PURCHASE AND SALE AGREEMENT

Exhibit 10.22.3

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

WESTFIELD AMERICA LIMITED PARTNERSHIP,

as Transferor

 

AND

 

CBL & ASSOCIATES LIMITED PARTNERSHIP,

as Transferee

 

 

 

 

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made as of August 9, 2007, by and among WESTFIELD AMERICA LIMITED PARTNERSHIP, a Delaware limited partnership (“ Transferor ”), and CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership (“ Transferee ”). All capitalized terms used but not otherwise defined herein shall have the respective meanings set forth herein or in Schedule 1 attached hereto.

RECITALS

WHEREAS, Transferor owns, and immediately prior to Closing will own, directly or indirectly, 100% of the limited liability company interests (the “ Sale Interest ”) in Chesterfield Mall LLC, a Delaware limited liability company (“ Property Owner ”).

WHEREAS, Property Owner is disregarded as an entity separate from Transferor for tax purposes.

WHEREAS, Property Owner owns fee title to the shopping center located at Chesterfield, Missouri, commonly known as “Westfield Chesterfield Mall” (including the Land described in Exhibit G attached hereto and all Improvements located thereon, the “ Property ”).

WHEREAS, Transferor desires to sell, or to cause to be sold, to Transferee, and Transferee desires to purchase, the Sale Interest (the “ Conveyance ”), upon and subject to the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

ARTICLE I

Purchase and Sale of Sale Interest

1.1  Conveyance . For the consideration hereinafter set forth, but subject to the terms, provisions, covenants and conditions contained herein, Transferor hereby agrees to sell, or cause to be sold, and Transferee hereby agrees to purchase, the Sale Interest.

 

(a)             The purchase price for the Sale Interest shall be $301,789,733, less the outstanding principal balance of the Existing Mortgage Loan as of the Closing Date, and subject to the adjustments as set forth in Sections 1.2(b) and (c) and Section 10.1 (such reduced and adjusted amount being hereinafter referred to as the “ Purchase Price ”).

 

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[ 97% of (New Income – Lost Rent)]

0.06

; provided , however , that if the above-described amount is equal to less than zero, the Purchase Price shall not be adjusted pursuant to this Section 1.2(b) . The adjustments made to the Purchase Price pursuant to this Section 1.2(b) shall be deemed final and not subject to further adjustments if no such adjustments have been requested in good faith within one year after the Closing Date. All post-Closing adjustments to the Purchase Price pursuant to this Section 1.2(b) shall be subject to Sections 10.1(h) and (m) . For purposes of this Section 1.2(b) , the following definitions shall apply:

(i)              “ Early Terminated Tenant Lease ” shall mean each Tenant Lease which expires or terminates after April 24, 2007 and prior to the Closing Date.

(ii)             “ Lost Rent ” means the aggregate annualized reduction in income which is expected to occur from the Early Terminated Tenant Leases, calculated based on the annualized amount of minimum rent payable under each Early Terminated Tenant Lease during the last full calendar month period immediately prior to the expiration or termination thereof.

(iii)            “ New Income ” means the aggregate annualized increase in income which is expected to occur from the New Tenant Leases, calculated based on the annualized amount of minimum rent payable under each New Tenant Lease for the first full calendar month after the rent commencement date thereunder.

(iv)            “ New Tenant Lease ” means each new Tenant Lease entered into by Property Owner after April 24, 2007 and prior to the Closing Date in accordance with Section 6.1(c) or otherwise with the approval of Transferee; provided , that the Tenant thereunder is scheduled to open for business on or prior to December 31, 2007 (except as may otherwise be agreed to by Transferee); provided , further , that, with respect to each New Tenant Lease:

(1)             Transferee shall receive a credit for (A) all unpaid, non-disbursed Tenant incentives, allowances or inducements (including work to be performed by or at Property Owner’s expense pursuant to the terms of such New Tenant Lease) for the initial term of such Tenant Lease, and (B) all third party brokerage and leasing agreements for which fees or commissions are or will be payable relating to such New Tenant Lease, in each case, as and to the extent set forth in Section 10.1(k) ; and

(2)             without duplication of any credits received under clause (1) , Transferee shall receive a credit for the value of any rent

 

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concessions, abatements, free rent amounts, rent “holidays”, or other “lost” rent between the Closing Date and the scheduled (as of the Closing Date) rent commencement date under such New Tenant Lease; provided , that there shall be a post-closing adjustment based on the actual rent commencement date under such New Tenant Lease.

(c)              Deposit . Within 2 Business Days after the full execution and delivery of this Agreement by Transferor and Transferee, Transferee shall deliver to Escrow Agent the amount of Three Million Seven Hundred Fifty Thousand and No/100 Dollars ($3,750,000.00) (which sum, together with any and all interest and dividends earned thereon, shall hereinafter be referred to as the “ Deposit ”). Transferee may, at its election, deliver all or any portion of the Deposit in the form of either (i) cash (by Federal funds wire transfer to a U.S. bank account specified by Escrow Agent), or (ii) an unconditional and irrevocable letter of credit, that is payable to Transferor (x) at sight in the State of New York or (y) upon presentation via facsimile followed by overnight courier delivery of the original, and expires no earlier than the 60 ^th day after the last possible date for Closing under Section 9.1 , and is issued from Regions Bank or another creditworthy bank or financial institution reasonably acceptable to Transferor. Transferor hereby approves the form of letter of credit attached hereto as Exhibit F . Escrow Agent shall hold the Deposit (including any proceeds from draws under any letter of credit) pursuant to the provisions of Article XII . If the Conveyance is not consummated for any reason (other than a termination of this Agreement in accordance with its terms arising out of a default by Transferee or CBL OP of any provision hereof, the CBL Contribution Agreement or any other agreement between or among Transferor, Transferee and CBL OP or their respective affiliates), then the Deposit shall be returned to Transferee. Notwithstanding anything to the contrary contained herein, at Closing, (i) any Deposit delivered in the form of cash shall be paid to Transferor, and Transferee shall receive a credit to the Purchase Price in an amount equal to such cash Deposit, and (ii) any Deposit delivered in the form of a letter of credit shall be returned to Transferee upon the payment in full of the Purchase Price by Transferee to Transferor. The parties hereto shall promptly take any action required to cause the Deposit to be delivered to any party entitled thereto pursuant to the terms of this Agreement.

(d)              Balance of Purchase Price . At Closing, Transferee shall pay the Purchase Price, less any Deposit delivered in the form of cash, to Transferor in accordance with Sections 9.3 and 9.5 .

1.3  Closing Costs . At Closing, (i) Transferee shall cause Transferee’s Closing Costs to be paid in full by delivering the amount thereof to Escrow Agent (by Federal funds wire transfer), (ii) Transferor shall cause Transferor’s Closing Costs to be paid in full by delivering the amount thereof (but only to the extent that such amount is in excess of the Purchase Price) to Escrow Agent (by Federal funds wire transfer), and (iii) Transferee and Transferor shall cause Escrow Agent to deliver all such amounts directly to the Persons to whom such amounts are owed (all as described in Section 10.2 ).

 

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ARTICLE II

Investigation of the Property and Title

2.1  Inspection of Property; Indemnity . Until Closing or earlier termination of this Agreement, Transferee shall continue to have the rights set forth in that certain Access Agreement, dated as of May 10, 2007, by and between Transferor, on behalf of itself and its subsidiaries and affiliates, as owner, and Transferee, as inspector (as the same may be amended, supplemented or otherwise modified, the “ Access Agreement ”), as amended by this Agreement. Without limiting the provisions of the Access Agreement, Transferee shall, jointly and severally, indemnify, hold harmless and defend Transferor and each Transferor Related Party from and against any mechanics’ or materialmen’s lien or claim therefor, any claim, cause of action, lawsuit, damage, liability, loss, cost, expense or any other Losses (including, without limitation, attorneys’ fees) due to injury to persons or damage to property arising out of any entry by Transferee or Transferee’s engineers, architects and other employees, representatives, contractors, subcontractors and agents, or out of any inspections, tests or surveys conducted by or on behalf of Transferee in connection with the transactions contemplated herein, in each case, except to the extent caused by the gross negligence or willful misconduct of Transferor or such Transferor Related Party.

 

(a)              Schedule 2.2(a) attached hereto is a schedule of the Liens, defects and other exceptions to title to which the Property will be subject at Closing when Transferee shall acquire the Sale Interest and accept indirect possession of the Property (such exceptions, together with (a) Liens for Taxes that are not yet due and payable, (b) rights of Tenants, as tenants only, under Tenant Leases, (c) any Liens arising out of any act of Transferee, and (d) any other matters that are approved or deemed approved by Transferee hereunder being collectively, the “ Permitted Exceptions ”).

(b)             Notwithstanding anything to the contrary contained herein, on or before the tenth (10 ^th ) day after the Effective Date, Transferee shall have the right to object to any matter shown on the Title Commitment or the Survey heretofore delivered to Transferee, but only with respect to any matter reported or shown thereon which has or could have a Material Adverse Title Effect (as hereinafter defined) (such objections, “ Transferee’s Objections ”). Notwithstanding anything herein to the contrary contained herein, from and after the Effective Date until Closing, Transferee shall have until the tenth (10 ^th ) day after Transferee’s receipt, after the Effective Date, of any update to the Survey or the Title Commitment (and legible copies of all documents referenced in any such update) to notify Transferor in writing of any objection (also, “ Transferee’s Objections ”) which Transferee may have to any matter disclosed, reported or shown thereon and not disclosed, reported or shown on the Title Commitment or the Survey previously delivered to Transferee as to which Transferee has already responded or failed to timely respond pursuant to the preceding sentence, but only if such matter or thing has or could have a Material Adverse Title Effect. The term “ Material Adverse Title Effect ” means any matter that has a material adverse effect on the use, value or operation of the Property that

 

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breaches a law or that breaches a contract, but only if such breach would have a material adverse effect on the use, value or operation of the Property. The preceding three (3) sentences do not apply to Liens, as to which the express provisions of this Agreement as to Liens shall apply. Transferor will and (prior to Closing) will cause the Property Owner to cooperate reasonably and in good faith with Transferee in Transferee’s attempts to obtain customary and reasonable title insurance with respect to Permitted Exceptions (e.g., the omission of recorded memoranda of lease for leases that have expired or been terminated). As a condition to Closing, Transferor shall remove or discharge from title to the Property (i) any Liens which secure an obligation to pay sums of money borrowed by Transferor, Property Owner or any affiliate thereof (other than the Existing Mortgage Loan) or which are set forth on Schedule 2.2(b) attached hereto and any other matters set forth on Schedule 2.2(b) attached hereto as Transferor’s obligation to remove or discharge, (ii) any exceptions and matters objected to by Transferee which were created or caused by Transferor, Property Owner or any affiliate thereof between the Effective Date and the Closing Date, and (iii) any other exceptions and matters timely objected to by Transferee in Transferee’s Objections that may be discharged by the payment of an ascertainable amount of money (the exceptions and matters described in clauses (i) , (ii) and (iii) , other than mechanic’s lien or materialman’s lien arising from work performed by or on behalf of a Tenant (other than by Property Owner as the landlord of such Tenant, or Property Owner’s contractors), collectively, the “ Curable Title Objections ”); provided , however , that Transferor shall have no obligation to spend more than One Million and No/100 Dollars ($1,000,000.00) in the aggregate in connection with the curing and/or insuring over of the Curable Title Objections described in clause (iii) , and Transferor shall have no obligation to remove any mechanic’s lien or materialman’s lien arising from work performed by or on behalf of a Tenant (other than by Property Owner as the landlord of such Tenant, or Property Owner’s contractors). Alternatively, in lieu of removing or discharging any of the Curable Title Objections from title to the Property (other than any mechanic’s lien or materialman’s lien arising from work performed by Property Owner or its contractors), Transferor may obtain for Transferee, title insurance coverage reasonably acceptable to Transferee from the Title Company insuring over any such exceptions or matters, and subject to the $1,000,000 limitation described above and without limiting the provisions of Section 10.2(ii) , Transferor shall be responsible for the incremental costs and expenses charged by the Title Company to insure over any such exceptions and matters (the “ Incremental Title Costs ”). Without limiting the foregoing, Transferor and Transferee hereby agree to cooperate to cause to be removed from title to the Property, at Transferor’s expense, any mechanic’s lien or materialman’s lien arising from work performed by Property Owner or its contractors which were of record prior to the Closing Date and which remain uncured after the Closing Date. The provisions of the immediately preceding sentence shall survive Closing

(c)             As a condition to Closing, Transferor shall, at Transferor’s expense, remove or discharge from title to the Sale Interest any Liens which were created or caused by Transferor, Property Owner or any affiliate thereof.

(d)             On or before the 10 ^th day following Transferor’s receipt of Transferee’s Objections (or by the Outside Closing Date, if earlier), Transferor shall deliver

 

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written notice to Transferee (“ Transferor’s Response ”) indicating whether Transferor elects to remove or insure over those Transferee’s Objections that Transferor is not obligated to remove or insure over in accordance with Section 2.2(b) . If Transferor fails to deliver Transferor’s Response within the time frame set forth above, it shall be deemed to be an election by Transferor to not remove or insure over all of such Transferee’s Objections. If Transferor elects not to (or is deemed to have elected not to) remove or insure over all of such Transferee’s Objections, then Transferee must elect, by delivering written notice of such election to Transferor on or before the earlier to occur of (i) the 10 ^th day following Transferee’s receipt of Transferor’s Response (or by the Outside Closing Date, if earlier), or (ii) if no Transferor’s Response is received by Transferee, the 10 ^th day following the date on which Transferor shall have been deemed to have responded, as provided above (or by the Outside Closing Date, if earlier), to: (x) terminate this Agreement (in which case none of the parties thereafter shall have any rights or obligations to the other hereunder, other than pursuant to any provision hereof which expressly survives the termination of this Agreement); or (y) proceed to a timely Closing whereupon such objected to exceptions or matters shall be deemed to be approved by Transferee and constitute Permitted Exceptions. If Transferee fails to deliver a response within such 10 day period (or by the Outside Date, if earlier), then Transferee shall be deemed to have elected to proceed to Closing pursuant to clause (y) above.

2.3  Status of Title . At Closing, Transferor shall convey, or cause to be conveyed, to Transferee all of Transferor’s and/or its affiliates’ rights, titles and interests in and to the Sale Interest, and Transferee shall acquire (a) the Sale Interest, and (b) indirect ownership and possession of the Property, subject only to the Permitted Exceptions.

ARTICLE III

Transferee’s Acknowledgement

THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT: (A) TRANSFEREE IS A SOPHISTICATED INVESTOR IN REAL PROPERTY WHO IS FAMILIAR WITH INVESTMENTS SIMILAR TO THE PROPERTY AND THE SALE INTEREST; (B) EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, NEITHER TRANSFEROR NOR ANY TRANSFEROR RELATED PARTY HAS MADE OR WILL MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO PROPERTY OWNER, THE SALE INTEREST, THE PROPERTY, THE PERMITTED USE THEREOF, OR THE ZONING AND OTHER LAWS, REGULATIONS AND RULES APPLICABLE THERETO, OR THE COMPLIANCE BY THE PROPERTY THEREWITH, THE REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH THE PROPERTY OR THE SALE INTEREST, OR OTHERWISE RELATING TO PROPERTY OWNER, THE PROPERTY, THE SALE INTEREST, OR THE TRANSACTIONS CONTEMPLATED HEREIN; AND (C) EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, THE SALE INTEREST IS BEING TRANSFERRED TO TRANSFEREE AND

 

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TRANSFEREE IS ACCEPTING THE SALE INTEREST AND INDIRECT POSSESSION OF THE PROPERTY, IN EACH CASE, IN THEIR PRESENT “AS IS, WHERE IS” CONDITION “WITH ALL FAULTS”, WITH NO RIGHT OF SETOFF OR DEDUCTION IN THE PURCHASE PRICE. IN ADDITION, TRANSFEREE EXPRESSLY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT UNKNOWN CONDITIONS MAY EXIST WITH RESPECT TO THE PROPERTY, PROPERTY OWNER, AND/OR THE SALE INTEREST AND THAT TRANSFEREE EXPLICITLY TOOK THE POSSIBILITY OF SUCH UNKNOWN CONDITIONS INTO ACCOUNT, TOGETHER WITH THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, IN DETERMINING AND AGREEING TO THE PURCHASE PRICE. SUBJECT TO THE TERMS HEREOF, TRANSFEREE HAS BEEN AFFORDED THE OPPORTUNITY TO MAKE ANY AND ALL INSPECTIONS AND DUE DILIGENCE OF THE PROPERTY, PROPERTY OWNER, AND ANY OTHER MATTERS RELATED TO THE SALE INTEREST AND THE CONVEYANCE AS TRANSFEREE REASONABLY DESIRED AND, ACCORDINGLY, EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, TRANSFEREE WILL RELY SOLELY ON ITS OWN DUE DILIGENCE AND INVESTIGATIONS IN ACQUIRING THE SALE INTEREST. TRANSFEREE HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, NONE OF TRANSFEROR, ANY TRANSFEROR RELATED PARTY OR ANY PERSON ACTING ON BEHALF OF ANY OF THEM, NOR ANY PERSON WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY TRANSFEREE IN CONDUCTING ITS DUE DILIGENCE, NOR ANY REPRESENTATIVE, BROKER, ACCOUNTANT, ADVISOR, ATTORNEY, CONSULTANT, SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES, HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, WARRANTIES OF HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE PROPERTY, PROPERTY OWNER, OR THE SALE INTEREST, OTHER THAN THOSE EXPRESSLY CONTAINED HEREIN. TRANSFEREE FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS AGREEMENT AND THE CLOSING DOCUMENTS, ALL MATERIALS WHICH HAVE BEEN PROVIDED BY TRANSFEROR OR ANY TRANSFEROR RELATED PARTY OR ANY REPRESENTATIVE, BROKER, ACCOUNTANT, ADVISOR, ATTORNEY, CONSULTANT, SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES, HAVE BEEN PROVIDED WITHOUT ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THEIR CONTENT, SUITABILITY FOR ANY PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS AND TRANSFEREE SHALL NOT HAVE ANY RECOURSE AGAINST TRANSFEROR, ANY TRANSFEROR RELATED PARTY OR ANY REPRESENTATIVE, BROKER, ACCOUNTANT, ADVISOR, ATTORNEY, CONSULTANT, SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES IN THE EVENT OF ANY ERRORS

 

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THEREIN OR OMISSIONS THEREFROM. THE PROVISIONS OF THIS ARTICLE III SHALL SURVIVE CLOSING.

ARTICLE IV

Transferor’s Representation & Warranties

Transferor represents and warrants to Transferee as follows as of the Effective Date and (except with respect to any representation or warranty set forth in the Bringdown Certificate which is updated as of the Closing Date in accordance with the terms of Section 6.1(c) ) as of the Closing Date:

 

(a)             (i) Each of Transferor and Property Owner is duly formed or organized, validly existing and in good standing under the laws of the State of Delaware, (ii) Property Owner is qualified to do business in the State of Missouri, and (iii) except as otherwise disclosed in Schedule 4.1(a) attached hereto, Property Owner has not existed or operated under any other name, and Transferor has not existed under any other name since July 1, 2002. Property Owner has made all filings necessary in the State of Missouri to own and operate the Property, except to the extent such failure would not have a material adverse effect on the business operations, financial condition or results of operations of the Property.

(b)             Other than as may be limited by the Existing Mortgage Loan, Transferor has the full right, power and authority to enter into this Agreement, the Closing Documents and all other documents contemplated hereby, and to consummate the transactions contemplated by this Agreement, the Closing Documents and such other documents. All requisite partnership, limited liability company and corporate, as applicable, action have been taken by Transferor to authorize the execution and delivery of this Agreement, and will be taken by Transferor prior to Closing to authorize the execution and delivery of the instruments referenced herein and the consummation of the transactions contemplated hereby. Each of the Persons signing this Agreement, the Closing Documents, and the other documents contemplated by this Agreement on behalf of Transferor has the legal right, power and authority to bind Transferor.

(c)             Transferor owns, and will own immediately prior to Closing, directly or indirectly, beneficially and, to the extent applicable, of record, the Sale Interest free and clear of any Lien of any nature whatsoever (subject to the rights of Transferee pursuant to this Agreement and the covenants, conditions and restrictions set forth in the Existing Loan Documents). The Sale Interest is the only authorized, issued and outstanding direct equity interests in Property Owner. Except for this Agreement, the Existing Loan Documents and any agreements entered into by Transferee, the Sale Interest is not subject to any written agreements or understandings among Persons with respect to the voting or transfer thereof to which Transferee or Property Owner would be subject on or after the Closing Date. Except for any agreements entered into by Transferee, there are no subscriptions, options, warrants, calls, rights,

 

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convertible securities or other agreements or commitments of any character obligating Transferor, Property Owner or any of their respective affiliates to issue, transfer or sell, or cause the issuance, transfer or sale of, any direct equity interests or other securities (whether or not such securities have voting rights) of Property Owner to which Transferee or Property Owner would be subject on or after the Closing Date.

4.2  No Conflicts . The execution, delivery and performance by Transferor of this Agreement and the instruments referenced herein and the transaction contemplated hereby will not conflict with, or with or without notice or the passage of time or both, (i) result in a breach of, violation of, or constitute a default under any material term or provision of any articles of formation, certificate of incorporation, bylaws, certificate of limited partnership, certificate of limited liability company, partnership agreement (oral or written) (including any designation supplemental thereto), limited liability company agreement (oral or written) (including any designation supplemental thereto) or other operating agreement (oral or written) (including any designation supplemental thereto), as applicable, of Transferor or Property Owner, (ii) result in a breach of, violation of, or constitute a default under (subject to obtaining any consents required under the Existing Mortgage Loan) any material term or provision of, any indenture, deed of trust, mortgage, judicial or administrative order or Law, applicable to Transferor or Property Owner or by which Transferor, Property Owner, the Sale Interest, the Property (or any portion thereof), or any other asset of Property Owner is bound, or (iii) result in a breach of, violation of, or constitute a default under, any material term or provision of any Continuing Contract which breaches, violations and defaults would, individually or in the aggregate, have a material adverse effect on the business operations, financial condition or results of operations of the Property or Property Owner.

4.3  Consents; Binding Obligations . Other than with respect to any approval required under the Existing Loan Documents, no approval or consent (other than those which have already been obtained and have not been revoked) is required from any Person for Transferor to execute, deliver or perform this Agreement, the Closing Documents or the other instruments contemplated hereby, or for Transferor to consummate the transaction contemplated hereby, and (b) this Agreement, the Closing Documents and all other documents required hereby to be executed by Transferor are and shall be valid, legally binding obligations of Transferor, enforceable against Transferor in accordance with their respective terms. Transferor has delivered to Transferee copies of the Property Owner Organizational Documents, including all amendments thereto, which are true and complete in all material respects.

4.4  No Bankruptcy . No petition in bankruptcy (voluntary or otherwise), attachment, execution proceeding, assignment for the benefit of creditors, or petition seeking reorganization or insolvency, arrangement or other action or proceeding under Federal or state bankruptcy law is pending against or contemplated (or, to Transferor’s Actual Knowledge, threatened) by or against Transferor, any general partner of Transferor or Property Owner.

 

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(a)             Transferor has delivered to Transferee copies of the Tenant Leases, including all amendments, modifications and guaranties relating thereto which are true and complete in all material respects. Transferor has also made available to Transferee other material documents and notices relating to the Tenant Leases. Property Owner is the lessor under the Tenant Leases, and Property Owner has not, directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, assigned, transferred, encumbered, hypothecated, pledged or granted a security interest in any of the Tenant Leases or its interest therein (other than in connection with the Existing Mortgage Loan).

(b)             To Transferor’s Actual Knowledge, except as otherwise disclosed in Schedule   4.5(b) attached hereto, each of the Tenant Leases is in full force and effect. To Transferor’s Actual Knowledge, except as otherwise disclosed in Schedule   4.5(b) attached hereto, Property Owner has not sent or received any written notice of default under any of the material Tenant Leases. Transferor is not an affiliate of any Tenant under a Tenant Lease which will survive Closing, and Transferor does not have any direct or indirect ownership interest in any Tenant under a Tenant Lease which will survive Closing. For purposes of this Section 4.5(b) and Section 6.1(i) , the term “material Tenant Lease” shall mean a Tenant Lease demising more than 10,000 square feet of space.

(c)             Attached hereto as Schedule 4.5(c) is a true and correct copy of the rent roll for the Property (each, a “ Rent Roll ”) based upon which Property Owner operates the Property as of the date indicated therein, together with a schedule, to Transferor’s Actual Knowledge, of the amount of (i) all Tenant Deposits and pre-paid rent of more than one month in advance paid by each Tenant under each Tenant Lease, less amounts previously applied or returned to such Tenant, and (ii) any and all unpaid incentives, concessions, abatements, free rent amounts, allowances or inducements granted to each Tenant (other than those expressly set forth in the Tenant Leases).

(d)             Attached hereto as Schedule 4.5(d) is a list (the “ Contract List ”) that is true and complete in all material respects of all management, service, supply, repair and maintenance agreements, equipment leases, leasing and/or brokerage agreements and all other contracts and agreements (including the Contracts, but excluding the Tenant Leases) with respect to or affecting the Property, or by which Property Owner is bound, or under which Property Owner is liable, in each case, as of the Effective Date. Transferor has delivered to Transferee copies of all written material Continuing Contracts, which are true and complete in all material respects. The Contracts which are national contracts are identified on Schedule 4.5(d) attached hereto. Transferor has no direct or indirect ownership interest in any service provider under any Continuing Contract.

(e)             Except as otherwise disclosed in Schedule 4.5(e) attached hereto, neither Property Owner nor any other party thereto is in default under (i) any of the material Continuing Contracts or Permits beyond the expiration of any applicable grace or cure period,

 

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except to the extent such default would not have, individually or in the aggregate, a material adverse effect on the business operations, financial condition or results of operations of the Property or Property Owner, or (ii) any of the Permitted Exceptions beyond the expiration of any applicable grace or cure period, except to the extent such default would not have, individually or in the aggregate, a material adverse effect on the business operations, financial condition or results of operations of the Property or Property Owner.

(f)              Except as otherwise disclosed in Schedule 4.5(f) attached hereto, there are no third party brokerage and leasing agreements for which fees or commissions are or will be payable relating to the Tenant Leases which would be payable by Transferee or Property Owner after Closing.

4.6  No Actions/Compliance With Laws . Except as otherwise disclosed in Schedule   4.6 attached hereto, there are no actions, suits, proceedings, claims or investigations before any court or governmental authority pending, or to Transferor’s Actual Knowledge, threatened, against Transferor or Property Owner with respect to or affecting all of any portion of the Property (other than actions, suits, proceedings or claims fully covered (other than any applicable deductible) by insurance) which, if determined adversely to Transferor or Property Owner, could reasonably be expected to have a material adverse effect on the business operations, financial condition or results of operations of the Property or Property Owner, or on Transferor’s ability to consummate the transactions contemplated by this Agreement. None of Transferor, Property Owner or any affiliate thereof is a party to or otherwise bound by any consent decree, judgment, other decree or order, or settlement agreement which could reasonably be expected to have (i) an adverse effect on Transferor’s ability to perform its obligations hereunder, or (ii) a material adverse effect on the business operations, financial conditions or results of operations of the Property or Property Owner. To Transferor’s Actual Knowledge, except as otherwise disclosed in Schedule   4.6 attached hereto, neither Transferor nor Property Owner has received any written notice that the Property is in material violation of any Laws or requirements of any governmental authority, agency or officer having jurisdiction against or affecting the Property (a “ Violation ”), which have not previously been complied with in all material respects. Except as otherwise disclosed in Schedule   4.6 attached hereto, there are no proceedings pending nor, to Transferor’s Actual Knowledge, threatened, to alter or restrict the zoning or other use restrictions applicable to the Property, or to condemn all or any portion of the Property by eminent domain proceedings or otherwise (including a study or plan for road widening, realignment or relocation).

4.7  Hazardous Materials and Repairs . Schedule 4.7 attached hereto describes the most recent environmental report for the Property in Transferor’s Possession or Reasonable Control. Transferor has delivered to Transferee copies of all such environmental reports, which are true and complete in all material respects.

 

(a)             Transferor has delivered to Transferee copies of all ad valorem and other property tax statements and assessments covering the Property for the current plus 2

 

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preceding years, together with a copy of any notice of increase in valuation received by Transferor or Property Owner since the most recent of such tax statements that were issued, which copies are true and complete in all material respects. There are no special assessments or charges which have been levied against the Property that are not reflected on the tax bills with respect to the Property. Except as set forth on Schedule 4.8(a) attached hereto, to Transferor’s Actual Knowledge, no application or proceeding is pending to seek a reduction or increase in taxes or assessments for the Property.

(b)             Property Owner has never elected to be taxed other than as a partnership or a disregarded entity for Federal, state or local income tax purposes and Property Owner is currently classified for Federal, state or local income tax purposes as an entity which is disregarded as an entity separate from its owner. Property Owner has filed, or caused to be filed, all federal, state and material local tax returns, informational filings and reports (collectively, “ Tax Returns ”) that are required to be filed by them. All such returns, reports, and filings are true and complete in all material respects. Property Owner has paid, or caused to be paid, all Taxes shown to be due on such Tax Returns, and have paid, or caused to paid, all other Taxes that are shown on such return. Property Owner has no liability for Taxes (i) of another Person by reason of an agreement, transferee liability, joint and several liability, or otherwise, or (ii) of any predecessor. Property Owner does not own any direct or indirect ownership interest in any Person which is liable for any Taxes, including liability for Taxes (x) of another Person by reason of an agreement, transferee liability, joint and several liability, or otherwise, or (y) of any predecessor. Transferor has not received from any governmental authority any written notice the subject of which remains uncured (1) of underpayment of any material Tax which could become a Lien on the Property if not paid, (2) that any actions relating to the Tax liability of, or relating to, the Property, and which could become a Lien on the Property if not paid, are pending, and/or (3) that the institution of any such action is contemplated by any governmental authority. Property Owner has not waived any restrictions on the assessment or collection of Taxes which, if unpaid, could become a Lien on the Property, or has consented to the extension of any statute of limitations with respect to any such Tax that has not since expired. As of the Effective Date, and except as set forth on Schedule 4.8(b) attached hereto, neither Property Owner nor Transferor has received any written notice (A) of an actual or threatened audit of any tax return filed by or on behalf of Property Owner, or (B) that the applicable governmental entity disputes any material position taken by Property Owner or (if applicable to the transactions contemplated by this Agreement and the Closing Documents) Transferor, in any tax return subject to such audit.

(c)             Property Owner does not hold any securities, directly or indirectly, possessing more than 10% of the total voting power or total value of the outstanding securities of any one issuer for purposes of Section 856(c)(4)(B) of the Code, and not more than 5% of the total value of the total assets of Property Owner is represented by securities of any one issuer for purposes of Section 856(c)(4)(B) of the Code. Property Owner does not own any direct or indirect ownership interest in any Person which is classified as a corporation for Federal, state, or local income tax purposes. Except for this Agreement and the agreements listed on Schedule  

 

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4.8(c) attached hereto, there are no Tax Matters Agreements to which Property Owner or any subsidiary thereof is currently subject. For purposes of this Section 4.8(c) , “ Tax Matters Agreement ” shall mean any agreement pursuant to which Property Owner or any subsidiary thereof may have any liability relating to Taxes of another Person, whether or not as a result of the consummation of the transactions contemplated by this Agreement.

(d)             The adjusted tax basis of the Property (including all of its components) as set forth on Schedule 4.8(d) attached hereto is true and complete in all material respects as of March 31, 2007.

(e)             Annual tax depreciation amounts for the 2007 tax year and subsequent tax years for the Property (including all of its components), based on assets in place as of March 31, 2007 as set forth on Schedule 4.8(e) attached hereto is true and complete in all material respects as of March 31, 2007.

4.9  Non-Foreign Status . Neither Property Owner nor Transferor is a “foreign person” within the meaning of Section 1445 of the Code.

4.10      Not a Prohibited Person . (a) Neither Transferor nor Property Owner is a Prohibited Person; (b) to Transferor’s Actual Knowledge, none of its investors, affiliates or brokers or other agents (if any), acting or benefiting in any capacity in connection with this Agreement is a Prohibited Person; and (c) to Transferor’s Actual Knowledge, the Sale Interest is not the property of, and are not beneficially owned, directly or indirectly, by a Prohibited Person, nor are any of such assets the proceeds of specified unlawful activity as defined by 18 U.S.C. §1956(c)(7).

4.11      Union Contracts; Employees . Property Owner is not a party to, and neither Property Owner nor the Property is bound by, and Transferee shall have no obligation to assume, any collective bargaining agreement, union contract, retirement plan, benefit plan or other employment agreement with respect to the Property, and neither Transferor nor Westfield, LLC is subject to any such collective bargaining agreement, union contract, retirement plan, benefit plan or other employment agreement that will be binding upon Property Owner or Property Owner’s employees from and after Closing. Attached hereto as Schedule 4.11 is a list of all managers, leasing directors and other employees who are located at or specifically assigned to the Property (collectively, the “ Property Employees ”) as of the Effective Date, their base salaries, their hire dates and a summary of their employment benefits, which list is true and complete in all material respects. All of the Property Employees are employees of Westfield, LLC, and Property Owner does not have any employees.

4.12      Single-Purpose . Property Owner (a) has been formed solely for the purpose of acquiring, owning, operating, managing, leasing, financing and disposing of the Property and transacting any lawful business that is incidental to accomplish the foregoing, (b) has not engaged in any business that is unrelated to the activities set forth in the preceding clause (a) , (c) does not have any assets or liabilities other than those related to the Property and that are

 

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reflected in Property Owner’s financial statements, and (d) has never had any assets or liabilities other than those related to the Property.

4.13      ERISA . None of the assets of Transferor or Property Owner constitutes assets of any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, a “plan” within the meaning of Section 4975 of the Code, or a Person deemed to hold “plan assets” within the meaning of 29 C.F.R. 2510.3-101 of any such employee benefit plan or plans.

4.14      Financial Statements . Transferor has delivered to Transferee copies of financial statements for Property Owner, as of December 31, 2006. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, without footnotes, and present fairly in all material respects and in accordance with such principles, the financial position and result of the operations of the applicable entity as the date or period specified therein. Except as set forth in Schedule 4.14 attached hereto, Property Owner has not incurred any material liability other than (i) liabilities reflected in Property Owner’s financial statements described above, and (ii) liabilities incurred in the ordinary course of business of owning or operating the Property.

4.15      No Other Assets . Transferor has no material assets related to the ownership or operation of the Property other than Transferor’s interest in the Sale Interest to be conveyed to Transferee upon Closing.

4.16      Gift Certificates; Merchants Associations . Property Owner does not operate any gift certificate program other than the Westfield Gift Card Program currently being run through American Express. There are no Merchants Associations at the Property.

4.17      Existing Mortgage Loan . Attached hereto as Schedule 4.17 , is a list of all of the material loan documents related to the Existing Mortgage Loan, including all amendments and modifications thereto (the “ Existing Loan Documents ”). Transferor has delivered to Transferee copies of the Existing Loan Documents which are true and complete in all material respects. To Transferor’s Actual Knowledge, the outstanding principal balance of the Existing Mortgage Loan as of June 30, 2007 is set forth on Schedule 4.17 attached hereto. Neither Property Owner nor Transferor has received any written notice of default under the Existing Mortgage Loan. The only guarantees or letters of credit contemplated by the Existing Loan Documents that are currently applicable to the Property and which will be binding on Transferee and/or CBL REIT after Closing are the Assumed Guarantees. Property Owner is not currently required to make any cash escrow deposits under the Existing Loan Documents.

4.18      REAs . Transferor has delivered to Transferee copies of the REAs, which are true and complete in all material respects. To Transferor’s Actual Knowledge, each of the REAs are in full force and effect. Neither Property Owner nor Transferor has received or given any written notice of default under any of the REAs.

 

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4.19      Insurance Certificates . Transferor has delivered to Transferee copies of the certificates of the casualty and commercial liability insurance policies being maintained for the Property as of the Effective Date, which are true and complete in all material respects. The parties hereto acknowledge and agree that the insurance policies which will be maintained for the Property as of the Closing Date may not be the same as the insurance policies which are currently being maintained for the Property as of the Effective Date, but Transferor represents that the insurance policies which will be maintained for the Property through the Closing Date will afford substantially the same coverage as the insurance policies then being maintained for other properties directly or indirectly owned by Transferor which are similar to the Property.

Each of the representations and warranties contained in this Article IV (as the same may be updated in the Bringdown Certificate delivered in accordance with Section 6.1(c) ) are acknowledged by Transferor to be material and to be relied upon by Transferee in proceeding with this transaction, and (except for any representation or warranty set forth in the Bringdown Certificate which is updated as of the Closing Date in accordance with the terms of Section 6.1(c) ) shall be deemed to have been remade by Transferor as of the Closing Date. Transferor shall promptly notify Transferee, in writing, of any event or condition known to Transferor which occurs prior to the Closing Date and which causes a material adverse change in the facts relating to, or the truth of, any of the above representations or warranties.

Transferor shall not be deemed to be in breach of the representations and warranties contained in Sections 4.5 or 4.11 , as the case may be, with respect to any Contract(s) or employee matter(s), if Transferee does not assume responsibility for such Contract(s) or such employee matter(s), respectively, which violate(s) such representations and warranties, and none of Transferee, Property Owner or the Property would otherwise be bound thereby or have any liability with respect thereto on or after the Closing Date.

Except with respect to (i) any claims or actions arising out of any breach of covenants, agreements, indemnities, representations or warranties expressly set forth herein, (ii) any claims or actions for which Property Owner has liability insurance coverage, in which case the release set forth herein shall not include any amounts which are actually received from the applicable insurance company for such claim or action or the right of Property Owner to seek reimbursement under such policies, and (iii) any claims or actions for fraud on the part of Transferor or Property Owner or any of their respective affiliates, Transferee, for itself and its agents, affiliates, successors and assigns, hereby releases and forever discharges Transferor and each Transferor Related Party and their respective successors and assigns from any and all rights, claims and demands at law or in equity, whether known or unknown at the time of this Agreement, which Transferee has or may have in the future, arising out of the physical, environmental, economic or legal condition of the Property, or any tax, legal, economic or financial matters or condition relating to Property Owner or the Sale Interest.

Notwithstanding anything to the contrary set forth in this Agreement, (x) Transferee hereby expressly waives, relinquishes and releases any right or remedy available to it at law, in equity or under this Agreement, in the event Closing occurs, to make a claim against Transferor

 

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for damages that Transferee may incur, or to rescind this Agreement and the transactions contemplated hereby, as the result of any of Transferor’s representations or warranties in this Article IV being untrue, inaccurate or incorrect if, to Transferee’s Actual Knowledge and/or CBL OP’s Actual Knowledge, such representation or warranty shall be untrue, inaccurate or incorrect at the time of Closing and Transferee shall nevertheless proceed with Closing hereunder, and (y) without limiting the provisions of Section 13.4 , Transferor’s liability for breach of any representations or warranties of Transferor contained in this Article IV , any Closing Document, and/or in any other document executed by Transferor pursuant to this Agreement, including any instruments delivered at Closing, shall be deferred until such claims equal or exceed One Hundred Twenty Five Thousand and No/100 Dollars ($125,000.00) in the aggregate (to be valued and paid from the first dollar of loss in the event that such aggregate amount is exceeded), and Transferor’s aggregate liability for all claims arising out of any such covenants, representations and warranties shall not exceed Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00).

ARTICLE V

Transferee’s Representations and Warranties

Transferee represents and warrants to Transferor as follows as of the Effective Date and (except with respect to any representation or warranty set forth in the certificate delivered at Closing which is updated as of the Closing Date in accordance with the terms of Section 8.1(a) ) as of the Closing Date:

5.1  Authority . Transferee is a Delaware limited partnership duly formed or organized, validly existing and in good standing under the laws of the state of its organization and Transferee is qualified to do business in the states in which it presently conducts its business. Transferee has not existed or operated under any name other than CBL & Associates Limited Partnership. Transferee has made all filings necessary in the states in which it presently conducts its business to so conduct its business, except to the extent such failure would not have a material adverse effect on the business operations, financial conditions or results of operations of Transferee. Transferee has the full limited partnership right, power and authority to enter into this Agreement, the Closing Documents, and all other documents contemplated hereby, and to consummate the transaction contemplated by this Agreement, the Closing Documents and such other documents. All requisite partnership, limited liability company and corporate, as applicable, action have been taken by Transferee to authorize the execution and delivery of this Agreement, and will be taken by Transferee prior to the Closing to authorize the execution and delivery of the instruments referenced herein and the consummation of the transactions contemplated hereby. Each of the Persons signing this Agreement, the Closing Documents and the other documents contemplated by this Agreement on behalf of Transferee has the legal right, power and authority to bind Transferee.

5.2  No Conflicts . The execution, delivery and performance by Transferee of this Agreement and the instruments referenced herein and the transaction contemplated hereby will not conflict with, or with or without notice or the passage of time or both, (i) result in a breach

 

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of, violation of, or constitute a default under any material term or provision of any articles of formation, certificate of incorporation, bylaws, certificate of limited partnership, certificate of limited liability company, partnership agreement (oral or written) (including any designation supplemental thereto), limited liability company agreement (oral or written) (including any designation supplemental thereto) or other operating agreement (oral or written) (including any designation supplemental thereto), as applicable, of Transferee, or (ii) result in a breach of, violation of, or constitute a default under any material term or provision of any indenture, deed of trust, mortgage, contract, agreement, judicial or administrative order or Law applicable to Transferee, or by which Transferee or its assets are bound.

5.3  Consents; Binding Obligations . No approval or consent (other than those which have already been obtained and have not been revoked) from any Person is required for Transferee to execute, deliver or perform this Agreement, the Closing Documents or the other instruments contemplated hereby, or for Transferee to consummate the transactions contemplated hereby. This Agreement, the Closing Documents and all other documents required hereby to be executed by Transferee are and shall be valid, legally binding obligations of, and enforceable against, Transferee in accordance with their terms.

5.4  No Bankruptcy . No petition in bankruptcy (voluntary or otherwise), attachment, execution proceeding, assignment for the benefit of creditors, or petition seeking reorganization or insolvency, arrangement or other action or proceeding under Federal or state bankruptcy law is pending against or contemplated (or, to Transferee’s Actual Knowledge, threatened) by or against Transferee or any general partner of Transferee.

5.5  No Legal Proceedings . There are no actions, suits, proceedings or investigations before any court or governmental authority pending or, to Transferee’s Actual Knowledge, threatened against Transferee which, if determined adversely to Transferee, could reasonably be expected to have (a) an adverse effect on Transferee’s ability to perform its obligations hereunder, or (b) a material adverse effect on Transferee’s business operations, financial condition or results of operations (a “ Material Adverse Effect ”). Transferee is not a party to or otherwise bound by any consent decree, judgment, other decree or order, or settlement agreement which could reasonably be expected to have (i) an adverse effect on Transferee’s ability to perform its obligations hereunder, or (ii) a Material Adverse Effect.

5.6  Not a Prohibited Person . (a) Transferee is not a Prohibited Person; (b) to Transferee’s Actual Knowledge, none of its investors, affiliates or brokers or other agents (if any), acting or benefiting in any capacity in connection with this Agreement is a Prohibited Person; and (c) to Transferee’s Actual Knowledge, the assets owned by Transferee are not the property of, and are not beneficially owned, directly or indirectly, by a Prohibited Person, nor are any of such assets the proceeds of specified unlawful activity as defined by 18 U.S.C. §1956(c)(7).

5.7  ERISA . None of the assets of Transferee constitutes assets of any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, a “plan” within the meaning of Section 4975 of the Code, or a Person deemed

 

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to hold “plan assets” within the meaning of 29 C.F.R. 2510.3-101 of any such employee benefit plan or plans.

Each of the representations and warranties contained in this Article V (as the same may be updated in the certificate delivered in accordance with Section 8.1(a) ) are acknowledged by Transferee to be material and to be relied upon by Transferor in proceeding with this transaction, and (except for any representation or warranty set forth in such certificate which is updated as of the Closing Date in accordance with the terms of Section 8.1(a) ) shall be deemed to have been remade by Transferee as of the Closing Date. Transferee shall promptly notify Transferor, in writing, of any event or condition known to Transferee which occurs prior to the Closing Date and which causes a material adverse change in the facts relating to, or the truth of, any of the above representations or warranties.

ARTICLE VI

Additional Undertakings

6.1  Covenants . Until the earlier of Closing or the termination of this Agreement, Transferor undertakes and agrees as follows:

(a)             Transferor shall cause the Property to be operated and maintained, shall perform or cause to be performed all of its and Property Owner’s obligations (including obligations under the Existing Loan Documents, the Contracts, the REAs, and the Tenant Leases), and shall timely make or cause to be made any required payments relating to the Property in a professional manner, in each case, in accordance, in all material respects, with Transferor’s and Property Owner’s past practice and all applicable Laws. Transferor shall cause Property Owner to maintain in existence all material licenses, permits and approvals, if any, in its name necessary to the continuing ownership, operation and maintenance of the Property.

(b)             Subject to Section 6.1(c) , without Transferee’s prior written approval, which may be withheld in Transferee’s sole and absolute discretion, neither Transferor nor Property Owner shall directly or indirectly (i) sell, contribute or assign the Sale Interest or the Property or any part thereof, (ii) cause any voluntary mortgage, deed of trust or Lien (other than the Permitted Exceptions) to be placed of record against the Sale Interest or the Property or any part thereof, (iii) subject to Section 2.2 , take any action which would modify the status of title to (or the legal description of) the Property as shown on the Title Commitment, (iv) subject to Section 2.2 , take any action which would adversely affect Transferee’s ability to obtain the Title Policy in accordance with Section 7.1(a) , (v) enter into any agreement to do any of the foregoing, or (vi) cause or permit Property Owner to do any of the foregoing.

(c)             Without Transferee’s prior written approval (not to be unreasonably withheld, delayed or conditioned, except that Transferee may withhold its consent in its sole discretion to any proposed Tenant Lease which is not consistent with the Approved Transactions Guidelines), Transferor shall not (i) enter into any new (or extend, renew or replace any existing) lease, agreement, service contract, employment contract, permit or obligation affecting the

 

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Property which would be binding upon Transferee or Property Owner after the Closing, or (ii) terminate any Tenant Lease or Continuing Contract, or otherwise materially amend, supplement or modify any of the foregoing ( provided , however , that nothing in the foregoing clauses (i) or (ii) shall prohibit Transferor or Property Owner from (A) entering into a Tenant Lease if such Tenant Lease is with a reasonably creditworthy Tenant on terms substantially consistent with those set forth on Schedule 6.1(c) attached hereto (the “ Approved Transactions Guidelines ”) ( i.e. , within 10% of the applicable base rent set forth in the Approved Transactions Guidelines), or (B) extending or renewing the term of any Tenant Lease, or expanding the space demised by any Tenant Lease, or otherwise amending any Tenant Lease, if such extension, renewal, expansion or amendment is (I) pursuant to an existing option in such Tenant Lease, or (II) on terms substantially consistent with those set forth on the Approved Transactions Guidelines ( i.e. , within 10% of the applicable base rent set forth in the Approved Transactions Guidelines); in the case of each of clauses (A) and (B) , without Transferee’s consent, and Transferor and Property Owner shall have the right to do any of the foregoing without Transferee’s consent), (iii) change, alter, file for, pursue, accept or obtain any zoning, land use permit or other development approval or entitlement related to the Property, (iv) consent to the inclusion of the Property in any special district, (v) commence any action, suit or proceeding against a defaulting anchor Tenant or any other Tenant under a Tenant Lease involving more than 25,000 square feet of gross leaseable area, or (vi) cause or permit Property Owner to do any of the foregoing; provided , however , that Transferor may enter into, or cause Property Owner to enter into, any service or similar contract without Transferee’s approval if such contract is entered into in the ordinary course of Transferor’s or Property Owner’s business and is terminable without penalty or premium on not more than 30 days’ notice from Transferor or Property Owner. Transferee shall respond to any request for consent under this Section 6.1(c) within 5 Business Days of its receipt of a written request for such consent together with a copy of the document (or a summary of all material terms) for which such consent is being requested. In the event that Transferee fails to respond within such 5 Business Day period, Transferee shall be deemed to have consented to such request. At Closing, Transferor shall deliver to Transferee an updated representation certificate (the “ Bringdown Certificate ”), pursuant to which Transferor shall provide, and represent and warrant to Transferee as to, updated versions of each of the representations and warranties set forth in Article IV , all updated as of the Closing Date (or such other date as may be specified in Article IV ). Transferee’s obligation to consummate the transaction contemplated by the Agreement shall remain subject to the satisfaction of, or waiver by Transferee of, the condition set forth in Section 7.1(b) .

(d)             Neither Transferor nor Property Owner shall (other than security deposits and first month’s rent received at the commencement of the term of a Tenant Lease), accept any rent from any Tenant for more than one month in advance of the payment date.

(e)             Except as set forth in Section 6.1(c) , Transferor and Property Owner shall have the right to commence or prosecute any action, suit or proceeding against a defaulting Tenant or any defaulting vendor under any Continuing Contract so long as the commencement

 

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and prosecution of such action, suit or proceeding is consistent with Transferor’s or Property Owner’s past practice.

(f)              Transferor shall not elect, and Property Owner shall not file an election, to treat Property Owner as other than as a disregarded entity (as described in Section 301.7701-3(b)(1)(ii) of the Treasury Regulations) for Federal, state or local income tax purposes.

(g)             Transferor shall maintain, or cause to be maintained, casualty and general commercial insurance coverage for the Property similar to the insurance coverage maintained for other properties directly or indirectly owned by Transferor which are similar to the Property.

(h)             Transferor shall not, and shall cause Property Owner not to, settle any proceedings with respect to the payment of real property taxes or assessments for the Property with respect to (i) the tax year in which the Closing Date occurs and each tax year thereafter, and (ii) any tax year preceding the tax year in which the Closing Date occurs in a manner that would have a material adverse effect on Transferee after the Closing Date; provided , that the foregoing shall not prohibit Transferor from commencing and/or pursuing, or causing Property Owner to commence and/or to pursue, any tax proceedings with respect to the payment of real property taxes or assessments in the ordinary course of business.

(i)              Transferor shall, or shall cause Property Owner to, provide Transferee with (i) a copy of any written notice of default given or received by Transferor or Property Owner under any material Tenant Lease, the Existing Mortgage Loan or any REA, and (ii) notice of any litigation (other than litigation covered by insurance) actually commenced by or against Transferor (with respect to Property Owner or the Property) or Property Owner, (iii) notice of any arbitration or governmental proceeding instituted against Property Owner, and (iv) a copy of any written notice of eminent domain or condemnation proceedings received by Transferor or Property Owner. On the Closing Date, Transferor shall, or shall cause Property Owner to, provide Transferee with a list of all outstanding litigation (including litigation covered by insurance) against Transferor (with respect to Property Owner or the Property) or Property Owner.

(j)              Notwithstanding the provisions of the Access Agreement, from and after the Effective Date, upon reasonable prior notice to Transferor, Transferee shall have the right, during normal business hours, to interview the Tenants under Tenant Leases, the holder of the Existing Mortgage Loan (but only to the extent necessary for Transferee to comply with its obligations under Section 6.9 ) and the counterparties to the REAs; provided , that Transferor shall have the right to have a representative of Transferor present at all such interviews. The parties shall reasonably cooperate to facilitate such interviews and such participation.

(k)             Each of Transferor and Transferee hereby agrees that, between the Effective Date and Closing, each shall keep the other reasonably informed (and shall establish

 

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procedures to keep the other reasonably informed) of matters relating to the operation and leasing of the Property and satisfaction of any conditions precedent to Closing hereunder.

6.2  Actions by Property Owner . Except as otherwise expressly permitted by this Agreement, prior to Closing or termination of this Agreement, without the prior written consent of Transferee (which consent may be withheld in Transferee’s sole and absolute discretion), Transferor shall not, and shall not cause or permit Property Owner to:

(a)             issue, sell, dispose of, or agree to issue, sell, or dispose of, any equity interests, or any debt or any securities convertible into or exchangeable for equity interests in Property Owner;

(b)             purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, any equity interests in Property Owner, if as a result of any of the foregoing, Transferor would fail to be able to convey the Sale Interest to Transferor in accordance with the terms of this Agreement;

(c)             incur, or become contingently liable with respect to, any new or additional indebtedness or enter into any guarantee of any indebtedness or issue any debt securities, other than trade payables in the ordinary course of business consistent with past practices;

(d)             acquire, or agree to acquire, by merging or consolidating with, or by purchasing a substantial direct or indirect equity interest in or a substantial portion of the assets of, or by any other manner, any business or any Person;

(e)             mortgage or otherwise voluntarily place a Lien on the Property, unless such Lien is discharged or bonded over on or prior to the Closing Date;

(f)              acquiesce in or admit liability with respect to any claim against it, or, except in the ordinary course of business, waive, surrender or compromise any claim it possesses unless any liability arising from such admission, compromise or settlement is fully discharged on or prior to the Closing Date or as to which Property Owner would not have any liability after the Closing Date;

(g)             commence, or allow to be commenced, on Property Owner’s behalf, any material action, suit or proceeding affecting Property Owner or with respect to all or any portion of the Property or the Sale Interest, except in the ordinary course of business or as contemplated in Section 6.1(e) ;

(h)             commence, or allow to be commenced (other than by a Tenant) any capital improvements or material renovations or alterations to the Property, except as may be (i) required by applicable law, any Tenant Lease, a holder of the Existing Mortgage Loan, or any

 

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REA, or (ii) set forth in the budgets delivered to Transferee by Transferor in connection with Transferee’s due diligence of the Sale Interest; or

(i)              be listed for direct or indirect sale or transfer; and Transferor shall not, and shall not cause or permit Property Owner to, negotiate for the same, other than to Transferee.

6.3  Termination of Contracts . Transferee agrees to use commercially reasonable efforts to communicate with all vendors under the Contracts and to consider in good faith continuing the terms of such Contracts, provided , that for any Contracts which are national contracts or which require the consent of the other party thereto to any change-of-control in Property Owner, if Transferee so elects, Transferee shall negotiate with such contract parties to continue the terms of such Contracts pursuant to a separate agreement with the applicable counterparty to such Contract. Transferor agrees to terminate (or cause Property Owner to terminate) by written notice to the other party thereto, effective as of Closing (or as soon as possible after Closing if termination as of Closing is not possible under the terms of such Contracts), any of the Contracts specifically identified in Schedule 6.3 attached hereto or any other Contract that Transferee requests Transferor prior to Closing to terminate. Transferor shall furnish Transferee with copies of all notices of termination given by Transferor pursuant to this Section   6.3 , each of which notices shall be delivered to the addressee thereof promptly after Transferor’s receipt of Transferee’s request to terminate the related Contract. With respect to any Contracts which Transferee timely requires to be terminated, Transferee shall pay all termination costs, fees and/or expenses related thereto (together with all other fees, amounts, costs and expenses due under the terms of such Contracts whether or not due and payable on or prior to Closing); provided , however , that, Transferor shall pay such costs, fees and expenses to the extent related to the termination of (a) any Contract between Property Owner and its affiliate, (b) any Contract that is a national contract, and (c) any Contract that provides that a change-of-control in Property Owner must be consented to by any party to such Contract, but only if Transferee desires to continue the terms of such Contract and such consent cannot be obtained.

6.4  Casualty Damage/Condemnation . Notwithstanding anything to the contrary set forth in this Agreement, if, prior to Closing, (a) Fifteen Million and No/100 Dollars ($15,000,000.00) or more of damage is caused to the Property, or (b) any portion or portions of the Property having an aggregate fair market value equal to or greater than Fifteen Million and No/100 Dollars ($15,000,000.00) is taken (or is threatened to be taken) under the power or threat of eminent domain (temporarily or permanently), (c) material access to the Property or a material portion of the parking of the Property is destroyed as a result of a casualty or taking (or threatened taking) under the power or threat of eminent domain (temporarily or permanently), or (d) any portion of the Property is rendered untenantable as a result of a casualty or taking (or threatened taking) under the power or threat of eminent domain (temporarily or permanently) such that, with respect to clauses (c) , or (d) , the use of the balance of the Property is materially impaired for a material period of time, and such impairment would have a material adverse effect on the business operations, financial condition or results of operations of the Property, the Sale Interest, and Property Owner, taken as a whole, then, in any such event, Transferee may elect to

 

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terminate this Agreement by giving written notice to Transferor of its election to terminate this Agreement (a “ Material Event Termination Notice ”), on or before the 10 ^th day after Transferee receives written notice of such destruction, taking or threatened taking. If Transferee does not give (or has no right to give) a Material Event Termination Notice within such 10 day period, then (i) this transaction shall close as set forth in this Agreement, (ii) Transferee shall pay the full Purchase Price (subject to clause (iv) below), (iii) to the extent not automatically assigned indirectly to Transferee upon the consummation of the Conveyance, Transferor shall assign (or cause Property Owner to assign) to Transferee the proceeds of any insurance policies payable to Transferor or Property Owner (or shall assign the right or claim to receive such proceeds after Closing), or Transferor’s or Property Owner’s right to or portion of any condemnation award (or payment in lieu thereof), (iv) the amount of any deductible or self-insured or uninsured amount and any portion of the insurance proceeds or condemnation awards distributed to any direct or indirect equity owner of Property Owner shall be a credit against the Purchase Price in accordance with Section 10.1(h) , and any proceeds from rent or business interruption insurance allocable to the period from and after the Closing Date (less any deductibles allocable to such periods) shall be retained by Property Owner (or Transferor shall receive a credit for the portion of any such proceeds (less any such deductibles) not so retained by Property Owner). If an event described in the first sentence of this Section 6.4 shall occur, and Transferee timely delivers a Material Event Termination Notice with respect to such event pursuant to this Section 6.4 , Transferee shall pay all cancellation charges, if any, of Escrow Agent and the Title Company, and this Agreement shall be of no further force or effect and none of the parties shall have any further rights or obligations hereunder (other than pursuant to any provision which expressly survives the termination of this Agreement). Transferor shall not settle or compromise any insurance claim or condemnation action without the prior written consent of Transferee (not to be unreasonably withheld, delayed or conditioned), and Transferee shall have the option to participate in any such claim or action.

6.5  Risk of Loss . Transferor shall retain risk of loss of the Property until 12:01 a.m. on the Closing Date, after which time the risk of loss shall pass to Transferee and Transferee shall be responsible for obtaining its own insurance thereafter.

6.6  Estoppel Certificates . On or before the Closing Date, Transferee shall have received copies of (a) executed estoppel certificate from each Tenant identified on Schedule 6.6 attached hereto (each, an “ Anchor Tenant ”), each in the form customary for such Anchor Tenant and not alleging any default by Property Owner (such estoppel certificates being the “ Anchor Estoppels ”), (b) executed estoppel certificates from Tenants other than the Anchor Tenants and that, in the aggregate, lease at least 75% of the gross leaseable area of the Property that is occupied by Tenants that are not Anchor Tenants, each in substantially the form attached hereto as Exhibit A (each, a “ Tenant Estoppel ”), provided , that any such Tenant Estoppel shall be accepted as long as it is consistent with the information set forth in the applicable Tenant Lease, and does not indicate the continuing existence of an actual material default of Property Owner under the applicable Tenant Lease, and (c) executed estoppel certificates from each party to the reciprocal easement agreement (“ REA ”) encumbering the Property (each such party being an

 

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“ REA Party ”), each in the form customary for such REA Party and not alleging any default by Property Owner (each, an “ REA Estoppel ”). If a Tenant’s Tenant Lease prescribes a form of estoppel that is different than the applicable estoppel form attached to this Agreement, then an estoppel certificate executed by such Tenant in the form attached to such Tenant Lease shall be deemed to satisfy the requirements of this Section 6.6 with respect to such Tenant. Notwithstanding the foregoing, if Transferor is not able to procure the requisite number of Tenant Estoppels identified in subsection (b) above in accordance with the terms of this Section 6.6 , then Transferor may deliver a copy of an estoppel certificate (each, a “ Transferor’s Estoppel ”) executed by Transferor relating to such Tenant’s Tenant Lease (as the case may be), in substantially the same form as the applicable Tenant Estoppel (but limited to Transferor’s Actual Knowledge), in substitution for up to 15% of the gross leaseable area of the Tenant Estoppels required pursuant to subsection (b) above. If a Tenant Estoppel is subsequently delivered to Transferee with respect to any Tenant Lease for which a Transferor’s Estoppel has already been provided, such Transferor’s Estoppel shall cease to be effective and will be considered replaced by such Tenant Estoppel. Each of the Estoppel Certificates shall be dated effective as of no earlier than 45 days prior to the Closing Date. At Closing, Transferor shall deliver to Transferee each executed original Estoppel Certificate. The failure of Tenants or REA Parties (or of Tenants, REA Parties and Transferor, collectively) to deliver Estoppel Certificates sufficient to satisfy the condition precedent set forth in this Section   6.6 shall cause the closing condition set forth in Section 7.1(e) to remain unsatisfied, but shall not give rise to any liability on the part of Transferor, and Transferee’s rights under such circumstances shall be limited to the rights set forth in Section 7.2 . Notwithstanding the foregoing, any estoppel that alleges the existence of a material default by Transferor or Property Owner which remains uncured past applicable notice and cure periods shall not count towards the percentage of estoppels required under this Section 6.6 .

 

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