REG » Topics » 8.2. Sellers .

This excerpt taken from the REG 10-Q filed May 10, 2005.

8.2. Sellers.

 

(a) Organization. Each Seller is duly organized, validly existing and in good standing under the laws of the state of its organization.

 

(b) Power. Each Seller has all requisite power and authority to enter into, execute and deliver this Agreement and the Ancillary Instruments to which it is or shall be a party and to carry out the Transactions.

 

(c) Authorization. The execution and delivery of this Agreement and the Ancillary Instruments to which any Seller is or shall be a party and the full performance of the obligations of such Seller hereunder and, if applicable, thereunder, have been duly authorized by all requisite legal approval of such Seller and any other necessary approval or authorization.

 

(d) Validity. This Agreement has been duly and validly executed and delivered by each Seller and is, the legal, valid and binding obligation of such Seller, enforceable in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally, and by general equitable principles. Each Ancillary Instrument to which each Seller is a party or shall be a party when duly and validly executed and delivered by each Seller will be the legal, valid and binding obligation of such Seller, enforceable in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally, and by general equitable principles.

 

(e) Title. Each Seller has record and beneficial ownership of and shall convey to Buyer at Closing the Membership Interests to be sold by such Seller hereunder, free and clear of all Liens, including voting trusts or agreements, proxies, marital or community property interests, rights of first refusal, rights of first offer or options to purchase (except transfer restrictions set forth in the Organizational Documents of the Companies).

 

8.3. Ownership of Properties. An entity in the Company Group owns title to (or leases to the extent shown on Schedule 8.3) each of the Properties and Exhibit B correctly identifies which entity in the Company Group owns each Property. Neither the Company Group nor any Affiliate of any Selling Party owns or has any interest in any real property directly abutting or adjoining or in the immediate vicinity of any Property. For purposes hereof, the phrase “immediate vicinity of any Property” means any real property which would be deemed to be a material or integral part of the overall shopping center development on the Property.

 

8.4. No Encumbrances. Except as otherwise contemplated by this Agreement, the Membership Interests, the equity interests of all the Subsidiaries and the material non-real estate property and assets they purport to own, as reflected on the Recent Balance Sheet are free and clear of all Liens and Encumbrances that will remain outstanding after the Closing Date. There are no outstanding judgments against any entity in the Company Group and none of their material assets which are subject to any judgment liens.

 

8.5. No Violation. Except as set forth on Schedule 8.5 or otherwise contemplated by or provided for in this Agreement, neither the execution and delivery of this Agreement or the Ancillary Instruments nor the consummation by Selling Parties of the Transactions (a) will

 

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violate any Law or Order, (b) will require any authorization, consent, approval, exemption or other action by or notice to any Governmental Authority, or (c) will constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of, or accelerate the performance required by, or result in the creation of an additional third party right or any Lien upon any of the assets of the Sellers or the Company Group (or the Membership Interests) under any term or provision of the Organizational Documents of the Sellers or the Company Group.

 

8.6. Financial Statements. Included as Schedule 8.6 are true and complete copies of (a) the consolidated financial statements of the Company Group (or separate consolidated financial statements for each Company and its Subsidiaries) consisting of balance sheets as of December 31, 2003 and the related statements of income and cash flows for the years then ended (including the notes contained therein or annexed thereto), which financial statements have been reported on, and are accompanied by, the signed opinions of PricewaterhouseCoopers LLP, independent auditors for the Company Group for such year, and (b) the unaudited consolidated financial statements of the Company Group (or separate consolidated financial statements of each Company and its Subsidiaries), consisting of an unaudited balance sheet of the Company Group as of December 31, 2004 (the “Recent Balance Sheet”), and the related unaudited statements of income and cash flows for the twelve (12) months then ended and for the corresponding period of the prior year (including any notes and schedules contained therein or annexed thereto). Such financial statements and notes fairly present the financial condition and the results of operations and cash flow of the Company Group as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, subject in the case of the unaudited financial statements, to normal year-end adjustments and the absence of notes (that, if presented, would not differ materially from those included in the audited financial statements). Sellers acknowledge and agree that Buyer intends to execute and deliver an engagement letter with PricewaterhouseCoopers LLP, pursuant to which PricewaterhouseCoopers, LLP shall provide to Buyer, at Buyer’s expense, a certification of such financial statements as Buyer or Investor may reasonably require in connection with filing a Form 8-K or other documents.

 

8.7. Absence of Undisclosed Liabilities. As of the date hereof, the entities in the Company Group have no liabilities or obligations of any nature (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (i) liabilities stated or adequately reserved against on the Recent Balance Sheet, (ii) liabilities that arose in the ordinary course of business after the date of the Recent Balance Sheet consistent with past practice, (iii) liabilities for brokers, counsel, other consultants and other costs incurred in connection with the Transactions and this Agreement (all of which shall be paid by Sellers), and (iv) liabilities that would not be required to be disclosed on a combined balance sheet of all of the entities in the Company Group or in the footnotes thereto, if such balance sheet were prepared in accordance with GAAP as of the date hereof.

 

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