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)
October 22, 1998
General Growth Properties, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-11656 42-1283895
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
110 N. Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
312) 960-5000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Item 5. Other Events.
Mall St. Vincent
On October 21, 1998, GGP Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), acquired in a
negotiated arm's length transaction 100% of Mall St. Vincent, an
enclosed regional mall located in Shreveport, Louisiana, from MSV
Properties, L.L.C., a Georgia limited liability company. The
general partner of the Operating Partnership is the registrant,
General Growth Properties, Inc., a Delaware corporation (the
"Company" ), which holds approximately a 65.9% interest in the
Operating Partnership (assuming conversion of all preferred units
of limited partnership in the Operating Partnership into common
units of limited partnership in the Operating Partnership). The
Operating Partnership caused Mall St. Vincent to be conveyed to a
Delaware limited partnership, the general partner of which is a
wholly owned subsidiary of the Company and the limited partner is
the Operating Partnership.
The aggregate consideration paid by the Operating Partnership for
the Mall St. Vincent was approximately $26.4 million (subject to
prorations and to certain adjustments and payments to be made by
the Operating Partnership). The consideration was paid by issuing
200,052 redeemable common units of limited partnership in the
Operating Partnership (of which 88,871 common units were
immediately redeemed for cash by the Operating Partnership upon
demand of the holders of such units) and by assuming approximately
$19.2 million of existing debt. The cash paid in exchange for the
redemption of such units was funded from the Operating
Partnership's line of credit.
Mall St. Vincent was originally developed by a predecessor of the Company in
1977 and then sold in 1980. The center underwent
extensive remodeling in 1991. It is a one-level mall of
approximately 569,000 square feet. The center is anchored by
Dillard's, Sears, the Stage and AMC Theatres. In addition, the
center has 156,000 square feet of mall shop space and is currently
98% occupied.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a),(b) Not applicable.
(c) Exhibits
See Exhibit Index attached hereto and incorporated herein.
SIGNATURE
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: /s/ Bernard Freibaum
_____________________________
Bernard Freibaum
Executive Vice President and
Chief Financial Officer
Date: November 10, 1998
EXHIBIT INDEX
Exhibit Name Page
Number Number
2.1 Contribution Agreement, dated October 21, 1998,
between MSV Properties, L.L.C. and GGP Limited
Partnership.
2.2 Redemption Rights Agreement, dated October 21, 1998,
among (i) GGP Limited Partnership, (ii) General Growth Properties, Inc., and
(iii) the following:(a) MSV Properties,
L.L.C., (b) Shreve Capital, Inc., (c) CMS/Valley Forge Real
Estate Opportunity Fund, L.P., (d) Harry J. Butler, Jr., (e)
Sealy Retail Properties, L.L.C., (f) Scott P. Sealy (g) Mark
P. Sealy, (h) Gwen Sealy, (i) Scott P. Sealy, not
individually but solely as Trustee for J. Pollard Sealy Trust
for Scott P. Sealy, (j) Scott P. Sealy, not individually but
solely as Trustee for J. Pollard Sealy Trust for Laura
Celeste Sealy Curtis,(k) Scott P. Sealy, not individually but
solely as Trustee for J. Pollard Sealy Trust for Mark P.
Sealy, (l) Scott P. Sealy, not individually but solely as
Trustee for J. Pollard Sealy Trust for Lisa Wood Sealy
Hollier and (m) Scott P. Sealy, not individually but solely
as Trustee for J. Pollard Sealy Trust for Sue Sealy Geren.
MALL ST. VINCENT
Shreveport, Louisiana
CONTRIBUTION AGREEMENT
BETWEEN
MSV PROPERTIES, L.L.C.,
a Georgia limited liability company
and
GGP LIMITED PARTNERSHIP,
a Delaware limited partnership
October 21, 1998
CONTRIBUTION AGREEMENT
Contribution Agreement, dated October 21, 1998, between MSV
Properties, L.L.C., a Georgia limited liability company
("Contributor"), and GGP Limited Partnership, a Delaware limited
partnership (the "Partnership").
R E C I T A L S
WHEREAS, Contributor is the owner of a regional shopping center
located in Shreveport, Louisiana and commonly known as Mall St.
Vincent (the "Mall"); and
WHEREAS, Contributor desires to contribute to the capital of
the Partnership all of the Property (as defined herein) and the
Partnership desires to acquire the Property.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by both parties, the parties hereby agree as follows:
ARTICLE
Definitions
Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
"ADA" shall mean the Americans With Disabilities Act, as
amended.
"Adjacent Land" shall mean the real property and improvements
thereto more fully described on Schedule 1.1(a), less and except
all oil, gas and other minerals lying in, on or under the same.
"Adjacent Land Purchase Contract" shall mean that certain Sales
Contract dated as of April 24, 1998, as amended, between The
Congregation of the Daughters of the Cross and The Marianites of
Holy Cross (collectively, as "Seller" thereunder) and Mark P.
Sealy or his assigns (as "Purchaser" thereunder).
"Adjustable Tenant Charges" shall mean common or mall area
maintenance (exterior and interior) charges, real estate taxes and
assessments, property insurance charges and HVAC charges to the
extent denominated or treated as such in the Leases and the
Reciprocal Easement Agreement.
"Affiliates" shall mean, with respect to the Partnership, any
Person controlling, controlled by or under common control with the
General Partner or the Partnership and, with respect to
Contributor, any Person that is one of the constituent members of
Contributor or a member of any such constituent member, and with
respect to both the Partnership and Contributor, the members of
the families of such Persons, trusts for the benefit of any of
such Persons and any Person controlling, controlled by or under
common control with any of such Persons.
"Agreement" shall mean this Sale and 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(b).
"Annual Financial Statements" shall have the meaning set forth
in Section 6.2(j).
"Applicable Closing Fiscal Period" shall mean, with respect to
any item which is prorated under Article IV, the calendar year (or
other fiscal period for which such item is determined or assessed)
during which the Closing Date occurs.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.3.
"Basic Information" shall have the meaning set forth in Section
6.2(f).
"Books and Records" shall mean all records, books of account
and papers of Contributor relating to the construction, ownership
and operation of the Property, whether on paper or electronic
media, including without limitation architect's drawings, blue
prints and as-built plans, maintenance logs, instruction books,
licenses and permits, employee manuals, records and correspondence
relating to insurance claims, copies of guaranties and warranties,
financial statements, operating budgets, structural, mechanical,
geotechnical and other engineering studies, soil test reports,
environmental (including without limitation underground storage
tank) reports, feasibility studies, appraisals, ADA surveys or
reports, marketing studies, lease summaries and originals and/or
copies of the Leases, the Reciprocal Easement Agreement and the
Contracts and all correspondence related to any of the foregoing.
"Casualty" shall mean any damage to or destruction of the
Property or any portion thereof caused by fire or other casualty,
whether or not insured.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"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.
"Contract Party Consents" shall have the meaning set forth in
Section 10.5.
"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 Ground Lease, the Leases, the Permitted
Exceptions and the Reciprocal Easement Agreement) which are listed
on Schedule 6.2(m), together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered
into in accordance with the provisions of this Agreement.
"Contributor Information" shall have the meaning set forth in
Section 6.2(ag).
"Contributor's Liabilities" shall have the meaning set forth in
Section 2.3.
"Environmental Laws" shall mean all federal, state and local
statutes, ordinances, codes, rules, regulations, guidelines,
orders and decrees regulating, relating to or imposing liability
or standards concerning or in connection with Hazardous Materials,
underground or above-ground storage tanks or the protection of
human health or the environment, as any of the same may be amended
from time to time, including but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. 9601 et. seq., as amended by the Superfund Amendments
and Reauthorization Act or any equivalent state or local laws or
ordinances; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901 et seq., as amended by the Hazardous and Solid
Waste Amendments of 1984, or any equivalent state or local laws or
ordinances; the Federal Insecticide, Fungicide, and Rodenticide
Act ("FIFRA"), 7 U.S.C. 136 et. seq. or any equivalent state or
local laws or ordinances; the Hazardous Materials Transportation
Act (49 U.S.C. 1801 et seq.); the Emergency Planning and
Community Right-to-Know Act ("EPCRA"), 42 U.S.C. 11001 et. seq.
or any equivalent state or local laws or ordinances; the Toxic
Substance Control Act ("TSCA"), 15 U.S.C. 2601 et. seq. or any
equivalent state or local laws or ordinances; the Atomic Energy
Act, 42 U.S.C. 2011 et. seq., or any equivalent state or local
laws or ordinances; the Clean Water Act (the "Clean Water Act"),
33 U.S.C. 1251 et. seq. or any equivalent state or local laws or
ordinances; the Clean Air Act (the "Clean Air Act"), 42 U.S.C.
7401 et seq. or any equivalent state or local laws or ordinances;
the Occupational Safety and Health Act, 29 U.S.C. 651 et seq. or
any equivalent state or local laws or ordinances.
"Escrow Agent" shall have the meaning set forth in Section
2.2(d).
"Estoppels" shall mean the estoppel certificates to be obtained
pursuant to Section 10.7.
"Exchange Act" shall have the meaning set forth in Section
6.1(o).
"Exchange Act Reports" shall have the meaning set forth in
Section 6.1(o).
"Excluded 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 Existing Manager and, except as otherwise provided
herein (including without limitation Section 9.1(b) and Article
IV), the cash, cash accounts and receivables of Contributor.
"Existing Indebtedness" shall mean that certain loan in the
original principal amount of $19,325,000.00 made by Berkshire
Mortgage Finance Corporation, a Delaware corporation, to
Contributor, which loan is evidenced and secured by the Existing
Indebtedness Documents.
"Existing Indebtedness Documents" shall have the meaning set
forth in Schedule 6.2(u).
"Existing Indebtedness Consent Documents" shall have the
meaning set forth in Section 2.4.
"Existing Lender" shall mean Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of NationsLink
Funding Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1998-1, which is currently and as of the
Closing shall continue to be the holder of the Existing
Indebtedness.
"Existing Management Agreement" shall mean that certain
Management Agreement dated May 14, 1996, between Contributor and
the Existing Manager, as amended by First Extension and Amendment
of Real Estate Management Agreement dated March 27, 1997.
"Existing Manager" shall mean GGMI.
"Fifth Anniversary Date" shall have the meaning set forth in
Section 10.12.
"Financial Statements" shall have the meaning set forth in
Section 6.2(j).
"Fixed and Other Tenant Charges" shall mean Rent other than
Adjustable Tenant Charges, Sales Based Tenant Charges and
Promotional and Advertising Contributions.
"Fixed and Other Tenant Charge Arrearage" shall mean Fixed and
Other Tenant Charges due and payable prior to but unpaid as of the
Closing Date.
"GAAS" shall mean Generally Accepted Auditing Standards as
promulgated by the Auditing Standards Division of the American
Institute of Certified Public Accountants from time to time.
"General Partner" shall mean General Growth Properties, Inc., a
Delaware corporation and the general partner of the Partnership.
"GGMI" shall mean General Growth Management, Inc., a Delaware
corporation.
"Grantee" shall mean the assignee, designee or nominee (as the
case may be), if any, of the Partnership to which title to the
Property will be conveyed at Closing.
"Gross Asset Value" shall mean Twenty-Six Million Four Hundred
Thousand and no/100 Dollars ($26,400,000.00).
"Ground Lease" shall mean that certain Agreement between
General
Growth Properties, a Massachusetts voluntary association ("General
Growth"), as lessee, and Sears Roebuck and Co., a New York
corporation ("Sears"), as lessor, first dated May 30, 1975,
effective as of May 30, 1975, as evidenced by that certain
Memorandum of Ground Lease first dated February 13, 1976, and
recorded in the Conveyance Records of Caddo Parish, Louisiana on
March 5, 1976, in Book 1534, page 78, under Registry Number
677978, as corrected by that certain Correction Memorandum of
Ground Lease first dated April 12, 1986, and recorded in the
Conveyance Records of Caddo Parish, Louisiana on May 24, 1976, in
Book 1546, page 520, under Registry Number 685493, as the same has
been heretofore amended by that certain (a) Amendment to Lease
dated as of December 22, 1975, by and between General Growth and
Sears, and recorded in the Conveyance Records of Caddo Parish,
Louisiana on November 8, 1976, in Book 1571, page 196, under
Registry Number 700184, (b) Second Amendment to Lease dated and
effective as of July 12, 1976, by and between General Growth and
Sears, and recorded in the Conveyance Records of Caddo Parish,
Louisiana on November 5, 1976, in Book 1571, page 166, under
Registry Number 700165, (c) Memorandum of Amendments to Ground
Lease last dated November 5, 1976, by and between General Growth
and Sears, and recorded in the Conveyance Records of Caddo Parish,
Louisiana on November 5, 1976, in Book 1571, page 182, under
Registry Number 700189, and as the same has been heretofore
assigned by that certain (u) Assignment of Leases of Real Property
dated November 4, 1976, by and between General Growth, as
assignor, and General Growth Property, da Shreveport Mall, an
Ordinary Partnership in Commendam ("Shreveport Mall"), as
assignee, and recorded in the Conveyance Records of Caddo Parish,
Louisiana on November 17, 1976, in Book 1571, page 755, under
Registry Number 700988, (v) Assignment of Leasehold Interest dated
March 28, 1980, by and between Shreveport Mall, as assignor, and
St. Vincent's Mall, an ordinary partnership in commendam domiciled
in Caddo Parish, Louisiana ("St. Vincent's Mall"), as assignee,
and recorded in the Conveyance Records of Caddo Parish, Louisiana
on March 31, 1980, in Book 1785, page 367, under Registry Number
828634, (w) Assignment of Partnership Interest and Election by
Sole Partner to Continue Business of Partnership as a Sole
Proprietor made and entered into as of June 30, 1986, by and
between Knollwood Company, a South Dakota general partnership, as
assignor, and Aetna Life Insurance Company, a Connecticut
corporation ("Aetna"), as assignee, (x) Assignment and Assumption
of Lease and Operating Agreement effective as of December 1, 1994,
by and between Aetna, as assignor, and Mall St. Vincent, L.L.C., a
Georgia limited liability company ("Mall St. Vincent"), as
assignee, and recorded in the Conveyance Records of Caddo Parish,
Louisiana on December 6, 1994, in Book 3009, page 655, under
Registry Number 1454996, (y) Assignment and Assumption of Lease
and Operating Agreement effective as of August 28, 1995, by and
between Mall St. Vincent, as assignor, and Harry Julius Butler,
Jr., as assignee, and recorded in the Conveyance Records of Caddo
Parish, Louisiana on August 28, 1995, in Book 3063, page 621,
under Registry Number 1485717, and (z) Assignment and Assumption
of Lease and Operating Agreement dated August 23, 1995, by and
between Harry Julius Butler, Jr., as assignor, and MSV Properties,
L.L.C., as assignee, and recorded in the Conveyance Records of
Caddo Parish, Louisiana on August 28, 1998, in Book 3063, page
678, under Registry Number 1485722.
"Ground Lease Parcel" shall mean the real estate described on
Exhibit C and improvements thereto to which the Ground Lease
relates.
"Ground Lessor" shall mean Sears, Roebuck & Co.
"Ground Lessor Estoppel" shall have the meaning set forth in
Section 2.10.
"Hazardous Materials" shall mean any substance, material,
waste, gas or particulate matter which (a) is regulated by the
United States Government, the State of Louisiana, any other state
with jurisdiction, or any local governmental authority, or (b) the
exposure to, or manufacture, possession, presence, use,
generation, storage, transportation, treatment, release, disposal,
abatement, cleanup, removal, remediation or handling of is
prohibited, controlled or regulated by any Environmental Law, or
(c) requires investigation or remediation under any Environmental
Law or common law, or (d) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous, or (e) causes or threatens to cause a
nuisance upon the Property or to adjacent properties or poses or
threatens to pose a hazard to the health or safety of persons on
or about the Property, or (f) could or does cause the Partnership
or Contributor to be liable for trespass by virtue of its
migration to other properties. Such term includes, without
limitation, any material or substance which is (1) now or at any
future time defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste" or any like or similar term under any
applicable Environmental Law; (2) oil and petroleum products; (3)
asbestos or asbestos-containing material as defined in the
regulations of the Occupational Safety and Health Administration
at 29 C.F.R. 1910.1001 (but only if the same is friable); (4)
polychlorinated biphenyls; (5) radioactive material; (6) now or at
any future time designated as a "toxic pollutant" or a "hazardous
substance" pursuant to Sections 307 or 311 of the Clean Water Act;
(7) now or at any future time defined as a "hazardous waste"
pursuant to Section 1004 of RCRA; (8) now or at any future time
defined as a "hazardous substance" pursuant to Section 101 of
CERCLA; (9) now or at any future time designated as a "hazardous
chemical" substance or mixture pursuant to TSCA; (10) now or at
any future time designated as an "extremely hazardous" substance
under Section 302 of EPCRA; (11) now or at any future time
designated as a "priority pollutant" or "hazardous air pollutant"
pursuant to the Clean Air Act; (12) now or at any future time
designated as a hazardous chemical under the Occupational Safety
and Health Act; (13) radon gas or other radioactive source
material, including special nuclear material, and byproduct
materials regulated under the Atomic Energy Act, 42 U.S.C. 2011
et. seq.; (14) now or at any future time subject to regulation
under FIFRA; (15) natural gas, natural gas liquids, liquefied
natural gas, and synthetic gas usable for fuel; or (16) infectious
wastes or materials and pathogenic bacteria or other pathogenic
microbial agents.
"Improvements" shall mean all buildings, structures (surface
and subsurface), and other improvements located on the Land and
those located on the Ground Lease Parcel, including any fixtures
and any immovables as shall constitute real property under
applicable provisions of law. "Improvements" shall not include
any Tenant improvements on the Land which will not be a part of
the landlord's reversion upon expiration or termination of the
Leases or the Ground Lease.
"Indemnified Partnership Persons" shall have the meaning set
forth in Section 10.1(a).
"Inspection Period Expiration Date" shall have the meaning set
forth in Section 7.2.
"Insurance Policy" shall have the meaning set forth in Section
3.2(d).
"Intellectual Property" shall have the meaning set forth in
Section 6.2(k).
"IRS" shall have the meaning set forth in Section 10.13.
"Joinder Agreement" shall have the meaning set forth in Section
2.6.
"Land" shall mean those certain parcels of real estate
described on Exhibit B as to which Contributor holds a fee simple
estate.
"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 6.2(g-1),
together with any additions thereto, modifications thereof or
substitutions therefor hereafter entered into in accordance with
the provisions of this Agreement. Leases shall not include the
Ground Lease.
"Liens" shall mean mortgages, deeds of trust, liens, pledges,
security interests, options, rights of first refusal, charges,
claims, restrictions and other encumbrances of any nature
whatsoever.
"Loss" shall have the meaning set forth in Section 10.1(a).
"Mall" shall have the meaning set forth in the recitals.
"Memorandum" shall mean that certain Private Placement
Memorandum dated August 25, 1998 relating to the issuance of Units
pursuant hereto, among other things.
"Missing Parties" shall have the meaning set forth in Section
8.2(c).
"Net Asset Value" shall mean the excess of (a) the Gross Asset
Value over (b) the outstanding principal amount of the Existing
Indebtedness on the Closing Date, as the same may be further
adjusted in accordance with the terms hereof.
"Net Operating Cash Flow" shall have the meaning set forth in
the Partnership Agreement.
"Other Deposits" shall have the meaning set forth in Section
4.8.
"Partnership Agreement" shall mean the Second Amended and
Restated Agreement of Limited Partnership of the Partnership dated
as of April 1, 1998, as amended by that certain First Amendment
thereto dated as of June 10, 1998, and that certain Second
Amendment thereto dated as of June 29, 1998, and as the same may
be further amended hereafter.
"Party" shall mean a party to the Reciprocal Easement
Agreement, a Contract or a Tenant under a Lease (or the successor
or assignee thereof), in each case other than Contributor or the
Partnership or any predecessor in title with respect to the
Property.
"Permitted Exceptions" shall mean the following:
those title exceptions, defects and other matters that are
shown on Exhibit D;
the terms, covenants and conditions of the Reciprocal
Easement Agreement;
provided that there is no outstanding violation thereof of
which Contributor has received notice or otherwise has knowledge
which the Partnership has not otherwise accepted or waived in
accordance herewith, 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;
the state of facts shown on the Survey;
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;
the rights of the Tenants under the Leases as tenants only;
mechanics' liens, lis pendens and notices of commencement of
action against Contributor in respect of the Real Property (or
which affect the interest of Contributor 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 Partnership from loss
with respect thereto in form and substance acceptable to the
Partnership in its sole discretion;
subject to receipt by the Partnership of the Existing
Indebtedness Consent Documents, the Liens created pursuant to the
Existing Indebtedness Documents; and
such other Liens and title exceptions as the Partnership may
accept under Section 5.3.
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 6.2
or the rights of the Partnership contained in Section 5.3, it
being understood and agreed that the Partnership's agreements
regarding Permitted Exceptions assume the truth and accuracy of
all such representations and warranties, subject the provisions of
Section 6.3.
"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 right, title and interest of
Contributor 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 guaranties 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; computer and
peripheral equipment and computer software; 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(c) but
shall not include the rights of Contributor in or under the
Leases, Reciprocal Easement Agreement, Contracts or Excluded
Personalty.
"Pledge Agreement" shall have the meaning set forth in Section
2.7.
"Pre-Existing Property Conditions" shall have the meaning set
forth in Section 2.3(c).
"Prescribed Form" shall have the meaning set forth in Section
10.7.
"Prohibited Disposition" shall have the meaning set forth in
Section 10.12.
"Promotional and Advertising Contributions" shall mean
contributions made from time to time to the Promotional and
Advertising Fund by any Tenants, any Anchors, any Party to the
Reciprocal Easement Agreement, Contributor and any of
Contributor's predecessors in interest.
"Promotional and Advertising Fund" shall have the meaning set
forth in Section 2.11.
"Promotional Fund Waiver" shall have the meaning set forth in
Section 2.11.
"Property" shall mean (a) the Real Property, (b) the
Personalty, (c) the rights and interests of Contributor under all
Leases and the Ground Lease and (d) the rights and interests of
Contributor under, in and to the Contracts to the extent
assignable.
"Qualified Investor" shall mean a Person that (a) is an
"accredited investor" within the meaning of Regulation D under the
Securities Act and (b) has provided to the Partnership a
Questionnaire establishing the same to the satisfaction of the
Partnership.
"Questionnaire" shall mean an investor questionnaire in the
form prescribed by the Partnership.
"Real Property" shall mean the Land, the Ground Lease Parcel
and the Improvements, together with all of the estate, right,
title and interest of 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 or
the Ground Lease Parcel (as the case may be) 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, servitudes, 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 Agreement).
"Reciprocal Easement Agreement" shall have the meaning set
forth in Section 6.2(g-2).
"Recourse Liabilities" shall have the meaning set forth in
Section 2.4.
"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).
"Rent Roll" shall have the meaning set forth in Section 6.2(f).
"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, environmental charges (as such term is
defined in the Leases), amounts payable with respect to real
estate and other taxes, and other amounts payable by the Parties
under the Leases and the Reciprocal Easement Agreement.
"Required Estoppels" shall mean (a) Estoppels from each Anchor
and each other individual Tenant which under its Lease occupies
5,000 or more square feet of floor area, and (b) Estoppels from
Tenants under not fewer than 75% of the other Leases.
"Sales Based Tenant Charges" shall mean Rent consisting of
overage or percentage rent.
"Sealy" shall mean Mark P. Sealy, an individual who is an
Affiliate of Contributor.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Deposits" shall have the meaning set forth in Section
4.8.
"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 the Reciprocal
Easement Agreement, or 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 or have the right to do any of the
foregoing (unless such right shall have expired or been waived) or
the same shall occur with regard to Tenants occupying more than
45,000 leasable square feet at the Property in the aggregate; or
(c) the estimated time for repair or restoration shall exceed
three (3) months; or
(d) in the case of a Taking, a Taking with respect to such
portion of the Real Property as, when so taken would, in the
reasonable opinion of 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.
"Survey" shall mean have the meaning set forth in Section 5.2.
"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 (but shall not include Contributor, in
its capacity as ground lessee under the Ground Lease).
"Tenant Services" shall mean all services supplied by or on
behalf of Contributor to Tenants for which Tenants are separately
charged, other than services in the nature of common area
maintenance.
"Termination of Property Management Documents" shall have the
meaning set forth in Section 2.5.
"Title Commitment" shall have the meaning set forth in Section
5.1.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policies" shall have the meaning set forth in Section
5.1.
"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 Common Units of limited partnership interest
in the Partnership, as defined in the Partnership Agreement.
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, 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
Contribution; Consideration
Contribution. Upon the terms and subject to the conditions
contained herein, at the Closing, Contributor shall contribute to
the capital of the Partnership, and the Partnership shall acquire,
the Property, free and clear of all Liens (except for the
Permitted Exceptions). The Property is being acquired hereunder
only as an entirety, and not in separate parts, and all portions
of the Property shall be simultaneously conveyed to the
Partnership and/or one or more designees of the Partnership in
accordance with this Agreement.
Consideration.
In exchange for the contribution of the Property (including
without limitation all right, title and interest of Contributor in
and to the Real Estate) and in addition to the assumption of the
Existing Indebtedness and the cash and other adjustments between
the parties as hereinafter provided (including without limitation
adjustments in accordance with Article IV), at the Closing, the
Partnership shall issue in the aggregate to Contributor and/or to
its members (as directed by Contributor) the number of Units equal
to the quotient of (i) the Net Asset Value divided by (ii) the
Share Price. The Gross Asset Value is allocated among the items
of Property as set forth on Schedule 2.2(a). Contributor shall
deliver written notice to the Partnership at least five (5) days
prior to the Closing of the allocation of Units to be issued to
each of its constituent members.
Contributor shall not, and shall not cause, encourage or
permit its Affiliates to, buy or sell or induce any Person 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.
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.
Assumption of Liabilities.
At Closing, the Partnership or Grantee shall assume (i) the
obligations of Contributor under the Existing Indebtedness
Documents (including the obligation to repay the principal owing
thereunder and accrued and unpaid non- delinquent interest thereon
to the Existing Lender), (ii) the liabilities and obligations of
Contributor arising from and after the Closing Date under or in
respect of the Leases, the Ground Lease, the Reciprocal Easement
Agreement and the assignable Contracts (with such liabilities
being limited to the same extent, if any, as the liability of
Contributor is limited thereunder) but only to the extent that
such liabilities and obligations do not arise out of any 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 entry into the Lease, the Ground Lease, the
Reciprocal Easement Agreement and the Assignable Contracts
themselves), and (iii) other liabilities and obligations of
Contributor herein described to the extent the Partnership has
agreed herein to pay the same or has received credit hereunder
therefor (including, without limitation, those liabilities and
obligations for which the Partnership has received proration
credits under the provisions of Article IV hereof). All of the
obligations to be assumed by the Partnership pursuant to this
Section 2.3(a) are herein referred to as the "Assumed
Liabilities".
Except as provided in Section 2.3(a) and except for the
responsibilities of GGMI under the Existing Management Agreement,
from and after the Closing and whether or not disclosed herein or
elsewhere, neither the Partnership nor any Affiliate of the
Partnership (including without limitation the Grantee) shall be
responsible for, and neither the Partnership nor any Affiliate is
assuming, any liabilities or obligations of Contributor whether or
not the same relate to the Property or were incurred in connection
with the ownership, use, management or operation thereof prior to
Closing by Contributor or by its agents (such liabilities,
exclusive of the Assumed Liabilities, collectively, the
"Contributor's Liabilities") and Contributor shall pay or
otherwise satisfy 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 of Contributor relating to the period prior to Closing
or the consummation of the Transactions (other than real estate
taxes and assessments on real property to the extent that the
Partnership has received credit under Article IV; (b) 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 in the employ of Contributor
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);
(c) any tort liability arising from any accident, injury, event,
circumstance, action or omission occurring prior to Closing (other
than tort liability resulting from the physical condition of the
Property on the Closing Date where the accident or injury occurs
after the Closing Date), whether asserted before or after the
Closing, (d) any liability for breach of, or other payment
obligation under, a Lease, Reciprocal Easement Agreement,
Contract, Existing Indebtedness Document or Adjacent Land Purchase
Contract that occurred, was due or accrued prior to Closing,
whether asserted before or after the Closing (including, without
limitation, any claimed overcharge of Adjustable Tenant Charges),
and (e) any liability, fine, penalty or the like that is imposed
or assessed by a governmental authority for or with respect to the
period prior to Closing, whether imposed or assessed before or
after the Closing.
Contributor and the Partnership acknowledge and agree,
notwithstanding anything to the contrary set forth in Sections
2.3(a) or 2.3(b), that the term "Assumed Liabilities" does not
include and, except as provided in this Section 2.3(c), the term
"Contributor Liabilities" does not include any liability or
obligation relating to either (i) the physical condition of the
Property at any time on or prior to the Closing including the
environmental condition thereof and whether the physical condition
thereof is or is not in compliance with the Leases, the Reciprocal
Easement Agreement, the Contracts or Existing Indebtedness
Documents; or (ii) the compliance or non-compliance of the
Property at any time on or prior to the Closing with applicable
laws (such physical condition and status of compliance or non-
compliance of the Property at any time on or prior to the Closing
as referenced above in clauses (i) and (ii) being collectively
referred to herein as the "Pre-Existing Property Conditions").
The foregoing notwithstanding, except in connection with "Reserved
Environmental Actions" (as such term is hereinafter defined), the
term "Contributor's Liabilities" shall include any and all claims
asserted by, and obligations and liabilities to, any unaffiliated
third parties who shall have suffered loss or damage prior to
Closing relating to any Pre-Existing Property Conditions
regardless of whether the claim by any such third party is made
before or after Closing. For the purposes of this Agreement
"Reserved Environmental Actions" shall mean any and all claims by,
and obligations and liabilities to, any governmental authorities
or unaffiliated third parties which are asserted against the
Partnership or Grantee after Closing with respect to any
environmental matter relating to any Pre-Existing Property
Conditions. The Reserved Environmental Actions shall not be
included in Contributors Liabilities or in the Assumed Liabilities
but, with respect thereto, except in connection with environmental
matters which constitute Pre-Existing Property Conditions of which
the Partnership had knowledge (as defined in Section 6.1 hereof)
as of the Closing or which were disclosed in the Environmental
Reports (as defined in Section 6.2(e) hereof), the Partnership and
Grantee hereby expressly reserve and retain all rights and
remedies against Contributor and Contributor (subject to any valid
defenses to which it may be entitled) shall have liability to the
Partnership and Grantee for reimbursement and contribution
pursuant to any and all provisions of common law, statutory law or
otherwise with respect to any and all obligations and liabilities
which the Partnership may incur to governmental authorities or
third parties as a result of any and all such Reserved
Environmental Actions.
Matters Relating to Existing Indebtedness. It shall be a
condition precedent to the Partnership's obligation to close the
Transactions that Contributor shall obtain and provide to the
Partnership on or prior to Closing and at no cost to the
Partnership (all such costs to be paid by Contributor, including,
without limitation, the payment of the transfer fees and all other
fees, costs and expenses imposed or required by the Existing
Lender to be paid in connection therewith): (i) the consent of the
Existing Lender to the consummation of the Transactions
(including, without limitation, the ownership of the Property
following Closing by the Partnership or one or more Affiliates of
the Partnership and the management of the Property following
Closing by GGMI); and (ii) an agreement, estoppel, and
confirmation by and from the Existing Lender that (A) confirms
that the Existing Indebtedness Documents are in full force and
effect and have not been modified, supplemented or amended, (B)
confirms that there is, to the Existing Lender's knowledge, no
outstanding default or condition that, with the passage of time or
the giving of notice or both would constitute a default under the
Existing Indebtedness Documents, (C) sets forth the then current
outstanding principal balance of the Existing Indebtedness and the
then current outstanding amount of accrued and unpaid interest
thereon, (D) confirms that the Existing Indebtedness Documents
shall not restrict the issuance or transfer of Units or shares of
Common Stock, (E) confirms that the Existing Lender shall have no
recourse to the Partnership, the General Partner or other
Affiliates of the Partnership or the assets of any of them other
than the Property except that the Existing Lender may have
recourse to the Partnership in those instances where the Existing
Lender has recourse (without giving effect to the Transactions) to
the members of Contributor (the liabilities for which such
recourse against the members of Contributor exists, the "Recourse
Liabilities"; provided, however, that such recourse shall
nonetheless be limited to the Property in those instances where
recourse to the Contributor and/or its constituent members, does
not, as a practical matter, expose assets other than the Property
to liability because Contributor and its constituent members are
single purpose and/or single asset entities, such circumstances
being expressly excluded from the definition of Recourse
Liabilities), and (F) confirms that all rights of Contributor
under the Existing Indebtedness Documents shall inure to the
benefit of the Partnership or an Affiliate of the Partnership
following Closing, including without limitation the right not to
make tax escrow deposits thereunder. Contributor may request from
Existing Lender a release of liability of Contributor and its
constituent partners in respect of the Recourse Liabilities to the
extent such liability arises out of events or matters which occur
after the Closing, but the receipt of the same shall not be
condition to Contributor's obligation to close hereunder. The
documents referred to in this Section are hereinafter referred to
as the "Existing Indebtedness Consent Documents." Contributor
shall use its reasonable best efforts to obtain the Existing
Indebtedness Consent Documents as contemplated herein.
Termination of Existing Management Agreement and Release of
Property Management Liens. It shall be a condition precedent to
both the Contributor's and the Partnership's obligations to close
the Transactions that, on or prior to the Closing, Contributor
shall cause the Existing Management Agreement to be terminated and
obtain from the Existing Manager a release of Liens or other
claims with respect to the property management or leasing or other
services performed by the Existing Manager in respect of the
Property through the Closing Date, including without limitation
any claim for leasing commissions relating to leases signed before
or after the Closing (except as provided in Section 2.9(c)). The
documents effecting such termination and release are hereinafter
referred to as the "Termination of Property Management Documents".
Contributor shall use its reasonable best efforts to obtain the
Termination of Property Management Documents as contemplated
herein.
Admission to Partnership; Redemption Rights; Etc.
At the Closing, the Partnership shall deliver to Contributor
and to each member of Contributor to whom Units are to be issued
pursuant hereto a certificate representing such Units and
Contributor and each of such members shall execute a Joinder
Agreement in the form attached hereto as Exhibit E (the "Joinder
Agreement").
At the Closing, the General Partner, the Partnership and the
holders of the Units issued pursuant hereto shall execute and
deliver a Redemption Rights Agreement substantially in the form of
Exhibit F (the "Redemption Rights Agreement"), pursuant to which
the holders of the Units issued pursuant hereto are granted the
right to require the Partnership to redeem its Units from time to
time as provided therein.
Notwithstanding anything to the contrary contained in the
Partnership Agreement, (i) no distributions shall be made by the
Partnership in respect of Units that are redeemed (pursuant to the
Redemption Rights Agreement) on or before the one hundred
eightieth (180th) day following Closing and (ii) the holders of
the Units issued pursuant hereto otherwise will be entitled to
receive as a distribution only a pro rata portion of the Net
Operating Cash Flow which is distributed for the calendar quarter
during which the Closing occurs 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 Closing Date relative to the total
number of days in such quarter (and the holders of the Units
issued pursuant hereto will be entitled to receive no
distributions for previous quarters, including without limitation
the distribution for the first and second quarters of 1998; it
being acknowledged and agreed that the distribution for a calendar
quarter is made in the immediately succeeding calendar quarter).
Pledge Agreement. At the Closing, Contributor shall execute
and deliver to the Partnership a Pledge Agreement substantially in
the form of Exhibit G (the "Pledge Agreement").
Intentionally Omitted.
Leasing Matters.
Contributor shall pay all tenant allowances, leasing
commissions, construction costs, legal costs and other tenant
inducement costs with respect to any Leases identified on Schedule
2.9(a) and shall also pay all tenant allowances and other tenant
inducement costs which are owing or become owing under all Leases
entered into, and under all Lease renewals exercised, prior to May
1, 1998; and the Partnership shall be entitled to a credit at
Closing for all such allowances and other costs that have not been
paid in full prior to the Closing Date (which credit shall reduce
the Net Asset Value), whether or not such allowances and other
costs are then payable or the Lease or Lease renewal to which they
relate has been consummated, delayed or abandoned (and following
Closing the Partnership shall be responsible for the costs for
which it has received a credit).
From and after and subject to the occurrence of Closing, the
Partnership shall pay the cost of the tenant allowances and other
tenant inducement costs that are owing or become owing under the
Leases identified on Schedule 2.9(b) attached hereto and under any
other Leases entered into on or after May 1, 1998 provided the
same were pre-approved by the Partnership in accordance with the
terms hereof; and Contributor shall be entitled to a credit at
Closing for such amounts that have been paid prior to the Closing
Date (which credit shall increase the Net Asset Value).
Contributor shall obtain the prior written approval of the
Partnership for any and all plans and specifications, budgets,
Leases and contracts (including without limitation construction
contracts) relating to the matters described in this Section 2.9,
which approval shall not be unreasonably withheld or delayed. Any
such contract (other than Leases) which is executed prior to
Closing shall be deemed to be a "Contract" hereunder.
Contributor shall obtain the prior written approval of the
Partnership for any and all Leases relating to the matters
described in this Section 2.9 including without limitation any
Leases entered into on or after May 1, 1998, which approval shall
not be unreasonably withheld or delayed. If the Partnership does
not respond to a request for an approval under this subparagraph
(d) within ten (10) business days, such approval shall
conclusively be presumed.
Matters Relating to Ground Lease. It shall be a condition
precedent to the Partnership's obligation to close the
Transactions that on or prior to Closing, Contributor shall obtain
and deliver to the Partnership a written confirmation in the form
of an estoppel certificate from Ground Lessor (the "Ground Lessor
Estoppel") which inures to the benefit of the Partnership and its
Affiliates and confirms: (i) that the Ground Lessor holds the
entire lessor's interest under the Ground Lease; (ii) that the
Ground Lease is in full force and effect and has not been
modified, supplemented or amended; (iii) that the Ground Lessor
has not received nor has the Ground Lessor given any notice of
default pursuant to the Ground Lease; and (iv) that the leasehold
interest under the Ground Lease is assignable to the Partnership
or Grantee. Contributor shall use its reasonable best efforts to
obtain the Ground Lessor Estoppel as contemplated herein.
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
Fund Waiver") pursuant to which Contributor and its Affiliates
fully and forever waive and release any and all claims to all or
any portion of any funds designated as a promotional or marketing
fund or reserve which is utilized to pay for marketing and
advertising expenses and seasonal and other promotional events at
or with respect to the Mall regardless of whether the same was
voluntarily established by Contributor or any of its predecessors
in interest or is required to be maintained pursuant to any of the
Leases or the Reciprocal Easement Agreement (the "Promotional and
Advertising Fund").
ARTICLE
Closing
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 October 21, 1998 (the "Closing Date")
through a so-called "New York" style closing whereby there shall
occur the simultaneous exchange between the parties of the
Contributor Closing Documents and Partnership Closing Documents
(as such terms are hereinafter defined), payment or delivery of
the consideration set forth in Section 2.2 hereof and the issuance
of binding irrevocable commitments by the Title Company for the
issuance of the Title Policies.
Contributor Closing Documents. At or prior to the Closing,
Contributor shall deliver, or cause to be delivered, to the
Partnership the following documents (collectively, the
"Contributor Closing Documents"), duly executed by Contributor and
the other parties thereto (other than the General Partner and the
Partnership) and in form and substance reasonably acceptable to
the Partnership, the Title Company and to Contributor unless the
form thereof is attached hereto:
Act of Sale Deed in proper form for recording, so as to
convey the entire fee simple estate in the Land and Improvements
and all other items of Real Property to Grantee, with
Contributor's warranty of title limited to claims by, through or
under Contributor (which Act of Sale Deed shall be in the form of
that attached hereto as Exhibit J).
Assignment or assignments of all of the right, title and
interest of Contributor under the Leases and the Ground Lease, all
of which, to the extent the same relate to documents or memoranda
thereof which have been recorded in appropriate land records,
shall be in form suitable for recording.
Assignment or assignments of all of the right, title and
interest of Contributor under the Reciprocal Easement Agreement in
form suitable for recording.
Assignment of all of Contributor's right, title and interest
in and to the Contracts.
Bill of Sale containing a general warranty of title so as to
transfer to the Partnership all right, title and interest in and
to the specific items of Personalty set forth on Schedule 1.1(c)
(but free of any warranties as to the physical condition thereof)
and a quit-claim bill of sale as to all other items of Personalty.
The Termination of Property Management Documents.
Searches conducted by an independent search firm reasonably
satisfactory to the Partnership showing any Uniform Commercial
Code, judgment, bankruptcy, pending suit or tax lien filings
against Contributor in the jurisdictions designated by the
Partnership no later than ten (10) 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 and residences of Contributor are
located, which searches shall be dated not more than ten days
prior to the Closing Date.
The instruments, documents or certificates as are
customarily required by the Title Company as a condition to the
issuance of the Title Policies and endorsements thereto as are
described herein.
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.
The Estoppels as required by Section 8.2(c) and the Ground
Lessor Estoppel as contemplated by Section 2.10.
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 6.2 are true and correct in all material respects as of
the Closing Date (as supplemented in accordance with Section 10.3)
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.
Written notices to the Parties to the Reciprocal Easement
Agreement, the Leases and the Contracts and other Owners of
Excluded Parcels advising them of the consummation of the
Transactions and advising them of the address to which Rent or
other payments and notices are to be sent and that the Partnership
will be responsible for the return of the Security Deposits in
accordance with the Leases.
Such documents and instruments as shall be reasonably
required to substitute the Partnership for Contributor as the
plaintiff in any pending legal actions as are contemplated by
Section 4.9 (if any).
An opinion or opinions of counsel for Contributor dated as
of the Closing Date, in form attached hereto as Exhibit H.
All Books and Records; it being agreed that all Books and
Records on-site at the Mall shall remain and be delivered by
Contributor on-site at the Mall simultaneously with Closing and
shall include (without limitation) all original copies of Leases,
the Reciprocal Easement Agreement and the Contracts which are in
the possession of Contributor. All other Books and Records will
be made available to the Partnership upon its request at any
reasonable time and from time to time whether any such request is
made prior to or at any time or times after Closing.
Keys and combinations to locked compartments within the
Mall.
an updated rent roll containing the items described in
Section 6.2(f) as of the Closing Date or a date not more than 10
days prior thereto.
The statements referred to in Sections 4.3(b) and 4.6.
The Contract Party Consents.
The Pledge Agreement.
The Joinder Agreement.
The Redemption Rights Agreement.
The Existing Indebtedness Consent Documents.
Certificates of existence as to Contributor and as to each
of its members, as amended (if applicable), certified by the
Georgia Secretary of State or other applicable governmental
authority as of a date not more than 30 days prior to the Closing
Date, and a copy of the operating agreement of each of Contributor
and each of its members and any and all amendments thereto,
together with a certification by one of Contributor's members that
all such copies are true, accurate and complete and have not been
further amended, revised, restated, cancelled or rescinded up to
and including the Closing Date.
Such certificates as the Partnership may reasonably request
as to the authorization on the part of Contributor of the
execution, delivery and performance of this Agreement, the
authorization on the part of the members of Contributor of the
execution and delivery of this Agreement by them in their
capacities as members of the Contributor and the authority of the
Persons executing and delivering this Agreement and the
Contributor Closing Documents on behalf of the members of
Contributor.
a Questionnaire from each constituent member of Contributor.
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 vest or better vest in the Partnership
title to 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 3.2.
Notwithstanding any provision to the contrary set forth
elsewhere
in this Agreement, if after the use of reasonable best efforts
Contributor is unable in good faith to deliver to the Partnership
at Closing any of the items set forth in Section 3.2(n),
Section 3.2(aa), the Contract Party Consents, the Required
Estoppels or the consent of the Existing Lender pursuant to
Section 2.4, 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 paragraph, 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).
Partnership Closing Documents. At or prior to the Closing,
the Partnership shall deliver, or cause to be delivered, to
Contributor 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, the Title Company
and the Partnership unless the form thereof is attached hereto:
An agreement or agreements pursuant to which the Partnership
assumes the Assumed Liabilities.
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.
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.
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 amended, 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, in each case
as amended, are true, accurate and complete and have not been
further amended, revised, restated, cancelled or rescinded up to
and including the Closing Date.
An opinion of counsel for the Partnership dated as of the
Closing Date, in form attached hereto as Exhibit I.
A written certificate addressed to Contributor to the effect
that all of the representations and warranties of the Partnership
contained in Section 6.1 are true and correct in all material
respects on and as of the Closing Date (as supplemented in
accordance with Section 10.3) 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.
The Amendment to Partnership Agreement or the other
documents referred to in Section 2.6(a) evidencing the issuance of
the Units.
The Pledge Agreement.
The Redemption Rights Agreement.
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 3.3.
Copies of documentation evidencing the assumption of the
Existing Indebtedness.
Notwithstanding any provision to the contrary set forth
elsewhere in this Agreement, if after the use of reasonable best
efforts the Partnership is unable in good faith to deliver to the
Contributor at Closing any of the items set forth in Sections
3.3(e) or 3.3(j), the Contributor shall have the option, as the
Contributor's sole and exclusive right and remedy either (a) to
terminate this Agreement by giving written notice of such
termination to the Partnership 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 Contributor shall terminate this Agreement pursuant to the
provisions of this paragraph, 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).
ARTICLE
Prorations and Adjustments
Items to Be Prorated. Subject to the other provisions of
this Article and this Agreement, the following items in respect of
the Property shall be apportioned or adjusted on a per diem basis
(employing the actual number of calendar days in the period
involved and a 365-day year) between Contributor and the
Partnership at the Closing as of 11:59 p.m., Central Standard
Time, on the day immediately preceding the Closing Date and the
net amount thereof shall be settled as hereinafter provided:
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);
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);
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;)
actually accrued interest, if any, required to be paid to a
Party on Security Deposits;
amounts, if any, payable by or owed to Contributor under the
Reciprocal Easement Agreement;
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 Partnership
following the Closing;
fuel oil, diesel fuel 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;
deposits, if any, on account with any utility company
servicing the Mall;
amounts paid or payable by Contributor to the Promotional
and Advertising Fund;
Rents (subject to the other provisions of this Article IV);
amounts paid or payable by Contributor under the Contracts
to the extent the same constitute Assumed Liabilities;
interest and deposits on the Existing Indebtedness;
all other items customarily apportioned in connection with
the sale of properties that are similar to the Property and
similarly located; and
amounts payable under the Ground Lease.
Contributor shall cooperate with the Partnership in any
transfer of electricity, gas, water and other utility services if
deemed necessary by the Partnership.
Installment Payment of Assessments. In furtherance of
Section 4.1(a), if any real property assessment affects the Mall
at the Closing Date and such real property assessment is payable
in installments (whether at the election of Contributor 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. Central Standard
Time, on the day immediately preceding the Closing Date, and the
remaining installments shall be the obligation of the Partnership.
Adjustable Tenant Charges.
Notwithstanding anything to the contrary contained
herein, no adjustments or apportionments shall be made with
respect to the expense items listed in Section 4.1 hereof (other
than real estate taxes and assessments, as to which adjustment
shall be made as set forth in Section 4.1) 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
Contributor prior to Closing (including without limitation real
estate taxes and assessments for which Contributor has received
credit under Section 4.1), and the Partnership shall pay or
otherwise satisfy 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 4.1).
From and after the Closing, the Partnership shall have
the right to receive and retain, subject to Section 4.3(c), below,
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 at Closing
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 made
by Contributor for the portion of the Applicable Closing Fiscal
Period through the Closing Date and for any prior fiscal period
(with such certification subject to the provisions of Section
4.10).
The Partnership shall, no less frequently than is set
forth in Section 4.10(d), remit to Contributor any amounts
collected by it 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. From time to time
following the end of the Applicable Closing Fiscal Period, as
amounts are received by the Partnership from Parties and in any
event no later than the first (1st) anniversary of the Applicable
Closing Fiscal Period, the aggregate amount of Adjustable Tenant
Charges, if any, collected by the Partnership on the one hand, and
Contributor, on the other hand, 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
Partnership, on the one hand, and Contributor, 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 of the
Partnership, on the one hand, and Contributor, on the other hand,
have borne (including without limitation real estate taxes or
assessments for which either party has received credit under
Section 4.1), and, to the extent that either shall have received a
greater amount of Adjustable Tenant Charges, such party or parties
shall promptly pay such excess to the other.
Promotional and Advertising Contributions.
Notwithstanding anything to the contrary contained
herein, no adjustments or apportionments shall be made with
respect to the expense items listed in Section 4.1 hereof for the
Applicable Closing Fiscal Period or any prior fiscal period to the
extent such expense items are payable or reimbursable from funds
collected or held as Promotional and Advertising Contributions.
The Partnership shall be responsible for the payment of all such
expenses incurred by it and, to the extent of the funds paid by
Contributor to the Partnership pursuant to Section 4.4(b),
expenses properly incurred by Contributor prior to Closing but
Contributor otherwise shall be responsible for the payment of all
such expenses incurred by it.
At the Closing, Contributor shall pay to the
Partnership in cash the aggregate of all funds, if any, then held
by Contributor as Promotional and Advertising Contributions (or,
upon written notice from the Partnership, Contributor shall assign
and transfer to the Partnership all of Contributor's right, title
and interest in and to the bank account(s) in which such funds are
held) and, from and after the Closing, the Partnership shall have
the right to collect, receive and retain any amounts required to
be paid as Promotional and Advertising Contributions 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 (other than an adjustment pursuant to Section 4.1(i) for
amounts paid or payable by Contributor as Promotional and
Advertising Contributions and Section 4.4(d)). At the Closing,
Contributor shall deliver to the Partnership a true and correct
statement setting forth in reasonable detail and certifying the
amount of Promotional and Advertising Contributions collected and
expenditures for such items of expense made by Contributor for the
portion of the Applicable Closing Fiscal Period through the
Closing Date.
Any amounts collected by the Partnership after the
Closing Date which constitute Promotional and Advertising
Contributions shall be retained by the Partnership and held and
disbursed by the Partnership according to the Leases.
Whenever Fixed and Other Tenant Charge Arrearage are
collected, as contemplated by Section 4.5, the amount remitted to
Contributor in accordance with the provisions of Sections 4.5 and
4.7 shall be reduced or Contributor shall make a payment to the
Partnership from the amount collected by Contributor to the extent
the landlord is obligated under Leases to, or by custom has in the
past, made contributions or other payments to the Promotional and
Advertising Fund as Fixed and Other Tenant Charge Arrearages are
collected, and such withheld or remitted amounts shall be paid to
the Promotional and Advertising Fund.
Fixed and Other Tenant Charge Arrearage. Subject to
the provisions of Section 4.7, Fixed and Other Tenant Charge
Arrearage (which, for purposes of this Section 4.5, 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 Partnership as to Fixed and Other Tenant Charge
Arrearages which relate to periods from and after the Closing
Date, and to Contributor with respect to all other Fixed and Other
Tenant Charge Arrearages.
Sales Based Tenant Charges. Sales Based Tenant Charges
which are payable with respect to any period prior to the Closing
Date or which have been accrued prior to the Closing Date shall
not be apportioned as of the Closing Date. In lieu thereof, such
amounts shall be apportioned, after the Closing Date 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 each Applicable Closing Fiscal Period (it being
recognized that there may be different year ends for different
Tenants in computing Sales Based Tenant Charges), an amount which
bears the same ratio to the total Sales Based Tenant Charges for
the Applicable Closing Fiscal Period as the number of days in the
Applicable Closing Fiscal Period which have elapsed prior to the
Closing Date bears to the total number of days in the Applicable
Closing Fiscal Period. 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
Periods through the Closing Date.
Application of Rent Receipts. Notwithstanding anything
to the contrary contained herein, in determining the adjustments
and apportionments pursuant to Sections 4.3, 4.4, 4.5 and 4.6, any
payment of Rent shall be applied to the payment of the item or
items of Rent designated or indicated by the Party making such
payment or to which such payment otherwise relates in the
reasonable judgment of the Partnership.
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 its agents (or with any predecessor-
in-interest to Contributor or any such agent) 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
Partnership following Closing ("Other Deposits"), and Contributor
shall retain but provide a credit to the Partnership at Closing
for 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.
Collection of Rents.
The Partnership shall use reasonable best efforts to
collect the Fixed and Other Tenant Charge Arrearage, 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 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 the Reciprocal Easement
Agreement in connection with such collection efforts. The
Partnership shall not waive or settle any claims for any such
amounts in whole or in part to the extent such amounts, if
collected, would be payable to Contributor hereunder other than in
accordance with the policies of the Partnership from time to time
as to Rent delinquencies generally. Collection costs shall be
charged against amounts collected and charged to the parties
hereto in the proportion in which each is entitled to the proceeds
of such collection. The Partnership shall provide to Contributor
quarterly reports after Closing with respect to the collection by
the Partnership after Closing of any such amounts which are
payable with respect to the Applicable Closing Fiscal Period and
any prior fiscal year.
Contributor shall have the right to seek collection of
any Fixed and Other Tenant Charge Arrearage or other item of Rent
owed to it hereunder and not collected by the Partnership within
six months following the later of the Closing Date and the date
such item of Rent is due and payable (but Contributor otherwise
shall not have the right to seek collection of any Rents);
provided, however, that in seeking to collect any such Fixed and
Other Tenant Charge Arrearage, Contributor shall not be entitled
to terminate any Lease or the Reciprocal Easement Agreement or
otherwise seek any remedy other than a money judgment against the
delinquent Party. Prior to filing any such action, Contributor
shall notify the Partnership and the Partnership may join such
action. The 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 Partnership, in which event the
Partnership shall join and cooperate in such actions or
proceedings or permit the same to be brought by Contributor in the
Partnership's name but Contributor shall pay all costs and
expenses relating thereto, including without limitation the
Partnership's reasonable legal fees in reviewing pleadings and
other materials filed in connection with such litigation.
Notwithstanding anything to the contrary contained
herein, the Partnership shall have the right at any time on or
after the Closing, and whether or not the joinder of the
Partnership shall be required as a matter of law, to cause the
Partnership 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 Partnership intends to seek eviction of
such Tenant, cancellation of the Lease or repossession of the
premises. If the Partnership joins in, or is substituted for
Contributor as plaintiff, in any such litigation, the Partnership
shall, thereafter, assume sole liability for all costs and
expenses of such litigation, including legal fees and expenses, as
may thereafter be incurred (except as provided below) and shall
thereafter control all aspects of such proceedings, except that
the Partnership shall not waive, reduce or otherwise compromise
any claims for Rent to the extent that the amount of such claims,
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. 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 the Partnership's 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 Partnership in connection with the proceedings
previously instituted by Contributor in connection with such
collection efforts.
Settlement of Adjustments.
Contributor and the Partnership acknowledge that it may
be difficult to calculate, as of the day immediately preceding the
Closing Date, certain of the adjustments, apportionments and
payments to be made pursuant to this Article IV. Accordingly,
Contributor and the Partnership hereby agree that, except with
respect to those matters expressly required to be addressed at a
later date pursuant to the provisions hereof, any adjustments,
apportionments and payments otherwise required to be made as of
the Closing Date may to the extent necessary or desirable be
estimated by the 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.
Except as otherwise provided herein, net prorations and
adjustments made pursuant to this Article IV or other sections of
this Agreement on the Closing Date 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.
The Partnership, upon reasonable advance notice, shall
provide Contributor with access to the books and records of the
Partnership, including back-up calculations and information,
relating to the calculation of the adjustments required to be made
pursuant to this Article IV.
Any Rents that are payable to Contributor hereunder
shall be paid from time to time following the Closing as
determined by the Partnership, but in no event less frequently
than quarterly.
Notwithstanding anything to the contrary contained
herein, a final adjustment shall be made on March 31, 2000, with
respect to amounts owing under this Article IV as of such date,
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 IV 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 4.9(b)).
ARTICLE
Title Insurance and Survey
Title Commitment. Not less than thirty (30) days prior
to Closing, Contributor shall cause the Title Company to deliver
to the Partnership a commitment or commitments of the Title
Company (collectively, the "Title Commitment") to issue, at and as
of Closing, its ALTA Owners Title Insurance Policy in its most
current form as to the Land (the "Owner's Policy") and an ALTA
Owners Leasehold Title Policy in its most current form as to the
Ground Lease Parcel (the "Leasehold Policy" and, together with the
Owner's Policy, the "Title Policies") subject only to the
Permitted Exceptions and in the aggregate amount of the Gross
Asset Value (to be allocated between the Owner's Policy and
Leasehold Policy per the Partnership's instructions). It shall be
a concurrent condition to the Partnership's obligation to close
the Transactions that the Title Policies shall be issued at
Closing at Contributor's sole cost and expense insuring the
Partnership's or Grantee's (as the case may be) ownership of the
Property with coverage against matters relating to federal
bankruptcy, state insolvency or similar creditors' rights laws and
with the following special endorsements (in form and substance
satisfactory to the Partnership):
Full extended coverage over all general exceptions;
Location endorsement insuring the accuracy of the
Survey;
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;
An endorsement insuring against existing violations of
covenants, conditions or restrictions of record affecting the Real
Property and against any loss of title to the Real Property or the
inability of the owner thereof to maintain the improvements now
located thereon by reason of any existing or future violation of
any such covenant, condition or restriction of record;
Utility facility endorsement;
Zoning endorsement (ALTA 3.1) (with parking);
Tax parcel endorsement;
Contiguity endorsement;
Non-imputation endorsement insuring the Partnership
against any denial of coverage in the event of loss or damage
insured under the terms of the Title Policies 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 Contributor
prior to Closing; and
Fairway endorsement.
The Partnership also may require the issuance at the Closing
of such additional endorsements at no additional cost to
Contributor as the Partnership deems appropriate, but the issuance
thereof shall not be a condition to the Partnership's obligations
hereunder.
The Partnership also may require the Title Company (at no
additional cost to Contributor) to 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) which have been approved by the Partnership.
Survey. Contributor shall deliver to the Partnership
a survey for the Real Property, dated not earlier than 30 days
prior to the Closing Date, prepared by a licensed or registered
professional surveyor in the jurisdiction in which such property
is located (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 Title Surveys" jointly established
by the American Land Title Association and American Congress on
Surveying and Mapping then in effect; contains Table A Optional
Survey Responsibilities and Specifications 1, 2, 3, 4, 6, 7(a),
7(b)(1), 7(c), 8, 9, 10, 11 and 13; shall show the boundaries of
the Land, Ground Lease Parcel and Adjacent Land; shall disclose
that the Land, Ground Lease Parcel and Adjacent Land comprise a
single parcel of land with no strips, gores or gaps within its
boundaries; shall disclose that there are no encroachments of any
Improvements located primarily on the Land or Ground Lease Parcel
or Adjacent Land onto adjoining premises or public ways (unless a
valid easement exists and is in place with respect to each such
encroachment) or onto or over setback or building or side yard
lines located on the Land or Ground Lease Parcel or Adjacent Land
or of improvements located primarily on adjoining premises onto
any portion of the Land or Ground Lease Parcel or Adjacent Land
(unless a valid easement for the benefit of the adjoining premises
exists and is 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 or Ground Lease Parcel or
Adjacent Land and shall disclose any encroachment by any of the
Improvements located thereon or any other structures located on
the Land or Ground Lease Parcel or Adjacent Land in violation of
any such easements; shall contain a legal description of the Land,
Ground Lease Parcel and Adjacent Land; shall show the location of
any adjacent public streets, disclosing access, if any, to the
Land, Ground Lease Parcel and Adjacent Land therefrom; shall show
the configuration and number of parking spaces on the Land and
Ground Lease Parcel; shall show the area of the Land, Ground Lease
Parcel and Adjacent Land; shall indicate whether the Land or
Ground Lease Parcel or Adjacent Land is located in an area
designated by HUD as having special flood risks; and shall contain
a certificate of the surveyor attesting to the accuracy of the
Survey and its conformity to the requirements of the aforesaid
Minimum Standard Detail Requirements, which certificate shall be
directed to the Partnership, Grantee the Existing Lender and the
Title Company.
Title and Survey Defects.
If the Title Commitment or the Survey or any update to
the Title Commitment or any update to the Survey discloses
exceptions to title other than the Permitted Exceptions or any
survey defects, the Partnership shall notify Contributor in
writing within ten (10) business days of the delivery of the same.
Upon receipt of any such notice, Contributor shall
(i) cause any such exceptions which are monetary liens of a fixed
and ascertainable amount less than fifty thousand dollars
($50,000) or that result from any act by, through or under
Contributor and that may be removed and/or bonded 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 (ii) use reasonable best efforts
(but without any monetary obligation to incur any cost or expense
except as provided in clause (i) above) to cause all other such
title exceptions or matters to be so released and removed from
title and waived from the Title Commitment (or insured over at its
sole cost by the Title Company by an endorsement reasonably
satisfactory to the Partnership) or otherwise cured.
Nothing contained in this Section 5.3 shall limit the
rights of the Partnership in respect of a breach by Contributor of
Section 10.2.
If, despite compliance by Contributor with its
obligations contained herein, title is not insurable at Closing as
required by Section 5.1 and this Section 5.3 (including the
removal of or issuance of insurance over or other cure of all
matters specified in any of the above notices), then the
Partnership may, as its sole remedy, (A) waive such remaining
uncured defects and accept title subject to all such remaining
uncured defects (without any abatement or reduction of the
consideration hereunder) in which event all such remaining uncured
defects shall be deemed Permitted Exceptions hereunder or (B)
terminate this Agreement by giving written notice of such
termination to Contributor. In the event that this Agreement is
terminated, this Agreement shall be null and void and 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).
Title Insurance Premiums and Survey Costs. Except as
otherwise set forth herein, Contributor shall pay the premiums and
other charges in connection with the issuance of the owner's title
policies and endorsements complying with the requirements of
Section 5.1 and the Survey.
ARTICLE
Representations and Warranties
Partnership Representations and Warranties. The
Partnership represents and warrants to Contributor as follows as
of the date hereof and it shall be a condition precedent to
Contributor's obligation to close the Transactions that the
Partnership remake the following representations and warranties at
and as of the Closing Date:
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.
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 to which the
Partnership is a party will be, duly executed and delivered by the
Partnership. This Agreement constitutes, and when so executed and
delivered such Partnership Closing Documents will constitute, the
legal, valid and binding obligations of the Partnership,
enforceable against it in accordance with their terms, subject to
bankruptcy and similar laws affecting the remedies or recourse of
creditors generally and general principles of equity.
None of the execution, delivery or performance of this
Agreement or the Partnership Closing Documents by the Partnership
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.
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.
No bankruptcy, insolvency, rearrangement or similar action
involving the Partnership, whether voluntary or involuntary, is
pending or, to the best of the Partnership's knowledge,
threatened.
The Partnership is duly qualified to do business in all
jurisdictions where such qualification is necessary to carry on
its business, except where the failure to so qualify would not
materially and adversely affect the financial condition, business
or operations of the Partnership. The Partnership is treated as a
partnership for federal income tax purposes and not as an
association taxable as a corporation or a "publicly-traded
partnership" taxable as a corporation.
Contributor has received a true and correct copy of the
Partnership Agreement. The Partnership Agreement is in full force
and effect. The Units to be issued to Contributor hereunder have
been duly authorized for issuance to Contributor and, upon such
issuance will be validly issued, fully paid and non-assessable and
will not be subject to preemptive rights upon their issuance.
Upon admission of Contributor to the Partnership, pursuant to the
Partnership Agreement, Contributor will acquire legal and
equitable title to its Units, free and clear of all liens,
encumbrances, claims and rights of others, except for liens,
encumbrances, claims or rights of others created or conferred by,
under or through Contributor, including without limitation liens
created pursuant to the Pledge Agreement. The Units are
redeemable for shares of Common Stock (the "Conversion Shares") or
cash in accordance with the redemption procedures described in the
Redemption Rights Agreement, and such redemption obligations are
enforceable against the Partnership in accordance with the terms
of the Redemption Rights Agreement.
As of the Closing Date, the execution and delivery by the
Partnership of the Partnership Closing Documents, and the
performance by the Partnership of all obligations of the
Partnership under this Agreement and all other obligations under
the other Partnership Closing Documents are permitted under the
Partnership Agreement and shall have been duly authorized by all
requisite partnership action. None of the execution and delivery
by the Partnership of the Partnership Closing Documents, the
compliance with the terms and provisions thereof on the part of
the Partnership, or consummation by the Partnership of the
transactions contemplated thereby, will violate any statute,
license, decree, restriction, order or regulation of, or agreement
with any governmental authority, judicial or administrative body,
or other governmental body or agency having jurisdiction over the
Partnership, or will, at the Closing Date, breach, conflict with
or result in a breach of any of the terms, conditions or
provisions of, or result in the acceleration of, any material
agreement or instrument to which the Partnership is a party, or by
which it is or may be bound, or constitute a default thereunder,
or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever, upon, or give to others any
interest or rights in, the Units to be issued to Contributor
(other than pursuant to the Pledge Agreement). No consent,
waiver, approval or authorization of, or filing, registration or
qualification with, or notice to, any governmental authority,
judicial or administrative body, or other governmental body or
agency having jurisdiction over the Partnership, is required to be
made, obtained or given by the Partnership prior to the Closing
Date in connection with the execution, delivery and performance by
the Partnership of the Partnership Closing Documents.
The Partnership (i) has been at all times, and presently
intends to continue to be, classified as a partnership or a
publicly traded partnership taxable as a partnership for federal
income tax purposes and not an association taxable as a
corporation or a publicly traded partnership taxable as a
corporation, and (ii) will not be rendered unable to be classified
as a partnership or a publicly traded partnership taxable as a
partnership for federal income tax purposes as a consequence of
the transaction contemplated hereby.
The General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, with all requisite corporate power and authority to own,
lease, operate and sell its assets and to carry on its business as
it is now being conducted. The General Partner is duly qualified
to do business in all jurisdictions where such qualification is
necessary to carry on its business, except where the failure to so
qualify would not materially and adversely affect the financial
condition, business or operations of the General Partner. The
General Partner is the sole general partner in the Partnership.
The Conversion Shares will be duly authorized and, to the
extent delivered upon exchange of the Units in accordance with the
Redemption Rights Agreement, will have been validly issued, fully
paid, nonassessable and free and clear of any liens, encumbrances,
claims, rights of others, and preemptive or similar rights, except
for any liens, encumbrances, claims or rights of others created
by, under or through Contributor, including without limitation
liens created pursuant to the Pledge Agreement. The General
Partner has a sufficient number of authorized but unissued shares
of Common Stock to permit the issuance of the Conversion Shares
upon exchange of the Units pursuant to the Redemption Rights
Agreement.
The General Partner (i) has, in its federal income tax
return for its tax year ended December 31, 1993, elected to be
taxed as a "real estate investment trust" within the meaning of
Section 856 of the Code, which election remains in effect and is
currently intended to continue to remain in effect for each of the
General Partner's taxable years, (ii) has operated, and intends to
continue to operate, in such manner as to qualify as a real estate
investment trust for each of its taxable years, and (iii) will not
be rendered unable to qualify as a real estate investment trust
for federal income tax purposes as a consequence of the
transaction contemplated hereby.
As of the Closing Date, the General Partner shall have
all requisite corporate power and authority to (i) issue
Conversion Shares upon exchange of the Units in accordance with
the Redemption Rights Agreement. The execution and delivery by
the General Partner of all agreements and other documents the
General Partner executes and delivers in connection with the
transactions described in this Agreement, including, without
limitation, the Redemption Rights Agreement (the "General Partner
Documents"), and performance by the General Partner under the
General Partner Documents and of its other obligations arising out
of this Agreement, if any, have been (or, prior to execution,
shall be) duly authorized by all requisite corporate action and no
other proceeding on the part of the General Partner is necessary
to authorize the execution, delivery and performance by the
General Partner of this Agreement. The General Partner Documents
are (or, upon execution, shall be) binding on the General Partner
and enforceable against the General Partner in accordance with
their terms, subject to bankruptcy and similar laws affecting the
remedies or recourse of creditors generally and general principles
of equity. None of the execution and delivery by the General
Partner of the General Partner Documents, the compliance with the
terms and provisions thereof on the part of the General Partner,
and the consummation by the General Partner of the transactions
contemplated thereby, will violate any statute, license, decree,
restriction, order or regulation of, or agreement with, any
governmental authority, judicial or administrative body, or other
governmental body or agency having jurisdiction over the General
Partner, or will, at the Closing Date, breach, conflict with, or
result in a breach of, any of the terms, conditions or provisions
of, or result in the acceleration of, the certificate of
incorporation of the General Partner, as amended, or the bylaws of
the General Partner, as amended, or any material agreement or
instrument to which the General Partner is a party, or by which it
is or may be bound, or constitute a default thereunder, or result
in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon, or give to others any interest or
rights in, the Units to be issued to Contributor (other than
pursuant to the Pledge Agreement). No consent, waiver, approval
or authorization of, or filing, registration or qualification
with, or notice to, any governmental authority, judicial or
administrative body, or other governmental body or agency having
jurisdiction over the General Partner, is required to be made,
obtained or given by the General Partner prior to the Closing
Date, in connection with the execution, delivery and performance
by the General Partner of the General Partner Documents.
The General Partner meets the requirements for the use
of a Registration Statement on Form S-3.
The financial statements of the General Partner
included in the General Partner's periodic reports ("Exchange Act
Reports") pursuant to the Securities Exchange Act of 1934, as
amended ("Exchange Act") comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved; except:
(i) as may be otherwise indicated in such financial statements or
the notes thereto, or, (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or year-
end accruals or may be condensed in summary statements.
To the Partnership's knowledge, since the date of the
General Partner's most recent Exchange Act Report or filing with
the SEC of a registration statement pursuant to the Securities
Act, there has not been any material adverse change in the
financial condition of the General Partner.
Since January 1, 1996, the General Partner has timely
filed all Exchange Act Reports required to be filed under the
Exchange Act (exclusive of any periodic reports that may be
required as a result of the transaction described herein). As of
their respective dates, (i) the Exchange Act Reports complied in
all material respects with the requirements of the Exchange Act
and the rules and regulations of the SEC promulgated thereunder
applicable to the Exchange Act Reports, and (ii) no Exchange Act
Report filed with the SEC after December 31, 1996 and before the
date hereof contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading.
To the Partnership's knowledge, all of the various
written due diligence reports and summaries prepared by or at the
request of the Partnership with respect to its due diligence
inquiries relating to the Property in conjunction with the
Transactions have been reviewed by Joel Bayer, Stan Sadoris or
John Millar, either individually or on an aggregate basis in
combination with one another.
To the Partnership knowledge, none of the
representations and warranties made by Contributor pursuant to
Section 6.2 hereof are false or inaccurate nor, to the
Partnership's knowledge, are the underlying facts relating to any
such representation or warranty which is qualified by the
knowledge of Contributor such that if such facts were known by
Contributor, then the Contributor's representation or warranty set
forth in Section 6.2 would be untrue or not correct.
Joel Bayer, Stan Sadoris and John Millar are the
individuals who are most likely in the ordinary course of the
Partnership business and with respect to the Transactions to have
responsibility for, and therefore to have personal knowledge of,
the matters set forth in this Section 6.1.
For purposes of this Agreement, the phrase "to the
Partnership's knowledge" and other phrases of similar import shall
refer to the actual, current, subjective knowledge of any of Joel
Bayer, Stan Sadoris or John Millar following reasonable inquiry
and investigation of the Partnership's business records with
respect to the relevant subject matter.
Contributor's Representations and Warranties.
Contributor represents and warrants to the Partnership as follows
as of the date hereof and it shall be a condition precedent to the
Partnership's obligation to close the Transactions that the
Contributor remake the following representations and warranties at
and as of the Closing Date:
Contributor is a limited liability company duly formed,
validly existing and in good standing under the laws of the State
of Georgia with full power and authority to execute, deliver and
perform this Agreement. The members of Contributor as of the date
hereof (it being contemplated that the structure and ownership of
Contributor will change prior to Closing, consistent with the
charts attached hereto as Schedule 6.2(a) and that the
representations and warranties set forth in this Section 6.2(a)
will be revised at Closing accordingly) are (i) Harry J. Butler,
Jr., an individual, (ii) Sealy Retail Properties, L.L.C., a
Louisiana limited liability company, (iii) MSV Special Manager,
L.L.C., a Georgia limited liability company, and (iv) CMS/Sealy
Mall Properties, L.L.C., a Georgia limited liability company.
Each of the limited liability companies that are members of
Contributor are duly formed, validly existing and in good standing
under the laws of the State of their organization with full power
and authority to execute and deliver this Agreement in their
respective capacities as member of Contributor. The execution,
delivery and performance of this Agreement by Contributor has been
authorized by all necessary corporate action on the part of
Contributor, and the execution and delivery of this Agreement by
each constituent member of Contributor in its capacity as a member
of Contributor has been authorized, where applicable, by all
necessary corporate action. This Agreement has been, and when
executed and delivered the Contributor Closing Documents will have
been, duly executed and delivered by Contributor in its individual
capacity and by each constituent member of Contributor in its
capacity as a member of Contributor. 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 it in accordance
with their terms, subject to bankruptcy and similar laws affecting
the remedies or recourse of creditors generally and general
principal of equity.
Subject to obtaining the consent of the Existing Lender in
accordance with Section 2.4, 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 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 any of its
constituent partners, (ii) any agreement, instrument or other
document to which Contributor or any of its constituent partners
is a party or by which any of them is bound or (iii) any judgment,
decree, order, statute, injunction, rule, regulation or the like
of a governmental unit applicable to any of them.
To Contributor's knowledge, the Partnership (and/or its
Grantee) will upon Closing have good and marketable title to the
Property, free and clear of all Liens other than the Permitted
Exceptions and Liens created by, under or through the Partnership.
To Contributor's knowledge, the Property comprises all of the
assets and property necessary to operate the Mall as now operated.
To Contributor's knowledge, Contributor has not
received any written notice of any revocation or outstanding
violation of any license or permit maintained with respect to the
Property that has not been cured or otherwise resolved to the
satisfaction of the appropriate governmental entity.
Except as set forth in the Environmental Reports
(hereinafter defined): Neither Contributor nor, to Contributor's
knowledge, any other Person has caused or permitted any Hazardous
Material to be maintained, disposed of, stored, released or
generated on, under or at the Property or any part thereof or any
real property adjacent thereto except as otherwise specifically
set forth in Schedule 6.2(e) and except for the storage and use 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 all applicable laws,
including without limitation Environmental Laws. To Contributor's
knowledge, Contributor has not received any written notice from
any governmental unit or other Person (including without
limitation any consultant or engineer engaged by Contributor or
any 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 as otherwise
specifically set forth in Schedule 6.2(e) and 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 to
Contributor's knowledge there are no administrative, regulatory or
judicial proceedings pending against Contributor or, to the
knowledge of Contributor, threatened in writing against
Contributor with respect thereto pursuant to, or alleging any
violation of or liability under, any Environmental Law. For
purposes hereof, the "Environmental Reports" are all those certain
reports concerning environmental testing of the Property listed on
Schedule 6.2(e).
To Contributor's knowledge, attached hereto as Schedule
6.2(f) is a rent roll for the Mall (the "Rent Roll") dated as of
October 20, 1998 showing identification of each rentable space in
the Mall by space number, whether leased or not, and for each such
space, the name of the Tenant, the minimum or fixed annual rent
payable, the percentage sales rate (all of the foregoing
information, the "Basic Information"), the sales breakpoint for
percentage rent, the commencement and expiration dates of the
current Lease term, the square footage of such space, the
unapplied amount of any security or other deposit held, all
delinquencies in Rent, all outstanding rent abatements, all
outstanding tenant fit-out allowances and other tenant concessions
or inducements, all renewal options and "kick-out" clauses. To
Contributor's knowledge, all information therein is materially
accurate as of October 20, 1998. To Contributor's knowledge,
except as otherwise set forth in the Rent Roll, no Tenant has paid
any rent in advance except for the current month.
To Contributor's knowledge, Schedule 6.2(g)-1 contains
a complete and correct list of all existing Leases and
modifications thereof and supplements thereto (including without
limitation side letters modifying the terms of the Leases)
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). To Contributor's knowledge, the
documents listed on Schedule 6.2(g)-2 constitute a complete and
correct list of the reciprocal easement agreements and allocable
share agreements (which shall be deemed part of the Reciprocal
Easement Agreement for purposes of this Agreement) relating to the
Real Property and all modifications thereof and supplements
thereto (including without limitation side letters) (the
"Reciprocal Easement Agreement") 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. To
Contributor's knowledge, true and complete copies of the
Reciprocal Easement Agreement, Ground Lease and Leases, including
each written modification thereof and supplement thereto and all
material correspondence between the parties thereto have
heretofore been furnished to or made available to the Partnership
for inspection. The Reciprocal Easement Agreement, Ground Lease
and each Lease constitutes the entire agreement between the
parties thereto, and, to Contributor's knowledge, there are no
oral promises or agreements amending or modifying the same.
To Contributor's knowledge, there are no leases or
other rights of occupancy or use relating to the Real Property
other than the Leases, the Ground Lease and the Reciprocal
Easement Agreement 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. To Contributor's knowledge, Contributor
has received no written notice of the termination of any rights
granted therein.
To Contributor's knowledge, no Party to the
Reciprocal Easement Agreement, Ground Lease or any Lease has made
any claim to Contributor in writing (A) that Contributor has
defaulted in performing any of its obligations under such
Reciprocal Easement Agreement, Ground Lease or Lease, as the case
may be, 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, or has the right to cancel the
Reciprocal Easement Agreement, Ground Lease or such Lease or to be
relieved of its operating covenants thereunder.
Except for delinquencies in the payment of Rents
disclosed in the Rent Roll and except as set forth on Schedule
6.2(i), to Contributor's knowledge, Contributor has received no
written notice and has given no written notice that any currently
outstanding uncured default exists under the Reciprocal Easement
Agreement or any Lease on the part of any Party or Parties
thereto. To Contributor's knowledge, Contributor is not in
default (without giving effect to any applicable notice and cure
rights) in any respect with respect to any Lease, the Ground Lease
or the Reciprocal Easement Agreement.
To Contributor's knowledge, Contributor has
received no written notice that there are any 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.
To Contributor's knowledge, no Party to the Ground
Lease, any Lease or the Reciprocal Easement Agreement has asserted
in writing 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 Reciprocal Easement Agreement under the
Reciprocal Easement Agreement with respect to easements only.
Contributor has furnished the Partnership with audited
financial statements for the Mall (consisting of balance sheets
and income statements) as of, and for the calendar years ended
December 31, 1995 and December 31, 1996 (collectively, the
"Audited Financial Statements"), and with unaudited financial
statements for the Mall (consisting of balance sheets and income
statements) for calendar year ended December 31, 1997 and as of
and for the eight (8) month period ended August 31, 1998 (the
"Unaudited Financial Statements"). To Contributor's knowledge,
the Unaudited Financial Statements are consistent with the books
and records and accounts of Contributor reflecting the financial
condition and results of operations of Contributor as of the dates
thereof and for the periods referred to therein and have been
prepared utilizing sound accounting principles consistently
applied throughout the periods indicated.
To Contributor's knowledge, Schedule 6.2(k) lists the
patents, trademarks (including registrations thereof), and trade
names which are used by Contributor in connection with the
operation of the Mall (the "Intellectual Property"). To
Contributor's knowledge, Contributor has received no written
notice that the conduct of the business and activities of the Mall
by Contributor and the use of the Intellectual Property 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. To Contributor's knowledge, Contributor
has not granted to any Person or Persons the right to use the
Intellectual Property or any portion thereof.
Contributor is not a party to and is not bound by any
collective bargaining or union agreements with respect to the
Mall. To Contributor's knowledge, Contributor has not encountered
any labor union organizing activity or experienced any actual or
threatened employee strikes, work-stoppages, slow-downs or
lockouts with respect to the Mall. Contributor has no employees
and does not maintain or sponsor any employee benefit plan,
including, without limitation, any plans subject to the Employer
Retirement Income Security Act of 1974, as amended. Contributor
is not currently providing continuation coverage to any individual
under Section 4980B of the Code.
To Contributor's knowledge, Schedule 6.2(m) contains a
true and complete list of all Contracts with respect to the Mall,
including all modifications thereof and supplements thereto
(including without limitation all side letters amending or
modifying the same). To Contributor's knowledge, Contributor has
received no written notice that there has been any default
(without giving effect to any notice and cure rights) by
Contributor of any of its material obligations or, to
Contributor's knowledge, by any Party under any Contract which has
not heretofore been cured. To Contributor's knowledge, a true and
complete copy of each Contract, including any amendments or
supplements thereto, has been delivered or made available to the
Partnership. To Contributor's knowledge, such documents
constitute the entire agreement between the parties thereto and,
to Contributor's knowledge, there are no oral promises or
agreements amending, modifying, or supplementing the same.
To Contributor's knowledge, no condemnation proceeding
or other proceeding or action in the nature of eminent domain is
pending with respect to all or any part of the Real Property. To
Contributor's knowledge, Contributor has received no written
notice that any condemnation proceeding or other proceeding or
action in the nature of eminent domain is pending with respect to
any property owned by a Party to the Reciprocal Easement Agreement
which property is the subject of the Reciprocal Easement
Agreement. To Contributor's knowledge, Contributor has received
no written notice that any Taking is threatened with respect to
all or any part of the Real Property or any property owned by a
Party to the Reciprocal Easement Agreement which is the subject of
the Reciprocal Easement Agreement.
To Contributor's knowledge, 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 or made available to
the Partnership. Except for the Ground Lease Parcel which is
included as part of a larger tract of land owned by the Ground
Lessor, to Contributor's knowledge, no portion of the Real
Property comprises part of a tax parcel which includes property
other than property comprising all or a portion of the Real
Property. To Contributor's knowledge, no application or
proceeding is pending by or against Contributor with respect to a
reduction in or refund of or increase in such taxes. To
Contributor's knowledge, Contributor has received no written
notice that any special tax or assessment may be levied against
the Real Property or of any change in the tax assessment of the
Real Property.
To Contributor's knowledge, Contributor has not
received written 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.
To Contributor's knowledge, Contributor has received no
written notice that the Property has not been operated in
compliance with all laws, statutes, rules, regulations, and
ordinances (including without limitation the ADA) and, to
Contributor's knowledge, Contributor has not received any written
notice from any governmental authority having jurisdiction over
the Real Property or the Mall or from any other Person (including
without limitation any insurance company or Board of Fire
Underwriters) (A) of any violation of any law, ordinance, order or
regulation (including without limitation the ADA) relating to the
Mall which has not heretofore been complied with or (B) requiring
any alterations, improvements or changes in or about the Real
Property or any portion thereof which have not been completed. To
Contributor's knowledge, Contributor has received no written
notice that Contributor has any obligation to any governmental
authority for the performance of any capital improvements or other
work to be performed in or about the Real Property or donations of
monies or land (other than general real property taxes) which have
not been completely paid for or otherwise performed.
Except as provided in Schedule 6.2(r), to Contributor's
knowledge, 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 in writing against Contributor relating to the
Property, the Ground Lease Parcel or the Transactions and there
are no unsatisfied arbitration awards or judicial orders against
Contributor relating to the same. Copies of all pleadings and
other documents with respect to the litigation described on
Schedule 6.2(r) have been furnished to or made available to the
Partnership and are true, accurate and complete copies of the same
that are in the possession of the Contributor.
To Contributor's knowledge, Schedule 6.2(s) 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. To Contributor's knowledge, Contributor has
not received any written notice or written request from any
insurance company or Board of Fire Underwriters (or organization
exercising functions similar thereto) cancelling or threatening to
cancel any of said policies or denying or disputing coverage
thereunder.
Except as set forth in Schedule 6.2(t), to Contributor's
knowledge, Contributor has received no written notice that any of
the Tenants or Anchors is the subject of any bankruptcy,
reorganization, insolvency or similar proceedings or has ceased or
reduced or intends to cease or reduce operations at the Mall other
than temporarily due to casualty, remodeling, renovation or
similar cause.
To Contributor's knowledge, Schedule 6.2(u) accurately
sets forth (i) a list of all instruments, agreements and other
documents governing, evidencing or securing the Existing
Indebtedness and all modifications or amendments thereof and
supplements thereto including without limitation guaranties,
indemnity agreements and side letters that modify any of the terms
thereof (collectively, the "Existing Indebtedness Documents"),
(ii) the dates of each of the Existing Indebtedness Documents and
of each modification or amendment thereof and supplement thereto,
(iii) all written notices to Contributor, if any, with respect to
any and all changes as to the identity of the holder of the
Existing Indebtedness, (iv) the approximate unpaid balances
thereof as of the date hereof, and (v) the approximate amount of
any deposits or escrows held or established in connection
therewith. To Contributor's knowledge, Contributor has not
received any notice of default under any Existing Indebtedness
Document. To Contributor's knowledge, a true and complete copy of
the Existing Indebtedness Documents, including without limitation
each written modification thereof and supplement thereto, have
heretofore been furnished to or made available to the Partnership.
To Contributor's knowledge, such documents constitute the entire
agreement between the parties thereto and there are no oral
promises or agreements amending or modifying the same.
Except as set forth on Schedule 6.2(v), to
Contributor's knowledge, Contributor has no obligation to make
contributions or otherwise provide assistance to any promotional
association or promotional fund and has not customarily in the
past made or provided any such contributions or assistance. To
Contributor's knowledge, Contributor has paid or remitted to the
Promotional and Advertising Fund all amounts (including without
limitation amounts received by it from Tenants and other Parties
that constitute contributions to such promotional association or
fund) that are required to be paid or remitted by it to such
promotional fund.
To Contributor's knowledge, Contributor has delivered
or made available to the Partnership true and complete copies of
all environmental reports (including without limitation asbestos
surveys), engineering reports and ADA surveys relating to the Mall
or the Property that are in the possession of Contributor.
Contributor does not warrant the accuracy of any such report, but
Contributor does not have knowledge of any inaccuracy contained
therein.
Except as indicated on Schedule 6.2(x), Contributor and its
Affiliates do not directly or indirectly own or lease any land
within a five (5) mile radius of the Real Property.
Contributor and its members have been advised that the
Units to be issued to the members of Contributor hereunder shall
not be registered under the Securities 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 them 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 Securities
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 contained herein and in the Questionnaires.
Contributor and each of its members has received a copy
of, has been advised to read, and has read the Memorandum,
including its exhibits, and is familiar with the Memorandum's
terms and provisions.
Contributor and each of its members has been provided
with such other information regarding the Partnership as it has
requested and has had an opportunity to meet with and ask
questions of representatives of the Partnership. No oral or
written representations have been made to Contributor or its
members in connection with the Transactions which are in any way
inconsistent with the information contained in the Memorandum and
this Agreement, and, if any representations or warranties were
made that do not expressly state in writing that they supersede
this disclaimer, Contributor (on its own behalf and on behalf of
each of its members) hereby waives and disregards the same and
agrees that Contributor (on its own behalf and on behalf of each
of its members) shall not rely thereon.
Contributor acknowledges (on its own behalf and on
behalf of each of its members) that the Transactions may involve
complex tax consequences, that it and each of its members has been
advised to consult with, and has consulted with, independent tax
counsel, regarding the tax consequences of the Transactions and
that Contributor and each such member of Contributor is relying
solely upon the advice of its own tax advisors in evaluating such
consequences and that none of the Partnership, the General Partner
or their advisors have made (nor shall they be deemed to have
made) any representations as to the tax consequences of the
Transactions.
Contributor and each of its constituent members to whom
Units will be distributed pursuant to the Transactions, is an
"accredited investor" within the meaning of Regulation D under the
Securities Act or 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 pursuant
hereto, and Contributor and each of its constituent members is
able to bear the economic risk of such ownership. Neither
Contributor nor any of its members learned of the Units or were
attracted or induced to enter into this Agreement or acquire Units
as a result of any advertisement, article, notice or other
communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or presented at any
seminar or meeting, or any solicitation of a subscription by a
person not previously known to it in connection with investments
in real estate generally.
The Units to be acquired by the members of Contributor
pursuant to this Agreement are being acquired by such members of
Contributor for their own accounts, for investment purposes only
and not with a view to, and with no present intention of, selling
or distributing the same except as otherwise permitted pursuant to
the Redemption Rights Agreement.
All information provided by Contributor to its
constituent members (or the members of such members) in connection
with the issuance of the Units (the "Contributor Information")
(other than the Memorandum [except for information contained in or
omitted from the Memorandum in reliance upon and in conformity
with information provided by Contributor to the Partnership] and
any other data supplied in writing by the Partnership and
expressly identified as information supplied for inclusion in the
Contributor Information and fully and accurately reproduced and
incorporated therein as supplied by the Partnership) contained no
untrue statement of material fact and did not omit to state any
material fact necessary in order to make the statements therein
not misleading.
Contributor acknowledges that the General Partner may
be obligated, under applicable securities laws, to disclose
information relating to the Transactions in registration
statements or public reports filed under such laws (which
registration statements and reports may be filed prior to or
following the Closing Date). Contributor consents to the
inclusion by the General Partner in any such registration
statements or public reports of information provided to the
Partnership by or on behalf of Contributor in connection with this
Agreement without further notice to Contributor and confirms that
none of such information contains any untrue statement of material
fact or omits to state any material fact necessary in order to
make the statements therein not misleading.
To Contributor's knowledge, the Ground Lease is in full
force and effect and Contributor has received no written notice of
any default by Contributor under the Ground Lease. To
Contributor's knowledge, the Ground Lease contains the entire
agreement between Contributor and the Ground Lessor and there are
no oral promises or agreements amending or modifying the same.
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.
The Adjacent Land Purchase Contract has been terminated.
Contributor has provided or made available to the Partnership
true, complete and correct copies of all reports, studies,
surveys, title commitments, data and other material information
derived or obtained by Contributor or Sealy in connection with any
of their respective due diligence activities, inquiries or
investigations relating to the Adjacent Land.
Neither Contributor nor any of its members is a foreign
person or is owned directly or indirectly, in whole or in part, by
a foreign person, as determined in accordance with Code Section
897 (h)(4) and the regulations promulgated thereunder.
To Contributor's knowledge, none of the representations
and warranties made by the Partnership pursuant to Section 6.1
hereof are false or inaccurate nor, to Contributor's knowledge,
are the underlying facts relating to any such representation or
warranty which is qualified by the knowledge of the Partnership
such that if such facts were known by the Partnership, then the
Partnership's representation or warranty set forth in Section 6.1
would be untrue or not correct.
Mark Sealy, Melissa Riddick and Steve Gullat are the
individuals who are most likely in the ordinary course of
Contributor's business and with respect to the Transactions to
have responsibility for, and therefore to have personal knowledge
of, the matters set forth in this Section 6.2.
There are no gift certificates which have been issued
prior to Closing with respect to the Mall which remain outstanding
and unredeemed as of the Closing Date.
For purposes of this Agreement, the phrase "to Contributor's
knowledge" and other phrases of similar import shall refer to the
actual, current, subjective knowledge of any of Mark Sealy,
Melissa Riddick and Steve Gullat following reasonably diligent
inquiry and investigation of Contributor's Books and Records with
respect to the relevant subject matter.
Limitation on Liability for Representations and
Warranties. Notwithstanding anything contained in this Agreement
to the contrary, if either party hereto has knowledge (as defined
in Section 6.1 or 6.2 hereof, as applicable) that any
representation or warranty made pursuant to the provisions of this
Article VI by the other party is false or inaccurate as of the
Closing Date (or in the case where any such representation or
warranty is qualified by the knowledge of the party making the
same, that the underlying facts relating to such representation or
warranty are such that if known by the party making the same, then
such party's representation or warranty would be untrue or not
correct), then, the party having made such false or inaccurate
representation or warranty shall have no liability hereunder
whatsoever with respect to that specific representation or
warranty or with respect to other obligations or liabilities
arising hereunder which are the proximate result of the underlying
facts that render the representation or warranty untrue, but only
to the extent of such known falsity or inaccuracy on the part of
the party to which such representation or warranty is addressed.
ARTICLE
Access and Certain Rights of Early Termination
Due Diligence and Access.
From the date hereof until the Closing, Contributor shall
give the Partnership and its representatives and consultants, 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, the cost of which shall be borne by the Partnership);
provided, however, that the Partnership shall not conduct
structurally or physically invasive tests or Phase II
environmental studies without Contributor's consent (which consent
shall not be unreasonably withheld). From the date hereof until
Closing and upon reasonable request by the Partnership,
Contributor promptly shall provide the Partnership or make
available to the Partnership (for review and/or copying) such
other material information and data with respect to the Mall and
the Property which is in the possession of Contributor or the
Existing Manager, including without limitation copies of Leases,
the Reciprocal Easement Agreement 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.
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.
The Partnership shall indemnify, defend and hold
harmless Contributor and its successors and assigns 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 7.1. The indemnification obligations
of the Partnership under this Section 7.1(c) shall survive the
termination of this Agreement.
Termination. If the Partnership, in its sole and
absolute discretion, determines that the results of its due
diligence examination, including without limitation the results of
any legal, factual, physical or other inquiry or investigation as
to the physical condition, the success of Contributor in
connection with the leasing activities described in Section 2.8,
the suitability for intended use, the redevelopment potential, the
value, or the income or sales or financing proceeds to be derived
from the ownership, use, operation or disposition of the Property
or any other matter related to the Mall are not satisfactory in
any respect, the Partnership may terminate this Agreement upon
written notice given to Contributor not later than the Closing
Date (the "Inspection Period Expiration Date"). The parties
hereto acknowledge that the Partnership may expend material sums
of money in reliance on Contributor's obligations under this
Agreement in connection with negotiating and executing this
Agreement and conducting inspections and investigations pursuant
to this Article VII, that the Partnership would not have entered
into this Agreement without the availability of the termination
right contained herein and that, accordingly, adequate
consideration exists for Contributor's obligations hereunder
before the Inspection Period Expiration Date. In the event of a
termination of this Agreement, the Partnership shall return to
Contributor all documents containing material information and data
provided or made available to the Partnership by Contributor and
copies of third party reports obtained by the Partnership with
respect to the Property and 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). Notwithstanding anything to the contrary contained
herein (but subject to the provisions of Section 6.3 hereof), as
of the date hereof the Partnership shall not be deemed to have
approved any documents, materials or other information which have
been furnished to the Partnership or its representatives prior to
the date hereof or which are listed, described, set forth or
referred to on the Schedules hereof. Subject to the provisions
hereof, the Partnership may determine in its sole and absolute
discretion the scope and nature of its due diligence examination.
ARTICLE
Conditions to Closing
Conditions to Contributor's Obligations. Contributor's
obligation to close the Transactions is subject to satisfaction of
each of the following conditions (any of which may be waived by
Contributor in its sole discretion):
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 and any and all other conditions precedent to
Contributor's obligation to close the Transactions as are
expressly set forth in this Agreement have been satisfied.
Accuracy of Representations and Warranties. The
representations and warranties made by the Partnership in this
Agreement (without regard to materiality qualifications contained
therein and without regard to any supplementation in accordance
with Sections 3.3(f) or 10.3, except in the case of events or
developments expressly permitted hereunder or as to which
Contributor has otherwise consented in writing) shall be true and
complete in all material respects on and as of the Closing Date.
No Other Termination. No termination of this Agreement
by Contributor or the Partnership shall have occurred pursuant to
any other provision hereof.
Consent Obtained; Etc. The consent of the Existing
Lender pursuant to Section 2.4 shall have been obtained.
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 or 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 by the Partnership.
Conditions to Partnership's Obligations. In addition
to such other conditions precedent as are elsewhere expressly
provided in this Agreement, the Partnership's obligation to close
the Transactions is subject to satisfaction of each of the
following conditions (any of which may be waived by the
Partnership in its sole discretion):
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 and
any and all other conditions precedent to the Partnership's
obligation to close the Transactions as are expressly set forth in
this Agreement have been satisfied.
Accuracy of Representation and Warranties. The
representations and warranties made by Contributor in this
Agreement (without regard to materiality qualifications contained
therein and any supplementation in accordance with Sections 3.2(k)
or 10.3, except in the case of events or developments expressly
permitted hereunder or as to which the Partnership has otherwise
consented in writing) shall be true and complete in all material
respects on and as of the Closing Date.
Estoppels Obtained. The Estoppels shall have been
obtained in accordance with Section 10.7 and provided to the
Partnership on or prior to Closing. Such Estoppels shall contain
no material deviations from (i) the forms thereof provided by or
approved by the Partnership (or, where applicable, the Prescribed
Form) or (ii) the information contained in this Agreement and the
schedules hereto or the information otherwise furnished to the
Partnership by Contributor (without limiting the foregoing, the
Estoppels shall contain no assertion of default by Contributor as
the result of the matters described on Schedule 6.2(i)).
Notwithstanding any provision in this Agreement to the contrary,
if Contributor has not obtained Estoppels from all Anchors and
Tenants (the Parties from whom Estoppels have not been obtained
being herein called the "Missing Parties") but has obtained the
Required Estoppels, Contributor may (at its discretion), in its
own capacity, satisfy the condition of this Section 8.2(c) with
respect to the Estoppel from each Missing Party by executing and
delivering to the Partnership at Closing an Estoppel for such
Missing Party in the form prescribed by Section 10.7 or the
Prescribed Form if applicable (in either case, with appropriate
changes to such form to reflect that Contributor and not such
Missing Party is signing such Estoppel but otherwise meeting the
requirements set forth in this Section 8.2(c)).
Consents Obtained. The Contract Party Consents, the
Ground Lessor Estoppel, and the consent and agreement of the
Existing Lender pursuant to Section 2.4 shall have all been
obtained and provided to the Partnership.
Issuance of Title Policies. The Title Company shall
have issued, or irrevocably and unconditionally committed to
issue, the Title Policies as herein contemplated subject only to
the Permitted Exceptions with respect thereto.
No Other Termination. No termination of this Agreement
by the Partnership or Contributor shall have occurred pursuant to
any other provision hereof.
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 or 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.
Qualified Investors. Each member of Contributor to
whom Units are to be issued pursuant hereto shall be a Qualified
Investor and shall have delivered to the Partnership a signed,
completed Investor Questionnaire establishing the same to the
satisfaction of the Partnership and otherwise containing no
material modifications to the form thereof.
Nothing contained in this Article VIII shall relieve any
party hereto of responsibility for the breach by such party of a
representation, warranty or covenant of such party contained in
this Agreement subject, however, to the provisions of Section 6.3
hereof and except in the event of an express written waiver of any
non-compliance or breach by such party issued by the party which,
but for such waiver, would be entitled to the benefit of the same.
Notwithstanding anything contained in this Agreement to the
contrary, the Partnership in its sole and unreviewable discretion
may extend the Closing Date for seven (7) days in the event all
conditions precedent to the Partnership's obligation to close the
Transactions shall have not been satisfied on or before the
Closing Date as originally scheduled hereunder.
ARTICLE
Condemnation and Destruction
Casualty or Condemnation in General.
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.
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 (A) the Partnership shall be entitled to receive and retain
any and all insurance proceeds, whether collected before or after
Closing (and Contributor shall pay in cash to the Partnership all
deductibles in respect thereof), or condemnation awards with
respect thereto (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 prior to Closing to
preservation, repair or restoration), and (B) Contributor shall
cooperate in all reasonable respects with the Partnership at the
Partnership's sole cost and expense, in connection with the
collection thereof, to the extent not collected at the Closing.
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 (together with deductibles with
respect thereto) 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.
Adjustment of Claims and Condemnation Proceedings. If
a Taking or Casualty shall occur prior to the Closing Date,
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. Contributor
shall permit the Partnership to participate with Contributor 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 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
Additional Covenants
Indemnification.
Indemnification by Contributor. From and after the
Closing, Contributor shall indemnify, defend and hold harmless the
Partnership, the Grantee, their respective successors and assigns
and their respective members, shareholders, partners, directors,
officers, employees and agents (collectively, the "Indemnified
Partnership Person(s)") from and against any and all claims,
actions, demands, damages (other than consequential damages),
liabilities, penalties, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses)
incurred or suffered by any Indemnified Partnership Person(s)
together with any and all damages incurred or suffered by third
parties for which any Indemnified Partnership Person(s) shall be
liable (any and all of the foregoing indemnified items being
referred to herein collectively as "Losses" and individually as a
"Loss") that are proximately caused by any one or more of (i) the
breach or inaccuracy of any representation or warranty made by
Contributor in this Agreement or the Contributor Closing Documents
(provided the claim for indemnity is asserted prior to the
expiration of the limited survival period, if any, as is expressly
provided for and applicable to such representation or warranty),
(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, and (iii) the Contributor's
Liabilities.
Indemnification by Partnership. From and after the
Closing, the Partnership shall indemnify, defend and hold harmless
Contributor and its members and their respective members,
employees and agents (collectively, the "Indemnified Contributor
Person(s)") from and against any and all Losses incurred or
suffered by any Indemnified Contributor Person(s) that are
proximately caused by any one or more of (i) the breach or
inaccuracy of any representation or warranty made by the
Partnership in this Agreement or the Partnership Closing Documents
(provided the claim for indemnity is asserted prior to the
expiration of the limited survival period, if any, as expressly
provided for and applicable to such representation or warranty),
(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, (iii) the
operation or use of the Property on or after the Closing Date
(other than Losses that constitute, result from, relate to or
arise out of the Contributor's Liabilities or a breach of a
representation, warranty or other covenant made by Contributor
herein or in the Closing Documents and any such Losses to the
extent that they are proximately caused by the negligence or
wilful misconduct of any of the Indemnified Contributor
Person(s)), and (iv) the Assumed Liabilities.
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 (but no
later than 15 days after being served with process in any
litigation and 30 days after receiving any other written claim
which may be the subject of indemnification hereunder) to the
party from whom indemnification may be sought and shall reasonably
cooperate with the efforts of the party from whom indemnification
is sought to cure or mitigate the extent of such indemnified
liability. 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.
Notwithstanding anything to the contrary contained herein, a
failure to provide written notice to the party from whom
indemnification is sought within the time period specified above
shall not preclude the other party's right to indemnification
except to the extent the indemnifying party has been prejudiced by
such failure.
Conduct of Business Pending Closing. From the date
hereof until the Closing and unless expressly otherwise provided
herein, Contributor shall (a) pay its debts (or in good faith
contest the same) and perform its obligations in respect of the
Property as they become due; (b) maintain the Mall in its current
condition and repair, as such condition shall be altered by reason
of Casualty, Taking and/or normal wear and tear; (c) without the
express written consent of the Partnership, not (i) enter into any
new or additional Lease or ground lease, or extend, renew or
modify, consent to any assignment of or sublease or other matter
in respect of, or waive any material right under any Lease or the
Ground 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 the Ground Lease or 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 in respect of the
Property or amend or modify, consent to the assignment or any
other matter in respect of or waive any material right under the
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 in respect of the
Property, (v) enter into any other new contracts in respect of the
Property or extend, renew or cancel, consent to the assignment or
any other matter in respect 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
(provided any such new extended or renewed contracts must be
terminable without penalty or payment on not more than 30 days'
notice), (vi) sell, transfer, exchange, further encumber or grant
interests (including easements) in the Property or any part
thereof, (vii) extend, modify or amend any of the Existing
Indebtedness Documents or borrow additional funds thereunder,
(viii) hire any employees in respect of the Property, 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 (d) otherwise operate the Mall in the ordinary
course consistent with current practice. From the date hereof
until the Closing or the earlier termination of this Agreement,
Contributor shall not sell, transfer, exchange, encumber or grant
any interest in the Property or any part thereof, permit the sale,
transfer, exchange, further encumbrance or grant of any interest
in the Property, 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.
Supplemental Disclosure. From the date hereof through
Closing, Contributor and the Partnership shall each, respectively,
have the continuing obligation to promptly supplement or amend the
schedules hereto with respect to the respective representations
and warranties made by it to reflect any matter hereafter arising
and known to it or discovered by it which, if existing or known at
the date hereof, would have been required to be set forth herein
or described thereon (but no such supplementation shall relieve
either party from liability for any breach of its representations
and warranties as of the date made). 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. In
addition, if, at any time prior to the Closing Date, Contributor
should learn of any information that is necessary to correct any
statement that is or becomes incorrect in any material respect
(based upon information, including financial information, supplied
by or on behalf of Contributor) made in, or to provide material
information omitted from, the Contributor Information or the
Memorandum, or if Contributor obtains knowledge of any material
event that requires disclosure in the Contributor Information or
the Memorandum, Contributor shall promptly inform the Partnership
and cooperate with the Partnership so that the Contributor and the
Partnership may each prepare a supplement to the Contributor
Information and Memorandum, respectively, if the responsible party
deems that a supplement is necessary.
Bulk Sales. If, under applicable law, any notification may
be required to be given to, or a clearance may be required to be
obtained from, any state or local taxing authorities in order to
permit the consummation of the Transactions without a Lien
attaching to the Property or the Partnership having liability for
any state or local taxes required to be paid or collected by
Contributor relating to periods prior to the Closing Date,
Contributor shall obtain appropriate clearances or releases from
the applicable taxing authorities or, if not available,
Contributor shall deposit with the Partnership the amount as
directed by the applicable taxing authorities (such clearances or
releases or directions, the "Releases/Directions"), and the
Partnership shall hold such amount until it receives the release
or clearance therefor, whereupon the Partnership shall pay to
Contributor such amount; provided, however, if the delivery of a
clearance or release is subject to a demand for payment of all or
a portion of the amount held to any taxing authority, the
Partnership is hereby authorized and directed to pay such sums in
accordance with the demand and to pay the balance, if any, to
Contributor.
Cooperation. It shall be a condition precedent to the
Partnership's obligation to close the Transactions that
Contributor shall obtain and deliver to the Partnership on or
prior to Closing the Releases/Directions and consents of the
Parties to the Contracts marked with a "1" on Schedule 6.2(m), if
any (the "Contract Party Consents"). 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.
Transfer and Other Taxes; Costs, Etc. Contributor
shall pay the real property transfer taxes, personal property
sales taxes and recording fees, if any, imposed by the state,
county or municipality as the result of the Transactions.
Contributor and the Partnership shall equally share the costs of
any escrow established or "New York Style" closing fee charged in
connection with the closing of the Transactions. Each of
Contributor, on the one hand, and the Partnership, on the other
hand, shall pay the respective legal costs incurred by it in
connection with the Transactions.
Estoppel Certificates. It shall be a condition
precedent to the Partnership's obligations to close the
Transactions that Contributor shall obtain and deliver to the
Partnership on or prior to Closing an estoppel certificate from
each Party to the Reciprocal Easement Agreement and each Tenant
under a Lease, dated not more than thirty (30) days prior to the
Closing Date, in form reasonably acceptable to the Partnership,
and an estoppel certificate, dated not more than sixty (60) days
prior to the Closing Date, from the Existing Lender in form and
content satisfactory to the Partnership and consistent with the
provisions of Section 8.2(c) hereof; provided, however, that if
the Reciprocal Easement Agreement or any Lease shall, by its
terms, prescribe the form or content of an estoppel certificate,
Contributor only shall be required to attempt to obtain an
estoppel certificate from the Party thereto in the form prescribed
by the relevant document and containing only such information as
is required to be delivered thereunder (the "Prescribed Form").
Contributor shall complete the missing information in such form
estoppel certificates prior to sending them to Parties or the
Existing Lender, as the case may be. The Partnership shall not be
deemed to have approved any matters disclosed in the estoppel
certificates delivered to the Partnership on or prior to Closing
and no such disclosure shall constitute a waiver by the
Partnership of any terms or provision of this Agreement except as
otherwise provided in accordance with the provisions of Section
6.3 hereof.
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 (and Contributor shall retain copies of such records as
shall be necessary to enable it to comply with its obligations
contained in the last sentence of Section 10.10). The Partnership
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 or any portion thereof and turn the Books
and Records or such portion thereof over to Contributor if
Contributor so requests.
Publicity. In no event shall Contributor, on the one
hand, or the Partnership, on the other hand, issue any press
release or otherwise disclose any non-public information regarding
this Agreement or the Transactions (including without limitation
any information contained therein) unless the other party or
parties have consented thereto in writing and to the form and
substance of any such statement or disclosure (and Contributor and
the Partnership agree not unreasonably to withhold or delay such
consent); 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 Lender,
Estoppels or financing for the acquisition of the Property and to
assess the Property in connection with the Partnership's due
diligence examination (including without limitation contacting
Tenants and other Parties). Further, the Partnership 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 impermissible 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 the Transaction is not consummated,
each party promptly shall return to the other party all originals
and copies of documents, reports and financial and other
information relating to such other party and/or the Property which
such other party has furnished to such party. The provisions of
this Section 10.9 shall terminate upon the Closing.
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,
securities filings and bills, the adjustment of losses and claims,
the enforcement or settlement of any such claims or the operation
of the Property. 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, cause
the Contributor's 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 or direct the Existing Manager to do so if the Existing
Manager owns or maintains the same, on or prior to Closing, (b)
promptly provide to the Partnership or confirm any information
concerning Contributor or the Property or the operation thereof
that the Partnership or the General Partner reasonably determines
is necessary or desirable to be included in any registration
statement or periodic report of the General Partner that is filed
or to be filed under applicable securities law and (c) promptly
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 financial statements of the Partnership. Notwithstanding
anything to the contrary contained herein, Contributor shall, at
Contributor's sole cost and expense, cause the Existing Manager to
investigate, administer and, with the approval of the Partnership
(which shall not be unreasonably withheld or delayed), Contributor
shall settle all inquiries and disputes relating to Adjustable
Tenant Charges for any fiscal period ending prior to the
Applicable Closing Fiscal Period (but any and all amounts
collected shall be paid to the Partnership and, to the extent
provided in Article IV, remitted to Contributor).
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 of Contributor nor the Partnership shall be
obligated, pursuant to this Section 10.11, 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 the Closing Documents.
Restrictions on Certain Dispositions of Real Property.
Without the written consent of Contributor (or the
holders of the Units issued pursuant hereto), the Partnership
shall not voluntarily sell, distribute or exchange the Real
Property (or permit the Real Property to be voluntarily sold,
distributed or exchanged) prior to the fifth anniversary of the
Closing Date (the "Fifth Anniversary Date") if such sale or
exchange would be treated as a "sale" or "exchange" for federal
income tax purposes or if gain would otherwise be recognized to
Contributor as the result thereof.
The provisions of Section 10.12(a) shall not apply to
(i) transactions, such as like-kind exchanges, which would not
result in the recognition of income or gain to the Partnership for
federal income tax purposes that would be allocable to Contributor
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 10.12), (ii) the conveyance of the Real
Property or any part thereof to any Person in connection with a
foreclosure proceeding against the Real Property or deed in lieu
thereof, (iii) the conveyance of the Real Property or any part
thereof to a governmental authority in connection with an eminent
domain proceeding or conveyance in lieu thereof, (iv) the grant of
an easement or right-of-way, (v) the conveyance of all or any
portion of the Real Property to a governmental authority or to
such other Person as may be directed or requested by a
governmental authority in connection with the financing or
expansion of the Property or any part thereof, (vi) the sale,
exchange or other disposition of all or substantially all of the
properties of the Partnership and its subsidiaries (i.e., 80% or
more based on gross receipts of such properties), including
without limitation all or part of the Real Property, or (vii) the
sale to any department store or other retailer of the portion of
the Real Property occupied or proposed to be occupied by it
(including parking area and other surrounding area). In addition,
the provisions of Section 10.12(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 as to the business of the Partnership and the
General Partner taken as a whole (such as, without limitation, the
possible loss by the General Partner of REIT status) which require
the disposition of the Real Property. If the Partnership shall
have obtained and provided to the Contributor (or to the holders
of Units issued pursuant hereto) an opinion of counsel from Neal,
Gerber & Eisenberg or another law firm reasonably acceptable to
the Contributor (or the holders of Units issued pursuant hereto)
with respect to the determination of whether a particular
transaction will result in income or gain for federal income tax
purposes by Contributor or is treated as a sale or exchange of the
Real Property for federal income tax purposes (although the
Partnership shall not be required to do so), the determination set
forth in such opinion shall be deemed conclusive for purposes of
this Agreement. Any transaction prohibited pursuant to the
provisions of Section 10.12(a) is hereinafter referred to as a
"Prohibited Disposition."
Debt Allocation; Etc.
In accordance with paragraph (3)(a) under the heading
"Analysis" in Revenue Ruling 95-41, 1995-1 C.B. 32, "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 with respect
to the Real Property to the extent such gain is not taken into
account in making an allocation of nonrecourse liabilities to it
under Treasury Regs. 1.752-3(a)(2). It is the parties' intent
that an allocation pursuant to the preceding sentence of this
Agreement will cause the total share of nonrecourse liabilities of
Contributor 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.
The Partnership shall notify Contributor prior to the
repayment or refinancing of the Existing Indebtedness, 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.
In the event that any such repayment or refinancing or any
other event occurs prior to the Fifth Anniversary Date and reduces
the amount of the Partnership liabilities that Contributor and its
members may include in the tax basis of their respective Units
pursuant to Section 1.752 of the Treasury Regulations, the
Partnership shall, upon receipt of written notice from Contributor
and/or its member(s) (as the case may be), use commercially
reasonable efforts to do any of the following so as to enable
Contributor and its members to increase their respective "economic
risk of loss" (within the meaning of Section 1.752-2 of the
Treasury Regulations) with respect to liabilities of the
Partnership to the extent of such reduction: (i) allow
Contributor and/or its member(s) (as the case may be) to enter
into an agreement with the General Partner (provided the General
Partner determines that such agreement will not have adverse
consequences to either the Partnership or any partner of the
Partnership), (ii) make provision for Contributor and/or its
member(s) (as the case may be) to guaranty one or more
indebtedness of the Partnership (but the Partnership shall not be
obligated to incur additional indebtedness or retain the Existing
Indebtedness or to permit such guaranties if such guaranties shall
have a material adverse tax effect on the Partnership or the other
partners thereof) or (iii) allow Contributor and/or its member(s)
(as the case may be) to restore its deficit capital account
balance (provided that the General Partner determines that such
restoration does not have adverse consequences to either the
Partnership or any partner of the Partnership). The economic risk
to Contributor and/or its member(s) (as the case may be) of any
such guaranties shall be minimized to the extent practicable by
allowing Contributor and/or its member(s) (as the case may be) to
guaranty only the "bottom" portion of the indebtedness guarantied
thereby. The amount of the "bottom" guaranties given by
Contributor and/or its member(s) (as the case may be) and others
(whose obligations shall be pari passu) in respect of any
indebtedness shall not exceed fifty percent of the fair market
value of the collateral for that indebtedness at the time of such
guaranty, as determined in good faith by the Partnership. To the
extent that the amount to be "bottom" guaranteed exceeds fifty
percent of the fair market value (as determined above) of the
collateral for such indebtedness at the time of such guaranty, the
Partnership shall make commercially reasonable efforts to allow
Contributor and/or its member(s) (as the case may be) to "bottom"
guaranty one or more other indebtedness of the Partnership upon
the terms and subject to the limitations contained in the other
sentences of this subsection (d). Any such guaranties shall be in
form reasonably acceptable to Contributor and/or its member(s) (as
the case may be) and the Partnership.
The Partnership shall allocate the tax items arising from the
ownership of the Real Property, including items of depreciation,
amortization and gain or loss, using the "traditional method"
provided in Treasury Regulation 1.704-3(b)(1). The parties
hereto expressly agree and acknowledge that, notwithstanding
anything to the contrary in the Partnership Agreement, Contributor
and/or its member(s) (as the case may be) will bear the tax
detriments associated with any precontribution gain with respect
to the Real Property to the extent and in the manner required by
Treasury Regulation 1.704-3(b)(1), taking into account the
"ceiling rule", and that the General Partner shall not
specifically allocate any other tax items of the Partnership to
"cure" for the effects of the ceiling rule as applied to the Real
Property. The parties agree that the built-in gain with respect
to the Property (as defined in Reg. 1.704-3(a)(3)(ii)) shall be
determined in accordance with the provisions of Reg. 1.704-
1(b)(2)(iv)(g)(3).
The Partnership shall maintain, on a continuous
basis, an aggregate amount of indebtedness equal to at least
$12,000,000 (i) with respect to which Harry J. Butler, Jr. would
bear the "economic risk of loss" within the meaning of Regulation
1.752-2(b)-(j), or (ii) which would be allocated to Harry J.
Butler, Jr. pursuant to Regulation 1.752-3(a).
Delivery of Certain Information. The Partnership shall
transmit to Contributor (a) all periodic reports or statements
furnished to the public stockholders of the General Partner
simultaneously with the transmission thereof to such public
stockholders, (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.
Transfer of Units; Etc.
Except as permitted under Section 10.15(b), the Units may not
be sold, pledged or otherwise transferred prior to the first
anniversary of the Closing Date.
Prior to the first anniversary of the Closing Date, the Units
issued pursuant hereto may be distributed to the constituent
members of Contributor or the members of such members who are
Qualified Investors but only pursuant to distributions which are
made without the payment of any consideration in connection
therewith by such distributees. The General Partner shall
acknowledge upon request that such permitted distributees are
substituted limited partners of the Partnership. During the first
year following Closing, the Units may not otherwise be conveyed or
transferred and no other Person may own any direct or indirect
interest in Units through Contributor or any constituent member of
Contributor.
There may be no more than twelve (12) record owners of all of
the Units issued pursuant hereto at any time hereafter to the
extent that all of such Units are then owned by Contributor and/or
its constituent partners and/or their partners and/or by
Affiliates of any of the foregoing.
Employees. Following Closing, either the Partnership or
GGMI may, in its discretion, offer to employ any or all Property
employees (who Contributor shall cause to be terminated prior to
Closing) on such terms as it deems advisable. Contributor shall
pay or cause to be paid all amounts owing to all Property
employees through the Closing Date and accrued vacation pay
through the Closing Date.
ARTICLE
Miscellaneous
Survival. The representations, warranties and agreements of
Contributor as are set forth in any Estoppel(s) for a Missing
Party and the respective representations, warranties and
agreements of each of the parties as are set forth in (i) Sections
2.3, 10.1, 10.8, 10.10, 10.11, 10.12 and Article XI hereof and
(ii) the Closing Documents (other than the respective
representations and warranties of the parties contemplated under
Article VI hereof which are to be made at and as of the Closing
Date by the delivery of written certificates) shall survive
Closing indefinitely. Subject to the provisions of the next
succeeding sentence hereof, all other representations, warranties
and covenants of the parties set forth herein (including, without
limitation, those made at Closing pursuant to the aforementioned
certificates) shall survive Closing for the greater of (i)
eighteen (18) months and (ii) any specified period of time as may
be expressly herein provided with respect thereto.
Notwithstanding the foregoing provisions hereof, (i) the
respective representations and warranties of the parties set forth
in Sections 6.1(a), (b) and (c) and in Sections 6.2(a) and (b)
shall survive Closing indefinitely, (ii) the covenants of the
Contributor set forth in Sections 2.4, 2.9(a), 2.10, 3.1, 3.2(j),
3.2(s), 3.2(w), 5.1, 5.2, 5.3 and 7.1, and the conditions
precedent to Closing set forth in Sections 8.1, 8.2, 10.5 and 10.7
shall expire upon and shall not survive Closing, and (iii) all
covenants which are to be fully performed and discharged on or
prior to Closing pursuant to the provisions of this Agreement
which have been so performed and discharged on or prior to Closing
or which have been waived as of the Closing by the party entitled
to the benefits thereof pursuant to the provisions of this
Agreement shall not survive Closing.
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 delivered by hand with receipt acknowledged in
writing, as follows:
To the Partnership:
General Growth Properties, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Attention: Matthew Bucksbaum
with a copy thereof to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg
To Contributor:
c/o Mr. Mark Sealy
Sealy & Company
333 Texas - Suite 1450
Shreveport, Louisiana 71101
with a copy to:
Morris, Manning & Martin
1600 Atlanta Financial Center
3343 Peachtree Road NE - Suite 1600
Atlanta, Georgia, 30326
Attention: Frank Bazzel, Esq.
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 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.
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. Facsimile transmissions of executed copies hereof shall
be deemed to be the equivalent of original signatures for all
intents and purposes.
Amendments. Except as otherwise provided herein, this
Agreement may not be changed, modified, supplemented or
terminated, except by an instrument executed by the parties
hereto.
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.
Successors and Assigns. Subject to the provisions of
Section 11.10, 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.
Third Party Beneficiaries. The provisions of this
Agreement are made for the benefit of the parties 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.
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.
Governing Law. This Agreement has been made pursuant
to and shall be governed by the laws of the State of Delaware
(without regard to conflicts of law rules).
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 (or
any rights hereunder) 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.
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.
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.
Entire Agreement; Construction. 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,
including without limitation that certain letter of intent dated
May 1, 1998, between Contributor and the General Partner. Each
party hereto hereby acknowledges that all parties hereto
participated equally in the negotiation, preparation and
documentation of this Agreement and that, accordingly, no court
construing this Agreement shall construe it more stringently
against one party than against the other.
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 First Chicago NBD N.A. (or any successor), as the same may
change from time to time plus five percent (5%).
Arbitration. As a condition precedent to the exercise
after Closing of any rights or remedies for indemnification under
this Agreement or for any breach of representation, warranty or
covenant or otherwise with respect to the Transactions, the party
seeking to exercise such rights and remedies (the "Moving Party")
shall first give the other party (the "Defaulting Party") written
notice that specifies in particularity the indemnification sought
or the breach of representation, warranty or covenant asserted, as
well as the action necessary to effect a cure of such claimed
default or obligation (if curable) and the amount of Losses
suffered or claimed due to the Moving Party (if known). The
Defaulting Party shall have thirty (30) days after such written
notice to effect a cure of such claimed default or obligation or
to mitigate the Losses (as the case may be) prior to the Moving
Party exercising any rights or remedies under this Agreement or
the Pledge Agreement (including submission of the matter to
arbitration). After expiration of the 30 day period to cure set
forth herein, any claim arising out of an alleged breach of this
Agreement (including any breach of a covenant, representation or
warranty set forth in the Agreement) and any claim for
indemnification under this Agreement, if not cured during said 30
day period, shall be resolved by arbitration as set forth below:
(a) Following written notice by the Moving Party of the
commencement of arbitration proceedings hereunder said claim shall
be arbitrated in accordance with the Commercial Arbitration Rules
of the American Arbitration Association subject, however, to the
provisions of this Section 11.15.
(b) Following the designation of the arbitrator in
accordance with said Rules (the "Arbitrator"), the parties,
together with the Arbitrator, shall promptly undertake appropriate
informal efforts to attempt to mediate and negotiate a mutually
acceptable solution to the matter covered by the original notice.
(c) If a negotiated solution cannot be achieved within
fourteen (14) days after the date on which the Arbitrator is
designated, then the proceeding shall proceed as a compulsory
arbitration to be conducted under the Commercial Arbitration Rules
of the American Arbitration Association by the Arbitrator subject,
however, to the following modifications:
(i) discovery shall be permitted under the same standards
provided for in the Federal Rules of Civil Procedure but with the
Arbitrator vested with exclusive power and authority to render
decisions on all discovery disputes which may arise and with the
discovery period for any arbitrated matter limited to 120 days;
(ii) the Arbitrator shall interpret and apply the provisions
of this Agreement;
(iii) the proceedings will be held in New Castle County,
Delaware, unless the parties shall otherwise agree in writing; and
(iv) the Arbitrator shall determine, as applicable,
whether a breach of the Agreement or a right to indemnification
under the Agreement exists and, if so, the amount of damages which
shall be awarded (if and to the extent determinable at that time
and if not fully determinable at that time, then the Arbitrator
shall retain standing to adjudicate the final amount of such
damages from time to time as and when determinable).
(d) In connection with the enforcement of the provisions of
this Section 11.15, any agreement, decision or award rendered by
the Arbitrator shall be final, binding and conclusive as to any
such claim, enforceable in a court of competent jurisdiction and
non-appealable.
Consent to Jurisdiction. In connection with any
proceeding relating to the rights and obligations of the parties
arising out of this Agreement including the enforcement of the
provisions of Section 11.15 hereof and any agreement, decision or
award rendered or reached pursuant to such mediation or
arbitration, each party to this Agreement hereby consents and
stipulates to the exclusive in personam jurisdiction of the United
States federal courts and Delaware state courts located in New
Castle County, Delaware; each party to this Agreement agrees that
service by written notice in the manner set forth in Section 11.2
hereof shall be valid and sufficient for all purposes; and each
party to this Agreement agrees to, and irrevocably waives any
objection based on forum non conveniens or venue not to, appear in
any United States federal court or Delaware state court located in
New Castle County, Delaware.
DISCLAIMER. EXCEPT FOR SUCH REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS AS ARE EXPRESSLY SET FORTH
HEREIN OR IN THE CONTRIBUTOR CLOSING DOCUMENTS TO BE DELIVERED BY
CONTRIBUTOR TO THE PARTNERSHIP IN ACCORDANCE HEREWITH, THE
PARTNERSHIP ACKNOWLEDGES AND AGREES:
(A) THAT CONTRIBUTOR HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, COVENANTS
OR AGREEMENTS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN, AS TO, CONCERNING OR WITH RESPECT TO
(i) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (ii)
THE INCOME TO BE DERIVED FROM THE PROPERTY, (iii) THE SUITABILITY
OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH THE
PARTNERSHIP MAY CONDUCT THEREON, (iv) THE COMPLIANCE OF OR BY THE
PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (v)
THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, OR (vi) ANY
OTHER MATTERS WITH RESPECT TO THE PROPERTY;
(B) THAT THE PARTNERSHIP, HAVING BEEN GIVEN THE OPPORTUNITY
TO INSPECT THE PROPERTY, IS RELYING ON ITS OWN INVESTIGATION OF
THE PHYSICAL CONDITION OF THE PROPERTY AND NOT ON INFORMATION
RELATING THERETO PROVIDED OR TO BE PROVIDED BY CONTRIBUTOR;
(C) THAT CERTAIN INFORMATION PROVIDED OR TO BE PROVIDED BY
CONTRIBUTOR TO THE PARTNERSHIP WITH RESPECT TO THE PROPERTY MAY
HAVE BEEN OBTAINED FROM A VARIETY OF INDEPENDENT SOURCES AS TO
WHICH CONTRIBUTOR HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION AND CONTRIBUTOR THEREFOR MAKES NO REPRESENTATIONS AS
TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; AND
(D) THAT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE
AND CONTRIBUTION OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON
AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto effective as of the date and year first above
written.
CONTRIBUTOR:
MSV PROPERTIES, LLC, a
Georgia limited liability company
By: SEALY RETAIL PROPERTIES, L.L.C., a
Louisiana limited liability company
Its: Administrative Member
By:
Mark P. Sealy, member
PARTNERSHIP:
GGP LIMITED PARTNERSHIP, a
Delaware limited partnership
By: GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation, its
general partner
By:
Its:
c:\80821\11813\0096\0001.H TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 Definitions 1
1.2 References 14
ARTICLE II
Contribution; Consideration
2.1 Contribution 14
2.2 Consideration 14
2.3 Assumption of Liabilities 15
2.4 Matters Relating to Existing Indebtedness 17
2.5 Termination of Existing Management Agreement
and Release of Property Management Liens 18
2.6 Admission to Partnership; Redemption Rights;
Etc. 18
2.7 Pledge Agreement 19
2.8 Intentionally Omitted 19
2.9 Leasing Matters 19
2.10 Matters Relating to Ground Lease 20
2.11 Matters Relating to Promotional Association 21
ARTICLE III
Closing
3.1 Closing 21
3.2 Contributor Closing Documents 21
3.3 Partnership Closing Documents 25
ARTICLE IV
Prorations and Adjustments
4.1 Items to Be Prorated 26
4.2 Installment Payment of Assessments 28
4.3 Adjustable Tenant Charges 28
4.4 Promotional and Advertising Contributions 29
4.5 Fixed and Other Tenant Charge Arrearage 30
4.6 Sales Based Tenant Charges 30
4.7 Application of Rent Receipts 31
4.8 Security and Utility Deposits 31
4.9 Collection of Rents 31
4.10 Settlement of Adjustments 33
ARTICLE V
Title Insurance and Survey
5.1 Title Commitment 34
5.2 Survey 35
5.3 Title and Survey Defects 36
5.4 Title Insurance Premiums and Survey Costs 37
ARTICLE VI
Representations and Warranties
6.1 Partnership Representations and Warranties 37
6.2 Contributor's Representations and Warranties 43
6.3 Limitation on Liability for Representations and
Warranties 54
ARTICLE VII
Access and Certain Rights of Early Termination
7.1 Due Diligence and Access 54
7.2 Termination 55
ARTICLE VIII
Conditions to Closing
8.1 Conditions to Contributor's Obligations 56
8.2 Conditions to Partnership's Obligations 57
ARTICLE IX
Condemnation and Destruction
9.1 Casualty or Condemnation in General 59
9.2 Adjustment of Claims and Condemnation
Proceedings 60
ARTICLE X
Additional Covenants
10.1 Indemnification 60
10.2 Conduct of Business Pending Closing 62
10.3 Supplemental Disclosure 63
10.4 Bulk Sales 63
10.5 Cooperation 64
10.6 Transfer and Other Taxes; Costs, Etc. 64
10.7 Estoppel Certificates 64
10.8 Record Retention 65
10.9 Publicity 65
10.10 Assistance Following Closing 66
10.11 Further Assurances 66
10.12 Restrictions on Certain Dispositions of Real
Property 66
10.13 Debt Allocation; Etc. 68
10.14 Delivery of Certain Information 70
10.15 Transfer of Units; Etc. 70
10.16 Employees 70
ARTICLE XI
Miscellaneous
11.1 Survival 71
11.2 Notices 71
11.3 Counterparts 72
11.4 Amendments 72
11.5 Waiver 72
11.6 Successors and Assigns 72
11.7 Third Party Beneficiaries 72
11.8 Partial Invalidity 73
11.9 Governing Law 73
11.10 Assignment 73
11.11 Headings; Exhibits 73
11.12 Gender and Number 73
11.13 Entire Agreement; Construction 73
11.14 Costs of Enforcement 73
11.15 Arbitration 74
11.16 Consent to Jurisdiction 75
11.17 DISCLAIMER 75
Exhibits/Schedule Description
Exhibit A Legal Description of Excluded Parcels
Exhibit B Legal Description of Land
Exhibit C Legal Description of Ground Lease Parcel
Exhibit D Permitted Exceptions
Exhibit E Joinder Agreement
Exhibit F Redemption Rights Agreement
Exhibit G Pledge Agreement
Exhibit H Opinion or Opinions of Counsel for
Contributor
Exhibit I Opinion of Counsel for the Partnership
Exhibit J Act of Sale Deed
Schedule 1.1(a) Adjacent Land
Schedule 1.1(b) Anchor
Schedule 1.1(c) Personalty
Schedule 2.2(a) Allocation of Gross Asset Value
Schedule 2.9(a) Certain Leasing Matters (Contributor
Responsibility)
Schedule 2.9(b) Certain Leasing Matters (Partnership
Responsibility)
Schedule 6.2(a) Contemplated Revisions to Contributor Ownership
Structure
Schedule 6.2(e) Environmental Disclosures and Environmental
Reports
Schedule 6.2(f) Rent Roll
Schedule 6.2(g-1) Leases
Schedule 6.2(g-2) Reciprocal Easement Agreements
Schedule 6.2(i) Lease and Reciprocal Easement Agreement
Defaults
Schedule 6.2(k) Intellectual Property
Schedule 6.2(m) Contracts
Schedule 6.2(r) Litigation
Schedule 6.2(s) Insurance Coverage
Schedule 6.2(t) Tenant or Anchor Bankruptcies
Schedule 6.2(u) Existing Indebtedness Documents
Schedule 6.2(v) Matters Relating to Promotional
Association
Schedule 6.2(x) Ownership or Lease of Land within Five-Mile
Radius
Redemption Rights Agreement
Redemption Rights Agreement, dated October 21, 1998, among (i) GGP
Limited Partnership, a Delaware limited partnership (the
"Partnership"), (ii) General Growth Properties, Inc., a Delaware
corporation (the "General Partner"), and (iii) the following
(collectively, "Contributing Partners"): (a) MSV Properties,
L.L.C., a Georgia limited liability company, (b) Shreve Capital,
Inc., a Louisiana corporation, (c) CMS/Valley Forge Real Estate
Opportunity Fund, L.P., a Delaware limited partnership, (d) Harry
J. Butler, Jr., (e) Sealy Retail Properties, L.L.C., a Louisiana
limited liability company, (f) Scott P. Sealy, (g) Mark P. Sealy,
(h) Gwen Sealy, (i) Scott P. Sealy, not individually but solely as
Trustee for J. Pollard Sealy Trust for Scott P. Sealy, (j) Scott
P. Sealy, not individually but solely as Trustee for J. Pollard
Sealy Trust for Laura Celeste Sealy Curtis, (k) Scott P. Sealy,
not individually but solely as Trustee for J. Pollard Sealy Trust
for Mark P. Sealy, (l) Scott P. Sealy, not individually but solely
as Trustee for J. Pollard Sealy Trust for Lisa Wood Sealy Hollier
and (m) Scott P. Sealy, not individually but solely as Trustee for
J. Pollard Sealy Trust for Sue Sealy Geren.
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 Contributing Partners may cause the
Partnership to redeem its limited partnership units in the
Partnership.
NOW, THEREFORE, the parties hereby agree as follows:
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 "affiliates" as defined pursuant to the
Securities Act and the regulations promulgated thereunder.
"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 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. Notwithstanding anything
to the contrary contained herein, in the event that Redemption
Rights are exercised in respect of any Immediately Redeemable
Units on or before the one hundred eightieth (180th) day after the
date hereof, the Cash Purchase Price for such Units shall be equal
to the product of (a) the number of such Units multiplied by (b)
the Share Price (subject to adjustment in the event of a
subdivision, combination or other similar event in respect of the
Units).
"Certificate of Incorporation" shall mean the Certificate of
Incorporation of the General Partner, as the same may be amended
from time to time.
"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 Agreement" shall mean that certain Contribution
Agreement dated October 21, 1998, among the Partnership and MSV
Properties, L.L.C., a Georgia limited liability company, as the
same has 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.
"Expiration Date" shall mean the earlier of (a) August 1, 2038
and (b) the date upon which all Units have been redeemed or
purchased in accordance with the terms hereof.
"Holder" shall mean a Person (other than the General Partner)
who at the time in question holds one or more of the Units in
accordance with the Partnership Agreement, as the same may be
amended from time to time.
"Immediately Redeemable Units" shall mean the Units issued to
the parties as specified and in the quantities indicated on the
attached Exhibit B pursuant to the Contribution Agreement.
"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.
"Partnership Agreement" shall mean that certain Second Amended
and Restated Agreement of Limited Partnership of the Partnership,
dated April 1, 1998, as amended by that certain First Amendment
thereto dated as of June 10, 1998 and that certain Second
Amendment thereto dated as of June 29, 1998, and as the same may
be further amended from time to time.
"Person" shall mean any natural person, corporation,
partnership, association, limited liability company, trust or
other entity.
"Purchase Price" shall mean the Cash Purchase Price or the
Share Purchase Price, or a combination thereof.
"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 and printing 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; (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 and (f) all
SEC, stock exchange and National Association of Securities
Dealers, Inc. registration and filing fees. 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.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor statute.
"Share Price" shall have the meaning set forth in the
Contribution Agreement.
"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 common units of limited partnership in
the Partnership issued to Contributing Partners pursuant to the
Contribution Agreement.
Grant of Redemption Rights.
(a) Upon the terms and subject to the conditions contained
herein, the Partnership does hereby grant to each Contributing
Partner, and such Contributing Partner does hereby accept, the
right, but without obligation on the part of such Contributing
Partner, to require the Partnership to redeem from time to time
part or all of the Units of such Contributing Partner 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 any
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 any Contributing Partner of a Redemption Right as to
certain Units and makes the 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. Notwithstanding anything to the
contrary contained herein, the General Partner shall not have the
right to deliver the Share Purchase Price in connection with the
exercise of Redemption Rights in respect of any Immediately
Redeemable Units.
(c) If the General Partner shall assume the obligations of the
Partnership with respect to the exercise by a Contributing Partner
of a Redemption Right, the Partnership, such Contributing Partner
and the General Partner each shall treat the transaction between
the General Partner and such Contributing Partner as a sale of
such 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 any
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 such 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.
Exercise of Redemption Rights.
Time for Exercise of Redemption Rights. Each Contributing
Partner may exercise its 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 each Contributing Partner
holding Immediately Redeemable Units may exercise its Redemption
Rights as to such Units at any time and from time to time on or
after the date hereof) but prior to the Expiration Date; provided,
however, that the Redemption Rights may not be exercised at any
one time by a 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 (or the assignment
of Units or delivery of either the Cash Purchase Price or the
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.
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.
Closing. The closing of the redemption or purchase and sale
of Units pursuant to an exercise of the Redemption Rights shall
occur within 30 days following the giving of the Notice. Each
Contributing Partner shall execute such documents as the General
Partner may reasonably require in connection with the closing of
such redemption or purchase and sale.
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 by any Contributing Partner and
subject to the last sentence of Section 2(b), the Partnership
shall deliver to such 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, the General Partner shall deliver to such
Contributing Partner, 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.
Matters Relating to Shares.
Registration.
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
shelf 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 such
Redemption Rights by delivery of Shares to the extent permitted
hereunder) 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 provisions
of the Securities Act.
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 Holders of Units (other than
Immediately Redeemable Units) 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 Holders upon full exercise of the Redemption Rights by such
Holders 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; provided, however, that no Holder
shall be required to reimburse any costs (i) of preparing any
documents filed with the SEC that are incorporated by reference in
the Registration Statement or (ii) that become necessary because
the General Partner is unable to use Form S-3 (or any equivalent
short form that relies on incorporation by reference) for the
reason that the General Partner has failed to comply on a timely
basis with any requirement of the Acts or Form S-3. The
reimbursement of such expenses by the Holders shall be paid upon
demand.
Notwithstanding anything to the contrary contained herein,
the General Partner shall have no obligation to keep any
registration statement filed pursuant to this Section 4.1
effective after the Expiration Date or if the status of the
General Partner (or its successor) as an Exchange Act Reporting
Company is terminated or all of the Holders of Units (other than
the Immediately Redeemable Units) notify the General Partner in
writing that the General Partner no longer need keep such
registration statement effective.
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 to the extent permitted hereunder
in full satisfaction of the Redemption Rights which are from time
to 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 to the extent permitted hereunder).
Fully Paid and Non-Assessable. All Shares which may be
issued upon exercise of the Redemption Rights shall be duly and
validly issued and fully paid and non-assessable.
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 any
Contributing Partner, such Contributing Partner shall pay such
tax, and no Shares shall be issued or other consideration paid
pursuant hereto until such Contributing 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.
Anti-Dilution and Adjustment Provisions.
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 (unless a similar dividend,
distribution, subdivision or combination occurs with respect to
the Units). In such event, 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.
If at any time the General Partner grants to the holders of
its Common Stock 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 any
Contributing Partner (other than a Holder of Immediately
Redeemable Units) would have been entitled to subscribe for if,
immediately prior to such grant, such Contributing Partner had
exercised its 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 such
Contributing Partner the same subscription rights that such
Contributing Partner would be entitled to if such Contributing
Partner had exercised its Redemption Rights in full and received
the Share Purchase Price in satisfaction thereof prior to such
grant.
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 holders of
Common Stock 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 by a Contributing Partner (other than a
Holder of Immediately Redeemable Units) and payment of the
Purchase Price at any time following such Major Transaction Event
by means of the Share Purchase Price, such Holder shall have the
right to acquire, in lieu of the Shares which otherwise would have
been issued to such Holder, the kind and amount of shares of stock
and other securities and property (and the provisions contained in
Section 4.1 shall apply anew 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.
In the event of any other Major Transaction Event, each
Holder shall be entitled to exercise its 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 Rights shall be revived if such Major
Transaction Event is not consummated.
The Partnership shall give written notice of any Major
Transaction Event promptly after such Major Transaction is
announced to the public.
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.
Whenever the Conversion Factor is adjusted as herein
provided, the General Partner shall compute the adjusted
Conversion Factor in accordance with this 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.
Miscellaneous Provisions.
Notices. All notices or other communications given pursuant
to this Agreement, including without limitation any Notice, 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 and otherwise as set
forth in this Section 7.1. 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 7.1, the
addresses of the parties shall be, in the case of the Partnership
and the General Partner, 110 North Wacker Drive, Chicago, Illinois
60606, facsimile number (312) 960-5463, Attention: Matthew
Bucksbaum and Bernard Freibaum (with a copy to Neal, Gerber &
Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois
60602, Attn.: Marshall E. Eisenberg), and, in the case of each
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.
Assignment. The rights of any Contributing Partner
hereunder (including the Redemption Rights) shall automatically
devolve upon any Person to the extent that such Person holds
Units, and becomes a 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 (but the rights of any Contributing Partner hereunder are
not otherwise assignable). Subject to the provisions of Section
6, the General Partner may assign this Agreement without the
consent of Contributing Partner, provided that no such assignment
shall relieve the General Partner of its obligations under this
Agreement.
Binding Effect. Except as otherwise set forth herein, this
Agreement shall be binding upon, and inure to the benefit of, the
parties and their successors and permitted assigns.
Governing Law. This Agreement shall be governed by the laws
of the State of Delaware (without regard to its conflicts of law
principles).
Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which
shall constitute one document.
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.
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 "Exhibit" shall refer to a Section or
Exhibit of this Agreement unless otherwise specified.
Survival. The representations, warranties and covenants
contained herein or made pursuant hereto shall survive the
execution and delivery of this Agreement and the closing of any
redemption or purchase and sale pursuant to an exercise of
Redemption Rights hereunder.
Further Assurances. Each of the parties shall hereafter
execute and deliver such other instruments and documents and do
such further acts and things as may be required or useful to carry
out the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.
CONTRIBUTING PARTNERS:
MSV PROPERTIES, L.L.C.,
a Georgia limited liability company
By:______________________________
Its: _______________________
SHREVE CAPITAL, INC.,
a Louisiana corporation
By:______________________________
Its: _______________________
CMS/VALLEY FORGE REAL ESTATE OPPORTUNITY
FUND, L.P., a Delaware limited
partnership
By:______________________________
Its: _______________________
_________________________________
HARRY J. BUTLER, JR.
SEALY RETAIL PROPERTIES, L.L.C.,
a Louisiana limited liability company
________________________________
Mark P. Sealy, member
________________________________
SCOTT P. SEALY
________________________________
MARK P. SEALY
________________________________
GWEN SEALY
________________________________
SCOTT P. SEALY, not individually but solely as Trustee for
(i) J. Pollard Sealy Trust for Scott P. Sealy,
(ii) J. Pollard Sealy Trust for Laura Celeste Sealy Curtis,
(iii) J. Pollard Sealy Trust for Mark P. Sealy,
(iv) J. Pollard Sealy Trust for Lisa Wood Sealy Hollier, and
(v) J. Pollard Sealy Trust for Sue Sealy Geren.
PARTNERSHIP:
GGP LIMITED PARTNERSHIP,
a Delaware limited partnership
By: General Growth Properties, Inc.
a Delaware corporation
By:______________________________
Its: _______________________
GENERAL PARTNER:
General Growth Properties, Inc.
a Delaware corporation
By:______________________________
Its: _______________________
C:\80821\11813\0096\0041
Notice of Redemption
The undersigned hereby irrevocably (i) exercises its Redemption
Rights as to ___________ common units of limited partnership
interest (the "Units") in GGP Limited Partnership (the
"Partnership") in accordance with the terms of that certain
Redemption Rights Agreement, dated _______________, 1998 (the
"Agreement"), among the Partnership, General Growth Properties,
Inc. (the "General Partner"), and the other parties thereto, (ii)
transfers and surrenders such Units and all right, title and
interest of the undersigned therein to the party, which shall be
either the Partnership or the General Partner, that shall purchase
or redeem such Units pursuant to the Agreement, and (iii) directs
that the Cash Purchase Price or Share Purchase Price payable upon
exercise of the Redemption Right be delivered to the address
specified below and, if the Share Purchase Price is to be
delivered, the Shares shall be registered or placed in the name(s)
and at the address(es) specified below.
The undersigned hereby represents, warrants, certifies and
agrees (i) that the undersigned has good and marketable title to
the Units, free and clear of all Liens, (ii) that the undersigned
has the full right, power and authority to transfer and surrender
the Units as provided herein and such transfer and surrender has
been authorized by all necessary action, and (iii) that the
undersigned has obtained the consent or approval of all persons or
entities, if any, having the right to consent to or approve such
transfer and surrender.
Capitalized terms used but not defined herein shall have the
meanings set forth in the Agreement.
Dated: _______________________
SEALY RETAIL PROPERTIES, L.L.C.,
a Louisiana limited
liability company
_____________________________
Mark P. Sealy
_____________________________
(Street Address)
_____________________________
City (State (Zip Code)
Signature Guaranteed by
______________________________
If Shares are to be issued, issue to:
Please insert social security or identifying number:
