, including without limitation copies of
Leases, the Reciprocal Easement Agreements and the Contracts and such
financial and other information as the Partnership reasonably requests
with respect thereto. The Partnership may contact Parties as the
Partnership deems appropriate in connection with its due diligence
examination.
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(b) From the date hereof until the Closing, the Partnership shall
provide to Contributor such public information and data with respect to
the Partnership and the General Partner which is in the Partnership's
possession and which Contributor may request.
(c) The Partnership shall indemnify, defend and hold harmless
Contributor, its successors and assigns and their respective partners,
shareholders, officers, directors, employees and agents from and against
any Loss proximately caused by the exercise by the Partnership of its
rights of access and inspection pursuant to the provisions of this
Section 8.1. The indemnification obligations of the Partnership under
this Section 8.1(c) shall survive the Closing or termination of this
Agreement.
8.2 [INTENTIONALLY OMITTED]
8.3 Environmental Report. Contributor, at its sole cost and expense, shall
(a) cause an environmental consultant approved in writing by the Partnership
(the "Consultant") to conduct a Phase I environmental audit and asbestos survey
of the Real Property (and any additional testing recommended by the Consultant)
and (b) deliver a report (which may not be dated prior to the date hereof) (the
"Environmental Report") thereof (including without limitation the results of
such additional testing) to the Partnership no less than seven (7) days prior
to Closing. If the contents of the Environmental Report are unsatisfactory to
the Partnership, in its sole and absolute discretion, the Partnership may
terminate this Agreement within thirty (30) days following receipt of the
Environmental Report. In the event of the termination of this Agreement, this
Agreement shall be null and void and all parties shall be released from all
further rights and obligations under this Agreement (other than any right or
obligation that expressly survives the termination of this Agreement).
Following Closing, Contributor shall authorize the Consultant to make available
to the Partnership the samples, the results of, and other information obtained
in connection with the environmental testing of the Consultant pursuant hereto.
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations. Contributor's obligation to
close is subject to satisfaction of each of the following conditions (any of
which may be waived by Contributor in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by the
Partnership under this Agreement on or before
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the Closing shall have been complied with or performed in all material
respects.
(b) Accuracy of Representations and Warranties. The representations
and warranties made by the Partnership in this Agreement (without regard
to materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to events or
developments permitted hereunder or as to which Contributor have
otherwise consented in writing).
(c) No Other Termination. No termination of this Agreement by
Contributor or the Partnership shall have occurred pursuant to any other
provision hereof.
(d) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing.
(e) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
(f) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
9.2 Conditions to Partnership's Obligations. The Partnership's obligation
to close is subject to satisfaction of each of the following conditions (any of
which may be waived by the Partnership in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by Contributor
under this Agreement on or before the Closing shall have been complied
with or performed in all material respects.
(b) Accuracy of Representation and Warranties. The representations
and warranties made by Contributor in this Agreement (without regard to
materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to the bankruptcy
or default of any Anchor or Tenant that occurred following the date
hereof and events or developments permitted
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hereunder or as to which the Partnership has otherwise consented in
writing).
(c) Estoppels Obtained. The Estoppels shall have been obtained in
accordance with Section 11.7. Notwithstanding any provision in this
Agreement to the contrary, if Contributor has not obtained Estoppels from
all Tenants but have obtained Estoppels from all Anchors, 70% of all
Major Tenants, and 60% of all other Tenants (the Tenants from whom
Estoppels have not been obtained being herein called the "Missing
Tenants"), Contributor in its own capacity shall have the right, at
Contributor's sole option (but without having any obligation to do so) to
satisfy the condition of this Section 9.2(c) with respect to the Estoppel
from each Missing Tenant by executing and delivering to the Partnership
at Closing an Estoppel for such Missing Tenant in the form prescribed by
Section 11.7 (with appropriate changes to such form to reflect that
Contributor and not such Missing Tenant are signing such Estoppel), which
Estoppel will be released upon delivery of an Estoppel from such Missing
Tenant.
(d) Consents and Releases/Directions Obtained. The Contract Party
Consents, the Releases/Directions and the consent of the Existing Lenders
pursuant to Section 2.5 shall have been obtained.
(e) Issuance of Title Policy. The Title Company shall have issued,
or be irrevocably committed to issue, with respect to the Real Property
its owners' title insurance policy pursuant to the Title Commitment as
herein contemplated subject only to the Permitted Exceptions with respect
thereto (the "Title Policy").
(f) No Other Termination. No termination of this Agreement by the
Partnership or Contributor shall have occurred pursuant to any other
provision hereof.
(g) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing or materially adversely affect the
Mall or the operation thereof.
(h) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
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(i) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General.
(a) If prior to the Closing Date the Property shall be the subject
of a Taking or Casualty, Contributor shall promptly inform the
Partnership of same.
(b) If prior to the Closing Date the Property shall be the subject
of a Substantial Taking or a Substantial Casualty, the Partnership may by
written notice delivered to Contributor on or before the Closing Date,
elect as its sole remedy on account thereof, either (i) to terminate this
Agreement, and the rights of the parties hereto, in which event this
Agreement (other than any right or obligation that expressly survives the
termination of this Agreement) shall terminate as of the date of delivery
of such notice; or (ii) to continue this Agreement in effect, in which
event Contributor (A) shall transfer and assign to the Acquired
Partnership, at the Closing, its full right, title and interest in and to
any insurance proceeds (and shall pay in cash to the Acquired Partnership
all deductibles owing in respect thereof) or condemnation awards with
respect thereto, and shall cooperate in all reasonable respects with the
Acquired Partnership, at the Acquired Partnership's sole cost and
expense, in connection with the collection thereof, to the extent not
collected at the Closing, and (B) to the extent any insurance proceeds or
condemnation awards shall have been received by Contributor prior to the
Closing, remit to the Acquired Partnership the full amount thereof so
collected, less, in each such case, (i) reasonable costs of collection
thereof (other than the cost of deductibles), and (ii) amounts, if any,
applied by Contributor or, following the Drop-Down, the Acquired
Partnership prior to Closing to preservation, repair or restoration.
(c) If prior to the Closing Date, the Property or any portion
thereof is (i) the subject of a Taking (other than a Substantial Taking)
or (ii) the subject of a Casualty (other than a Substantial Casualty),
this Agreement shall nevertheless remain in full force and effect with no
abatement of the consideration to be delivered to Contributor on account
thereof and the Transactions shall be consummated as provided herein. In
such event, any insurance proceeds or condemnation awards shall be
applied and paid in the same manner and subject to the same provisions
set forth above as are
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applicable in a case of a Substantial Casualty or a Substantial Taking
as to which the Partnership has elected nevertheless to continue this
Agreement in effect.
10.2 Adjustment of Claims and Condemnation Proceedings. If a Taking or
Casualty shall occur, Contributor shall initiate or cause to be initiated all
actions required to adjust, compromise and collect the awards payable by the
condemning authority or the proceeds payable under the applicable policy or
policies of casualty insurance. The Partnership shall have the right (but not
the obligation) to participate with Contributor or, following the Drop-Down,
the Acquired Partnership in the initiation of all such actions and, in any
event, Contributor shall consult with, and keep the Partnership advised of,
Contributor's progress in connection therewith. Contributor shall not agree
(and shall not permit the Acquired Partnership to agree) to any settlement of
the awards or insurance proceeds payable in connection with any such Taking or
Casualty (or enter into any agreement in lieu of a Taking) without the
Partnership's approval, which approval shall not be unreasonably withheld or
delayed.
ARTICLE XI
Additional Covenants
11.1 Indemnification.
(a) Indemnification by Contributor. From and after the Closing and
subject to the provisions of Section 12.1, Contributor shall indemnify,
defend and hold harmless the Partnership and the Acquired Partnership,
their successors and assigns and their partners, employees and agents
(the "Indemnified Partnership Persons") from and against any claim,
action, demand, loss, cost, expense, liability, penalty or damages,
including, without limitation, reasonable attorneys' fees and expenses (a
"Loss"), incurred or suffered by any Indemnified Partnership Person that
results from, relates to or arises out of (i) the breach or inaccuracy of
any representation or warranty made by Contributor in this Agreement or
the Contributor Closing Documents, (ii) the breach or non-fulfillment by
Contributor of any of the covenants or agreements of Contributor under
this Agreement or the Contributor Closing Documents, (iii) the
Contributor's Liabilities, or (iv) the operation of the Mall prior to the
Closing Date.
(b) Indemnification by Partnership. From and after the Closing, the
Partnership shall indemnify, defend and hold harmless Contributor and
their partners, their successors and assigns and their respective
partners, shareholders, directors, officers, employees and agents (the
"Indemnified Contributor Persons") from and against any Loss incurred or
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suffered by any Indemnified Contributor Person that results from, relates
to or arises out of (i) the breach or inaccuracy of any representation or
warranty made by the Partnership in this Agreement or the Partnership
Closing Documents, (ii) the breach or non-fulfillment by the Partnership
of any of the covenants or agreements of the Partnership under this
Agreement or the Partnership Closing Documents, or (iii) the Partnership
Liabilities.
(c) Joint Cooperation. Upon obtaining knowledge of the institution
of any action or proceeding or other event which could give rise to a
claim for indemnity hereunder, the person seeking indemnification shall
promptly give written notice thereof to the party from whom
indemnification may be sought. If such claim or demand relates to a claim
or demand asserted by a third party, the indemnifying party shall have
the right, at its expense, to employ counsel to defend such claim or
demand and the indemnified person shall have the right, but not the
obligation, to participate in the defense of any such claim or demand at
its own cost; provided, however, that counsel to be utilized in defense
of the matter by the indemnifying party shall be reasonably approved by
the indemnified person, and provided further that the indemnifying party
shall not assume the defense for matters as to which there is a conflict
of interest or separate and inconsistent defenses, in which case the
indemnified person will utilize counsel reasonably approved by the
indemnifying party and the indemnifying party will reimburse the
indemnified person for any legal and other expenses reasonably incurred
in connection with investigating, preparing or defending any such claim,
loss, damage, liability or action. The indemnified person will not
settle any claim or demand for which indemnity is sought hereunder
without the indemnifying party's written consent (which consent shall not
be unreasonably withheld or delayed), and the indemnifying party may
settle such claim or demand with the written consent of the indemnified
person, which consent may not be unreasonably withheld or delayed so long
as the indemnified person receives an unconditional release. The
indemnified person shall make available to the indemnifying party all
records and other materials reasonably required by it in contesting a
claim or demand asserted by a third party against the indemnified person
and shall cooperate in the defense thereof.
(d) Waiver of Certain Claims Known at Closing. Notwithstanding
anything to the contrary contained herein, (a) the Partnership may not
assert a claim for damages or indemnity hereunder following the Closing
for a breach of representation, warranty or covenant existing on the
Closing Date to the extent that representatives of the Partnership have
conscious, actual knowledge of such breach and the scope thereof as of
the Closing Date and (b) Contributor may not
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assert a claim for damages or indemnity hereunder following the Closing
for a breach of representation, warranty or covenant existing on the
Closing Date to the extent that representatives of Contributor have
conscious, actual knowledge of such breach and the scope thereof as of
the Closing Date.
11.2 Conduct of Business Pending Closing. From the date hereof until the
Closing, Contributor shall (a) use reasonable best efforts to maintain, for the
benefit of the Partnership and the Acquired Partnership following the Closing,
the goodwill of Tenants, prospective tenants, vendors and other parties having
business relations with Contributor; (b) pay its debts (or in good faith
contest the same) and perform its obligations as they become due (or, following
the Drop-Down, the debts and obligations of the Acquired Partnership); (c)
maintain the Mall in the same manner and condition that exists on the date
hereof, as such condition shall be altered by reason of Casualty, Taking and/or
normal wear and tear; (d) without the express written consent of the
Partnership, not (i) enter into any new or additional Lease, or extend, renew
or modify, consent to any assignment of or sublease in respect of, or waive any
material right under any Lease, other than renewals or extensions resulting
from the exercise by a Tenant of a currently existing renewal or extension
option, (ii) cancel or terminate any Lease or take any action to enforce any
Lease which would have the effect of cancelling or terminating the same, (iii)
enter into a new reciprocal easement or similar agreement or amend or modify,
consent to the assignment of or waive any material right under either
Reciprocal Easement Agreement, (iv) make any alterations to the Mall or enter
into any new contracts or extend or renew or cancel any Contract relating to
capital expenditures, (v) enter into any other new contracts or extend, renew
or cancel, consent to the assignment of or waive any material right under any
other Contract, except in the ordinary and usual course and business and in
accordance with past practices and policies, (vi) except as permitted under (i)
above, sell, transfer, exchange, further encumber or grant interests (including
easements) in the Property or the Interests or any part thereof or engage in
negotiations or discussions with, or otherwise solicit or assist, any third
party relating to the acquisition by such third party of the Property or the
equity interests in Contributor or other Person owning the Property, (vii)
extend, modify or amend any of Existing Indebtedness Documents or borrow
additional funds thereunder (viii) permit the Acquired Partnership to have
employees and (ix) otherwise take any action which could or would render
inaccurate any of the representations or warranties made by Contributor in this
Agreement; and (e) otherwise operate the Mall in the ordinary course consistent
with current practice. The consent of the Partnership shall not be
unreasonably withheld or delayed as to the matters set forth in clause (d)(i)
of this Section 11.2; and, in the event that the Partnership shall fail to
notify Contributor in writing of its disapproval of any proposed matter
described in
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clause (d)(i) within five (5) business days after it receives a written
request for approval therefor (which request shall contain a statement as to
the consequences of a failure to respond), such failure shall be deemed to
constitute Contributor's approval thereto.
11.3 Supplemental Disclosure. From the date hereof through Closing,
Contributor and the Partnership shall have the continuing obligation to
promptly supplement or amend the Schedules with respect to the representations
and warranties made by them or it to reflect any matter hereafter arising or
discovered which, if existing or known at the date hereof, would have been
required to be set forth herein or described thereon. Without limiting the
foregoing, if any Leases or Contracts, or amendments thereto, are hereafter
entered into, Contributor shall give the Partnership prompt written notice
thereof and the appropriate exhibits or schedules hereto shall be updated and
amended accordingly.
11.4 [INTENTIONALLY OMITTED]
11.5 Cooperation. The Partnership shall cooperate with Contributor in
seeking to obtain all approvals, consents and estoppels of third parties
required by this Agreement (but shall not be obligated to pay money or grant
concessions therefor), including any Contract Party Consents, and shall furnish
to Contributor or to any Party such information as to the Partnership, its
capabilities, its experience in the ownership and management of real property
and as to such other matters as Contributor or any Party shall reasonably
request in connection therewith. Contributor shall use reasonable best efforts
to obtain the Releases/Directions and a consent of the Parties to the Contracts
marked with a "1" on Schedule 7.2(n) (the "Contract Party Consents").
11.6 Transfer and Other Taxes; Etc. Contributor shall pay the real
property transfer taxes, documentary stamps and other taxes, fees or charges,
if any, imposed by the state, county or municipality in which the Mall is
located as the result of the prior transfer of the Real Property as described
in Section 2.3, the contribution of the Interests pursuant to Section 2.1 and
the conversion following Closing of the Acquired Partnership to a limited
partnership. Contributor shall pay all recording fees and charges and any
personal property sales or use taxes in connection with the transfer of the
Personalty and/or the Interests pursuant hereto.
11.7 Estoppel Certificates. Contributor shall request, and shall use
reasonable best efforts to obtain from each Party to the Reciprocal Easement
Agreements and each Tenant or other Party under a Lease estoppel certificates,
dated not more than 70 days prior to the Closing Date, in form reasonably
acceptable to the Partnership with no material changes thereto, and an estoppel
certificate,
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dated not more than 30 days prior to the Closing Date, in form reasonably
acceptable to the Partnership with no material changes thereto, and an estoppel
certificate, dated not more than 30 days prior to the Closing Date, from each
Existing Lender in form reasonably satisfactory to the Partnership; provided,
however, that if any Reciprocal Easement Agreement or Lease shall, by its
terms, prescribe the form or content of an estoppel certificate, Contributor
only shall be required to attempt to obtain estoppel certificates from the
Party thereto in the form prescribed by the relevant document and containing
only such information as is required to be delivered thereunder.
11.8 Record Retention. After the Closing, the Partnership shall provide
Contributor with reasonable access to the Books and Records and, at
Contributor's cost, copies of all or any portion thereof. The Partnership
either shall retain the Books and Records until the fifth anniversary of the
date hereof or notify Contributor of its desire to dispose of the Books and
Records and turn them over to Contributor if Contributor so request.
11.9 Publicity. In no event shall either Contributor or the Partnership
issue any press release or otherwise disclose any non-public information
regarding this Agreement or the Transactions (including without limitation the
Environmental Report or information contained therein) unless the other party
or parties have consented thereto in writing (and Contributor and the
Partnership agree not unreasonably to withhold or delay such consent) and to
the form and substance of any such statement or disclosure; provided, however,
that nothing herein shall be deemed to limit or impair in any way any party's
ability to disclose the details of or information concerning this Agreement,
the Transactions or the Property to such party's attorneys, accountants or
other advisors or to the extent such party reasonably deems necessary or
desirable pursuant to any court or governmental order or applicable securities
or other laws or regulations or financial reporting requirements, to obtain the
Contract Party Consents, the consent of the Existing Lenders, Estoppels or
financing for the acquisition of the Mall and to assess the Property in
connection with the Partnership's due diligence examination (including without
limitation contacting Tenants and other Parties). Further, either party may
disclose any information regarding this Agreement or the Transactions to its
direct or indirect constituent partners or shareholders, as the case may be
(and to counsel for such constituent partners and shareholders) and as
otherwise necessary to comply with the terms of this Agreement. Any disclosure
by a party's advisors or direct or indirect constituent partners or
shareholders or their advisors shall be deemed a breach hereof by such party.
If for any reason any Transaction is not consummated, the Partnership promptly
shall return to Contributor all originals and copies of documents, reports and
financial and other information relating to the Property and to Contributor
which Contributor has furnished to the Partnership. The obligations of
Contributor and the Partnership under this Section 11.9 shall survive the
termination hereof, however caused.
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11.10 Assistance Following Closing. From and after the Closing,
Contributor, at the Partnership's sole cost and expense, shall provide
reasonable assistance to the Partnership in connection with the preparation of
financial statements and bills and the adjustment of losses and claims and the
enforcement or settlement of any such claims. Without limiting the foregoing
and upon the request of the Partnership from time to time, Contributor shall
(a) subject to applicable law and contractual requirements, permit its lease
and property management databases relating to the Mall to be loaded onto the
computer systems of the Partnership or its designee or provide disks containing
such databases and (b) provide signed representation letters with respect to
revenues and expenses relating to the Mall if required under GAAS to enable the
Partnership's certified public accountants to render an opinion on the
Partnership's financial statements.
11.11 Further Assurances. Each of Contributor and the Partnership
agree, at any time and from time to time after the Closing, to execute,
acknowledge where appropriate and deliver such further instruments and other
documents (and to bear its own costs and expenses incidental thereto) and to
take such other actions as the other of them may reasonably request in order to
carry out the intents and purposes of this Agreement; provided, however, that
neither Contributor nor the Partnership shall be obligated, pursuant to this
Section 11.11 to incur any expense of a material nature and/or to incur any
material obligations in addition to those set forth in or contemplated by this
Agreement and/or its respective Closing Documents.
11.12 Restrictions on Certain Dispositions of Real Property.
(a) Without the written consent of Contributor, the Partnership
shall not, and shall cause the Acquired Partnership not to, voluntarily
dispose of all or substantially all of the Real Property prior to January
1, 2002 (the "Permitted Disposition Date").
(b) If at any time after the Permitted Disposition Date and prior to
the fifteenth anniversary of the Closing Date, the Partnership shall
desire to sell all or substantially all of the Real Property, the
Partnership shall deliver to Contributor a written notice stating the
price and other material economic terms upon which the Partnership
proposes to dispose of such Real Property (the "Offer Notice").
Contributor shall have the right, exercisable by delivery of written
notice to the Partnership no later than thirty (30) days after the Offer
Notice is given (the "Response Date") along with evidence reasonably
satisfactory to the Partnership of sufficient financial wherewithal of
Contributor at such time, to purchase such Real Property on the terms and
conditions set forth in the Offer Notice, in which event
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Contributor shall purchase, and the Partnership shall cause to be sold,
such Real Property within 60 days. In the event that Contributor does
not elect to purchase such Real Property within such thirty (30) day
period, Contributor shall be deemed to have waived its rights contained
in this Section 11.12(b) and the Partnership may thereafter sell the Real
Property on terms substantially no more favorable to the purchaser than
those set forth in the Offer Notice (that is, at a price that is not less
than 90% of the price contained in the Offer Notice and that does not
result in a reduction of more than 25% in the excess of the price paid by
such purchaser over the amount of indebtedness to be assumed by such
purchaser). In the event that such Real Property is not sold within one
year following the Response Date, such Real Property may not thereafter
be sold without again delivering an Offer Notice and complying with the
provisions of this Section 11.12. Notwithstanding anything to the
contrary contained herein, in the event that Contributor shall default in
the purchase of such Real Property pursuant hereto, Contributor shall
have no further right to purchase the Real Property pursuant to this
Section 11.12(b). Upon the written request of Contributor given no later
than ten days following the giving of the Offer Notice, the Partnership
will consider (and inform Contributor of its determination within ten
days but the Partnership shall have no liability for failure to respond)
whether it will distribute the Real Property to Contributor in redemption
of Units by accepting Units as consideration for the Real Property so as
to accomplish the transaction in a manner which would not result in
recognition of income and gain to Contributor for federal income tax
purposes; however, the Partnership shall not be obligated and shall have
no duty, (fiduciary or otherwise) to accept Units as the consideration or
to structure the proposed transaction in such manner, and the decision as
to whether to accept Units or so structure the transaction shall be
within the sole discretion of the Partnership. In the event that the
Mall and one or both of the malls acquired pursuant to the Other
Contribution Agreements are proposed to be sold as part of the same
transaction, Contributor may not exercise the rights pursuant to this
Section 11.12(b) or purchase the Mall pursuant to this Section 11.12(b)
unless the rights under Section 11.12(b) of such Other Contribution
Agreements also are exercised and such other malls also are acquired
pursuant thereto.
(c) The provisions of this Section 11.12 shall not apply to (i)
transactions, such as like-kind exchanges, which would not result in the
recognition of income or gain to Contributor for federal income tax
purposes by reason of the application of Section 704(c) or Section 737 of
the Code (but, in the event of any disposition permitted by the preceding
clause, the disposition of any carryover basis real property or other
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successor real property shall be subject to the provisions of this
Section 11.12), (ii) the mortgage or the granting of security interests
in any and all property of the Partnership provided the same is not a
sale or exchange for federal income tax purposes (and the conveyance of
such property in connection with foreclosure of any such mortgage or
security interest or by deed in lieu thereof), (iii) the sale, exchange
or other disposition of all or substantially all of the properties of the
Partnership and its subsidiaries, including all or part of the Real
Property, (iv) the grant of easements or rights-of-way, (v) the sale to
any occupant or prospective occupant of the portion of the Real Property
occupied or proposed to be occupied by it (including parking area and
other surrounding area), (vi) the lease of the Real Property or portions
thereof provided the same is not a sale or exchange for federal income
tax purposes and (vii) the exercise of all other rights of an owner with
respect to the Real Property provided the same is not a sale or exchange
for federal income tax purposes. In addition, the provisions of Section
11.12(a) shall not apply to the sale, conveyance or disposition of the
Real Property when, in the reasonable judgment of the Partnership, dire,
immediate circumstances exist which require the disposition of the Real
Property. Although the Partnership shall not be required to obtain an
opinion of counsel with respect to the matters set forth in clause (i) of
the first sentence of this Section 11.12(c), the requirements of such
clause will be conclusively deemed to have been satisfied if the
Partnership shall have obtained an opinion of counsel to the effect that
a particular transaction will not result in the recognition of income or
gain for federal income tax purposes by Contributor. Upon the written
request of Contributor, the Partnership promptly shall furnish to
Contributor a copy of any such opinion.
(d) For purposes of this Section 11.12 and Section 11.13, the term
"Contributors" shall include the partners of Contributor and the
partners, if any, of such partners who hold Units at the time of
reference thereto.
11.13 Repayment or Refinancing of Contributor Property Indebtedness. The
Partnership shall notify Contributor prior to the repayment or refinancing of
any Contributor Property Indebtedness and provide a good faith estimate of the
amount by which the amount of Partnership liabilities that Contributor may
include in the tax basis of its Units pursuant to Section 1.752 of the Treasury
Regulations shall be reduced as the result thereof (the "Refinancing Notice").
In the event that such repayment or refinancing shall reduce the amount of the
Partnership liabilities that Contributor may include in the tax basis of its
Units pursuant to Section 1.752 of the Treasury Regulations (after giving
effect to the allocations specified in Section 11.16(c)) and upon written
notice from Contributor delivered within ten (10) days after the
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Refinancing Notice is given, the Partnership shall use reasonable best
efforts to make provision for Contributor to guaranty indebtedness of the
Partnership (but the Partnership shall not be obligated to incur additional
indebtedness or to permit such guarantees if such guarantees shall have an
adverse effect on the Partnership or the other partners thereof) so as to
enable Contributor to increase its "economic risk of loss" (within the meaning
of Section 1.752-2 of the Treasury Regulations) with respect to liabilities of
the Partnership but minimize the real economic risk of such guarantees to
Contributor to the extent practicable (by, for example, guarantying the
"bottom" portion). No other person may incur the "economic risk of loss"
(within the meaning of section 1.752-2 of the Treasury Regulations) with
respect to any Contributor Property Indebtedness without the consent of
Contributor.
11.14 Delivery of Certain Information. The Partnership shall transmit to
Contributor (a) all periodic reports or statements furnished to the public
shareholders of the General Partner simultaneously with the transmission
thereof to such public shareholders, (b) promptly following request by
Contributor or its successors or assigns, copies of all amendments to the
Partnership Agreement and (c) promptly following written request by Contributor
or its successors or assigns (but no more frequently than once each calendar
year), a list of the names and addresses of all partners of the Partnership.
11.15 Record Owners of Units. The Units issued pursuant hereto may not be
sold, conveyed, pledged or otherwise transferred until the first anniversary of
the Closing Date (except for transfers to the partners of Contributor and/or
the partners, if any, of such partners). There may be no more than twelve
record owners of all of the Units issued pursuant hereto and the Other
Contribution Agreements at any time hereafter to the extent that such Units are
then owned directly or indirectly by the individuals who are the beneficial
owners of Contributor and/or the Other Contributors on the date hereof or
members of the families thereof.
11.16 Method of Allocation; Allocation of CenterMark Gain; Etc.
Notwithstanding anything to the contrary contained in the Partnership
Agreement:
(a) The Partnership shall allocate income, gain, loss and deduction
with respect to the Property, to the extent the adjusted basis thereof
differs from the Gross Asset Value, among the partners of the Partnership
(including Contributor) on a property by property basis, subject to the
application of "ceiling" limitation, in accordance with the traditional
method set forth in Section 1.704-3(b) of the Regulations or any
successor provision.
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(b) The Partnership shall specially allocate any and all gain on the
sale by the Partnership of stock of CenterMark Properties, Inc. only to
the other partners of the Partnership to the maximum extent permitted by
Section 704(c) of the Code and the Regulations promulgated thereunder.
(c) In accordance with paragraph (3)(a) under the heading "Analysis"
in Revenue Ruling 95-41, 1995-23 I.R.B. 5, "excess nonrecourse
liabilities" of the Partnership shall be allocated among the partners of
the Partnership by taking into account the share of Section 704(c)
built-in gain of Contributor and/or its partners with respect to the Real
Property to the extent such gain is not taken into account in making an
allocation of nonrecourse liabilities to them under Treasury Regs.
Section 1.752-3(a)(2). It is the parties' intent that an allocation
pursuant to the preceding sentence of this Agreement and the Other
Contribution Agreements will cause the total share of nonrecourse
liabilities of Contributor and/or its partners to at least equal the
excess of the debt encumbering the Real Property over the adjusted tax
basis of such property at the time of such contribution. This treatment
shall not be binding on the Partnership in the event that the Internal
Revenue Service (the "IRS") revokes, amends or modifies Rev. Rul. 95-41
or in the event that the IRS issues guidance which indicates that Rev.
Rul. 95-41 cannot be interpreted consistently with this Section 11.16(c).
ARTICLE XII
Miscellaneous
12.1 Survival. The representations, warranties and agreements of
Contributor and the Partnership set forth herein and in the Closing Documents
or an Estoppel for a Missing Tenant shall survive Closing indefinitely.
Notwithstanding the foregoing, the representations and warranties contained
herein or the Closing Documents (other than in Sections 7.2(a), (b), (c), (d)
and (af)), including the indemnities to the extent that they are derived
therefrom (but nothing contained in this sentence shall affect or limit other
indemnities and covenants contained herein or in the Closing Documents), shall
survive Closing only for a period of fifteen (15) months after the Closing Date
except as to Losses of which written notice has been given prior to the
expiration of such fifteen (15) month period in accordance with Section 12.2
and the other provisions of this Agreement.
12.2 Notices. Notices must be in writing and sent to the party to whom or
to which such notice is being sent, by certified or registered mail, return
receipt requested, commercial overnight delivery service or facsimile, or
delivered by hand with receipt acknowledged in writing, as follows:
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(a) To Partnership:
55 West Monroe Street, Suite 3100
Chicago, Illinois 60603
Attention: Matthew Bucksbaum
with a copy thereof to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg
(b) To Contributor:
Lakeview Square Associates
100 Galleria Officentre
Suite 427
Southfield, Michigan 48037
with a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attention: Maurice S. Binkow
Except as otherwise set forth herein, all notices (a) shall be deemed given
when received or, if mailed as described above with appropriate postage, after
5 business days or, if sent by facsimile, upon receipt of confirmed answerback
and (b) may be given either by a party or by such party's attorneys. The cost
of delivery shall be borne by the party delivering the notice.
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single document when at least one counterpart has
been executed and delivered by each party hereto.
12.4 Amendments. Except as otherwise provided herein, this Agreement may
not be changed, modified, supplemented or terminated, except by an instrument
executed by the party hereto which is or will be affected by the terms of such
change, modification, supplement or termination without the need for the
consent of any third party beneficiary hereof.
12.5 Waiver. Each party shall have the right, exercisable in its sole and
absolute discretion, but under no circumstances shall be obligated, to waive or
defer compliance by any other party with its obligations hereunder or to waive
satisfaction of any conditions contained herein for its benefit. No waiver by
any
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party of a breach of any covenant or a failure to satisfy any condition
shall be deemed a waiver of any other or subsequent breach or failure to
satisfy any other condition. All waivers of any term, breach or condition
hereof must be in writing.
12.6 Successors and Assigns. Subject to the provisions of Section 12.10,
the terms, covenants, agreements, conditions, representations and warranties
contained in this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
12.7 Third Party Beneficiaries. The provisions of this Agreement are made
for the benefit of the parties hereto (and the Indemnified Partnership Persons
and the Indemnified Contributor Persons with respect to Section 11.1 and the
Acquired Partnership, but none of such Persons that are not parties hereto or
successors and assigns of such parties hereto shall have any right to approve
any amendment, addition or waiver hereof or hereto), and their respective
successors in interest and assigns and are not intended for, and may not be
enforced by, any other person or entity.
12.8 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
12.9 Governing Law. This Agreement has been made pursuant to and shall be
governed by the laws of the State of Michigan (without regard to conflicts of
law rules).
12.10 Assignment. This Agreement may not be assigned or delegated by any
party without the written consent of the other party except that the
Partnership may assign this Agreement to an Affiliate of the Partnership, it
being acknowledged and agreed by the Partnership that no such assignment shall
relieve the Partnership of its obligations under this Agreement.
12.11 Headings; Exhibits. The headings of the various Articles and
Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
12.12 Gender and Number. Words of any gender shall include the other
gender and the neuter. Whenever the singular is used, the same shall include
the plural wherever appropriate, and whenever the plural is used, the same also
shall include the singular where appropriate.
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12.13 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any prior written or oral understandings and/or agreement among them with
respect thereto.
12.14 Costs of Enforcement. In the event that any action is brought by any
party or parties to this Agreement or any Closing Document against any other
party or parties to enforce rights under this Agreement or any Closing
Document, the prevailing party's or parties' costs in such action, including
reasonable attorneys' fees, shall be paid by the other party or parties. Any
amounts owing hereunder or thereunder which are not paid when due shall bear
interest at the per annum rate equal to the prime rate of Bank of America
Illinois, N.A. (or any successor), as the same may change from time to time,
plus four percent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
CONTRIBUTOR:
LAKEVIEW SQUARE ASSOCIATES, a
Michigan general partnership
By: Forbes/Cohen Properties, a
Michigan general partnership
By: /s/ Maurice Cohen
------------------------------
Maurice Cohen, general partner
By: /s/ Sidney Forbes
------------------------------
Sidney Forbes, general partner
By: Lakeview Properties, a Michigan limited partnership
By: Forbes/Cohen Properties,
a Michigan general partnership
By: /s/ Maurice Cohen
------------------------------
Maurice Cohen, general partner
By: /s/ Sidney Forbes
------------------------------
Sidney Forbes, general partner
PARTNERSHIP:
GGP LIMITED PARTNERSHIP, a
Delaware limited partnership
By: GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Joel Bayer
---------------------------------
Its: Vice President
--------------------------------
<PAGE> 64
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 Definitions .................................... 1
1.2 References .................................... 10
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution ................................... 10
2.2 Issuance of Units; Etc. ........................ 10
2.3 Drop-Down ...................................... 11
2.4 Liabilities .................................... 12
2.5 Matters Relating to Existing Indebtedness ...... 13
2.6 Termination of Existing Management Agreement ... 14
2.7 Admission to Partnership; Redemption Rights; Etc. 14
2.8 Pledge Agreement; Guaranty ..................... 15
2.9 Tenant Allowances and Leasing Commissions ...... 15
2.10 [INTENTIONALLY OMITTED] ........................ 15
2.11 Matters Relating to Promotional Association .... 15
2.12 Option Agreement................................ 15
ARTICLE III
Title
ARTICLE IV
Closing
4.1 Closing ........................................ 17
4.2 Contributor Closing Documents .................. 17
4.3 Partnership Closing Documents .................. 21
ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated ........................... 23
5.2 Installment Payment of Assessments ............. 24
5.3 Adjustable Tenant Charges ...................... 25
5.4 [Intentionally Omitted]......................... 26
5.5 Fixed and Other Tenant Charge Arrearages ....... 26
5.6 Sales Based Tenant Charges ..................... 26
5.7 Application of Rent Receipts ................... 27
5.8 Security and Utility Deposits .................. 27
5.9 Collection of Rents ............................ 28
5.10 Settlement of Adjustments ...................... 29
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment ............................... 30
6.2 Title Defects .................................. 31
6.3 Survey ......................................... 32
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ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties ......... 34
7.2 Contributor's Representations and Warranties ....... 34
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access ........................... 44
8.2 [INTENTIONALLY OMITTED] ............................ 45
8.3 Environmental Report. .............................. 45
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations ............ 46
9.2 Conditions to Partnership's Obligations ............ 46
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General ................ 48
10.2 Adjustment of Claims and Condemnation Proceedings .. 49
ARTICLE XI
Additional Covenants ............................ 49
11.1 Indemnification .................................... 49
11.2 Conduct of Business Pending Closing ................ 51
11.3 Supplemental Disclosure ............................ 52
11.4 [INTENTIONALLY OMITTED] ............................ 52
11.5 Cooperation ........................................ 52
11.6 Transfer and Other Taxes; Etc. ..................... 52
11.7 Estoppel Certificates .............................. 53
11.8 Record Retention ................................... 53
11.9 Publicity .......................................... 53
11.10 Assistance Following Closing ....................... 54
11.11 Further Assurances ................................. 54
11.12 Restrictions on Certain Dispositions of Real Property 54
11.13 Repayment or Refinancing of Contributor Property
Indebtedness ....................................... 57
11.14 Delivery of Certain Information .................... 57
11.15 Record Owners of Units ............................. 57
11.16 Method of Allocation; Allocation of CenterMark Gain;
Etc. ............................................... 58
ARTICLE XII
Miscellaneous
12.1 Survival............................................ 58
12.2 Notices ............................................ 59
12.3 Counterparts ....................................... 60
12.4 Amendments ......................................... 60
12.5 Waiver ............................................ 60
12.6 Successors and Assigns.............................. 60
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12.7 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . 60
12.8 Partial Invalidity. . . . . . . . . . . . . . . . . . . . . . . 60
12.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 60
12.10 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
12.11 Headings; Exhibits. . . . . . . . . . . . . . . . . . . . . . . 60
12.12 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . 60
12.13 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 61
12.14 Costs of Enforcement. . . . . . . . . . . . . . . . . . . . . . 61
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<PAGE> 1
EXHIBIT 2.3
CONTRIBUTION AGREEMENT
AMONG
JACKSON PROPERTIES
a Michigan general partnership
and
GGP LIMITED PARTNERSHIP
a Delaware limited partnership
December 6, 1996
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
1.1 Definitions ........................................ 1
1.2 References ......................................... 10
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution ..................................... 10
2.2 Issuance of Units; Etc............................. 10
2.3 Drop-Down ......................................... 11
2.4 Liabilities ....................................... 12
2.5 Matters Relating to Existing Indebtedness ......... 13
2.6 Termination of Existing Management Agreement ...... 14
2.7 Admission to Partnership; Redemption Rights; Etc... 14
2.8 Pledge Agreement; Guaranty......................... 14
2.9 Tenant Allowances and Leasing Commissions.......... 15
2.10 [INTENTIONALLY OMITTED]............................ 15
2.11 Matters Relating to Promotional Association........ 15
ARTICLE III
Title
ARTICLE IV
Closing
4.1 Closing ........................................... 16
4.2 Contributor Closing Documents ..................... 17
4.3 Partnership Closing Documents ..................... 21
ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated .............................. 23
5.2 Installment Payment of Assessments ................ 24
5.3 Adjustable Tenant Charges ......................... 24
5.4 [Intentionally Omitted] ........................... 25
5.5 Fixed and Other Tenant Charge Arrearages........... 25
5.6 Sales Based Tenant Charges ........................ 26
5.7 Application of Rent Receipts ...................... 26
5.8 Security and Utility Deposits ..................... 27
5.9 Collection of Rents ............................... 27
5.10 Settlement of Adjustments ......................... 29
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment .................................. 30
6.2 Title Defects ..................................... 31
6.3 Survey ............................................ 32
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ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties .......... 34
7.2 Contributor's Representations and Warranties ........ 34
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access ............................ 44
8.2 [INTENTIONALLY OMITTED] ............................. 45
8.3 Environmental Report ................................ 45
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations ............. 45
9.2 Conditions to Partnership's Obligations ............. 46
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General ................. 48
10.2 Adjustment of Claims and Condemnation Proceedings ... 49
ARTICLE XI
Additional Covenants ......................... 49
11.1 Indemnification ..................................... 49
11.2 Conduct of Business Pending Closing ................. 51
11.3 Supplemental Disclosure ............................. 52
11.4 [INTENTIONALLY OMITTED] ............................. 52
11.5 Cooperation ......................................... 52
11.6 Transfer and Other Taxes; Etc. ...................... 52
11.7 Estoppel Certificates ............................... 52
11.8 Record Retention .................................... 53
11.9 Publicity ........................................... 53
11.10 Assistance Following Closing ........................ 54
11.11 Further Assurances .................................. 54
11.12 Restrictions on Certain Dispositions of Real Property 54
11.13 Repayment or Refinancing of Contributor Property
Indebtedness ........................................ 56
11.14 Delivery of Certain Information ..................... 57
11.15 Record Owners of Units .............................. 57
11.16 Method of Allocation; Allocation of CenterMark Gain;
Etc. ................................................ 57
ARTICLE XII
Miscellaneous
12.1 Survival ............................................ 58
12.2 Notices ............................................. 58
12.3 Counterparts ........................................ 59
12.4 Amendments .......................................... 59
12.5 Waiver .............................................. 59
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<PAGE> 4
12.6 Successors and Assigns .......................... 60
12.7 Third Party Beneficiaries ....................... 60
12.8 Partial Invalidity .............................. 60
12.9 Governing Law ................................... 60
12.10 Assignment ...................................... 60
12.11 Headings; Exhibits .............................. 60
12.12 Gender and Number ............................... 60
12.13 Entire Agreement ................................ 61
12.14 Costs of Enforcement ............................ 61
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<PAGE> 5
CONTRIBUTION AGREEMENT
Contribution Agreement, dated December 6, 1996, among JACKSON
PROPERTIES, a Michigan general partnership ("Contributor"), and GGP LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Partnership").
R E C I T A L S
WHEREAS, Contributor is the developer of a regional shopping center
commonly known as Westwood Mall, Jackson, Michigan (the "Mall"); and
WHEREAS, Contributor desires to contribute to the capital of the
Partnership or cause to be contributed to the capital of the Partnership all of
the partnership interests in a partnership owning the Mall (other than the
property owned, if any, by the department stores or others at the Mall), and
the Partnership desires to accept such contributions to capital, upon the terms
and subject to the conditions contained herein.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
"Acquired Partnership" shall have the meaning set forth in Section 2.3(a).
"ADA" shall mean the Americans With Disabilities Act, as amended.
"Adjustment Date" shall have the meaning set forth in Section 4.1.
"Adjustable Tenant Charges" shall mean common or mall area maintenance
(exterior and interior) charges, real estate taxes and assessments, single
business taxes, property insurance charges and HVAC charges (except to the
extent that such HVAC charges are separately metered, in which event they shall
be treated as Fixed and Other Tenant Charges) to the extent denominated as such
in the Leases and the Reciprocal Easement Agreements.
"Affiliates" shall mean, with respect to the Partnership, any Person
controlling, controlled by or under common control with the Partnership and, in
the case of Contributor, Maurice Cohen, Sidney Forbes, Samuel Frankel, Stuart
Frankel, Avern Cohn or Rita Haddow or any members of the family of any of them
or any Person controlled by any of them.
<PAGE> 6
"Agreement" shall mean this Contribution Agreement, as amended or modified
from time to time hereafter in accordance with the terms hereof.
"Anchor" shall mean each Person identified in Schedule 1.1.
"Annual Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Applicable Closing Fiscal Period" shall mean, with respect to any item
which is prorated under Article V, the calendar year (or other fiscal period
for which such item is determined or assessed) during which the Closing Date
occurs.
"Assumed Unit Price" shall mean $25.00.
"Audited Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Books and Records" shall mean all records, books of account and papers of
Contributor and Existing Manager relating to the Interests, the Acquired
Partnership and the construction, ownership and operation of the Property,
including without limitation architect's drawings, blue prints and as-built
plans, maintenance logs, instruction books, employee manuals, records and
correspondence relating to insurance claims, copies of guarantees and
warranties, originals and/or copies of the Leases, the Reciprocal Easement
Agreements and the Contracts and correspondence related thereto.
"Casualty" shall mean any damage to or destruction of the Mall or any
portion thereof caused by fire or other casualty, whether or not insured.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Closing Documents" shall mean the Contributor Closing Documents and
Partnership Closing Documents, collectively.
"Closing Price" shall have the meaning set forth in the Partnership
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the common stock, $.10 par value per share, of
the General Partner.
"Consultant" shall have the meaning set forth in Section 8.3.
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"Contract Party Consents" shall have the meaning set forth in Section
11.5.
"Contracts" shall mean the service, maintenance and other contracts and
concessions that are currently in effect with respect to the Mall respecting
the use, maintenance, development, sale or operation thereof or any portion
thereof (but excluding this Agreement, the Leases, the Permitted Exceptions and
the Reciprocal Easement Agreements) which are listed on Schedule 7.2(n),
together with any additions thereto, modifications thereof or substitutions
therefor hereafter entered into in accordance with the provisions of this
Agreement.
"Contributor Property Liabilities" shall mean the Existing Indebtedness,
any mortgage indebtedness secured by the Real Property (alone or in conjunction
with any other properties) incurred to refinance the Existing Indebtedness and
any indebtedness guaranteed by Contributor pursuant to Section 11.13.
"Contributor's Liabilities" shall have the meaning set forth in Section
2.4.
"Drop-Down" shall mean the transactions contemplated by Section 2.3.
"Drop-Down Documents" shall have the meaning set forth in Section 2.3.
"Environmental Laws" shall mean the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.); the Toxic Substance
Control Act (15 U.S.C. Section 2601 et seq.; Clean Air Act (42 U.S.C. Section
9402 et seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
seq.); and all other applicable federal, state and local environmental laws,
including obligations under the common law, ordinances, rules and regulations,
as any of the foregoing may have been amended, supplemented or supplanted prior
to the date hereof, relating to regulation or control of hazardous, toxic or
dangerous substances or wastes, or their handling, storage or disposal or to
environmental health and safety.
"Environmental Report" shall have the meaning set forth in Section 8.3.
"Estoppels" shall mean the estoppel certificates to be obtained pursuant
to Section 11.7.
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"Excluded Anchor Parcels" shall mean those certain parcels of land legally
described in Exhibit A and the improvements thereon owned by certain of the
Anchors or other Persons other than Contributor.
"Excluded Personalty" shall mean the personal items belonging to employees
of Contributor and the cash, cash accounts (including any cash or cash accounts
constituting the Security Deposits) and, except as provided in Article V,
receivables of Contributor or, following the Drop-Down, the Acquired
Partnership.
"Existing Indebtedness" shall mean the loans listed on Schedule 7.2(x).
"Existing Indebtedness Documents" shall have the meaning set forth in
Schedule 7.2(x).
"Existing Indebtedness Consent Documents" shall have the meaning set forth
in Section 2.5.
"Existing Lenders" shall mean the holders of the Existing Indebtedness as
specified on Schedule 7.2(x).
"Existing Manager" shall mean FCP.
"Existing Management Agreement" shall mean any agreement or agreements
between FCP or any of its affiliates and Contributor relating to provision of
property management services by FCP or such affiliate for the Mall.
"FCP" shall mean Forbes/Cohen Properties, a Michigan general partnership.
"Financial Statements" shall have the meaning set forth in Section 7.2(k).
"Fixed and Other Tenant Charges" shall mean Rent other than Adjustable
Tenant Charges, Sales Based Tenant Charges and Advertising and Promotional
Contributions.
"Fixed and Other Tenant Charge Arrearages" shall mean Fixed and Other
Tenant Charges due and payable prior to but unpaid as of the Adjustment Date.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated by
the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"General Partner" shall mean General Growth Properties, Inc., a Delaware
corporation and the general partner of the Partnership.
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"Gross Asset Value" shall mean, with respect to the Property as of
Closing, the sum of (a) the principal amount of Existing Indebtedness as of the
Adjustment Date and (b) the product of the number of Units issued to
Contributor pursuant to the Supplemental Agreement and the Assumed Unit Price.
"Guaranty" shall have the meaning set forth in Section 2.8(b).
"Hazardous Materials" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including
without limitation asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof) and any material the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, disposal, abatement, cleanup, removal, remediation or
handling of which, is prohibited, controlled or regulated by any Environmental
Law.
"Improvements" shall mean all buildings, structures (surface and
subsurface) and other improvements located on the Land, including any fixtures
as shall constitute real property under applicable provisions of law.
"Indemnified Partnership Persons" shall have the meaning set forth in
Section 11.1(a).
"Intellectual Property" shall have the meaning set forth in Section
7.2(l).
"Interests" shall mean all of the general and/or limited partnership
interests in the Acquired Partnership, together with all rights and powers in
respect of such interests as a general and/or limited partner in the Acquired
Partnership and all property, real or personal, relating to such interests
and/or the Acquired Partnership.
"Interim Financial Statements" shall have the meaning set forth in Section
7.2(k).
"Lakeview Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between the Partnership and
LSA.
"Land" shall mean those certain parcels of real estate described on
Exhibit B.
"Lansing Contribution Agreement" shall mean that certain Contribution
Agreement dated as of even date herewith by and between Partnership and FCP.
"Leases" shall mean those leases, tenancies, concessions, licenses and
occupancy agreements currently in effect affecting or
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relating to the Mall which are listed on Schedule 7.2(h), together with
any additions thereto, modifications thereof or substitutions therefor
hereafter entered into in accordance with the provisions of this Agreement.
"Liens" shall mean mortgages, liens, pledges, security interests, charges,
claims, restrictions or other encumbrances of any nature whatsoever.
"Loss" shall have the meaning set forth in Section 11.1(a).
"LSA" shall mean Lakeview Square Associates, a Michigan general
partnership.
"Mall" shall have the meaning set forth in the recitals.
"Major Tenant" shall mean a Tenant who occupies space at a Mall consisting
of more than 5,000 square feet.
"Memorandum" shall mean that certain Private Placement Memorandum dated
November 18, 1996 relating to the issuance of Units pursuant hereto, among
other things.
"Michigan National Release" shall have the meaning set forth in Section
2.5.
"Missing Tenants" shall have the meaning set forth in Section 9.2(c).
"Net Operating Cash Flow" shall have the meaning set forth in the
Partnership Agreement.
"Offer Notice" shall have the meaning set forth in Section 11.12(b).
"Option Agreement" shall have the meaning set forth in Section 2.12.
"Other Deposits" shall have the meaning set forth in Section 5.8.
"Other Contributors" shall mean LSA and FCP, collectively.
"Other Contribution Agreements" shall mean the Lakeview Contribution
Agreement and the Lansing Contribution Agreement, collectively.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of July 27, 1993, as amended by
that certain First Amendment thereto dated May 23, 1995, that certain Second
Amendment thereto dated June 13, 1995, that certain Third Amendment thereto
dated as of May
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21, 1996, that certain Fourth Amendment thereto dated as of August 30,
1996, that certain Fifth Amendment thereto dated as of October 4, 1996, that
certain Sixth Amendment thereto dated as of November 27, 1996 and as the same
may be further amended hereafter.
"Partnership Liabilities" shall have the meaning set forth in Section 2.4.
"Party" shall mean a party to the Reciprocal Easement Agreements or a
Contract (or the successor or assignee thereof) or a Tenant under a Lease, in
each case other than Contributor (or, following the Drop-Down, the Acquired
Partnership) or any predecessor thereof.
"Permitted Exceptions" shall have the meaning set forth in Article III.
"Person" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity
of any type.
"Personalty" shall mean all Seller's right, title and interest in and to
the personal property, both tangible and intangible, located in or upon or used
in connection with the operation and maintenance of the Mall, including without
limitation fixtures; machinery; equipment; building supplies and materials;
consumables; inventories; names, logos, trademarks, trade names and copyrights;
all assignable licenses, permits and certificates of occupancy; all assignable
guarantees or warranties (including performance bonds obtained by, or for the
benefit of, Contributor, pertaining to the ownership, construction or
development of the Real Property or any part thereof); the Intellectual
Property; the Books and Records; advertising materials and telephone exchange
numbers. Without limiting the foregoing, "Personalty" shall include the
computer and peripheral equipment located at the Mall and the property listed
on Schedule 1.1(a) but shall not include the rights of Contributor or,
following the Drop-Down, the Acquired Partnership in or under the Leases,
Contracts or Excluded Personalty.
"Pledge Agreement" shall have the meaning set forth in Section 2.8(a).
"Promotional Association" shall have the meaning set forth in Section
7.2(af).
"Promotional Association Waiver" shall have the meaning set forth in
Section 2.10.
"Property" shall mean (a) the Real Property, (b) the Personalty, (c) the
rights of Contributor under all Leases and (d) the rights and interests of
Contributor under, in and to the Contracts to the extent assignable.
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"Real Property" shall mean the parcels of Land and the Improvements,
together with all of the estate, right, title and interest of the Contributor
therein, and in and to (a) any land lying in the beds of any streets, roads or
avenues, open or proposed, public or private, in front of or adjoining the Land
to the center lines thereof, and in and to any awards to be made in lieu
thereof and in and to any unpaid awards for damage to the foregoing by reason
of the change of grade of any such streets, roads or avenues; and (b) all
easements, rights, licenses, privileges, rights-of-way, strips and gores,
hereditaments and such other real property rights and interests appurtenant to
the foregoing (including, without limitation, all rights of Contributor under
the Reciprocal Easement Agreements).
"Reciprocal Easement Agreements" shall have the meaning set forth in
Section 7.2(h).
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Recourse Liabilities" shall mean, with respect to any Existing
Indebtedness, the liabilities under the Existing Indebtedness Documents for
such Existing Indebtedness as to which the holder of such Existing Indebtedness
would have recourse to Messrs. Maurice Cohen and Sidney Forbes in their
capacities as general partners of Contributor or otherwise (without giving
effect to the Transactions).
"Rents" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and other taxes, and other amounts payable by the
Parties under the Leases and the Reciprocal Easement Agreements.
"Response Date" shall have the meaning set forth in Section 11.12(b).
"Sales Based Tenant Charges" shall mean Rent consisting of overage or
percentage rent.
"Security Deposits" shall have the meaning set forth in Section 5.8.
"Share Price" shall mean the average of the Closing Price for the twenty
(20) Trading Days preceding the third Trading Day prior to the Closing Date.
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"Substantial Casualty" or "Substantial Taking" shall mean, a Casualty or
Taking, as the case may be, where:
(a) the condemnation award, or the proceeds payable under the
applicable policy or policies of casualty insurance maintained by
Contributor, are insufficient by more than $100,000 to fully repair the
damage caused by such Casualty or Taking, unless Contributor shall (at
its sole option and without any obligation to do so) grant to the
Partnership a credit equal to such deficiency; or
(b) an Anchor shall, by reason of such Casualty or Taking, either
terminate its Lease or its obligations under either Reciprocal Easement
Agreement, or permanently cease operating at the Mall (other than
temporarily due to such damage and destruction, remodeling, renovation or
any similar cause), or cease operating at the Mall under the name under
which it was operating immediately prior to such Taking or Casualty (as
permitted by the provisions of such Lease or Reciprocal Easement
Agreement) or have the right to do any of the foregoing (unless such
right shall have expired or been waived); or
(c) the estimated time for repair or restoration shall exceed six
(6) months; or
(d) in the case of a Taking, a Taking with respect to such portion
of the Real Property as, when so taken would, in the reasonable opinion
of the Partnership, leave remaining a balance of the Real Property,
which, due either to the area taken or the location of the part taken
would not, under applicable zoning laws, building regulations and
economic conditions then prevailing or otherwise, readily accommodate a
new or restructured building or buildings of a type and size generally
similar to the building or buildings existing on the date hereof, or
would result in inadequate parking or lack of reasonable access to public
roads.
"Supplemental Agreement" shall mean that certain Supplemental Agreement
dated the date hereof, among the Partnership, Contributor, LSA and FCP.
"Survey" shall mean have the meaning set forth in Section 6.3.
"Taking" shall mean a taking of all or any portion of the Real Property in
condemnation or by exercise of the power of eminent domain or by an agreement
in lieu thereof.
"Tenants" shall mean tenants, concessionaires, licensees and/or occupants
under the Leases.
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"Tenant Services" shall mean all services supplied by or on behalf of
Contributor (or, following the Drop-Down, the Acquired Partnership) to Tenants
for which Tenants are separately charged, other than services in the nature of
common area maintenance.
"Termination of Existing Management Agreement Documents" shall have the
meaning set forth in Section 2.6.
"Title Commitment" shall have the meaning set forth in Section 6.1.
"Title Company" shall mean Near North National Title Corporation as
issuing agent for First American Title Insurance Company or as escrow agent, as
the case may be.
"Title Policy" shall have the meaning set forth in Section 9.2(e).
"Trading Day" shall mean a day on which the New York Stock Exchange is
open for business.
"Transactions" shall mean the transactions contemplated by this Agreement.
"Units" shall mean units of limited partnership interest in the
Partnership.
1.2 References. All references in this Agreement to particular sections or
articles shall, unless expressly otherwise provided, or unless the context
otherwise requires, be deemed to refer to the specific sections or articles in
this Agreement, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the exhibits annexed hereto and, by such reference,
be made a part hereof. The words "herein", "hereof", "hereunder",
"hereinafter", "hereinabove" and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection or article
hereof.
ARTICLE II
Contribution of Interests; Issuance of Units; Etc.
2.1 Contribution. Upon the terms and subject to the conditions contained
herein, at the Closing, Contributor shall contribute, or cause to be
contributed, to the capital of the Partnership, and the Partnership shall
accept, the Interests, free and clear of all Liens.
2.2 Issuance of Units; Etc.
(a) In exchange for the contribution of the Interests, at the
Closing and subject to adjustment as hereinafter
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provided, the Partnership shall issue to Contributor the number of
Units specified pursuant to the Supplemental Agreement.
(b) In the event that the Share Price is less than $22.50, the
number of Units issuable at Closing by the Partnership to Contributor
shall be increased by an amount equal to the quotient of (i) the product
of (A) the excess of $22.50 over the Share Price and (B) the number of
Units issued pursuant to Section 2.2(a) (without giving effect to this
subsection) divided by (ii) the Share Price.
(c) In the event that the Share Price is more than $27.50, the
number of Units issuable at Closing by the Partnership to Contributors
shall be decreased by an amount equal to the quotient of (i) the product
of (A) the excess of the Share Price over $27.50 and (B) the number of
Units issued pursuant to Section 2.2(a) (without giving effect to this
subsection) divided by (ii) the Share Price.
(d) Contributor shall not, and shall cause its Affiliates not to,
buy or sell (including without limitation short sell) any shares of
Common Stock during the twenty-five (25) Trading Days prior to the
Closing whether in the open market or in a negotiated transaction.
(e) Notwithstanding anything contained herein to the contrary,
fractional Units shall not be issued hereunder; instead, the number of
Units to be issued hereunder shall be the number of Units issuable
pursuant to the other provisions of this Agreement rounded up to the
nearest whole Unit.
2.3 Drop-Down.
(a) Prior to the Closing, Contributor has, pursuant to instruments
and agreements in form and substance acceptable to the Partnership, (i)
conveyed to a newly-formed partnership (the "Acquired Partnership"),
which is a general partnership, all of the Property subject to the Liens
created pursuant to the Existing Indebtedness Documents, and (ii) caused
the Acquired Partnership to assume all of the Partnership Liabilities
(other than liabilities under Existing Indebtedness Documents) as of the
date of the Drop-Down (assuming the date of the Drop-Down were the
Closing Date) and no other liabilities.
(b) The documents referred to in Section 2.3(a) (the "Drop-Down
Documents") include, but are not limited to, covenant deeds in proper
statutory form for recording so as to convey the entire fee simple estate
of Contributor in the Real Property; assignment or assignments of all of
Contributor's right, title and interest under the Leases and the
Reciprocal
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Easement Agreements, all of which, to the extent the same
relate to Leases or memoranda thereof which have been recorded in
appropriate land records or the Reciprocal Easement Agreements, are in
form suitable for recording; assignment or assignments of all of
Contributor's right, title and interest in and to the Contracts to the
extent assignable; and bills of sale so as to transfer Contributor's
right, title and interest in and to the Personalty.
(c) Prior to the Closing, Contributor may cause the Acquired
Partnership to distribute to the partners of the Acquired Partnership any
and all items of Excluded Personalty.
2.4 Liabilities.
(a) From and after the Closing, the Partnership shall cause the
Acquired Partnership to pay and otherwise satisfy from the assets of the
Acquired Partnership only (unless applicable law imposes liability upon
the general partners thereof) (i) the obligations of Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Existing
Indebtedness Documents, as modified pursuant hereto (including the
obligation to repay the principal owing thereunder and accrued and unpaid
interest thereon but excluding liabilities and obligations that arise out
of any existing or past facts or circumstances that exist or existed on
or prior to the Closing Date that constitute a breach of a
representation, warranty or covenant contained in such Existing
Indebtedness Documents or otherwise require the indemnification of or
other payment to the Existing Lenders other than regularly scheduled
payments of principal and interest) (the liabilities referred to in this
clause (i) to the extent that they are Recourse Liabilities are
hereinafter referred to as the "Partnership Recourse Liabilities"), (ii)
the liabilities and obligations of Contributor (or, following the
Drop-Down, the Acquired Partnership) arising from and after the Closing
Date under or in respect of the Leases, the Reciprocal Easement
Agreements and the assignable Contracts (with such liabilities being
limited to the same extent, if any, as the liability of Contributor and
its partners is limited thereunder) but only to the extent that such
liabilities and obligations do not arise out of any transaction, event,
circumstance, action, failure to act or occurrence of any sort or type
which occurred, existed or was taken prior to the Closing Date (other
than the execution and delivery of any Lease, Reciprocal Easement
Agreement or Contract by itself), and (iii) other liabilities and
obligations herein described to the extent the Partnership has received
proration credit therefor. All of the foregoing obligations are herein
referred to as the "Partnership Liabilities".
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(b) Except as expressly provided in Section 2.4(a) and
notwithstanding the assumption of liabilities pursuant to Section 2.3 or
otherwise, from and after the Closing, neither the Partnership nor the
Acquired Partnership shall be responsible for any liabilities or
obligations (whether recourse or nonrecourse) of Contributor (or,
following the Drop-Down, the Acquired Partnership), whether or not the
same relate to the Property or were incurred in connection with the
ownership, use, management or operation thereof by Contributor (or,
following the Drop-Down, the Acquired Partnership) or by its agents (such
liabilities exclusive of the Partnership Liabilities, collectively, the
"Contributor's Liabilities") and Contributor shall pay Contributor's
Liabilities as and when due. Without limiting the foregoing,
Contributor's Liabilities shall include (a) all federal, state and local
taxes of whatever kind and nature (other than real estate taxes and
assessments on real property for which the Partnership has received
credit under Article V); (b) liabilities relating to the asserted Lease
and other defaults described on Schedule 7.2(j) (other than the cost of
repairs to the Mall to the extent that they may be charged to Tenants as
Adjustable Tenant Charges, which shall constitute Partnership
Liabilities); and (c) liabilities relating to any employees, employee
benefit plans or collective bargaining agreements of Contributor or the
Existing Manager, including without limitation severance pay and accrued
vacation pay obligations and other liabilities of Contributor or others
relating to the termination of such employees as the result of the
consummation of the Transactions (but not the termination by the
Partnership or any Affiliate thereof of any such employees who are
employed by the Partnership or such Affiliate following Closing).
2.5 Matters Relating to Existing Indebtedness.
(a) Contributor shall use reasonable best efforts (including without
limitation the payment of the fees or costs imposed or required to be paid by
The Prudential Insurance Company of America, but excluding any transfer fees
and the one-quarter point administrative fee) to obtain, at or prior to Closing
and at no cost to the Partnership, the consent of such Existing Lender to the
consummation of the Transactions (including the Drop-Down), which consent may
be conditioned on the prepayment in full by the Acquired Partnership or the
Partnership of the Existing Indebtedness (including the yield maintenance fees)
held by such Existing Lender on or before January 6, 1996. The documents
referred to in this Section are hereinafter referred to as the "Existing
Indebtedness Consent Documents." At Closing, Contributor shall pay to the
Partnership in cash an amount equal to 1.5% of the outstanding principal amount
of such Existing Indebtedness on the Closing Date; but, in the event that such
Existing Indebtedness is not paid in full on or before January 6, 1996, (a) the
Partnership
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shall (a) return to Contributor in cash on such date an amount equal to .5% of
the outstanding principal amount of such Existing Indebtedness on the Closing
Date, (b) thereafter pay or otherwise perform or cause to be paid or otherwise
performed the Partnership Recourse Liabilities as and when due, (c) use
reasonable best efforts to obtain the release of Contributors in respect of the
remaining Recourse Liabilities (but the Partnership shall have no obligation to
pay money or incur material liabilities therefor or refinance such Existing
Indebtedness) and (d) pay to Contributor in cash the amount of the escrow
deposit held by such Existing Lender on the Closing Date. In the event that
such Existing Indebtedness is prepaid on or before January 6, 1996, the
Partnership shall pay to Contributor such deposit upon receipt thereof from
such Existing Lender. There shall be no credit or other adjustment at Closing
for such deposit.
(b) The Partnership shall cause the Acquired Partnership to prepay in full
the Existing Indebtedness held by Michigan National Bank immediately following
the Closing, and Contributor shall obtain and cause to be delivered to the
Partnership, upon such prepayment, a release of the Liens created pursuant to
the Existing Indebtedness Documents relating thereto (the "Michigan National
Release").
2.6 Termination of Existing Management Agreement. On or prior to the
Closing Date, Contributor shall cause the termination of the Existing
Management Agreement and obtain from the Existing Manager a release of Liens
against the Property with respect to the services performed by the Existing
Manager under the Existing Management Agreement. The documents effecting such
termination and release are hereinafter referred to as the "Termination of
Existing Management Agreement Documents".
2.7 Admission to Partnership; Redemption Rights; Etc.
(a) At the Closing, Contributor and the General Partner shall execute and
deliver an amendment to the Partnership Agreement substantially in the form of
Exhibit C (the "Amendment to Partnership Agreement"), pursuant to which the
Partnership issues to Contributor the number of Units to be issued to
Contributor in accordance with this Agreement and Contributor is admitted as
limited partner of the Partnership and agrees to be bound by the terms of the
Partnership Agreement, as amended by the Amendment.
(b) At the Closing, the General Partner and Contributor shall execute and
deliver a Redemption Rights Agreement substantially in the form of Exhibit D
(the "Redemption Rights Agreement"), pursuant to which Contributor and the
Other Contributors are granted the right to require the Partnership to redeem
its Units from time to time as provided therein.
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<PAGE> 19
(c) Contributor acknowledges that the Partnership intends to distribute
prior to Closing the Net Operating Cash Flow for the portion of the calendar
quarter during which the Closing occurs through the day prior to the Adjustment
Date and that, if such distribution is not made for any reason and the Closing
occurs, Contributor will be entitled to receive as a distribution only a pro
rata portion of the Net Operating Cash Flow which is distributed for such
quarter based on the number of Units issued to it pursuant hereto relative to
the total number of issued and outstanding Units and the number of days in such
quarter from and following the Adjustment Date relative to the total number of
days in such quarter.
2.8 Pledge Agreement; Guaranty.
(a) At the Closing, Contributor shall execute and deliver to the
Partnership a Pledge Agreement substantially in the form of Exhibit E (the
"Pledge Agreement").
(b) At the Closing, Contributor shall execute and deliver, and cause
Messrs. Maurice Cohen and Sidney Forbes, to execute and deliver to the
Partnership a guaranty in the form of Exhibit F (the "Guaranty").
2.9 Tenant Allowances and Leasing Commissions. Contributor shall pay the
cost of the tenant allowances identified on Schedule 7.2(g) and leasing
commissions that are owing or become owing under Leases entered into prior to
the date hereof, and, with respect to such amounts that have not been paid in
full or otherwise satisfied prior to the Closing Date, Contributor shall pay
the same to the Partnership within five business days following the giving of
written notice by the Partnership that they are due to Tenants but in any event
not later than December 31, 1997.
2.10 [INTENTIONALLY OMITTED].
2.11 Matters Relating to Promotional Association. At Closing, Contributor
shall deliver to the Partnership a written waiver in form reasonably
satisfactory to the Partnership (the "Promotional Association Waiver") pursuant
to which Contributor waives and releases, and causes its Affiliates to waive
and release, any claims or indebtedness of Contributor or its Affiliates
against or owing by the Promotional Association.
2.12 Option Agreement. At the Closing, Contributor shall execute and
deliver an option agreement substantially in the form of Exhibit F-1 (the
"Option Agreement"), pursuant to which Contributor grants to the Partnership an
option to purchase certain real property described therein.
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ARTICLE III
Title
The Real Property shall be, on the Closing Date, subject only to the
following (collectively, the "Permitted Exceptions"):
(a) those title exceptions, defects and other matters that are shown
on Exhibit G;
(b) the terms, covenants and conditions of the Reciprocal Easement
Agreements;
(c) provided that there is no violation thereof, zoning,
subdivision, environmental, municipal building and all other laws, rules,
regulations, ordinances, codes, restrictions or legal requirements
applicable to the ownership, use, occupancy or development of, or the
right to maintain or operate (including the construction of improvements
on), the Real Property and any other lawful action of any duly
constituted public authority or other body having or exercising
jurisdiction over the Real Property presently existing;
(d) the state of facts shown on the Survey;
(e) Liens for unpaid real property taxes and assessments, water
rates and charges, sewer taxes and rents and other governmental charges
which are not yet due and payable;
(f) all Leases or such of them as shall be in effect on the Closing
Date, and the rights of the Tenants thereunder;
(g) mechanics' liens, lis pendens and notices of commencement of
action against Contributor in respect of the Real Property (or which
affect Contributor's [or, following the Drop-Down, the Acquired
Partnership] interest in the Real Property) provided that the same do not
exceed $25,000 in the aggregate and provided further that the Title
Company shall provide affirmative insurance with respect thereto insuring
the Acquired Partnership from loss with respect thereto in form and
substance acceptable to the Partnership in its sole discretion; and
(h) all other Liens and title exceptions the Partnership may accept
under Section 6.2.
No agreement to take title to the Real Property subject to Permitted Exceptions
shall be deemed a waiver of any representation or warranty of Contributor set
forth in Section 7.2 or the rights of the Partnership contained in Section 6.2,
it being understood and agreed that the Partnership's agreements regarding
Permitted Exceptions assume the truth and accuracy of all such representations
and warranties.
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ARTICLE IV
Closing
4.1 Closing. The closing of the Transactions (the "Closing") shall take
place at the offices of Neal, Gerber & Eisenberg, Two North LaSalle Street,
Chicago, Illinois 60602, commencing at 10:00 a.m., local time, on December 2,
1996 (as the same may be extended in accordance with this Section 4.1, the
"Closing Date"). Time shall be of the essence with respect to the Closing
Date; provided, however, in the event that as of December 2, 1996 Contributor
has not, despite the use by it of reasonable best efforts, obtained the
Estoppels, the consent of the Existing Lenders pursuant to Section 2.5, the
Releases/Directions or the Contract Party Consents or cured any title or survey
defects specified pursuant to Article VI, either Contributor or the Partnership
shall have the right, exercisable by delivering written notice to the other on
or before December 2, 1996, to extend the Closing Date until not later than
December 9, 1996. Unless otherwise provided herein, the prorations and
adjustments pursuant to this Agreement shall be computed as of 11:59 p.m. on
October 31, 1996 (the "Adjustment Date") and the Units issued pursuant to this
Agreement shall be deemed to have been issued as of such date. In addition to
but not in duplication of any other prorations and adjustments pursuant to this
Agreement, Contributor shall pay or cause to be paid to the Partnership in cash
at, and subject to the occurrence of, Closing all Rents and other amounts
collected by Contributor (or, following the Drop-Down, the Acquired
Partnership) for November 1996 and the month of Closing (net of expenses paid
by Contributor or, following the Drop-Down, the Acquired Partnership relating
to the operation of the Mall during such period in the ordinary course of
business and consistent with past practice other than salary and other
compensation paid to Contributors or Affiliates thereof [other than an amount
for management fees equal to the product of $1,633, the number of days in such
period prior to Closing and a fraction the numerator of which is the Gross
Asset Value of the Property and the denominator of which is equal to the "Gross
Asset Values" of the Property and the properties conveyed pursuant to the Other
Contributor Agreements], amounts paid pursuant to Section 2.9, and amounts paid
or incurred in connection with the Transactions or by reason of this Agreement
and principal payments on Existing Indebtedness that were due in November
1996).
4.2 Contributor Closing Documents. At or prior to the Closing, Contributor
shall deliver, or cause to be delivered, to the Partnership (either directly or
through an escrow with the Title Company) the following documents
(collectively, the "Contributor Closing Documents"), duly executed by
Contributor and the other parties thereto (other than the Partnership) and in
form and substance reasonably acceptable to the Partnership and to Contributor
unless the form thereof is attached hereto:
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(a) Assignments of the Interests so as to convey the Interests to
the Partnership and/or one or more of its designees.
(b) The Termination of Existing Management Agreement Documents.
(c) Searches conducted by an independent firm reasonably
satisfactory to the Partnership showing any Uniform Commercial Code,
judgment, bankruptcy, pending suit or tax lien filings against
Contributor and the Acquired Partnership in the jurisdictions designated
by the Partnership no earlier than twenty (20) days prior to the Closing
Date but in any event in the state and county or counties in which the
Mall and the principal offices of Contributor are located, which searches
shall be dated not more than ten days prior to the Closing Date.
(d) The instruments, documents or certificates as are customarily
required by the Title Company to be executed or provided by Contributor
as a condition to the issuance of its title insurance policies pursuant
to the Title Commitment.
(e) An affidavit of Contributor stating its U.S. taxpayer
identification number and that it is a "United States person", as defined
by Sections 1445(f)(3) and 7701(b) of the Code.
(f) The Estoppels.
(g) The Drop-Down Documents.
(h) A written certificate executed on behalf of Contributor and
addressed to the Partnership to the effect that all of the
representations and warranties of Contributor herein contained in Section
7.2 are true and correct in all material respects as of the Closing Date
(as supplemented in accordance with Section 11.3) with the same force and
effect as though remade and repeated in full on and as of the Closing
Date (except for actions taken in accordance with or as contemplated by
this Agreement and except for matters approved in writing or consented to
in writing by the Partnership) or stating the specific respects, if any,
in which any of the representations and warranties is untrue.
(i) Written notices (i) to the Parties to the Reciprocal Easement
Agreements advising them of the change of ownership and directing them to
pay all charges under the Reciprocal Easement Agreements as directed by
the Partnership; (ii) to the Tenants advising them of the change of
ownership and directing them to pay Rent and other charges under their
respective Leases as directed by the Partnership; and (iii) to
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each Party to the Contracts advising of the transfer and assignment of
the Contracts to the Acquired Partnership and directing that future
inquiries be made directly to the Acquired Partnership.
(j) Such documents and instruments as shall be reasonably required
to substitute the Acquired Partnership for the Contributor as the
plaintiff in legal actions contemplated by Section 5.9.
(k) With respect to each of the Acquired Partnership, Contributor
or a general partner of Contributor or the Acquired Partnership that is a
corporation or limited partnership, a certificate issued by the Michigan
Secretary of State, dated not more than ten days prior to the Closing
Date, certifying the good standing of such limited partnership or
corporation.
(l) With respect to each of the Acquired Partnership, Contributor or
a general partner of Contributor or the Acquired Partnership that is
limited partnership, copies of the certificate of limited partnership of
such limited partnership and any amendments thereto, certified by the
Secretary of State of the state of formation as of a date not more than
30 days prior to the Closing Date, together with a certificate of the
general partner(s) of such limited partnership to the effect that the
certificate of limited partnership of such limited partnership, as
certified by the Secretary of State aforesaid has not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copy of the partnership agreement
of such limited partnership and amendments thereto is true, accurate and
complete and has not been further amended, revised, restated, cancelled
or rescinded up to and including the Closing Date.
(m) With respect to each general partner of Contributor or the
Acquired Partnership that is a corporation, copies of the articles or
certificate of incorporation of such corporation and any amendments
thereto, certified by the Secretary of State of the state of formation
thereof as of a date not more than 30 days prior to the Closing Date,
together with a certificate of the secretary of such corporation to the
effect that the articles or certificate of incorporation thereof, as
certified by the Secretary of State aforesaid, has not been further
amended, revised, restated, cancelled or rescinded up to and including
the Closing Date and that the attached copy of the by-laws thereof and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
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(n) A copy of the partnership agreement of each of Contributor, the
Acquired Partnership or a general partner of Contributor or the Acquired
Partnership that is a general partnership, together with a certification
by the general partners of such general partnership that the attached
copy of the partnership agreement of such general partnership and
amendments thereto is true, accurate and complete and has not been
further amended, revised, restated, cancelled or rescinded up to and
including the Closing Date.
(o) Such certificates as the Partnership may reasonably request as
to the authorization on the part of Contributor and its general partners
of the execution, delivery and performance of this Agreement and the
authority of the Persons executing and delivering this Agreement and the
Contributor Closing Documents on behalf of Contributor and its general
partners.
(p) An opinion or opinions of counsel for Contributor dated as of
the Closing Date, in form and substance reasonably acceptable to the
Partnership.
(q) All Books and Records.
(r) Keys and combinations to locked compartments within the Mall.
(s) Schedule of Fixed and Other Tenant Charge Arrearages payable as
of the Closing Date or a date not more than 10 days prior thereto by each
Party which schedule shall set forth separately and certify the items of
Rents with respect to which each such Party is in arrears, the amount of
each item and the period of such arrearage.
(t) The schedules referred to in Section 5.3 and 5.6.
(u) The Contract Party Consents.
(v) [Intentionally Deleted].
(w) The Guaranty.
(x) The Pledge Agreement.
(y) The Amendment to Partnership Agreement.
(z) The Redemption Rights Agreement.
(aa)The Existing Indebtedness Consent Documents.
(bb)The Promotional Association Waiver.
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(ac) The Option Agreement.
(ad) The Michigan National Release.
(ae) Such other documents, instruments or agreements which
Contributor is required to deliver to the Partnership pursuant to the
other provisions of this Agreement or which the Partnership reasonably
may deem necessary or desirable in order to consummate the Transactions
or to better vest in the Partnership or the Acquired Partnership title to
the Interests or the Property; provided, however, that any such other
documents, instruments or agreements which the Partnership reasonably
deems necessary or desirable shall not impose upon Contributor any
obligation or liability other than an obligation or liability expressly
imposed upon Contributor pursuant to the terms of this Agreement or
pursuant to the terms of the other Contributor Closing Documents
specified in this Section 4.2.
Notwithstanding any provision to the contrary set forth elsewhere in this
Agreement, if after the use of reasonable best efforts Contributor is unable to
deliver to the Partnership at Closing (subject to the extensions set forth in
Section 4.1) the Contract Party Consents, the Estoppels, the consent of the
Existing Lenders pursuant to Section 2.5, the Partnership shall have the
option, as the Partnership's sole and exclusive right and remedy either (a) to
terminate this Agreement by giving written notice of such termination to
Contributor on or before the Closing or (b) to complete Closing without the
delivery of such item or items and waive the requirement for the delivery of
such item or items. If the Partnership shall terminate this Agreement pursuant
to the provisions of this Section, this Agreement shall be null and void and no
party shall have any further rights or obligations under this Agreement (other
than any right or obligation that expressly survives the termination of this
Agreement).
4.3 Partnership Closing Documents. At or prior to the Closing, the
Partnership shall deliver to Contributor (either directly or through an escrow
with the Title Company) the following documents (herein referred to
collectively as the "Partnership Closing Documents"), duly executed by an
authorized officer of the General Partner and the other parties thereto (other
than Contributor) and in form and substance reasonably acceptable to
Contributor and the Partnership unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which the Partnership and
its designee or designees accept the Interests conveyed to them.
(b) A duly executed and acknowledged secretary's certificate,
certifying that the Board of Directors of the
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General Partner or committee thereof has duly adopted resolutions
authorizing the consummation of the Transactions and certifying the
authority of the officers of the General Partner executing and delivering
this Agreement and the Partnership Closing Documents in their capacities
as officers of the General Partner.
(c) A certificate issued by the Secretary of State of Delaware dated
not earlier than ten days prior to the Closing Date certifying the good
standing of the Partnership as of the date of such certificate.
(d) Copies of the certificate of limited partnership of the
Partnership and certificate of incorporation of the General Partner and
any amendments thereto, certified by the Secretary of State of the State
of Delaware as of a date not more than 30 days prior to the Closing Date,
together with a certificate of the secretary of the General Partner to
the effect that such certificate of limited partnership and certificate
of incorporation, as certified by the Secretary of State of Delaware,
have not been further amended, revised, restated, cancelled or rescinded
up to and including the Closing Date and that the attached copies of the
partnership agreement of the Partnership and by-laws of the General
Partner and amendments thereto are true, accurate and complete and have
not been further amended, revised, restated, cancelled or rescinded up to
and including the Closing Date.
(e) An opinion of counsel for the Partnership dated as of the
Closing Date, in form and substance reasonably satisfactory to
Contributor, including without limitation an opinion that the
consummation of the Transactions by the Partnership does not violate the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (provided that any opinion as to the
enforceability of the Agreement or any Partnership Closing Documents
shall be based on the assumption that the enforceability of the such
document is governed by the laws of the State of Illinois without regard
to its conflicts of law rules).
(f) A written certificate addressed to Contributor to the effect
that all of the representations and warranties of the Partnership
contained in Section 7.1 are true and correct in all material respects on
and as of the Closing Date (as supplemented in accordance with Section
11.3) with the same force and effect as though remade and repeated in
full on and as of the Closing Date (except for actions taken in
accordance with or as contemplated by this Agreement and except for
matters approved in writing or consented to in writing by Contributor) or
stating the specific respects, if any, in which any of the
representations and warranties is untrue.
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(g) The Amendment to Partnership Agreement.
(h) The Pledge Agreement.
(i) The Redemption Rights Agreement.
(j) The Option Agreement.
(k) Such other documents, instruments or agreements which the
Partnership may be required to deliver to Contributor pursuant to the
other provisions of this Agreement or which Contributor reasonably may
deem necessary or desirable to consummate the Transactions; provided,
however, that any such other document, instrument or agreement which
Contributor reasonably deems necessary or desirable shall not impose upon
the Partnership any obligation or liability other than an obligation or
liability expressly imposed upon the Partnership pursuant to the terms of
this Agreement or pursuant to the terms of the other Partnership Closing
Documents specified in this Section 4.3.
ARTICLE V
Prorations and Adjustments
5.1 Items to Be Prorated. Subject to the other provisions of this Article
and this Agreement, the following shall be apportioned or adjusted between
Contributor and the Partnership at the Closing as of the date specified in
Section 4.1 and the net amount thereof shall be settled as hereinafter
provided:
(a) real property taxes and assessments (or installments thereof)
based on the most recent tax bills except those required to be paid
directly to the entity imposing the same by those Tenants who are current
in all of their Lease payment obligations on the Closing Date (such
proration shall be computed based on the assumption that the real estate
taxes due in July 1996 and December 1996 (and payable without penalty in
September 1996 and February 1997, respectively) relate to calendar year
1996 and accrued ratably throughout such year);
(b) water rents and charges, if any, except those required to be
paid directly to the entity imposing the same by Tenants who are current
in all of their Lease payment obligations on the Closing Date;
(c) sewer taxes and rents, if any, except those required to be paid
directly to the entity imposing the same by Tenants who are current in
all of their Lease payment obligations on the Closing Date;
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(d) actually accrued interest, if any, required to be paid to a
Party on Security Deposits;
(e) amounts, if any, payable by or owed to Contributor (or,
following the Drop-Down, the Acquired Partnership) under the Reciprocal
Easement Agreements;
(f) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied, if the rights with respect thereto
continue for the benefit of the Acquired Partnership following the
Closing;
(g) fuel oil and liquid propane gas, if any, at the cost or costs
per gallon or cubic foot most recently charged with respect to the Mall,
based on the supplier's measurements thereof, plus sales taxes thereon;
(h) deposits, if any, on account with any utility company servicing
the Mall;
(i) deposits on account with any municipality having jurisdiction
over the Mall (other than deposits which are in the nature of security
for the performance of work);
(j) amounts paid or payable by the owner of the Mall to the
Promotional Association;
(k) Rents (subject to the other provisions of this Article V);
(l) amounts paid or payable under the Contracts relating to the Mall
to the extent the same constitute Partnership Liabilities;
(m) interest on the Existing Indebtedness; and
(n) all other items customarily apportioned in connection with the
sale of properties that are similar to the Property and similarly
located.
Contributor shall cooperate with the Partnership in the transfer of
electricity, gas, water and other utility services from Contributor's name to
the name of the Acquired Partnership as of the Closing Date if not previously
transferred in connection with the Drop-Down.
5.2 Installment Payment of Assessments. In furtherance of Section 5.1(a),
if any real property assessment affects the Mall at the Adjustment Date and
such real property assessment is payable in installments (whether at the
election of the Mall owner or otherwise), the installment relating to, or
payable over, the Applicable Closing Fiscal Period shall be apportioned between
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Contributor and the Partnership as of 11:59 p.m. Eastern Standard time
on the day immediately preceding the Adjustment Date, and the remaining
installments shall be the obligation of the Partnership.
5.3 Adjustable Tenant Charges.
(a) Notwithstanding anything to the contrary contained herein, no
adjustments or apportionments shall be made with respect to the expense
items listed in Section 5.1 hereof (other than real estate taxes and
assessments, as to which adjustment shall be made as set forth in Section
5.1) for the Applicable Closing Fiscal Period or any prior fiscal period
to the extent such expense items are payable or reimbursable from funds
collected as Adjustable Tenant Charges. Contributor shall be responsible
for the payment of all such expenses incurred by it or the Acquired
Partnership prior to Closing (which shall be deemed to have been incurred
by Contributor for the purposes of this Section 5.3), and the Partnership
shall cause the Acquired Partnership to pay or otherwise satisfy out of
the assets of the Acquired Partnership only (unless applicable law
imposes liability upon the general partners thereof) all such expenses
incurred by it following Closing (including without limitation real
estate taxes and assessments for which the Partnership has received
credit under Section 5.1).
(b) At the Closing, Contributor shall assign to the Acquired
Partnership (to the extent not assigned in connection with the Drop-Down)
any amounts required to be paid as Adjustable Tenant Charges by Tenants
which were due and payable on or before, but remain unpaid on, the
Closing Date, and there shall be no adjustment hereunder with respect
thereto. At the Closing, Contributor shall deliver to the Partnership a
true and correct statement setting forth in reasonable detail and
certifying the amount of Adjustable Tenant Charges collected and
expenditures for such items of expense (and any credits for real estate
taxes) made by Contributor or the Acquired Partnership for the portion of
the Applicable Closing Fiscal Period through a date not more than 30 days
prior to the Closing Date and for any prior fiscal period and a good
faith estimate of such amounts through the Closing Date.
(c) The Partnership shall cause any amounts collected by the
Acquired Partnership after the Closing Date which relate to Adjustable
Tenant Charges payable with respect to any fiscal period ending prior to
the Applicable Closing Fiscal Period to be remitted to Contributor.
Within 90 days following the end of the Applicable Closing Fiscal Period
and from time to time thereafter as amounts are received by the Acquired
Partnership from Parties, the aggregate amount of Adjustable Tenant
Charges, if any, collected and retained by
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the Acquired Partnership and Contributor with respect to the Applicable
Closing Fiscal Period shall be apportioned and adjusted such that the
total amount of such Adjustable Tenant Charges received by the Acquired
Partnership (excluding amounts received prior to Closing), on the one
hand, and Contributor (including amounts received by the Acquired
Partnership prior to Closing), on the other hand, shall be in the same
proportion as the amount of the expense items to which such Adjustable
Tenant Charges relate which each has borne (including without limitation
real estate taxes or assessments for which either party has received
credit under Section 5.1), and, to the extent that either shall have
received a greater share of the payments with respect to Adjustable
Tenant Charges, such party or parties shall promptly settle such excess
with the other.
5.4 [Intentionally Omitted].
5.5 Fixed and Other Tenant Charge Arrearages. Subject to the provisions of
Section 5.7(c), Fixed and Other Tenant Charge Arrearages (which, for purposes
of this Section 5.5, shall include, without limitation, any real estate taxes
or special assessments or other amounts otherwise required to be paid by a
Party directly to the taxing authority but actually paid by Contributor to the
taxing authority with respect to the amount of the taxes or special assessments
actually paid), if and when collected, shall be paid to the Acquired
Partnership as to Fixed and Other Tenant Charge Arrearages which relate to
periods from and after the Adjustment Date, and to Contributor with respect to
all other Fixed and Other Tenant Charge Arrearages.
5.6 Sales Based Tenant Charges. Sales Based Tenant Charges which are
payable with respect to any period prior to the Adjustment Date or which have
been accrued prior to the Adjustment Date shall not be apportioned as of the
Adjustment Date. In lieu thereof, such amounts shall be apportioned, after the
Closing Date and after final determination thereof, so that the amount thereof
to which Contributor shall be entitled shall be the entire amount thereof with
respect to any fiscal period ending prior to the Closing Date, and, for the
Applicable Closing Fiscal Period, an amount which bears the same ratio to the
total Sales Based Tenant Charges as the number of days in the Applicable
Closing Fiscal Period which have elapsed prior to the Adjustment Date bears to
the total number of days in the Applicable Closing Fiscal Period. At the
Closing, Contributor shall deliver to the Partnership a true and correct
statement setting forth in reasonable detail and certifying the amount of Sales
Based Tenant Charges collected for the portion of the Applicable Closing Fiscal
Period through a date not more than 30 days prior to the Closing Date and a
good faith estimate of such amounts collected through the Closing Date.
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5.7 Application of Rent Receipts. Notwithstanding anything to the contrary
contained herein, in determining the adjustments and apportionments pursuant to
Sections 5.3, 5.4, 5.5 and 5.6, the following shall apply:
(a) Payments of Rents (other than Rents collected pursuant to
Section 5.9(b)) shall be deemed to have been made by a Party first to the
payment of Fixed and Other Tenant Charges (other than charges for Tenant
Services), second to the payment of Sales Based Tenant Charges, third to
the payment of charges for Tenant Services (and designated as such in the
Lease), fourth to the payment of Adjustable Tenant Charges, and last to
the payment of all other items of Rent payable by such Party.
(b) Any amounts collected as Sales Based Tenant Charges, and
Adjustable Tenant Charges, within each category, shall be deemed to have
been paid by the Party, first, on account of amounts then due for periods
after the Applicable Closing Fiscal Period, next, on account of amounts
then due for the Applicable Closing Fiscal Period and, next, on account
of amounts then due for all fiscal years prior to the Applicable Closing
Fiscal Period.
(c) If the Acquired Partnership shall receive any Fixed and Other
Tenant Charges after the Closing Date from a Party who is delinquent as
of the Adjustment Date in the payment of Fixed and Other Tenant Charges
payable under its Lease or either Reciprocal Easement Agreement, as the
case may be, such Fixed and Other Tenant Charges shall be deemed to have
been paid by the Party, first, on account of amounts owing to Acquired
Partnership, next, on account of Fixed and Other Tenant Charge Arrearages
due to the Contributor (after reduction for amounts collected pursuant to
Section 5.9(b) and 5.7(d)), and the balance remaining thereafter shall be
retained by the Acquired Partnership.
(d) Notwithstanding anything to the contrary contained in this
Section 5.7, a payment of Rent shall be applied to the payment of the
item or items of Rent designated by the Party making such payment or to
which such payment otherwise clearly relates in the good faith judgment
of the Partnership.
5.8 Security and Utility Deposits. At the Closing, Contributor shall
furnish the Partnership with a schedule setting forth and certifying, as of the
Closing Date, the unapplied and unreturned portion of any security deposits
which have been deposited with Contributor (or, following the Drop-Down, the
Acquired Partnership) or its agents (or with any predecessor-in-interest
thereto) by any Tenants through the Closing Date (the "Security Deposits") and
the amount of any deposits on account with any utility company servicing the
Mall that will continue for the
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benefit of the Acquired Partnership following Closing ("Other Deposits"), and
Contributor shall pay to the Partnership at Closing in cash the amount of the
Security Deposits, together with all interest, if any, accrued thereon and
required to be paid to Tenants or actually paid in accordance with past
practices) to Tenants. Contributor shall receive a credit at Closing for the
amount of the Other Deposits.
5.9 Collection of Rents.
(a) The Partnership shall cause the Acquired Partnership to use its
best efforts to collect the Fixed and Other Tenant Charge Arrearages,
Adjustable Tenant Charges, Sales Based Tenant Charges and other Rents
which are payable with respect to the Applicable Closing Fiscal Period
and any prior fiscal period, but the Acquired Partnership shall not be
required to retain a collection agency, commence litigation or file
proofs of claim or commence an adversary proceeding in a bankruptcy case,
or terminate Leases or either Reciprocal Easement Agreement in connection
with such collection efforts. The Partnership shall not permit the
Acquired Partnership to waive or settle any claims for any such amounts
in whole or in part to the extent such amounts, if collected, would be
payable to Contributor hereunder other than in accordance with the
policies of the Partnership from time to time as to Rent delinquencies
generally. Out-of-pocket collection costs shall be charged against
amounts collected and charged to the parties hereto in the proportion in
which each is entitled to the proceeds of such collection. The
Partnership shall provide to Contributor semi-annual reports after
Closing with respect to the collection by the Acquired Partnership after
Closing of any such amounts which are payable with respect to the
Applicable Closing Fiscal Period and any prior fiscal year.
(b) Contributor shall have the right to seek collection of any Fixed
and Other Tenant Charge Arrearages owed to it and not collected by or on
behalf of it within six months following the Closing Date; provided,
however, that in seeking to collect any such Fixed and Other Tenant
Charge Arrearages, Contributor shall not be entitled to terminate any
Lease or Reciprocal Easement Agreement or otherwise seek any remedy which
could materially affect or impact the Mall or the ownership or operation
thereof other than a money judgment against the delinquent Party. The
Acquired Partnership shall not be required to join in any such actions or
proceedings commenced by Contributor unless the provisions of any law,
rule or regulation at the time in effect shall require that such actions
or proceedings be brought by and/or in the name of the Acquired
Partnership, in which event the Partnership shall cause the Acquired
Partnership to join and cooperate in such actions or proceedings or
permit the same to be brought
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by such Contributor in the Acquired Partnership's name but such
Contributor shall pay all costs and expenses relating thereto, including
without limitation the Acquired Partnership's reasonable legal fees in
reviewing pleadings and other materials filed in connection with such
litigation.
(c) Notwithstanding anything to the contrary contained herein, the
Acquired Partnership shall have the right at any time on or after the
Closing, and whether or not its joinder shall be required as a matter of
law, to join in, or to be substituted for Contributor in, any proceedings
for the eviction of Tenants and/or the collection of Rent which may have
been instituted by Contributor either prior to or after the Closing, if
the Tenant in question is still in possession of the premises covered by
its Lease and if, in connection therewith, the Acquired Partnership
intends to seek eviction of such Tenant, cancellation of the Lease or
repossession of the premises. If the Acquired Partnership joins in, or
is substituted for Contributor as plaintiff in any such litigation, the
Partnership shall cause the Acquired Partnership to, thereafter, assume
sole liability for all costs and expenses of such litigation, including
legal fees and expenses, as may thereafter be incurred (except as
provided below) and shall thereafter control all aspects of such
proceedings, except that the Partnership shall not permit the Acquired
Partnership to waive, reduce or otherwise compromise any claims for Rent
relating to any period prior to the Adjustment Date other than in
accordance with the policies of the Partnership from time to time as to
Rent deficiencies generally. Contributor in any event may, at its
option, continue to participate in such litigation. In any event,
Contributor shall reimburse the Partnership for a pro rata portion of its
out-of-pocket costs and expenses of such collection in proportion to, but
in no event in an amount greater than, the amount, if any, actually
received by Contributor after Closing as a result of such proceedings;
provided, however, Contributor shall be entitled to a credit for legal
fees and expenses incurred by Contributor prior to the intervention by
the Acquired Partnership in connection with the proceedings previously
instituted by Contributor in connection with such collection efforts.
5.10 Settlement of Adjustments.
(a) Contributor and the Partnership acknowledge that it may be
difficult to calculate, as of the day immediately preceding the
Adjustment Date, certain of the adjustments, apportionments and payments
to be made pursuant to this Article V. Accordingly, Contributor and the
Partnership hereby agree that any adjustments, apportionments and
payments otherwise required to be made as of the Adjustment Date may to
the extent necessary or desirable be estimated by Partnership
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and Contributor based on the most recent available data, and, additional
adjustments, apportionments and payments shall be made to adjust for any
differences between the actual apportionment or adjustment and the amount
thereof estimated on the Closing Date. Any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after
their discovery.
(b) Except as otherwise provided herein, net prorations and
adjustments made pursuant to this Article V on the Closing Date and
determined as provided in subsection (a) above shall be settled in cash.
From time to time after the Closing as further adjustments are made as
herein provided, settlement thereon between Contributor and the
Partnership shall be made in cash.
(c) The Partnership, upon reasonable advance notice, shall cause the
Acquired Partnership to provide Contributor with access to its books and
records, including back-up calculations and information, relating to the
calculation of the adjustments required to be made pursuant to this
Article V.
(d) Any Rents that are payable to Contributor hereunder shall be
paid from time to time following the Closing as determined by the
Partnership but no less frequently than quarterly.
(e) Notwithstanding anything to the contrary contained herein, a
final adjustment shall be made with respect to the amounts owing under
this Article V as of December 31, 1997, and the amounts owing settled in
cash no later than 10 days thereafter. No further adjustments or
payments shall be required to be made under this Article V thereafter
(except with respect to legal proceedings for or bankruptcy claims in
respect of the collection of Rent which are pending on such date or legal
proceedings or bankruptcy claims brought by Contributor under Section
5.9(b)).
ARTICLE VI
Title Insurance and Survey
6.1 Title Commitment. Contributor shall cause the Title Company to deliver
to the Partnership, not later than seven (7) days prior to the Closing Date, a
commitment of the Title Company (the "Title Commitment") to issue, at Closing,
its ALTA Form B Owners Title Insurance Policy as to the Real Property in the
aggregate amount of the Gross Asset Value with coverage against matters
relating to federal bankruptcy, state insolvency or similar creditors' rights
laws and with the following special endorsements:
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(a) Full extended coverage over all general exceptions;
(b) Location endorsement insuring the accuracy of the Survey for the
Real Property;
(c) An endorsement insuring legal access to the Real Property from
each of the streets bordering thereon, and insuring that all such streets
are dedicated public streets;
(d) An endorsement insuring against loss of title to the Real
Property or the inability of the owner thereof to maintain the
improvements now located thereon by reason of a violation of a covenant,
condition or restriction of record affecting such property;
(e) Utility facility endorsement;
(f) Zoning endorsement (ALTA 3.1) (with parking);
(g) Tax parcel endorsement;
(h) Contiguity endorsement;
(i) Non-imputation endorsement insuring the Acquired
Partnership against any denial of coverage in the event of
loss or damage insured under the terms of the Title Policy by
virtue of a defect, lien, encumbrance, adverse claim or other
matter not known to the Title Company and not known to the
Partnership which were not shown by the public records but
were known to representatives of Contributor or the Acquired
Partnership prior to Closing; and
(j) "Fairway" endorsement.
The Partnership also may require the issuance at the Closing of such
additional endorsements as it deems appropriate, but the issuance thereof shall
not be a condition to the Partnership's obligations hereunder and the costs of
such additional endorsements shall be paid by the Partnership except as set
forth in Sections 3.1 and 6.2.
The Title Company shall reinsure portions of the risk covered by its title
insurance policies with reinsurance companies reasonably satisfactory to the
Partnership under standard reinsurance agreements providing, at a minimum, for
direct access and enforcement of rights by the insured party to and against the
reinsurer.
6.2 Title Defects. If the Title Commitment for the Real Property discloses
exceptions to title other than Permitted
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Exceptions or if the Partnership determines, in its sole and absolute
discretion, that such Permitted Exceptions shall interfere with the current or
the Partnership's anticipated use of such property or materially and adversely
affects the value of such property, the Partnership shall notify Contributor in
writing thereof and Contributor shall (a) cause any such exceptions which are
monetary liens of a fixed and ascertainable amount that may be removed solely
by the payment of money, including without limitation, judgment and mechanics'
liens, to be removed at or prior to the Closing and shall deposit with the
Title Company releases or other appropriate instruments, in recordable form,
sufficient to cause the removal of such items from the title; and (b) use
reasonable best efforts to cause all other such title exceptions to be so
released and removed from title and waived from the Title Commitment, or
insured over at its cost by the Title Company by an endorsement reasonably
satisfactory to the Partnership. Nothing contained herein shall limit the
rights of the Partnership in respect of a breach by Contributor of Section
11.2. All premiums and other charges in connection with the issuance of the
owner's title policies and endorsements complying with the requirements of
Section 6.1 shall be borne by Contributor and Contributor shall cause the same
to be paid in full at or prior to Closing. If title is not insurable at Closing
as required by Section 3.1, Section 6.1 and this Section 6.2 (including causing
the removal of or issuance of insurance over, the matters specified in the
above notice), then the Partnership may, as its sole remedy, (i) accept title
subject to all Liens and other title exceptions (without any abatement or
reduction of the consideration hereunder) or (ii) terminate this Agreement by
giving written notice of such termination to Contributor. In the event that
this Agreement is terminated in its entirety, this Agreement shall be null and
void the parties shall be released from all further rights and obligations
under this Agreement (other than any right or obligation that expressly
survives the termination of this Agreement).
6.3 Survey.
(a) Contributor shall cause a survey for the Real Property, dated
not earlier than 90 days prior to the Closing Date, to be prepared by a
licensed or registered professional surveyor in the jurisdiction in which
such property is located and delivered to the Partnership not later than
seven (7) days prior to the Closing Date (such survey, the "Survey").
The Survey shall be an Urban ALTA/ACSM Land Title Survey made in
compliance with and meeting the accuracy standards under the "Minimum
Standard Detail Requirements for ALTA/ACSM Land Surveys" jointly
established by the American Land Title Association and American Congress
on Surveying and Mapping then in effect; shall show the boundaries of the
Land; shall disclose whether or not the Land comprises a single parcel of
land with no strips, gores or gaps within its boundaries;
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shall disclose any encroachments of any Improvements located primarily on
the Land onto adjoining premises and public ways (and whether or not a
valid easement for the benefit of such property exists and is in place
with respect to each such encroachment) or onto or over setback or
building lines located on the Land or of improvements located primarily
on adjoining premises onto any portion of the Land (and whether or not a
valid easement for the benefit of the adjoining premises shall exist and
be in place with respect to each such encroachment); shall locate all
easements created by recorded instruments (to the extent plottable) or
visible on the Land and shall disclose any encroachment by any of the
Improvements located thereon, or any other structures located on the
Land, in violation of any such easements; shall contain a legal
description of the Land; shall show the location of any adjacent public
streets, disclosing access, if any, to the Land therefrom; shall contain
a certificate of the surveyor attesting to the accuracy of the Survey and
its conformity to the requirements of the aforesaid Minimum Standard
Detail Requirements, which certificate shall be directed to the
Partnership, the Acquired Partnership and the Title Company. The costs
of the Survey shall be borne by Contributor.
(b) If the Survey discloses that the Land does not comprise a single
parcel of land with no strips, gores or gaps within its boundaries (other
than land parcels owned by a Party to either Reciprocal Easement
Agreement and outlots, if any, which are located on a portion of the Land
but which contain free-standing improvements not otherwise physically
connected to other Improvements), discloses any encroachments of
Improvements located primarily on the Land onto adjoining premises or
public ways (except to the extent a valid easement for the benefit of
such property exists and is in place with respect to each such
encroachment, the Title Company has insured the Acquired Partnership
against loss by reason thereof, or the encroachments may be removed or
abated without material cost or expense or material damage to such
property or the conduct or business therefrom) or of improvements located
primarily on adjoining premises onto any portion of the Land (except to
the extent a valid easement for the benefit of the adjoining premises
shall exist and be in place with respect to each such encroachment and
each such encroachment does not interfere with the present or reasonably
anticipated future use or operation of such property for its intended
purposes and does not materially and adversely affect the market value of
such property), discloses any encroachment by any of the Improvements
located thereon, or any other structures located on the Land in violation
of any recorded setback lines or boundaries or easements created by
recorded instrument (to the extent plottable) or visible on such property
(unless the Title Company has insured the Acquired Partnership against
loss by reason of such encroachment or the
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encroachment may be removed or abated without material cost or expense or
material damage to such property or the conduct of business therefrom),
if the legal description of the Land shown by the Survey does not conform
to the legal description thereof contained herein or if the boundaries of
the Land as depicted on the Survey do not conform in a material manner to
those depicted on Exhibit D-1, the Partnership shall have the option to
terminate this Agreement prior to Closing by giving written notice of
such termination to Contributor. If the Partnership shall terminate this
Agreement pursuant to the provisions of this Section 6.3(b), this
Agreement shall be null and void, and no party shall have any further
rights or obligations under this Agreement with respect thereto (other
than any right or obligation that expressly survives the termination of
this Agreement).
ARTICLE VII
Representations and Warranties
7.1 Partnership Representations and Warranties. The Partnership represents
and warrants to Contributor as follows:
(a) The Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Partnership of
this Agreement have been duly and validly authorized by all requisite
action on the part of the Partnership. This Agreement has been, and the
Partnership Closing Documents will be, duly executed and delivered by the
Partnership. This Agreement constitutes, and when so executed and
delivered the Partnership Closing Documents will constitute, the legal,
valid and binding obligations of the Partnership, enforceable against it
in accordance with their terms.
(c) Except as set forth on Schedule 7.2(c), none of the execution,
delivery or performance of this Agreement or the Partnership Closing
Documents by the Partnership or the consummation of the Transactions does
or will, with or without the giving of notice, lapse of time or both,
violate, conflict with, constitute a default or result in a loss of
rights under or require the approval or waiver of or filing with any
Person (including without limitation any governmental body, agency or
instrumentality) under (i) the organizational documents of the
Partnership or any material agreement, instrument or other document to
which the Partnership is a party or by which the Partnership is bound or
(ii) any judgment, decree, order, statute, injunction, rule, regulation
or the like of a
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governmental unit applicable to the Partnership, including without
limitation applicable securities laws.
(d) No broker, finder, investment banker or other person is entitled
to any brokerage, finder's or other fee or commission in connection with
the Transactions based upon arrangements made by or on behalf of the
Partnership.
7.2 Contributor's Representations and Warranties. Contributor represents
and warrants to the Partnership as follows:
(a) Contributor is a general partnership duly formed and validly
existing under the laws of the State of Michigan with full power and
authority to execute, deliver and perform this Agreement.
(b) The execution, delivery and performance of this Agreement by
Contributor have been duly and validly authorized by all necessary action
on the part of Contributor. This Agreement has been, and the Contributor
Closing Documents delivered by Contributor will be, duly executed and
delivered by Contributor to the extent it is a party hereto and thereto.
This Agreement constitutes, and when so executed and delivered the
Contributor Closing Documents will constitute, the legal, valid and
binding obligations of Contributor, enforceable against Contributor in
accordance with their terms.
(c) None of the execution, delivery or performance of this Agreement
by Contributor or the consummation of the Transactions does or will, with
or without the giving of notice, lapse of time or both, violate, conflict
with, constitute a default, result in a loss of rights, acceleration of
payments due or creation of any Lien upon the property of Contributor or,
following the Drop-Down, the Acquired Partnership or require the approval
or waiver of or filing with any Person (including without limitation any
governmental body, agency or instrumentality) under (i) the
organizational documents of Contributor or the Acquired Partnership or
its general partners or, subject to obtaining the consents of the
Existing Lenders specified on Schedule 2.5, any agreement, instrument or
other document to which Contributor or the Acquired Partnership or its
general partners is a party or by which it is bound or (ii) any judgment,
decree, order, statute, injunction, rule, regulation or the like of a
governmental unit applicable to any of Contributor or the Acquired
Partnership or its general partners.
(d) At Closing, Contributor will have good and marketable title to
the Interests, free and clear of all Liens; and, upon execution and
delivery of the Contributor Closing Documents, the Partnership and its
designees will have good and marketable title to the Interests, free and
clear of
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all Liens other than Liens created by, under or through the
Partnership or such designee(s); and, at Closing, the Interests shall
constitute all of the partnership interests in the Partnership (except
for the 1% interest owned by Jackson Properties, Inc.) and no other
Person shall have any other equity or income interest therein or right or
option to acquire the same. Contributor has good and marketable title to
the Property (other than the Land, the improvements and the other Real
Property to extent covered by the Title Policy), free and clear of all
Liens other than the Permitted Exceptions and, at Closing, the Acquired
Partnership will have good and marketable title to the Property free and
clear of all Liens other than the Permitted Exceptions.
(e) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received any notice of violation from any federal, state
or municipal entity that has not been cured or otherwise resolved to the
satisfaction of such governmental entity.
(f) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received any notice
from any governmental unit or other person (including without limitation
any consultant or engineer engaged by Contributor or other person) that
it or the Real Property or any occupant thereof is not in compliance with
any Environmental Law, that the Real Property or any portion thereof has
been used as a storage or disposal site for Hazardous Materials (other
than the storage of substances commonly present at or used in the
operation and maintenance of shopping centers in quantities commonly
present at shopping centers and in compliance with applicable laws) or
that it has any liability with respect thereto, and there are no
administrative, regulatory or judicial proceedings pending or, to the
knowledge of Contributor, threatened with respect thereto pursuant to, or
alleging any violation of, or liability under any Environmental Law. To
Contributor's knowledge and except as set forth on Schedule 7.2(f), no
underground or above-ground storage tanks are located on, under or about
the Real Property and there is no facility located on or at the Real
Property that is subject to the reporting requirements of Section 312 of
the Federal Emergency Planning and Community Right to Know Act of 1986
and the federal regulations promulgated thereunder (42 U.S.C. Section
11022).
(g) Schedule 7.2(g) contains a rent roll for the Mall as of
December 5, 1996 showing the identification of each rentable space in the
Mall, whether leased or not, and for each such space, the name of the
Tenant, the expiration date of the current term of the Lease, the minimum
or fixed annual rent payable, the unapplied amount of any security deposit
held, all delinquencies in Rent and all outstanding rent abatements
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and tenant fit-out allowances or other tenant concessions. All
information therein is accurate as of its date. No Tenant has paid any
rent in advance except for the current month.
(h) Schedule 7.2(h) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto
(including without limitation side letters) regardless of whether the
terms thereof have commenced, setting forth with respect to each (i) the
date thereof and of each modification thereof and supplement thereto and
(ii) the names of the parties thereto (including the name of the current
assignee, if any, but only if and to the extent Contributor has actual
notice of any such assignment). The documents listed on Schedule 7.2(h)
and marked with an "R" constitute a complete and correct list of the
reciprocal easement agreements relating to the Real Property and
modifications thereof and supplements thereto (including without
limitation side letters) (the "Reciprocal Easement Agreements") setting
forth with respect to each (i) the date thereof and of each modification
thereof and supplement thereto and (ii) the names of the parties thereto.
True and complete copies of the Reciprocal Easement Agreements and
Leases, including each written modification thereof and supplement
thereto and, to Contributor's knowledge, all material correspondence
between Contributor (or, following the Drop-Down, the Acquired
Partnership) and the Parties thereto bearing a date on or after January
1, 1993, have heretofore been furnished to the Partnership for
inspection. Each Reciprocal Easement Agreement and Lease constitutes the
entire agreement between the parties thereto and there are no oral
promises or agreements amending or modifying the same.
(i) There are no leases or other rights of occupancy or use relating
to the Real Property other than the Leases and the Reciprocal Easement
Agreements and other rights of persons arising under instruments or
agreements which comprise Permitted Exceptions and/or the Contracts,
except subleases, concessions or license agreements which may have been
entered into by Tenants or by subtenants of Tenants. Each of the Leases
and Reciprocal Easement Agreements is valid and subsisting and in full
force and effect, and Contributor has received no notice of the
termination of any easement granted therein.
(j) (i) No Party to any Reciprocal Easement Agreement or Lease has
made any written claim or, to Contributor's knowledge, has any other
claim, whether or not in writing, (A) that Contributor (or, following the
Drop-Down, the Acquired Partnership) has defaulted in any extent in
performing any of its obligations under such Reciprocal Easement
Agreement or Lease which has not heretofore been cured, (B) that any
condition exists which with the passage of time would
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constitute any such default, or (C) that such Party is entitled to any
reduction in, refund of, or counterclaim or offset against, or is
otherwise disputing, any Rents or other charges paid, payable or to
become payable by such Party, to cancel such Reciprocal Easement
Agreement or Lease or to be relieved of its operating covenants
thereunder.
(ii) Except as set forth on Schedule 7.2(v), no Tenant or other Party
has pending any action, proceeding or arbitration against Contributor
(or, following the Drop-Down, the Acquired Partnership) based on any
claims of the nature described in Section 7.2(j)(i).
(iii) With the exception of delinquencies in the payment of Rents
under Leases and except as shown on Schedule 7.1(j), to Contributor's
knowledge, no material default exists under any Reciprocal Easement
Agreement or Lease on the part of the Party or Parties thereto. To
Contributor's knowledge, neither Contributor nor, following the
Drop-Down, the Acquired Partnership is in default (without giving effect
to any applicable notice and cure rights) in any respect with respect to
any Lease or Reciprocal Easement Agreement.
(iv) There are no unsatisfied rent abatements or other tenant
concessions or inducements, including, without limitation, lease
assumptions or buy-outs, applicable to any of the Leases or any rights to
extend or renew any of the Leases except as set forth in the rent roll
referred to in Section 7.2(g) and the Leases.
(v) No Party to a Lease or Reciprocal Easement Agreement has any
rights, options or rights of first refusal of any kind which are
currently in effect, to purchase or to otherwise acquire the Real
Property or any part thereof or interest therein other than the rights of
such Tenant (as tenants only) under its Lease or such Party to the
applicable Reciprocal Easement Agreement (with respect to easements
only).
(k) Contributor has furnished the Partnership with its audited
financial statements (consisting of balance sheets and income statements)
relating to the Mall as of, and for the calendar years ended, December
31, 1993, 1994 and 1995 (the "Annual Financial Statements") and its
unaudited financial statements (consisting of balance sheets and income
statements) as of and for the seven-month period ended July 31, 1996 (the
"Interim Financial Statements" and, together with the Annual Financial
Statements, the "Financial Statements"). The Financial Statements are
consistent with the books and records and accounts of Contributor
relating to the Mall and fairly present the financial condition and
results of operations of Contributor relating to the Mall as
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of the dates thereof and for the periods referred to therein, and,
except for the absence of footnotes and subject to normal year-end
accruals as to the Interim Financial Statements, the Financial
Statements have been prepared on a tax basis and otherwise in accordance
with generally accepted accounting principles, consistently applied
throughout the periods indicated. Since December 31, 1995, each of
Contributor and, following the Drop-Down, the Acquired Partnership
has conducted its business relating to the Mall in the ordinary course
consistent with past practice.
(l) Schedule 7.2(l) lists the patents, trademarks (including
registrations thereof), and trade names which are used by each of
Contributor and, following the Drop-Down, the Acquired Partnership in
connection with the operation of the Mall (the "Intellectual Property").
The conduct of the business of each of Contributor and, following the
Drop-Down, the Acquired Partnership relating to the Mall and the use of
the Intellectual Property do not infringe upon the patents, trademarks,
copyrights or other intellectual property rights of any third party, and,
to Contributor's knowledge, no third parties are currently infringing
upon the patents, copyrights, trademarks or other intellectual property
rights of Contributor (or, following the Drop-Down, the Acquired
Partnership) relating to the Mall. Neither Contributor nor, following
the Drop-Down, the Acquired Partnership has granted to any Person or
Persons the right to use the Intellectual Property or any portion
thereof.
(m) Neither Contributor (or, following the Drop-Down, the Acquired
Partnership) nor the Existing Manager is a party to any collective
bargaining or union agreements with respect to the Mall. Contributor has
not encountered any labor union organizing activity or experienced any
actual or threatened employee strikes, work-stoppages, slow-downs or
lockouts. Except as set forth on Schedule 7.2(m), neither Contributor
nor, following the Drop-Down, the Acquired Partnership maintains or
sponsors any employee benefit plan, including, without limitation, any
plans subject to the Employer Retirement Income Security Act of 1974, as
amended. There are no pending claims or, to Contributor's knowledge, any
threatened claim against Contributor (or, following the Drop-Down, the
Acquired Partnership) by any employee whose employment relates or related
to the Mall.
(n) Schedule 7.2(n) contains a true and complete list of all
Contracts with respect to the Mall, including all modifications thereof.
To Contributor's knowledge, there has been no default (without giving
effect to any notice and cure rights) by Contributor (or, following the
Drop-Down, the Acquired Partnership) any Party under any Contract which
has not heretofore been cured. Contributor has received no notice
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of any claim by a Party of any such default, which has not heretofore
been cured. A true and complete copy of each Contract, including any
amendments or supplements thereto, has been delivered or made available
to the Partnership. Such documents constitute the entire agreement
between the parties thereto and there are no oral promises or agreements
amending or modifying the same.
(o) No condemnation proceeding is pending with respect to all or any
part of the Real Property, and, to Contributor's knowledge, no
condemnation proceeding is pending with respect to any property owned by
a Party to any Reciprocal Easement Agreement which is the subject of such
Reciprocal Easement Agreement and no Taking is threatened with respect to
all or any part of the Real Property, or any property owned by a Party to
any Reciprocal Easement Agreement which is the subject of such Reciprocal
Easement Agreement.
(p) The Real Property is an independent unit which does not now rely
on any facilities (other than facilities covered by Permitted Exceptions
[including, without limitation, the Reciprocal Easement Agreements] or
facilities of municipalities or public utility and water companies and
other than parking areas which the Real Property makes use of under the
Reciprocal Easement Agreements) located on any property not included in
the Real Property to fulfill any municipal or governmental requirement or
for the furnishing to the Real Property of any essential building systems
or utilities, including but not limited to, water, electrical, plumbing,
mechanical and heating, ventilating and air conditioning systems,
drainage facilities, catch basins and retention ponds, sewage treatment
facilities and the like, unless recorded easements or other rights are in
effect for the benefit of the Real Property (which run with the land) for
the continued use and benefit thereof. Except as may be covered by the
Permitted Exceptions (including, without limitation, the Reciprocal
Easement Agreements), no building or other improvement not included in
any part of the Real Property relies on any part of the Real Property to
fulfill any governmental or municipal requirement or to provide
facilities to such building or improvement for any essential building
systems or utilities, including, without limitation, electrical,
plumbing, mechanical, sewage treatment or heating, ventilating and air
conditioning facilities or services.
(q) Copies of current real estate tax bills with respect to the Real
Property, other than tax bills sent to Tenants who have the obligation to
pay such taxes to the collecting authority, have been delivered to the
Partnership. No portion of the Real Property comprises part of a tax
parcel which includes property other than property comprising all or a
portion of Real Property. No application or proceeding is
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pending with respect to a reduction or an increase of such taxes. There
are no tax refund proceedings relating to the Real Property which are
currently pending. Contributor has no knowledge of any special tax or
assessment to be levied against the Real Property or any change in
the tax assessment of the Real Property.
(r) Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received notice that there is, and to Contributor's
knowledge there does not now exist, any violation of any restriction,
condition or agreement contained in any easement, restrictive covenant or
any similar instrument or agreement affecting the Real Property or any
portion thereof.
(s) Except as set forth on Schedule 7.2(f), neither Contributor nor,
following the Drop-Down, the Acquired Partnership has received (i) any
written notice from any governmental authority having jurisdiction over
the Real Property or the Mall or from any other person (including without
limitation a consultant or engineer or any insurance company or Board of
Fire Underwriters) (A) of any violation of any law, ordinance, order or
regulation (including without limitation the ADA) by Contributor (or,
following the Drop-Down, the Acquired Partnership) relating to the Mall
which has not heretofore been complied with or (B) requiring any
alterations, improvements or changes at the Mall or any portion thereof
which have not been completed. Contributor has no obligation to any
governmental authority for the performance of any capital improvements or
other work to be performed by Contributor (or, following the Drop-Down,
the Acquired Partnership) in or about the Real Property or donations of
monies or land (other than general real property taxes) which has not
been completely performed and paid for.
(t) Except as provided in Schedule 7.2(t), there is no litigation,
including any arbitration, investigation or other proceeding by or before
any court, arbitrator or governmental or regulatory official, body or
authority which is pending or, to Contributor's knowledge, threatened
against Contributor (or, following the Drop-Down, the Acquired
Partnership) relating to the Mall or the Transactions and there are no
unsatisfied arbitration awards or judicial orders against Contributor
(or, following the Drop-Down, the Acquired Partnership). Copies of all
pleadings and other documents with respect to the litigation described on
Schedule 7.2(t) have been furnished to the Partnership and are true,
accurate and complete in all respects.
(u) Schedule 7.2(u) contains a true and accurate list of all
policies of insurance relating to the Mall, which policies are and will
be kept in full force to and including the
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Closing Date. All premiums for such insurance have been paid in full.
Neither Contributor nor, following the Drop-Down, the Acquired
Partnership has received (and Contributor has no knowledge of) any
notice or request from (or organization exercising functions similar
thereto) cancelling or threatening to cancel any of said policies or
denying or disputing coverage thereunder.
(v) Except as set forth in Schedule 7.2(v), to Contributor's
knowledge, none of the Tenants or Anchors is the subject of any
bankruptcy, reorganization, insolvency or similar proceedings or has
ceased or reduced operations at the Mall other than temporarily due to
casualty, remodeling, renovation or similar cause). Except as set forth
in Schedule 7.2(v), Contributor has received no written notice that any
Tenant or Anchor intends to cease or reduce operations at the Mall other
than temporarily as described above.
(w) [Intentionally deleted]
(x) Schedule 7.2(x) accurately sets forth (i) a list of all
instruments, agreements and other documents relating to the Existing
Indebtedness and all modifications or amendments thereof and supplements
thereto (including without limitation side letters) (the "Existing
Indebtedness Documents"), (ii) the date of the Existing Indebtedness
Documents and of each modification or amendment thereof and supplement
thereto, (iii) the name of the holders of the Existing Indebtedness as of
the date hereof, (iv) the unpaid balances thereof as of the date hereof,
(v) the security therefor as of the date hereof and (vi) the amount of
any deposits or escrows held or established in connection therewith. The
Existing Indebtedness Documents are in full force and effect, neither
Contributor nor, following the Drop-Down, the Acquired Partnership has
received any notice of default under any Existing Indebtedness Document,
and no default on the part of Contributor (or, following the Drop-Down,
the Acquired Partnership) or, or to the knowledge of Contributor, any
other Party thereto exists thereunder (without regard to notice and cure
provisions). A true and complete copy of the Existing Indebtedness
Documents, including each written modification thereof and supplement
thereto, have heretofore been furnished to the Partnership. Such
documents constitute the entire agreement between Contributor (or
following the Drop-Down, the Acquired Partnership) and each Party
thereto, and there are no oral promises or agreements amending or
modifying the same.
(y) Contributor is aware that the Units to be issued to it hereunder
shall not be registered under the 1933 Act or under the securities laws
of any state or other jurisdiction; that the Partnership shall not have
any obligation to register the same in connection with the offering, sale
or issuance
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thereof to it pursuant hereto or at any time thereafter; that
the Units are subject to restrictions on transfer contained in the
Partnership Agreement and the Pledge Agreement and herein and, in any
event, cannot be sold unless they are subsequently registered under the
1933 Act or an exemption from such registration is available; and that
the Partnership, in issuing its Units in accordance with the provisions
hereof, is relying upon the representations and warranties of Contributor
contained in Sections 7.2(y), (z), (aa), (ab) and (ac).
(z) Contributor has received a copy of, has been advised to read,
and has read the Memorandum, including its exhibits, has become familiar
with the Memorandum's terms and provisions, and has been advised to
consult, and has consulted, with independent tax counsel regarding the
tax consequences of the Transactions.
(aa) Contributor has been provided with such other information
regarding the Partnership as Contributor has requested and has had an
opportunity to meet with and ask questions of representatives of the
Partnership.
(ab) Contributor, each of the partners of Contributor and each of
the partners, if any, of each such partner is an "accredited investor"
within the meaning of Regulation D under the 1933 Act and has knowledge
and experience in financial and business matters such that it is capable
of evaluating the merits and risks of receiving and owning the Units to
be issued to it pursuant hereto, and Contributor is able to bear the
economic risk of such ownership.
(ac) The Units to be acquired by Contributor pursuant to this
Agreement are being acquired by Contributor for its own, if any, account
for investment purposes only and not with a view to, and with no present
intention of, selling or distributing the same (other than a distribution
of such Units to the partners of Contributor or the partners, if any, of
such partners).
(ad) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements made by or on
behalf of Contributor.
(ae) Except as set forth on Schedule 7.2(ae), neither Contributor
(or, following the Drop-Down, the Acquired Partnership) nor any
predecessor in title is under obligation to make contributions or
otherwise provide assistance to any promotional association or
promotional fund or has customarily in the past made or provided any such
contributions or assistance. The promotional association established
with respect to the Property (the "Promotional Association") is an
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independent association established by and on behalf of the Tenants,
neither Contributor nor, following the Drop-Down, the Acquired
Partnership having no ownership, fiduciary or monetary interest of any
kind therein. Each of Contributor and, following the Drop-Down, the
Acquired Partnership has remitted to the Promotional Association any
amounts received by it from Tenants and other Parties that constitute
contributions to the Promotional Association.
(af) At Closing, the Acquired Partnership will be a partnership duly
formed and validly existing under the laws of the state of its formation
with full power and authority to execute, deliver and perform the
Contributor's Closing Documents to which it is a party, the execution,
delivery and performance of such Contributor Closing Documents will have
been duly and validly authorized by all necessary action on the part of
the Acquired Partnership, such Contributor Closing Documents will be duly
executed and delivered by the Acquired Partnership, such Contributor
Closing Documents will constitute the legal, valid and binding
obligations of the Acquired Partnership, enforceable against the Acquired
Partnership in accordance with their terms and there shall be no
indebtedness or other obligations of the Acquired Partnership to
Contributor or any of its Affiliates.
(ag) To best of Contributor's knowledge, Contributor has delivered
to the Partnership true and complete copies of all environmental reports
(including without limitation asbestos surveys), engineering reports, ADA
surveys and other material reports or studies relating to the Mall or the
Property that were prepared at the request of or otherwise are in the
possession of Contributor or any Affiliate of Contributor.
Any reference herein to the "best knowledge of Contributor" or other
phrases of similar import shall mean the knowledge of Sidney Forbes,
Maurice Cohen, Nate Forbes, G. Thomas York, Michael N. Hartz, David
Forbes and Rebecca Macrardini after a review of the files of Contributor
at the offices of FCP in Southfield, Michigan and inquiry of the general
manager and the operations manager (or the equivalent), if any, of the
Mall.
ARTICLE VIII
Access and Certain Rights of Early Termination
8.1 Due Diligence and Access.
(a) From the date hereof until the Closing, Contributor shall give
the Partnership and its representatives and consultants, during normal
business hours, upon reasonable notice and in a manner that does not
unreasonably interfere
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with the operation of Contributor's business, access to and the right to
inspect the Mall and the Property (including without limitation for
purposes of conducting environmental testing). From the date hereof
until Closing and upon request by the Partnership, Contributor promptly
shall provide the Partnership with other material information and data
with respect to the Mall and the Property which is in Contributor's
possession, including without limitation copies of Leases, the Reciprocal
Easement Agreements and the Contracts and such financial and other
information as the Partnership reasonably requests with respect thereto.
The Partnership may contact Parties as the Partnership deems appropriate
in connection with its due diligence examination.
(b) From the date hereof until the Closing, the Partnership shall
provide to Contributor such public information and data with respect to
the Partnership and the General Partner which is in the Partnership's
possession and which Contributor may request.
(c) The Partnership shall indemnify, defend and hold harmless
Contributor, its successors and assigns and their respective partners,
shareholders, officers, directors, employees and agents from and against
any Loss proximately caused by the exercise by the Partnership of its
rights of access and inspection pursuant to the provisions of this
Section 8.1. The indemnification obligations of the Partnership under
this Section 8.1(c) shall survive the Closing or termination of this
Agreement.
8.2 [INTENTIONALLY OMITTED]
8.3 Environmental Report. Contributor, at its sole cost and expense, shall
(a) cause an environmental consultant approved in writing by the Partnership
(the "Consultant") to conduct a Phase I environmental audit and asbestos survey
of the Real Property (and any additional testing recommended by the Consultant)
and (b) deliver a report (which may not be dated prior to the date hereof) (the
"Environmental Report") thereof (including without limitation the results of
such additional testing) to the Partnership no less than seven (7) days prior
to Closing. If the contents of the Environmental Report are unsatisfactory to
the Partnership, in its sole and absolute discretion, the Partnership may
terminate this Agreement within thirty (30) days following receipt of the
Environmental Report. In the event of the termination of this Agreement, this
Agreement shall be null and void and all parties shall be released from all
further rights and obligations under this Agreement (other than any right or
obligation that expressly survives the termination of this Agreement).
Following Closing, Contributor shall authorize the Consultant to make available
to the Partnership the samples, the results of and other information
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obtained in connection with, the environmental testing of the Consultant
pursuant hereto.
ARTICLE IX
Conditions to Closing
9.1 Conditions to Contributor's Obligations. Contributor's obligation to
close is subject to satisfaction of each of the following conditions (any of
which may be waived by Contributor in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by the
Partnership under this Agreement on or before the Closing shall have been
complied with or performed in all material respects.
(b) Accuracy of Representations and Warranties. The representations
and warranties made by the Partnership in this Agreement (without regard
to materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to events or
developments permitted hereunder or as to which Contributor have
otherwise consented in writing).
(c) No Other Termination. No termination of this Agreement by
Contributor or the Partnership shall have occurred pursuant to any other
provision hereof.
(d) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing.
(e) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
(f) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
9.2 Conditions to Partnership's Obligations. The Partnership's obligation
to close is subject to satisfaction of each of the following conditions (any of
which may be waived by the Partnership in its sole discretion):
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(a) Compliance with Agreement. On the Closing Date, all of the
covenants and agreements to be complied with or performed by Contributor
under this Agreement on or before the Closing shall have been complied
with or performed in all material respects.
(b) Accuracy of Representation and Warranties. The representations
and warranties made by Contributor in this Agreement (without regard to
materiality qualifications contained therein and supplementation in
accordance with Section 11.3) shall be true and complete in all material
respects on and as of the Closing Date (without regard to the bankruptcy
or default of any Anchor or Tenant that occurred following the date
hereof and events or developments permitted hereunder or as to which the
Partnership has otherwise consented in writing).
(c) Estoppels Obtained. The Estoppels shall have been obtained in
accordance with Section 11.7. Notwithstanding any provision in this
Agreement to the contrary, if Contributor has not obtained Estoppels from
all Tenants but have obtained Estoppels from all Anchors, 70% of all
Major Tenants, and 60% of all other Tenants (the Tenants from whom
Estoppels have not been obtained being herein called the "Missing
Tenants"), Contributor in its own capacity shall have the right, at
Contributor's sole option (but without having any obligation to do so) to
satisfy the condition of this Section 9.2(c) with respect to the Estoppel
from each Missing Tenant by executing and delivering to the Partnership
at Closing an Estoppel for such Missing Tenant in the form prescribed by
Section 11.7 (with appropriate changes to such form to reflect that
Contributor and not such Missing Tenant are signing such Estoppel), which
Estoppel will be released upon delivery of an Estoppel from such Missing
Tenant.
(d) Consents and Releases/Directions Obtained. The Contract Party
Consents, the Releases/Directions and the consent of the Existing Lenders
pursuant to Section 2.5 shall have been obtained.
(e) Issuance of Title Policy. The Title Company shall have issued,
or be irrevocably committed to issue, with respect to the Real Property
its owners' title insurance policy pursuant to the Title Commitment as
herein contemplated subject only to the Permitted Exceptions with respect
thereto (the "Title Policy").
(f) No Other Termination. No termination of this Agreement by the
Partnership or Contributor shall have occurred pursuant to any other
provision hereof.
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(g) No Litigation. At Closing, there is no litigation, including
any arbitration, investigation or other proceeding, pending by or before
any court, arbitrator or governmental or regulatory official, body or
authority nor any decree, order or injunction issued by any such court,
arbitrator or governmental or regulatory official, body or authority and
remaining in effect which does or is likely to prevent or hinder the
timely consummation of the Closing or materially adversely affect the
Mall or the operation thereof.
(h) Share Price. The Share Price shall not be less than $21.75 nor
more than $28.75.
(i) Simultaneous Closings Under Other Contribution Agreements. The
simultaneous closing of the transactions contemplated by the Other
Contribution Agreements.
ARTICLE X
Condemnation and Destruction
10.1 Casualty or Condemnation in General.
(a) If prior to the Closing Date the Property shall be the subject
of a Taking or Casualty, Contributor shall promptly inform the
Partnership of same.
(b) If prior to the Closing Date the Property shall be the subject
of a Substantial Taking or a Substantial Casualty, the Partnership may by
written notice delivered to Contributor on or before the Closing Date,
elect as its sole remedy on account thereof, either (i) to terminate this
Agreement, and the rights of the parties hereto, in which event this
Agreement (other than any right or obligation that expressly survives the
termination of this Agreement) shall terminate as of the date of delivery
of such notice; or (ii) to continue this Agreement in effect, in which
event Contributor (A) shall transfer and assign to the Acquired
Partnership, at the Closing, its full right, title and interest in and to
any insurance proceeds (and shall pay in cash to the Acquired Partnership
all deductibles owing in respect thereof) or condemnation awards with
respect thereto, and shall cooperate in all reasonable respects with the
Acquired Partnership, at the Acquired Partnership's sole cost and
expense, in connection with the collection thereof, to the extent not
collected at the Closing, and (B) to the extent any insurance proceeds or
condemnation awards shall have been received by Contributor prior to the
Closing, remit to the Acquired Partnership the full amount thereof so
collected, less, in each such case, (i) reasonable costs of collection
thereof (other than the cost of deductibles), and (ii) amounts, if any,
applied by Contributor or, following the Drop-Down, the
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Acquired Partnership prior to Closing to preservation, repair or
restoration.
(c) If prior to the Closing Date, the Property or any portion
thereof is (i) the subject of a Taking (other than a Substantial Taking)
or (ii) the subject of a Casualty (other than a Substantial Casualty),
this Agreement shall nevertheless remain in full force and effect with no
abatement of the consideration to be delivered to Contributor on account
thereof and the Transactions shall be consummated as provided herein. In
such event, any insurance proceeds or condemnation awards shall be
applied and paid in the same manner and subject to the same provisions
set forth above as are applicable in a case of a Substantial Casualty or
a Substantial Taking as to which the Partnership has elected nevertheless
to continue this Agreement in effect.
10.2 Adjustment of Claims and Condemnation Proceedings. If a Taking or
Casualty shall occur, Contributor shall initiate or cause to be initiated all
actions required to adjust, compromise and collect the awards payable by the
condemning authority or the proceeds payable under the applicable policy or
policies of casualty insurance. The Partnership shall have the right (but not
the obligation) to participate with Contributor or, following the Drop-Down,
the Acquired Partnership in the initiation of all such actions and, in any
event, Contributor shall consult with, and keep the Partnership advised of,
Contributor's progress in connection therewith. Contributor shall not agree
(and shall not permit the Acquired Partnership to agree) to any settlement of
the awards or insurance proceeds payable in connection with any such Taking or
Casualty (or enter into any agreement in lieu of a Taking) without the
Partnership's approval, which approval shall not be unreasonably withheld or
delayed.
ARTICLE XI
Additional Covenants
11.1 Indemnification.
(a) Indemnification by Contributor. From and after the Closing and
subject to the provisions of Section 12.1, Contributor shall indemnify,
defend and hold harmless the Partnership and the Acquired Partnership,
their successors and assigns and their partners, employees and agents
(the "Indemnified Partnership Persons") from and against any claim,
action, demand, loss, cost, expense, liability, penalty or damages,
including, without limitation, reasonable attorneys' fees and expenses (a
"Loss"), incurred or suffered by any Indemnified Partnership Person that
results from, relates to or arises out of (i) the breach or inaccuracy of
any representation or warranty made by Contributor in this
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Agreement or the Contributor Closing Documents, (ii) the breach or
non-fulfillment by Contributor of any of the covenants or agreements of
Contributor under this Agreement or the Contributor Closing Documents,
(iii) the Contributor's Liabilities, or (iv) the operation of the Mall
prior to the Closing Date.
(b) Indemnification by Partnership. From and after the Closing, the
Partnership shall indemnify, defend and hold harmless Contributor and
their partners, their successors and assigns and their respective
partners, shareholders, directors, officers, employees and agents (the
"Indemnified Contributor Persons") from and against any Loss incurred or
suffered by any Indemnified Contributor Person that results from, relates
to or arises out of (i) the breach or inaccuracy of any representation or
warranty made by the Partnership in this Agreement or the Partnership
Closing Documents, (ii) the breach or non-fulfillment by the Partnership
of any of the covenants or agreements of the Partnership under this
Agreement or the Partnership Closing Documents, or (iii) the Partnership
Liabilities.
(c) Joint Cooperation. Upon obtaining knowledge of the institution
of any action or proceeding or other event which could give rise to a
claim for indemnity hereunder, the person seeking indemnification shall
promptly give written notice thereof to the party from whom
indemnification may be sought. If such claim or demand relates to a claim
or demand asserted by a third party, the indemnifying party shall have
the right, at its expense, to employ counsel to defend such claim or
demand and the indemnified person shall have the right, but not the
obligation, to participate in the defense of any such claim or demand at
its own cost; provided, however, that counsel to be utilized in defense
of the matter by the indemnifying party shall be reasonably approved by
the indemnified person, and provided further that the indemnifying party
shall not assume the defense for matters as to which there is a conflict
of interest or separate and inconsistent defenses, in which case the
indemnified person will utilize counsel reasonably approved by the
indemnifying party and the indemnifying party will reimburse the
indemnified person for any legal and other expenses reasonably incurred
in connection with investigating, preparing or defending any such claim,
loss, damage, liability or action. The indemnified person will not
settle any claim or demand for which indemnity is sought hereunder
without the indemnifying party's written consent (which consent shall not
be unreasonably withheld or delayed), and the indemnifying party may
settle such claim or demand with the written consent of the indemnified
person, which consent may not be unreasonably withheld or delayed so long
as the indemnified person receives an unconditional release. The
indemnified person shall make available to the
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indemnifying party all records and other materials reasonably required by
it in contesting a claim or demand asserted by a third party against the
indemnified person and shall cooperate in the defense thereof.
(d) Waiver of Certain Claims Known at Closing. Notwithstanding
anything to the contrary contained herein, (a) the Partnership may not
assert a claim for damages or indemnity hereunder following the Closing
for a breach of representation, warranty or covenant existing on the
Closing Date to the extent that representatives of the Partnership have
conscious, actual knowledge of such breach and the scope thereof as of
the Closing Date and (b) Contributor may not assert a claim for damages
or indemnity hereunder following the Closing for a breach of
representation, warranty or covenant existing on the Closing Date to the
extent that representatives of Contributor have conscious, actual
knowledge of such breach and the scope thereof as of the Closing Date.
11.2 Conduct of Business Pending Closing. From the date hereof until the
Closing, Contributor shall (a) use reasonable best efforts to maintain, for the
benefit of the Partnership and the Acquired Partnership following the Closing,
the goodwill of Tenants, prospective tenants, vendors and other parties having
business relations with Contributor; (b) pay its debts (or in good faith
contest the same) and perform its obligations as they become due (or, following
the Drop-Down, the debts and obligations of the Acquired Partnership); (c)
maintain the Mall in the same manner and condition that exists on the date
hereof, as such condition shall be altered by reason of Casualty, Taking and/or
normal wear and tear; (d) without the express written consent of the
Partnership, not (i) enter into any new or additional Lease, or extend, renew
or modify, consent to any assignment of or sublease in respect of, or waive any
material right under any Lease, other than renewals or extensions resulting
from the exercise by a Tenant of a currently existing renewal or extension
option, (ii) cancel or terminate any Lease or take any action to enforce any
Lease which would have the effect of cancelling or terminating the same, (iii)
enter into a new reciprocal easement or similar agreement or amend or modify,
consent to the assignment of or waive any material right under either
Reciprocal Easement Agreement, (iv) make any alterations to the Mall or enter
into any new contracts or extend or renew or cancel any Contract relating to
capital expenditures, (v) enter into any other new contracts or extend, renew
or cancel, consent to the assignment of or waive any material right under any
other Contract, except in the ordinary and usual course and business and in
accordance with past practices and policies, (vi) except as permitted under (i)
above, sell, transfer, exchange, further encumber or grant interests (including
easements) in the Property or the Interests or any part thereof or engage in
negotiations or discussions with, or otherwise solicit or assist, any third
party
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relating to the acquisition by such third party of the Property or the
equity interests in Contributor or other Person owning the Property, (vii)
extend, modify or amend any of Existing Indebtedness Documents or borrow
additional funds thereunder (viii) permit the Acquired Partnership to have
employees and (ix) otherwise take any action which could or would render
inaccurate any of the representations or warranties made by Contributor in this
Agreement; and (e) otherwise operate the Mall in the ordinary course consistent
with current practice. The consent of the Partnership shall not be
unreasonably withheld or delayed as to the matters set forth in clause (d)(i)
of this Section 11.2; and, in the event that the Partnership shall fail to
notify Contributor in writing of its disapproval of any proposed matter
described in clause (d)(i) within five (5) business days after it receives a
written request for approval therefor (which request shall contain a statement
as to the consequences of a failure to respond), such failure shall be deemed
to constitute Contributor's approval thereto.
11.3 Supplemental Disclosure. From the date hereof through Closing,
Contributor and the Partnership shall have the continuing obligation to
promptly supplement or amend the Schedules with respect to the representations
and warranties made by them or it to reflect any matter hereafter arising or
discovered which, if existing or known at the date hereof, would have been
required to be set forth herein or described thereon. Without limiting the
foregoing, if any Leases or Contracts, or amendments thereto, are hereafter
entered into, Contributor shall give the Partnership prompt written notice
thereof and the appropriate exhibits or schedules hereto shall be updated and
amended accordingly.
11.4 [INTENTIONALLY OMITTED]
11.5 Cooperation. The Partnership shall cooperate with Contributor in
seeking to obtain all approvals, consents and estoppels of third parties
required by this Agreement (but shall not be obligated to pay money or grant
concessions therefor), including any Contract Party Consents, and shall furnish
to Contributor or to any Party such information as to the Partnership, its
capabilities, its experience in the ownership and management of real property
and as to such other matters as Contributor or any Party shall reasonably
request in connection therewith. Contributor shall use reasonable best efforts
to obtain the Releases/Directions and a consent of the Parties to the Contracts
marked with a "1" on Schedule 7.2(n) (the "Contract Party Consents").
11.6 Transfer and Other Taxes; Etc. Contributor shall pay the real
property transfer taxes, documentary stamps and other taxes, fees or charges,
if any, imposed by the state, county or municipality in which the Mall is
located as the result of the prior transfer of the Real Property as described
in Section 2.3,
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the contribution of the Interests pursuant to Section 2.1 and the
conversion following Closing of the Acquired Partnership to a limited
partnership. Contributor shall pay all recording fees and charges and any
personal property sales or use taxes in connection with the transfer of the
Personalty and/or the Interests pursuant hereto.
11.7 Estoppel Certificates. Contributor shall request, and shall use
reasonable best efforts to obtain from each Party to the Reciprocal Easement
Agreements and each Tenant or other Party under a Lease estoppel certificates,
dated not more than 70 days prior to the Closing Date, in form reasonably
acceptable to the Partnership, and an estoppel certificate, dated not more than
30 days prior to the Closing Date, from each Existing Lender in form reasonably
satisfactory to the Partnership; provided, however, that if any Reciprocal
Easement Agreement or Lease shall, by its terms, prescribe the form or content
of an estoppel certificate, Contributor only shall be required to attempt to
obtain estoppel certificates from the Party thereto in the form prescribed by
the relevant document and containing only such information as is required to be
delivered thereunder.
11.8 Record Retention. After the Closing, the Partnership shall provide
Contributor with reasonable access to the Books and Records and, at
Contributor's cost, copies of all or any portion thereof. The Partnership
either shall retain the Books and Records until the fifth anniversary of the
date hereof or notify Contributor of its desire to dispose of the Books and
Records and turn them over to Contributor if Contributor so request.
11.9 Publicity. In no event shall either Contributor or the Partnership
issue any press release or otherwise disclose any non-public information
regarding this Agreement or the Transactions (including without limitation the
Environmental Report or information contained therein) unless the other party
or parties have consented thereto in writing (and Contributor and the
Partnership agree not unreasonably to withhold or delay such consent) and to
the form and substance of any such statement or disclosure; provided, however,
that nothing herein shall be deemed to limit or impair in any way any party's
ability to disclose the details of or information concerning this Agreement,
the Transactions or the Property to such party's attorneys, accountants or
other advisors or to the extent such party reasonably deems necessary or
desirable pursuant to any court or governmental order or applicable securities
or other laws or regulations or financial reporting requirements, to obtain the
Contract Party Consents, the consent of the Existing Lenders, Estoppels or
financing for the acquisition of the Mall and to assess the Property in
connection with the Partnership's due diligence examination (including without
limitation contacting Tenants and other Parties). Further, either party may
disclose any information regarding this Agreement or the Transactions to its
direct or indirect constituent partners or
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shareholders, as the case may be (and to counsel for such constituent
partners and shareholders) and as otherwise necessary to comply with the terms
of this Agreement. Any disclosure by a party's advisors or direct or indirect
constituent partners or shareholders or their advisors shall be deemed a breach
hereof by such party. If for any reason any Transaction is not consummated, the
Partnership promptly shall return to Contributor all originals and copies of
documents, reports and financial and other information relating to the Property
and to Contributor which Contributor has furnished to the Partnership. The
obligations of Contributor and the Partnership under this Section 11.9 shall
survive the termination hereof, however caused.
11.10 Assistance Following Closing. From and after the Closing, Contributor,
at the Partnership's sole cost and expense, shall provide reasonable assistance
to the Partnership in connection with the preparation of financial statements
and bills and the adjustment of losses and claims and the enforcement or
settlement of any such claims. Without limiting the foregoing and upon the
request of the Partnership from time to time, Contributor shall (a) subject to
applicable law and contractual requirements, permit its lease and property
management databases relating to the Mall to be loaded onto the computer
systems of the Partnership or its designee or provide disks containing such
databases and (b) provide signed representation letters with respect to
revenues and expenses relating to the Mall if required under GAAS to enable the
Partnership's certified public accountants to render an opinion on the
Partnership's financial statements.
11.11 Further Assurances. Each of Contributor and the Partnership agree, at
any time and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and other documents (and to
bear its own costs and expenses incidental thereto) and to take such other
actions as the other of them may reasonably request in order to carry out the
intents and purposes of this Agreement; provided, however, that neither
Contributor nor the Partnership shall be obligated, pursuant to this Section
11.11 to incur any expense of a material nature and/or to incur any material
obligations in addition to those set forth in or contemplated by this Agreement
and/or its respective Closing Documents.
11.12 Restrictions on Certain Dispositions of Real Property.
(a) Without the written consent of Contributor, the Partnership
shall not, and shall cause the Acquired Partnership not to, voluntarily
dispose of all or substantially all of the Real Property prior to January
1, 2002 (the "Permitted Disposition Date").
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(b) If at any time after the Permitted Disposition Date and prior to
the fifteenth anniversary of the Closing Date, the Partnership shall
desire to sell all or substantially all of the Real Property, the
Partnership shall deliver to Contributor a written notice stating the
price and other material economic terms upon which the Partnership
proposes to dispose of such Real Property (the "Offer Notice").
Contributor shall have the right, exercisable by delivery of written
notice to the Partnership no later than thirty (30) days after the Offer
Notice is given (the "Response Date") along with evidence reasonably
satisfactory to the Partnership of sufficient financial wherewithal of
Contributor at such time, to purchase such Real Property on the terms and
conditions set forth in the Offer Notice, in which event Contributor
shall purchase, and the Partnership shall cause to be sold, such Real
Property within 60 days. In the event that Contributor does not elect to
purchase such Real Property within such thirty (30) day period,
Contributor shall be deemed to have waived its rights contained in this
Section 11.12(b) and the Partnership may thereafter sell the Real
Property on terms substantially no more favorable to the purchaser than
those set forth in the Offer Notice (that is, at a price that is not less
than 90% of the price contained in the Offer Notice and that does not
result in a reduction of more than 25% in the excess of the price paid by
such purchaser over the amount of indebtedness to be assumed by such
purchaser). In the event that such Real Property is not sold within one
year following the Response Date, such Real Property may not thereafter
be sold without again delivering an Offer Notice and complying with the
provisions of this Section 11.12. Notwithstanding anything to the
contrary contained herein, in the event that Contributor shall default in
the purchase of such Real Property pursuant hereto, Contributor shall
have no further right to purchase the Real Property pursuant to this
Section 11.12(b). Upon the written request of Contributor given no later
than ten days following the giving of the Offer Notice, the Partnership
will consider (and inform Contributor of its determination within ten
days but the Partnership shall have no liability for failure to respond)
whether it will distribute the Real Property to Contributor in redemption
of Units by accepting Units as consideration for the Real Property so as
to accomplish the transaction in a manner which would not result in
recognition of income and gain to Contributor for federal income tax
purposes; however, the Partnership shall not be obligated and shall have
no duty, (fiduciary or otherwise) to accept Units as the consideration or
to structure the proposed transaction in such manner, and the decision as
to whether to accept Units or so structure the transaction shall be
within the sole discretion of the Partnership. In the event that the
Mall and one or both of the malls acquired pursuant to the Other
Contribution Agreements are proposed to be sold as part of the
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same transaction, Contributor may not exercise the rights pursuant to
this Section 11.12(b) or purchase the Mall pursuant to this Section
11.12(b) unless the rights under Section 11.12(b) of such Other
Contribution Agreements also are exercised and such other malls also are
acquired pursuant thereto.
(c) The provisions of this Section 11.12 shall not apply to (i)
transactions, such as like-kind exchanges, which would not result in the
recognition of income or gain to Contributor for federal income tax
purposes by reason of the application of Section 704(c) or Section 737 of
the Code (but, in the event of any disposition permitted by the preceding
clause, the disposition of any carryover basis real property or other
successor real property shall be subject to the provisions of this
Section 11.12), (ii) the mortgage or the granting of security interests
in any and all property of the Partnership provided the same is not a
sale or exchange for federal income tax purposes (and the conveyance of
such property in connection with foreclosure of any such mortgage or
security interest or by deed in lieu thereof), (iii) the sale, exchange
or other disposition of all or substantially all of the properties of the
Partnership and its subsidiaries, including all or part of the Real
Property, (iv) the grant of easements or rights-of-way, (v) the sale to
any occupant or prospective occupant of the portion of the Real Property
occupied or proposed to be occupied by it (including parking area and
other surrounding area), (vi) the lease of the Real Property or portions
thereof provided the same is not a sale or exchange for federal income
tax purposes and (vii) the exercise of all other rights of an owner with
respect to the Real Property provided the same is not a sale or exchange
for federal income tax purposes. In addition, the provisions of Section
11.12(a) shall not apply to the sale, conveyance or disposition of the
Real Property when, in the reasonable judgment of the Partnership, dire,
immediate circumstances exist which require the disposition of the Real
Property. Although the Partnership shall not be required to obtain an
opinion of counsel with respect to the matters set forth in clause (i) of
the first sentence of this Section 11.12(c), the requirements of such
clause will be conclusively deemed to have been satisfied if the
Partnership shall have obtained an opinion of counsel to the effect that
a particular transaction will not result in the recognition of income or
gain for federal income tax purposes by Contributor. Upon the written
request of Contributor, the Partnership promptly shall furnish to
Contributor a copy of any such opinion.
(d) For purposes of this Section 11.12 and Section 11.13, the term
"Contributors" shall include the partners of Contributor and the
partners, if any, of such partners who hold Units at the time of
reference thereto.
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11.13 Repayment or Refinancing of Contributor Property Indebtedness. The
Partnership shall notify Contributor prior to the repayment or refinancing of
any Contributor Property Indebtedness (other than any repayment or refinancing
of Existing Indebtedness referred to in Section 2.5), which notice shall
include a good faith estimate of the amount by which the amount of Partnership
liabilities that Contributor may include in the tax basis of its Units pursuant
to Section 1.752 of the Treasury Regulations shall be reduced as the result
thereof (the "Refinancing Notice"). In the event that any such repayment or
refinancing (other than any repayment or refinancing of Existing Indebtedness
referred to in Section 2.5) shall reduce the amount of the Partnership
liabilities that Contributor may include in the tax basis of its Units pursuant
to Section 1.752 of the Treasury Regulations (after giving effect to the
allocations specified in Section 11.16(c)) and upon written notice from
Contributor delivered within ten (10) days after the Refinancing Notice is
given, the Partnership shall use reasonable best efforts to make provision for
Contributor to guaranty indebtedness of the Partnership (but the Partnership
shall not be obligated to incur additional indebtedness or to permit such
guarantees if such guarantees shall have an adverse effect on the Partnership
or the other partners thereof) so as to enable Contributor to increase its
"economic risk of loss" (within the meaning of Section 1.752-2 of the Treasury
Regulations) with respect to liabilities of the Partnership but minimize the
real economic risk of such guarantees to Contributor to the extent practicable
(by, for example, guarantying the "bottom" portion). No other person may incur
the "economic risk of loss" (within the meaning of section 1.752-2 of the
Treasury Regulations) with respect to any Contributor Property Indebtedness
without the consent of Contributor.
11.14 Delivery of Certain Information. The Partnership shall transmit to
Contributor (a) all periodic reports or statements furnished to the public
shareholders of the General Partner simultaneously with the transmission
thereof to such public shareholders, (b) promptly following written request by
Contributor or its successors or assigns, copies of all amendments to the
Partnership Agreement and (c) promptly following written request by Contributor
or its successors or assigns (but no more frequently than once each calendar
year), a list of the names and addresses of all partners of the Partnership.
11.15 Record Owners of Units. The Units issued pursuant hereto may not be
sold, conveyed, pledged or otherwise transferred until the first anniversary of
the Closing Date (except for transfers to the partners of Contributor and/or
the partners, if any, of such partners). There may be no more than twelve
record owners of all of the Units issued pursuant hereto and the Other
Contribution Agreements at any time hereafter to the extent that such Units are
then owned directly or indirectly by the individuals
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<PAGE> 62
Documents (other than in Sections 7.2(a), (b), (c), (d) and (af)),
including the indemnities to the extent that they are derived therefrom (but
nothing contained in this sentence shall affect or limit other indemnities and
covenants contained herein or in the Closing Documents), shall survive Closing
only for a period of fifteen (15) months after the Closing Date except as to
Losses of which written notice has been given prior to the expiration of such
fifteen (15) month period in accordance with Section 12.2 and the other
provisions of this Agreement.
12.2 Notices. Notices must be in writing and sent to the party to whom or
to which such notice is being sent, by certified or registered mail, return
receipt requested, commercial overnight delivery service or facsimile, or
delivered by hand with receipt acknowledged in writing, as follows:
(a) To Partnership:
55 West Monroe Street, Suite 3100
Chicago, Illinois 60603
Attention: Matthew Bucksbaum
with a copy thereof to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg
(b) To Contributor:
Jackson Properties
100 Galleria Officentre
Suite 427
Southfield, Michigan 48037
with a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attention: Maurice S. Binkow
Except as otherwise set forth herein, all notices (a) shall be deemed given
when received or, if mailed as described above with appropriate postage, after
5 business days or, if sent by facsimile, upon receipt of confirmed answerback
and (b) may be given either by a party or by such party's attorneys. The cost
of delivery shall be borne by the party delivering the notice.
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and
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all of which together shall constitute a single document when at least
one counterpart has been executed and delivered by each party hereto.
12.4 Amendments. Except as otherwise provided herein, this Agreement may
not be changed, modified, supplemented or terminated, except by an instrument
executed by the party hereto which is or will be affected by the terms of such
change, modification, supplement or termination without the need for the
consent of any third party beneficiary hereof.
12.5 Waiver. Each party shall have the right, exercisable in its sole and
absolute discretion, but under no circumstances shall be obligated, to waive or
defer compliance by any other party with its obligations hereunder or to waive
satisfaction of any conditions contained herein for its benefit. No waiver by
any party of a breach of any covenant or a failure to satisfy any condition
shall be deemed a waiver of any other or subsequent breach or failure to
satisfy any other condition. All waivers of any term, breach or condition
hereof must be in writing.
12.6 Successors and Assigns. Subject to the provisions of Section 12.10,
the terms, covenants, agreements, conditions, representations and warranties
contained in this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
12.7 Third Party Beneficiaries. The provisions of this Agreement are made
for the benefit of the parties hereto (and the Indemnified Partnership Persons
and the Indemnified Contributor Persons with respect to Section 11.1 and the
Acquired Partnership, but none of such Persons that are not parties hereto or
successors and assigns of such parties hereto shall have any right to approve
any amendment, addition or waiver hereto or hereof), and their respective
successors in interest and assigns and are not intended for, and may not be
enforced by, any other person or entity.
12.8 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
12.9 Governing Law. This Agreement has been made pursuant to and shall be
governed by the laws of the State of Michigan (without regard to conflicts of
law rules).
12.10 Assignment. This Agreement may not be assigned or delegated by any
party without the written consent of the other
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<PAGE> 64
party except that the Partnership may assign this Agreement to an
Affiliate of the Partnership, it being acknowledged and agreed by the
Partnership that no such assignment shall relieve the Partnership of its
obligations under this Agreement.
12.11 Headings; Exhibits. The headings of the various Articles and Sections
of this Agreement have been inserted solely for purposes of convenience, are
not part of this Agreement and shall not be deemed in any manner to modify,
explain, expand or restrict any of the provisions of this Agreement.
12.12 Gender and Number. Words of any gender shall include the other gender
and the neuter. Whenever the singular is used, the same shall include the
plural wherever appropriate, and whenever the plural is used, the same also
shall include the singular where appropriate.
12.13 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any prior written or oral understandings and/or agreement among them with
respect thereto.
12.14 Costs of Enforcement. In the event that any action is brought by any
party or parties to this Agreement or any Closing Document against any other
party or parties to enforce rights under this Agreement or any Closing
Document, the prevailing party's or parties' costs in such action, including
reasonable attorneys' fees, shall be paid by the other party or parties. Any
amounts owing hereunder or thereunder which are not paid when due shall bear
interest at the per annum rate equal to the prime rate of Bank of America
Illinois, N.A. (or any successor), as the same may change from time to time,
plus four percent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 65
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
CONTRIBUTOR:
JACKSON PROPERTIES, a
Michigan general partnership
By: Forbes/Cohen Properties, a
Michigan general partnership,
a partner
By: /s/ Maurice Cohen
-------------------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
-------------------------------------
Sidney Forbes, partner
By: The Frankel Group, a Michigan general
partnership, a partner
By: /s/ Samuel Frankel
-------------------------------------
Samuel Frankel, partner
By: /s/ Stuart Frankel
-------------------------------------
Stuart Frankel, partner
By: /s/ Jean Frankel
-------------------------------------
Jean Frankel, partner
By: /s/ Stanley Frankel
-------------------------------------
Stanley Frankel, partner
By: /s/ Bruce Frankel
-------------------------------------
Bruce Frankel, partner
By: /s/ JoElyn Frankel
-------------------------------------
JoElyn Frankel, partner
<PAGE> 66
By: The Cohn Group, a Michigan general
partnership, a partner
By: /s/ Avern Cohn
--------------------------------
Avern Cohn, partner
By: /s/ Rita Haddow
--------------------------------
Rita Haddow, partner
PARTNERSHIP:
GGP LIMITED PARTNERSHIP, a
Delaware limited partnership
By: GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Joel Bayer
------------------------------
Its: Vice President
-------------------------
<PAGE> 1
Exhibit 4
EXHIBIT D
REDEMPTION RIGHTS AGREEMENT
Redemption Rights Agreement, dated December 6, 1996, among GGP Limited
Partnership, a Delaware limited partnership (the "Partnership"), General Growth
Properties, Inc., a Delaware corporation (the "General Partner"), and the
parties whose names are set forth under the caption "Contributing Partners" on
the signature pages hereof (collectively, "Contributing Partners").
R E C I T A L S
WHEREAS, concurrently herewith, Contributing Partners are being admitted
as limited partners of the Partnership, the general partner of which is the
General Partner;
WHEREAS, shares of common stock, $.10 par value per share, of the General
Partner (the "Common Stock") are listed on the New York Stock Exchange; and
WHEREAS, the parties desire to set forth herein the terms and conditions
upon which the Contributing Partners may cause the Partnership to redeem their
limited partnership units in the Partnership.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Acts" shall mean the Securities Act and the Exchange Act, collectively.
"Affiliates" shall mean, with respect to any Contributing Partner, the
"Affiliates" of such Contributing Partner as defined in the Contribution
Agreement between the Partnership and such Contributing Partner.
"Business Day" shall mean any day upon which commercial banks are open for
business in Chicago, Illinois.
"Cash Purchase Price" shall mean, with respect to any redeemed or
purchased Units, an amount of cash equal to the value of the Share Purchase
Price (computed as of the Computation Date and equal to the Current Per Share
Market Price on such Computation Date multiplied by the number of Shares) that
would be payable with respect to such Units assuming the Share Purchase Price
were paid in full satisfaction of the
<PAGE> 2
Purchase Price of such Units. In the event that the Share Purchase
Price includes securities other than Shares, then the value of such other
securities shall be determined by the General Partner acting in good faith on
the basis of the closing prices of securities if listed on a nationally
recognized exchange and otherwise on the basis of such quotations and other
information as the General Partner considers, in its reasonable judgment,
appropriate.
"Certificate of Incorporation" shall mean the Certificate of Incorporation
of the General Partner, as the same may be amended from time to time.
"Closing Price" shall have the meaning set forth in the Partnership
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor code.
"Common Stock" shall have the meaning set forth in the recitals.
"Computation Date" shall mean the date on which the applicable Notice is
received by the Partnership or, if such date is not a Business Day, the first
Business Day thereafter.
"Conversion Factor" shall mean 100%, provided that such factor shall be
adjusted in accordance with Section 6(a).
"Contribution Agreements" shall mean the Contribution Agreements each
dated the date hereof, and each between the Partnership and one of Contributing
Partners, as the same have been and may hereafter be amended from time to time,
pursuant to which this Agreement is being executed.
"Current Per Share Market Price" shall have the meaning set forth in the
Partnership Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exchange Act Reporting Company" shall mean any corporation or other
entity which is subject to the reporting requirements of the Exchange Act.
2
<PAGE> 3
"Expiration Date" shall mean the earlier of (a) April 16, 2023 (b) the
date upon which all Units have been redeemed or purchased in accordance with
the terms hereof.
"Forbes/Cohen Units" shall mean any and all Units that are owned directly
or indirectly through one or more partnerships by Sidney Forbes and/or Maurice
Cohen on the date hereof.
"Liens" shall have the meaning set forth in the Contribution Agreement.
"Major Transaction Event" shall mean, with respect to the General Partner,
(a) a reclassification, capital reorganization or other similar change
regarding or affecting outstanding Shares (other than a change addressed in
Section 6(a)); (b) a merger or consolidation of the General Partner with one or
more other corporations or entities, other than a merger pursuant to which the
General Partner is the surviving corporation and the outstanding Shares are not
affected, (c) a sale, lease or exchange of all or substantially all of the
General Partner's assets or (d) the liquidation, dissolution or winding up of
the General Partner.
"Notice" shall have the meaning set forth in Section 3.2.
"Other REIT" shall mean CenterMark Properties, Inc., GGP/Homart, Inc. and
any other REIT in which the General Partner holds a direct or indirect equity
interest and of which Contributing Partners are notified in writing.
"Partnership Agreement" shall mean that certain Amended and Restated
Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as
amended by that certain First Amendment thereto dated May 23, 1995, that
certain Second Amendment dated June 13, 1995, that certain Third Amendment
thereto dated May 21, 1996 and that certain Fourth Amendment thereto dated
August 30, 1996, that certain Fifth Amendment dated as of October 4, 1996, that
certain Sixth Amendment dated as of November 27, 1996 and as the same may be
further amended through the date of this Agreement.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, trust or other entity.
"Pledge Agreement" shall mean that certain Pledge Agreement of even date
herewith, between the Partnership and Contributing Partners.
3
<PAGE> 4
"Purchase Price" shall mean the Cash Purchase Price or the Share Purchase
Price, or a combination thereof.
"Purchase Right" shall have the meaning set forth in Section 7.1.
"Redemption Rights" shall have the meaning set forth in Section 2.
"REIT" shall mean real estate investment trust as such term is defined
under the Code.
"REIT Requirements" shall have the meaning set forth in the Partnership
Agreement, as the same may change from time to time.
"Registration Expenses" shall mean all expenses incident to the General
Partner's performance of or compliance with the registration requirements set
forth in this Agreement, including without limitation (a) the fees,
disbursements and expenses of the General Partner's counsel and accountants in
connection with the registration of Shares issuable upon the exercise of the
Redemption Rights; (b) all expenses in connection with the preparation,
printing and filing of the registration statement or statements, any
preliminary prospectus or final prospectus, any other offering document and
amendments and supplements thereto; (c) the cost of printing or producing any
blue sky or legal investment memoranda or other documents in connection with
the offering, sale or delivery of such Shares; (d) all expenses in connection
with the qualification of such Shares under state securities laws; and (e) the
fees and expenses incurred in connection with the listing of such Shares on
each securities exchange on which securities of the same class are then listed.
Notwithstanding the foregoing, Registration Expenses shall not include (and
the General Partner will pay) any costs incurred by the Partnership or the
General Partner in preparing any document that is incorporated by reference in
a registration statement, or any professional fee or other expenses, that would
have been incurred apart from the obligation of the General Partner hereunder
to file a Registration Statement.
"Retailer Interest" shall have the meaning set forth in Section 7.5.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor statute.
4
<PAGE> 5
"Share Purchase Price" shall mean, with respect to the exercise of any
Redemption Rights and subject to the provisions of Section 6(c), a number of
Shares equal to the product of (a) the number of Units being redeemed or
purchased multiplied by (b) the Conversion Factor; provided, however, that, in
the event the General Partner, after the date of this Agreement, issues to all
holders of Shares rights, options, warrants or convertible or exchangeable
securities entitling the stockholders to subscribe for or purchase Shares
(other than rights referred to in Section 6(b)) or any other securities or
property, then the Share Purchase Price also shall include such rights,
options, warrants or convertible or exchangeable securities that a holder of
that number of Shares would have been entitled to receive.
"Shares" shall mean shares of the Common Stock.
"Units" shall mean the limited partnership units in the Partnership issued
to Contributing Partners pursuant to the Contribution Agreement.
"Unitholder" shall mean the Person who at the time in question holds one
or more Units in accordance with the Partnership Agreement, as the same may be
amended from time to time.
2. Grant of Redemption Rights.
(a) Upon the terms and subject to the conditions contained herein, the
Partnership does hereby grant to Contributing Partners, and Contributing
Partners do hereby accept, the right, but without obligation on the part of
Contributing Partners, to require the Partnership to redeem from time to time
part or all of their Units for the Cash Purchase Price ("Redemption Rights").
(b) Notwithstanding the provisions of Section 2(a), the General Partner
may, in its sole and absolute discretion, assume the obligation of the
Partnership with respect to and satisfy a Contributing Partner's exercise of a
Redemption Right by paying to such Contributing Partner, at the General
Partner's election (which may be exercised in the General Partner's sole
discretion), either the Cash Purchase Price or the Share Purchase Price (or a
combination thereof) with respect to the Units for which such Contributing
Partner exercised its Redemption Rights. If the General Partner assumes such
obligations with respect to the exercise by a Contributing Partner of a
Redemption Right as to certain Units and makes the
5
<PAGE> 6
required payment, then the Partnership shall have no obligation to pay
any amount to such Contributing Partner with respect to the exercise of a
Redemption Right for such Units, and any Units purchased shall be owned by the
General Partner for all purposes.
(c) If the General Partner shall assume the obligations of the Partnership
with respect to and satisfy a Redemption Right, the Partnership, the
Contributing Partner and the General Partner each shall treat the transaction
between the General Partner and Contributing Partner as a sale of Contributing
Partner's Units (or a portion thereof) to the General Partner for federal
income tax purposes.
(d) Upon the redemption or purchase of part or all of a Contributing
Partner's Units and the payment of the Purchase Price with respect thereto,
such Person shall be deemed withdrawn as a Partner in the Partnership to the
extent of the Units redeemed or purchased and shall have no further rights or
obligations under this Agreement with respect to such redeemed or purchased
Units, provided, however, that Contributing Partner's rights under this
Agreement with regard to any other Units will continue in full force and
effect.
(e) No fractional Shares shall be issued hereunder; in lieu of fractional
Shares, the General Partner shall pay cash based on the Current Per Share
Market Price on the relevant Computation Date.
3. Exercise of Redemption Rights.
3.1 Time for Exercise of Redemption Rights. Contributing Partners may
exercise their Redemption Rights in whole or in part and at any time and from
time to time on or after the first anniversary of the date hereof but prior to
the Expiration Date; provided, however, that the Redemption Rights may not be
exercised at any one time by any Contributing Partner with respect to less than
1,000 Units (or all the Units then owned by such Contributing Partner if such
Contributing Partner owns less than 1,000 Units) or in the event that such
exercise of Redemption Rights (and the assignment of Units or delivery of the
Cash Purchase Price or Share Purchase Price with respect thereto) violates the
terms of the Partnership Agreement or applicable law. Once given, a Notice
shall be irrevocable subject to the payment of the Purchase Price for the Units
specified therein in accordance with the terms hereof.
6
<PAGE> 7
3.2 Method of Exercise. The Redemption Rights shall be exercised by written
notice (the "Notice") to the Partnership in the form of Exhibit A specifying
the number of Units to be redeemed and the name or names (with address) in
which any Shares issuable upon such exercise shall be registered if different
than the exercising Contributing Partner.
3.3 Closing. Subject to the provisions of Section 4.1(d), the closing of
the redemption or purchase and sale pursuant to an exercise of the Redemption
Rights shall occur within 30 days following the giving of the Notice. A
Contributing Partner that has exercised Redemption Rights shall execute such
documents as the General Partner may reasonably require in connection with the
closing of the redemption or purchase and sale pursuant thereto.
3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption
or purchase and sale of Units pursuant to an exercise of Redemption Rights, the
Partnership shall deliver to Contributing Partner the Cash Purchase Price by
check or, in the event that the General Partner has assumed the obligations of
the Partnership with respect to such exercise of Redemption Rights and subject
to the provisions of Section 4.1(d), the General Partner shall deliver to the
Partnership, at the election of the General Partner, which may be exercised in
the General Partner's sole discretion, either (a) the Cash Purchase Price by
check or (b) certificates representing the Shares and any other securities
constituting the Share Purchase Price, together with cash in lieu of the
issuance of any fraction of a Share as provided in Section 2(e), or a
combination thereof.
4. Matters Relating to Shares.
4.1 Registration.
(a) The General Partner shall (i) prepare, file and use reasonable efforts
to cause to become effective on or before the ninetieth day following the first
anniversary of the date hereof a registration statement, which may be on Form
S-3, under the Securities Act relating to the Shares to be issued upon exercise
of the Redemption Rights assuming full satisfaction of the Redemption Rights by
delivery of Shares (and, in the sole discretion of the General Partner, any
other Shares) and (ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the
7
<PAGE> 8
provisions of the Securities Act. The General Partner may, but shall
not be obligated to, issue Shares previously registered under its current
registration statement on Form S-3 (Registration No. 33-90556).
(b) The General Partner shall pay all Registration Expenses incurred prior
to the sixth anniversary of the date hereof with respect to filing and keeping
effective the registration statement through such date, and the Unitholders
(other than the Unitholders that have given a notice pursuant to Section
4.1(e)) shall reimburse the General Partner for Registration Expenses (or a pro
rata portion of the Registration Expenses based on the number of Shares
issuable to such Unitholders upon full exercise of the Redemption Rights of
such Unitholders relative to the total number of Shares issuable pursuant to
such registration statement) which are incurred after the sixth anniversary of
the date hereof in respect of maintaining effective (but not the initial filing
and causing to become effective of) such registration statement. The
reimbursement of such expenses by the Unitholders shall be paid upon demand.
(c) If under the Securities Act or then current SEC policy public resale
of any Shares to be delivered pursuant hereto may not be effected by
Contributing Partners without the registration under the Securities Act of such
Shares for resale and Contributing Partners shall have notified the Partnership
of the same prior to or concurrently with the giving of a Notice by a
Contributing Partner of the exercise of Redemption Rights, the General Partner
may, at any time during the thirty-day period following the giving of such
Notice, elect to delay the closing pursuant to such exercise of Redemption
Rights until the ninetieth day following the giving of such Notice and
thereafter use reasonable best efforts to register for resale the Shares
constituting the Share Purchase Price in respect thereof (assuming full
satisfaction of such Redemption Rights by delivery of Shares), which may be
accomplished by means of a shelf registration, and such Contributing Partner
and the General Partner will enter into customary agreements with respect
thereto which contain provisions similar to those contained in Section 4.1(a)
and (b) (except that (i) such registration statement only shall be maintained
until the Shares registered thereunder have been sold or are eligible for
resale under Rule 144(k) promulgated under the Securities Act and (ii) after
the sixth anniversary of the date hereof, the Contributing Partners whose
Shares are being registered for resale under such registration statement shall
pay the Registration Expenses
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therefor) and other customary provisions, including customary
indemnification agreements.
(d) If the registration statement referred to in Section 4.1(a) is not
effective on the later of the ninetieth day following the first anniversary of
the date hereof and the closing pursuant to any exercise of Redemption Rights
where Shares are otherwise issuable or the SEC shall not be prepared to declare
effective a registration statement referred to in Section 4.1(c) in respect of
Shares to be issued pursuant to any exercise of Redemption Rights referred to
in such subsection (assuming the full satisfaction of such Redemption Rights by
delivery of the Share Purchase Price) (unless, in either case, the Contributing
Partners have defaulted hereunder), the General Partner shall not have the
right to deliver the Share Purchase Price for Units as to which Redemption
Rights have been exercised, and the General Partner or the Partnership shall
deliver the Cash Purchase Price on the date specified in Section 3.3 or 4.1(c),
as the case may be (but the General Partner shall not otherwise have any
liability therefor).
(e) Notwithstanding anything to the contrary contained herein, (i) the
General Partner shall have no obligation to keep any registration statement
filed pursuant to this Section 4.1 effective after the Expiration Date and the
provisions of Section 4.1(d) shall not apply if the status of the General
Partner (or its successor) as an Exchange Act Reporting Company is terminated
or any or all of the Unitholders notify the General Partner in writing that the
General Partner no longer need keep such registration statement effective (in
which case such obligation shall be terminated only as to the registration
statement specified in such notice and the Shares that otherwise would be
issuable or have been issued, as the case may be, to the Unitholder(s) that
gave such notice and the provisions of Section 4.1(d) shall not apply only to
the exercise of Redemption Rights by such Unitholders) and (ii) the provisions
of Section 4.1(d) also shall not apply upon an exercise of Redemption Rights as
to Forbes/Cohen Units in the event that the General Partner previously has
filed two registration statements pursuant to Section 4.1(c) for Shares issued
upon the exercise of Redemption Rights as to Forbes/Cohen Units.
4.2 Reservation of Shares. At all times while the Redemption Rights are
outstanding, the General Partner shall reserve for issuance such number of
Shares as may be necessary to enable the General Partner to issue Shares in
full satisfaction of all Redemption Rights which are from time to
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time outstanding (assuming no limitations as to the ownership of such
Shares under the Certificate of Incorporation which relate to compliance with
the REIT Requirements and that the General Partner elected to pay the Share
Purchase Price with respect to all such Redemption Rights).
4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon
exercise of the Redemption Rights upon issue shall be duly and validly issued
and fully paid and non-assessable.
4.5. Transfer and Other Taxes. In the event that any state or local
property transfer or other tax is payable as the result of or in connection
with any exercise of the Redemption Rights by a Contributing Partner, such
Contributor Partner shall pay such tax, and no Shares shall be issued pursuant
hereto until such Contributor Partner has paid to the General Partner or the
Partnership, as the case may be, the amount of such tax or has provided
evidence, in form reasonably satisfactory to the General Partner or the
Partnership, as the case may be, as to the payment thereof.
6. Anti-Dilution and Adjustment Provisions.
(a) The Conversion Factor shall be adjusted in the event that the General
Partner (i) declares or pays a dividend on its outstanding Shares in Shares or
makes a distribution to all holders of its outstanding Shares in Shares, (ii)
subdivides its outstanding Shares, or (iii) combines its outstanding Shares
into a smaller number of Shares. The Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall
be the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any
adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event.
(b) If at any time the General Partner grants to its stockholders any
right to subscribe pro rata for additional securities of the General Partner,
whether Common Stock or other classifications, or for any other securities or
interests that
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Contributing Partners would have been entitled to subscribe for
if, immediately prior to such grant, Contributing Partners had exercised their
Redemption Rights and received the Share Purchase Price in payment thereof, in
lieu of any adjustment under any other subsection of this Section 6 or other
provision of this Agreement, then the General Partner also shall grant to
Contributing Partners the same subscription rights that Contributing Partners
would be entitled to if Contributing Partners had exercised their Redemption
Rights in full and received the Share Purchase Price in satisfaction thereof
prior to such grant.
(c) Upon the occurrence of a Major Transaction Event where at least
one-half of the value (as determined in good faith by the General Partner) of
the consideration received by the stockholders of the General Partner in
connection with such Major Transaction Event is in the form of securities in a
successor entity, the General Partner shall cause effective provision to be
made so that, upon exercise of the Redemption Rights and payment of the
Purchase Price by means of the Share Purchase Price, Unitholders shall have the
right thereafter to acquire, in lieu of the Shares which would have been
surrendered therefor, the kind and amount of shares of stock and other
securities and property (and the provisions contained in Section 4.1 shall
apply to the extent that such securities are of a class of securities of the
General Partner or its successor that are registered under the Exchange Act)
and interests as would be issued or payable with respect to or in exchange for
the number of Shares constituting the Share Purchase Price as if such
Redemption Rights had been exercised and the General Partner had satisfied the
Redemption Rights by delivery of the Share Purchase Price immediately before
such Major Transaction Event.
(d) In the event of any other Major Transaction Event, each Unitholder
shall be entitled to exercise the Redemption Rights in full prior to the
consummation of such Major Transaction Event, and, with respect to any Shares
acquired upon exercise thereof, shall be entitled to all of the rights of the
other holders of Shares with respect to any distribution by the General Partner
(or the other party to such Major Transaction Event) in connection with such
Major Transaction Event. If not exercised within forty-five days after written
notice from the General Partner of such Major Transaction Event or such shorter
period between the date of such notice and the effective date of such Major
Transaction Event, the Redemption Rights shall terminate at the expiration of
such period, but the Redemption
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Rights shall be revived if such Major Transaction Event is not
consummated.
(e) The Partnership shall give written notice of any Major Transaction
Event promptly after such Major Transaction is announced to the public.
(f) The provisions of this Section 6 shall apply to successive events that
may occur from time to time but only shall apply to a particular event if it
occurs prior to the exercise in full of the Redemption Rights or the
liquidation of the Partnership. Nothing contained herein shall prevent or
otherwise limit the liquidation of the Partnership pursuant to the Partnership
Agreement, as amended from time to time.
(g) Whenever the Conversion Factor is adjusted as herein provided, the
General Partner shall compute the adjusted Conversion Factor in accordance with
Section 6 and shall prepare a certificate signed by the chief financial officer
of the General Partner setting forth the adjusted Conversion Factor and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at the offices of the General Partner.
7. Purchase Right.
7.1 Purchase Right. In the event that the General Partner in good faith
determines at any time that the continued ownership of Units by the holder of
such Units would cause amounts which would otherwise be characterized as "rents
from real property" (within the meaning of Section 865(d)(1) of the Code) to
fail to be so characterized as the result of the ownership or deemed ownership
of any Retailer Interest, the holder of such Units shall dispose of such
Retailer Interest within five Business Days of written notice from the
Partnership. In the absence of such a disposition, the General Partner shall
have the right, but not the obligation (the "Purchase Right"), to purchase all
of the Units then held by such holder upon the terms and subject to the
conditions contained in this Section 7.
7.2 Method of Exercise. The Purchase Right shall be exercised by written
notice to the holder of the Units to be purchased specifying that the General
Partner has elected to purchase such Units pursuant to Section 7 of this
Agreement.
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7.3 Purchase Price. The purchase price for such Units shall be the Cash
Purchase Price with respect to such Units.
7.4 Closing. The closing of any purchase and sale pursuant to this
Section 7 shall occur at the time specified in the notice described in Section
7.2 but in no event later than 30 days after the giving of such notice. At the
closing, the General Partner shall deliver to the selling Unitholder the Cash
Purchase Price in immediately available funds, and the selling Unitholder shall
deliver to the General Partner an instrument of transfer in form sufficient to
transfer the Units to be transferred, free and clear of all Liens, and
containing the representations and warranties set forth in Exhibit A.
7.5 Notice of Certain Events. Each Contributing Partner shall provide to
the Partnership a written statement describing the acquisition by it or its
partners or Affiliates of any equity interest in a retailer or other person or
entity which is or could be a potential tenant of the Partnership or of any
Other REIT (a "Retailer Interest").
8. Miscellaneous Provisions.
8.1 Notices. All notices or other communications given pursuant to this
Agreement shall be sent to the party to whom or to which such notice is being
sent, by certified or registered mail, return receipt requested, commercial
overnight delivery service, facsimile or delivered by hand with receipt
acknowledged in writing. All notices (a) shall be deemed given when received
or, if mailed as described above, after 5 Business Days or, if sent by
facsimile, upon receipt of confirmed answerback and (b) may be given either by
a party or by such party's attorneys. For purposes of this Section 8.1, the
addresses of the parties shall be, in the case of the Partnership and the
General Partner, 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603,
facsimile number (312) 551-5475, Attention: Matthew Bucksbaum and Bernard
Freibaum, and, in the case of Contributing Partner, as set forth on the records
of the Partnership. The address of any party may be changed by a notice in
writing given in accordance with the provisions hereof.
8.2 Assignment. Contributing Partners may not assign this Agreement or
their rights hereunder; provided, however, that the rights of Contributing
Partners hereunder (including the Redemption Rights) shall automatically
devolve upon any Person to the extent that such Person holds Units, and becomes
a
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substituted partner with respect to such Units, in accordance with the
Partnership Agreement, as amended from time to time, and delivers to the
Partnership a written instrument, in form reasonably satisfactory to the
Partnership, pursuant to which such Person agrees to be bound by the terms
hereof. Subject to the provisions of Section 6, the General Partner may assign
this Agreement without the consent of Contributing Partners, provided that no
such assignment shall relieve the General Partner of its obligations under this
Agreement.
8.3 Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, the parties and their successors and permitted assigns, except as
expressly herein otherwise provided.
8.4 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware (without regard to its conflicts of law principles).
8.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, but all of which shall constitute one document.
8.6 Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes any prior
written or oral understandings and/or agreements among them with respect
thereto.
8.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the
masculine, feminine and neuter, and all terms shall include the singular and
plural thereof wherever the context and facts require such construction. The
headings herein are inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof. Any references in this
Agreement to a "Section" or "Schedule" shall refer to a Section or Schedule of
this Agreement unless otherwise specified.
8.8 Survival. The representations, warranties and covenants contained
herein or made pursuant hereto shall survive the execution and delivery of this
Agreement and the issuance of Shares pursuant hereto.
8.9 Further Assurances. Each of the parties shall hereafter execute and
deliver such other instruments and
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documents and do such further acts and things as may be required or
useful to carry out the purposes of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
CONTRIBUTING PARTNERS:
FORBES/COHEN PROPERTIES, a
Michigan general partnership
By: /s/ Maurice Cohen
---------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
---------------------------
Sidney Forbes, partner
JACKSON PROPERTIES, a
Michigan general partnership
By: Forbes/Cohen Properties, a
Michigan general partnership,
partner
By: /s/ Maurice Cohen
-----------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
-----------------------------
Sidney Forbes, partner
By: The Frankel Group, a Michigan general
partnership, a partner
By: /s/ Samuel Frankel
-----------------------------
Samuel Frankel, Trustee under
Trust Agreement dated 7/9/91,
partner
By: The Cohn Group, a Michigan general
partnership, a partner
By: /s/ Avern Cohn
-------------------
Avern Cohn, partner
<PAGE> 17
LAKEVIEW SQUARE ASSOCIATES, a
Michigan general partnership
By: Forbes/Cohen Properties, a
Michigan general partnership,
a partner
By: /s/ Maurice Cohen
-------------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
-------------------------------
Sidney Forbes, partner
By: Lakeview Properties, a
Michigan limited partnership,
a partner
By: Forbes/Cohen Properties,
a Michigan general partnership,
its general partner
By: /s/ Maurice Cohen
-------------------------------
Maurice Cohen, partner
By: /s/ Sidney Forbes
------------------------------
Sidney Forbes, partner
PARTNERSHIP:
GGP LIMITED PARTNERSHIP,
a Delaware limited partnership
By: General Growth Properties, Inc.
a Delaware corporation
By: /s/ Joel Bayer
------------------------------
Its Vice President
------------------------------
GENERAL PARTNER:
General Growth Properties, Inc.
a Delaware corporation
<PAGE> 18
By: /s/ Joel Bayer
------------------------------------
Its Vice President
--------------------------------
18
