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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March
4, 1998 (February 27, 1998)
THE MACERICH COMPANY
(Exact Name of Registrant as Specified in Charter)
Maryland 1-12504 95-4448705
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
401 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911)
N/A
(Former Name or Former Address, if Changed Since Last Report)
1
Item 2. Acquisition or Disposition of Assets
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On February 27, 1998, SDG Macerich Properties, L.P., a 50/50
joint venture of a majority owned subsidiary of The Macerich Company (the
"Registrant"), and a majority owned subsidiary of the Simon DeBartolo Group,
Inc., acquired twelve regional malls ("the portfolio") from The Equitable Life
Assurance Society of the United States ("the Seller"). The portfolio contains
approximately 10.7 million square feet of gross leasable area.
The purchase price was $974.5 million (including the
assumption of $485 million of debt), and was determined in good faith arms
length negotiations between the Registrant, Simon DeBartolo Group, Inc. and the
Seller. In negotiating the purchase price the Registrant considered, among other
factors, the mall's historical and projected cash flow, the nature and term of
existing tenancies and leases, the current operating costs, the expansion
availability, the physical condition of the property, and the terms and
conditions of available financing. No independent appraisals were obtained by
the Registrant. The Registrant funded its half of the acquisition price, less
its prorata share of debt, with proceeds of $100 million from a convertible
preferred stock sale in a private placement, proceeds totaling $75.6 million
from the sale of common stock to two REIT unit trusts, and the balance from the
Registrant's line of credit.
An affiliate of the Registrant will handle the management and
leasing of Empire Mall, Lindale Mall, Mesa Mall, Rushmore Mall, Southern Hills
Mall and SouthRidge Mall. An affiliate of the Simon DeBartolo Group, Inc. will
have management and leasing responsibility for Eastland Mall, Granite Run Mall,
Lake Square Mall, NorthPark Mall, SouthPark Mall and Valley Mall. SDG Macerich
Properties, L.P. intends to continue operating the malls as currently operated
and leasing the space therein to national and local retailers.
The description contained herein of the transaction described
above does not purport to be complete and is qualified in its entirety by
reference to the Purchase Agreement which is filed as Exhibit 2.1 hereto.
2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements of Business Acquired*
(b) Pro Forma Financial Information*
(c) Exhibits
2.1 Purchase and Sale Agreement dated December 12, 1997 between The Equitable
Life Assurance Society of the United States and SM Portfolio Partners,
predecessor in interest to SDG Macerich Properties, L.P.
*It is impracticable to provide the required financial statements and pro
forma financial information regarding the acquisition of the twelve
regional malls. The required financial statements and pro forma financial
information will be filed under cover of Form 8-K/A as soon as possible,
but not later than 60 days after the date on which this Current Report on
Form 8-K must be filed.
3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, The Macerich Company has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized, in the City of Santa
Monica, State of California, on March 4, 1998.
THE MACERICH COMPANY
By: /s/Thomas E. O'Hern
Thomas E. O'Hern
Senior Vice President and
Chief Financial Officer
4
EXHIBIT INDEX
Exhibit No. Document Page
2.1 Purchase and Sale Agreement dated
December 12, 1997 between The Equitable
Life Assurance Society of the United States
and SM Portfolio Partners, predecessor in
interest to SDG Macerich Properties, L.P.
5
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES,
Seller,
and
SM PORTFOLIO PARTNERS
Purchaser.
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PURCHASE AND SALE AGREEMENT
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December 12, 1997
Premises
Eastland Mall NorthPark Mall
Evansville, Indiana Davenport, Iowa
Empire East Rushmore Mall
Sioux Falls, South Dakota Rapid City, South Dakota
Empire Mall Southern Hills Mall
Sioux Falls, South Dakota Sioux City, Iowa
Granite Run Mall SouthPark Mall
Media, Pennsylvania Moline, Illinois
Lake Square Mall Southridge Mall
Leesburg, Florida Des Moines, Iowa
Lindale Mall Valley Mall
Cedar Rapids, Iowa Harrisonburg, Virginia
Mesa Mall
Grand Junction, Colorado
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as
of the 12th day of December, 1997, by and between THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES, a New York corporation with an office at 1290
Avenue of the Americas, New York, New York 10104 ("Equitable"), as Seller, and
SM PORTFOLIO PARTNERS, a Delaware general partnership with an office at 115 West
Washington Street, Indianapolis, Indiana 46204 ("Purchaser"), as Purchaser.
W I T N E S S E T H :
WHEREAS, Equitable is owner in fee (other than the portions
thereof owned by Anchors and the portions of Eastland Mall, Empire Mall and
Southridge Mall that are leasehold interests) of (i) Eastland Mall, a regional
shopping mall located in Evansville, Indiana, (ii) Empire East, a community
shopping center located in Sioux Falls, South Dakota, (iii) Empire Mall, a
regional shopping mall located in Sioux Falls, South Dakota, (iv) Granite Run
Mall, a regional shopping mall located in Media, Pennsylvania, (v) Lake Square
Mall, a regional shopping mall located in Leesburg, Florida, (vi) Lindale Mall,
a regional shopping mall located in Cedar Rapids, Iowa, (vii) Mesa Mall, a
regional shopping mall located in Grand Junction, Colorado, (viii) NorthPark
Mall, a regional shopping mall located in Davenport, Iowa, (ix) Rushmore Mall, a
regional shopping mall located in Rapid City, South Dakota, (x) Southern Hills
Mall, a regional shopping mall located in Sioux City, Iowa, (xi) SouthPark Mall,
a regional shopping mall located in Moline, Illinois, (xii) Southridge Mall, a
regional shopping mall located in Des Moines, Iowa, and (xiii) Valley Mall, a
regional shopping mall located in Harrisonburg, Virginia, each of which is more
particularly described in and is the subject of this Agreement.
WHEREAS, Equitable desires to sell such shopping malls and
center to Purchaser, and Purchaser desires to purchase such shopping malls and
center from Equitable, subject to and upon all of the terms, covenants and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual undertakings in this Agreement, the parties hereto agree as follows:
1. Definitions.
Wherever used in this Agreement, the following terms shall
have the meanings set forth in this Article 1 unless the context of this
Agreement clearly requires another interpretation:
"Adjoining Owners" - shall mean, with respect to each Mall,
all owners of stores on sites at such Mall or adjacent to such Mall which are
owned or ground leased by such owners, which stores are operated in conjunction
with the Mall pursuant to an Operating Agreement.
"Adjoining Properties" - shall mean, with respect to each
Mall, the land and/or the improvements thereon of Adjoining Owners which are not
part of but are operated in conjunction with such Mall under the terms of one or
more Operating Agreements.
"Adjustment Point" - shall have the meaning set forth in
Article 6.
"Allocated Price" - shall have the meaning set forth in
Section 12.1.
"Anchor" - shall mean a Tenant or Adjoining Owner occupying a
store containing more than 50,000 square feet of gross leasable area.
"Appurtenances" - shall mean, with respect to each Mall and
the applicable Land, all right, title and interest, if any, of Equitable in and
to the following: (a) all land lying in the bed of any street, highway, road or
avenue, open or proposed, public or private, in front of or adjoining the Land,
to the center line thereof; (b) all rights of way, highways, public places,
easements, appendages, appurtenances, sidewalks, alleys, strips and gores of
land adjoining or appurtenant to the Land which are now or hereafter used in
connection with the Mall; (c) all awards to be made in lieu of any of the
foregoing (other than any condemnation award made as a result of the pending
condemnation (or agreement in lieu thereof) of a portion of the Lindale Mall),
or for damages to the Land by reason of the change of grade of any street,
highway, road or avenue; and (d) all easements, rights and privileges benefiting
the applicable Land, including, without limitation, those under the applicable
Operating Agreements.
"Bill of Sale" - shall mean each bill of sale to the Personal
Property to be delivered at the Closing as provided in subsection 7.1.3.
"Broker" - shall have the meaning set forth in Section 15.1.
"Business Day" - shall mean any day other than a Saturday, a
Sunday or a day on which national banking institutions located in New York
City are authorized or required to close.
"Casualty" - shall mean any damage to or destruction of any
Mall or any portion thereof caused by fire or other casualty, whether or not
insured.
"Closing" - shall mean the closing of the sale of the Malls by
Equitable to Purchaser provided for in Article 5.
"Closing Date" - shall have the meaning set forth in Section
5.1.
"Deed"- shall have the meaning set forth in subsection 7.1.1.
"Eastland Mall" - shall mean, with respect to the premises
described in Exhibit A-1 hereto, collectively, the Land (or, in the case of
that portion of the Land which is leased by Equitable under a Ground
Lease, Equitable's leasehold interest therein), the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements,
the Other Agreements and the Intangible Personal Property.
"Empire East" - shall mean, with respect to the premises
described in Exhibit A-2 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Empire Mall" - shall mean, with respect to the premises
described in Exhibit A-3 hereto, collectively, the Land (or, in the case of that
portion of the Land what is leased by Equitable under a Ground Lease,
Equitable's leasehold interest therein), the Appurtenances, the Improvements,
the Personal Property, the Leases, the Operating Agreements, the Other
Agreements and the Intangible Personal Property.
"Equitable's Copy" or "Equitable's Copies" - shall mean
Equitable's executed counterpart of the instrument in question or, if an
executed counterpart is not in Equitable's or the Managing Agent's possession,
such conformed or photostatic copies as may be in Equitable's, ERE's or the
Managing Agent's possession.
"ERE" - shall mean ERE Yarmouth, a member of the Lend Lease
Group and the name under which Equitable Real Estate Investment Management, Inc.
now conducts business.
"Excepted Items" - shall mean, with respect to each Mall: (i)
all items of personal property owned by Tenants, subtenants, independent
contractors, business invitees, utilities or Adjoining Owners; (ii) all items of
personal property used in connection with the Mall which are not owned but are
leased by Equitable, it being understood that at the Closing such leases are to
be assigned by Equitable to Purchaser without additional consideration to
Equitable beyond the
Purchase Price; and (iii) all cash on hand, checks, money orders, accounts
receivable (subject to the provisions of Article 6) and prepaid postage in
postage meters.
"Exhibits" - shall mean the exhibits attached to this
Agreement, each of which shall be deemed to form part of this Agreement whether
or not so stated in this Agreement.
"Existing Financing" - shall mean that certain financing with
respect to all of the Malls evidenced by those certain collateralized fixed and
floating rate notes in the aggregate principal sum of $485,000,000 issued by
Equitable, which notes are secured by, inter alia, those documents and
instruments more particularly described on Exhibit B hereto.
"Governmental Authorities" - shall mean all agencies, bureaus,
departments and officials of federal, state, county, municipal and local
governments and public authorities having jurisdiction over the applicable Mall
or any part thereof.
"Granite Run Mall" - shall mean, with respect to the premises
described in Exhibit A-4 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Ground Leases " - shall means those certain ground leases
pursuant to which Equitable leases the land underlying portions of the Eastland
Mall, the Empire Mall and the Southridge Mall, which ground leases are described
in Exhibit C annexed hereto.
"Impositions" - shall mean, with respect to each Mall, all
real estate and personal property taxes, general and special assessments, water
and sewer charges, license fees and other fees and charges assessed or imposed
by Governmental Authorities upon the applicable Property, Intangible Personal
Property and/or Personal Property.
"Improvements" - shall mean, with respect to each Mall, all
buildings, facilities, structures and improvements now located or hereafter
erected on the Land, and all fixtures constituting a part thereof; provided,
however, that in the case of buildings or other improvements owned by Adjoining
Owners and erected on a portion of the Land leased by Equitable to such
Adjoining Owner, "Improvements" shall mean Equitable's reversionary interest as
ground lessor in and to such buildings and improvements.
"Income" -shall have the meaning set forth in subsection 3.2.1
"Intangible Personal Property" - shall mean, with respect to
each Mall, all right, title and interest of Equitable in and to all intangible
personal property used in connection with the operation of the Mall and
including, without limitation, good will, going concern value, radius
restriction and operating agreements of Tenants and Anchors, all telephone
numbers listed after the name of the Mall, all names, trade names, designations,
logos and service marks, and the appurtenant good will, used in connection with
operation of the Mall (other than the names or variations thereof of Equitable,
the Managing Agent, Adjoining Owners and Tenants), the right to own, develop,
lease and manage the Malls and all similar items of intangible personal property
owned by Equitable and utilized solely in connection with the operation of the
Mall (excluding items which would be treated as Excepted Items).
"knowledge" or "notice" - with respect to Equitable shall
mean, without independent investigation other than inquiry of and review of
Equitable's warranties and representations set forth herein with the Managing
Agent, the actual knowledge of or written notice received by any of William
Horvath, Suman Gera and Douglas Healy.
"Lake Square Mall" - shall mean, with respect to the premises
described in Exhibit A-5 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Land" - shall mean the following: with respect to Eastland
Mall, all those certain lots, pieces or parcels of land situate, lying and being
in the County of Vanderburgh, State of Indiana, more particularly described in
Exhibit A-1 annexed hereto and made a part hereof; with respect to Empire East,
all those certain lots, pieces or parcels of land situate, lying and being in
the County of Minnehaha, State of South Dakota, more particularly described in
Exhibit A-2 annexed hereto and made a part hereof; with respect to Empire Mall,
all those certain lots, pieces or parcels of land situate, lying and being in
the County of Minnehaha, State of South Dakota, more particularly described in
Exhibit A-3 annexed hereto and made a part hereof; with respect to Granite Run
Mall, all those certain lots, pieces or parcels of land situate, lying and being
in the County of Delaware, State of Pennsylvania, more particularly described in
Exhibit A-4 annexed hereto and made a part hereof; with respect to Lake Square
Mall, all those certain lots, pieces or parcels of land situate, lying and being
in the County of Lake, State of Florida, more particularly
described in Exhibit A-5 annexed hereto and made a part hereof; with respect to
Lindale Mall, all those certain lots, pieces or parcels of land situate, lying
and being in the County of Linn, State of Iowa, more particularly described in
Exhibit A-6 annexed hereto and made a part hereof; with respect to Mesa Mall,
all those certain lots, pieces or parcels of land situate, lying and being in
the County of Mesa, State of Colorado, more particularly described in Exhibit
A-7 annexed hereto and made a part hereof; with respect to NorthPark Mall, all
those certain lots, pieces or parcels of land situate, lying and being in the
County of Scott, State of Iowa, more particularly described in Exhibit A-8
annexed hereto and made a part hereof; with respect to Rushmore Mall, all those
certain lots, pieces or parcels of land situate, lying and being in the County
of Pennington, State of South Dakota, more particularly described in Exhibit A-9
annexed hereto and made a part hereof; with respect to Southern Hills Mall, all
those certain lots, pieces or parcels of land situate, lying and being in the
County of Woodbury, State of Iowa, more particularly described in Exhibit A-10
annexed hereto and made a part hereof; with respect to SouthPark Mall, all those
certain lots, pieces or parcels of land situate, lying and being in the County
of Rock Island, State of Illinois, more particularly described in Exhibit A-11
annexed hereto and made a part hereof; with respect to Southridge Mall, all
those certain lots, pieces or parcels of land situate, lying and being in the
County of Polk, State of Iowa, more particularly described in Exhibit A-12
annexed hereto and made a part hereof; and with respect to Valley Mall, all
those certain lots, pieces or parcels of land situate, lying and being in the
City of Harrisonburg, State of Virginia, more particularly described in Exhibit
A-13 annexed hereto and made a part hereof; in each case together with the
Appurtenances.
"Leases" - shall mean, with respect to each Mall, all leases,
licenses, concessions and other forms of agreement, written or oral, however
denominated, wherein Equitable (as a party named therein or the successor
thereto) grants to any party or parties, other than the Managing Agent, the
right of exclusive use or occupancy of any portion of the Mall, and all
renewals, modifications, amendments, guaranties and other agreements affecting
the same, but expressly excluding the Operating Agreements.
"Leasing Costs" - shall have the meaning set forth in Section
6.2.
"Legal Requirements" - shall mean, with respect to each Mall,
all statutes, laws, ordinances, rules, regulations, executive orders and
requirements of all Governmental Authorities
which are applicable to such Mall or any part thereof or the use or manner of
use thereof, or to the owner, Tenants or occupants thereof in connection with
such ownership, occupancy or use.
"Letter(s) of Credit" - shall have the meaning set forth in
subsection 3.1.1.
"Lindale Mall" - shall mean, with respect to the premises
described in Exhibit A-6 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Mall" - shall mean any of Eastland Mall, Empire East, Empire
Mall, Granite Run Mall, Lake Square Mall, Lindale Mall, Mesa Mall, NorthPark
Mall, Rushmore Mall, Southern Hills Mall, SouthPark Mall, Southridge Mall and
Valley Mall, and "Malls" shall mean all of the foregoing.
"Management Agreement" - shall mean the agreement for the
management and leasing of the Malls dated as of February 1, 1994 between Seller
and the Managing Agent, as heretofore amended.
"Managing Agent" - shall mean General Growth Management Inc.
"Mesa Mall" - shall mean, with respect to the premises
described in Exhibit A-7 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Mortgage" - shall mean that certain Mortgage, Deed of Trust,
Security Agreement, Assignment of Leases and Rents, Fixture Filing and Financing
Statement dated and effective as of May 29, 1996 among Equitable, as Mortgagor,
W. Allen Ames, Jr., as Deed Trustee (solely with respect to Valley Mall), Mesa
County Public Trustee, as Deed Trustee (solely with respect with Mesa Mall) and
State Street Bank and Trust Company, as Trustee, which encumbers each of the
Malls, and related agreements and instruments which evidence or secure the
Existing Financing, the documents comprising which are listed in Exhibit B.
"NorthPark Mall" - shall mean, with respect to the premises
described in Exhibit A-8 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Operating Agreement" - shall mean, with respect to each Mall,
each reciprocal easement and operating agreement or ground lease, as amended, by
and between Equitable or its
predecessor in title to the Mall and an Adjoining Owner, the documents
comprising which are listed in Exhibit D.
"Other Agreements" - shall mean, with respect to each Mall,
all contracts, agreements and documents pertaining to the Mall to which
Equitable or its predecessor in interest is a party and by which Equitable is
bound, other than the Ground Leases, the Operating Agreements, the Management
Agreement, the Mortgage and the Leases, and including without limitation, all
service contracts, construction contracts, leases of personal property and
utility agreements, the documents comprising which are listed in Exhibit E.
"Permitted Encumbrances" - shall have the meaning set forth in
Section 4.1.
"Personal Property" - shall mean, with respect to each Mall,
all apparatus, machinery, devices, appurtenances, equipment, furniture,
Furnishings, promotional and marketing fund accounts and other items of
personal property (other than Intangible Personal Property and the
Excepted Items) owned by Equitable and located at and used in connection with
the ownership, operation or maintenance of the Mall.
"Property" - shall mean, with respect to each Mall, the Land,
the Appurtenances and the Improvements.
"Purchase Price" - shall have the meaning set forth in Section
3.1.
"Rating Agencies - shall mean Moody's Investors Service, Inc.
and Fitch Investors Service, L.P.
"Rating Agency Approval" - shall mean the approval, pursuant
to Section 19.1 of the Mortgage, by each of the Rating Agencies of the
conveyance of the Malls to Purchaser subject to, and the assumption by Purchaser
of, the Existing Financing.
"Recording Office" - shall mean, with respect to each Mall,
the appropriate office or offices in the state in which the Mall is located for
the recording or filing of the documents to be delivered at Closing which are to
be recorded or filed therein.
"Rents" - shall mean all fixed, minimum, additional,
percentage, overage and escalation rents, common area and/or mall maintenance
charges, advertising and promotional charges, insurance charges, rubbish removal
charges, sprinkler charges, shoppers aid charges, water charges, utility
charges, HVAC charges and other amounts payable under the Leases or the
Operating Agreements.
"Required Consents" shall have the meaning specified in
subsection 8.3.3.
"Rushmore Mall" - shall mean, with respect to the premises
described in Exhibit A-9 hereto, collectively, the Land, the Appurtenances,
the Improvements, the Personal Property, the Leases, the Operating Agreements,
the Other Agreements and the Intangible Personal Property.
"Southern Hills Mall" - shall mean, with respect to the
premises described in Exhibit A-10 hereto, collectively, the Land, the
Appurtenances, the Improvements, the Personal Property, the Leases, the
Operating Agreements, the Other Agreements and the Intangible Personal Property.
"SouthPark Mall" - shall mean, with respect to the premises
described in Exhibit A-11 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Southridge Mall" - shall mean, with respect to the premises
described in Exhibit A-12 hereto, collectively, the Land (or, in the case of
this portion of the Land which is leased by Equitable under a Ground Lease,
Equitable's leasehold interest therein), the Appurtenances, the Improvements,
the Personal Property, the Leases, the Operating Agreements, the Other
Agreements and the Intangible Personal Property.
"Substantial Casualty" - shall mean a Casualty with respect to
which the cost to repair or restore the affected Improvements substantially to
their condition prior to such Casualty exceeds $2,000,000.
"Substantial Taking" - shall mean a Taking which shall have a
material adverse effect on the value of the Malls taken as a whole.
"Taking" shall mean a taking of all or any portion of the Land
and/or improvements in condemnation or by exercise of the power of eminent
domain or by an agreement in lieu thereof.
"Tenants" - shall mean the tenants, licensees, concessionaires
or other users or occupants under Leases.
"Title Company" shall mean Commonwealth Land Title Insurance
Company, c/o Interstate Title Services, as agent.
"Valley Mall" - shall mean, with respect to the premises
described in Exhibit A-13 hereto, collectively, the Land, the Appurtenances, the
Improvements, the Personal Property, the Leases, the Operating Agreements, the
Other Agreements and the Intangible Personal Property.
"Violations" - shall mean, with respect to each Mall,
violations of Legal Requirements existing with respect to the Mall.
2. Agreement to Sell and Purchase. Upon and subject to the terms and
conditions of this Agreement, Equitable agrees to sell and convey the Malls to
Purchaser and Purchaser agrees to purchase the Malls from Equitable.
3. Purchase Price; Existing Financing.
3.1 Purchase Price. The aggregate purchase price (the
"Purchase Price") for the Malls is Nine Hundred Seventy-Four Million Five
Hundred Thousand and No/100 Dollars ($974,500,000), and shall be payable as
follows:
3.1.1 Twenty-Five Million and No/100 Dollars
($25,000,000) (the "Deposit") shall be paid by Purchaser to Escrow Agent
simultaneously herewith, by wire transfer of immediately available federal
funds to an account designated by Escrow Agent or by Purchaser's delivering
to Equitable one or more clean, irrevocable letters of credit with Equitable
as the beneficiary, the form of each of which is reasonably acceptable to
Equitable (the "Letter(s) of Credit"). If Letter(s) of Credit are delivered by
Purchaser to Equitable: (i) if the Closing occurs the Letter(s) of Credit
shall be redelivered by Equitable to Purchaser and the "Remaining Balance"
(as defined in subsection 3.1.2) shall in such case be increased by the amount
of the Letter(s) of Credit; and (ii) if Equitable shall be holding any
Letter of Credit thirty (30) days prior to the expiration date thereof and
Purchaser shall not theretofore have delivered to Equitable an endorsement
to such Letter of Credit signed by the issuer thereof extending such
expiration date for a minimum of thirty (30) days or a
replacement Letter of Credit bearing an expiration date at least thirty (30)
days following the expiration date of the original Letter of Credit, Equitable
shall have the right to draw the full amount of such Letter of Credit and,
unless Equitable is then entitled to retain the proceeds of such Letter of
Credit pursuant to the terms of this Agreement, such proceeds shall be paid to
Escrow Agent (as hereinafter defined) to be held and disposed of in accordance
with Section 3.2.
3.1.2 The balance of the Purchase Price, plus or minus adjustments and
credits provided for in Article 6 and any other applicable provisions of this
Agreement (the "Remaining Balance") shall be paid as follows: (i) that portion
of the Remaining Balance which equals the outstanding principal balance of the
Existing Financing on the Closing Date shall be paid by Purchaser's accepting
title to the Malls subject to and assuming the Existing Financing; and (ii) the
balance of the Remaining Balance shall be paid in cash at the Closing, by wire
transfer of immediately available federal funds to an account designated by
Equitable.
3.2 Escrow Provisions.
3.2.1 If the Deposit is paid in cash, the Title Company (referred to in this
Section and sometimes in other sections hereof as "Escrow Agent") shall hold the
Deposit in escrow in an interest-bearing bank account in an institution
acceptable to Equitable and Purchaser, or in such other type or types of
investments as may be agreed to in writing by Equitable and Purchaser, until the
Closing or such other time as is specified herein, and shall pay over or apply
the Deposit in accordance with the terms of this Section 3.2. All interest or
other income earned on the Deposit (the "Income") shall be paid to or applied
for the benefit of Purchaser unless the Deposit is to be paid to Equitable as
provided in Section 16.1, in which case the Income shall be paid to Equitable.
The party that receives the Income or the benefit thereof shall be responsible
for paying any income taxes thereon. The tax identification numbers of the
parties hereto shall be furnished to Escrow Agent upon request.
3.2.2 If the Closing occurs, the Deposit shall be paid to Equitable and
credited against the Purchase Price and the Income shall be paid to or at the
direction of Purchaser. If this Agreement is terminated pursuant to Section
16.1, the Deposit and the Income shall be paid to Equitable as liquidated and
agreed upon damages for Purchaser's default. If the Closing does not occur for
any reason other than termination of this Agreement pursuant to Section 16.1,
then, subject to the provisions of Section 16.2, the Deposit and the Income
shall be paid to Purchaser.
3.2.3 Escrow Agent shall not be required to make any disposition of the
Deposit or the Income unless (i) Escrow Agent is directed to do so in writing by
Equitable and Purchaser or (ii) Escrow Agent is directed to do so in writing by
the party which claims to be entitled to receive the Deposit and the Income and
the other party does not object to such
disposition within ten (10) days after written notice of such direction is given
by Escrow Agent to the other party or (iii) Escrow Agent is directed to do so by
a final order or judgment of a court as hereinafter provided. The notice given
by Escrow Agent pursuant to clause (ii) above shall state in capital letters
that failure of the addressee to object to the disposition of the Deposit and
the Income described in such notice within ten (10) days after the giving
thereof shall constitute a waiver of the addressee's right to contest or object
to such disposition. In the event that any dispute shall arise with respect to
the entitlement of either party to the Deposit or the Income, Escrow Agent shall
continue to hold the Deposit and the Income until otherwise directed by written
instruction from Equitable and Purchaser or a final order or judgment of a court
of competent jurisdiction entered in an action or proceeding to which Escrow
Agent is a party. In addition, in the event of any such dispute, Escrow Agent
shall have the right at any time to commence an action in interpleader and to
deposit the Deposit and/or the Income with the clerk of a court of appropriate
jurisdiction in the State of New York. Upon the commencement of such action and
the making of such deposit, Escrow Agent shall be released and discharged from
and of all further obligations and responsibilities hereunder. For the purposes
of this subsection 3.2.3, no dispute shall be deemed to exist as to entitlement
of either party to the Deposit and the Income if the party receiving notice from
Escrow Agent pursuant to clause (ii) of this subsection 3.2.3 objects to the
disposition of the Deposit and the Income provided for in such notice more than
ten (10) days after the giving of such notice by Escrow Agent.
3.2.4 The parties hereto acknowledge that Escrow Agent is acting solely
as a stakeholder at their request and for their convenience, that with respect
to the Deposit and the Income Escrow Agent shall not be deemed to be the agent
of any of the parties hereto and that Escrow Agent shall not be liable to either
of the parties hereto for any act or omission on its part unless taken or
suffered in bad faith, in willful disregard of this Agreement or involving gross
negligence on the part of Escrow Agent. Escrow Agent may act upon any instrument
or other writing and upon signatures believed by it to be genuine, without any
duty of independent verification. Escrow Agent shall not be bound by any
modification of this Agreement unless the same is in writing and signed by the
parties hereto and a counterpart thereof is delivered to Escrow Agent and, if
Escrow Agent's duties, rights or liabilities hereunder are affected, unless
Escrow Agent shall have given its prior consent thereto in writing. Escrow Agent
shall not be required
or obligated to determine any questions of law or fact. The parties hereto shall
jointly and severally indemnify and hold harmless Escrow Agent from and against
all costs, claims and expenses, including reasonable attorneys' fees and
litigation costs, incurred by Escrow Agent in connection with the performance of
its duties under this Section 3.2 (including, without limitation, in an
interpleader action or other litigation regarding the disposition of the Deposit
and the Income), except with respect to acts or omissions taken or suffered by
Escrow Agent in bad faith, in willful disregard of this Agreement or involving
gross negligence on the part of Escrow Agent.
3.2.5 Escrow Agent shall have no liability for the selection of any particular
account or investment made by the parties hereto, for fluctuations in the value
of said account or investment, for the amount of interest or other income earned
on said account or investment or for any loss incurred in connection therewith.
3.2.6 Escrow Agent has acknowledged its agreement to the provisions of
this Section 3.2 by signing this Agreement, and Escrow Agent has executed this
Agreement solely for such purpose.
3.2.7 References in succeeding provisions of this Agreement to the Deposit
shall be deemed to be references both to the Deposit and the Income.
3.3 Existing Financing.
3.3.1 As provided in Sections 10.5 and 11.6, it shall be a condition
precedent to Equitable's and Purchaser's respective obligations to close title
hereunder that the Rating Agency Approval shall have been obtained, it being
agreed, however, that Purchaser may elect, in its sole discretion, to satisfy
this condition by repaying in full the Existing Financing, including any
prepayment penalty or premium required to be paid in connection with such
repayment and, if Purchaser does so, the amount of the Purchase Price payable by
Purchaser to Equitable at Closing shall be the amount provided for in Section
3.1 as if Purchaser had taken title to the Malls subject to the Existing
Financing. Purchaser and Seller each shall, in a timely manner, provide such
information, execute and deliver such documents and take such other actions as
are required in order that the Rating Agencies may determine whether Purchaser
is qualified under the Mortgage to take title to the Malls subject to the
Existing Financing. If the Rating Agencies determine that Purchaser is so
qualified, Purchaser shall, at (or, if appropriate, prior to) the Closing,
execute and deliver such additional documents, and take such other actions, as
shall
be required under the Mortgage in connection with Purchaser's assumption of the
Existing Financing. Without limiting the generality of the foregoing, if
required by the Rating Agencies, Purchaser shall submit copies of its
organizational documents and shall make such modifications thereto as shall be
required by the Rating Agencies, deliver a substantive nonconsolidation opinion
from Purchaser's counsel and such other legal opinions of Purchaser's counsel as
may be required by the Rating Agencies, and execute and deliver an assumption of
the Mortgage and the other loan documents in the form required thereunder.
3.3.2 If prior to the Closing Purchaser desires to communicate or meet
with the Trustee for the Existing Financing or the Rating Agencies with respect
to the Existing Financing or Purchaser's ability to qualify as a party entitled
to take title to the Malls subject thereto, Purchaser shall so advise Equitable
and afford Equitable the right to participate in each meeting or communication.
3.3.3 The terms and conditions of the Existing Financing require that
Equitable complete certain maintenance, repair and replacement work at the
Malls. To the extent that such work has not heretofore been completed by
Equitable, Purchaser shall be solely responsible for the performance of, and
payment for, such work following Closing.
4. Permitted Encumbrances.
4.1 Definitions. At the Closing title to the Malls shall be
subject only to the following matters ("Permitted Encumbrances"):
4.1.1 the matters set forth in Exhibit F annexed hereto and made a part
hereof;
4.1.2 liens for Impositions which are not due and payable as of the Closing
Date or which are apportioned in accordance with Article 6;
4.1.3 liens for Impositions which are paid directly by Tenants in occupancy
on the Closing Date or by Adjoining Owners to the entity imposing same;
4.1.4 the state of facts shown on the surveys described in Exhibit G
annexed hereto and made a part hereof, which surveys, to the extent not already
so updated, shall be updated by surveys dated no earlier than October 23, 1997,
which are certified to Purchaser and the Title Company and are accompanied by an
affidavit by Equitable, in the form required by the Title Company, that, except
in the case of Southridge Mall and any other Mall where material
exterior construction is now in progress, there have been no exterior physical
changes at the Malls since the date of such updated surveys; and any state of
facts a physical inspection of the Malls would show;
4.1.5 zoning, subdivision, environmental, building and all other Legal
Requirements applicable to the ownership, use or development of or the right to
maintain or operate the Malls, or have space therein used and occupied by
Tenants or Adjoining Owners, presently existing or enacted prior to the Closing;
4.1.6 all Leases in effect on the date of this Agreement, any extensions or
renewals of Leases pursuant to options contained therein which do not require
the consent of Equitable thereunder, and any extensions, renewals or amendments
of Leases or additional or substituted Leases made between the date hereof and
the Closing Date in accordance with the provisions of Article 13;
4.1.7 mechanics liens, lis pendens and notices of commencement arising
from work or other obligations, the payment for which is the responsibility of
any Tenant in occupancy on the Closing Date under a Lease then in effect and in
good standing or any Adjoining Owner and not Equitable, it being agreed that a
Lease shall be deemed in "good standing" if on the Closing Date the Tenant
thereunder is not more than sixty (60) days delinquent in the payment of minimum
rent due under its Lease and is not at that time the subject of any petition for
relief under the Bankruptcy Code;
4.1.8 the Mortgage and the applicable loan documents relating thereto;
4.1.9 the applicable Operating Agreements;
4.1.10 the applicable Other Agreements; and
4.1.11 all other matters affecting title to the Malls which are hereafter
accepted or required to be accepted or are waived by Purchaser as provided in
Article 14.
5. The Closing.
5.1 Closing Date. The closing of the transactions provided for
in this Agreement (the "Closing") shall be held at 10:00 A.M. on February 2,
1998 (as the same may be adjourned or advanced pursuant to the terms of this
Agreement, the "Closing Date"), at the offices of Paul, Weiss, Rifkind, Wharton
& Garrison, 1285 Avenue of the Americas, New York, New York 10019. Time shall be
of the essence with respect to the Closing Date, provided that (i) Equitable
shall have the right to adjourn the Closing Date one or more times for a
combined aggregate of not more than sixty (60) days, which shall run
concurrently with any adjournment effected by Purchaser pursuant to clause (ii)
below, to cure exceptions to title, obtain the Required Consents, enable the
parties to obtain the Rating Agency Approval, obtain estoppel certificates or
satisfy other closing conditions; and (ii) Purchaser shall have the right to
adjourn the Closing Date one or more times for an aggregate of not more than
sixty (60) days, which shall run concurrently with any adjournment effected by
Equitable pursuant to clause (i) above, to enable the parties to obtain the
Rating Agency Approval or to allow additional time for Equitable to satisfy its
closing conditions.
5.2 Actions at Closing. At the Closing, the parties shall
deliver and accept the documents and instruments and take all other action
required of them pursuant to this Agreement.
6. Apportionments. At the Closing (except where a later date is
specifically provided for in this Article), the items set forth below shall be
adjusted as of 11:59 P.M. on the day preceding the Closing Date (the "Adjustment
Point"); provided, however, that if the Closing occurs on February 2, 1998, the
Adjustment Point shall be 11:59 PM on January 31, 1998 and at the Closing,
Purchaser shall pay to Seller an amount equal to interest on the cash portion of
the Purchase Price at the rate of 10% per annum for one day.
6.1 Rents. Rents as and when collected. Any Rents collected by
or on behalf of Purchaser (which, for purposes of this Section 6.1, shall
include Rents collected by any property manager or other agent acting for
Purchaser) subsequent to the Closing (whether due and payable prior to or
subsequent to the Adjustment Point) shall be adjusted as of the Adjustment
Point, and any portion thereof properly allocable to periods prior to the
Adjustment Point, net of costs of collection properly allocable thereto, if any,
shall be paid by Purchaser to Equitable promptly after the collection thereof by
or on behalf of Purchaser, but subject to the further provisions of this Section
6.1 in the case of Rents due prior to the Adjustment Point. If prior to the
Closing Equitable shall have collected, or if subsequent to the Closing
Equitable shall collect, any Rents (which, for the purposes of this Section 6.1,
shall include Rents collected by the Managing Agent or other agent acting for
Equitable) which are properly allocable in whole or in part to periods
subsequent to the Adjustment Point, the portion thereof so allocable to periods
subsequent to the Adjustment Point, net of costs of collection properly
allocable thereto, if any, shall be credited to
Purchaser by Equitable at the Closing or, if collected after the Closing, shall
be promptly remitted by Equitable to Purchaser. As used in this Section 6.1 the
term "costs of collection" shall mean and include reasonable attorneys' fees and
other costs incurred by or on behalf of Purchaser or Equitable in collecting any
Rents, but shall not include the regular fees payable to any property manager
for the Malls, the payroll costs of any of Equitable's or Purchaser's employees
or any other internal costs or overhead of Equitable or Purchaser.
6.1.1 Equitable shall deliver to Purchaser at Closing a list of all Tenants
and Adjoining Owners at each Mall that are delinquent in payment of Rents as of
the Adjustment Point, which list shall set forth the amount of each such
delinquency, the period to which each such delinquency relates and the nature of
the amount due, itemizing separately fixed monthly rent, tax reimbursements,
common area maintenance, electric charges, charges for tenant services, charges
for overtime services, percentage rent and other charges, if any. The first
amounts collected by or on behalf of Purchaser from each delinquent Tenant or
Adjoining Owner, net of costs of collection, if any, shall be deemed to be in
payment of Rents (or the specific components of Rents) for the month in which
the Closing occurs, next in payment of Rents (or the specific components of
Rents) then due on account of any month after the month in which the Closing
occurs and finally in payment of delinquent Rents (or the specific components of
Rents) which are in arrears as of the first day of the month in which the
Closing occurs, as set forth on such list; provided, however, that if at the
Closing Date any Tenant or Adjoining Owner is more than thirty (30) days in
arrears in payment of Rents (or any component of Rents), the first amounts
collected by or on behalf of Purchaser from each such Tenant or Adjoining Owner
on account of the Rents (or the specific component of Rents) as to which it is
so delinquent, net of costs of collection, if any, shall be deemed in payment of
such Rents (or such specific component of Rents) then due on account of any
month after the month in which the Closing occurs, next in payment of such Rents
(or such specific component of Rents) for the month in which the Closing occurs
and finally in payment of such Rents (or such specific component of Rents) which
are in arrears as of the first day of the month in which the Closing occurs, as
set forth on such list. Any amounts collected by or on behalf of Purchaser from
each delinquent Tenant or Adjoining Owner which, in accordance with the
preceding sentence, are allocable to the month in which the Closing occurs
(as adjusted as of the Adjustment Point) or any prior month, net of costs of
collection properly allocable thereto, if any, shall be paid promptly by
Purchaser to Equitable.
6.1.2 Purchaser shall exert reasonable efforts for a period of one (1) year
after the Closing to bill and collect any delinquencies set forth on the list
delivered by Equitable pursuant to subsection 6.1.1 and the amount thereof, as,
when and to the extent collected by or on behalf of Purchaser shall, if due to
Equitable pursuant to the provisions of subsection 6.1.1, be paid by Purchaser
to Equitable, net of costs of collection, if any, properly allocable thereto,
promptly after the collection thereof by Purchaser. In no event shall Purchaser
be obligated to institute any actions or proceedings or to seek the eviction of
any Tenant or Adjoining Owner in order to collect any such delinquencies.
6.1.3 Following the Closing, Purchaser shall submit or cause to be
submitted to Equitable, within 30 days after the end of each calendar quarter up
to and including the calendar quarter ending on March 31, 1999, but only so long
as any delinquencies shall be owed to Equitable, a statement which sets forth
all collections made by or on behalf of Purchaser from the Tenants and Adjoining
Owners which owe such delinquencies through the end of such calendar quarter.
Equitable shall have the right from time to time following the Closing until 90
days after receipt by Equitable of the last quarterly statement required
hereunder, at Equitable's expense during business hours and on reasonable prior
notice to Purchaser, to examine and audit so much of the books and records of
Purchaser as relate to such delinquencies in order to verify the collections
reported by Purchaser in such quarterly statements.
6.1.4 Nothing contained in this Section 6.1 shall be deemed to prohibit
Equitable, at its own expense, from instituting any actions or proceedings in
its own name against any Tenant or Adjoining Owner after the Closing in order to
collect the amount of any delinquencies due in whole or in part to Equitable
from such Tenant or Adjoining Owner; provided, however, that in no event shall
Equitable be entitled in any such action or proceeding to seek to evict any
Tenant or Adjoining Owner or to recover possession of its space. If requested by
Equitable, Purchaser shall join in any such action or proceeding, or permit the
same to be bought in Purchaser's name or in the names of Equitable and
Purchaser, all at Equitable's sole cost and expense. Purchaser shall not waive
or settle any delinquency owed in whole or in part to Equitable without the
prior written consent of Equitable.
6.1.5 With respect to that portion of the Rents which constitute percentage
or overage rents, or other amounts payable by Tenants or Adjoining Owners based
upon sales, receipts or income of such entities, the following shall apply: (i)
at the Closing and/or, in the case of percentage or overage rents which are in
arrears or are payable in other than monthly installments, subsequent to the
Closing, percentage or overage rents shall be apportioned as provided in the
other subsections of this Section 6.1 in the case of Rents generally; and (ii)
following the end of the fiscal year on account of which such percentage or
overage rents are payable by each Tenant or Adjoining Owner and receipt by
Purchaser of any final payment on account thereof due from such Tenant or
Adjoining Owner, Purchaser shall pay to Equitable, net of costs of collection,
if any, the excess, if any, of (a) the amount of percentage or overage rents
paid by such Tenant or Adjoining Owner on account of such entire fiscal year
multiplied by a fraction, the numerator of which is the number of months
(including any fraction of a month expressed as a fraction) of such fiscal year
which occurred prior to the Adjustment Point and the denominator of which is 12
or such lesser number of months (including any fraction of a month expressed as
a fraction) as may have elapsed in such fiscal year prior to the expiration of
the Lease or Operating Agreement in question over (b) all amounts theretofore
received by Equitable on account of the percentage or overage rents in question
for such fiscal year. If in any case the amount provided for in (b) above
exceeds the amount provided for in (a) above, Equitable shall pay the amount of
such excess to Purchaser upon demand. Upon request of Purchaser, Equitable shall
advise Purchaser of the amount of percentage or overage rents collected by
Equitable from each Tenant or Adjoining Owner prior to the Closing Date. If on
the Closing Date Equitable shall be conducting any audits of payments of
percentage or overage rents previously made by Tenants or Adjoining Owners for
fiscal years prior to the ones in effect on the Closing Date, Equitable shall
have the right to continue all such audits until completion thereof and to
collect and retain any amounts payable by reason thereof. In addition, Equitable
shall have the right to initiate such audits subsequent to the Closing in
respect of any fiscal years prior to the ones in effect on the Closing Date, and
in respect of the fiscal year in which the Closing Date occurs if more than
eight months shall have elapsed in such fiscal year as of the Closing Date.
Equitable shall provide Purchaser with copies of the results of such audits
promptly after the completion thereof.
6.1.6 With respect to that portion of Rents which are payable on an annual,
semi-annual or other non-monthly basis, Purchaser shall use its reasonable
efforts to bill and collect or cause to be billed and collected all such
payments which become due after the Closing, which payments, to the extent
allocable to periods prior to the Adjustment Point, shall be paid by Purchaser
to Equitable promptly after receipt thereof, net of costs of collection, if any,
properly allocable thereto. With respect to that portion of Rents which are
billed on an estimated basis during the fiscal or other period for which paid,
at the end of such fiscal or other period Purchaser shall determine or cause to
be determined whether the items in question have been overbilled or underbilled
in accordance with provisions of the applicable Leases and the method of billing
previously followed by Equitable. If Purchaser determines or causes to be
determined that there has been an overbilling and an overbilled amount has been
received, Purchaser shall reimburse or cause to be reimbursed such amount to the
Tenants and/or Adjoining Owners which paid the excess amount and Equitable shall
pay to Purchaser the portion of such reimbursement which is properly allocable
to the period prior to the Adjustment Point. If Purchaser determines that there
has been an underbilling, the additional amount shall be billed or caused to be
billed by Purchaser to the Tenants and Adjoining Owners, as applicable, and any
amount received by Purchaser, net of costs of collection, if any, to the extent
properly allocable to periods prior to the Adjustment Point shall promptly be
paid by Purchaser to Equitable. Purchaser's determination of any amounts
underbilled or overbilled shall in each case be subject to Equitable's approval.
In connection with any annual true-up of estimated common area maintenance or
other charges paid during the course of any fiscal year, Equitable shall have
the right to furnish to Purchaser schedules and other information to be utilized
in calculating amounts due in connection with such true-up for the portion of
the fiscal year elapsed prior to the Closing Date (and/or, if applicable, the
prior fiscal year), and Purchaser agrees to calculate amounts due on the basis
of the schedules and information furnished by Equitable.
6.1.7 Notwithstanding anything to the contrary set forth in this Section 6.1,
Equitable shall be entitled to receive, and Purchaser shall pay to Equitable
promptly after receipt thereof, net of costs of collection, if any, properly
allocable thereto, (i) subject to the provisions of subsection 6.4.1, all
amounts payable by Tenants and Adjoining Owners on account of Impositions which,
pursuant to the terms of subsection 6.4.1, it is Equitable's obligation to pay
and discharge, which amounts shall be apportioned between Equitable and
Purchaser in the same manner as the Impositions to which they relate, and (ii)
all amounts payable by Tenants and Adjoining Owners on account of utilities
which, pursuant to the terms of subsections 6.4.2 and 6.4.3, it is Equitable's
obligation to pay and discharge, which amounts shall be apportioned between
Equitable and Purchaser in the same manner as the utilities to which they
relate.
6.1.8 Any advance rental deposits or payments held by Equitable on the
Closing Date and applicable to periods of time subsequent to the Adjustment
Point, and any security deposits held by Equitable on the Closing Date, together
with interest thereon, if any, which, under the terms of the applicable Leases,
is payable to the Tenants thereunder, shall be paid to Purchaser at the Closing.
6.1.9 Each of Equitable and Purchaser shall be responsible for paying any
sales tax on the Rent paid to it.
6.2 Leasing Costs. Equitable shall pay and indemnify Purchaser
in respect of all leasing commissions, costs of tenant alterations and
improvements performed or to be performed for Tenants at the expense of the
landlord thereof (or allowances payable by the landlord in lieu thereof), moving
and other allowances, if any, and fees and disbursements of architects,
engineers and attorneys (collectively "Leasing Costs") in respect of (i) all
Leases executed by or on behalf of all parties thereto on or before December 15,
1997, (ii) any renewal of any Lease resulting from the exercise by the Tenant of
an option or from an agreement executed by or on behalf of all parties thereto
on or before December 15, 1997 and (iii) any increase of the space demised by
any Lease resulting from the exercise of an option by the Tenant or from an
agreement executed by all of the parties thereto on or before December 15, 1997.
Purchaser shall assume and pay and indemnify Equitable in respect of all Leasing
Costs payable in respect of Leases, renewals, expansions and amendments of the
nature described in clauses (i), (ii) and (iii) above which are executed by all
parties thereto or the options for which are exercised after December 15, 1997
(including, without limitation, any leasing commissions which may become payable
to the Managing Agent with respect to Leases executed after the Closing Date
with Tenants with whom the Managing Agent had been negotiating prior to the
Closing Date, which commissions shall be payable by Purchaser to the Managing
Agent pursuant to the terms of the Management Agreement). If any Leasing Costs
shall be paid by Equitable prior to the Closing, which, in
accordance with this Section 6.2, it is Purchaser's obligation to pay, Purchaser
shall reimburse Equitable for the documented amount thereof at the Closing.
6.3 Ancillary Income. Ancillary income received by Equitable
in connection with the licensing of the name of the Malls, the furnishing of
utilities from the Mall to third parties and the like shall be adjusted as of
the Adjustment Point between Equitable and Purchaser.
6.4 Additional Items. At the Closing, the following additional
items shall be apportioned between Equitable and Purchaser as of the Adjustment
Point for each Mall:
6.4.1 Impositions payable by Equitable in respect of each Mall shall be
adjusted on the basis of the fiscal year for which the same are imposed, whether
or not yet due and payable as of the Closing Date. If an Imposition is not due
and payable until after the Closing Date and the assessed valuation or the tax
rate or any other factor upon which the amount of the Imposition will be based
has not been fixed at the Closing Date, then the parties shall at the Closing
apportion such Imposition based on the most recently available assessed
valuation and tax rate, and shall make a final adjustment of such item within 30
days following the date on which the actual assessed valuation and tax rate or
any other factor applicable to such Imposition becomes known. Notwithstanding
the foregoing, in the case of real estate taxes which are payable in arrears, at
the Closing, Purchaser shall pay to Equitable one-half of the estimated
aggregate amount of such real estate taxes which will be payable after the
Closing Date, which are properly allocable to any period prior to the Adjustment
Point and which are otherwise credited to Purchaser at Closing, such payment
being the estimated aggregate amount of payments to be (and not previously) made
by Tenants and Adjoining Owners in reimbursement of such taxes, which payments,
when made, and notwithstanding the provisions of subsection 6.1.7, shall be
retained by Purchaser. Such estimates shall be subject to readjustment at such
time as the actual amounts of the real estate taxes and reimbursement payments
have been determined. In the case of special assessments payable in
installments, the installment for the fiscal year in which the Adjustment Point
occurs shall be apportioned by Equitable and Purchaser as provided above and
Purchaser shall be responsible for paying all subsequent installments thereof.
If any Tenant in occupancy at the Closing Date or Adjoining Owner is obligated
to pay any Impositions directly to the applicable taxing authority, such
Impositions shall not be apportioned.
6.4.2 Water and sewer charges, if any, payable by Equitable on the basis
of the period or periods for which the same are payable. If there are water
meters at any Mall, Equitable shall furnish readings to a date not more than
thirty (30) days prior to the Closing Date, and the unfixed meter charges and
the unfixed sewer charges, if any, based thereon for the inter vening time shall
be apportioned on the basis of such last readings. Any water and sewer charges
payable by Tenants in occupancy on the Closing Date or Adjoining Owners directly
to the entity or entities furnishing such services shall not be apportioned.
6.4.3 Utilities and fuel payable by Equitable, including without limitation
electricity and gas. Equitable shall endeavor to have the meters for such
utilities read the day on which the Adjustment Point occurs and will pay the
bills rendered to it on the basis of such readings. If Equitable does not obtain
such a meter reading with respect to any such utility, the adjustment therefor
shall be made on the basis of the most recently issued bills therefor which are
based on meter readings not earlier than thirty (30) days prior to the
Adjustment Point. Equitable will receive a credit in an amount equal to any cash
security deposits held by any utility companies (with interest thereon, if any,
in the amount equal to the amount accrued on such security deposits), and shall
assign to Purchaser at the Closing all of Equitable's right, title and interest
in and to such security deposits. Purchaser will make its own arrangements for
any surety bonds required by any utility companies within 10 Business Days
following the Closing Date, and Equitable will thereafter cancel any bonds
previously furnished. If fuel oil, propane or other fuel is used at any Mall,
Equitable shall deliver to Purchaser at the Closing statements of the suppliers
of such fuel dated within three days of the Adjustment Point setting forth the
quantity of fuel on hand and the cost paid by Equitable therefor, and Purchaser
shall pay to Equitable at the Closing the cost of such fuel (including taxes
thereon, if any) as shown on such statements. Charges for any utilities payable
by Tenants in occupancy on the Closing Date and Adjoining Owners directly to the
utility companies furnishing the same shall not be apportioned.
6.4.4 Charges payable by Equitable under the Other Agreements.
6.4.5 Contributions payable by Equitable to merchants' and other
associations, and to promotional and marketing funds and activities at the
Malls, it being understood that Equitable shall be required to fund any share of
pre-Closing marketing and promotion costs.
6.4.6 If on the Closing Date, there are pending any tax certiorari
proceedings and/or protests of real estate tax assessments of any Mall in
respect of the real estate taxes payable for the then-current tax fiscal year,
then (i) Equitable shall have the right to continue the prosecution of such
proceedings or protests and collect any refunds payable in respect thereof if on
the Closing Date more than half of such fiscal year shall have elapsed, and (ii)
Purchaser shall have the right to take over the prosecution of such proceedings
or protests and collect any refunds payable in respect thereof if on the Closing
Date half of such fiscal year or less shall have elapsed; provided, however,
that no such settlement shall be made without the prior written approval of the
other party hereto, such approval not to be unreasonably withheld or delayed.
Equitable shall have the right to continue to prosecute any such proceedings or
protests with respect to any prior periods without the participation or approval
of Purchaser, and Purchaser shall have the right to prosecute any such
proceedings or protests for any subsequent periods without the participation or
approval of Equitable. Within 30 days after receipt by Equitable of a refund for
the fiscal year in which the Closing occurs or any prior period, Equitable shall
submit to Purchaser a schedule showing the amount of such refund, net of the
costs and expenses of obtaining the same, which is payable to each Tenant then
in possession at such Mall and each Adjoining Owner, and shall remit to
Purchaser the aggregate of all amounts so payable. From time to time after the
Closing Purchaser shall, upon request, advise Equitable of the names of any
Tenants which are in occupancy at the Closing but cease to be in occupancy
thereafter. Purchaser shall promptly pay any amounts so received from Equitable
to the Tenants in possession and Adjoining Owners pursuant to and in accordance
with the schedule submitted to it by Equitable and shall indemnify and hold
Equitable harmless from and against all claims, demands, liabilities and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) asserted against, imposed on or incurred by Equitable by reason
of Purchaser's failure to make any such payment to a Tenant in possession or an
Adjoining Owner. Equitable shall indemnify and hold Purchaser harmless from and
against all claims, demands, liabilities and expenses (including, without
limitation, reasonable attorneys' fees) asserted against, imposed on or incurred
by Purchaser by reason of (i) any claim by a Tenant no longer in possession at
the applicable Mall that it is entitled to a portion of any such refund and (ii)
any claim by a Tenant in possession or Adjoining Owner at the applicable Mall
that it is entitled to more than the amount paid to it by
Purchaser in accordance with the schedule furnished by Equitable to Purchaser.
The amount of any refund obtained by Equitable or Purchaser in respect of the
fiscal year in which the Closing occurs as a result of any such proceeding or
protest, or the settlement thereof, net of costs and expenses payable by
Equitable or Purchaser in connection therewith and the amount of such refund
payable to Tenants and Adjoining Owners, shall be apportioned between Purchaser
and Equitable in the manner that real estate taxes for such year were
apportioned pursuant to subsection 6.4.1, and the portion of such amount
properly allocable to the period prior to the Adjustment Point shall be paid by
Purchaser to Equitable or the amount properly allocable to the period subsequent
to the Adjustment Point shall be paid by Equitable to Purchaser, as applicable.
6.4.7 Any accrued but unpaid interest and Trustee's and Rating Agency fees
in connection with the Existing Financing, but excluding fees payable in
connection with the obtaining of the Rating Agency Approval.
6.4.8 Any amounts deposited with the Trustee pursuant to the terms of the
Existing Financing.
6.4.9 Rent under the Ground Leases, including, without limitation,
percentage or overage rent, real estate taxes, insurance premiums and any other
amounts paid or to be paid by the ground lessee thereunder.
6.4.10 Any other items of income or expense of the Malls which, in
accordance with generally accepted business practices, should be apportioned
between Equitable and Purchaser.
6.5 Adjustment Statement. Equitable will deliver to Purchaser
prior to the Closing a copy of a proposed adjustment statement showing all
adjustments to be made at the Closing. The parties shall then endeavor to agree
upon such statement or any modification thereof so that it or such modification
can be executed by them at the Closing. To the extent that there is an error or
omission in any of the adjustments made pursuant to such statement and the same
is discovered following the Closing, the parties agree to rectify the same as
promptly as possible following such discovery.
6.6 Tenant Note Obligations. As listed and described on
Exhibit I, certain Tenants have executed promissory notes, in the amounts and
having terms as described therein, in payment of certain back Rent obligations.
Anything hereinabove contained to the contrary notwithstanding,
Equitable shall retain said notes as its sole property, shall be entitled, at
its election and discretion, to take whatever action it deems appropriate for
the enforcement thereof or collection of amounts due thereunder, all at
Equitable's sole cost and expense, and shall be entitled to retain, as its sole
property, any amount received by Equitable with respect thereto or as is
otherwise paid by any such Tenant and identified as having been paid with
respect to its note obligations. Any amounts collected by Purchaser following
Closing with respect to said Tenant note obligations shall promptly be remitted
to Equitable; provided, however, that no amounts received by Purchaser from any
such Tenant following the Closing shall be deemed to have been paid with respect
to any of such notes unless specifically identified by the Tenant as being paid
with respect thereto. Notwithstanding the provisions of any Lease or the
provisions of any such note (or any instrument or document further evidencing or
securing the obligations of the Tenant under any such note), in no event shall
Equitable have the right to seek cancellation of any such Tenant's Lease, or the
repossession of the premises demised to the Tenant, or the eviction of the
Tenant therefrom, in connection with any action or proceeding taken for the
enforcement or collection of any amount due from any Tenant under or with
respect to said notes.
6.7 Survival. The provisions of this Article 6 shall survive
the Closing. 7. Actions to be Taken and Documents to be Delivered at or
Prior to the Closing.
7.1 Equitable's Deliveries. At or prior to the Closing,
Equitable will deliver or cause to be delivered to Purchaser each of the
instruments and documents listed in the following provisions of this Section
7.1, executed and acknowledged where appropriate by Equitable and/or the other
party or parties thereto:
7.1.1 A special or limited warranty deed (each, a "Deed") with respect to
each Property, in proper statutory form for recording, conveying such Property
from Equitable to Purchaser, subject only to Permitted Encumbrances.
7.1.2 An assignment by Equitable to Purchaser with respect to each Ground
Lease of the tenant's interest under such Ground Lease in proper form for
recording and otherwise in the form of Exhibit N, subject to any modifications
required pursuant to the applicable Ground Lease.
7.1.3 A bill of sale with respect to each Mall conveying the applicable
Personal Property to Purchaser, which bill of sale shall contain no warranties,
express or implied,
by Equitable except that Equitable is the owner of and has not previously sold,
transferred or encumbered (other than for the Existing Financing) the Personal
Property.
7.1.4 An assignment, in proper form for recording and otherwise in the
form of Exhibit O (subject to any modifications required pursuant to the
applicable Operating Agreement), by Equitable to Purchaser of all of Equitable's
right, title and interest in, to and under each of the Operating Agreements.
7.1.5 An assignment, in the form attached as Exhibit P, by Equitable to
Purchaser with respect to each Mall of all of Equitable's right, title and
interest in, to and under all the applicable Leases, and in and to all security
deposits and any interest thereon which, under the terms of the applicable
Leases, is payable to the Tenants thereunder.
7.1.6 An assignment by Equitable to Purchaser with respect to each Mall
in the form attached as Exhibit Q of all of Equitable's right, title and
interest in, to and under the applicable Other Agreements.
7.1.7 A "General Assignment" by Equitable to Purchaser with respect to
each Mall in the form attached as Exhibit R of all of Equitable's right, title
and interest in and to the following, if any: (i) all warranties and guaranties
of manufacturers, suppliers and contractors, to the extent the same are
assignable, (ii) all permits of Governmental Authorities, and licenses and
approvals of private utilities and others, required for or necessary to the
operation and maintenance of such Mall, to the extent the same are assignable,
(iii) all cash security deposits held by any utility with respect to such Mall
(plus the interest accrued thereon, if any), (iv) all names, trade names,
trademarks, service marks and logos (and all good will associated therewith) by
which the Mall or any part thereof may be known or which may be used in
connection therewith, together with all registrations, if any, for the same and
other intangible property relating thereto, and all telephone numbers and
listings employed in connection with the Mall, (v) all site plans, surveys,
plans or specifications and floor plans relating to the Mall, (vi) all
catalogues, booklets, manuals, files, logs, records, correspondence, Tenant
lists, Tenant prospect lists, Tenant histories, brochures and materials,
advertisements and other items with respect to the Mall and (vii) all
promotional and marketing fund accounts.
7.1.8 Equitable's Copies of the Mortgage and other documents listed in
Exhibit B comprising the Mortgage.
7.1.9 Equitable's Copies of the Operating Agreements.
7.1.10 The Required Consents and any consents required under the Other
Agreements for the assignment thereof by Equitable to Purchaser; provided,
however, that it shall not be a condition to Purchaser's obligations under this
Agreement that any consent required under any Other Agreement for the assignment
thereof to Purchaser shall be obtained, but Equitable shall be obligated to pay
and indemnify Purchaser from and against any damages, penalties or other sums
that may be payable to the other party to such Other Agreement by reason of
Equitable's failure to assign the same to Purchaser or to obtain the consent of
such other party to such assignment, which obligation shall survive the Closing.
7.1.11 Equitable's Copies of the Leases and the Ground Leases.
7.1.12 Equitable's Copies of the Other Agreements.
7.1.13 An executed copy of an agreement between Equitable and the
Managing Agent terminating the Management Agreement as of the Closing Date, the
form and content of which shall be reasonably satisfactory to Purchaser and
shall in any event provide that Purchaser shall have no liability with respect
to any employees of Managing Agent at any Mall or who render services with
respect to any Mall.
7.1.14 A notice to Tenants, and a notice to Adjoining Owners, notifying
each of the sale of the applicable Mall to Purchaser as of the Closing Date, in
form reasonably satisfactory to Purchaser.
7.1.15 The certificate of Equitable provided for in subsection 8.6.3.
7.1.16 A certificate that Equitable is not a "foreign person" within the
meaning of ss. 1445 of the Internal Revenue Code of 1986, as amended.
7.1.17 Counterparts of an adjustment statement summarizing all adjustments
in respect of the Purchase Price made at the Closing pursuant to Article 6.
7.1.18 All sales tax, transfer tax and other tax returns, if any, which
Equitable is required by law to execute and deliver, either individually or
together with Purchaser, to any Governmental Authority as a result of the sale.
7.1.19 A copy of the resolutions of the Investment or Separate Account
Committee of Equitable, certified to by the secretary or an assistant secretary
of Equitable, which authorize (i) the transactions contemplated by this
Agreement, and (ii) the execution by Equitable
of this Agreement and the documents, instruments and agreements to be executed
and delivered by Equitable pursuant hereto, together with an incumbency
certificate as to the authority of the person(s) executing and delivering this
Agreement and such documents, instruments and agreements on behalf of Equitable.
7.1.20 A good standing certificate from the Insurance Department of the
State of New York for Equitable, dated within 15 days of the Closing Date, and
good standing certificates issued in respect of Equitable by the Secretary of
State, Insurance Commission or State Corporation Commission, as the case may be,
of each State in which a Mall is located, dated within 30 days of the Closing
Date.
7.1.21 All records and files which are in the possession of Equitable, ERE
or the Managing Agent relating to the current operation and maintenance of the
Malls, including without limitation, to the extent in the possession of such
parties, current tax bills, current water, sewer, utility and fuel bills,
payroll records, billing records for Tenants and Adjoining Owners, repair and
maintenance records and the like which affect or relate to the Malls, plans,
drawings, blue prints and specifications for each of the Malls, all warranties
and guaranties of manufacturers, suppliers and contractors in effect on the
Closing Date, certificates of occupancy and other licenses and permits and keys
to the Malls. Delivery of such materials, as well as the documents referred to
in subsections 7.1.9, 7.1.11 and 7.1.12, shall be effectuated pursuant to
arrangements made by the Managing Agent and the property manager or managers
retained by Purchaser to operate the Malls.
7.1.22 An assignment by Equitable to Purchaser of all of Equitable's right,
title and interest in, to and under the interest rate cap agreements dated May
24, 1996 between Equitable and Goldman Sachs Capital Markets, L.P., as assigned
by Goldman Sachs Capital Markets, L.P. to Goldman Sachs Mitsui Marine Derivative
Products, L.P., in form reasonably acceptable to Purchaser.
7.1.23 All vehicle titles assigned to Purchaser, duly endorsed by
Equitable or the Managing Agent, as required.
7.1.24 If applicable, a written direction to Escrow Agent to deliver the
Deposit to Equitable and the Income to Purchaser.
7.1.25 A letter from the Managing Agent to Purchaser in which the
Managing Agent agrees to honor all gift certificates issued at the Malls prior
to the Closing Date and presented to Tenants and Adjoining Owners after the
Closing Date.
7.1.26 All other instruments and documents, if any, to be executed,
acknowledged and/or delivered by Equitable pursuant to any of the other
provisions of this Agreement.
7.2 Purchaser's Deliveries. At or prior to the Closing,
Purchaser shall deliver or cause to be delivered to Equitable or the other
parties indicated below each of the payments, documents and instruments listed
in this Section 7.2, such instruments and documents to be executed and
acknowledged where appropriate:
7.2.1 The cash portion of the Remaining Balance, as set forth in Section 3.1.
7.2.2 All sales tax, transfer tax and other tax returns, if any, certificates
of value and similar documents which Purchaser is required by law to execute and
deliver, either individually or together with Equitable, to any Governmental
Authority as a result of the sale.
7.2.3 Counterparts of each of the instruments and documents listed in
subsections 7.1.2, 7.1.4, 7.1.5 and 7.1.6 (in order to evidence Purchaser's
assumption of the Ground Leases, Operating Agreements, Leases and Other
Agreements) and in subsections 7.1.17, 7.1.18 and, if applicable, 7.1.24.
7.2.4 Such instruments and documents as are required by the Mortgage or
any of the other loan documents, or as may be required by the Rating Agencies,
in connection with Purchaser's assumption of the Mortgage.
7.2.5 A copy of resolutions of the board of directors of each general partner
of Purchaser's general partners, in each case certified by a Secretary or an
Assistant Secretary, which authorize (both on behalf of Purchaser and partners
of Purchaser) (i) the transactions contemplated by this Agreement, and (ii) the
execution of this Agreement and the documents, instruments and agreements to be
executed and delivered by Purchaser pursuant hereto, together with an incumbency
certificate as to the authority of the person(s) executing and delivering this
Agreement and such documents, instruments and agreements on behalf of Purchaser.
In addition,
copies of resolutions of the board of directors of each of Simon DeBartolo
Group, Inc. and The Macerich Company approving the transaction provided for in
this Agreement.
7.2.6 A good standing certificate for each of the general partners of
Purchaser, and each general partner of such general partners from the
Secretaries of State of the states of their respective incorporation, dated
within fifteen days of the Closing Date.
7.2.7 All other payments, instruments and documents, if any, to be
executed, acknowledged and/or delivered by Purchaser pursuant to any of the
other provisions of this Agreement.
7.3 Access to Records. Purchaser agrees for a period of seven
years following the Closing it will retain and make available to Equitable or to
any Governmental Authority having jurisdiction over Equitable for inspection and
copying, at Equitable's expense, on reasonable advance notice at reasonable
times at the place in the continental United States where Purchaser then
maintains its records in respect of the Malls, all documents and records
concerning the Malls delivered by Equitable, ERE or the Managing Agent in
connection with the Closing. If Purchaser shall desire to destroy any such
records prior to the expiration of such seven-year period, Purchaser shall first
notify Equitable and permit Equitable to take delivery of the records in
question; and if Equitable fails to do so within 90 days after such notice from
Purchaser, Purchaser shall then be free to destroy the same. The provisions of
this Section 7.3 shall survive the Closing.
8. Malls Conveyed As Is; Representations and Warranties of Equitable.
8.1 No Implied Representations. Purchaser acknowledges that except as
expressly set forth in this Agreement and in the documents and instruments
delivered by Equitable at the Closing, neither Equitable nor any agent or
representative or purported agent or representative of Equitable has made,
and Equitable is not liable for or bound in any manner by, any express or
implied warranties, uaranties, promises, statements, inducements,
representations or information (including, without limitation, any information
set forth in offering materials heretofore furnished to Purchaser) pertaining
to the Malls or any of them, the physical condition thereof, environmental
matters, the income, expenses or operation thereof or the Personal Property or
Intangible Personal Property, the uses which can be lawfully made of any
Property under applicable zoning or other laws or any other matter or thing with
respect to the Malls, including, without limitation, any
existing or prospective Leases, Operating Agreements or Other Agreements.
Without limiting the foregoing, Purchaser acknowledges and agrees that, except
as expressly set forth in this Agreement and in the documents and instruments
delivered by Equitable at the Closing, Equitable is not liable for or bound by
(and Purchaser has not relied upon) any verbal or written statements,
representations, real estate brokers' "set-ups" or offering materials or any
other information respecting the Malls furnished by Equitable or any broker,
employee, agent, consultant or other person representing or purportedly
representing Equitable.
8.2 "As-Is" Purchase. Purchaser represents that it has
inspected the Malls, the physical and environmental condition and the uses
thereof and the fixtures, equipment and Personal Property included in this sale
to its satisfaction, that it has independently investigated, analyzed and
appraised the value and profitability thereof, the creditworthiness of Tenants
and Adjoining Owners and the presence of hazardous materials, if any, in or on
the Malls, that it has reviewed the Ground Leases, the Mortgage, all other
documents and instruments that evidence or secure the Existing Financing, the
Leases listed on Exhibit K annexed hereto, the Operating Agreements, the Other
Agreements and all other documents referred to herein, that it is thoroughly
acquainted with all of the foregoing and that Purchaser, in purchasing the
Malls, is relying upon its own investigations, analyses, studies and appraisals
and not upon any information provided to Purchaser by or on behalf of Equitable
with respect thereto (except to the extent covered by any warranties or
representations of Equitable set forth in this Agreement, in any Seller's
Estoppel Letter or in any other document or instrument delivered by Equitable in
connection with the Closing). Purchaser agrees to accept the Malls "as is" and
in their condition as at the date hereof, reasonable wear and tear between the
date hereof and the Closing Date excepted, and Purchaser shall assume the risk
that adverse matters, including but not limited to, construction defects and
adverse physical and environmental conditions may not have been revealed by
Purchaser's investigations; and Purchaser, upon closing, shall be deemed to have
waived, relinquished and released Equitable from and against any and all claims,
demands, causes of action, losses, damages, liabilities, costs and expenses
(including, attorneys' fees and court costs) of any and every kind or character,
known or unknown, which Purchaser might have asserted or alleged against
Equitable by reason of or arising out of any latent or patent construction
defects or physical conditions, violations of applicable laws (including,
without limitation,
environmental laws) and any and all other acts, omissions, events, circumstances
or matters with respect to the Malls, subject, however, to Purchaser's rights
and remedies provided for in this Agreement in the event of the breach of any of
Equitable's warranties and representations con tained herein, in any Seller's
Estoppel Letter or in any other document or instrument delivered by Equitable in
connection with the Closing, and subject to the next to last sentence of this
Section 8.2. Nothing contained in this Section 8.2 shall be deemed to constitute
a waiver by Purchaser of its rights at law or in equity, if any, to seek
contribution or other recourse against Equitable in the event of a claim
asserted against Purchaser by a third party with respect to liabilities arising
from or relating to any circumstances or conditions which exist at or in respect
of the Malls prior to the Closing. The provisions of this Section 8.2 shall
survive the Closing.
8.3 Representations and Warranties of Equitable. Equitable
hereby represents and warrants to Purchaser as follows:
8.3.1 Equitable is a corporation duly organized,
validly existing and in
good standing under the laws of the State of New York. Equitable has full power
and authority to enter into this Agreement and to perform its obligations
hereunder in accordance with the terms hereof. The execution, delivery and
performance by Equitable of this Agreement and the documents to be executed by
Equitable pursuant hereto have been duly and validly authorized by all necessary
corporate action on the part of Equitable. This Agreement constitutes the legal,
valid and binding obligation of Equitable, enforceable against Equitable in
accordance with its terms, subject as to enforceability to the effect of
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent conveyance or other similar laws affecting the rights of creditors
generally and to general principles of equity. No bankruptcy, insolvency,
reorganization, arrangement or moratorium proceeding or allegation of fraudulent
conveyance is now pending or threatened against Equitable or any of the Malls.
8.3.2 Equitable is not a "foreign person" as defined in Section 1445 of the
Internal Revenue Code of 1986, as amended.
8.3.3 Execution by Equitable of this Agreement and all documents provided
for herein to be executed by Equitable, and performance by Equitable of the
provisions hereof and thereof, will not violate or result in any breach of, or
constitute a default under, any law, regulation, rule, order or judgment of any
governmental authority to which Equitable is subject,
or any agreement, indenture, mortgage, deed of trust, bank loan, credit
agreement or other instrument to which Equitable is a party or by which
Equitable is bound (subject to Purchaser's qualifying to take title to the Malls
subject to the Mortgage thereon in accordance with the terms thereof, and to
Equitable's obtaining the consents listed on Exhibit W annexed hereto (the
"Required Consents") and any consents required under the Other Agreements,
subject to the provisions of Section 7.1.10), where such breach or default might
adversely affect Equitable's ability to perform its obligations hereunder or
under such other documents. Equitable is not in default under any note, evidence
of indebtedness, lease, contract, license, undertaking or other agreement where
the liability thereunder might adversely affect Equitable's ability to perform
its obligations under this Agreement or any document executed by Equitable
pursuant hereto.
8.3.4 With respect to the Existing Financing:
8.3.4.1 Exhibit B annexed hereto is a true, correct and complete list
of all documents which evidence and secure the Existing Financing.
8.3.4.2 The copies of such documents which have been made
available or delivered to Purchaser for review are true, correct and complete
copies thereof.
8.3.4.3 The Existing Financing is in full force and effect on the date
hereof. Equitable is current in all payments of principal and interest due under
the Existing Financing as of the date hereof. Equitable has complied in all
material respects with the terms of the documents which evidence and secure the
Existing Financing. Equitable has received no written notice that is still
outstanding from the mortgagee thereunder or any holder of notes evidencing the
same that any default on the part of Equitable exists thereunder. None of the
documents which evidence and secure the Existing Financing has heretofore been
amended or supplemented (whether orally or in writing) except as shown in
Exhibit B.
8.3.5 With respect to the Leases:
8.3.5.1 Exhibit K annexed hereto is a true, correct and complete list
of all of the Leases in effect on December 15, 1997 (except those Leases
consisting of licenses and concession agreements which have terms, including any
rights to renew or extend, not in excess of four (4) months), setting forth,
with respect to each Lease: (i) the date thereof and the date of each amendment
or supplement thereto; (ii) the name of the current Tenant thereunder; (iii) the
premises demised thereby; (iv) the commencement and expiration dates of the
current term
thereof; (v) the monthly amount of minimum rent currently payable thereunder;
(vi) the monthly amount of common area maintenance and real estate tax
contributions currently payable thereunder; and (vii) the amount, if any, of the
security deposit held by Equitable thereunder. As of the date hereof, there are
no leases, licenses or other rights of occupancy or use of any portion of the
Malls other than the Leases set forth in Exhibit K, except subleases,
concessions or license agreements which may have been entered into by Tenants or
subtenants of Tenants (as sublessor, grantor or licensor, as the case may be),
Leases consisting of licenses and concession agreements which have terms,
including any rights to renew or extend, not in excess of four (4) months and
Operating Agreements. None of the Leases has been modified, amended or
supplemented (whether orally or in writing) except as set forth in Exhibit K. No
Tenant or Adjoining Owner has the option to purchase any Mall or a right of
first refusal in respect of the sale of any Mall to a third party.
8.3.5.2 True, correct and complete copies of all of the Leases, and
all amendments and supplements thereto, listed in Exhibit K annexed hereto have
heretofore been made available and/or delivered to Purchaser for review.
8.3.5.3 Exhibit S annexed hereto is a true, correct and complete list
of Tenants and Adjoining Owners that are delinquent in the payment of Rents as
of December 15, 1997, which schedule sets forth the information specified in
subsection 6.1.1.
8.3.5.4 Except as set forth in Exhibit K annexed hereto, to
Equitable's knowledge each of the Leases listed in Exhibit K is in full force
and effect as of the date hereof. Equitable has received no written notice from
any Tenant under a Lease listed in Exhibit K which is still outstanding (i) that
Equitable has defaulted in performing any of its material obligations under such
Lease or (ii) that such Tenant is entitled to any reduction in, refund of or
counterclaim or offset against, or is otherwise disputing, any Rents paid,
payable or to become payable by such Tenant thereunder or is entitled to cancel
or terminate such Lease or to be released of any of its material obligations
thereunder, except as set forth in Exhibit K. With the exception of
delinquencies in the payment of Rents, to Equitable's knowledge no material
default exists under any Lease by the Tenant thereunder except as set forth in
Exhibit K.
8.3.5.5 All leasing commissions in respect of the current terms of
Leases listed in Exhibit K which were entered into on or before the date hereof
have been, or by the Closing Date will have been, paid in full by Equitable.
8.3.5.6 All tenant alterations which Equitable is obligated to
perform at its expense pursuant to its obligations under the Leases listed in
Exhibit K on or prior to the date hereof in order to prepare space for occupancy
by Tenants have been performed by Equitable, and all allowances payable to such
Tenants in lieu of such work which were payable in respect of such Leases prior
to the date hereof have been paid.
8.3.6 With respect to the Operating Agreements:
8.3.6.1 Exhibit D annexed hereto is a true, correct and complete list
of all documents which comprise all of the Operating Agreements, setting forth
the date of each such Operating Agreement and each amendment or supplement
thereto and the names of the parties thereto.
8.3.6.2 True, correct and complete copies of all of the Operating
Agreements, and all amendments and supplements thereto, listed on Exhibit D
annexed hereto have heretofore been made available and/or delivered to Purchaser
for review.
8.3.6.3 Each Operating Agreement is in full force and effect as of
the date hereof. None of the Operating Agreements has been modified, amended or
supplemented (whether orally or in writing) except as set forth in Exhibit D.
Equitable has received no written notice from any party to an Operating
Agreement which is still outstanding (i) that Equitable has defaulted in
performing any of its material obligations under such Operating Agreement, or
(ii) that such party is entitled to any reduction in, refund of or counterclaim
or offset against, or is otherwise disputing, any Rents paid, payable or to
become payable thereunder by such party or is entitled to cancel or terminate
such Operating Agreement or to be relieved of any of its material obligations
thereunder, except as set forth in Exhibit D. With the exception of
delinquencies in the payment of Rents which are listed in Exhibit S, to
Equitable's knowledge no material default exists under any Operating Agreement
on the part of the other parties thereto, except as set forth in Exhibit D.
8.3.6.4 There is no unpaid obligations of Equitable under or in
respect of any of the Operating Agreements for leasing or similar commissions or
for the performance of work (or payment of allowances in lieu thereof) in the
nature of tenant alterations.
8.3.7 With respect to the Other Agreements:
8.3.7.1 Exhibit E annexed hereto is a true, correct and complete list
of all material Other Agreements affecting each Mall, setting forth, with
respect to such Other Agreements, the date thereof and of each amendment or
supplement thereto, the name of each party thereto (other than Equitable) and a
brief description of the services provided thereunder or property covered
thereby. Except as set forth in Exhibit E, there are no material Other
Agreements, except those that can be terminated by Equitable on not more than
thirty (30) days' notice without penalty.
8.3.7.2 True, correct and complete copies of all of the Other
Agreements, and all amendments and supplements thereto, listed on Exhibit E have
heretofore been made available and/or delivered to Purchaser for review.
8.3.7.3 To Equitable's knowledge, each of the material Other
Agreements is in full force and effect on the date hereof, and Equitable has
received no written notice from any party to any material Other Agreement which
is still outstanding that Equitable has defaulted in performing any of its
material obligations under such Other Agreement. None of the Other Agreements
listed on Exhibit E has heretofore been amended or supplemented (whether orally
or in writing) except as set forth on Exhibit E.
8.3.8 With respect to the Ground Leases:
8.3.8.1 Exhibit C annexed hereto is a true, correct and complete list
of all documents which comprise all of the Ground Leases, setting forth the date
of each such Ground Leases and each amendment or supplement thereto and the
names of the parties thereto.
8.3.8.2 The copies of the Ground Leases and all amendments and
supplements thereto heretofore made available and/or delivered to Purchaser for
review are true, correct and complete copies thereof.
8.3.8.3 Each Ground Lease is in full force and effect as of the date
hereof. None of the Ground Leases has been modified, amended or supplemented
(whether orally r in writing) except as set forth in Exhibit C. Equitable has
complied in all material respects with
the terms of the Ground Leases. Equitable has received no written notice from
the lessor under any Ground Lease that Equitable has defaulted in performing any
of its obligations under such Ground Lease.
8.3.9 Equitable has not received (i) any written notice of any Violation with
respect to any Mall from any Governmental Authority which has not heretofore
been complied with except as set forth in Exhibit L, or (ii) any written notice
from any Governmental Authority which is still outstanding of any failure by
Equitable to obtain any certificate, permit, license or approval with respect to
any Mall, or any intended revocation, modification or cancellation of any of the
same.
8.3.10 Except as set forth in Exhibit T, no condemnation, eminent domain
or similar proceeding in which Equitable has been served with process or of
which Equitable has otherwise received written notice is pending with respect to
all or any part of any Mall, and Equitable has no knowledge that any such
proceeding is threatened or contemplated.
8.3.11 Equitable has not received any written notice which is still
outstanding of any violation of any restriction, condition, covenant or
agreement contained in any easement, restrictive covenant or any similar
instrument or agreement which constitutes a Permitted Encumbrance.
8.3.12 There is no pending litigation against Equitable affecting any Mall
in respect of which Equitable has been served with process or otherwise received
written notice except for (i) claims for personal injury, property damage or
worker's compensation for which the insurance carrier has not disclaimed
liability and in which the amounts claimed do not exceed the applicable
insurance policy limits, and (ii) other litigation shown on Exhibit M annexed
hereto. Equitable has no knowledge of any threatened litigation affecting any
Mall except litigation of the nature described in clause (i) above. Equitable
shall be responsible for indemnifying and holding Purchaser harmless from and
against all costs, expenses, damages and other amounts payable in connection
with such litigation and claims; provided, however, that if Equitable collects
any Rents in any such litigation which are allocable to periods after the
Adjustment Point, the amount payable to Purchaser in respect of such Rents shall
be net of costs of collection properly allocable thereto.
8.3.13 All fixtures, equipment and articles of personal property attached
or appurtenant to or used in connection with any Mall and located thereat,
except those belonging to Tenants, subtenants of Tenants, Adjoining Owners and
independent contractors or utility companies, and items which are leased by
Equitable, are owned by Equitable, free from all liens and encumbrances. A
schedule of the material items of personal property included in the sale, which
in any event includes all items of personal property having a cost of $5,000 or
more, is attached hereto as Exhibit X, which Exhibit separately identifies any
leased personal property, the leases for which are listed on Exhibit E annexed
hereto.
8.3.14 Equitable has no employees or agreements with any employees who
will continue performing services after the Closing in connection with the
operation of the Mall. All persons who regularly perform services at the Mall
are employees of the Managing Agent or other independent contractors.
8.3.15 Exhibit J annexed hereto lists all environmental reports relating to
Hazardous Materials at the Malls which Equitable caused to be prepared and
heretofore delivered to Purchaser. As used herein, the term "Hazardous
Materials" means (i) toxic wastes, hazardous materials, hazardous substances or
other substances which are prohibited or regulated by any federal, state or
local law or regulation addressing environmental protection or pollution control
matters, (ii) hazardous levels of asbestos, (iii) polychlorinated biphenyls
(PCBs) and (iv) oil, petroleum and their by-products. Except as disclosed or as
may be disclosed in the reports listed on Exhibit J, and except with respect to
cleaning fluids and similar substances which may be used in the routine
operation or maintenance of the Malls, (a) Equitable has not itself caused any
Hazardous Materials to be utilized or stored in or on any Mall, or to be
disposed of therefrom, except in accordance with the provisions of Legal
Requirements applicable to Hazardous Materials and (b) to Equitable's knowledge,
no Hazardous Materials are present in, on or under any Mall in quantities or
amounts which would be in violation of Legal Requirements applicable thereto.
Equitable has not received any written notice from any Governmental Authority or
other person or entity that any condition exists at any Mall which constitutes
or has resulted in a violation of any Legal Requirement relating to Hazardous
Materials or that any claim is being asserted against Equitable by reason of any
such violation.
8.3.16 Equitable has not received any written notice from any insurer of
the Malls requiring any work to be performed as a condition to the renewal of
any insurance policy carried by Equitable in respect thereof which has not
heretofore been complied with.
8.3.17 The audited financial statements for Separate Account 174 for the
calendar years 1994 through 1996 were prepared in accordance with generally
accepted accounting principles, consistently applied, and fairly and accurately
reflected in all material respects the financial condition of the Malls for the
periods covered thereby. All unaudited interim statements of operation of the
Malls for any portion of 1997 heretofore or hereafter delivered by Equitable to
Purchaser fairly and accurately reflect, or will reflect, in all material
respects the revenues and expenses of each of the Malls for the periods covered
thereby, subject to year-end adjustments made in the ordinary course in
connection with the preparation of the audited financial statements for 1997.
8.4 Effect of Estoppels. If prior to the Closing the lessor
under any Ground Lease, the Trustee under the Existing Financing, a Tenant or an
Adjoining Owner has provided an estoppel letter to Purchaser which sets forth
information with respect to any item as to which Equitable has made a
representation or warranty, then Equitable's representation and warranty in
respect of such information shall thereafter be null and void and of no further
force or effect, such representation and warranty shall not be deemed to have
been remade as of the Closing and Purchaser shall rely solely on the information
set forth in such estoppel letter, subject to Section 17.3.
8.5 Condition of the Malls. Notwithstanding anything to the
contrary set forth in subsection 8.3.4.3 or 8.3.8.3, the representations and
warranties contained therein to the effect that Equitable has complied in all
material respects with the documents which evidence or secure the Existing
Financing or with the terms of the Ground Leases not apply to any obligation on
the part of Equitable, or any default or alleged default based on Equitable's
failure, to maintain the Malls, or any of them, in good repair and condition or
to make any replacements or improvements thereto, it being understood that
Purchaser has agreed to accept the Malls in their "as-is" physical condition,
although nothing in this Section 8.5 shall be deemed to constitute a waiver by
Purchaser of its rights at law or in equity, if any, to seek contribution or
other recourse against Equitable in the event of a claim asserted against
Purchaser by a third party with respect to liabilities arising
from or relating to any circumstances or conditions which exist at or in respect
of the Malls prior to closing. The provisions of this Section 8.5 shall survive
the Closing.
8.6 Survival of Equitable's Warranties, etc.
8.6.1 All of Equitable's representations and warranties contained in this
Article 8 (other than those contained in subsections 8.3.1, 8.3.2 and 8.3.3,
which shall survive the Closing without limitation as to time), and all
certifications, representations and warranties made by Equitable in Equitable's
certificate delivered pursuant to Section 8.6.3 or in any Seller's Estoppel
Letter delivered by Equitable to Purchaser, shall (except as otherwise provided
in Section 8.4) survive until one (1) year after the date of the Closing;
provided, however, that Equitable's liability for any breach of such warranties,
representations and certifications shall not expire as to any breach or alleged
breach thereof if notice of such breach or alleged breach is given by Purchaser
to Equitable prior to one (1) year after the date of the Closing and, if such
notice is given, legal proceedings are instituted in respect of such breach or
alleged breach within six (6) months after such notice is given.
8.6.2 Notwithstanding anything to the contrary set forth in this Article 8,
Equitable shall have no liability to Purchaser for breach of any warranty and
representation set forth in this Article 8 or in any Seller's Estoppel Letter or
in the certificate provided for in subsection 8.6.3 unless and except to the
extent that the damages due to Purchaser by reason of all such breaches together
with damages resulting from any adverse facts and matters described in Section
17.3, exceed $5,000,000, and in no event shall Equitable be liable to Purchaser
for consequential or punitive damages in respect of any such breach. For the
purposes of this subsection 8.6.2, matters disclosed in any estoppel letter
which, under the terms of this Agreement or any instrument or document delivered
pursuant hereto, it is Equitable's obligation to pay or rectify, shall not be
applied against said $5,000,000.
8.6.3 All of Equitable's representations and warranties set forth in this
Article 8 shall be deemed to have been remade on and as of the Closing Date and
Equitable shall deliver to Purchaser at the Closing a certificate in the form of
Exhibit Y, which certificate shall be subject to all limitations on liability
and survival, limitations on Equitable's knowledge and other matters set forth
elsewhere in this Agreement (to the same effect as if the statements made in
such certificate were included in Section 8.3). Notwithstanding the foregoing,
if any matter or
event shall have occurred between the date hereof and the date of the Closing
which does not result from any intentional act or omission of Equitable, that is
not permitted under any provisions of this Agreement and which makes any such
warranty or representation untrue in any material respect, Equitable shall have
the right to disclose such matter or event in the certificate above provided
for, and if Equitable does so, Equitable shall not be liable to Purchaser
following the Closing for the breach of the warranty or representation in
question which results from the occurrence of such matter or thing, but in no
event shall Purchaser be obligated to close hereunder unless the conditions
precedent to Purchaser's obligation to close set forth in this Agreement
(including, without limitation, in Section 11.1) shall have been fulfilled.
8.6.4 Notwithstanding anything to the contrary set forth in this Article 8
or elsewhere in the Agreement, if prior to the Closing Purchaser has or obtains
knowledge that any of Equitable's warranties or representations set forth in
this Article 8, or any of Equitable's certifications, warranties or
representations made in Equitable's representation certificate pursuant to
Section 8.6.3 or in any Seller's Estoppel Letter, is untrue in any respect, and
Purchaser nevertheless proceeds with the Closing, then the breach by Equitable
of the warranties, representations or certifications as to which Purchaser shall
have such knowledge shall be waived by Purchaser and Equitable shall have no
liability to Purchaser or its successors or assigns in respect thereof. For the
purposes of this subsection 8.6.4, Purchaser shall be deemed to have or to have
obtained knowledge of any such matter or thing only if such matter or thing (i)
was set forth in written studies, reports, memoranda, letters or other documents
furnished to Purchaser by or on behalf of Equitable (including, without
limitation, by Equitable's attorneys, ERE or the Managing Agent), by any
affiliates, agents or representatives of Purchaser, by third-party consultants
retained by Purchaser or by Purchaser's attorneys (including in-house
attorneys), or (ii) was otherwise known to any of Bruce Gobeyn, Arthur Massing,
Donald Gandolf and Cheryl Arnold.
9. Representations and Warranties of Purchaser.
9.1 Purchaser's Warranties. Purchaser warrants and represents to Equitable as
follows:
9.1.1 Purchaser is a general partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
9.1.2 Each of Purchaser and its general partner has full power and
authority to enter into this Agreement and perform its obligations hereunder in
accordance with the terms hereof. The execution, delivery and performance of
this Agreement by Purchaser and the documents to be executed by Purchaser
pursuant hereto have been duly and validly authorized by all necessary
partnership action on the part of Purchaser and by all necessary partnership
action on the part of its partners and by all necessary corporate action on
behalf of the general partner of each of its partners. This Agreement
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject as to enforceability to
the effect of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws affecting the rights of creditors
generally and to general principles of equity. No bankruptcy, insolvency,
reorganization, arrangement or moratorium proceeding, or allegation of
fraudulent conveyance, is now pending or threatened against Purchaser.
9.1.3 Execution by Purchaser of this Agreement and all documents
provided for herein to be executed by Purchaser, and performance by Purchaser of
the provisions hereof and thereof, will not violate or result in any breach of,
or constitute a default under, any law, regulation, order or judgment of any
governmental authority to which Purchaser or either of its partners is subject,
or any agreement, indenture, mortgage, deed of trust, bank loan, credit
agreement or any other instrument to which Purchaser or either of its partners
is a party or by which Purchaser or either of its partners is bound, where such
breach or default might adversely affect Purchaser's or either of its partners'
ability to perform its or their obligations hereunder or under such other
documents. None of Purchaser or its partners is in default under any note,
evidence of indebtedness, lease, contract, license, undertaking or other
agreement where the liability thereunder might adversely affect Purchaser's or
its partners' ability to perform its or their obligations under this Agreement
or such other documents.
9.1.4 Purchaser is not utilizing the assets of any employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended) for or in connection with its acquisition of the Malls.
9.2 Remaking of Warranties; Survival. All of Purchaser's
representations and warranties set forth in this Article 9 shall be deemed to
have been remade on and as of the Closing
Date. Such representations and warranties, as remade, shall survive the Closing
without limitation as to time.
10. Conditions to the Obligation of Equitable to Close. The obligation
of Equitable to close under this Agreement is expressly conditioned upon the
fulfillment by and as of the Closing Date of each of the conditions listed
below, provided that Equitable, at its election, may waive all or any of such
conditions, which election shall be conclusively evidenced by Equitable's
proceeding with and completing the closing of the transaction provided for
herein:
10.1 Purchase Price. Purchaser shall have paid to Equitable
the Purchase Price as provided in Article 3 hereof and all other amounts due to
Equitable hereunder.
10.2 Representations and Warranties. All representations and
warranties of Purchaser set forth in Article 9 shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of such
date.
10.3 Performance of Obligations. Purchaser shall have executed
and/or delivered or caused to be delivered at the Closing all documents and
executed counterparts of documents and instruments required by this Agreement to
be executed and/or delivered by Purchaser and shall have taken all other actions
and fulfilled all other covenants and conditions required of Purchaser under
this Agreement.
10.4 Required Consents. All of the Required Consents shall
have been obtained, to the extent failure to obtain the same would result in any
material liability to Equitable.
10.5 Rating Agency Approval. Subject to the provisions of
subsection 3.3.1, the parties shall have received the Rating Agency Approval, to
the extent failure to obtain the same would result in any material liability to
Equitable.
If any of the foregoing conditions is not satisfied and, as a result,
the Closing does not occur, the Deposit or Letter(s) of Credit shall be returned
to Purchaser, this Agreement shall terminate and neither party shall have any
further rights or obligations under this Agreement except as otherwise
specifically provided herein; provided, however, that if any such condition is
not satisfied due to Purchaser's default, Equitable shall have the rights
provided for in Section 16.1.
11. Conditions to the Obligation of Purchaser to Close. The obligation
of Purchaser to close under this Agreement is expressly conditioned upon the
fulfillment by and as of the Closing
Date of each of the conditions listed below, provided that Purchaser, at its
election, may waive all or any of such conditions, which election shall be
conclusively evidenced by Purchaser's proceeding with and completing the closing
of the transaction provided for herein:
11.1 Representations and Warranties. All representations and
warranties of Equitable set forth in Section 8.3 shall be true and correct on
and as of the Closing Date as if made on and as of such date (without reference
to any modifications thereof contained in the certificate delivered by Equitable
to Purchaser pursuant to subsection 8.6.3), except for breaches thereof, if any,
which do not in the aggregate have a material adverse affect on the value of the
Malls taken as a whole.
11.2 Performance of Obligations. Equitable shall have executed
and/or delivered or caused to be delivered at Closing all of the documents and
instruments required by this Agreement to be executed and/or delivered by
Equitable and shall have taken all other actions and fulfilled all other
covenants and conditions required of Equitable under this Agreement in all
material respects.
11.3 Title. Purchaser shall not elect or be entitled to elect
to terminate this Agreement pursuant to Section 14.1 and the Title Company shall
be prepared to issue to Purchaser one or more owner's policies of title
insurance for the Malls in an aggregate amount equal to the Purchase Price,
subject only to the Permitted Encumbrances.
11.4 Estoppels. Purchaser shall have received the estoppels
required by subsections 17.1.1, 17.1.2 and 17.1.4 and the condition set forth in
Section 17.3 shall be satisfied.
11.5 Required Consents. All of the Required Consents shall
have been obtained.
11.6 Rating Agency Approval. Subject to the provisions of
subsection 3.3.1, the parties shall have received the Rating Agency Approval.
If any of the foregoing conditions is not satisfied and, as a result,
the Closing does not occur, the Deposit or Letter(s) of Credit shall be returned
to Purchaser, this Agreement shall terminate and neither party shall have any
further rights or obligations under the Agreement except as otherwise
specifically provided herein; provided, however, that if any such condition is
not satisfied due to Equitable's default, Purchaser shall have the rights
provided for in Section 16.2.
12. Risk of Loss.
12.1 Substantial Casualty. If prior to the Closing any Mall
shall suffer any Substantial Casualty, Purchaser shall nevertheless be required
to close title to all Malls hereunder. In the event of any such Substantial
Casualty Equitable shall provide prompt written notice thereof to Purchaser, and
Purchaser shall give written notice to Equitable within twenty (20) business
days after Purchaser receives Equitable's written notice that Purchaser elects
on the Closing Date either (i) to purchase all of the Malls, in which event
Section 12.3 shall apply, or (ii) to purchase all of the Malls other than the
Mall affected by such Substantial Casualty, in which event the Purchase Price
payable at the Closing shall be reduced by that portion thereof which is
allocated to the damaged Mall, as agreed by Equitable and Purchaser (the
"Allocated Price") and Purchaser shall remain obligated to purchase the damaged
Mall as hereinafter provided. If Purchaser shall make the election set forth in
clause (ii) above, (a) the Closing shall take place as to all of the Malls other
than the damaged Mall, (b) Escrow Agent shall retain in escrow pursuant to the
terms of this Agreement that portion of the Deposit which bears the same
proportion thereto as the Allocated Price bears to the Purchase Price (or the
Letter(s) of Credit held by Equitable shall be reduced to such aggregate
amount), (c) Equitable shall proceed with reasonable diligence to repair and
restore the damaged Mall substantially to its condition immediately prior to
such Substantial Casualty at Equitable's sole cost and expense, (d) Equitable
shall be entitled to all insurance proceeds payable by reason of such
Substantial Casualty, and (e) upon completion of such repair and restoration,
Equitable and Purchaser shall consummate the sale of the affected Mall on the
terms and conditions set forth in this Agreement applicable thereto.
12.2 Substantial Taking. If prior to the Closing any Mall
shall be subject to a Substantial Taking (it being agreed that the condemnation
of a portion of the Lindale Mall referred to in Exhibit T shall not be deemed to
be a Substantial Taking under this Section 12.2), Equitable shall promptly
deliver written notice thereof to Purchaser, and Purchaser shall have the right
to terminate this Agreement by giving written notice to Equitable within twenty
(20) business days after Purchaser receives Equitable's written notice of such
taking. If this Agreement is so terminated by Purchaser, Escrow Agent shall
return the Deposit and the Income to Purchaser (and Equitable and Purchaser
shall execute a written instruction to Escrow Agent to do so), or Equitable
shall return the Letter(s) of Credit to Purchaser, and neither party shall have
any further
obligations or liabilities hereunder, or otherwise with respect to the subject
matter hereof, except as otherwise expressly provided herein to the contrary. If
Purchaser shall fail to deliver timely the aforesaid notice of termination, then
Purchaser shall irrevocably be deemed to have elected to proceed to the Closing
and to waive such termination right, in which event the provisions of Section
12.3 shall apply.
12.3 Other Casualty or Taking. Notwithstanding the foregoing,
in the event of any Casualty or Taking that does not constitute a Substantial
Casualty or a Substantial Taking, as the case may be, or if Purchaser shall,
notwithstanding a Substantial Casualty or a Substantial Taking, elect or be
deemed to have elected to proceed to Closing pursuant to clause (i) of Section
12.1 or pursuant to Section 12.2, as the case may be, this Agreement and the
obligations of Equitable and Purchaser hereunder shall remain in full force and
effect except that (i) Purchaser shall accept the Malls notwithstanding such
damage or taking and shall pay the full Purchase Price therefor and (ii) at the
Closing (a) Equitable shall assign to Purchaser all of its right, title and
interest in and to all insurance proceeds (including, without limitation,
business interruption or rent insurance proceeds) payable by reason of such
Casualty or all awards payable by reason of such Taking (other than any such
award payable in respect of the pending condemnation of a portion of the Lindale
Mall, which shall be retained by and payable to Equitable), and, in the case of
insurance proceeds, shall credit against the Purchase Price the amount of any
deductible under Equitable's insurance policies, and (b) Equitable shall pay
over to Purchaser the amount of such proceeds or award, if any, received by
Equitable prior to the date of the Closing, and (c) Equitable shall not settle
or compromise any claim for such proceeds or award without the prior consent of
Purchaser, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Equitable shall be entitled to receive or retain
out of any such insurance proceeds or award (i) any amounts expended by
Equitable to restore or protect the Malls, with the prior reasonable approval of
Purchaser, and (ii) in the case of insurance proceeds, loss of rents by reason
of the fire or other casualty suffered by Equitable prior to the Closing, which
entitlement shall survive the Closing.
13. Operation of the Malls Until Closing.
13.1 Standard of Operation. From the date hereof until the
Closing, Equitable shall (a) use reasonable efforts to maintain, for the benefit
of Purchaser following the Closing, the good will of Tenants, prospective
tenants, vendors and other parties having business relations with
Equitable in respect of the Malls; (b) pay its debts (or in good faith contest
the same) and perform its obligations in respect of the Malls as they become
due; (c) maintain all of the Malls in the same manner and condition that exists
on the date hereof, as such condition shall be altered by reason of Casualty,
Taking and/or normal wear and tear (provided, that Equitable shall not be
obligated to make any capital improvements, repairs or replacements to any
Mall); (d) without the express written consent of Purchaser, not (i) modify any
Lease, (ii) enter into any new Lease or extend or renew an existing Lease unless
either the terms thereof are set forth in the list of pending lease transactions
annexed hereto as Exhibit Z, or the provisions of Section 13.2 are complied with
(other than renewals or extensions resulting from the exercise by a Tenant of a
currently existing renewal or extension option), (iii) cancel or terminate any
Lease or take any action to enforce any Lease which would have the effect of
canceling or terminating the same, (iv) enter into a new reciprocal easement and
operating agreement or similar agreement or amend or modify, consent to the
assignment of or waive any material right under the Operating Agreements, (v)
make any material alterations to any Mall or enter into any new contracts or
extend or renew or cancel any Other Agreement relating to material capital
expenditures, (vi) enter into any other new contracts or extend, renew or cancel
any of the Other Agreements, except for contracts executed in the ordinary and
usual course and business and in accordance with past practices and policies
which can be terminated without penalty or payment upon not more than thirty
(30) days prior notice, (vii) amend, modify or terminate any of the Ground
Leases, (viii) terminate the Management Agreement. (ix) modify any of the
documents which evidence or secure the Existing Financing or prepay the Existing
Financing in whole or in part, or (x) enter into any material agreement the
effect of which is to cause Equitable to be unable to convey title to the Malls
to Purchaser subject only to the Permitted Encumbrances; and (e) otherwise
operate the Malls in the ordinary course of business and consistent with current
practice.
13.2 Leasing. If between December 15, 1997 and the Closing
Date, Equitable desires to enter into any new Lease, or renewal of an existing
Lease of space in a Mall which is not set forth in the list of pending lease
transactions annexed hereto as Exhibit Z, Equitable shall give Purchaser notice
(the "New Lease Notice") which sets forth with respect to such proposed new
Lease or Lease renewal, (i) the name of the prospective tenant, (ii) the term of
the Lease, (iii) the Rents payable under the Lease, (iv) the location and size
of the premises, (v) the permitted uses
under the Lease, (vi) the expenses associated with the consummation of the
Lease, including without limitation leasing commissions, tenant improvement
costs, tenant allowances and the like, and (vii) any concessions or free Rent
being granted, and which sets forth on its face the substance of the last
sentence of this Section 13.2. No such Lease shall be entered into by Equitable
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld. If Purchaser does not respond to any New Lease Notice
within five (5) Business Days after its receipt thereof, Purchaser shall be
conclusively deemed to have approved the new Lease or Lease renewal which is the
subject of such New Lease Notice and Equitable shall have the right to enter
into such new Lease or Lease renewal.
14. Title to the Mall.
14.1 Title Defects. If on the Closing Date Equitable shall be
unable to cause title to the Malls to be in accordance with the terms of this
Agreement as a result of any exception to title that is not a Permitted
Exception, Purchaser may terminate this Agreement by notice to Equitable
delivered on or prior to the Closing Date, as the same may have been extended,
in which event this Agreement shall be terminated and of no further force or
effect, the Deposit or Letter(s) of Credit shall be returned to Purchaser, and
neither party shall have any obligations of any nature to the other hereunder or
by reason hereof, except as to those obligations hereunder that are specifically
stated to survive such termination. Equitable shall be under no obligation to
take any steps or to institute or prosecute any action or proceedings, or expend
any sums of money, to remove from title to the Mall any defect, encumbrance or
objection to title; provided, however, that Equitable shall be responsible for
discharging any liens or encumbrances which do not constitute Permitted
Encumbrances, which can be discharged solely by the payment of a sum of money
not in excess of the sum of $5,000,000 in the aggregate which arise solely on
account of obligations undertaken or actions performed by Equitable. Equitable
may use any part of the Purchase Price to discharge the same, provided that
Equitable shall deliver to Purchaser at the Closing instruments in recordable
form sufficient to discharge such liens and encumbrances of record. Except for
Equitable's failure to discharge such liens or encumbrances as aforesaid up to
an aggregate amount of $5,000,000, Equitable shall not be deemed in default of
this Agreement, and Purchaser shall not be entitled to damages of any kind, if
Equitable shall fail or be unable to cause title to the Mall to be in the
condition called for by this Agreement, nor shall Purchaser in
such circumstances be entitled to specific performance of this Agreement. In no
event shall Equitable be obligated to discharge any mechanic's or similar lien
created by a Tenant in occupancy at the Closing whose Lease is in full force and
effect and in good standing (as described in subsection 4.1.7) or an Adjoining
Owner, but Equitable shall use reasonable efforts to cause such Tenant or
Adjoining Owner to do so.
14.2 Waiver by Purchaser. Purchaser, at its election, may at
the Closing accept such title as Equitable can convey, without reduction of the
Purchase Price or any credit or allowance on account thereof or any claim
against Equitable by reason thereof.
14.3 Deeds Full Performance; Survival. The acceptance of the
Deeds and other closing documents by Purchaser from Equitable shall be deemed
full performance on the part of Equitable of all of its obligations under this
Agreement, except as to any such obligation which is specifically stated in this
Agreement to survive the Closing or is expressly contained in documents
delivered at Closing. Except where otherwise expressly provided in this
Agreement, none of the provisions of this Agreement shall survive the Closing.
15. Brokers, etc.
15.1 Equitable's Representation. Equitable represents and
warrants to Purchaser that Equitable dealt with no broker, finder or like agent
who might claim a commission or fee in connection with the transaction
contemplated in this Agreement or on account of introducing the parties, the
preparation or submission of brochures, the negotiation or execution of this
Agreement or the closing of the transaction contemplated herein other than
Goldman, Sachs & Co. ("Broker"). The fees of Broker shall be paid by Equitable
pursuant to a separate agreement between Equitable and Broker. Equitable agrees
to indemnify and hold harmless Purchaser and its successors and assigns from and
against any and all claims, losses, liabilities and expenses, including without
limitation reasonable attorneys' fees, disbursements and charges, arising out of
any claim or demand for commissions or other compensation for bringing about
this transaction by any broker, finder or similar agent or party, including,
without limitation, Broker, who claims to have dealt with Equitable or any
affiliate thereof in connection with this transaction.
15.2 Purchaser's Representation. Purchaser represents and
warrants to Equitable that neither Purchaser, nor any affiliate thereof, has
dealt with any broker, finder or like agent who might claim a commission or fee
in connection with the transaction contemplated in this
Agreement or on account of introducing the parties, the preparation or
submission of brochures, the negotiation or execution of this Agreement or the
closing of the transaction contemplated herein, other than Broker. Purchaser
agrees to indemnify and hold harmless Equitable and its successors and assigns
from and against any and all claims, losses, liabilities and expenses, including
without limitation reasonable attorneys' fees, disbursements and charges,
arising out of any claim or demand for commissions or other compensation for
bringing about this transaction by any broker, finder or similar agent or party
other than Broker who claims to have dealt with Purchaser or any affiliate
thereof in connection with this transaction.
15.3 Survival. The provisions of this Article 15 shall survive
the Closing or the termination of this Agreement.
16. Default; Remedies.
16.1 Purchaser's Default. If at the Closing Date the
conditions to the obligation of Equitable to close title as set forth in Article
10 have not been fulfilled on account of the default of Purchaser in performing
any of its obligations hereunder, and the Closing does not occur as a result
thereof, then Equitable shall be entitled as its sole and exclusive remedy to
terminate this Agreement and receive the Deposit from the Escrow Agent or draw
upon the full amount of the Letter(s) of Credit as liquidated damages for
Purchaser's default (and in such circumstances Purchaser shall, if applicable,
join with Equitable in a written instrument to Escrow Agent to pay the Deposit
to Equitable). Purchaser and Equitable agree that such liquidated damages are
based in part upon the following damages which Equitable will suffer on account
of a default by Purchaser and the failure of the Closing to occur, which damages
Purchaser and Equitable agree are incapable of an exact determination of amount:
the removal of the Malls from the real estate market and the loss of the
possibility of obtaining a new purchaser during such time at a higher amount;
the possibility of being unable to find a new purchaser for the amount of the
Purchase Price after Purchaser's default; various restrictions related to the
management and maintenance of the Malls during the period of this Agreement; the
inconvenience and expense of remarketing the Malls for sale; and the expense of
negotiating and documenting a new transaction; and that the Deposit is a
reasonable estimate of Equitable's damages.
16.2 Equitable's Default. If at the Closing Date the
conditions to the obligation of Purchaser to close title as set forth in Article
11 have not been fulfilled on account of the default
of Equitable hereunder, and the Closing shall not occur as a result thereof,
then Purchaser shall be entitled to pursue, at its election, either of the
following as its sole and exclusive remedy: (i) terminate this Agreement and
have the Deposit returned to it by the Escrow Agent or the Letter(s) of Credit
returned to it by Equitable, or (ii) seek specific performance of Equitable's
obligations under this Agreement. Purchaser hereby waives any right to sue
Equitable for damages (including consequential damages) for any default by
Equitable hereunder but if the Closing occurs such waiver shall not apply to
damages to which Purchaser may be entitled hereunder by reason of any breach by
Equitable of any of its warranties or representations hereunder which survive
the Closing; provided, however, that in the event of a willful default by
Equitable which would render the remedy of specific performance unavailable to
Purchaser, Purchaser may seek damages (but not consequential damages) from
Equitable provided that Purchaser has sought and been unable to pursue the
remedy of specific performance within six months after the occurrence of such
default.
16.3 Survival. The provisions of this Article 16 shall
survive the termination of this Agreement.
17. Estoppels.
17.1 Required Estoppels. At or before the Closing Equitable
shall deliver to Purchaser the following estoppel letters:
17.1.1 estoppel letters from all Anchors which are parties to Operating
Agreements, such estoppel letters to be in substantially the form annexed hereto
as Exhibit U; provided, however, that if any Operating Agreement provides for
the form or content of an estoppel letter, Purchaser shall accept an estoppel
letter as called for therein if an Anchor refuses to execute one in the form
annexed hereto as Exhibit U after being requested to do so by Equitable;
17.1.2 estoppel letters from (i) all Anchors which are Tenants under Leases,
if any, and (ii) from 70% of all other Tenants at each Mall (other than Tenants
under Leases consisting of licenses and concession agreements which have terms,
including any rights to renew or extend, not in excess of six (6) months), such
estoppel letters to be in substantially the form annexed hereto as Exhibit V;
provided, however, that if any Lease provides for the form or content of an
estoppel letter, Purchaser shall accept an estoppel letter as called for therein
if any
Tenant refuses to execute one in the form annexed hereto as Exhibit V after
being requested to do so by Equitable; and
17.1.3 estoppel letters from the lessors under the Ground Leases listed in
paragraphs 1 and 3 of Exhibit C annexed hereto, such estoppel letters to be in
substantially the form annexed hereto as Exhibit AA or in the form, if any,
provided for in the applicable Ground Lease.
17.2 Additional Estoppels. Equitable shall request and shall
use reasonable efforts to obtain and deliver to Purchaser at or before the
Closing the following additional estoppel letters:
17.2.1 an estoppel letter from the lessor under the Ground Lease listed in
paragraph 2 of Exhibit C annexed hereto, such estoppel letter to be in
substantially the form annexed hereto as Exhibit AA; and
17.2.2 an estoppel letter from the Trustee under the Existing Financing
containing the information required of the Trustee under Section 41 of the
Mortgage; provided, that the delivery of any of such estoppel letters shall not
be a condition to Purchaser's obligation to close title hereunder.
17.3 No Default. Equitable shall not be in default under this
Agreement if one or more estoppel letters signed by Anchors, Tenants or other
third parties set forth allegations or facts at variance with statements in the
forms annexed hereto as exhibits, but it shall be a condition to Purchaser's
obligation to close the transaction provided for herein that such estoppel
letters, taken as a whole, do not in Purchaser's reasonable judgment reveal
facts which when aggregated with those matters revealed in the certificate
delivered pursuant to subsection 8.6.3, and the knowledge obtained by Purchaser
as described in subsection 8.6.4, have a material adverse effect on the value of
the Malls, taken as a whole. For purposes of this Section 17.3, matters
disclosed in any estoppel letter which, under the terms of this Agreement or any
instrument or document delivered pursuant hereto, it is Equitable's obligation
to pay or rectify shall not be deemed to have an adverse effect on the value of
the Malls.
17.4 Seller's Estoppels. If Equitable shall be unable to
deliver any such estoppel certificate from any Anchor pursuant to Sections
17.1.1 or 17.1.2 currently in bankruptcy, then Equitable may, at its option,
deliver to Purchaser at Closing, and, if so delivered, Purchaser shall accept in
lieu of the Anchor estoppel certificate in question, in respect of the
applicable Lease or
Operating Agreement, as the case may be (but in no event more than one for each
Anchor at a Mall which is currently in bankruptcy), a certificate of Equitable
("Seller's Estoppel Letter") with respect to those matters set forth in the
applicable form of estoppel certificate attached hereto, which Seller's Estoppel
Letter may be limited to Equitable's knowledge as appropriate, and which shall
contain the same limitations on survival, liability, knowledge and other matters
set forth elsewhere in this Agreement as if the representations set forth
therein were set forth in Section 8.3 hereof. In addition, (i) if Equitable
shall be unable to deliver up to two (2) such estoppel certificates from any
Anchor pursuant to Sections 17.1.1 or 17.1.2 not currently in bankruptcy, then
Equitable may, at its option, deliver to Purchaser at Closing and if so
delivered Purchaser shall accept in lieu of each of the two (2) or fewer Anchor
estoppel certificates in question, in respect of the applicable Lease or
Operating Agreement, as the case may be, a Seller's Estoppel Letter with respect
to those matters set forth in the applicable form of estoppel certificate
attached hereto, which Seller's Estoppel Letter may be limited to Equitable's
knowledge as appropriate, and which shall contain the same limitations on
survival, liability, knowledge and other matters set forth elsewhere in this
Agreement as if the representations set forth therein were set forth in Section
8.3; or (ii)if Equitable shall be unable to deliver more than two (2) such
estoppel certificates from any Anchor pursuant to Sections 17.1.1 or 17.1.2 not
currently in bankruptcy, then Equitable may, at its option, deliver to Purchaser
at Closing, and if so delivered Purchaser shall accept in lieu of each of the
Anchor estoppel certificates in question, in respect of the applicable Lease or
Operating Agreement, as the case may be, a certificate of Equitable ("DS
Estoppel Certificate") with respect to those matters set forth in the applicable
form of estoppel certificate attached hereto, which DS Estoppel Certificate may
be limited to Equitable's knowledge as appropriate and which shall contain the
same limitations on knowledge and other matters as set forth elsewhere in this
Agreement as if the representation set forth therein were set forth in Section
8.3; provided, however, that Equitable may in no event deliver more than six (6)
DS Estoppel Certificates as provided in this subsection 17.4, there shall be no
more than one (1) DS Estoppel Certificate for any one Mall and the limitation on
survival set forth in subsection 8.6.1 and the provisions of subsection 8.6.2
shall not apply to any DS Estoppel Certificate.
17.5 If Equitable elects not to deliver any Seller's Estoppel
Certificate or DS Estoppel Certificate, Equitable shall not thereby be deemed to
be in default hereunder and
Purchaser's sole remedy shall be that which is set forth in Article 11. At
Equitable's request and expense, Purchaser shall cooperate with Equitable and
provide Equitable with reasonable assistance in its attempt to obtain estoppel
letters from Anchors and Tenants required hereunder.
18. Notices. Except as otherwise provided in this Agreement, all
notices, demands, requests, consents, approvals or other communications which
are required or permitted to be given under this Agreement or which either party
desires to give with respect to this Agreement shall be in writing and shall be
delivered by hand or sent by telecopy (with the original sent by first-class
mail, postage prepaid), or sent postage prepaid, by registered or certified
mail, return receipt requested, or by reputable overnight courier service
addressed to the party to be notified as follows (or to such other address as
such party shall have specified at least ten (10) days prior thereto by like
notice) and shall be deemed given when so delivered by hand, telecopied, or if
mailed, three (3) Business Days after mailing (one (1) Business Day in case of
overnight courier service), as follows:
if to Equitable, to:
ERE Yarmouth 3424 Peachtree Road, N.E.
Suite 800
Atlanta, Georgia 30326
Attn: Douglas T. Healy
Telecopier: (404) 848-8916
with copies at the same time to:
ERE Yarmouth 3424 Peachtree Road, N.E.
Suite 800
Atlanta, Georgia 30326
Attn: Suman P. Gera
Telecopier: (404) 848-8916
with copies at the same time to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Walter F. Leinhardt, Esq.
Telecopier: (212) 373-2771
55
if to Purchaser, to:
115 West Washington Street
Indianapolis, Indiana 46204
Attn: Bruce Gobeyn
Telecopier: (317) 685-7221
and
The Macerich Company
2 Galleria Tower
13455 Noel Rd., Suite 1480
Dallas, Texas 75240
Attn: Edward Coppola
Telecopier: (972) 458-7021
with copies at the same time to:
115 West Washington Street
Indianapolis, Indiana 46204
Attn: James M. Barkley, Esq.
Telecopier: (317) 685-7221
and
The Macerich Company
233 Wilshire Blvd., Suite 700
Santa Monica, California 90401
Attn: Richard Bayer, Esq.
Telecopier: (310) 395-2791
19. Further Assurances. Each of Equitable and Purchaser agrees, at any
time and from time to time after the Closing, to execute, acknowledge, where
appropriate, and deliver such further instruments and documents and to take such
other action as the other party may reasonably request in order to carry out the
intents and purposes of this Agreement, provided that such request is made by
notice given within two (2) years after the Closing Date. If required by the
other party, the party making the request will bear the reasonable cost
involved. Neither party shall be required to execute any instrument or document
pursuant to this Article 19 which would increase the liability or obligations of
such party over that provided for in this Agreement and the
56
instruments and documents executed by such party pursuant hereto. The provisions
of this Article 19 shall survive the Closing.
20. Captions. The article and section titles or captions in this
Agreement and the Table of Contents and the Schedule of Exhibits prefixed hereto
are for convenience only and shall not be deemed to be part of this Agreement.
21. Governing Law; Construction. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of New York
applicable to contracts negotiated, executed and to be performed wholly within
such State; provided, however, that matters relating to title to a Mall or
instruments conveying or affecting such title shall be governed by the laws of
the state in which such Mall is located. Each party hereto acknowledges that it
was represented by counsel in connection with this Agreement and the
transactions contemplated herein, that it and its counsel reviewed and
participated in the preparation and negotiation of this Agreement and the
documents and instruments to be delivered hereunder, and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
the documents and instruments to be delivered hereunder.
22. Entire Agreement; No Third Party Beneficiary, etc. This Agreement,
including all Exhibits, contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior understandings, if
any, with respect thereto. The parties have made no representations with respect
to the subject matter of this Agreement and have given no warranties with
respect to the subject matter hereof except as expressly provided herein and/or
expressly provided in the documents delivered at Closing. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the party to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein. The parties do not intend to confer any benefit hereunder on
any person, firm, corporation or other entity other than the parties hereto. The
provisions of this Article 22 shall survive the Closing or termination of this
Agreement.
23. Waivers; Extensions. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof or of any other agreement or provision herein
contained. No extension of time for performance of any obligations
57
or acts shall be deemed an extension of the time for performance of any other
obligations or acts. Whenever in this Agreement it is provided that a document,
such as an estoppel letter or good standing certificate, must be dated within a
specified number of days prior to the Closing Date, the reference to the Closing
Date in each such provision shall be deemed to be February 2, 1998 and not any
date to which such Closing Date may be adjourned by agreement of the parties
hereto. The provisions of this Article 23 shall survive the Closing or
termination of this Agreement.
24. Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties may require.
25. Transaction Expenses; Fees and Disbursements of Counsel, etc.
25.1 Transaction Expenses. Equitable shall pay recording fees
and charges for documents required to remove exceptions to title which do not
constitute Permitted Exceptions and/or the cost of causing the Title Company to
omit or insure over any such exceptions, the cost of updating the survey for
each Mall, the fees of the Broker and all costs incurred in connection with
obtaining the Required Consents. Equitable and Purchaser shall each pay one-half
of all recording charges and escrow fees (except as provided in the preceding
sentence) and one-half of any documentary stamp taxes and surtaxes, transfer
taxes and similar charges payable in connection with the conveyance of the Malls
by Equitable to Purchaser. Purchaser shall pay the premiums for the owners
policies of title insurance issued to Purchaser at Closing. Equitable shall pay
all costs necessary to obtain the Rating Agency Approval (exclusive of
Purchaser's attorneys' fees, which shall be paid by Purchaser).
25.2 Other Expenses. Subject to Section 25.1, each party shall
pay its own expenses in connection with the transaction contemplated in this
Agreement, including the fees, disbursements and charges of its own counsel,
accountants, consultants, experts and other advisors in connection with the
negotiation and preparation of this Agreement and the Closing.
25.3 Financial Statements; Appraisals. Equitable shall, at its
sole cost and expense, cause to be prepared and delivered to Purchaser the
audited financial statements and appraisals of the Malls for 1997 which are
required pursuant to the Existing Financing, as well as common area maintenance
expense calculations for each of the Malls for 1997, such calculations to be in
the form utilized in previous years are to be audited if the calculations for
58
previous years were audited. Further, Equitable shall assist Purchaser in
obtaining comfort letters and similar documentation as may be required to permit
Purchaser and its affiliates to comply with applicable public reporting
requirements including Regulation Sx.
25.4 Survival. The provisions of this Article 25 shall survive
the Closing or (except for Section 25.3) the termination of this Agreement.
26. Assignment. Purchaser shall not, without the prior written consent
of Equitable, assign this Agreement or its rights hereunder, in whole or in
part, to any other person or entity; provided, however, that Purchaser may
designate a nominee to take title to the Malls at Closing so long as such
nominee is controlled by or under common control with Purchaser and Rating
Agency Approval has been obtained with respect to such nominee.
27. Counterparts. This Agreement may be executed in counterparts, each
of which (or any combination of which, signed by all of the parties) shall be
deemed an original, but all of which, taken together, shall constitute one and
the same instrument.
28. No Recording. The parties agree that neither this Agreement nor any
memorandum or notice hereof shall be recorded or filed in any public records
except as required by law. If Purchaser violates the terms of this Article,
Equitable, in addition to any other rights or remedies it may have, may
immediately terminate this Agreement by giving notice to Purchaser of its
election so to do and receive and retain the Deposit or draw upon the Letter(s)
of Credit as liquidated damages in accordance with Section 16.1. The provisions
of this Article shall not be construed as preventing Purchaser from filing a lis
pendens against the Malls in the event it institutes any litigation against
Equitable with respect to the transaction provided for herein and, under
applicable law, it is entitled to file such lis pendens. The provisions of this
Article shall survive the Closing or any termination of this Agreement.
29. Unitary Transaction. The parties hereto agree that if the Closing
is to occur, it must be in respect of all thirteen Malls, subject to Article 12,
and unless the parties hereafter otherwise agree, Purchaser shall not have the
right to acquire, and Equitable shall not have the right to require Purchaser to
acquire, fewer than all of the Malls.
30. Prevailing Party's Attorneys' Fees. In connection with any
litigation, including appellate proceedings, initiated by a party hereto against
the other party hereto and arising out of
59
this Agreement or any instrument or document executed pursuant hereto, the party
adjudicated to be the substantially prevailing party shall be entitled to
recover reasonable attorneys' fees and disbursements from the other party. The
provisions of this Article shall survive the Closing or the termination of this
Agreement.
31. Radon Gas Notification. In accordance with Florida Statutes Section
404.056, Equitable hereby notifies Purchaser that radon is a naturally occurring
radioactive gas that, when it has accumulated in a building in sufficient
quantities, may present health risks to persons who are exposed to it over time.
Levels of radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding radon and radon testing
may be obtained from the county public health unit.
32. Energy-Efficiency Rating Disclosure. In accordance with Florida
Statutes Section 553.996, Purchaser may have the energy-efficiency rating of
Lake Square Mall determined. Purchaser acknowledges that it has received from
Seller a copy of The Florida Building Energy- Efficiency Rating System Brochure
as provided by the State of Florida Department of Community Affairs.
33. Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THAT EITHER PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THE MALL, THE CONVEYANCE INSTRUMENT OR ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF CONDUCT,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION
AND SHALL SURVIVE THE CLOSING OR THE TERMINATION OF THIS AGREEMENT.
60
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
SELLER:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
By:/s/ Paul A. Mucci
Name: Paul A. Mucci
Title: Investment Officer
PURCHASER:
SM PORTFOLIO PARTNERS, a Delaware general partnership
By: MACERICH EQ LIMITED PARTNERSHIP, a California limited
partnership, a general partner
By: MACERICH EQ GP CORP., a Delaware corporation,
its general partner
By: /s/ Edward C. Coppola
Its: Executive Vice President
By: SDG EQ DEVELOPERS LIMITED PARTNERSHIP, a Delaware limited
partnership, a general partner
By: SDG EQ ASSOCIATES, INC., a Delaware corporation,
its general partner
By: /s/ David Simon
Its: Chief Executive Officer
61
The undersigned has executed this Agreement solely for the purpose of agreeing
to be bound by the provisions of Section 3.2
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
By: Roger Gamblin
As Agent