Exhibit 10.1

PropCo Agreement

Notarial roll of deeds No. 1767/2010

Recorded

in Munich on this  27th day of  May 2010

Before the undersigned notary

Dr. Michael Bohrer (Notary),

officially appointed in Munich, State of Bavaria, Germany appeared in my offices
located at Brienner Straße 29, D-80333 München:

appeared today:

I.             Mr. Dr. Martin Ströhmann, born on 02/18/1973,

with business address at Kirkland & Ellis International LLP, Maximilianstraße
11, 80539 Munich, Germany, personally known to me,
excluding any personal liability while acting not in his own name, but on the
basis of notarized powers of attorney the originals of which were presented to
the Notary on the beginning of the notarization and certified copies of which
are attached to this deed, on behalf of

 

1.       Sunrise Reinbek Senior Living GmbH & Co. KG, organized and existing
under the laws of Germany, registered with the commercial register of the local
court of Königstein under HRA 2918, with business address at Frankfurter Straße
1, 61476 Kronberg im Taunus, Germany

- Reinbek PropCo -

2.       Sunrise Hannover Senior Living GmbH & Co. KG, organized and existing
under the laws of Germany, registered with the commercial register of the local
court of Königstein under HRA 3045, ibidem

- Hannover PropCo -

3.       Sunrise Villa Camphausen Senior Living GmbH & Co. KG, organized and
existing under the laws of Germany, registered with the commercial register of
the local court of Königstein under HRA 2915, ibidem

- Camphausen PropCo -

4.       Sunrise Frankfurt-Westend Senior Living GmbH & Co. KG, organized and
existing under the laws of Germany, registered with the commercial register of
the local court of Königstein under HRA 2943, ibidem

- Frankfurt PropCo -

5.       Sunrise Königstein Senior Living GmbH & Co. KG, organized and existing
under the laws of Germany, registered with the commercial register of the local
court of Königstein under HRA 3029, ibidem

- Königstein PropCo -

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PropCo Agreement

6.       Sunrise Oberursel Senior Living GmbH & Co. KG, organized and existing
under the laws of Germany, registered with the commercial register of the local
court of Königstein under HRA 2972, ibidem

- Oberursel PropCo -

7.       Sunrise Wiesbaden Senior Living GmbH & Co. KG, organized and existing
under the laws of Germany, registered with the commercial register of the local
court of Königstein under HRA 3008, ibidem

- Wiesbaden PropCo -

8.       Sunrise München-Thalkirchen Senior Living GmbH & Co. KG, organized and
existing under the laws of Germany, registered with the commercial register of
the local court of Königstein under HRA 3038, ibidem

- München PropCo –

- Reinbek PropCo, Hannover PropCo, Camphausen PropCo, Frankfurt PropCo,
Königstein PropCo, Oberursel PropCo, Wiesbaden PropCo and München PropCo
hereinafter collectively referred to as Seller PropCos and each as a Seller
PropCo -

 

9.       Sunrise Reinbek GmbH, organized and existing under the laws of Germany,
registered with the commercial register of the local court of Königstein under
HRB 6204, with business address at Frankfurter Straße 1, 61476 Kronberg im
Taunus, Germany

- Reinbek OpCo -

10.    Sunrise Hannover GmbH, organized and existing under the laws of Germany,
registered with the commercial register of the local court of Königstein under
HRB 6613, ibidem

- Hannover OpCo -

11.    Sunrise Villa Camphausen GmbH, organized and existing under the laws of
Germany, registered with the commercial register of the local court of
Königstein under HRB 6156, ibidem

- Camphausen OpCo -

12.    Sunrise Frankfurt-Westend GmbH, organized and existing under the laws of
Germany, registered with the commercial register of the local court of
Königstein under HRB 6510, ibidem

- Frankfurt OpCo -

13.    Sunrise Königstein GmbH, organized and existing under the laws of
Germany, registered with the commercial register of the local court of
Königstein under HRB 6787, ibidem

- Königstein OpCo -

14.    Sunrise Oberursel GmbH, organized and existing under the laws of Germany,
registered with the commercial register of the local court of Königstein under
HRB 6334, ibidem

- Oberursel OpCo -

15.    Sunrise Wiesbaden GmbH, organized and existing under the laws of Germany,
registered with the commercial register of the local court of Königstein under
HRB 6570, ibidem

- Wiesbaden OpCo -

 

 

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PropCo Agreement

16.    Sunrise München-Thalkirchen GmbH, organized and existing under the laws
of Germany, registered with the commercial register of the local court of
Königstein under HRB 6614, ibidem

- München OpCo -

- Reinbek OpCo, Hannover OpCo, Camphausen OpCo, Frankfurt OpCo, Königstein OpCo,
Oberursel OpCo, Wiesbaden OpCo and München OpCo hereinafter collectively
referred to as Seller OpCos and each as a Seller OpCo -

         - Seller PropCos and Seller OpCos hereinafter collectively referred to
as Sellers and each as Seller -

17.    Sunrise Senior Living Germany GmbH, organized and existing under the laws
of Germany, registered with the commercial register of the local court of
Königstein under HRB 5854, ibidem

- ManCo -

II.            Mr. Dr. Kai Terstiege, born on 01/12/1980,

with business address at Kirkland & Ellis International LLP, Maximilianstraße
11, 80539 Munich, Germany, identified by his German identity card No. 132842543,
excluding any personal liability while acting not in his own name, but an the
basis of a written power of attorney a pdf-copy of which was presented to the
Notary on the beginning of the notarization and the original of which will be
send to the notary and shall be attached to this deed, on behalf of

 

18.    Sunrise Properties Germany GmbH, organized and existing under the laws of
Germany, registered with the commercial register of the local court of
Königstein under HRB 5835, ibidem

- HoldCo -

III.          Mr. Edward Frantz, born on 08/31/1960,

with business address at Sunrise Senior Living, Inc., 7900 Westpark Drive, Suite
T-900, 22102 McLean, USA,  personally known to me,
excluding any personal liability while acting not in his own name, but an the
basis of a written power of attorney a pdf-copy of which was presented to the
Notary on the beginning of the notarization and the original of which will be
send to the notary and shall be attached to this deed, on behalf of

 

19.    Sunrise Senior Living, Inc., organized and existing under the laws of
Delaware, USA registered with the Secretary of State Office under number
2461436, with business address at 7900 Westpark Drive, Suite T-900, 22102
McLean, USA

- SSLI -

 

IV.          Mr. Jochen Lindner, born on 09/20/1964 and Mr. Wolfgang Grimm. born
on 11/23/1953,  

both with business address at Mühlbauerstrasse 1, 81677 Munich, Germany,
identified by their German identity cards No. 802353990 (Mr. Lindner) and
2387958927 (Mr. Grimm),

acting not in their own name, but jointly each of them in his capacity as a
managing director on behalf of,

 

 

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PropCo Agreement

 

20.    GHS Pflegeresidenzen Grundstücks GmbH, organized and existing under the
laws of Germany, registered in the commercial register of the local court of
München under HRB 173455, with business address at Mühlbauerstrasse 1, 81677
Munich, Germany

- GHS -

 

V.            Mr. Jobst Beckmann, born on 02/24/1943,  and Mr. Dr. Ulrich Nack,
born on 05/17/1966,

with business address at Wittelbacherplatz 1, 80333 Munich, Germany, both of
them personally known to me,

acting not in their own name, but jointly each of them in his capacity as a
managing director on behalf of,

 

21.    TMW Pramerica Property Investment GmbH, organized and existing under the
laws of Germany, registered in the commercial register of the local court of
Munich under HRB 149355, with business address at Wittelsbacherplatz 1, 80333
Munich, acting for the account of the special real estate fund to be formed and
named Pflegeheimspezialfonds I.

- Pramerica -

- GHS and Pramerica hereinafter collectively referred to as PropCo Buyers
and each as a PropCo Buyer -

 

- Sellers and PropCo Buyers hereinafter collectively referred to as Parties and
each as a Party -

 

I, the undersigned Notary, have reviewed the real estate register. The persons
appeared have given, while being present at the same time, concurred
declarations which I notarize as follows:

 

Ich, der beurkundende Notar, habe mich über den Inhalt des Grundbuchs
unterrichtet. Die Erschienenen gaben bei gleichzeitiger Anwesenheit mündlich
übereinstimmende Erklärungen ab, die ich wie folgt beurkunde:

The persons appeared also requested to notarize this deed in the English
language. The declarations in Clauses 2 and 9 have been made, as requested, in
the English as well as in the German language. If and to the extent the English
language deviates from the German language, the Parties shall amend the German
language version without undue delay (unverzüglich) in the necessary form so
that it conforms to the English language version to ensure that the English
language version is fully and adequately reflected in the German language of
this deed.

 

Die Beteiligten beantragten darüber hinaus, diese Urkunde in der englischen
Sprache aufzunehmen. Die Erklärungen in den Abschnitten 2 und 9 der Urkunde sind
antragsgemäß sowohl in der deutschen als auch in der englischen Sprache
beurkundet; sofern der Inhalt des deutschen und des englischen Textes
divergiert, sind die Vertragsteile verpflichtet, den deutschen Vertragstext
unverzüglich und formgerecht in der Weise zu ergänzen, dass der Inhalt des
englischen Vertragstexts auch in dem deutschsprachigen Teil der Urkunde
verlautbart ist.

 

 

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PropCo Agreement

 

The persons appearing, acting as indicated above, requested to record the
following:

 

P R O P C O   a g r e e m e n t

In preparation of this deed, several annexes were recorded for the Parties by
the Notary under deed number 1715/2010, dated 22/25 May 2010, and 1756/2010,
dated 26/27 May 2010 (Reference Deed PropCo). Directly prior the conclusion of
this PropCo Agreement (i) a business transfer agreement (OpCo Agreement)
recorded by the Notary under deed number 1766/2010, dated 27 May 2010,
(Reference Deed II) relating to the sale of certain assets and the transfer of
the employees from the Seller OpCo to Kursana Seniorenvilla GmbH registered in
the commercial register of the local court of Berlin-Charlottenburg under no.
HRB 106 214 B with business address at Mauerstraße 85, 10117 Berlin (OpCo
Transferee I) and Dussmann Seniorenvilla Service GmbH, currently under the name
of Vierte Verwaltungsgesellschaft für Sozialeinrichtungen mbH registered in the
commercial register of the local court of Berlin-Charlottenburg under no. HRB
106 213 B with business address at Friedrichstraße 90, 10117 Berlin (OpCo
Transferee II and together with OpCo Transferee I the OpCo Transferees) and (ii)
lease agreements recorded by the Notary under deed number 1757/2010, 1758/2010,
1759/2010, 1760/2010, 1761/2010, 1762/2010, 1763/2010, 1764/2010,  dated 27 May
2010, (Reference Deed III and together with the Reference Deed PropCo and
Reference Deed II the Reference Deeds) between the PropCo Buyers and the OpCo
Transferees or their Affiliates regarding the lease of the Properties by the
PropCo Buyers to the OpCo Transferees or their Affiliates, have been concluded.
The simultaneous sale of these certain assets along with the transfer of the
employees and the implementation of the OpCo Agreement are the basis
(Geschäftsgrundlage) of this PropCo Agreement. For clarification: (i)
capitalized terms which are used in this PropCo Agreement but are not defined,
shall have the meaning given to them in the OpCo Agreement and (ii) in case of
deviations, repetitions or lack of clarity of defined terms between the PropCo
Agreement and the OpCo Agreement, the definitions of this PropCo Agreement shall
prevail. Reference is made to the Reference Deeds. The Reference Deeds were
presented in the original on the occasion of the notarization of this deed (the
date of notarization the Signing Date) and presented to the persons appeared for
perusal. Upon instruction, the persons appeared unanimously stated that they
were aware of the contents of the Reference Deeds, that they hereby expressly
approved the statements contained in the Reference Deeds, in each case in the
name of the respective Party represented by them, and that another reading was
waived. The persons appeared also waived the attachment of the Reference Deeds
to this deed. Any references below to Annexes refer to the annexes to the
Reference Deed PropCo.

 

 

 

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PropCo Agreement

Table of Contents

(for convenience only)

PART A: PROPERTY PURCHASE
AGREEMENT...................................................................................................14

1.          Purchase
Objects...........................................................................................................................................14

2.          Sale and Purchase /
Kaufvertrag...............................................................................................................14

3.          Purchase Price, Down Payment, Due
Date..............................................................................................15

4.          Value Added
Tax...........................................................................................................................................24

5.          Encumbrances, Public
Levies.....................................................................................................................25

6.          Transfer of
Properties..................................................................................................................................26

7.          Guarantees,
Indemnities.............................................................................................................................28

8.          Power to encumber the
Properties...........................................................................................................31

9.          Priority Notice of Conveyance, Conveyance / Auflassungsvormerkung,
Auflassung....................31

PART B: FF&E PURCHASE
AGREEMENT............................................................................................................35

10.        Purchase
Object..........................................................................................................................................35

11.       
Sale................................................................................................................................................................35

12.       
Transfer.........................................................................................................................................................35

13.        Purchase Price, Due
Date.........................................................................................................................36

14.        Value Added
Tax.........................................................................................................................................36

15.       
Guarantees...................................................................................................................................................37

PART C: GENERAL
PROVISIONS..........................................................................................................................38

16.        Right to Rescind and Aggregate Purchase
Price..................................................................................39

17.        General
Guarantees....................................................................................................................................40

18.        Legal Consequences, Time
Limitations...................................................................................................42

19.        De Minimis Amount, Cap
Amount.............................................................................................................45

20.        Merger Control, Condition
Precedent....................................................................................................46

21.        Period until Payment
Date.........................................................................................................................47

22.        Covenants after Payment
date...................................................................................................................49

23.        Intellectual Property Rights of
Sellers.....................................................................................................51

24.       
Confidentiality..............................................................................................................................................52

25.        Notices, Process
Agent.................................................................................................................................52

26.        Implementation, Power of
Attorney...........................................................................................................54

 

 

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PropCo Agreement

27.        Notarial
Instructions...................................................................................................................................55

28.        Expenses and Real Estate Transfer
Tax...................................................................................................55

29.        Written
Form.................................................................................................................................................55

30.        Liability, Assignment of Rights, Third Party Rights,
Set-off/Net-Off...................................................56

31.        Choice of
Law...............................................................................................................................................56

32.       
Jurisdiction....................................................................................................................................................56

33.        Entire
Agreement..........................................................................................................................................57

34.       
Interpretation................................................................................................................................................57

35.        Severability
Clause......................................................................................................................................57

36.       
Language........................................................................................................................................................57

 

 

 

 

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PropCo Agreement

Annexes (in Reference Deed PropCo)

(for convenience only)

 

Annex 1.1                                         Properties

Annex 1.2                                         Public Easements

Annex 3.1                                         Property Purchase Price
break-down

Annex 3.2                                         Escrow Agreement

Annex 3.5-1                                     Copies of Financing
Letters/Commitments

Annex 3.5-2                                     Security Release Agreements and
Debt Assumption Agreements

Annex 3.6.3                                      Negative Statement of Receipt

Annex 3.7.2                                      Copies of Beneficiary Letters

Annex 3.8.1                                      Instructions to Notary
regarding DVD storage

Annex 3.8.3                                      Deadline Extensions for Tax
Filings

Annex 3.9.2                                      Intercompany Debt

Annex 4.2                                         Tegut Premises

Annex 5.1-1                                     Exceptions from assumed
Encumbrances and Public Easements

Annex 5.1-2                                     List of assumed Encumbrances in
Section III

Annex 6.3-1(a)                                Property Documents

Annex 6.3-1(b)                                Additional Property Documents

Annex 6.3-2                                     Plan of Locking System and Key
Holders

Annex 6.4-1                                     Legal Disputes (Insurances)

Annex 6.4-2                                     List of Existing Property
Insurances and Addresses for Notification

Annex 6.5.1                                      Construction, Architectural and
Related Agreements

Annex 6.5.2                                      List of Performance Bonds

Annex 6.6                                         Assigned Property Agreements

Annex 7.3                                         List of Persons for Knowledge
of the Sellers

Annex 7.3.1                                      Arrangements to transfer
Properties or create Encumbrances

Annex 7.3.2                                      Special Areas / Public
Restrictions

Annex 7.3.4                                      Facilities / Equipment on
Neighboring Properties

Annex 7.3.7                                      Legal Disputes (Properties)

Annex 7.3.8-1                                  Existing Leases

Annex 7.3.8-2                                  Terminated Leases

Annex 7.3.10                                   Outstanding Charges / Levies

Annex 7.3.12                                   Contaminations of Properties

Annex 7.3.13                                   Subordination Agreements

Annex 10.1                                       FF&E

Annex 13.1                                       FF&E Purchase Price break-down

Annex 15.1.5                                   Legal Disputes (FF&E)

Annex 21.1.15                                 List of Stand Still Agreements

Annex 22.1                                       Steps Plan

Annex 23                                          Sunrise Logo

 

 

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PropCo Agreement

The following capitalized terms (provided that the singular includes the plural
and vice versa) have the meaning given to them on the page referred to:

 

                                 A

Affiliate.............................................................................
51

Affiliates...........................................................................
51

Aggregate Purchase Price............................................... 39

                                 B

Bank
Debt........................................................................ 19

Business............................................................................
12

Business Day....................................................................
19

Business Taxes.................................................................
30

Businesses........................................................................
12

                                 C

Camphausen OpCo.......................................................... 3

Camphausen PropCo....................................................... 2

Cap Amount....................................................................
46

Charges............................................................................
26

Contamination.................................................................
30

                                 D

Damages...........................................................................
43

Debt Assumption Agreements....................................... 18

Down Payment................................................................ 15

Down Payment PropCo Buyer Release......................... 17

Down Payment Seller Release I...................................... 17

                                 E

Escrow Account I............................................................ 15

Escrow Account II.......................................................... 23

Escrow Agent...................................................................
15

Escrow Agreement.......................................................... 15

Escrow Sub Account I-1................................................. 15

Escrow Sub Account I-2................................................. 15

Escrow Sub Account I-3................................................. 15

Escrow Sub Account II-1............................................... 23

Escrow Sub Account II-2............................................... 23

Escrow Sub Account II-3............................................... 23

                                F

FCO..................................................................................
46

FF&E................................................................................
35

FF&E Purchase Agreement............................................ 12

FF&E Purchase Price...................................................... 36

Frankfurt OpCo................................................................ 3

Frankfurt PropCo............................................................. 2

Funds Flow Memo........................................................... 39

                                 G

German Companies........................................................ 49

German Companies' Fire Funds.................................... 50

German Company........................................................... 49

GHS....................................................................................
4

Guarantee Claim............................................................. 43

Guarantee Claims............................................................ 43

                                H

Hannover OpCo................................................................ 3

Hannover PropCo............................................................. 2

HoldCo...............................................................................
4

                                 I

Intercompany Debt......................................................... 21

                                 K

Königstein OpCo............................................................... 3

Königstein PropCo............................................................ 2

                                 L

Lender Banks..................................................................
17

Limited Permitted Use.................................................... 51

Long Stop Date................................................................
23

LuxCo...............................................................................
50

 

 

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PropCo Agreement

 

                                M

ManCo................................................................................
4

Material Injunction......................................................... 19

Merger Condition............................................................ 46

MoU..................................................................................
17

München OpCo................................................................. 3

München PropCo.............................................................. 3

                                N

Notary.................................................................................
1

                               O

Oberursel OpCo................................................................ 3

Oberursel PropCo............................................................. 2

OpCo Agreement............................................................... 6

OpCo Transferee I............................................................ 6

OpCo Transferee II........................................................... 6

OpCo Transferees............................................................. 6

                              P

Parties.................................................................................
5

Party...................................................................................
5

Payment Condition......................................................... 19

Payment Conditions........................................................ 19

Payment Date...................................................................
26

Per Property De Minimis Amount................................. 46

Pramerica...........................................................................
5

Priority
Notice.................................................................. 19

PropCo Agreement.......................................................... 12

PropCo Buyer....................................................................
5

PropCo Buyers..................................................................
5

PropCo Buyers' Process Agent...................................... 54

Properties.........................................................................
14

Property............................................................................
14

Property Purchase Agreement....................................... 12

Property Purchase Price.................................................. 15

Public Charges.................................................................
26

                           R

Reference Deed II..............................................................
6

Reference Deed III............................................................ 6

Reference Deed PropCo.................................................... 6

Reference Deeds.................................................................
6

Reinbek OpCo...................................................................
3

Reinbek PropCo................................................................ 2

                           S

Security For Claims......................................................... 16

Security For Taxes........................................................... 23

Security Release Agreements.......................................... 18

Seller...................................................................................
3

Seller FF&E VAT Amount............................................. 37

Seller
OpCo........................................................................ 3

Seller
OpCos...................................................................... 3

Seller
PropCo..................................................................... 3

Seller
PropCos................................................................... 3

Sellers..................................................................................
3

Sellers' Process Agent...................................................... 53

Signing
Date....................................................................... 6

SSLI....................................................................................
4

Steps
Plan......................................................................... 49

                         T

Taxes.................................................................................
21

Tegut Premises.................................................................
24

Third Party Claim........................................................... 44

Third Party Debt............................................................. 21

Third Party Debt Management Certificate................... 22

                        W

Wiesbaden OpCo.............................................................. 3

Wiesbaden PropCo........................................................... 2

 

 

 

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PropCo Agreement

WHEREAS:

 

(A)               The Seller PropCos are the owners of real properties located
in Reinbek, Hanover, Bonn (Camphausen), Frankfurt, Königstein, Oberursel,
Wiesbaden and Munich. Assisted living facilities and nursing homes have been
built on the real properties which are leased to the Seller OpCos. (together
Businesses, and each a Business)

(B)               The Seller OpCos operate the properties as assisted living
facilities and nursing homes where they offer premier senior care. The assisted
living facilities and nursing homes located in Reinbek and Hanover were closed
with effect as of 31 January 2009 and no longer have any residents.

(C)               The Seller and the PropCo Buyers intend to enter into this
sale and purchase agreement (PropCo Agreement) as follows:

i.         The Seller PropCos intend to sell and transfer to the PropCo Buyers
the real properties including the buildings as set forth in part A of this
PropCo Agreement (Property Purchase Agreement);

ii.        The Seller OpCos intend to sell and transfer to the PropCo Buyers
furniture and equipment (including inventories) as set forth in part B of this
PropCo Agreement (FF&E Purchase Agreement);

iii.      Part C of this PropCo Agreement contains joint provisions in relation
to (i) to (ii) above; and

iv.      The Seller OpCos intend to sell and transfer to the OpCo Transferees
selected parts of the Businesses along with a transfer of employees as set forth
in the OpCo Agreement.

(D)               With regard to the transaction contemplated under this PropCo
Agreement, PropCo Buyers and their representatives and advisers have carried out
an independent due diligence regarding the Properties, FF&E on the basis of data
room material provided by the Seller as well as independent on site visits, and
the PropCo Buyers acknowledge having knowledge of such materials to the extent
set forth in this PropCo Agreement. Such due diligence led to a consensual
purchase price reduction of EUR three (3) million versus the agreed upon price
as set out in the MoU. The Parties acknowledge that the Purchase Price has been
adjusted downwards with regard to defects and wear and tear of the Properties,
missing parking space as well as with regard to missing FF&E. Therefore, unless
specifically otherwise set forth in this PropCo Agreement, the Buyers will have
no rights whatsoever with regard to such defects and wear and tear of the
Properties as well as with regard to missing FF&E and the Sellers shall be under
no obligation to acquire additional FF&E or cure defects of the Properties or
the FF&E.

(E)                Any reference in this PropCo Agreement to a Seller refers to
all Sellers, however, in each case only relating to the purchase object sold by
the individual Seller. Any reference in this PropCo Agreement to a PropCo Buyer
refers to all PropCo Buyers, however, in each case only relating to the purchase
object acquired by the individual PropCo Buyer.

 

 

 

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PropCo Agreement

NOW, THEREFORE, the Parties agree as follows:

 

 

 

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PropCo Agreement

PART A: PROPERTY PURCHASE AGREEMENT

1.                  PURCHASE OBJECTS

1.1               EACH SELLER PROPCO IS THE SOLE OWNER OF THE REAL PROPERTY AS
SET FORTH IN ANNEX 1.1 (TOGETHER PROPERTIES, AND EACH A PROPERTY). THE
PROPERTIES ARE ENCUMBERED IN THE RESPECTIVE LAND REGISTER (GRUNDBUCH) IN SECTION
II AND SECTION III (ABTEILUNGEN II UND III) AS SET FORTH IN ANNEX 1.1.

1.2               THE PROPERTIES ARE ENCUMBERED WITH PUBLIC EASEMENTS AS SET
FORTH IN ANNEX 1.2.

1.3               THE NOTARY REVIEWED THE LAND REGISTERS (GRUNDBUCH) ON 20 MAY
2010 AND CONFIRMS THE LAND REGISTER SITUATION DESCRIBED IN CLAUSE 1.1.

2.                  SALE AND PURCHASE / KAUFVERTRAG

Each of the Seller PropCos hereby sells to each of the PropCo Buyers the
respective Property including the related buildings, structures and material
components (wesentliche Bestandteile). Each PropCo Buyer accepts the respective
sale. The respective Seller PropCo, PropCo Buyer and Property of each sale is
set out below:

 

Jeder der PropCo Verkäufer verkauft jedem einzelnen PropCo Käufer das
entsprechende Grundstück einschließlich der Gebäude, Bauten und wesentlichen
Bestandteile. Jeder PropCo Käufer nimmt den entsprechenden Verkauf an. Der
entsprechende PropCo Verkäufer, PropCo Käufer und die Grundstücke sind
nachfolgend aufgelistet:

 

Seller PropCo / PropCo Verkäufer

PropCo Buyer / PropCo Käufer

Property / Grundstücke

Reinbek PropCo / Reinbek PropCo

GHS / GHS

Property located in Reinbek as set forth in Annex 1.1 under no. 1 (Reinbek
Property) / Grundstück in Reinbek wie beschrieben in Annex 1.1 unter Nummer 1
(Reinbek Property)

München PropCo / München PropCo

GHS / GHS

Property located in Munich as set forth in Annex 1.1 under no. 8 (München
Property) / Grundstück in München wie beschrieben in Annex 1.1 unter Nummer 8
(München Property)

Oberursel PropCo / Oberursel PropCo

GHS / GHS

Property located in Oberursel as set forth in Annex 1.1 under no. 6 (Oberursel
Property) / Grundstück in Oberursel wie beschrieben in Annex 1.1 unter Nummer 6
(Oberursel Property)

Hannover PropCo / Hannover PropCo

Pramerica / Pramerica

Property located in Hanover as set forth in Annex 1.1 under no. 2 (Hannover
Property) / Grundstück in Hannover wie beschrieben in Annex 1.1 unter Nummer 2
(Hannover Property)

Camphausen
PropCo /
Camphausen
PropCo

Pramerica / Pramerica

Property located in Bonn as set forth in Annex 1.1 under no. 3 (Camphausen
Property) / Grundstück in Bonn wie beschrieben in Annex 1.1 unter Nummer 3
(Camphausen Property)

Frankfurt PropCo / Frankfurt PropCo

Pramerica / Pramerica

Property located in Frankfurt as set forth in Annex 1.1 under no. 4 (Frankfurt
Property) / Grundstück in Frankfurt wie beschrieben in Annex 1.1 unter Nummer 4
(Frankfurt Property)

Königstein PropCo / Königstein PropCo

Pramerica / Pramerica

Property located in Königstein as set forth in Annex 1.1 under no. 5 (Königstein
Property) / Grundstück in Königstein wie beschrieben in Annex 1.1 unter Nummer 5
(Königstein Property)

Wiesbaden PropCo / Wiesbaden PropCo

Pramerica / Pramerica

Property located in Wiesbaden as set forth in Annex 1.1 under no. 7 (Wiesbaden
Property) / Grundstück in Wiesbaden wie beschrieben in Annex 1.1 unter Nummer 7
(Wiesbaden Property)

 

 

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PropCo Agreement

 

3.                  PURCHASE PRICE, DOWN PAYMENT, DUE DATE

3.1               THE TOTAL PURCHASE PRICE FOR THE PROPERTIES IS

EUR 57,850,000
(in words: fifty seven million eight hundred fifty thousand Euro)

(Property Purchase Price) and allocated (plus any VAT pursuant to Clause 4.2) to
the individual Properties as shown in Annex 3.1.

3.2               BY NO LATER THAN FIVE BUSINESS DAYS AFTER THE SIGNING DATE,
THE PROPCO BUYERS SHALL PAY AN AGGREGATE AMOUNT OF EUR 4,000,000 (IN WORDS: FOUR
MILLION EURO) OF THE PROPERTY PURCHASE PRICE (DOWN PAYMENT) INTO AN INTEREST
BEARING ESCROW ACCOUNT (ESCROW ACCOUNT I) WITH THE NOTARY, ALSO REFERRED TO AS
ESCROW AGENT, WHEN ACTING IN SUCH CAPACITY (ESCROW AGENT). ESCROW ACCOUNT I
CONSISTS OF THREE ESCROW ACCOUNTS (ANDERKONTEN) (ESCROW SUB ACCOUNT I-1, ESCROW
SUB ACCOUNT I-2 AND ESCROW SUB ACCOUNT I-3) WHICH WILL BE, FOR PURPOSES OF THIS
PROPCO AGREEMENT, REFERRED TO IN THEIR ENTIRETY AS ESCROW ACCOUNT I. A COPY OF
THE ESCROW AGREEMENT IN RELATION TO THE ESCROW ACCOUNT I IS ATTACHED AS
ANNEX 3.2 HERETO (ESCROW AGREEMENT). PROPCO BUYERS ACKNOWLEDGE THAT THE INTEREST
IN THE DOWN PAYMENT (INCLUDING ANY ACCRUED INTEREST THEREON) HAS BEEN ASSIGNED
TO THE LENDER BANKS, SUBJECT TO THE RIGHTS OF THE SELLERS AND PROPCO BUYERS TO
SUCH DOWN PAYMENT AS DESCRIBED HEREIN AND IN THE ESCROW AGREEMENT. THE DOWN
PAYMENT (INCLUDING ANY ACCRUED INTEREST HEREON) CONSTITUTES BOTH A PART OF THE
AGGREGATE PURCHASE PRICE AND, AS REGARDS A PORTION OF THE DOWN PAYMENT, A
SECURITY WITH REGARD TO CERTAIN CLAIMS UNDER THIS PROPCO AGREEMENT AS SET FORTH
IN CLAUSE 3.3 BELOW. A PAYMENT OF THE DOWN PAYMENT (INCLUDING ANY ACCRUED
INTEREST HEREON) OR A PORTION THEREOF TO THE SELLERS REDUCES THE AMOUNT OF THE
PROPERTY PURCHASE PRICE

 

 

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PropCo Agreement

               PAYABLE BY EACH OF THE PROPCO BUYERS PRO RATA, BASED ON THE
RELATION THAT THE AGGREGATE OF THE PROPERTY PURCHASE PRICE PAYABLE BY EACH
PROPCO BUYER BEARS TO THE AGGREGATE OF THE PROPERTY PURCHASE PRICE. IF THE
PROPCO BUYERS HAVE NOT MADE THE DOWN PAYMENT IN FULL, WHEN DUE AND AFTER THE
SELLERS GRANTING THEM AN ADDITIONAL GRACE PERIOD OF FIVE (5) BUSINESS DAYS, THE
SELLERS WILL HAVE THE RIGHT TO (I) RESCIND THIS PROPCO AGREEMENT AND (II) GET
REIMBURSED BY THE PROPCO BUYERS FOR THEIR REASONABLE OUT OF POCKET TRANSACTION
COSTS (PLUS VAT, IF APPLICABLE, BUT ONLY TO THE EXTENT THE SELLERS DO NOT HAVE A
RIGHT TO AN INPUT VAT CLAIM) RELATED TO THE PREPARATION AND SIGNING OF THIS
PROPCO AGREEMENT AS WELL AS THE PREPARATION OF THE DELETION OF THE ENCUMBRANCES
BY THE RELEVANT BANKS.

3.3               THE DOWN PAYMENT SHALL BE RELEASED AS FOLLOWS:

3.3.1            RELEASE AS PART OF AGGREGATE PURCHASE PRICE: ON THE DAY PAYMENT
BECOMES DUE IN ACCORDANCE WITH CLAUSE 3.6, (I) ALL OF THE DOWN PAYMENT AND ANY
ACCRUED INTEREST, EXCEPT FOR EUR 1,000,000 (IN WORDS: ONE MILLION EURO), SHALL
BE RELEASED TO THE SELLERS IN ACCORDANCE WITH CLAUSE 16.2, (THE TOTAL AMOUNT
HEREBY RELEASED TO BE DEDUCTED FROM THE AGGREGATE PURCHASE PRICE (AS DEFINED IN
CLAUSE 16.1)) AND (II) EUR 1,000,000 (IN WORDS: ONE MILLION EURO) (SECURITY FOR
CLAIMS) OF THE DOWN PAYMENT SHALL REMAIN IN THE ESCROW ACCOUNT I AS SECURITY FOR
ANY CLAIM THE PROPCO BUYERS AND, FOR A PERIOD OF 18 MONTHS AFTER THE PAYMENT
DATE, THE OPCO TRANSFEREES HAVE AGAINST THE SELLER(S) UNDER THIS PROPCO
AGREEMENT AND THE OPCO AGREEMENT, RESPECTIVELY. EACH OF THE PROPCO BUYERS AND
THE OPCO TRANSFEREES SHALL, DURING THE FIRST 15 MONTHS FOLLOWING THE PAYMENT
DATE, ONLY HAVE THE RIGHT TO MAKE A CLAIM AGAINST THE ESCROW ACCOUNT I UP TO AN
AMOUNT OF EUR 250,000 EACH. ON THE DATE THAT IS 15 MONTHS AFTER THE PAYMENT
DATE, THE PROPCO BUYERS AND OPCO TRANSFEREES SHALL PROVIDE EACH OTHER WITH A
STATEMENT OF THEIR UNSATISFIED VALID CLAIMS AGAINST THE SELLERS. EACH OF THE
PROPCO BUYERS AND OPCO TRANSFEREES WILL BE ENTITLED TO A FURTHER WITHDRAWAL FROM
THE ESCROW ACCOUNT I IN THE RELATION THAT THEIR RESPECTIVE VALID UNSATISFIED
CLAIMS BEAR TO EACH OTHER, E.G. IF THE PROPCO BUYERS HAVE EUR 500,000 VALID
UNSATISFIED CLAIMS AND THE OPCO TRANSFEREES HAVE EUR 250,000 VALID UNSATISFIED
CLAIMS, AND ASSUMING THERE IS EUR 500,000 REMAINING IN THE ESCROW ACCOUNT I
BECAUSE EACH HAS ALREADY WITHDRAWN THEIR FULL EUR 250,000 FROM SUCH ACCOUNT,
THEN PROPCO BUYERS WILL BE ENTITLED TO A FURTHER WITHDRAWAL OF EUR 333,333 FROM
THE ESCROW ACCOUNT I AND OPCO TRANSFEREES WILL BE ENTITLED TO A WITHDRAWAL OF
EUR 166,667 FROM THE ESCROW ACCOUNT I. PROPCO BUYERS ACKNOWLEDGE THAT THE
SELLERS' INTEREST IN THE ESCROW ACCOUNT I HAS BEEN ASSIGNED TO THE LENDER BANKS,
SUBJECT TO THE RIGHTS OF THE SELLERS, PROPCO BUYERS AND OPCO TRANSFEREES TO SUCH
ESCROW ACCOUNT I AS DESCRIBED HEREIN AND IN THE ESCROW AGREEMENT. IF, ON THE
DATE THAT IS 15 MONTHS AFTER THE PAYMENT DATE, EITHER THE PROPCO BUYERS OR OPCO
TRANSFEREES HAVE INITIATED ANY LEGAL PROCEEDINGS (RECHTSHÄNGIGKEIT) AGAINST THE
SELLERS, THEN THE PROCEDURE DESCRIBED ABOVE FOR ESTABLISHING THE RELATIONSHIP OF
UNSATISFIED PROPCO BUYER CLAIMS TO OPCO TRANSFEREE CLAIMS SHALL BE DELAYED UNTIL
ALL SUCH PENDING LEGAL PROCEEDINGS HAVE BEEN FINALLY DETERMINED AND ARE SUBJECT
TO AN ENFORCEABLE JUDGMENT (RECHTKRÄFTIGES URTEIL). FOR THE AVOIDANCE OF DOUBT,
IN THE EVENT THE ENTIRE ACCUMULATED CLAIMS BY PROPCO BUYERS AND OPCO TRANSFEREES
ARE SINCE PAYMENT DATE BELOW EUR 1,000,000 (EVEN CONSIDERING THE CLAIM FOR WHICH
LEGAL PROCEEDINGS ARE PENDING) SUCH AMOUNT FOR WHICH NEITHER PARTY HAS MADE A
CLAIM SHALL BE RELEASED IMMEDIATELY.

 

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PropCo Agreement

3.3.2            RELEASE TO SELLERS: IN CASE THE TRANSACTIONS CONTEMPLATED UNDER
THIS PROPCO AGREEMENT ARE NOT COMPLETED DUE TO ISSUES THAT ARISE OUT OF THE
RESPONSIBILITY OF THE PROPCO BUYERS (INCLUDING THE PROPCO BUYERS’ INVESTORS AND
OTHER FINANCING SOURCES, BUT EXCLUDING (I) CARTEL CLEARANCE, AS LONG AS THE
PROPCO BUYERS ARE IN COMPLIANCE WITH CLAUSE 20, (II) THE MERE NON CLOSING OF THE
OPCO AGREEMENT AND (III) ANY SUPPLEMENTAL FILING REQUESTED BY THE NOTARY OR THE
LAND REGISTERS), SUBJECT TO SELLERS’ MATERIAL COMPLIANCE WITH THE TERMS AND
CONDITIONS OF THIS PROPCO AGREEMENT, THE DOWN PAYMENT PLUS INTEREST ACCRUED
THEREON SHALL BE RELEASED FROM THE ESCROW ACCOUNT I TO THE SELLERS (DOWN PAYMENT
SELLER RELEASE I), PAYABLE TO SELLERS, BUT ONLY IF AND TO THE EXTENT THE SELLERS
HAVE A CLAIM FOR DAMAGES (LIQUIDATED OR OTHERWISE) OR A CLAIM FOR PAYMENT OF THE
AGGREGATE PURCHASE PRICE (AS DEFINED IN CLAUSE 16.1). IN ADDITION SELLERS MAY
EXERCISE ANY OTHER LEGAL REMEDY THEY MAY HAVE UP TO THE FULL AMOUNT OF THE
AGGREGATE PURCHASE PRICE (AS DEFINED IN CLAUSE 16.1), SUBJECT HOWEVER TO CLAUSE
30.1. IN ANY EVENT A CONDITION PRECEDENT FOR THE DOWN PAYMENT SELLER RELEASE I
IS THAT ALL PAYMENT CONDITIONS (AS DEFINED IN CLAUSE 3.6) HAVE BEEN FULFILLED;
OR

3.3.3            RELEASE TO THE BUYERS: IN CASE THE TRANSACTIONS CONTEMPLATED
UNDER THIS PROPCO AGREEMENT ARE NOT COMPLETED DUE TO ISSUES THAT ARISE OUT OF
THE RESPONSIBILITY OF THE SELLERS (INCLUDING CAPMARK FINANCE INC., NATIXIS
(LONDON BRANCH), BARCLAYS BANK PLC (LENDER BANKS) AND FINANCIAL INTERIMS LENDING
TO SELLERS, HOLDCO OR SSLI BUT EXCLUDING (I) THE MERE NON CLOSING OF THE OPCO
AGREEMENT AND (II) ANY SUPPLEMENTAL FILING REQUESTED BY THE NOTARY OR THE LAND
REGISTERS), SUBJECT TO PROPCO BUYERS’ MATERIAL COMPLIANCE WITH THE TERMS AND
CONDITIONS OF THIS PROPCO AGREEMENT, THE DOWN PAYMENT PLUS INTEREST ACCRUED
THEREON SHALL BE RELEASED FROM THE ESCROW ACCOUNT I TO THE PROPCO BUYERS (DOWN
PAYMENT PROPCO BUYER RELEASE) TO AN ACCOUNT OF THE PROPCO BUYERS AS INSTRUCTED
IN WRITING BY THE PROPCO BUYERS' PROCESS AGENT. IN ADDITION, THE SELLERS SHALL
REIMBURSE THE PROPCO BUYERS UP TO AN AGGREGATE AMOUNT OF EUR 750,000 (IN WORDS:
SEVEN HUNDRED FIFTY THOUSAND EURO) FOR THEIR REASONABLE OUT OF POCKET
TRANSACTION COSTS (INCLUDING BUT NOT LIMITED TO FINANCING COSTS AND VAT, IF
APPLICABLE) RELATED TO THE PREPARATION AND SIGNING OF (I) THE MEMORANDUM OF
UNDERSTANDING DATED AS OF 11/12 JANUARY 2010 (MOU) AND (II) THIS PROPCO
AGREEMENT, BOTH ACCRUED (ENTSTANDEN) WITH RESPECT TO SERVICES PERFORMED AFTER 1
NOVEMBER 2009. HOWEVER, FURTHER CLAIMS OF THE PROPCO BUYERS SHALL BE EXCLUDED TO
THE MAXIMUM EXTENT PERMISSIBLE BY LAW; OR

3.3.4            RETURN TO BUYERS: IN CASE THE TRANSACTIONS CONTEMPLATED UNDER
THIS PROPCO AGREEMENT ARE NOT COMPLETED IN CASES OTHER THAN COVERED BY
CLAUSES 3.3.1 THROUGH 3.3.3 AND UNLESS THE TRANSACTIONS CONTEMPLATED UNDER THIS
PROPCO AGREEMENT ARE NOT COMPLETED DUE TO THE FAILURE BY THE PROPCO BUYER TO (I)
CAUSE THE FUNDING OF THE ESCROW ACCOUNT I AND ESCROW ACCOUNT II AT A TIME WHEN
THE PROPCO BUYERS ARE ACTUALLY OBLIGATED TO PAY THE PROPERTY PURCHASE PRICE
UNDER THIS PROPCO AGREEMENT BECAUSE ALL PAYMENT CONDITIONS HAVE BEEN FULFILLED
OR (II) TO COMPLY WITH ITS OBLIGATIONS AS SET FORTH IN CLAUSE 20 OF THIS PROPCO
AGREEMENT, THE DOWN PAYMENT PLUS INTEREST ACCRUED THEREON SHALL BE RELEASED FROM
THE ESCROW ACCOUNT I TO THE PROPCO BUYERS TO AN ACCOUNT

 

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PropCo Agreement

                OF THE PROPCO BUYERS AS INSTRUCTED IN WRITING BY THE PROPCO
BUYERS' PROCESS AGENT BUT IN SUCH CASE NONE OF THE PARTIES WILL BE ENTITLED TO
ANY COST REIMBURSEMENT FROM, OR HAVE ANY CLAIMS AGAINST, ANY OTHER PARTY.

The Escrow Agent shall release funds from Escrow Account I in accordance with
the terms of the Escrow Agreement. The Parties shall provide the Escrow Agent
without undue delay (unverzüglich) with the necessary information and
instructions for the release of funds from the Escrow Account I as (i) foreseen
in the Escrow Agreement as well as (ii) stipulated in Clauses 3.3.1 and 3.3.4.

3.4               DUE TO THE SECURITY PURPOSE OF THE DOWN PAYMENT AS DESCRIBED
ABOVE IN CLAUSE 3.3.1, ANY BALANCES ON THE ESCROW ACCOUNT I INCLUDING INTEREST
ACCRUED THEREON SHALL BE RELEASED TO THE SELLERS IN ACCORDANCE WITH CLAUSE 16.2
ON THE DATE FALLING EIGHTEEN (18) MONTHS AFTER THE PAYMENT DATE BUT ONLY TO THE
EXTENT:

3.4.1            NEITHER THE PROPCO BUYERS NOR THE OPCO TRANSFEREES HAVE
INITIATED LEGAL PROCEEDINGS (RECHTSHÄNGIGKEIT) AGAINST THE SELLER(S) WITH REGARD
TO ANY GUARANTEE OR INDEMNIFICATION CLAIM UNDER THIS PROPCO AGREEMENT OR THE
OPCO AGREEMENT, RESPECTIVELY, OR

3.4.2            THE OPCO TRANSFEREES HAVE NOT WITHDRAWN FUNDS FROM THE ESCROW
ACCOUNT II, AS FURTHER DESCRIBED IN CLAUSE 3.20.

In case of Clause 3.4.1 or 3.4.2, the relevant amount shall continue to be held
in escrow (and the balance released promptly) until: (i) a final and binding
court decision has been made, with regard to such claim(s) in which event the
amount in question shall be paid to the PropCo Buyers to an account of the
PropCo Buyers as instructed in writing by the PropCo Buyers' Process Agent if
and to the extent the relevant court has confirmed the claim of the PropCo
Buyers and the remainder shall be paid to the Sellers (as to Clause 3.4.1), or
(ii) the earlier of (x) three years after the Payment Date and (y) six months
after the last of the actions required to be taken in accordance with the Steps
Plan has been completed, or earlier upon mutual agreement (as to Clause 3.4.2).

The Escrow Agent shall release funds from Escrow Account I in accordance with
the terms of the Escrow Agreement. The Parties shall provide the Escrow Agent
without undue delay (unverzüglich) with the necessary information and
instructions for the release of funds from the Escrow Account I as (i) foreseen
in the Escrow Agreement as well as (ii) stipulated in Clause 3.4.

3.5               THE PROPCO BUYERS HAVE PROVIDED THE SELLERS WITH (I) A BINDING
FINANCING OFFER AND (II) FINANCE COMMITMENTS OF INVESTORS (ZEICHNUNGSSCHEINE),
COPIES OF THE DOCUMENTS REFERRED TO IN (I) AND (II) ARE ATTACHED AS ANNEX 3.5-1
SHOWING FINANCING OF THE AGGREGATE PURCHASE PRICE PLUS ANY REAL ESTATE TRANSFER
TAX, VAT PAYABLE BY THE PROPCO BUYERS (AS LIMITED BY CLAUSE 14) AS WELL AS THE
NOTARY, FILING FEE AND MERGER FILINGS COSTS OF THE PROPCO BUYERS.

ATTACHED AS ANNEX 3.5-2 ARE COPIES OF ALL OF THE SECURITY RELEASE AGREEMENTS
(SECURITY RELEASE AGREEMENTS) AMONG, INTER ALIA, THE SELLER PROPCOS, SELLER
OPCOS AND THE LENDER BANKS, AND THE DEBT ASSUMPTION AGREEMENTS (DEBT ASSUMPTION
AGREEMENTS) AMONG THE SELLER PROPCOS, SELLER OPCOS AND SSLI
GOVERNING                                    

 

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PropCo Agreement

THE EXTINGUISHMENT OF THE DEBT OWED BY THE SELLER PROPCOS AND SELLER OPCOS TO
THE LENDER BANKS (BANK DEBT).

3.6               THE PROPERTY PURCHASE PRICE (I.E. AS ALLOCATED TO THE
RESPECTIVE PROPERTIES AS SHOWN IN ANNEX 3.1) SHALL BECOME DUE FOR PAYMENT ON THE
LAST BUSINESS DAY (BUSINESS DAY MEANS ANY DAY ON WHICH THE COMMERCIAL BANKS IN
FRANKFURT AM MAIN, GERMANY, ARE OPEN FOR GENERAL BUSINESS) OF THE MONTH IN WHICH
(I) THE NOTARY HAS INFORMED THE PROPCO BUYERS’ PROCESS AGENT AND THE SELLER'S
PROCESS AGENT IN WRITING (RELEVANT IS THE DATE OF RECEIPT OF THE NOTARY'S LETTER
BY THE PROPCO BUYERS’ PROCESS AGENT, RECEIPT BY CONFIRMED FACSIMILE BEING
SUFFICIENT), THAT THE PAYMENT CONDITIONS LISTED BELOW IN THIS CLAUSE 3.6 AND
CLAUSE 3.7 HAVE BEEN FULFILLED AND (II) THE OTHER PAYMENT CONDITIONS LISTED
BELOW IN CLAUSES 3.8 AND 3.9 ALSO HAVE BEEN FULFILLED ((I) AND (II) TOGETHER
PAYMENT CONDITIONS, AND EACH A PAYMENT CONDITION). IF THE NOTICE IS RECEIVED
LESS THAN FIVE (5) BUSINESS DAYS BEFORE THE LAST BUSINESS DAY OF A MONTH, THE
PROPERTY PURCHASE PRICE WILL BECOME DUE FOR PAYMENT ON THE LAST BUSINESS DAY OF
THE FOLLOWING MONTH. HOWEVER, THIS DOES NOT APPLY IF THE NOTICE IS RECEIVED IN
AUGUST 2010, IN WHICH CASE THE PROPERTY PURCHASE PRICE WILL BECOME DUE EVEN IF
THE NOTICE IS RECEIVED LESS THAN FIVE (5) BUSINESS DAYS BEFORE THE LAST DAY OF
SUCH MONTH. IN ANY EVENT THE PROPERTY PURCHASE PRICE WILL NOT BECOME DUE FOR
PAYMENT BEFORE THREE MONTHS AND ONE CALENDAR DAY HAVE LAPSED AFTER THE DATE ON
WHICH THE PRIORITY NOTICE OF CONVEYANCE (AUFLASSUNGSVORMERKUNG) IN ACCORDANCE
WITH §883 BGB (PRIORITY NOTICE) HAS BEEN FILED AND RECEIVED BY THE LAND REGISTER
OF EACH PROPERTY IN ACCORDANCE WITH CLAUSE 3.6.1. IMMEDIATELY AFTER THE
NOTARIZATION OF THIS PROPCO AGREEMENT THE NOTARY WILL MAKE THE NECESSARY FILINGS
FOR THE REGISTRATION OF THE PRIORITY NOTICES IN ACCORDANCE WITH CLAUSE 3.6.1 AND
WILL CONFIRM RECEIPT THEREOF BY THE RESPECTIVE LAND REGISTER OF EACH PROPERTY.
IT IS AGREED BETWEEN THE PARTIES THAT RECEIPT BY THE PROPCO BUYERS OF A COPY OF
THE ENTRY STAMP (EINGANGSSTEMPEL) SHOWING THE ACTUAL DATE OF RECEIPT WILL BE
REQUIRED TO EVIDENCE RECEIPT BY THE RESPECTIVE LAND REGISTER OF EACH PRIORITY
NOTICE. THE PARTIES SHALL USE REASONABLE BEST EFFORTS TO SUPPORT THE NOTARY IN
PROCESSING THE PRIORITY NOTICES IN ORDER TO CAUSE THE RECEIPT THEREOF BY THE
RESPECTIVE LAND REGISTERS AT THE LATEST BY 28 MAY 2010. IN CASE A LAND REGISTER
REJECTS AN APPLICATION FOR REGISTRATION (ZURÜCKWEISUNG) OF A PRIORITY NOTICE OR
ISSUES AN INTERIM INJUNCTION (ZWISCHENVERFÜGUNG) SOLELY WITH RESPECT TO MATERIAL
INJUNCTION, THE THREE MONTH AND ONE CALENDAR DAY PERIOD DESCRIBED ABOVE WILL
BEGIN ONLY AT THE EARLIER OF THE DATE (I) FOR SUCH PRIORITY NOTICES BEING
RE-FILED AND RECEIVED AND NOT BEING REJECTED AGAIN OR SUBJECT TO A FURTHER
MATERIAL INJUNCTION OR (II) HAVING BEEN REGISTERED (EINTRAGUNG) BY THE
APPLICABLE LAND REGISTER. A MATERIAL INJUNCTION MEANS AN INJUNCTION THAT (I) IS
BASED ON THE FACT THAT THIS DEED IS PORTLY NOTARIZED IN THE ENGLISH LANGUAGE OR
(II) ARISES OUT OF ANY MATERIAL DEFICIENCY (MATERIELLER MANGEL) OF THE
APPLICATION FOR REGISTRATION OF THE PRIORITY NOTICE.

PAYMENT CONDITIONS ACCORDING TO (I) ABOVE ARE:

3.6.1           A PRIORITY NOTICE IN ACCORDANCE WITH CLAUSE 9.1 OF THIS PROPCO
AGREEMENT HAS BEEN REGISTERED IN THE LAND REGISTER OF EACH PROPERTY RANKING ONLY
AFTER (I) SUCH ENCUMBRANCES WHICH ARE ASSUMED BY THE RESPECTIVE PROPCO BUYER OR
TO WHICH THE RESPECTIVE PROPCO BUYER CONSENTED (ESPECIALLY BASED ON CLAUSE 8)
AND (II) THE EXISTING LIENS (GRUNDPFANDRECHTEN) ON THE PROPERTIES TO BE
RELEASED;

3.6.2           THE NOTARY HAS RECEIVED THE NECESSARY PUBLIC APPROVALS REQUIRED
FOR THE IMPLEMENTATION OF THIS PROPCO AGREEMENT IN RELATION TO THE TRANSFER OF
THE PROPERTIES INCLUDING ORIGINALS OF THE DECLARATION OF THE RESPECTIVE
MUNICIPALITY REGARDING THE NON-EXISTENCE OR NON-EXERCISE OF A STATUTORY
PRE-EMPTIVE RIGHT (NEGATIVZEUGNISSE), HOWEVER, NOT THE CLEARANCE CERTIFICATE
RELATING TO

 

 

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PropCo Agreement

                THE REAL ESTATE TRANSFER TAX (UNBEDENKLICHKEITSBESCHEINIGUNG IM
HINBLICK AUF DIE GRUNDERWERB­STEUER) OF THE TAX AUTHORITIES; AND

3.6.3           THE MERGER CONDITION IN ACCORDANCE WITH CLAUSE 20.1 HAS BEEN
FULFILLED. EACH PARTY WILL WITHOUT UNDUE DELAY (UNVERZÜGLICH) FORWARD TO THE
NOTARY (I) THE RECEIVED WRITTEN NOTICES, ORDERS OR STATEMENTS BY THE FCO IN
CONNECTION WITH CLAUSES 20.1.1, 20.1.2 AND 20.1.5 (IT IS AGREED BETWEEN THE
PARTIES THAT RECEIPT OF ANY SUCH DOCUMENT FROM ONE PARTY CONSTITUTES SUFFICIENT
PROOF FOR PURPOSES OF CLAUSE 3.6.3 THAT THE MERGER CONDITION HAS BEEN FULFILLED)
OR (II) THE SIGNED STATEMENT ATTACHED AS ANNEX 3.6.3 ONCE THE RESPECTIVE PERIOD
REFERRED TO IN CLAUSES 20.1.3 OR 20.1.4 HAS LAPSED WITHOUT THE PARTY SIGNING THE
STATEMENT HAVING RECEIVED A RESPECTIVE NOTICE BY THE FCO (IT IS AGREED BETWEEN
THE PARTIES THAT ONLY RECEIPT FROM ALL PARTIES OF SUCH NOTICES CONSTITUTES
SUFFICIENT PROOF FOR PURPOSES OF CLAUSE 3.6.3 THAT THE MERGER CONDITION HAS BEEN
FULFILLED).

3.7               PAYMENT CONDITIONS ACCORDING TO CLAUSE 3.6 (I) ARE FURTHER
THAT THE NOTARY CONFIRMS THAT HE HAS RECEIVED (IN A FORM SATISFACTORY TO HIM BUT
IN SUBSTANCE COMPLIANT WITH THE REQUIREMENTS OF THE FOLLOWING CLAUSES):

3.7.1           THE ORIGINALS OF THE CONSENT DECLARATIONS
(LASTENFREISTELLUNGSERKLÄRUNGEN/ LÖSCHUNGSBE­WILLIGUNGEN) IN THE FORM REQUIRED
BY § 29 GERMAN LAND REGISTER CODE (GRUNDBUCHORDNUNG) BY THE RESPECTIVE
BENEFICIARIES TO THE CANCELLATION OF ALL ENCUMBRANCES IN SECTION III (ABTEILUNG
III) OF THE RESPECTIVE LAND REGISTERS NOT ASSUMED BY THE RESPECTIVE PROPCO
BUYERS; THIS PAYMENT CONDITION SHALL BE DEEMED SATISFIED IF THE NOTARY HAS
CONFIRMED THAT THE CONSENT DECLARATIONS ARE IN A FORM AND SUBSTANCE NECESSARY TO
CANCEL THE ENCUMBRANCES;

3.7.2           THE ORIGINALS OF THE LETTERS BY THE RESPECTIVE BENEFICIARIES
(TREUHANDAUFLAGEN) TO MAKE USE OF THE CANCELLATION DECLARATIONS PURSUANT TO
CLAUSE 3.7.1 (THE USE OF THE CANCELLATION DECLARATIONS TO BE EITHER
UNCONDITIONAL OR CONDITIONAL ONLY UPON RECEIPT OF (I) ALL AGREED PAYMENTS INTO
ESCROW ACCOUNTS I AND II AND (II) RECEIPT BY THE RESPECTIVE LENDERS BANK OF THE
AGGREGATE PURCHASE PRICE (AS DEFINED IN CLAUSE 16.1) (EXCEPT FOR THE AGGREGATE
AMOUNT OF EUR 1,000,000 EACH REMAINING IN ESCROW ACCOUNT I AND II,
RESPECTIVELY), NOTIFICATION OF ASSIGNMENT, PAYMENT INSTRUCTION AND RESPECTIVE
CONFIRMATIONS OF THE NOTARY, HOWEVER, THE AGGREGATE AMOUNTS DUE NOT EXCEEDING
THE AGGREGATE PURCHASE PRICE AND THE INDIVIDUAL AMOUNTS DUE NOT EXCEEDING THE
PRICE PER THE RELEVANT PROPERTIES AND FF&E),

3.7.3           CONFIRMATIONS OF THE SELLER OPCOS AND THE OPCO TRANSFEREES THAT
THE CLOSING CONDITIONS IN THE OPCO AGREEMENT, OTHER THAN PAYMENT OF THE
AGGREGATE PURCHASE PRICE AND THEREFORE FULL FUNDING OF ESCROW ACCOUNT I AND
ESCROW ACCOUNT II, HAVE BEEN FULFILLED AND THAT AFTER THE PAYMENT OF THE
AGGREGATE PURCHASE PRICE AND THEREFORE FUNDING OF THE ESCROW ACCOUNT II, NEITHER
THE SELLER OPCOS NOR THE OPCO TRANSFEREES MAY WITHDRAW FROM, TERMINATE OR
OTHERWISE HINDER THE CLOSING OF THE OPCO AGREEMENT.

3.8               THE PROPCO BUYERS AND THE SELLERS AGREE THAT THE PROPERTY
PURCHASE PRICE WILL ONLY BECOME DUE IF THE FOLLOWING FURTHER PAYMENT CONDITIONS
ARE FULFILLED:

WAS TO VERITY THE AUTHENTICITY OF THE PERFORMANCE BONDS.

 

 

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PropCo Agreement

3.8.1            A DVD (CONTAINING COPIES OF THE DOCUMENTATION SET FORTH IN
ANNEX 6.3-1(A)) AS WELL AS THE ORIGINALS OF THE PERFORMANCE BONDS
(GEWÄHRLEISTUNGSBÜRGSCHAFTEN) LISTED IN ANNEX 6.5.2 HAVE BEEN HANDED OVER TO THE
NOTARY BOTH TO BE HELD IN ESCROW ACCORDING TO THE TERMS OF THE INSTRUCTIONS TO
THE NOTARY ATTACHED HERETO AS ANNEX 3.8.1 UNTIL AFTER PAYMENT OF THE AGGREGATE
PURCHASE PRICE AFTER WHICH THEY ARE TO BE RELEASED TO THE PROPCO BUYERS.
CONFIRMATION OF THE NOTARY THAT HE HAS RECEIVED THE DVD AND THE ORIGINALS OF THE
PERFORMANCE BONDS (GEWÄHRLEISTUNGSBÜRGSCHAFTEN) SHALL BE DEEMED EVIDENCE THAT
THIS PAYMENT CONDITION HAS BEEN FULFILLED; THE NOTARY IS WITHER REQUIRED TO
OBTAIN KNOWLEDGE OF THE CONDITIONS OF SUCH DVD.

3.8.2            ALL TAXES IN THE MEANING OF § 3 GERMAN TAX CODE
(ABGABENORDNUNG; AO), INCLUDING ALL INTEREST, DUTIES OR CHARGES ACCESSORY TO
SUCH TAXES (TAXES); WHICH HAVE BECOME DUE BY ONE MONTH PRIOR TO THE PAYMENT
DATE, HAVE BEEN PAID, TO BE EVIDENCED, IN THE DISCRETION OF PROPCO BUYERS, BY
COPIES OF (I) THE CLEARANCE CERTIFICATES (UNBEDENKLICHKEITSBESCHEINIGUNG) OR
(II) EXCERPTS FROM THE TAX AUTHORITIES WITH RESPECT TO TAX ACCOUNTS (AUSZUG DER
FINANZKASSEN);

3.8.3        all Tax returns required to be filed by or on behalf of the Sellers
and HoldCo on or before the Payment Date have been prepared and filed to the
extent that (i) these Tax returns relate in whole or in part to any Tax period
(Veranlagungszeitraum) ending on or before the Payment Date and (ii) no
extension of the filing deadline has been granted by the relevant taxing
authority except as disclosed in Annex 3.8.3; and

3.8.4            BANK OF AMERICA HAS CONSENTED TO THIS PROPCO AGREEMENT.

3.9               FURTHER, THE PROPCO BUYERS AND SELLERS AGREE ON THE FOLLOWING
PAYMENT CONDITIONS AND OTHER CONDITIONS WITH RESPECT TO DEBTS OF THE SELLERS AND
HOLDCO:

3.9.1            BANK DEBT: THE SELLERS SHALL HAVE DELIVERED (AND SSLI SHALL
PROCURE THAT THE SELLERS DELIVER) (IT BEING UNDERSTOOD THAT THE ONLY REMEDY OF A
BREACH OF SUCH OBLIGATION WOULD BE THE REMEDIES PROVIDED FOR IN CLAUSE 3.3.3) A
CONFIRMATION BY THE LENDER BANKS THAT ALL OF THE CONDITIONS PRECEDENT TO THE
EFFECTIVENESS SET FORTH IN THE APPLICABLE SECURITY RELEASE AGREEMENTS, OTHER
THAN PAYMENT OF THE RESPECTIVE PORTION OF THE AGGREGATE PURCHASE PRICE, HAVE
BEEN FULFILLED.

3.9.2            INTERCOMPANY DEBT: ATTACHED HERETO AS ANNEX 3.9.2 IS A LIST
SETTING FORTH ALL DEBT OWED BY SELLER PROPCOS, THE SELLER OPCOS, THE LIMITED
PARTNERS OF THE SELLER PROPCOS THAT ARE SUBSIDIARIES OF HOLDCO, THE GENERAL
PARTNERS OF THE SELLER PROPCOS, AND/OR HOLDCO TO THEIR RESPECTIVE AFFILIATES
(COLLECTIVELY AND ANY UPDATE THERETO REFERRED TO AS INTERCOMPANY DEBT
(INTERCOMPANY DEBT)) EXISTING AS OF 30 APRIL 2010. ON THE PAYMENT DATE, THE
MANAGEMENT OF THE SELLERS AND HOLDCO SHALL DELIVER EITHER AN UPDATE OF THE LIST
OF INTERCOMPANY DEBT SHOWING SUCH DEBT EXISTING AS OF END OF THE MONTH PRECEDING
THE MONTH IN WHICH THE PAYMENT DATE FALLS OR A STATEMENT THAT THERE HAS BEEN NO
CHANGE IN THE INTERCOMPANY DEBT SINCE THE SIGNING DATE.

 

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PropCo Agreement

3.9.3            THIRD PARTY DEBT: ON THE PAYMENT DATE THE SELLERS AND HOLDCO
SHALL DELIVER (I) A CERTIFICATE SETTING FORTH ALL DEBT OWED BY ONE OR MORE OF
SELLER PROPCOS, SELLER OPCOS, OR HOLDCO TO ONE OR MORE THIRD PARTIES, INCLUDING
TAXES, OTHER THAN TO THE LENDER BANKS AND AFFILIATES (COLLECTIVELY REFERRED TO
AS THIRD PARTY DEBT)) (INCLUDING ESTIMATES OF THIRD PARTY DEBT THAT HAS ACCRUED
BUT NOT YET BEEN INVOICED; BUT EXCLUDING ANY FEES OWED BY HOLDCO TO DR.
GOP & KLINGSÖHR PROJEKTENTWICKLUNG UND MARKTFORSCHUNG GMBH, WHICH FEES WILL BE
PAID OUT OF THE AGGREGATE PURCHASE PRICE ON THE PAYMENT DATE) AS OF THE PAYMENT
DATE TO THEIR BEST KNOWLEDGE (THIRD PARTY DEBT MANAGEMENT CERTIFICATE), AND (II)
SSLI SHALL MAKE A CASH TRANSFER TO THE SELLERS AND HOLDCO, AS APPLICABLE, IN THE
AMOUNT OF ANY THIRD PARTY DEBT SET FORTH ON THE THIRD PARTY DEBT MANAGEMENT
CERTIFICATE TO THE EXTENT NECESSARY TO EXTINGUISH THE THIRD PARTY DEBT DUE TO
INSUFFICIENT FUNDS IN THE SELLERS.

3.10           THE SELLERS, MANCO AND SSLI SHALL CAUSE THE PAYMENT CONDITIONS
SET FORTH IN CLAUSES 3.7 (BUT AS TO CLAUSE 3.7.3 ONLY AS IT APPLIES TO THE
SELLER PROPCOS), 3.8 AND CLAUSE 3.9 (IT BEING UNDERSTOOD THAT THE ONLY REMEDY OF
A BREACH OF SUCH OBLIGATION WOULD BE THE REMEDIES PROVIDED FOR IN CLAUSE 3.3.3)
TO BE FULFILLED.

3.11           THE PROPCO BUYER’S MAY WAIVE ANY OR ALL OF THE PAYMENT CONDITIONS
DESCRIBED UNDER CLAUSE 3.7 THROUGH 3.9 IN THEIR DISCRETION; WITH THE EXCEPTION
OF CLAUSES 3.7.3 AND 3.8.4. THE PARTIES SHALL PROMPTLY INFORM EACH OTHER UPON
THE FULFILLMENT OF ANY PAYMENT CONDITION.

3.12           THE PROPCO BUYERS ARE NOT OBLIGED TO REVIEW THE INFORMATION
PROVIDED BY THE LENDER BANKS UNDER CLAUSES 3.7.1 AND 3.7.2.

3.13        In case the PropCo Buyers do not pay the Property Purchase Price
when due according to Clause 3.6, they shall be obliged to pay default interest
in an amount of 8 percentage points p.a. above the applicable base interest rate
(Basiszinssatz) as defined in § 247 German Civil Code (BGB) and published by the
German Federal Bank. In such case, the PropCo Buyers will be in payment default
(and for the avoidance of doubt shall remain in payment default until the full
outstanding amount including default interest is paid).

3.14           EACH PROPCO BUYER (ALS TEILSCHULDNER) SUBMITS ITSELF TO IMMEDIATE
FORECLOSURE (SOFORTIGE ZWANGSVOLLSTRECKUNG) INTO ALL OF ITS ASSETS SOLELY WITH
REGARD TO THE PORTION OF THE AGGREGATE PURCHASE PRICE DUE FROM SUCH PROPCO BUYER
AND INTEREST IN THE STATUTORY AMOUNT. FOR PURPOSES OF FORECLOSURE, INTEREST
SHALL BE OWED AS OF 1 SEPTEMBER 2010. THE NOTARY SHALL HAVE THE RIGHT TO PROVIDE
ENFORCEABLE DEEDS TO THE SELLER PROPCOS, BUT NOT BEFORE 1 SEPTEMBER 2010,
WITHOUT THE SELLER PROPCOS HAVING TO EVIDENCE THAT THE AGGREGATE PURCHASE PRICE
HAS BECOME DUE. THE BURDEN OF PROOF SHALL NOT BE AFFECTED BY THIS SUBMISSION TO
FORECLOSURE. THE SELLERS SHALL ONLY MAKE USE OF THE ENFORCEABLE DEEDS IN SUCH A
MANNER THAT ANY PROCEEDS FROM THE ENFORCEMENT SHALL BE HANDED OVER WITHOUT UNDUE
DELAY (UNVERZÜGLICH) TO THE NOTARY WHO, IN TURN, WILL DISTRIBUTE ANY PROCEEDS IN
ACCORDANCE WITH THIS PROPCO AGREEMENT, I.E. TO THE LENDER BANKS IN ACCORDANCE
WITH THE INSTRUCTIONS IN CLAUSE 3.7.2, ANDS WILL DEPOSIT ANY BALANCE (IF ANY).

3.15           IN CASE OF PAYMENT DEFAULT (ZAHLUNGSVERZUG) ON THE PROPERTY
PURCHASE PRICE AFTER THE SELLERS HAVING SET A FIVE (5) BUSINESS DAYS PAYMENT
DEADLINE BY WRITTEN WARNING LETTER (MAHNUNG MIT NACHFRIST), THE SELLERS SHALL
HAVE A RIGHT TO RESCIND THIS PROPCO AGREEMENT IN WHICH EVENT THE DOWN PAYMENT
(INCLUDING ANY INTEREST ACCRUED THEREON) SHALL BE RELEASED FROM THE ESCROW
ACCOUNT I TO THE SELLERS AS LUMP SUM DAMAGES.

 

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PropCo Agreement

               HOWEVER, THIS DOES NOT APPLY IF THE PAYMENT CONDITIONS HAVE BEEN
FULFILLED BY 31 AUGUST 2010, IN WHICH CASE THE RIGHT TO RESCIND SHALL BE
IMMEDIATE (I.E. WITHOUT ANY FIVE (5) BUSINESS DAYS PAYMENT DEADLINE BY WRITTEN
WARNING LETTER (MAHNUNG MIT NACHFRIST) BEING NECESSARY). IN CASE THE SELLERS DO
NOT EXERCISE THEIR RIGHT TO RESCIND THIS PROPCO AGREEMENT BASED ON THE PAYMENT
DEFAULT, (I) ANY OPERATIONAL DEFICITS UP TO EUR 300,000 PER MONTH PLUS (II) UP
TO A MAXIMUM AMOUNT OF EUR 150,000 FOR VALID CLAIMS ASSERTED BY THE OPCO
TRANSFEREES UNDER THE OPCO AGREEMENT CAUSED BY A DELAY OF CLOSING OF THIS
TRANSACTION BY ONE MONTH OR MORE (I.E. UNTIL THE LAST BUSINESS DAY OF ONE OF THE
FOLLOWING MONTHS), WILL BE BORN BY THE PROPCO BUYERS ALSO BY WAY OF
INDEMNIFICATION OF THE SELLERS FOR ANY SUCH DEFICITS AND CLAIMS.

3.16           EITHER PARTY MAY RESCIND THIS PROPCO AGREEMENT IN CASE THE
PAYMENT CONDITIONS HAVE NOT BEEN FULFILLED, UNLESS SUCH PARTY IS RESPONSIBLE FOR
THE NON-FULFILLMENT OF SUCH PAYMENT CONDITION, BY 2 NOVEMBER 2010 (LONG STOP
DATE) BY WRITTEN NOTICE TO THE OTHER PARTY (THE RESCINDING PARTY SHALL SEND A
COPY OF SUCH DECLARATION TO THE NOTARY FOR PURELY EVIDENTIARY PURPOSES, I.E.
SUCH COPY SHALL NOT BE REQUIRED FOR THE VALIDITY OF THE RESCISSION) IN WHICH
EVENT THE DOWN PAYMENT (INCLUDING ANY INTEREST ACCRUED THEREON) SHALL BE
RELEASED FROM THE ESCROW ACCOUNT I TO THE PROPCO BUYERS (UNLESS THE PROPCO
BUYERS ARE RESPONSIBLE FOR THE NON FULFILLMENT OF SUCH PAYMENT CONDITION).

3.17           THE PARTIES AGREE THAT THE SALE OF (I) THE PROPERTIES AND (II)
THE FF&E FORM, IN LEGAL TERMS, A SALE AND PURCHASE AS A WHOLE AND THAT,
THEREFORE, ANY PARTY MAY ONLY EXERCISE A RIGHT OF RESCISSION (BY AND THROUGH THE
RESPECTIVE SELLERS' PROCESS AGENT OR PROPCO BUYERS' PROCESS AGENT) WITH RESPECT
TO ALL PROPERTIES AND ALL PARTS OF THIS PROPCO AGREEMENT (I.E. INCLUDING THEIR
RESPECTIVE FF&E OF EACH PROPERTY) AND NOT WITH RESPECT TO INDIVIDUAL PROPERTIES
ONLY. IN CASE OF ANY RESCISSION, ANY RIGHTS OF THE PARTIES ON WHATEVER LEGAL
BASIS – SAVE FOR THE PROVISIONS ON CONFIDENTIALITY PURSUANT TO CLAUSE 24, ON
NOTICES / PROCESS AGENT PURSUANT TO CLAUSE 25, ON IMPLEMENTATION / POWER OF
ATTORNEY PURSUANT TO CLAUSE 26, ON EXPENSES / PROPERTY TRANSFER TAX PURSUANT TO
CLAUSE 28 AND ON CHOICE OF LAW / JURISDICTION PURSUANT TO CLAUSES 31 AND 32 –
SHALL BE EXCLUDED. FOR THE AVOIDANCE OF DOUBT, THE RIGHT TO RESCIND THIS PROPCO
AGREEMENT TERMINATES ONCE THE PAYMENT CONDITIONS PURSUANT TO CLAUSE 3.6 ARE
FULFILLED EXCEPT FOR THE RIGHT TO RESCISSION UNDER CLAUSE 3.15.

3.18           NOTWITHSTANDING ANY OTHER PROVISION IN THIS PROPCO AGREEMENT, IF
(I) ONE OR MORE MUNICIPALITIES EXERCISE THEIR STATUTORY PRE-EMPTIVE RIGHT OR
(II) A LAND REGISTER REJECTS THE APPLICATION FOR PRIORITY NOTICE OR ISSUES A
MATERIAL INJUNCTION WITH RESPECT TO A PRIORITY NOTICE, THE PARTIES SHALL AS TO
(I) ABOVE NEGOTIATE IN GOOD FAITH A MUTUALLY ACCEPTABLE TRANSACTION THAT DOES
NOT INCLUDE THE RESPECTIVE PROPERTIES BUT ONLY THOSE REMAINING AND AS TO (II)
ABOVE CLOSE THOSE PROPERTIES FOR WHICH PRIORITY NOTICES OF CONVEYANCES HAVE BEEN
REGISTERED WITHOUT A MATERIAL INJUNCTION AND WORK ON A MUTUALLY ACCEPTABLE
TRANSACTION AS TO THOSE WHERE MATERIAL INJUNCTIONS HAVE BEEN RECEIVED.

3.19           INTEREST UNDER THIS PROPCO AGREEMENT SHALL BE CALCULATED ON THE
BASIS OF DAYS ELAPSED (ANY FRACTIONAL DAY SHALL COUNT AS A FULL DAY) AND A
CALENDAR YEAR OF 360 DAYS.

3.20           OF THE PROPERTY PURCHASE PRICE, THE PROPCO BUYERS SHALL PAY THE
AMOUNT OF EUR 1,000,000 (IN WORDS: ONE MILLION EURO) ON THE PAYMENT DATE INTO AN
ESCROW ACCOUNT (ESCROW ACCOUNT II). ESCROW ACCOUNT II CONSISTS OF THREE ESCROW
ACCOUNT (ANDERKONTEN) (ESCROW SUB ACCOUNT II-1, ESCROW SUB ACCOUNT II-2 AND
ESCROW SUB ACCOUNT II-3) WHICH WILL BE, FOR PURPOSES OF THIS PROPCO AGREEMENT,
REFERRED TO IN THEIR ENTIRETY AS ESCROW ACCOUNT II. THE COPY OF THE ESCROW
AGREEMENT IN RELATION TO THE ESCROW ACCOUNT II IS ATTACHED HERETO AS ANNEX 3.2.
THIS AMOUNT (SECURITY FOR TAXES) SHALL SERVE AS SECURITY SHOULD A CLAIM FOR

 

 

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PropCo Agreement

               TAXES BE RAISED AGAINST ONE OR MORE OF THE SELLERS AND/OR HOLDCO
AND SUCH TAX CLAIM LEADS TO ONE OR MORE OF THE SELLERS AND/OR HOLDCO HAVING A
REASON TO FILE FOR INSOLVENCY OR INSOLVENCY PROCEEDINGS BEING INITIATED (ANTRAG
AUF ERÖFFNUNG DES INSOLVENZVERFAHRENS) OR OPENED (ERÖFFNUNG DES
INSOLVENZVERFAHRENS) UNLESS SUCH INITIATION OR OPENING IS, IN THE CASE OF AN
INITIATION, REJECTED (ABWEISUNG DES INSOLVENZANTRAGS) OR WITHDRAWN DUE TO THE
REASON TO FILE FOR INSOLVENCY (INSOLVENZGRUND) HAVING BEEN CURED (RÜCKNAHME DES
INSOLVENZANTRAGS), OR, IN THE CASE OF AN OPENING, DISCONTINUED (EINSTELLUNG DES
INSOLVENZVERFAHRENS) WITHIN TEN (10) BUSINESS DAYS. THE SECURITY FOR TAXES SHALL
BE DIRECTLY RELEASED TO THE TAX AUTHORITIES FROM THE ESCROW ACCOUNT II UPON
REQUEST OF THE RESPECTIVE PROPCO BUYER TO EXTINGUISH TAXES CLAIMED AGAINST ONE
OR MORE OF THE SELLERS AND/OR HOLDCO, ANY RESIDUAL AMOUNT OF THE SECURITY FOR
TAXES, INCLUDING ACCRUED INTEREST THEREON, WILL BE RELEASED TO THE SELLERS TO
THE ACCOUNT SET FORTH IN CLAUSE 16.2. THE PROPCO BUYERS ACKNOWLEDGE THAT THEY DO
NOT HAVE ANY RIGHTS WITH RESPECT TO THE ESCROW ACCOUNT II UNTIL THE DATE THAT IS
THIRTEEN MONTHS AFTER THE PAYMENT DATE AND THAT DURING THE THIRTEEN MONTHS
FOLLOWING THE PAYMENT DATE, ONLY THE OPCO TRANSFEREES MAY EXERCISE ANY RIGHTS
WITH REGARD TO THE ESCROW ACCOUNT II. AN AMOUNT EQUIVALENT TO THE AMOUNT OF
ESCROW ACCOUNT II THAT HAS BEEN PAID TO THE OPCO TRANSFEREES WITHIN THE FIRST
THIRTEEN MONTHS AFTER THE PAYMENT DATE, WILL REMAIN IN ESCROW ACCOUNT I (TO THE
EXTENT AVAILABLE) AFTER THE LAPSE OF EIGHTEEN MONTHS FOLLOWING THE PAYMENT DATE
AND BEFORE DISTRIBUTION TO THE SELLERS IN ACCORDANCE WITH CLAUSE 3.4. THIS
AMOUNT WILL SERVE THE SAME SECURITY PURPOSE AS THE SECURITY FOR TAXES AS
STIPULATED IN THIS CLAUSE 3.20. ANY AMOUNTS REMAINING IN THE ESCROW ACCOUNT I
(DUE TO THE ABOVE REQUIREMENT) AND ESCROW ACCOUNT II WILL BE RELEASED TO THE
SELLERS UPON THE EARLIER OF (I) THREE YEARS AFTER THE PAYMENT DATE AND (II) THE
DATE THAT IS SIX MONTHS AFTER THE LAST OF THE ACTIONS REQUIRED TO BE TAKEN
ACCORDING TO THE STEPS PLAN HAS BEEN COMPLETED. PROPCO BUYERS ACKNOWLEDGE THAT
THE INTEREST IN THE ESCROW ACCOUNT II HAS BEEN ASSIGNED TO THE LENDER BANKS,
SUBJECT TO THE RIGHTS OF THE SELLERS, PROPCO BUYERS AND OPCO TRANSFEREES TO SUCH
ESCROW ACCOUNT II AS DESCRIBED HEREIN AND IN THE ESCROW AGREEMENT.

The Escrow Agent shall release funds from Escrow Account II in accordance with
the terms of the Escrow Agreement. The Parties shall provide the Escrow Agent
with the necessary information and instructions foreseen in the Escrow Agreement
for the release of funds from Escrow Account II.

4.                  VALUE ADDED TAX

4.1               THE PARTIES ASSUME THAT THE SALE AND TRANSFER OF THE
PROPERTIES AS PROVIDED IN THIS PROPCO AGREEMENT NEITHER COLLECTIVELY NOR
INDIVIDUALLY CONSTITUTE THE SALE AND TRANSFER OF A GOING CONCERN (KEINE
GESCHÄFTSVERÄUSSERUNG IM GANZEN) PURSUANT TO § 1 PARA.1A GERMAN VALUE ADDED TAX
ACT (UMSATZSTEUERGESETZ - USTG). THE SALE AND TRANSFER OF THE PROPERTIES IS VAT
EXEMPT PURSUANT TO § 4 NO. 9 LIT. A) USTG, UNLESS THE SELLER WAIVES THIS
VAT-EXEMPTION AND EXERCISES ITS OPTION PURSUANT TO § 9 PARA. 1 IN CONNECTION
WITH § 4 NO. 9 LIT. A) USTG TO MAKE THE SALE AND TRANSFER OF THE PROPERTY
SUBJECT TO VAT, AS FURTHER SET FORTH IN CLAUSE 4.2. WITH THE EXCEPTION IN
CLAUSE 4.2, THE SELLERS UNDERTAKE NOT TO EXERCISE THEIR OPTION RIGHTS PURSUANT
TO § 9 PARA. 1 IN CONNECTION WITH § 4 NO. 9 LIT. A) USTG.

4.2               PART OF THE OBERURSEL PROPERTY IS RENTED BY WAY OF VAT-ABLE
COMMERCIAL LEASE TO TEGUT... GUTBERLET STIFTUNG & CO. (TEGUT PREMISES).
OBERURSEL PROPCO HEREWITH WAIVES THE VAT-EXEMPTION AND EXERCISES ITS OPTION TO
MAKE THE SALE AND TRANSFER OF THE OBERURSEL PROPERTY SUBJECT TO VAT ACCORDING TO
§ 9 PARA 1, PARA 3 SENTENCE 2 USTG, TO THE EXTENT THE SALE AND TRANSFER RELATES
TO THE TEGUT PREMISES. THE PURCHASE PRICE FOR THE TEGUT PREMISES REPRESENTS
9.38% OF THE OVERALL PURCHASE PRICE FOR THE OBERURSEL PROPERTY (A FLOOR PLAN OF
THE TEGUT PREMISES IS ATTACHED AS ANNEX 4.2). IN THIS CONNECTION THE RELEVANT
SELLER GUARANTEES IN THE

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PropCo Agreement

               MEANING OF § 311 BGB THAT IT HAS VALIDLY OPTED FOR VAT WITH
RESPECT TO THE RENTAL SERVICES REGARDING THE TEGUT PREMISES AND THAT TO THE
KNOWLEDGE OF THE RELEVANT SELLER PROPCO THERE ARE NO FACTS OR CIRCUMSTANCES
WHICH HAVE THE CONSEQUENCE THAT THIS VAT OPTION IS IN PART OR IN FULL INVALID.
THE SELLERS SHALL HAND OVER TO THE PROPCO BUYERS THE ORIGINAL LEASE, INCLUDING
ALL AMENDMENTS, WITH RESPECT TO THE TEGUT PREMISES ON OR AFTER THE PAYMENT DATE.

4.3               IN THE EVENT THAT THE COMPETENT TAX OFFICE DOES NOT
ACKNOWLEDGE THE PARTIAL WAIVER OF THE VAT-EXEMPTION AND / OR THE SEGMENTATION OF
THE BUILDING PARTS AS MENTIONED ABOVE UNDER CLAUSE 4.2., THE OBERURSEL PROPCO
SHALL BE AUTHORIZED AND OBLIGED TO ISSUE A SUPPLEMENTAL DEED (NACHTRAGSURKUNDE)
AT THE OBERURSEL PROPCO'S EXPENSE IN WHICH THE OBERURSEL PROPCO WAIVES THE
VAT-EXEMPTION AS MENTIONED ABOVE UNDER CLAUSE 4.2 IN ACCORDANCE WITH THE
REQUIREMENTS OF THE COMPETENT TAX OFFICE.

4.4               SINCE WITH RESPECT TO THE TEGUT PREMISES THE VAT LIABILITY IS
SHIFTED TO THE PROPCO BUYER OF THE OBERURSEL PROPERTY PURSUANT TO § 13B USTG,
THE RELEVANT AMOUNT OF VAT WILL BE PAID BY THE OBERURSEL PROPCO BUYER DIRECTLY
TO THE COMPETENT TAX AUTHORITY WHEN DUE. THE OBERUSEL PROPCO BUYER GUARANTEES
THAT IT IS AN ENTREPRENEUR (UNTERNEHMER) FOR VAT PURPOSES AND THAT IT WILL
CONTINUE TO LEASE THE TEGUT PREMISES SUBJECT TO VAT.

4.5               THE OBERURSEL PROPCO SHALL DELIVER A PROPER INVOICE ACCORDANT
TO § 14 PARA 4 USTG IN WHICH OBERURSEL PROPCO SETS FORTH THE VAT-LIABILITY OF
THE OBERURSEL PROPCO BUYER.

4.6               THE SELLERS SHALL INFORM THE COMPETENT TAX AUTHORITIES ABOUT
THE SALE AND TRANSFER OF THE PROPERTIES AND APPLY FOR A SPECIAL VAT AUDIT
(UMSATZSTEUERSONDERPRÜFUNG) TO CONFIRM THE ASSUMPTION OF THE PARTIES THAT THE
SALE AND TRANSFER OF THE PROPERTIES NEITHER COLLECTIVELY NOR INDIVIDUALLY
CONSTITUTE THE SALE AND TRANSFER OF A GOING CONCERN. IN THE EVENT THAT THE
COMPETENT TAX OFFICE IS OF THE OPINION THAT THE SALE AND TRANSFER OF THE
PROPERTIES COLLECTIVELY OR INDIVIDUALLY DOES CONSTITUTE A SALE AND TRANSFER OF A
GOING CONCERN, THE FOLLOWING SHALL APPLY: THE RESPECTIVE SELLER PROPCO SHALL
PROVIDE TO THE PROPCO BUYERS ALL INFORMATION AND DELIVER COPIES OF ALL DOCUMENTS
NECESSARY OR BENEFICIAL FOR THE CONDUCT OF AN INPUT VAT READJUSTMENT ACCORDING
TO § 15A USTG (UMSATZSTEUERBERICHTIGUNG) WITHIN ONE (1) MONTH AFTER THE
RESPECTIVE WRITTEN NOTICE BY THE TAX OFFICE HAS BEEN ISSUED.

5.                  ENCUMBRANCES, PUBLIC LEVIES

5.1               THE ENCUMBRANCES OF THE PROPERTIES REGISTERED IN SECTION II
(ABTEILUNG II) OF THE LAND REGISTER (GRUNDBUCH) OF THE PROPERTIES AS WELL AS THE
PUBLIC EASEMENTS (BAULASTEN) OF THE PROPERTIES AS SHOWN IN ANNEXES 1.1 AND 1.2
WILL BE ASSUMED BY THE PROPCO BUYERS UNLESS LISTED IN ANNEX 5.1-1. WITH REGARD
TO THE ENCUMBRANCES OF THE PROPERTIES REGISTERED IN SECTION III (ABTEILUNG III)
OF THE LAND REGISTER (GRUNDBUCH) OF THE PROPERTIES ONLY THOSE THAT ARE LISTED IN
ANNEX 5.1-2 WILL BE ASSUMED. WITH REGARD TO THE ASSUMED ENCUMBRANCES OF THE
PROPERTIES REGISTERED IN SECTION II (ABTEILUNG II), THE PROPCO BUYERS WILL ALSO
ASSUME THE UNDERLYING OBLIGATIONS. THE PARTIES SHARE THE VIEW THAT THE
ENCUMBRANCES ASSUMED PURSUANT TO THIS PROPCO AGREEMENT DO NOT MATERIALLY REDUCE
THE VALUE OF THE PROPERTIES.

 

 

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PropCo Agreement

5.2               ANY LIENS/ENCUMBRANCES ON THE PROPERTIES ASSUMED PURSUANT TO
THIS PROPCO AGREEMENT WILL BE ASSUMED WITHOUT ANY EFFECT ON THE PROPERTY
PURCHASE PRICE. THE PARTIES – EACH IN RELATION TO THE RESPECTIVE PROPERTY AS SET
FORTH IN CLAUSE 2 – HEREBY CONSENT TO THE CANCELLATION OF THE ENCUMBRANCES NOT
ASSUMED BY THE PROPCO BUYERS AND APPLY FOR THE RESPECTIVE REGISTRATION IN THE
LAND REGISTER.

5.3               IF REGISTERED RIGHTS (EINGETRAGENE RECHTE), OWNERSHIP RIGHTS
(EIGENTÜMERRECHTE) OR WITHDRAWAL CLAIMS (RÜCKGEWÄHRANSPRÜCHE) ARE CREATED PRIOR
TO THE REGISTRATION OF THE PROPCO BUYERS AS OWNERS OF THE PROPERTIES IN THE LAND
REGISTER, SUCH OWNERSHIP RIGHTS AND WITHDRAWAL CLAIMS ARE HEREBY ASSIGNED TO THE
PROPCO BUYERS WITH EFFECT AS OF THE PAYMENT DATE. THE PROPCO BUYERS ACCEPT SUCH
ASSIGNMENT.

5.4               THE PROPCO BUYERS ASSUME EXISTING OLD ENCUMBRANCES
(ALTRECHTLICHE DIENSTBARKEITEN), IF ANY, NOT REGISTERED IN THE LAND REGISTER.

5.5               THE RESPECTIVE SELLER PROPCO BEARS THE PUBLIC SERVICE
DEVELOPMENT CHARGES AND OTHER RESIDENTS’ OR OCCUPIERS’ LEVIES (I.E. ALL
DEVELOPMENT CONTRIBUTIONS (ERSCHLIESSUNGSBEITRÄGE) RELATED TO THE PROPERTIES
ACCORDING TO THE GERMAN BUILDING CODE (BAUGESETZBUCH) AND CONTRIBUTIONS
ACCORDING TO THE LOCAL CONTRIBUTION ORDINANCE (KOMMUNALABGABENGESETZ)) WITH
RESPECT TO CONSTRUCTION MEASURES WHICH AS OF THE PAYMENT DATE HAVE BEEN CARRIED
OUT OR ARE PENDING (PUBLIC CHARGES). THE PARTIES SHALL REIMBURSE EACH OTHER IN
CASE OF DEMANDS FOR PAYMENT OF PUBLIC CHARGES WHICH DO NOT COMPLY WITH THE
PROVISIONS SET FORTH HEREIN. SEE ALSO CLAUSE 6.2.

6.                  TRANSFER OF PROPERTIES

6.1               THE PARTIES SHALL COOPERATE PRIOR TO AND ON THE TRANSFER OF
PHYSICAL POSSESSION OF THE PROPERTIES IN ORDER TO ENSURE THAT THIS PROPCO
AGREEMENT IS EFFICIENTLY AND TIMELY CONSUMMATED.

6.2               ANY RISK, BENEFITS AND CHARGES (BESITZ, NUTZEN UND LASTEN)
WITH RESPECT TO THE PROPERTIES WILL TRANSFER FROM THE SELLER PROPCOS TO THE
PROPCO BUYERS (I.E. THE USUFRUCT RIGHTS (NUTZUNGEN) AND OBLIGATIONS (LASTEN) ON
EXPIRATION (24:00 CET) OF THE DAY THE PAYMENT OF THE AGGREGATE PURCHASE PRICE IS
MADE AND RECEIVED (PAYMENT DATE) AND SHALL BE BORNE BY PROPCO BUYERS IMMEDIATELY
UPON THE BEGINNING OF THE DAY FOLLOWING THE PAYMENT DATE (00:00 CET). THE PROPCO
BUYERS SHALL ASSUME ALL RIGHTS AND OBLIGATIONS RESULTING FROM THE OWNERSHIP OF
THE PROPERTIES IMMEDIATELY UPON THE BEGINNING OF THE DAY FOLLOWING THE PAYMENT
DATE (00:00 CET) BUT NOT WITH RESPECT TO THE INSURANCES FOR WHICH CLAUSE 6.4
SHALL BE DECISIVE. SUBJECT TO CLAUSE 5.5, THE CHARGES, REAL ESTATE TAXES, REAL
ESTATE LEVIES, INSURANCE PREMIUMS OR OTHER PUBLIC CHARGES (CHARGES) SHALL BE
SHARED BETWEEN THE SELLER PROPCOS AND THE PROPCO BUYERS AS OF THE PAYMENT DATE
ON A PRO RATA TEMPORIS BASIS, I.E. IF THERE IS, FOR EXAMPLE, AN INVOICE COVERING
FEES FOR THE ENTIRE CALENDAR YEAR WHICH BECOMES DUE FOR PAYMENT IN DECEMBER 2010
(AND ASSUMING THE PAYMENT DATE TO BE 31 AUGUST 2010) THEN THE SELLER PROPCOS
SHALL BE RESPONSIBLE FOR TWO THIRDS OF SUCH ANNUAL FEE AND PROPCO BUYERS SHALL
BE RESPONSIBLE FOR ONE THIRD OF SUCH ANNUAL FEE. THE PARTIES SHALL REIMBURSE
EACH OTHER FOR PAYMENTS OF CHARGES IN ACCORDANCE WITH THIS CLAUSE 6.2. IN THE
EVENT THE PAYMENT DATE DOES NOT FALL ON THE LAST CALENDAR DAY OF A MONTH (E.G.
29 OCTOBER 2010), THE TRANSFER ACCORDING TO THE FIRST TWO SENTENCES OF THE
CLAUSE 6.2 SHALL OCCUR AT 24:00 CET/00:00 CET OF SUCH LAST DAY OF THE CALENDAR
MONTHS (E.G. 31 OCTOBER 2010/1 NOVEMBER 2010).

6.3               THE SELLERS SHALL, AND SHALL CAUSE THEIR AFFILIATES AND THIRD
PARTIES TO, (I) HAND OVER TO THE PROPCO BUYERS OR A THIRD PARTY NOMINATED BY THE
PROPCO BUYERS ALL DOCUMENTS RELATING TO THE PROPERTIES ALL OF WHICH ARE 

 

 

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               LISTED IN ANNEX 6.3-1(A) AS HARD COPIES ON OR AFTER THE PAYMENT
DATE AND (II) USE REASONABLE BEST EFFORTS TO LOCATE AND HAND OVER THE ADDITIONAL
MISSING DOCUMENTS LISTED IN ANNEX 6.3-1(B) BY THE PAYMENT DATE, WITHOUT ANY
OBLIGATION TO REFURBISH ANY DOCUMENTS LISTED IN ANNEX 6.3-1(B), TO THE EXTENT
LEGALLY PERMISSIBLE UNDER APPLICABLE STATUTORY RULES AND REGULATIONS (ESPECIALLY
APPLICABLE DATA PROTECTION LAWS). THE SELLER PROPCOS UNDERTAKE TO PROMPTLY
DELIVER TO THE PROPCO BUYERS ANY DOCUMENTS RELATING TO THE PROPERTIES WHICH THE
SELLER PROPCOS MAY RECEIVE THEREAFTER OR AFTER THE PAYMENT DATE. THE SELLER
PROPCOS SHALL HAND OVER ANY SPARE KEYS OR SPARE CODE CARDS FOR THE PROPERTIES TO
THE PROPCO BUYERS ON THE PAYMENT DATE. ALL OTHER KEYS OR CODE CARDS ARE USED BY
THE PERSONS AS LISTED IN ANNEX 6.3-2 WHICH ALSO CONTAINS AN OVERVIEW OF THE
LOCKING SYSTEM (SCHLIESSPLAN) OF THE PROPERTIES. SELLER PROPCOS AND THE PROPCO
BUYERS SHALL (AND PROPCO BUYERS SHALL ENSURE ANY LESSEE OF THE PROPERTIES SHALL)
AFFORD TO EACH OTHER AS WELL AS THEIR RESPECTIVE COUNSEL, ACCOUNTANTS, AND OTHER
DESIGNATED REPRESENTATIVES REASONABLE ACCESS AND DUPLICATING RIGHTS (WITH
COPYING COSTS TO BE BORNE BY THE REQUESTING PARTY) DURING NORMAL BUSINESS HOURS
AND UPON REASONABLE NOTICE, TO ALL BOOKS, RECORDS, DOCUMENTS AND COMMUNICATIONS
RELATING TO THE PROPERTIES AND WITHIN THE KNOWLEDGE, POSSESSION, CUSTODY OR
CONTROL OF THE RESPECTIVE OTHER PARTY AND TO THE EXTENT SUCH DOCUMENTATION IS
REQUIRED TO COMPLY WITH ITS STATUTORY OBLIGATIONS UNDER APPLICABLE LAW. AS OF
THE BEGINNING OF THE DAY FOLLOWING THE PAYMENT DATE (00:00 CET), THE PROPCO
BUYERS ARE LIABLE FOR THE PREMISES (TRAGEN DIE VERKEHRSSICHERUNGSPFLICHT) AND
ANY THIRD PARTY RISK (HAFTPFLICHTRISIKO).

6.4               DEVIATING FROM THE STATUTORY PROVISIONS, THE PROPCO BUYERS
ACKNOWLEDGE THAT THEY WILL NOT ASSUME THE EXISTING INSURANCE CONTRACT BUT SHALL
PROCURE INSURANCE FOR THE PROPERTIES AS OF THE BEGINNING OF THE DAY FOLLOWING
THE PAYMENT DATE (00:00 CET). SSLI WILL OBTAIN COVERAGE FOR THE PROPCO BUYERS
UNDER THE EXISTING INSURANCE POLICIES FROM THE DAY FOLLOWING SIGNING DATE UP TO
AND INCLUDING THE PAYMENT DATE AS ADDITIONAL NAMED INSURED UNDER THE EXISTING
INSURANCE POLICIES FOR THE PROPERTIES AND WILL USE BEST EFFORTS TO PROVIDE
SIMILAR INSURANCE COVERAGE UNDER ANY FUTURE INSURANCE POLICY, IN THE EVENT THE
EXISTING INSURANCE POLICIES ARE REPLACED. ANNEX 6.4-1 CONTAINS A LIST OF
INSURANCE CLAIMS PENDING AS OF THE DATE HEREOF. THE EXISTING INSURANCE POLICIES
ALSO COVER THE FF&E AND ANY SUCH FUTURE POLICIES WILL ALSO COVER FF&E. THE
PROPCO BUYERS SHALL WITHOUT UNDUE DELAY (UNVERZÜGLICH) INFORM THE EXISTING
INSURANCE COMPANIES AS LISTED IN ANNEX 6.4-2 ABOUT THE ACQUISITION OF THE
PROPERTIES AND THE NEW INSURANCE POLICIES ENTERED INTO. SSLI COVENANTS TO (I)
OPT FOR PAYMENT OF "REPLACEMENT OF COSTS" UNDER THE EXISTING INSURANCE POLICIES,
(II) PASS THROUGH ANY SUCH PAYMENTS UNDER THE INSURANCE POLICIES RECEIVED FOR
INSURED EVENTS OF THE PROPERTIES (INCLUDING THE FF&E) TO THE PROPCO BUYERS AND
(III) WILL USE BEST EFFORTS TO ASSIGN, TO THE EXTENT LEGALLY POSSIBLE, ANY
CLAIMS UNDER THE FUTURE INSURANCE POLICIES, IF ANY, FOR DESTROYED PROPERTY OR
FF&E. NO FURTHER OBLIGATIONS WILL BE OWED BY THE SELLER PROPCOS UNLESS
STATUTORILY PROVIDED FOR.

6.5               MANCO, CAMPHAUSEN PROPCO AND REINBEK PROPCO ARE CONTRACTING
PARTIES TO THE CONSTRUCTION AGREEMENTS (AS AMENDED FROM TIME TO TIME), THE
ARCHITECTURAL AGREEMENTS AS WELL AS OTHER CONSTRUCTION RELATED AGREEMENTS (ALL
AS LISTED IN ANNEX 6.5.1). WITH EFFECT AS OF THE BEGINNING OF THE DAY FOLLOWING
THE PAYMENT DATE (00:00 CET), MANCO AND THE SELLER PROPCOS HEREBY ASSIGN, AND TO
THE EXTENT MANCO OR SELLER PROPCOS ARE NOT A PARTY TO THE RESPECTIVE AGREEMENTS
THEY SHALL CAUSE TO BE ASSIGNED, TO THE EXTENT LEGALLY PERMISSIBLE:

6.5.1           ANY CLAIM HELD BY SUCH ENTITIES AGAINST NON AFFILIATES (I.E. IN
PARTICULAR AGAINST THE RESPECTIVE CONTRACTING COUNTER PARTY) UNDER AND IN
CONNECTION WITH THE CONSTRUCTION AGREEMENTS (AS AMENDED FROM TIME TO TIME), THE
ARCHITECTURAL AGREEMENTS AS WELL AS OTHER CONSTRUCTION RELATED AGREEMENTS

 

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PropCo Agreement

                (ALL AS LISTED IN ANNEX 6.5.1) PROVIDED THAT FOR SUCH MATTERS
FOR WHICH THE SELLERS OR THEIR AFFILIATES ARE OR WILL BECOME LIABLE UNDER THIS
PROPCO AGREEMENT WHICH ARE COVERED BY SUCH CLAIMS ASSIGNED UNDER THIS
CLAUSE 6.5.1, SUCH ASSIGNMENT IS MADE WITH DISCHARGING EFFECT (AN ERFÜLLUNGS
STATT) OF THE RESPECTIVE LIABILITY OF THE SELLER OR ITS AFFILIATES; AND

6.5.2           ANY SECURITIES (SICHERHEITEN) – ESPECIALLY THE PERFORMANCE BONDS
(GEWÄHRLEISTUNGSBÜRGSCHAFTEN) AS LISTED IN ANNEX 6.5.2 –, THE INTELLECTUAL
PROPERTY RIGHTS RELATED TO THE CONSTRUCTION UNDER AND IN CONNECTION WITH THE
CONSTRUCTION AGREEMENTS (AS AMENDED FROM TIME TO TIME) AS WELL AS OTHER
CONSTRUCTION RELATED AGREEMENTS (ALL AS LISTED IN ANNEX 6.5.1) AND ANY RIGHTS
THAT WERE ASSIGNED TO MANCO AGAINST ANY SUB-CONTRACTORS. WITH RESPECT TO THE
PERFORMANCE BONDS (GEWÄHRLEISTUNGS­BÜRGSCHAFTEN), THE CURRENT HOLDER OF THE
ORIGINAL CERTIFICATE WILL DEPOSIT SUCH ORIGINAL WITH THE NOTARY IN ACCORDANCE
WITH CLAUSE 3.8.1 AND THE PROPCO BUYERS HEREBY UNDERTAKE THAT THEY WILL RELEASE
THE PERFORMANCE BONDS (GEWÄHRLEISTUNGSBÜRGSCHAFTEN) TO THE RESPECTIVE CONTRACTOR
IN THE EVENT THE RESPECTIVE CONTRACTOR REQUESTS SO IN ACCORDANCE WITH THE
RELEASE PROVISIONS UNDER THE RESPECTIVE CONSTRUCTION AGREEMENT AND HEREBY
INDEMNIFIES THE RESPECTIVE SELLER FROM ANY DAMAGES RELATING TO ANY FAILURE TO
ABIDE BY THE TERMS IN THIS CLAUSE 6.5.2.

PropCo Buyer herewith accepts such assignment. The Seller PropCos produced
evidence satisfactory to Buyer PropCos that all payment obligations of ManCo and
the Seller PropCos resulting from the contracts mentioned in Clause 6.5.1 have
been fulfilled. By assigning the abovementioned rights and securities, ManCo is
fulfilling its obligations under the development agreements between it and the
Seller PropCos in compliance with its function of centrally coordinating and
procuring services for its Affiliates and the consideration to be paid to ManCo
for such assignments will be handled internally among ManCo and its Affiliates.

6.6               THE PROPCO BUYERS SHALL ASSUME THE MAINTENANCE, SUPPLY AND
OTHER PROPERTY RELATED AGREEMENTS LISTED IN ANNEX 6.6. WITH REGARD TO THE
ASSUMED AGREEMENTS, CLAUSE 3.2 OF THE OPCO AGREEMENT APPLIES MUTATIS MUTANDIS.

7.                  GUARANTEES, INDEMNITIES

7.1               THE SELLER PROPCOS SHALL GRANT UNRESTRICTED POSSESSION OF AND
TITLE TO THE PROPERTIES FREE OF THE ENCUMBRANCES IN ACCORDANCE WITH CLAUSE 5.1.

7.2               THE PROPERTIES ARE SOLD AND TRANSFERRED IN THEIR PRESENT
CONDITION, WHICH IS KNOWN TO THE PROPCO BUYERS, UNLESS OTHERWISE AGREED UNDER
THIS PROPCO AGREEMENT, AND THE PROPCO BUYERS REVIEWED THE PROPERTIES AS
DESCRIBED IN "WHEREAS (D)" ABOVE. TO THAT EXTENT, THE PROPCO BUYERS' RIGHTS
BECAUSE OF DEFECTS (AS TO THE PROPERTIES AND BUILDINGS), IN PARTICULAR WITH
RESPECT TO ANY APPARENT OR HIDDEN DEFECTS, ARE EXCLUDED TO THE MAXIMUM EXTENT
PERMITTED BY LAW UNLESS A SPECIFIC CONDITION IS AGREED UPON IN THIS PROPCO
AGREEMENT. THE SELLER PROPCOS DO NOT OWE (NOR GUARANTEE OR REPRESENT) A
PARTICULAR SQUARE MEASURE (FLÄCHENMASS) OR GIVE ANY GUARANTEES WITH RESPECT TO
CERTAIN FIRE INSURANCE VALUES, UNLESS OTHERWISE AGREED UNDER THIS PROPCO
AGREEMENT. THE SELLER PROPCOS HEREWITH ASSIGN (TO THE EXTENT LEGALLY
PERMISSIBLE) TO PROPCO BUYERS, WHICH ACCEPT SUCH ASSIGNMENT, ANY RECOURSE CLAIMS
AGAINST THEIR PREDECESSORS IN TITLE (VOREIGENTÜMER) UNDER THE CONDITION
PRECEDENT (AUFSCHIEBENDE BEDINGUNG) OF FULL AND FINAL PAYMENT OF THE AGGREGATE
PURCHASE PRICE (AS DEFINED IN CLAUSE 16.1).

 

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PropCo Agreement

7.3               EACH OF THE SELLER PROPCOS GUARANTEES, WITH RESPECT TO ITS
RESPECTIVE PROPERTY, BY WAY OF AN INDEPENDENT GUARANTEE WITHIN THE MEANING OF §
311 PARA. 1 BGB (SELBSTÄNDIGES GARANTIEVERSPRECHEN I.S.D. § 311 ABS. 1 BGB) – IT
BEING UNDERSTOOD THAT THE STATEMENTS SHALL NEITHER CONSTITUTE A QUALITY
GUARANTEE CONCERNING THE OBJECT OF THE PURCHASE WITHIN THE MEANING OF § 443 BGB
(GARANTIE FÜR DIE BESCHAFFENHEIT DER SACHE I.S.D. § 443 BGB) NOR A GUARANTEE AS
TO QUANTITY –THAT AT THE SIGNING DATE AND AT THE PAYMENT DATE (PROVIDED THAT
SUCH GUARANTEES WHICH ARE SUBJECT TO KNOWLEDGE (KNOWLEDGE MEANS THE ACTUAL
KNOWLEDGE OF THOSE PERSONS LISTED IN ANNEX 7.3) SHALL ONLY BE GIVEN AS OF THE
SIGNING DATE AND THAT GUARANTEES WHICH ARE EXPRESSLY GIVEN AS OF A SPECIFIC DATE
SHALL BE TRUE AND CORRECT ONLY AS OF SUCH DATE):

7.3.1           THEY ARE THE UNRESTRICTED LEGAL OWNERS OF THE PROPERTIES; THE
PROPERTIES ARE NOT SUBJECT TO ANY CONVEYANCE (AUFLASSUNG), DISPOSITION
(VERFÜGUNG) OR ANY SALE, CONTRIBUTION OR OTHER CONTRACTUAL ARRANGEMENT CREATING
AN OBLIGATION TO TRANSFER THE PROPERTIES OR TO CREATE OR CHANGE ANY ENCUMBRANCES
UNLESS EXPRESSLY PROVIDED FOR IN THIS PROPCO AGREEMENT AND AS LISTED IN
ANNEX 7.3.1; NO CHANGES IN THE LAND REGISTER OR PUBLIC EASEMENT REGISTER TO THE
STATUS AS DESCRIBED ABOVE IN CLAUSE 1 HAVE BEEN REGISTERED OR APPLIED FOR,
UNLESS EXPRESSLY STATED DIFFERENTLY IN THIS PROPCO AGREEMENT;

7.3.2           TO THE KNOWLEDGE OF THE RESPECTIVE SELLER PROPCOS, THE
PROPERTIES ARE NEITHER LOCATED IN A REFURBISHMENT AREA, A DEVELOPMENT AREA,
REAPPORTIONMENT AREA, AN AREA THAT IS SUBJECT TO A DEVELOPMENT FREEZE, NOR AN
AREA SUBJECT TO A PRESERVATION STATUTE NOR SUBJECT TO MONUMENT PROTECTION EXCEPT
AS EXPRESSLY DISCLOSED IN ANNEX 7.3.2;

7.3.3           AS OF THE SIGNING DATE, THE CURRENT CONSTRUCTION OF THE
PROPERTIES AND THE CURRENT USE OF THE PROPERTIES ARE PERMITTED UNDER PUBLIC LAW
AND NO UNFULFILLED ORDERS BY PUBLIC AUTHORITIES EXIST EXCEPT AS EXPRESSLY
DISCLOSED IN ANNEX 7.3.3;

7.3.4           AS OF THE SIGNING DATE, NO FACILITIES OR EQUIPMENT ON
NEIGHBORING PROPERTIES ARE REQUIRED FOR THE OPERATION AND FUNCTIONALITY OF THE
PROPERTIES EXCEPT FOR PUBLIC SUPPLY FACILITIES OR EXCEPT AS EXPRESSLY DISCLOSED
IN ANNEX 7.3.4;

7.3.5           TO THE KNOWLEDGE OF THE RESPECTIVE SELLER PROPCOS, THE BUILDINGS
HAVE NO MATERIAL HIDDEN DEFECTS;

7.3.6           THE INSURANCE PREMIUMS FOR THE INSURANCES OF THE PROPERTIES AND
THE BUILDINGS (INCLUDING THE FF&E) HAVE BEEN PAID FOR THE PERIOD UNTIL THE
PAYMENT DATE;

7.3.7           AS OF THE DATE OF THIS PROPCO AGREEMENT, THERE ARE NO DISPUTES
OR LITIGATIONS PROPERLY SERVED (RECHTSHÄNGIG) OR TO THE KNOWLEDGE OF THE SELLERS
PENDING (ANHÄNGIG) UPON OR AGAINST SSLI OR ANY OF ITS AFFILIATES EITHER BEFORE A
COURT, AN ARBITRATION TRIBUNAL, AN ADMINISTRATION OR OTHERWISE, CRIMINAL
PROCEEDINGS OR INVESTIGATIONS OR OTHER INVESTIGATIONS BY ANY AUTHORITY, RELATING
TO ANY OF THE PROPERTIES, AND TO THE KNOWLEDGE OF THE SELLERS NO SUCH DISPUTES,
LITIGATION PROCEEDINGS OR INVESTIGATIONS HAVE BEEN THREATENED IN WRITING (IN
EACH CASE IN EXCESS OF EUR 25,000) EXCEPT FOR THE DEFAULT CLAIMS EXPRESSLY
DISCLOSED IN ANNEX 7.3.7, WHICH WILL BE SETTLED UPON PAYMENT OF THE AGGREGATE
PURCHASE PRICE;

 

 

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PropCo Agreement

7.3.8           NO LEASE AGREEMENTS OR OTHER AGREEMENTS GRANTING A RIGHT OF USE
EXIST FOR THE PROPERTIES EXCEPT AS EXPRESSLY DISCLOSED IN ANNEX 7.3.8-1;
FURTHERMORE, THE LEASE AGREEMENTS CURRENTLY IN PLACE AS SET OUT IN ANNEX 7.3.8-2
HAVE OR WILL BE TERMINATED WITH EFFECT AS OF THE PAYMENT DATE;

7.3.9           TO THE KNOWLEDGE OF THE SELLERS, NO OLD ENCUMBRANCES
(ALTRECHTLICHE DIENSTBARKEITEN) EXIST THAT ARE NOT REGISTERED IN THE LAND
REGISTER;

7.3.10        THERE ARE NO CHARGES OR LEVIES OUTSTANDING THAT ARE NOT ENTERED
INTO THE RESPECTIVE LAND REGISTER AND, TO THE KNOWLEDGE OF THE SELLERS, THERE
ARE NO PLANNED DEVELOPMENT MEASURES (IN EACH CASE EXCEPT AS EXPRESSLY DISCLOSED
IN ANNEX 7.3.10);

7.3.11        THE SELLER PROPCOS DO NOT HAVE ANY EMPLOYEES (E.G. CARETAKER)
WHICH WILL TRANSFER TO THE PROPCO BUYERS ACCORDING TO § 613A GERMAN CIVIL CODE,

7.3.12        TO THE KNOWLEDGE OF THE SELLERS, UNLESS EXPRESSLY DISCLOSED IN
ANNEX 7.3.12, THERE ARE NO CONTAMINATIONS OF THE PROPERTIES WITHIN THE MEANING
OF § 2 PARA. 3 TO 6 FEDERAL SOIL PROTECTION ACT (BUNDESBODENSCHUTZGESETZ /
BBODSCHG) AS WELL AS ANY HAZARDOUS MATERIAL (E.G. ASBESTOS, MOULD, DRY ROT,
HOUSE FUNGUS OR XYLOPHAGA) OF THE BUILDINGS (TOGETHER CONTAMINATION) WHICH CAUSE
THE NEED FOR ANY REMEDIAL ACTION;

7.3.13        ANNEX 7.3.13 (I) SETS FORTH A TRUE AND A COMPLETE LIST AND (II)
CONTAINS COPIES OF ALL SUBORDINATION AGREEMENTS (RANGRÜCKTRITTSERKLÄRUNGEN),
WHICH ARE, WITHOUT CHANGES OR AMENDMENTS, IN FULL FORCE AND EFFECT AS OF THE
SIGNING DATE, SUBORDINATING THE INTERCOMPANY DEBT TO THE CLAIMS OF ALL OTHER
SUBORDINATED CREDITORS (RANGRÜCKTRITT I.S.D. § 39 ABS. 2 INSO) TO WHICH ONE OR
MORE OF THE SELLERS AND/OR HOLDCO ARE A PARTY;

7.3.14        ANY AND ALL TAXES WHICH REFER TO THE BUSINESS OPERATIONS OF THE
SELLERS (BETRIEBSSTEUERN), IN THE MEANING OF § 75 GENERAL TAX CODE
(ABGABENORDNUNG) (BUSINESS TAXES), ALL REAL ESTATE TAX AND ANY CLAIM FOR
REIMBURSEMENT OF TAX REBATES WHICH WERE DECLARED OR ASSESSED ON OR BEFORE
SIGNING DATE HAVE BEEN FULLY PAID. ADDITIONALLY, ANY AND ALL BUSINESS TAXES AND
TAX REBATES WHICH WILL BE DECLARED OR ASSESSED BETWEEN THE SIGNING DATE AND UP
TO AND INCLUDING THE PAYMENT DATE WILL BE PAID IN THE FULL AMOUNT AND IN DUE
TIME. IN CASE ANY OF THE PROPCO BUYERS BECOMES LIABLE UNDER § 75 GENERAL TAX
CODE OR § 11 PARA 2 REAL ESTATE TAX CODE (GRUNDSTEUERGESETZ) VIS-À-VIS THE
GERMAN TAX AUTHORITIES, THE SELLERS WILL INDEMNIFY, BY NO MORE THAN FIVE
BUSINESS DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM THE PROPCO BUYER, SUCH
PROPCO BUYER FOR ANY AND ALL CLAIMS VIS-À-VIS THE GERMAN TAX AUTHORITIES
RESULTING FROM SUCH LIABILITY INCLUDING ANY EXPENDITURE INCURRED BY SUCH PROPCO
BUYER THAT IS CAUSED OR OTHERWISE RELATED TO SUCH CLAIMS. THE PROPCO BUYERS
SHALL TAKE REASONABLE ADMINISTRATIVE OR LEGAL MEASURES AGAINST THE ACTIONS OF
THE GERMAN TAX AUTHORITIES ON THE REQUEST OF THE RESPECTIVE SELLER PROPCO. FOR
THIS PURPOSE, THE SELLER PROPCOS WILL PROVIDE TO THE RESPECTIVE PROPCO BUYER ANY
INFORMATION THAT IS NECESSARY OR HELPFUL FOR TAKING SUCH MEASURES. THE PROPCO
BUYERS ARE OBLIGED TO INFORM THE GERMAN TAX AUTHORITIES REGARDING THE CONCLUSION
OF THIS PROPCO AGREEMENT AND THE START OF THEIR BUSINESS WITHIN THREE WEEKS
AFTER THE PAYMENT DATE.

 

 

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PropCo Agreement

8.                  POWER TO ENCUMBER THE PROPERTIES

8.1               THE SELLER PROPCOS HEREBY AUTHORIZE THE PROPCO BUYERS AND BOTH
PARTIES AUTHORIZE THE NOTARY UNDER RELEASE FROM PERSONAL LIABILITY AS WELL AS
UNDER RELEASE FROM THE RESTRICTIONS OF § 181 BGB, TO ENCUMBER THE PROPERTIES
WITH IMMEDIATELY ENFORCEABLE (§ 800 GERMAN CODE ON CIVIL PROCEDURE /
ZIVILPROZESSORDNUNG / ZPO) LAND CHARGES IN FAVOR OF THE FINANCING BANKS OF THE
PROPCO BUYERS (INCLUDING THE CREATION OF COMPREHENSIVE LAND CHARGES) IN THE
MAXIMUM AMOUNT OF UP TO EUR 40 MILLION PLUS INTEREST OF 20% P.A. IN ANY AMOUNT
FROM TODAY AND A SINGLE ANCILLARY PAYMENT OF UP TO 10% IN ANY AMOUNT AND TO
CONSENT TO IMMEDIATE ENFORCEMENT ON THE ENCUMBERED PROPERTY ON BEHALF OF THE
RELEVANT OWNER OF THE PROPERTIES AND TO APPROVE OF AND APPLY FOR CHANGES IN
PRIORITY AS WELL AS TO MAKE AND ACCEPT ANY DECLARATIONS OF PURPOSE AND ALL OTHER
REPRESENTATIONS NECESSARY FOR THE ENCUMBRANCE OF THE PROPERTIES BY WAY OF A
DECLARATION BEFORE THE NOTARY OR HIS OFFICIALLY APPOINTED SUBSTITUTE.

8.2               THE AUTHORIZATION IS RESTRICTED AS (I) THE SELLER PROPCOS
ASSUME NO PERSONAL LIABILITY WHATSOEVER UNDER OR IN CONNECTION WITH ANY LAND
CHARGES GRANTED ACCORDING TO CLAUSE 8.1 AND (II) THE PURPOSE (ZWECKBESTIMMUNG)
OF THE LAND CHARGES IN THE RESPECTIVE LAND CHARGE GRANTING DEEDS
(GRUNDSCHULDBESTELLUNGSURKUNDEN) WILL, UNTIL THE AGGREGATE PURCHASE PRICE (AS
DEFINED IN CLAUSE 16.1) HAS BEEN PAID IN FULL, BE RESTRICTED TO SOLELY ALLOW FOR
THE LAND CHARGES TO SERVE AS SECURITY FOR THE AGGREGATE PURCHASE PRICE (AS
DEFINED IN CLAUSE 16.1) WHICH IS FINANCED AND ACTUALLY PAID TO THE SELLERS.

8.3               THE NOTARY HAS POINTED OUT THAT, AS A RULE, THE CREDITORS OF
LAND CHARGES DEMAND THAT THE PROPCO BUYER, IN ADDITION TO THE GRANTING OF A LAND
CHARGE, PROVIDES A NOTARIAL ACKNOWLEDGEMENT OF DEBT AND CONSENTS TO IMMEDIATE
ENFORCEMENT OF THE NOTARIAL DEED ON ITS ENTIRE ASSETS WITH RESPECT TO THE
ACKNOWLEDGED DEBT. THE NOTARY HAS INFORMED THE PROPCO BUYERS OF THE CONSEQUENCES
RESULTING THEREFROM.

8.4               THE PROPCO BUYERS HEREBY IRREVOCABLY INSTRUCT THE CREDITORS OF
THE LAND CHARGES TO EFFECT PAYMENTS ACCORDING TO THE PAYMENT PROVISIONS AGREED
HEREIN UPON MATURITY OF THE AGGREGATE PURCHASE PRICE (AS DEFINED IN
CLAUSE 16.1).

8.5               THE NOTARY IS HEREBY INSTRUCTED TO PROVIDE ENFORCEABLE COPIES
OF THE DEEDS ON THE CREATION OF THE LAND CHARGES (VOLLSTRECKBARE AUSFERTIGUNGEN)
TO THE RELEVANT CREDITORS ONLY WHEN THE RELEVANT CREDITORS HAVE CONFIRMED IN
WRITING THAT THEY WILL OBSERVE THE ABOVE AGREEMENT ON THE SECURITY PURPOSE OF
THE LAND CHARGES AND PAYMENT INSTRUCTION.

9.                  PRIORITY NOTICE OF CONVEYANCE, CONVEYANCE /
AUFLASSUNGSVORMERKUNG, AUFLASSUNG

9.1               EACH SELLER PROPCO – IN RELATION TO THE RESPECTIVE PROPERTY AS
SET FORTH IN CLAUSE 2 – CONSENTS TO AND EACH SELLER PROPCO AND EACH PROPCO BUYER
– IN RELATION TO THE RESPECTIVE PROPERTY AS SET FORTH IN CLAUSE 2 – APPLIES FOR
THE REGISTRATION OF PRIORITY NOTICES ON THE RESPECTIVE PROPERTY IN FAVOR OF THE
RESPECTIVE PROPCO BUYER IN ORDER TO SECURE THE RESPECTIVE PROPCO BUYER'S CLAIM
TO CONVEYANCE OF TITLE IN THE LAND REGISTER ENCUMBERING EACH OF THE PROPERTIES.
THE PROPCO BUYERS CONSENT TO AND HEREBY APPLY FOR THE CANCELLATION OF PRIORITY
NOTICES REGISTERED ON THE BASIS OF THE ABOVE-MENTIONED CONSENTS OF THE SELLER
PROPCOS, PROVIDED THAT OWNERSHIP OF THE PROPERTIES IS ENTERED INTO THE REGISTER
IN THE ORDER OF THE RESPECTIVE PRIORITY NOTICE. PARTIAL COMPLETION (TEILVOLLZUG)
IS PERMISSIBLE.

 

9.1     Jeder PropCo Verkäufer bewilligt – in Bezug auf das jeweilige
Grundstück, wie in Ziffer 2 dargelegt – die Eintragung von Vormerkungen für das
jeweilige Grundstück zugunsten des jeweiligen PropCo Käufer, um den Anspruch der
PropCo Käufer auf Eigentumsübertra­gung zu sichern, und der jeweilige PropCo
Verkäufer und PropCo Käufer – in Bezug auf die Grundstück, wie in Ziffer 2
dargelegt - beantragen die Eintragung derselben. Die PropCo Verkäufer bewilligen
und beantragen die Löschung der Vormerkungen, die auf der Grundlage der
vorstehenden Bewilligung der PropCo Verkäufer eingetragen wurden, sofern die
Eintragung als Eigentümer der Liegenschaften im Rang der entsprechenden
Vormerkung erfolgt ist. Ein Teilvollzug ist zulässig

Each PropCo Buyer – in relation to the respective Property as set forth in
Clause 2 – consents to and each Seller PropCo – in relation to the respective
Property as set forth in Clause 2 – applies for registration of a reservation in
rank with the Priority Notices for the land charges still to be registered
pursuant to Clause 8 up to an amount of EUR 40 million plus up to 20% interest
p.a. and a single ancillary payment of up to 10% which may also be exercised in
partial amounts. Each PropCo Buyer - in relation to the Property as set forth in
Clause 2 - further applies for the cancellation of such Priority Notice upon its
registration as owner in the land register, provided that no other registrations
have been made in the land register in the meantime which respective PropCo
Buyer has not approved.

 

Jeder PropCo Verkäufer stimmt – in Bezug auf die jeweilige Grundstück, wie in
Ziffer 2 dargelegt – zu und jeder PropCo Käufer beantragt – in Bezug auf das
jeweilige Grundstück, wie in Ziffer 2 dargelegt – die Eintragung eines
Rangvorbehalts mit der Vormerkung für die noch gemäß Ziffer 8 einzutragenden
Gesamtgrundpfandrechte bis zu einer Höhe von EUR 40 Millionen zuzüglich bis zu
20 % Zinsen jährlich und einer einzelnen Zusatzzahlung von bis zu 10 %, die auch
in Teilbeträgen ausgeübt werden können. Jeder PropCo Käufer beantragt ferner -
in Bezug auf das jeweilige Grundstück, wie in Ziffer 2 dargelegt – die Löschung
dieser Vormerkung mit seiner Eintragung als Eigentümer im Grundbuch,
vorausgesetzt das Eigentum wird im Rang der Vormerkung eingetragen .

9.2               EACH SELLER PROPCO AND EACH PROPCO BUYER – IN RELATION TO THE
RESPECTIVE PROPERTY AS SET FORTH IN CLAUSE 2 – HEREWITH AGREES THAT TITLE TO THE
RESPECTIVE PROPERTY SHALL BE TRANSFERRED TO THE RESPECTIVE PROPCO BUYER AS SOLE
OWNER. EACH SELLER PROPCO – IN RELATION TO THE RESPECTIVE PROPERTY AS SET FORTH
IN CLAUSE 2 – CONSENTS (BEWILLIGT) TO AND EACH PROPCO BUYER – IN RELATION TO THE
RESPECTIVE PROPERTY AS SET FORTH IN CLAUSE 2 – APPLIES FOR THE REGISTRATION OF
THE TRANSFER OF TITLE IN THE LAND REGISTER. PARTIAL COMPLETION (TEILVOLLZUG) IS
PERMISSIBLE.

 

9.2     Jede PropCo Verkäufer und jeder PropCo Käufer vereinbaren hiermit – in
Bezug auf die jeweilige Grundstück, wie in Ziffer 2 dargelegt –, dass das
Eigentumsrecht an dem jeweiligen Grundstück auf den jeweiligen PropCo Käufer als
alleinigem Eigentümer übertragen wird. Jede PropCo Verkäufer bewilligt – in
Bezug auf das jeweilige Grundstück, wie in Ziffer 2 dargelegt – und jeder PropCo
Käufer beantragt – in Bezug auf das jeweilige Grundstück, wie in Ziffer 2
dargelegt – die Eintragung der Übertragung des Eigentumsrechts in dem Grundbuch.
Ein Teilvollzug ist zulässig.

9.3               THE NOTARY IS HEREBY INSTRUCTED TO APPLY FOR THE REGISTRATION
OF THE CHANGE OF OWNERSHIP ONLY AFTER FULL PAYMENT OF THE PROPERTY PURCHASE
PRICE AND RECEIPT OF CLEARANCE CERTIFICATES (UNBEDENLICHKEITSBE­SCHEINIGUNGEN)
WITH RESPECT TO REAL ESTATE TRANSFER TAX HAS BEEN PROVEN TO HIM BY WRITTEN
CONFIRMATION BY THE SELLER PROPCOS WITH RESPECT TO THE FULL PAYMENT OF THE
PURCHASE PRICE AND BY PROPCO BUYERS WITH RESPECT TO THE FULL PAYMENT OF REAL
ESTATE TRANSFER TAX, WHICH THE SELLER PROPCOS AND PROPCO BUYERS SHALL ISSUE
PROMPTLY, OR OF THE PROPCO BUYERS' BANK, AND NOT TO ISSUE ANY OFFICIAL OR
CERTIFIED COPY OF THIS DEED CONTAINING THIS CONVEYANCE, IT BEING UNDERSTOOD THAT
PAYMENT INTO THE ESCROW ACCOUNT I AND ESCROW ACCOUNT II SHALL BE DEEMED TO BE A
PAYMENT OF A PORTION OF THE AGGREGATE PURCHASE PRICE WITH DELIBERATING EFFECT
(SEE CLAUSE 16.2),

 

9.3     Der Notar wird hiermit beauftrag, die Eintragung der Eigentumsänderung
nur zu beantragen, nachdem die vollständige Zahlung des Grundstückskaufpreises
und der Eingang einer Unbedenklichkeits­bescheinigung hinsichtlich der
Grund­erwerbssteuer ihm gegenüber durch die PropCo Verkäufer hinsichtlich der
voll­ständigen Zahlung des Kaufpreises und durch die PropCo Käufer hinsichtlich
der vollständigen Zahlung der Grunderwerb­steuer jeweils schriftlich bestätigt
wurde, wobei dies PropCo Verkäufer und PropCo Käufer unverzüglich vorzunehmen
haben, oder durch die Bank der PropCo Käufer nachgewiesen wurde, und kein
offizielles oder beglaubigtes Exemplar dieser Urkunde auszustellen, das diese
Grundstücks­übertragung enthält. Dabei besteht Einigkeit darüber, dass eine
Zahlung auf das Treuhandkonto I und das Treuhandkonto II als Zahlung auf einen
Teil des Gesamtkauf­preises mit befreiender Wirkung anzusehen ist (vgl. Ziffer
16.2).

9.4               IF AND TO THE EXTENT §§ 885 PARA.2 BGB (GERMAN CIVIL CODE), 44
PARA.2 GBO (GERMAN REAL ESTATE CODE) REQUIRE THE REFERENCE TO A GERMAN LANGUAGE
DOCUMENT (LEGAL CONDITION / RECHTSBEDINGUNG), THE PARTIES SHALL NOTARIZE A
GERMAN LANGUAGE DOCUMENT OF THIS DEED; TO THIS EFFECT THE ABOVE FOR MENTIONED
DECLARATIONS (BEWILLIGUNGEN) AND REQUESTS (ANTRÄGE) ARE HEREBY AMENDED TO
REFLECT THAT A FUTURE FULLY GERMAN DEED CONTAINING CLAIMS FOR CONVEYING
OWNERSHIP SHALL BE SECURED.

 

9.4     Falls und soweit §§ 885 Abs. 2 BGB, 44 Abs. 2 GBO Bezugnahme auf eine
original-sprachig deutsch abgefasste Urkunde verlangen (Rechtsbedingung), sind
die Vertragsteile verpflichtet, die entsprech­enden Bestimmungen gegenwärtiger
Nie­derschrift original-deutschsprachig beur­kunden zu lassen; im Hinblick
hierauf sind die vorstehend niedergelegten Bewil­ligungen und Anträge hiermit
dahingehend ergänzt, dass auch die durch Bezugnahme auf die künftig
originalsprachig deutsch dokumentierten Ansprüche auf Eigentumsverschaffung
gesichert sind.

 

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PropCo Agreement

 

PART B: FF&E PURCHASE AGREEMENT

10.               PURCHASE OBJECT

10.1           THE OBJECTS OF PURCHASE UNDER THIS PART B ARE ALL OF THE
FURNITURE AND EQUIPMENT AS WELL AS ALL OF THE INVENTORY (INCLUDING SOFTWARE
LICENSES BUT EXCLUDING ALL SOFTWARE LICENSES OF DETEWEOPAS AND MICROSOFT) OF THE
SELLER OPCOS, ALL OF WHICH ARE SET FORTH IN ANNEX 10.1 (FF&E) ON AN AS IS/WHERE
IS BASIS (WIE BESEHEN).

10.2           THE FF&E ALSO INCLUDES ALL NEW INVENTORIES CORRESPONDING TO ANY
CATEGORY OF ITEMS LISTED IN ANNEX 10.1 WHICH WILL BE ACQUIRED BY ANY OF THE
SELLER OPCOS IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE ON
OR AFTER THE DATE HEREOF UNTIL THE PAYMENT DATE (FOR THE AVOIDANCE OF DOUBT,
EVEN IF NOT LISTED IN ANNEX 10.1). ANY FF&E DISPOSED OF BY ANY OF THE SELLER
OPCOS IN THE ORDINARY COURSE, IN ANY EVENT WITH THE STANDARD OF CARE OF A
PRUDENT BUSINESSMAN ON OR AFTER THE DATE HEREOF UNTIL THE PAYMENT DATE WILL BE
EXCLUDED FROM THE DEFINITION OF FF&E (FOR THE AVOIDANCE OF DOUBT, EVEN IF LISTED
IN ANNEX 10.1). NEVERTHELESS, ALL ITEMS THAT ARE NECESSARY TO OPERATE THE
BUSINESSES ARE DEEMED TO BE FF&E.

11.               SALE

Each Seller OpCo hereby sells its FF&E to the applicable PropCo Buyer. Regarding
the allocation of the FF&E to each PropCo Buyer, Clause 2 shall apply mutatis
mutandis. Each PropCo Buyer hereby accepts such sale.

12.               TRANSFER

12.1           SUBJECT TO THE CONDITION PRECEDENT OF THE PAYMENT OF THE
AGGREGATE PURCHASE PRICE (AS DEFINED IN AND IN ACCORDANCE WITH CLAUSE 16.1),
EACH SELLER OPCO HEREBY TRANSFERS TO THE APPLICABLE PROPCO BUYER ITS OWNERSHIP
RIGHTS IN THE RESPECTIVE FF&E EFFECTIVE AS OF THE PAYMENT DATE (24:00 CET), AND
THE APPLICABLE PROPCO BUYER ASSUMING SUCH OWNERSHIP RIGHTS THE BEGINNING OF THE
DAY FOLLOWING THE PAYMENT DATE (00:00 CET). EACH PROPCO BUYER HEREBY ACCEPTS
SUCH TRANSFER (DINGLICHE EINIGUNG). DELIVERY (ÜBERGABE) OF THE RESPECTIVE FF&E
WILL TAKE PLACE BY WAY OF PHYSICAL DELIVERY (KÖRPERLICHE ÜBERGABE) OR DELIVERY
OF POSSESSION (BESITZVERSCHAFFUNG) AT THE RESPECTIVE LOCATION. IF AND TO THE
EXTENT THAT ANY FF&E IS HELD IN IMMEDIATE POSSESSION OF A THIRD PARTY, THE
APPLICABLE SELLER OPCO HEREBY ASSIGNS TO THE RELEVANT PROPCO BUYER THE RIGHT TO
REQUEST DELIVERY FROM SUCH THIRD PARTY OF SUCH FF&E (ABTRETUNG DES
HERAUSGABEANSPRUCHS) EFFECTIVE AS OF THE PAYMENT DATE (24:00 CET) AND THE
APPLICABLE PROPCO BUYER ASSUMING SUCH RIGHT THE BEGINNING OF THE DAY FOLLOWING
THE PAYMENT DATE (00:00 CET). EACH PROPCO BUYER HEREBY ACCEPTS SUCH ASSIGNMENT.
IN THE EVENT THE PAYMENT DATE DOES NOT FALL ON THE LAST CALENDAR DAY OF A MONTH
(E.G. 29 OCTOBER 2010), THE TRANSFER ACCORDING TO THE FIRST TWO SENTENCES OF THE
CLAUSE 12.1 SHALL OCCUR AT 24:00 CET/00:00 CET OF SUCH LAST DAY OF THE CALENDAR
MONTHS (E.G. 31 OCTOBER 2010/1 NOVEMBER 2010).

12.1.1        THE RESPECTIVE SELLER OPCO AND PROPCO BUYER SHALL MAKE ALL FURTHER
DECLARATIONS AND PERFORM ALL ACTIONS WHICH ARE OR BECOME NECESSARY TO COMPLETE
THE TRANSFER OF THE POSSESSION OF, AND THE TITLE TO, THE RESPECTIVE FF&E.

 

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PropCo Agreement

12.1.2        IN CASE ANY FF&E (THAT THE PARTIES INTENDED TO BE COVERED BY THIS
PART B) SHOULD NOT BE SPECIFIED IN SUFFICIENT DETAILS TO ALLOW A TRANSFER TO THE
APPLICABLE PROPCO BUYER, THIS LACK OF SPECIFICATION WILL NOT AFFECT THE INTENDED
SALE UNDER THIS PART B. THE CONCERNED PARTIES SHALL INFORM EACH OTHER WITHOUT
UNDUE DELAY ABOUT SUCH FF&E IN WRITING AND SHALL MUTUALLY AGREE ON AND EFFECT
ALL NECESSARY ADDITIONAL STEPS TO TRANSFER THE FF&E AT NO ADDITIONAL COSTS.

12.2           SUBJECT TO THE CONDITION PRECEDENT OF THE PAYMENT OF THE
AGGREGATE PURCHASE PRICE (AS DEFINED IN AND IN ACCORDANCE WITH CLAUSE 16.1) EACH
SELLER OPCO – TO THE EXTENT THAT THE RESPECTIVE FF&E COMPRISE EXPECTANCY RIGHTS
(ANWARTSCHAFTSRECHTE) RESULTING FROM A RESERVATION OF TITLE (EIGENTUMSVORBEHALT)
– HEREBY TRANSFERS TO THE RESPECTIVE PROPCO BUYER ITS EXPECTANCY RIGHTS
EFFECTIVE AS OF THE PAYMENT DATE (24:00 CET) AND THE RESPECTIVE PROPCO BUYER
ASSUMING SUCH EXPECTANCY RIGHTS THE BEGINNING OF THE DAY FOLLOWING THE PAYMENT
DATE (00:00 CET). EACH PROPCO BUYER HEREBY ACCEPTS SUCH TRANSFER (DINGLICHE
EINIGUNG). CLAUSES 12.1.1 AND 12.1.2 APPLY MUTATIS MUTANDIS. THE APPLICABLE
SELLER OPCO SHALL PROVIDE THE APPLICABLE PROPCO BUYER WITH ALL RELEVANT
DOCUMENTS AND INFORMATION TO ENABLE SUCH PROPCO BUYER TO FULFILL ANY OUTSTANDING
OBLIGATION ON BEHALF OF THE APPLICABLE SELLER OPCO IN ORDER TO RECEIVE FULL
TITLE TO THE RESPECTIVE FF&E.

12.3           THE SELLERS AND THE PROPCO BUYERS SHALL, TOGETHER WITH THE OPCO
TRANSFEREES, (I) PROMPTLY AFTER THE SIGNING DATE COMMENCE TAKING INVENTORY OF
THE FF&E WITH ORIGINAL PURCHASE PRICE VALUES OF EUR 400 AND HIGHER AND SHALL
COMPLETE SUCH MEASURES BY NO LATER THAN 14 BUSINESS DAYS AFTER THE SIGNING DATE
AND (II) COMPLETE A FURTHER TAKING OF THE INVENTORY OF THE FF&E WITH ORIGINAL
PURCHASE PRICE VALUES OF EUR 400 AND HIGHER BY THE PAYMENT DATE.

13.               PURCHASE PRICE, DUE DATE

13.1           THE TOTAL PURCHASE PRICE FOR THE FF&E IS

EUR 2,950,000
(in words: two million nine hundred fifty thousand Euro)

(FF&E Purchase Price), including a total VAT of up to EUR 471,008 as set forth
in Clause 14 (however, plus any additional PropCo Buyer VAT, if any, as per
Clause 14.1). The FF&E Purchase Price (plus the respective applicable VAT which
consists of the included VAT amount plus any additional PropCo Buyer VAT
pursuant to Clause 14.1, if any) is allocated to the FF&E of the individual
Sellers as shown in Annex 13.1.

13.2           THE FF&E PURCHASE PRICE (IF APPLICABLE, PLUS ADDITIONAL PROPCO
BUYER VAT AS PER CLAUSE 14.1) WILL BECOME DUE ON THE DATE ON WHICH THE RELATED
PROPERTY PURCHASE PRICE BECOMES DUE; CLAUSES 3.16 THROUGH 3.17 SHALL APPLY
MUTATIS MUTANDIS.

14.               VALUE ADDED TAX

14.1           ACCORDING TO THE ASSUMPTION OF THE PARTIES PURSUANT TO
CLAUSE 4.1, THE PARTIES ASSUME THAT THE SALE AND TRANSFER OF THE FF&E AS
PROVIDED IN THIS PROPCO AGREEMENT DOES NEITHER COLLECTIVELY NOR INDIVIDUALLY
CONSTITUTE THE SALE OF A GOING CONCERN. HENCE, THE SALE AND TRANSFER OF THE FF&E
IS, IF AND TO THE EXTENT NOT VAT-EXEMPT ACCORDING TO § 4 NR. 28 USTG, SUBJECT TO
GERMAN VAT AT THE CURRENT RATE OF 19%, I.E. A TOTAL

 

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PropCo Agreement

               AMOUNT OF EUR 471,008. FOR THE AVOIDANCE OF DOUBT, ANY VAT UP TO
EUR 574,790, IF AND TO THE EXTENT PAYABLE, WILL BE BORNE BY THE SELLERS (SELLER
FF&E VAT AMOUNT), IT BEING UNDERSTOOD THAT ANY VAT WHICH IS ALLOCATED TO THE
FF&E AND EXCEEDS THE AMOUNT OF EUR 574,790 WILL BE PAID BY THE RESPECTIVE PROPCO
BUYER IN ADDITION TO THE FF&E PURCHASE PRICE. THE SELLER OPCOS SHALL ON THE
PAYMENT DATE DELIVER A PROPER INVOICE ACCORDANT TO § 14 PARA 4 USTG TO THE
RESPECTIVE PROPCO BUYER. THE SELLER FF&E VAT AMOUNT WILL BE PAID OUT OF THE
AGGREGATE PURCHASE PRICE ON THE PAYMENT DATE.

14.2           IF THE TAX AUTHORITIES ARE OF THE OPINION THAT THE SALE OF THE
FF&E COLLECTIVELY OR INDIVIDUALLY DOES CONSTITUTE A SALE AND TRANSFER OF A GOING
CONCERN (GESCHÄFTSVERÄUSSERUNG IM GANZEN) PURSUANT TO § 1 PARA. 1A USTG WHICH IS
NOT SUBJECT TO VAT (NICHT UMSATZSTEUERBAR), THE FOLLOWING WILL APPLY: THE
PURCHASE PRICE FOR THE FF&E WHICH WERE SOLD BY THE RELEVANT SELLER OPCO WILL BE
REDUCED BY THE VAT AMOUNT, IF ANY, WHICH WAS PAID BY THE PROPCO BUYERS IN
ADDITION TO THE FF&E PURCHASE PRICE PURSUANT TO CLAUSE 14.1, AND THE SELLERS
SHALL ISSUE A REVISED INVOICE IN ACCORDANCE WITH APPLICABLE VAT LAW. THE
RELEVANT PROPCO BUYER SHALL WITHOUT UNDUE DELAY COOPERATE TO SETTLE EACH
SELLER'S VAT POSITION (INCLUDING BY CORRECTING INVOICES AND RETURNS) IN
ACCORDANCE WITH APPLICABLE VAT LAWS. THE RELEVANT SELLER OPCO SHALL PROVIDE ALL
INFORMATION AND DELIVER COPIES OF DOCUMENTS FOR THE CONDUCT OF AN INPUT VAT
READJUSTMENT ACCORDING TO § 15A USTG (UMSATZSTEUERBERICHTIGUNG) WITHIN ONE (1)
MONTH AFTER THE PAYMENT DATE.

15.               GUARANTEES

15.1           EACH OF THE SELLER OPCOS GUARANTEES WITH RESPECT TO ITS
RESPECTIVE FF&E BY WAY OF AN INDEPENDENT GUARANTEE WITHIN THE MEANING OF § 311
PARA. 1 BGB (SELBSTÄNDIGES GARANTIEVERSPRECHEN I.S.D. § 311 ABS. 1 BGB) – IT
BEING UNDERSTOOD THAT THE STATEMENTS NEITHER CONSTITUTE A QUALITY GUARANTEE
CONCERNING THE OBJECT OF THE PURCHASE WITHIN THE MEANING OF § 443 BGB (GARANTIE
FÜR DIE BESCHAFFENHEIT DER SACHE I.S.D. § 443 BGB) NOR A GUARANTEE AS TO
QUANTITY – WITH RESPECT TO THE FF&E THAT AT THE SIGNING DATE AND AT THE PAYMENT
DATE (PROVIDED THAT SUCH GUARANTEES WHICH ARE SUBJECT TO THE KNOWLEDGE OF THE
SELLERS ARE ONLY GIVEN AS OF THE SIGNING DATE AND THAT GUARANTEES WHICH ARE
EXPRESSLY GIVEN AS OF A SPECIFIC DATE ARE TRUE AND CORRECT ONLY AS OF SUCH
DATE):

15.1.1       THE SELLER OPCOS HOLD FULL TITLE TO THE LEGAL OWNERSHIP TO THE
FF&E;

15.1.2       AS OF THE PAYMENT DATE AND UPON PAYMENT OF THE AGGREGATE PURCHASE
PRICE, THE FF&E ARE NOT PLEDGED OR OTHERWISE ENCUMBERED WITH RIGHTS OF THIRD
PARTIES OTHER THAN STATUTORY LIENS INCURRED IN THE ORDINARY COURSE OF BUSINESS;

15.1.3       TO THE KNOWLEDGE OF THE SELLERS THE FF&E HAS IN GENERAL BEEN
PROPERLY MAINTAINED, IS GENERALLY IN GOOD WORKING ORDER AND REPAIR (NORMAL WEAR
AND TEAR EXCEPTED), AND IS GENERALLY FIT FOR THE INTENDED USE. THE FF&E IS
SUFFICIENT FOR THE CURRENTLY CONDUCTED BUSINESSES;

15.1.4       AS OF THE PAYMENT DATE, THE FF&E IS AVAILABLE AT THE PROPERTIES AS
DESCRIBED IN ANNEX 10.1 SUBJECT ONLY TO NORMAL WEAR AND TEAR AND AS REPLACED IN
THE ORDINARY COURSE OF BUSINESS; AND

15.1.5       AS OF THE DATE OF THIS PROPCO AGREEMENT, THERE ARE NO PENDING
DISPUTES AND NO PENDING (RECHTSHÄNGIG OR, TO THE KNOWLEDGE OF THE SELLERS,
ANHÄNGIG) LITIGATION, EITHER BEFORE A COURT, AN ARBITRATION TRIBUNAL, AN
ADMINISTRATION OR OTHERWISE, CRIMINAL PROCEEDINGS OR INVESTIGATIONS OR OTHER

 

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PropCo Agreement

               INVESTIGATIONS BY ANY AUTHORITY, RELATING TO ANY OF THE FF&E, AND
TO THE KNOWLEDGE OF THE SELLERS NO SUCH DISPUTES, LITIGATION PROCEEDINGS OR
INVESTIGATIONS HAVE BEEN THREATENED IN WRITING (IN EACH CASE IN EXCESS OF EUR
25,000) EXCEPT AS EXPRESSLY DISCLOSED IN ANNEX 15.1.5.

15.2           WITH EFFECT AS OF THE PAYMENT DATE, THE SELLER OPCOS HEREBY
ASSIGN TO THE PROPCO BUYERS ANY AND ALL POSSIBLY EXISTING RIGHTS TO THE EXTENT
ASSIGNABLE (INCLUDING WARRANTY RIGHTS (GEWÄHRLEISTUNGSRECHTE) UNDER AND IN
CONNECTION WITH THE FF&E. THE PROPCO BUYERS HEREWITH ACCEPT SUCH ASSIGNMENT.

 

 

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PropCo Agreement

 

PART C: GENERAL PROVISIONS

16.               RIGHT TO RESCIND AND AGGREGATE PURCHASE PRICE

16.1           UNTIL THE PROPERTY PURCHASE PRICE AND THE FF&E PURCHASE PRICE
(COLLECTIVELY THE AGGREGATE PURCHASE PRICE) HAVE BECOME DUE (INCLUDING THE
AMOUNT FROM THE ESCROW ACCOUNT I EXCEPT FOR THE AMOUNTS IN ACCORDANCE WITH
CLAUSE 3.3.1) IN ACCORDANCE WITH CLAUSE 3.6, IN ADDITION TO ANY OTHER VALID
RESCISSION RIGHT IN THIS PROPCO AGREEMENT, THE PROPCO BUYERS ARE ENTITLED TO
RESCIND THIS PROPCO AGREEMENT, IF WITH RESPECT TO ANY SELLER, HOLDCO, MANCO OR
SSLI, INSOLVENCY OR SIMILAR PROCEEDINGS ARE (I) INITIATED (ANTRAG AUF ERÖFFNUNG
EINES INSOLVENZVERFAHRENS) AND NOT REJECTED WITHIN A PERIOD OF TEN (10) BUSINESS
DAYS, PROVIDED THAT THE PROPCO BUYER IS NOT OBLIGATED TO PAY THE PROPERTY
PURCHASE PRICE WHILE SUCH PROCEEDINGS HAVE BEEN INITIATED BUT NOT REJECTED OR
(II) OPENED (ERÖFFNUNG EINES INSOLVENZVERFAHRENS) OR (III) REBUTTED DUE TO LACK
OF ASSETS (ABWEISUNG MANGELS MASSE).

16.2           THE PARTIES SHALL, BY NO LATER THAN TEN (10) BUSINESS DAYS BEFORE
THE PAYMENT DATE, SET FORTH ALL PAYMENT DETAILS, INCLUDING RECIPIENT ACCOUNT
INFORMATION IN A FUNDS FLOW MEMORANDUM (FUNDS FLOW MEMO). THE AGGREGATE PURCHASE
PRICE SHALL BE PAID OUT IN IMMEDIATELY AVAILABLE FUNDS ON THE PAYMENT DATE BY
THE RESPECTIVE PROPCO BUYER IN ACCORDANCE WITH THE FUNDS FLOW MEMO AND THE
ESCROW AGENT IN ACCORDANCE WITH THE ESCROW AGREEMENT.

SSLI, THE SELLERS AND THE PROPCO BUYERS SHALL PROCURE THAT THEIR RESPECTIVE
BANKS, IN PARTICULAR THE LENDER BANKS, ARE AVAILABLE VIA TELEPHONE, ONLINE OR
OTHERWISE, TO ACTIVATE RELEVANT WIRE TRANSFERS, EXCHANGE RELEVANT SWIFT CODES
AND OTHER INFORMATION, AND IMMEDIATELY CONFIRM RECEIPT OF FUNDS. WITHIN 20
BUSINESS DAYS AFTER THE SIGNING DATE, SSLI AND THE SELLERS SHALL PROCURE THAT
THE LENDER BANKS CONFIRM IN WRITING TO THE SELLERS THAT THEY WILL FULLY
PARTICIPATE IN THE PROCEDURES REQUIRED IN THE PRIOR SENTENCE, EXCEPT FOR THAT
THEY WOULD ACTIVATE RELEVANT WIRE TRANSFERS. THE SELLERS AND SSLI SHALL PROCURE
(STEHT DAFÜR EIN) THAT THE RECIPIENT OF SUCH FUNDS SHALL, UPON RECEIPT, PROVIDED
THAT THE FUNDS ARE RECEIVED BEFORE 14:00 CET/CEDT, IMMEDIATELY ACKNOWLEDGE
RECEIPT OF THE FUNDS TO THE NOTARY AND THE PROPCO BUYERS IN WRITING, BY
FACSIMILE OR BY EMAIL. THE SELLERS SHALL INFORM THE LENDER BANKS FIVE (5)
BUSINESS DAYS PRIOR TO THE SCHEDULED PAYMENT DATE OF SUCH SCHEDULED PAYMENT
DATE.

ANY PAYMENTS TO THE ACCOUNTS SET FORTH ABOVE AND TO ESCROW ACCOUNT I AND ESCROW
ACCOUNT II WILL HAVE DELIBERATING EFFECT (SCHULDBEFREIENDE WIRKUNG).

FOR THE AVOIDANCE OF DOUBT, TITLE TO THE PROPERTIES, FF&E WILL NOT TRANSFER
UNTIL FULL PAYMENT OF THE AGGREGATE PURCHASE PRICE.

16.3           THE SELLERS SHALL PROMPTLY CONFIRM RECEIPT OF THE AGGREGATE
PURCHASE PRICE WITH THE BENEFICIARIES OF THE LAND CHARGES AND THEMSELVES TO THE
PROPCO BUYERS AND THE NOTARY IN WRITING.

16.4           SSLI AND THE SELLERS SHALL USE BEST EFFORTS TO PROCURE THAT EACH
OF THE LENDER BANKS PROVIDE CONFIRMATIONS TO THE SELLERS, IMMEDIATELY UPON
RECEIPT OF THE RESPECTIVE PORTION OF THE AGGREGATE PURCHASE PRICE, TAKING INTO
ACCOUNT PAYMENTS MADE INTO THE ESCROW ACCOUNT I AND ESCROW ACCOUNT II,
CONFIRMING THAT NO INDEBTEDNESS OWED BY THE SELLERS TO SUCH LENDER IS
OUTSTANDING.

 

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16.5           WHENEVER REFERENCE IN THIS PROPCO AGREEMENT IS MADE TO A PAYMENT
THAT SHALL BE MADE TO THE SELLERS, IT SHALL BE MADE DIRECTLY TO THE LENDER BANKS
(ABGEKÜRZTER ZAHLUNGSWEG) AS (PARTIAL) REPAYMENT UNDER THEIR RESPECTIVE FACILITY
AGREEMENTS WITH THE SELLERS BY PAYMENT TO THE ACCOUNTS AS SPECIFIED BELOW.
CONFIRMATION BY THE LENDER BANKS OF PAYMENT OF THE AMOUNTS REQUESTED BY THEM
UNDER CLAUSE 3.7 SHALL BE DEEMED AS (PARTIAL) PAYMENT OF THE AGGREGATE PURCHASE
PRICE (AS DEFINED IN CLAUSE 16.1) TO THE SELLERS.

The account details for Lender Banks are as follows:

16.5.1        BARCLAYS BANK PLC

A/C WITH:          ____________________
REFERENCE:     Sunrise Senior Living
SWIFT:                 BARCGB22
IBAN:                   GB94 BARC 2065 8285 1193 44.

16.5.2        NATIXIS (LONDON BRANCH)

A/C WITH:          NATIXIS PARIS
REFERENCE:     SUNRISE
SWIFT:                 CCBPFRPPPAR / BFCEGB2L
IBAN:                   FR76 3000 7999 9906 9126 4700 180.

16.5.3        CAPMARK FINANCE, INC.

HOLDER:            Capmark Finance Inc, Debtor in Possession
A/C WITH:          Wachovia London, NA
SWIFT:                 PNBPGB2L
IBAN:                   GB32 PNBP 1656 7104 7701 66.

16.6           THE SELLERS SHALL USE BEST EFFORTS TO PROCURE THAT THE LENDER
BANKS SHALL PROMPTLY AFTER THE PAYMENT DATE DELIVER, THE ORIGINALS OF THE
ENFORCEABLE DEEDS (VOLLSTRECKBARE AUSFERTIGUNGEN) OF THE LAND CHARGES TO BE
DELETED UNDER CLAUSE 3.7.1 ALL IN VOIDED FORM, TO THE PROPCO BUYERS.

17.               GENERAL GUARANTEES

17.1           EACH SELLER, HOLDCO AND, SOLELY WITH RESPECT TO THE GUARANTEES IN
CLAUSE 17.1.7 BELOW, SSLI, GUARANTEES BY WAY OF AN INDEPENDENT GUARANTEE WITHIN
THE MEANING OF § 311 PARA. 1 BGB (SELBSTÄNDIGES GARANTIEVERSPRECHEN I.S.D. § 311
ABS. 1 BGB) – IT BEING UNDERSTOOD THAT THE STATEMENTS SHALL NOT CONSTITUTE A
QUALITY GUARANTEE CONCERNING THE OBJECT OF THE PURCHASE WITHIN THE MEANING OF §
443 BGB (GARANTIE FÜR DIE BESCHAFFENHEIT DER SACHE I.S.D. § 443 BGB) – THAT AT
THE SIGNING DATE AND AT THE PAYMENT DATE (EXCEPT AS SPECIFICALLY NOTED),

17.1.1        IT IS DULY INCORPORATED AND VALIDLY EXISTING UNDER THE LAWS OF
GERMANY AND HAS FULL CORPORATE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS
PRESENTLY CONDUCTED;

 

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PropCo Agreement

17.1.2        IT IS EMPOWERED, AUTHORIZED AND QUALIFIED TO ENTER INTO THIS
PROPCO AGREEMENT AND THAT THIS PROPCO AGREEMENT CONSTITUTES VALID LEGAL AND
BINDING OBLIGATIONS OF THE SELLERS, ENFORCEABLE AGAINST THE SELLERS IN
ACCORDANCE WITH ITS TERMS AND SUBJECT TO ITS CONDITIONS;

17.1.3        THERE ARE AS OF THE DATE HEREOF NO PROCEEDINGS OR INVESTIGATIONS
THREATENED IN WRITING AGAINST ANY OF THE SELLERS WHICH ARE REASONABLY EXPECTED
TO PREVENT OR MATERIALLY DELAY THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
IN THIS PROPCO AGREEMENT;

17.1.4        THE PERSONS SIGNING THIS PROPCO AGREEMENT ON BEHALF OF THE SELLERS
HAVE BEEN DULY AUTHORIZED BY THE SELLERS TO DO SO;

17.1.5        IT HAS FULL CORPORATE POWER AND AUTHORITY TO SELL, TRANSFER AND
DELIVER TO THE APPLICABLE PROPCO BUYER THE RESPECTIVE PURCHASE OBJECT AND TO
PERFORM ALL OF ITS RESPECTIVE OTHER UNDERTAKINGS UNDER THIS PROPCO AGREEMENT;

17.1.6        TO THE EXTENT NOT OTHERWISE DISCLOSED PRIOR TO THE PAYMENT DATE,
NO INSOLVENCY OR SIMILAR PROCEEDINGS ARE PENDING WITH RESPECT TO THE ASSETS OF
ANY SELLER OR HOLDCO, NOR HAVE APPLICATIONS FOR SUCH PROCEEDINGS BEEN FILED FOR
BY ANY SELLER OR HOLDCO OR, TO THE KNOWLEDGE OF THE SELLER, BY A THIRD PARTY;
THERE ARE TO THE KNOWLEDGE OF THE SELLERS NO CIRCUMSTANCES THAT WOULD REQUIRE
THE OPENING OF OR APPLICATION FOR SUCH PROCEEDINGS;

17.1.7        (I) AS OF THE SIGNING DATE NO FINANCIAL INDEBTEDNESS IS OWED BY
ANY SELLER OR HOLDCO TO ANY BANK, FINANCIAL INSTITUTION OR OTHERWISE OTHER THAN
THE BANK DEBT AND, AS OF 30 APRIL 2010, THERE WAS NO OTHER INTERCOMPANY DEBT
EXCEPT AS SET FORTH ON ANNEX 3.9.2, (II) AS OF THE PAYMENT DATE THERE IS NO
INTERCOMPANY DEBT EXCEPT AS REFLECTED ON THE MANAGEMENT CERTIFICATE DELIVERED IN
ACCORDANCE WITH CLAUSE 3.9.2, (III) TO ITS BEST KNOWLEDGE BASED ON (1) A
CONFIRMATION DELIVERED BY THE LENDER BANKS PURSUANT TO CLAUSE 16.4 REGARDING THE
REPAYMENT AND EXTINGUISHMENT OF THE BANK DEBT AND (2) THE SECURITY RELEASE
AGREEMENTS, DEBT ASSUMPTION AGREEMENTS, THE FACILITY AGREEMENTS FOR, AND ALL
OTHER DOCUMENTS RELATED TO, THE BANK DEBT AND THE RESTRUCTURING THEREOF, AS OF
THE PAYMENT OF THE PROPERTY PURCHASE PRICE ON THE PAYMENT DATE, ALL OF THE BANK
DEBT HAS BEEN EXTINGUISHED IN A MANNER TAX NEUTRAL TO THE SELLER PROPCOS, SELLER
OPCOS AND HOLDCO, (IV) AS OF THE PAYMENT DATE TO ITS BEST KNOWLEDGE THERE IS NO
THIRD PARTY DEBT OTHER THAN AS SET FORTH ON THE THIRD PARTY DEBT MANAGEMENT
CERTIFICATE, AND (V) AS OF THE PAYMENT DATE, ALL INTERCOMPANY DEBT IS SUBJECT TO
A SUBORDINATION AGREEMENT THAT SUBORDINATES SUCH INTERCOMPANY DEBT TO THE EXTENT
THAT IT WOULD RANK PARI PASSU WITH EQUITY INTERESTS UPON A LIQUIDATION OF THE
RELEVANT DEBTOR (QUALIFIZIERTER RANGRÜCKTRITT); AND

17.1.8        SUNRISE MEERBUSCH SENIOR LIVING GMBH & CO KG, SUNRISE
RATINGEN-HÖSEL SENIOR LIVING GMBH & CO KG, UND SUNRISE BAD SODEN SENIOR LIVING
GMBH & CO KG ARE DORMANT ENTITIES THAT HAVE NO OPERATING ACTIVITIES AND HAVE, AS
OF 30 APRIL 2010, NO OUTSTANDING INDEBTEDNESS OTHER THAN INDEBTEDNESS OWED TO
AFFILIATES.

17.2           EACH OF THE PROPCO BUYERS GUARANTEES BY WAY OF AN INDEPENDENT
GUARANTEE WITHIN THE MEANING OF § 311 PARA. 1 BGB (SELBSTÄNDIGES
GARANTIEVERSPRECHEN I.S.D. § 311 ABS. 1 BGB) – IT BEING UNDERSTOOD THAT THE
STATEMENTS SHALL NOT CONSTITUTE A QUALITY GUARANTEE CONCERNING THE OBJECT OF THE
PURCHASE WITHIN THE MEANING

 

 

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               OF § 443 BGB (GARANTIE FÜR DIE BESCHAFFENHEIT DER SACHE I.S.D. §
443 BGB) – THAT AT THE SIGNING DATE AND AT THE PAYMENT DATE

17.2.1        IT IS DULY INCORPORATED AND VALIDLY EXISTING UNDER THE LAWS OF
GERMANY;

17.2.2        IT IS EMPOWERED, AUTHORIZED AND QUALIFIED TO ENTER INTO THIS
PROPCO AGREEMENT AND THAT THIS PROPCO AGREEMENT CONSTITUTES VALID LEGAL AND
BINDING OBLIGATIONS OF THE PROPCO BUYERS, ENFORCEABLE AGAINST THE PROPCO BUYERS
IN ACCORDANCE WITH ITS TERMS AND SUBJECT TO ITS CONDITIONS;

17.2.3        THERE ARE AS OF THE DATE HEREOF NO PROCEEDINGS OR INVESTIGATIONS
THREATENED IN WRITING AGAINST ANY OF THE PROPCO BUYERS WHICH ARE REASONABLY
EXPECTED TO PREVENT OR MATERIALLY DELAY THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATES IN THIS PROPCO AGREEMENT;

17.2.4        THE PERSONS SIGNING THIS PROPCO AGREEMENT ON BEHALF OF THE PROPCO
BUYERS HAVE BEEN DULY AUTHORIZED BY THE PROPCO BUYERS TO DO SO;

17.2.5        IT HAS FULL CORPORATE POWER AND AUTHORITY TO ACQUIRE FROM THE
APPLICABLE SELLER THE RELEVANT PURCHASE OBJECT AND TO PERFORM ALL OF ITS OTHER
UNDERTAKINGS UNDER THIS PROPCO AGREEMENT;

17.2.6        THE EXECUTION AND DELIVERY OF, AND THE PERFORMANCE BY EACH PROPCO
BUYER OF ITS OBLIGATIONS UNDER THIS PROPCO AGREEMENT WILL NOT REQUIRE SUCH
PROPCO BUYER TO OBTAIN ANY CONSENT OR APPROVAL OF (OTHER THAN THOSE SPECIFIED IN
CLAUSE 20.1 OR THOSE REQUIRED FOR OPCO TRANSFEREES TO START ITS BUSINESS AS
FUTURE OPERATOR), OR GIVE ANY NOTICE (OTHER THAN, PRE-MERGER NOTIFICATIONS, IF
APPLICABLE) TO OR MAKE ANY REGISTRATION WITH, ANY GOVERNMENTAL OR OTHER
AUTHORITY WHICH HAS NOT BEEN OBTAINED OR MADE AT THE DATE HEREOF BOTH ON AN
UNCONDITIONAL BASIS AND ON A BASIS WHICH CANNOT BE REVOKED;

17.2.7        NO INSOLVENCY OR SIMILAR PROCEEDINGS ARE PENDING WITH RESPECT TO
THE ASSETS OF ANY PROPCO BUYER NOR HAVE APPLICATIONS FOR SUCH PROCEEDINGS BEEN
FILED FOR BY ANY PROPCO BUYER OR THIRD PARTY; THERE ARE TO THE KNOWLEDGE OF THE
PROPCO BUYERS NO CIRCUMSTANCES THAT WOULD REQUIRE THE OPENING OF OR APPLICATION
FOR SUCH PROCEEDINGS; AND

17.2.8        IT IS ACQUIRING THE PROPERTIES AND FF&E FOR INVESTMENT FOR PROPCO
BUYER'S OWN ACCOUNT, EXCEPT THAT PRAMERICA IS AQUIRING SUCH PROPERTIES AND FF&E
FOR SUCH PURPOSES FOR THE ACCOUNT OF A SPECIAL REAL ESTATE FUND TO BE FORMED AND
NAMED PFLEGEHEIMSPEZIALFONDS I AND, ACCORDINGLY, QUALIFIES AS ECONOMIC
BENEFICIARY (WIRTSCHAFTLICH BERECHTIGTER) UNDER § 3 PARA. 1 NO. 3 IN CONJUNCTION
WITH § 4 PARA. 5 GERMAN MONEY LAUNDERING ACT (GELDWÄSCHEGESETZ; GWG).

18.               LEGAL CONSEQUENCES, TIME LIMITATIONS

18.1           IF A SELLER GUARANTEE UNDER THIS PROPCO AGREEMENT IS INCORRECT OR
INCOMPLETE, THE SELLERS SHALL (SUBJECT TO THE LIMITATIONS CONTAINED IN
CLAUSE 18.2) UPON THEIR OWN AND FREE ELECTION:

18.1.1        EITHER CREATE THE SITUATION WHICH WOULD HAVE EXISTED HAD THE
GUARANTEE BEEN CORRECT OR COMPLETE OR PUT THE PROPCO BUYERS IN A POSITION IN
WHICH THEY WOULD HAVE BEEN HAD THE GUARANTEE BEEN CORRECT AND COMPLETE
(RESTITUTION IN KIND / NATURALRESTITUTION); OR

 

 

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PropCo Agreement

18.1.2        IN CASE THE RESTITUTION IN KIND IS IMPOSSIBLE, INSUFFICIENT OR NOT
RENDERED WITHIN THE PERIOD OF TIME SET BY THE PROPCO BUYERS WHICH PERIOD SHALL
NOT BE LESS THAN FOUR (4) WEEKS, PAY FOR THE ACTUAL DAMAGES SUFFERED BY THE
PROPCO BUYERS AS A RESULT OF SUCH BREACH OR NON-FULFILLMENT THE COMPENSATION IN
CASH REQUIRED THEREFORE (SCHADENSERSATZ IN GELD STATT DER LEISTUNG). THE
COMPENSATION IN CASH WILL INCLUDE CONSEQUENTIAL DAMAGES (FOLGESCHÄDEN ODER
MITTELBARE SCHÄDEN) EXCLUDING ANY OF THE FOLLOWING: DAMAGES CAUSED BY BUSINESS
INTERRUPTIONS, LOST PROFIT (ENTGANGENER GEWINN) OR REDUCTION IN VALUE
(WERTMINDERUNG), ANY INTERNAL COSTS AND EXPENSES INCURRED BY THE PROPCO BUYER,
DAMAGES TO GOODWILL OR FOR LOST OPPORTUNITIES (ENTGANGENE GESCHÄFTSCHANCEN) OR
DAMAGES IN RESPECT OF AN ALLEGED MISCALCULATION OF THE PROPERTY PURCHASE PRICE
OR FF&E PURCHASE PRICE (INDIVIDUALLY A GUARANTEE CLAIM AND COLLECTIVELY THE
GUARANTEE CLAIMS). DAMAGES MEANS LIABILITIES, RESPONSIBILITIES, LOSSES, DAMAGES,
PENALTIES, CLAIMS, COSTS (INCLUDING REASONABLE COSTS FOR THE DEFENSE AND
PROSECUTION OF CLAIMS) AND EXPENSES (INCLUDING TAXES, TO THE EXTENT SUCH TAXES
ARE NOT CREDITABLE OR REFUNDABLE, INTEREST AND LATE PAYMENT CHARGES THEREON), IN
EACH CASE OF ANY NATURE WHATSOEVER.

18.1.3        IN CASE THE GUARANTEE IN CLAUSE 17.1.7 IS INCORRECT OR INCOMPLETE
WITH RESPECT TO INTERCOMPANY DEBT, THEN THE SELLERS WILL HAVE THE OPTION TO
SUBORDINATE THE INTERCOMPANY DEBT THAT IS NOT YET SUBJECT TO SUBORDINATION,
PURSUANT TO A SUBORDINATION AGREEMENT THAT SUBORDINATES SUCH INTERCOMPANY DEBT
TO THE EXTENT THAT IT WOULD BE TREATED EQUALLY WITH EQUITY INTERESTS UPON A
LIQUIDATION OF THE RELEVANT DEBTOR (QUALIFIZIERTER RANGRÜCKTRITT), IN ORDER TO
MAKE CLAUSE 17.1.7 CORRECT.

18.2           THE PARTIES AGREE THAT THE RIGHTS AND REMEDIES WHICH THE PROPCO
BUYERS MAY HAVE AGAINST THE SELLERS FOR A BREACH OF ANY GUARANTEE OR INDEMNITY
UNDER OR IN CONNECTION WITH THIS PROPCO AGREEMENT ARE EXCLUSIVELY GOVERNED BY
THIS PROPCO AGREEMENT. TO THE EXTENT LEGALLY PERMISSIBLE, ALL EXPLICIT OR
IMPLIED REPRESENTATIONS OR WARRANTIES BY SELLERS WHICH MIGHT EXIST UNDER
STATUTORY LAW OR OTHERWISE, OTHER THAN THOSE BY SELLERS CONTAINED IN CLAUSES 7
OR 15 ARE EXCLUDED. FURTHERMORE, ALL OTHER AND FURTHER REACHING RIGHTS AND
REMEDIES OF THE PROPCO BUYERS FOR A BREACH OF ANY GUARANTEE OR INDEMNITY WHICH
MIGHT EXIST UNDER STATUTORY LAW OR OTHERWISE, OTHER THAN THOSE CONTAINED IN THIS
PROPCO AGREEMENT, IN PARTICULAR IN THIS CLAUSE 18, ARE EXCLUDED, EXCEPT FOR
CLAIMS BASED ON THE SELLER'S FRAUD (ARGLIST) OR WILLFUL MISCONDUCT (VORSATZ) OR
AFTER RESCISSION ACCORDING TO CLAUSE 16.1. THIS APPLIES TO ALL RIGHTS AND
REMEDIES OF ANY LEGAL NATURE WHATSOEVER (CONTRACTUAL, PRE-CONTRACTUAL, TORT OR
OTHERWISE), VICARIOUS LIABILITY FOR AGENT (§ 278 GERMAN CIVIL CODE (BÜRGERLICHES
GESETZBUCH; BGB)) AND FURTHERMORE IN PARTICULAR TO ALL RIGHTS AND REMEDIES WHICH
WOULD RESULT IN THE CANCELLATION (RÜCKABWICKLUNG) OF THIS PROPCO AGREEMENT, OR
ANY RIGHT OR REMEDY WHICH WOULD HAVE A SIMILAR EFFECT.

18.3           IN CASE OF A GUARANTEE CLAIM, THE APPLICABLE PROPCO BUYER SHALL,
WITHOUT UNDUE DELAY AFTER BECOMING AWARE OF ANY SUCH MATTER OR CIRCUMSTANCE

18.3.1        NOTIFY THE APPLICABLE SELLER OF ANY SUCH MATTER OR CIRCUMSTANCE;

18.3.2        DESCRIBE SUCH MATTER OR CIRCUMSTANCE AND THE GUARANTEE CLAIM
RELATING THERETO IN REASONABLE DETAIL AND SET FORTH THE ESTIMATED AMOUNT OF SUCH
GUARANTEE CLAIM; AND

 

 

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18.3.3        IF APPLICABLE, GIVE THE APPLICABLE SELLER THE OPPORTUNITY TO
REMEDY THE GUARANTEE CLAIM WITHIN A REASONABLE PERIOD OF TIME AFTER RECEIPT OF
SUCH NOTICE.

18.4           ANY GUARANTEE CLAIM TO BE COMPENSATED BY THE SELLERS UNDER ANY
PROVISION OF THIS AGREEMENT SHALL BE REDUCED BY ALL PRESENT OR FUTURE ADVANTAGES
AND BENEFITS OF THE BUYERS RELATED TO THE RELEVANT GUARANTEE CLAIM. FOR THE
PURPOSE OF CALCULATING ANY SUCH FUTURE ADVANTAGE OR BENEFIT A DISCOUNT RATE OF
6% SHALL BE USED. IN PARTICULAR, ANY GUARANTEE CLAIM SHALL BE REDUCED BY ANY
EFFECTIVE TAX SAVING WHICH HAS BEEN OBTAINED BY EFFECTIVELY REDUCING A TAX
AMOUNT DUE TO OR WITH RESPECT TO SUCH GUARANTEE CLAIM, IT BEING UNDERSTOOD THAT
BUYERS SHALL CARRY OUT THEIR TAX AFFAIRS WITH THE CARE OF A PRUDENT BUSINESSMAN.

18.5           IF A GUARANTEE CLAIM ARISES AS A RESULT OF, OR IN CONNECTION
WITH, A LIABILITY OR ALLEGED LIABILITY OF A PROPCO BUYER TO A THIRD PARTY,
INCLUDING ANY PUBLIC AUTHORITY, (THIRD PARTY CLAIM), THEN THE APPLICABLE PROPCO
BUYER SHALL

18.5.1        NOTIFY THE APPLICABLE SELLER ABOUT SUCH THIRD PARTY CLAIM AND
PROVIDE SUCH SELLER WITH DOCUMENTATION AND CORRESPONDENCE NECESSARY TO EVALUATE
THE THIRD PARTY CLAIM;

18.5.2        SUBJECT TO THE SELLERS DECLARING, IN A FORM REASONABLY
SATISFACTORY TO THE PROPCO BUYERS, TO INDEMNIFY THE PROPCO BUYERS AGAINST ANY
DAMAGES WHICH MAY BE INCURRED THEREBY; GIVE THE APPLICABLE SELLER THE
OPPORTUNITY TO DEFEND (AT ITS OWN COSTS) AGAINST SUCH THIRD PARTY CLAIM BY
APPROPRIATE PROCEEDINGS. THE RELEVANT SELLERS SHALL CONSULT WITH THE PROPCO
BUYERS AS TO HOW TO DEFEND AGAINST SUCH THIRD PARTY CLAIM, AND THE PARTIES SHALL
TRY IN GOOD FAITH TO JOINTLY DETERMINE WHICH ACTIONS SHALL BE TAKEN. IN CASE OF
A DISAGREEMENT BETWEEN THE PARTIES, THE SELLER PROPCOS' DETERMINATION SHALL
PREVAIL. IN PARTICULAR

18.5.2.1           THE PROPCO BUYERS SHALL ALLOW THE RELEVANT SELLER, UNLESS
INAPPROPRIATE TO THE BUSINESS OF THE PROPCO BUYER, TO PARTICIPATE IN ALL
NEGOTIATIONS AND CORRESPONDENCE WITH SUCH THIRD PARTY;

18.5.2.2           THE PROPCO BUYERS SHALL LITIGATE TAKING ALSO INTO ACCOUNT IN
REASONABLE MANNER ALSO THE INTERESTS OF THE APPLICABLE SELLER; AND

18.5.2.3           THE PROPCO BUYERS SHALL MAKE SETTLEMENTS, ACKNOWLEDGEMENTS OR
WAIVERS TAKING ALSO INTO ACCOUNT IN REASONABLE MANNER ALSO THE INTERESTS OF THE
APPLICABLE SELLER AND ONLY UPON PRIOR CONSULTATION WITH THE APPLICABLE SELLER.

In order to enable the applicable Seller to properly assess the benefits of a
Third Party Claim and the chances of any litigation, and to proceed with the
litigation, the PropCo Buyers shall, upon the Sellers' reasonable request,
furnish without undue delay copies of all relevant information, grant reasonable
access to the books and the documents and allow interviews of the relevant
employees, if any, of the PropCo Buyers, provided that the applicable Seller
shall keep business and trade secrets confidential and shall not use these
secrets for any purpose other than that contemplated under this Clause 18.5.

18.6           THE GUARANTEE CLAIMS WILL BE LIMITED TO THE EXTENT (I.E. THE
SELLERS SHALL NOT BE OBLIGATED (SCHULDEN NICHT) AND LIABLE (HAFTEN NICHT) UNDER
THIS PROPCO AGREEMENT) THAT

 

 

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18.6.1        THE GUARANTEE CLAIM IS ACTUALLY RECOVERED OR REASONABLY
RECOVERABLE AGAINST A THIRD PARTY;

18.6.2        THE PROPCO BUYER OR ITS ADVISORS HAD ACTUAL KNOWLEDGE OF ANY FACTS
PRIOR TO THE DATE HEREOF WHICH LED TO THE GUARANTEE CLAIM, PROVIDED THAT THE
MERE OPENING OF A DOCUMENT IN THE VIRTUAL DATA ROOM BY ONE OF THE PROPCO BUYERS
OR THEIR ADVISERS WILL NOT BE CONCLUSIVE EVIDENCE BY ITSELF THAT PROPCO BUYERS
OR THEIR ADVISERS HAD ACTUAL KNOWLEDGE OF SUCH FACTS; OR

18.6.3        THE PROPCO BUYERS HAVE PARTICIPATED IN CAUSING (MITVERURSACHEN)
SUCH GUARANTEE CLAIM WITHIN THE MEANING OF § 254 PARA. 1 BGB OR HAVE FAILED TO
COMPLY WITH THEIR DUTIES TO MITIGATE THE GUARANTEE CLAIMS PURSUANT TO § 254
PARA. 2 BGB.

18.7           ANY CLAIM UNDER THIS PROPCO AGREEMENT WILL BECOME TIME-BARRED
(AUSSCHLUSSFRIST) AS FOLLOWS:

18.7.1        CLAIMS AS TO THE GUARANTEES AGREED UNDER CLAUSES 7.3.1, 15.1.1,
17.1.2, 17.1.5 AND 17.1.7, AND THE COVENANTS AND INDEMNITIES AGREED UNDER
CLAUSES 3.9.3, 21.1.11, 22.1, 22.2, 22.3, AND 22.5 WILL (TO THE EXTENT LEGALLY
PERMISSIBLE) BE TIME-BARRED FOUR (4) YEARS AFTER THE PAYMENT DATE;

18.7.2        CLAIMS BASED ON WILLFUL MISCONDUCT (VORSATZ) WILL BE TIME-BARRED
IN ACCORDANCE WITH THE STATUTORY PROVISIONS IN §§ 195, 199 BGB; AND

18.7.3        ALL OTHER CLAIMS UNDER OR IN CONNECTION WITH THIS PROPCO AGREEMENT
WILL BE TIME-BARRED EIGHTEEN (18) MONTHS AFTER THE PAYMENT DATE.

FOR THE AVOIDANCE OF DOUBT CLAIMS AGAINST THE ESCROW ACCOUNT II PURSUING TO
CLAUSE 3.20 ARE SUBJECT TO THE TIME LIMITS SET FORTH IN CLAUSE 3.20.

Any limitation period pursuant to the aforementioned sentence will be suspended
(gehemmt) with respect to a particular claim only by instituting legal
proceedings within the meaning of § 204 para. 1 no. 1 BGB in respect of such
claim before the competent court. For the avoidance of doubt, § 203 BGB does not
apply, unless the Parties explicitly agree in writing that the limitation period
will be suspended on the basis of pending settlement negotiations.

18.8           IF AND TO THE EXTENT SELLERS ARE OBLIGATED OR LIABLE UNDER THIS
CLAUSE 18, THE SELLERS SHALL BEAR ANY REASONABLE EXTERNAL COSTS OF THE DEFENSE.

19.               DE MINIMIS AMOUNT, CAP AMOUNT

19.1           THE PROPCO BUYERS ARE ONLY ENTITLED TO ASSERT A GUARANTEE CLAIM
IF AND TO THE EXTENT THAT THE ENTIRETY OF GUARANTEE CLAIMS EXCEEDS EUR 25,000
(IN WORDS: TWENTY FIVE THOUSAND EURO) IN AGGREGATE PER PROPERTY (PER PROPERTY
DE MINIMIS AMOUNT), UNLESS SUCH CLAIM RELATES TO THE GUARANTEE CONTAINED IN
CLAUSES 7.3.1, 15.1.1, 17.1.2, 17.1.5, OR 17.1.7.

19.2           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS PROPCO
AGREEMENT, THE AGGREGATE LIABILITY OF THE SELLERS FOR ALL CLAIMS UNDER ANY
GUARANTEE, COVENANT OR INDEMNITY, SHALL BE LIMITED TO AN AGGREGATE AMOUNT OF
EUR 1,000,000 (IN WORDS: ONE MILLION EURO) MINUS ANY AMOUNT PAID OUT OF ESCROW
ACCOUNT I TO THE OPCO TRANSFEREES PURSUANT TO A CLAIM UNDER THE OPCO AGREEMENT
(CAP AMOUNT) UNLESS THE SELLERS

 

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               VIOLATED THEIR GUARANTEE OR COVENANT OBLIGATIONS INTENTIONALLY.
HOWEVER, AS TO THE GUARANTEES AGREED UNDER CLAUSES 7.3.1, 15.1.1, 17.1.2,
17.1.5, AND 17.1.7, AND THE COVENANTS AND INDEMNITIES AGREED UNDER CLAUSES
3.9.3, 21.1.11, 22.3 (II) AND 22.3 (III), AND 22.5, THE LIMIT WILL NOT BE THE
CAP AMOUNT BUT RATHER 100% OF THE ALLOCATED PURCHASE PRICE (I.E. FOR
CLAUSE 7.3.1 THE PROPERTY PURCHASE PRICE AS SHOWN IN ANNEX 3.1, FOR
CLAUSES 15.1.1 THE FF&E PURCHASE PRICE AS SHOWN IN ANNEX 13.1). AS REGARDS
CLAUSE 22.1, 22.2 AND 22.3 (I) THE AGGREGATE LIABILITY WILL NOT BE LIMITED BY
THE CAP AMOUNT BUT RATHER BY THE AMOUNT SET FORTH IN CLAUSE 22.2 AND IT IS
UNDERSTOOD THAT ANY AMOUNTS CLAIMED AND PAID TO THE BUYERS UNDER CLAUSE 22.1,
CLAUSES 22.2 AND 22.3 (I) SHALL NOT BE CREDITED AGAINST THE CAP AMOUNT.

For the avoidance of doubt a draw on the Escrow Account II pursuing to Clause
3.20 will not be charged against the Cap Amount.

19.3           FOR THE AVOIDANCE OF DOUBT, THE PER PROPERTY DE MINIMIS AMOUNT
AND CAP AMOUNT APPLY TO ANY OTHER LIABILITY OR OBLIGATION OF THE SELLERS,
HOLDCO, MANCO AND SSLI UNDER THIS PROPCO AGREEMENT, UNLESS EXPLICITLY STATED
OTHERWISE ELSEWHERE.

20.               MERGER CONTROL, CONDITION PRECEDENT

20.1           IT IS THE PARTIES' SHARED UNDERSTANDING THAT THE TRANSACTIONS
CONTEMPLATED IN THIS PROPCO AGREEMENT REQUIRE MERGER CONTROL CLEARANCE AND MAY
ONLY BE IMPLEMENTED IF ONE OF THE FOLLOWING CONDITIONS (MERGER CONDITION) IS
FULFILLED:

20.1.1        FOLLOWING A NOTIFICATION TO THE FEDERAL CARTEL OFFICE (FCO), THE
FCO HAS GIVEN WRITTEN NOTICE TO THE PARTIES THAT THE CONDITIONS FOR A
PROHIBITION OF THE INTENDED ACQUISITIONS PURSUANT TO § 36 PARA. 1 GERMAN ACT
AGAINST RESTRAINTS OF COMPETITION (GESETZ GEGEN WETTBEWERBSBE­SCHRÄNKUNG / GWB)
ARE NOT PRESENT; AND/OR

20.1.2        THE FCO HAS CLEARED THE INTENDED ACQUISITIONS PURSUANT TO § 40
PARA. 2 SENTENCE 1 GWB; AND/OR

20.1.3        THE ONE-MONTH PERIOD PRESCRIBED BY § 40 PARA. 1 SENTENCE 1 GWB
FOLLOWING A NOTIFICATION BY THE PARTIES HAS LAPSED WITHOUT THE PARTIES TO THE
INTENDED ACQUISITION HAVING RECEIVED NOTICE FROM THE FCO THAT PRINCIPAL
PROCEEDINGS HAVE BEEN INSTITUTED; AND/OR

20.1.4        THE FOUR-MONTH PERIOD OR AN EXTENDED PERIOD ALLOTTED FOR NEGATIVE
CLEARANCE PURSUANT TO § 40 PARA. 2 SENTENCE 2 GWB AND § 40 PARA. 2 SENTENCE 4
NO. 1 GWB, RESPECTIVELY, HAS LAPSED WITHOUT THE FCO DENYING CLEARANCE TO THE
INTENDED ACQUISITION; AND/OR

20.1.5        THE FCO HAS STATED IN WRITING, UPON REQUEST, THAT THE TRANSACTION
IS NOT SUBJECT TO NOTIFICATION.

20.2           THE PARTIES SHALL USE REASONABLE EFFORTS PROMPTLY TO OBTAIN, IF
NECESSARY, MERGER CLEARANCE FOR THE ACQUISITION OF THE PROPERTIES CONTEMPLATED
UNDER THIS PROPCO AGREEMENT. IN THE INTEREST OF SWIFT NOTIFICATION, THE PARTIES
SHALL COOPERATE TO THE BEST OF THEIR ABILITIES AND PROCURE THAT ANY INFORMATION
NEEDED FOR REGISTRATION PURPOSES IS MADE AVAILABLE AS SOON AS POSSIBLE. THE
PROPCO BUYERS HEREBY UNDERTAKE TO DELIVER WITHIN FIVE (5) BUSINESS DAYS AFTER
THE SIGNING DATE ALL NECESSARY INFORMATION REGARDING THE PROPCO BUYERS TO FILE
THE MERGER WITH THE FCO AND TO USE REASONABLE BEST EFFORTS TO FILE THE MERGER
WITH THE FCO WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE HEREOF.

 

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20.3           FOR THE AVOIDANCE OF DOUBT, IF AND TO THE EXTENT THAT THE FCO (I)
GRANTS CLEARANCE OF THE TRANSACTIONS CONTEMPLATED IN THIS PROPCO AGREEMENT ONLY
SUBJECT TO THE SATISFACTION OF ANY CONDITIONS BY EITHER PARTY OR ANY OF THEIR
AFFILIATES, OR (II) THREATENS NOT TO GRANT CLEARANCE OF THE TRANSACTIONS
CONTEMPLATED IN THIS PROPCO AGREEMENT IN CASE SUCH CONDITIONS ARE NOT FULFILLED,
THE PROPCO BUYERS SHALL BE OBLIGATED TO SATISFY SUCH CONDITIONS UNLESS THE
SATISFACTION OF SUCH CONDITIONS LEAD TO RESULTS HAVING A MATERIAL ADVERSE EFFECT
(WESENTLICH NACHTEILIG) IMPACT ON THE BUSINESS OF PRAMERICA OR GHS AND THEIR
RESPECTIVE AFFILIATES AS A GROUP. IF THE PROPCO BUYERS HAVE USED REASONABLE
EFFORTS, THEY ARE NOT LIABLE TO THE SELLERS FOR THE FAILURE TO OBTAIN CLEARANCE.

21.               PERIOD UNTIL PAYMENT DATE

21.1           UNTIL THE PAYMENT DATE, THE SELLERS SHALL, AND HOLDCO SHALL CAUSE
THE SELLERS TO, UNLESS OTHERWISE (I) REQUIRED BY LAW, REGULATIONS, ORDERS BY
PUBLIC AUTHORITIES OR BY COURT RULINGS OR (II) PERMITTED BY PROPCO BUYERS:

21.1.1        MAINTAIN AND MANAGE THE PROPERTIES IN CLOSE COOPERATION WITH THE
PROPCO BUYER MATERIALLY IN THE ORDINARY COURSE OF BUSINESS INCLUDING DEALING
WITH (VERFÜGEN ÜBER) THE FF&E AS BE DESCRIBED IN 10.1 WITH THE CARE OF A PRUDENT
BUSINESSMAN; REPLACE AND DISPOSE OF FF&E ONLY IN THE ORDINARY COURSE OF BUSINESS
AND NOT SELL, TRANSFER OR ENCUMBER THE FF&E; NOT UNDULY DEFER ANY NECESSARY
MAINTENANCE OR REPLACEMENT MEASURES; NOT COMMIT ANY OF THE PURCHASE OBJECTS TO
ANY NEW MORTGAGE, PLEDGE, LIEN, SECURITY OR ENCUMBRANCE OF ANY KIND, EXCEPT FOR
THOSE ARISING BY OPERATION OF LAW OR PURSUANT TO THE REQUIREMENTS OF THE
EXISTING FINANCING ARRANGEMENTS;

21.1.2        ENSURE THAT THE SECURITY SERVICES FOR THE REINBEK PROPERTY AND
HANNOVER PROPERTY CONTINUE AS CURRENTLY BEING PERFORMED;

21.1.3        COMPLETE THE RENOVATION WORK CURRENTLY BEING CARRIED OUT ON THE
BASEMENT IN THE KÖNIGSTEIN PROPERTY;

21.1.4        NOT CARRY OUT ANY MATERIAL BUILDING MEASURES OR MATERIAL CHANGES
IN THE PROPERTY MANAGEMENT (OTHER THAN AS A RESULT OF RESIGNATIONS OF MANAGEMENT
PERSONNEL) WITHOUT THE PRIOR WRITTEN CONSENT OF THE PROPCO BUYERS;

21.1.5        NOT ENTER INTO NEW LEASE AGREEMENTS WITH RESPECT TO THE PROPERTIES
AND THE FF&E WITHOUT THE PRIOR WRITTEN CONSENT OF THE PROPCO BUYERS;

21.1.6        NOT INITIATE ANY JUDICIAL OR FORECLOSURE PROCEEDINGS REGARDING THE
PROPERTIES WITHOUT THE PRIOR WRITTEN CONSENT OF THE PROPCO BUYERS;

21.1.7        INFORM THE PROPCO BUYERS OF ANY MATERIAL NEW OCCURRENCES WITH
RESPECT TO THE BUSINESS;

21.1.8        USE REASONABLE EFFORTS TO CONTINUE THE BUSINESS IN THE ORDINARY
COURSE OF BUSINESS;

21.1.9     not materially reduce the existing insurance coverage for the
Properties except to the extent that continuation of any such insurance coverage
is not available on commercially reasonable terms;

 

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21.1.10    PROVIDE THE PROPCO BUYERS WITH ALL FINANCIAL INFORMATION ON THE
SELLERS PROPCO AND THE PROPERTIES AS THE PROPCO BUYERS REASONABLY REQUEST;

21.1.11    ENSURE THAT THE SUBORDINATION AGREEMENTS SET FORTH IN ANNEX 7.3.13
REMAIN IN FULL FORCE AND EFFECT;

21.1.12    ENSURE THAT IN NONE OF THE SELLERS OR HOLDCO A REASON TO FILE FOR
INSOLVENCY (INSOLVENZGRUND) OCCURS, THAT INSOLVENCY PROCEEDINGS ARE NEITHER
INITIATED NOR OPENED AND THAT, IN CASE INSOLVENCY PROCEEDINGS ARE INITIATED BY
THIRD PARTIES OR OPENED, SUCH INITIATION AND OPENING IS REBUTTED IMMEDIATELY;

21.1.13    REPAY THIRD PARTY DEBT IN THE ORDINARY COURSE OF BUSINESS;

21.1.14    USE BEST EFFORTS AT THEIR OWN EXPENSE TO (I) CAUSE THE DELETION OF
THE PRIORITY NOTICE WITH RESPECT TO THE PROPERTY IN KÖNIGSTEIN AND (II) REMEDY
THE ENCROACHMENT ON NEIGHBORING PROPERTY WITH RESPECT TO THE PROPERTY IN
OBERURSEL BY ACQUIRING TITLE THERETO AND TRANSFERRING SUCH TITLE UPON CLOSING TO
GHS WITH NO ADDITIONAL CONSIDERATION;

21.1.15    ENSURE THAT THE STANDSTILL AGREEMENTS AS LISTED IN ANNEX 21.1.15
CONTINUE TO BE IN FULL FORCE AND EFFECT OR WILL BE AGREED/RESTATED SUBSTANTIALLY
IN THE SAME FORM THROUGH THE PAYMENT DATE;

21.1.16    USE BEST EFFORTS TO PROVIDE SECRETARY'S CERTIFICATES ACCORDING TO
CLAUSE 3.9.1 OF THE RELEVANT U.S. ENTITIES EVIDENCING SIGNING AUTHORITY OF THE
RELEVANT SIGNATORY AS WELL AS CORPORATE AUTHORITY TO CONCLUDE SUCH AGREEMENTS
WITH RESPECT TO ALL OF THE SECURITY RELEASE AGREEMENTS AND THE DEBT ASSUMPTION
AGREEMENTS WITHIN 30 BUSINESS DAYS AFTER SIGNING DATE, IN ANY EVENT NO LATER
THAN PAYMENT DATE. IN CASE SAID CERTIFICATES ARE NOT PROVIDED WITHIN 30 BUSINESS
DAYS FORMS OF SAID CERTIFICATES SHALL BE PROVIDED AND ORIGINALS OF SIGNED
CERTIFICATES SHALL BE PROVIDED AT THE PAYMENT DATE. THE FOREGOING SHALL APPLY
MUTATIS MUTANDIS TO ALL OTHER NON-GERMAN ENTITIES, IT BEING UNDERSTOOD THAT,
WITH REGARD TO BELGIUM, LUXEMBOURG AND FRANCE, A CERTIFIED COMMERCIAL REGISTER
EXTRACT TOGETHER WITH A NOTARIAL CONFIRMATION, WILL BE SUFFICIENT;

21.1.17    PROVIDE SECRETARY'S CERTIFICATES OF THE RELEVANT U.S. ENTITIES
EVIDENCING SIGNING AUTHORITY OF THE RELEVANT SIGNATORY AS WELL AS CORPORATE
AUTHORITY TO CONCLUDE SUCH AGREEMENTS WITH RESPECT TO ALL SUBORDINATION
AGREEMENTS ON ALL INTERCOMPANY DEBT. THE FOREGOING CLAUSE 21.1.16 SHALL APPLY
MUTATIS MUTANDIS TO ALL OTHER NON-GERMAN ENTITIES;

21.1.18    USE BEST EFFORTS TO PROVIDE WITHIN FIVE (5) BUSINESS DAYS AFTER
SIGNING THE ORIGINALS OF THE POWERS OF ATTORNEY ISSUED BY SSLI AND HOLDCO, OF
WHICH ELECTRONIC COPIES (I.E. PDF VERSIONS) WERE AVAILABLE DURING THE
NOTARIZATION; AND

21.1.19    USE REASONABLE BEST EFFORTS PROVIDE WITHIN 30 BUSINESS DAYS AFTER
SIGNING THE CONSENT OF BANK OF AMERICA TO THIS PROPCO AGREEMENT (CLAUSE 3.8.4).

21.1.20    USE REASONABLE BEST EFFORTS TO OBTAIN THE APPROVAL OF THE CITY OF
FRANKFURT TO THE FIRE ALARM SYSTEM LOCATED AT THE FRANKFURT PROPERTY.

 

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21.2           IF ANY PRIOR CONSENT IS REQUIRED BY THE SELLERS FOR ANY MEASURES
LISTED IN CLAUSE 21.1, THE PROPCO BUYERS SHALL NOT UNREASONABLY WITHHOLD OR
DELAY SUCH CONSENT.

22.               COVENANTS AFTER PAYMENT DATE

22.1           AFTER THE PAYMENT DATE, THE SELLERS AND HOLDCO SHALL, AND SSLI
SHALL PROCURE THAT ITS RELEVANT AFFILIATES, COMMENCE THE PROCESS OF CARRYING OUT
ANY STEPS IN THE MANNER SET FORTH IN THE STEPS PLAN ATTACHED HERETO AS ANNEX
22.1 (STEPS PLAN). IN CARRYING OUT THE ACTIONS SET FORTH IN THE STEPS PLAN, SSLI
OR ANY RELEVANT AFFILIATE MAY ONLY DEVIATE MATERIALLY FROM THE REQUIREMENTS OF
THE STEPS PLAN IF IT OBTAINS THE PRIOR CONSENT OF THE PROPCO BUYER TO DO SO
WHICH SHALL NOT UNREASONABLY BE EITHER WITHHELD OR DELAYED. IN ADDITION, NONE OF
THE SELLERS OR HOLDCO SHALL, AND SSLI SHALL PROCURE THAT NONE OF ITS RELEVANT
AFFILIATES, AT ANY TIME WAIVE OR ASSIGN ANY OF THE INTERCOMPANY DEBT UNLESS
STATED IN THE STEPS PLAN OR TERMINATE ANY OF THE SUBORDINATION AGREEMENTS SHOWN
IN ANNEX 7.3.13, AND ONLY COLLECT ANY OF THE INTERCOMPANY DEBT IN ACCORDANCE
WITH THE TERMS OF THESE SUBORDINATION AGREEMENTS. ALL OF THE ACTIONS TO BE
TAKEN, IF ANY, ACCORDING TO THE STEPS PLAN WILL BE TAKEN WITHOUT UNDUE DELAY (IT
BEING UNDERSTOOD THAT THE MERGERS MAY BE FILED ONLY AFTER THE FY2010 ACCOUNTS
FOR THE MERGING ENTITIES (ÜBERTRAGENDE RECHTSTRÄGER) MENTIONED THEREIN HAVE BEEN
SET UP AND RESOLVED (FESTGESTELLT), THE MERGER OF KLEIN FLOTTBEK GMBH AND KLEIN
FLOTTBEK SENIOR LIVING GMBH & CO. KG ONTO HOLDCO MAY ONLY BE EFFECTED IF AND
WHEN THESE ENTITIES WILL HAVE BECOME DORMANT ENTITIES AND WILL NOT HAVE ANY
FINANCIAL INDEBTEDNESS OTHER THAN INTERCOMPANY DEBT, AND THE DISSOLUTION OF
HOLDCO MAY ONLY BE DONE AFTER THE MERGER OF KLEIN FLOTTBEK GMBH AND KLEIN
FLOTTBEK SENIOR LIVING GMBH & CO. KG HAVE BEEN EFFECTED). THIS CLAUSE 22.1 IS
SUBJECT TO CLAUSE 22.2, IN PARTICULAR AS TO ALL LIMITATIONS CONTAINED THEREIN.

22.2           SSLI SHALL CAUSE HOLDCO AND ITS SUBSIDIARIES, INCLUDING SELLER
PROPCOS AND THEIR GENERAL PARTNERS AND LIMITED PARTNERS, SELLER OPCOS AND THEIR
LEGAL SUCCESSORS (EACH A GERMAN COMPANY AND TOGETHER THE GERMAN COMPANIES,
EXCEPT FOR KLEIN FLOTTBEK SENIOR LIVING GMBH & CO. KG, KLEIN FLOTTBEK GMBH, PSRZ
KLEIN-FLOTTBEK GMBH AND PSRZ GP KLEIN-FLOTTBEK UG (HAFTUNGSBESCHRÄNKT), EACH OF
WHICH SHALL ONLY BE REGARDED AS A "GERMAN COMPANY" FOLLOWING A SALE OF ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS AND ITS FULL RELEASE FROM ALL INDEBTEDNESS OTHER
THAN INDEBTEDNESS OWED TO AFFILIATES) TO EXECUTE THE STEPS DESCRIBED IN THE
STEPS PLAN, SUBJECT TO THE FOLLOWING PROVISOS:

22.2.1        SSLI WILL PROVIDE UNDER THIS CLAUSE 22.2 FUNDS ONLY FOR THE
ORDINARY ADMINISTRATIVE EXPENSES IN THE MEANING OF § 275 PARA (3) LIT. 5 GERMAN
COMMERCIAL CODE (HGB) OF THE GERMAN COMPANIES, AND THE DIRECT EXPENSES (E.G.
FILING FEES, LEGAL, ACCOUNTING, AUDITING OR OTHER PROFESSIONAL EXPENSES) OF
MERGING THE GERMAN COMPANIES THAT ARE SUBSIDIARIES OF HOLDCO INTO IT AND
DISSOLVING HOLDCO. SSLI WILL PROCURE THAT THE GERMAN COMPANIES (OTHER THAN FOR
THE PURPOSES OF BEING THE MANAGING PARTNER (KOMPLEMENTÄR) OF KLEIN FLOTTBEK
SENIOR LIVING GMBH & CO. KG, PSRZ GENERAL PARTNER GMBH) WILL, AFTER THE PAYMENT
DATE, BE DORMANT ENTITIES (I.E. NOT ENGAGE INTO ANY OTHER BUSINESS THAN MANAGING
ITS OWN ASSETS (VERWALTUNG EIGENEN VERMÖGENS) AND CONSUMMATING THE STEPS PLAN).

22.2.2        AN PAYMENT DATE, SSLI WILL PAY EUR 500,000 INTO A GERMAN JOINT
BANK ACCOUNT (UND-KONTO) HELD BY PS ASSISTED LIVING S.À R.L. (LUXCO) AND PROPCO
BUYERS' PROCESS AGENT (AND PROPCO BUYERS' PROCESS AGENT WILL COOPERATE WITH SSLI
TO OPEN SUCH A BANK ACCOUNT) (GERMAN COMPANIES' FIRE FUNDS) AND PROCURE THAT
LUXCO WILL ENTER INTO AN UNDERTAKING VIS-À-VIS THE

 

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PropCo Agreement

                PROPCO BUYERS' PROCESS AGENT TO GIVE AN INSTRUCTION (IN ITS
CAPACITY AS CO-OWNER OF THE ACCOUNT) TO THE ACCOUNT BANK TO RELEASE THE GERMAN
COMPANIES' FIRE FUNDS IF AND TO THE EXTENT NEEDED (SUBJECT TO THE EXCEPTIONS
CONTAINED IN CLAUSES 22.2.2.1 AND 22.2.2.2) TO AVOID A CASH-FLOW INSOLVENCY
(ZAHLUNGSUNFÄHIGKEIT) WITHIN THE MEANING OF § 17 GERMAN INSOLVENCY CODE (INSO)
OF A GERMAN COMPANY (INCLUDING HOLDCO). SUCH UNDERTAKING WILL EXPIRE AFTER THE
EARLIER OF (I) FOUR (4) YEARS AFTER THE PAYMENT DATE AND (II) SIX (6) MONTHS
AFTER THE DISSOLUTION (LIQUIDATION) OF HOLDCO IS ENTERED INTO THE COMPANIES
REGISTER. IF AND TO THE EXTENT A CASH-FLOW INSOLVENCY WOULD ARISE

22.2.2.1           BY VIRTUE OF FACTS OR CIRCUMSTANCES FOR WHICH A CLAIM UNDER
ESCROW ACCOUNT II CAN BE MADE, I.E. TAXES (WHETHER ARISING BEFORE OR AFTER THE
PAYMENT DATE), THE PROPCO BUYERS' SHALL FIRSTLY APPLY ANY AMOUNTS STANDING ON
ESCROW ACCOUNT II, TO CURE SUCH CASH-FLOW INSOLVENCY; AND

22.2.2.2           BY VIRTUE OF FACTS OR CIRCUMSTANCES FOR WHICH A CLAIM UNDER
ESCROW I CAN BE MADE, THE PROPCO BUYERS' SHALL FIRSTLY APPLY ANY AMOUNTS
STANDING ON ESCROW ACCOUNT I TO CURE SUCH CASH-FLOW INSOLVENCY.

22.2.3        SSLI WILL PROCURE THAT THE RELEVANT GERMAN COMPANY WILL

22.2.3.1           CONTEST ANY CLAIMS THAT WOULD, IF ADVERSELY ASSESSED, RESULT
IN A CASH-FLOW INSOLVENCY OF A GERMAN COMPANY; NO DUTY TO CONTEST SHALL ARISE IF
AND TO THE EXTENT A GERMAN COMPANY, APPLYING THE CARE OF A PRUDENT BUSINESSMAN
(SORGFALT EINES ORDENTLICHEN KAUFMANNES), CONSIDERS A CLAIM JUSTIFIED AND
THEREFORE CONTESTING SUCH CLAIM LIKELY WOULD BE UNSUCCESSFUL;

22.2.3.2           CONSULT WITH THE PROPCO BUYERS PROCESS AGENT AS REGARDS ANY
DEFENSE OF ANY CLAIMS WHICH COULD, IF ADVERSELY ASSESSED, RESULT IN A CASH-FLOW
INSOLVENCY OF A GERMAN COMPANY; AND

22.2.3.3           IF IT BECOMES EVIDENT THAT ONE OF THE STEPS SET OUT IN THE
STEPS PAPER WOULD LIKELY RESULT IN A GERMAN COMPANY BECOMING INSOLVENT, NOT
PROCEED WITH SUCH STEP. ADDITIONALLY, SHOULD SSLI BE ADVISED BY ITS LEGAL AND/OR
ACCOUNTING CONSULTANTS AT ANY STAGE OF THE STEPS PLAN PROCESS THAT PROCEEDING
WITH THE STEPS PLAN WOULD LIKELY INCREASE THE RISK OF INSOLVENCY OF ONE OR MORE
GERMAN COMPANIES, THEN SSLI MAY STOP THE STEPS PLAN PROCESS AND KEEP THE
REMAINING GERMAN COMPANIES, ALONG WITH ANY RELATED INTERCOMPANY DEBT, IN PLACE
UNTIL THE DATE THAT IS FOUR YEARS FROM THE PAYMENT DATE.

22.3           SSLI SHALL INDEMNIFY THE PROPCO BUYERS AGAINST ALL DAMAGES THEY
SUFFER THAT ARISE OUT OF ANY OF THE RELEVANT ENTITIES (I) DEVIATING FROM THE
ACTIONS SET OUT IN THE STEPS PLAN IN ANY MATERIAL WAY WITHOUT THE PROPCO BUYER'S
PRIOR CONSENT, (II) WAIVING, COLLECTING OTHER THAN IN ACCORDANCE WITH THE TERMS
OF THE SUBORDINATION AGREEMENTS, OR ASSIGNING ANY OF THE INTERCOMPANY DEBT
UNLESS STATED IN THE STEPS PLAN, OR (III) TERMINATING ANY OF THE RELATED
SUBORDINATION AGREEMENTS, UNLESS THE PROPCO BUYERS HAVE GRANTED THEIR PRIOR
WRITTEN CONSENT TO SUCH ACTIONS. CLAUSE 18.2 THROUGH 18.8 SHALL APPLY MUTATIS
MUTANDIS TO SUCH INDEMNIFICATION CLAIM. THIS CLAUSE 22.3 (I) IS SUBJECT TO
CLAUSE 22.2, IN PARTICULAR AS TO ALL LIMITATIONS CONTAINED THEREIN.

 

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PropCo Agreement

22.4           PROMPTLY AFTER THE PAYMENT DATE, THE SELLERS, HOLDCO, MANCO AND
SSLI SHALL PROVIDE ALL PRICING INFORMATION REGARDING OTHER OFFERS RECEIVED IN
CONNECTION WITH THE AUCTION PROCESS FOR THE PROPERTIES, FF&E BEING SOLD AND
TRANSFERRED PURSUANT TO THIS AGREEMENT, IN PARTICULAR THE PRICES OFFERED FOR
SUCH ITEMS. TO THE EXTENT SUCH INFORMATION IS SUBJECT TO A CONFIDENTIALITY
AGREEMENT, SUCH INFORMATION SHALL BE PROVIDED ON AN ANONYMIZED BASIS. TO THE
EXTENT THE BUYER REQUESTS ADDITIONAL INFORMATION REGARDING SUCH OFFERS IN
CONNECTION WITH DEFENDING AN AVOIDANCE CLAIM (ANFECHTUNGSKLAGE) BY AN INSOLVENCY
ADMINISTRATOR OF THE SELLERS OR THEIR LEGAL SUCCESSORS, HOLDCO HEREBY AUTHORIZES
PROPCO BUYERS' PROCESS AGENT TO INSTRUCT DR. GOP & KLINGSÖHR PROJEKTENTWICKLUNG
UND MARKTFORSCHUNG GMBH TO PROVIDE SUCH INFORMATION TO THE BUYERS.

22.5           PROMPTLY AFTER THE PAYMENT DATE, THE SELLERS AND HOLDCO SHALL
REPAY THIRD PARTY DEBT THAT HAD ACCRUED AND FOR WHICH ONLY ESTIMATES WERE
PROVIDED IN THE THIRD PARTY DEBT MANAGEMENT CERTIFICATE AS AND WHEN SUCH THIRD
PARTY DEBT FALLS DUE, AND SHALL PROVIDE EVIDENCE OF SUCH REPAYMENT IN THE FORM
OF WIRE TRANSFER RECEIPTS TO THE PROPCO BUYERS PROCESS AGENT.

23.               INTELLECTUAL PROPERTY RIGHTS OF SELLERS

The PropCo Buyers shall not use the word/picture mark "Sunrise Senior Living"
and/or "Sunrise Assisted Living" and/or "Sunrise Domizile für Senioren" as well
as the associated logo as shown in Annex 23 provided, however, that the use of
these intellectual property rights is permitted – for the duration of six (6)
months after Payment Date – if and to the extent the relevant trademarks, logos,
signs or other symbols are physically attached to or connected with inventory
existing on the Payment Date at the facilities (Limited Permitted Use). The
PropCo Buyers shall not and shall procure that none of their affiliates within
the meaning of §§ 15 et seq. German Stock Corporation Act (Aktiengesetz)
(Affiliates, and each an Affiliate) uses (e.g. as part of their corporate names,
internet domains, products, services or otherwise) any name in any way to which
the Sellers or any of their Affiliates have rights, in particular the names
"Sunrise Senior Living", "Sunrise Assisted Living", "Sunrise Domizile für
Senioren" or the designation "Sunrise", nor any name or designation confusingly
similar therewith or parts thereof (including "PSRZ"). The PropCo Buyers shall
not and shall procure that none of their Affiliates use any brochure, sales
literature or letterhead or sell any products which contain or carry the name
"Sunrise" or "PSRZ" or any other mark or names which indicate that the business
of the PropCo Buyers or their Affiliates is part of the Sunrise group of
companies. The PropCo Buyers shall ensure that any lessee of the Properties
abides by the same restrictions and obligations.

24.               CONFIDENTIALITY

24.1           THE PARTIES ARE OBLIGATED TO TREAT THE CONTENT OF THIS PROPCO
AGREEMENT AS WELL AS THE INFORMATION THEY HAVE OBTAINED AND WILL OBTAIN WITH
RESPECT TO EACH OTHER AND ANY OF THE PROPERTIES, LENDERS OR BUSINESSES IN
CONNECTION WITH THIS PROPCO AGREEMENT AS STRICTLY CONFIDENTIAL, WITH THE
EXCEPTION THAT THE INFORMATION OBTAINED MAY BE DISCLOSED TO (I) TAX AUTHORITIES
AND TO TAX ADVISORS, PUBLIC ACCOUNTANTS, LEGAL ADVISORS AND THE FINANCING BANK,
(II) IN CASE A PUBLIC ANNOUNCEMENT/DISCLOSURE IS REQUIRED BY LAW OR MANDATORY
RULES OF ANY APPLICABLE REGULATORY ORGANIZATION (LIKE A STOCK EXCHANGE) AND
(III) THE OPCO TRANSFEREES AND THEIR AFFILIATES.

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PropCo Agreement

24.2           NONE OF THE PARTIES MAY MAKE A PRESS RELEASE OR ANY SIMILAR
PUBLIC ANNOUNCEMENTS WITH RESPECT TO THIS PROPCO AGREEMENT WITHOUT PRIOR WRITTEN
CONSULTATION WITH THE OTHER PARTY; FOR THE AVOIDANCE OF DOUBT, THE ALLOWED
DISCLOSURES UNDER CLAUSE 24.1 REMAIN UNAFFECTED BY THIS CLAUSE.

24.3           IF EITHER PARTY (OR ITS AFFILIATE) IS REQUIRED BY LAW (BY ORAL
QUESTIONS, INTERROGATORIES, REQUESTS FOR INFORMATION OR DOCUMENTS, SUBPOENA,
CIVIL INVESTIGATIVE DEMAND OR SIMILAR PROCESS) TO DISCLOSE ANY CONFIDENTIAL
INFORMATION OF THE OTHER PARTY PURSUANT TO CLAUSE 24.1, SUCH PARTY SHALL
PROMPTLY NOTIFY THE RESPECTIVE OTHER PARTY OF SUCH REQUEST OR REQUIREMENT. IF
THE PARTY (OR ANY OF ITS AFFILIATES) IS COMPELLED TO DISCLOSE THE CONFIDENTIAL
INFORMATION OR ELSE STAND LIABLE FOR CONTEMPT OR SUFFER OTHER CENSURE OR
SIGNIFICANT LEGAL PENALTY, THE PARTY (OR ITS AFFILIATE) MAY DISCLOSE ONLY SO
MUCH OF THE CONFIDENTIAL INFORMATION TO THE PARTY COMPELLING DISCLOSURE AS IS
REQUIRED BY LAW OR MANDATORY RULES OF ANY APPLICABLE REGULATORY ORGANIZATION
(LIKE A STOCK EXCHANGE).

24.4           THE PROPCO BUYERS SHALL (AND SHALL ENSURE THAT ANY LESSEE OF THE
PROPERTIES SHALL), FROM THE PAYMENT DATE, PROPERLY MAINTAIN AND PRESERVE ALL
RELEVANT BOOKS AND RECORDS (INCLUDING FILES, CORRESPONDENCE, DOCUMENTS, OTHER
PAPERS AND ELECTRONIC DATA) OF THE RESPECTIVE BUSINESS, TO THE EXTENT THEY
RELATE TO THE PERIOD PRIOR TO AND INCLUDING THE PAYMENT DATE, DURING THE LONGER
OF THE STATUTORY KEEPING PERIODS AND A PERIOD OF FOUR (4) YEARS AS FROM THE
PAYMENT DATE.

24.5           THE PROPCO BUYERS SHALL USE ALL COMMERCIALLY REASONABLE EFFORTS
TO PROCURE THAT SELLERS, THEIR EMPLOYEES, PROFESSIONAL ADVISORS AND OTHER
REPRESENTATIVES RECEIVE, UPON REQUEST, FULL ACCESS TO THE BOOKS (INCLUDING THE
RIGHT TO RECEIVE, IN DUE TIME, HARD AND/OR ELECTRONIC COPIES THEREOF) AND TO THE
PERSONNEL OF THE BUSINESS, TO THE EXTENT SUCH ACCESS IS REASONABLY REQUESTED BY
SELLERS FOR TAX OR OTHER LEGITIMATE REASONS AND PROVIDED THAT SUCH ACCESS DOES
NOT UNREASONABLY DISRUPT THE CONDUCT OF THE BUSINESS.

25.               NOTICES, PROCESS AGENT

25.1           ANY NOTICE GIVEN IN CONNECTION WITH THIS PROPCO AGREEMENT MUST BE
MADE IN WRITING, UNLESS NOTARIZATION OR ANY OTHER SPECIFIC FORM IS REQUIRED BY
MANDATORY LAW. THE WRITTEN FORM INCLUDES FAX (BUT NO OTHER TRANSMISSION BY WAY
OF TELECOMMUNICATION) AND EXCHANGE OF LETTERS. ANY ELECTRONIC FORM (E.G. E-MAIL)
DOES NOT REPLACE THE WRITTEN FORM, EXCEPT WITH RESPECT TO THE CONFIRMATION OF
RECEIPT OF FUNDS DESCRIBED IN CLAUSE 16.

25.2           ANY COMMUNICATION TO BE GIVEN IN CONNECTION WITH THIS PROPCO
AGREEMENT BETWEEN THE SELLERS, SSLI AND HOLDCO ON THE ONE SIDE AND THE BUYER
PROPCOS ON THE OTHER, MUST BE GIVEN IN ENGLISH.

25.3           THE SELLERS HEREBY APPOINT AS RECIPIENT FOR THE INITIATION OF
LEGAL PROCEEDINGS OR SERVICES TO BE MADE IN PENDING LEGAL PROCEEDINGS (EMPFANGS-
UND ZUSTELLUNGSBEVOLLMÄCHTIGTER) AS WELL AS FOR THE RECEIPT OF ANY NOTICES
HEREUNDER

Sunrise Senior Living Inc.
Attention: General Counsel
7900 Westpark Drive, Suite 900
22102 McLean, VA
USA
Fax: +1 (703) 744-1644
Email: david.haddock@sunriseseniorliving.com /
edward.frantz@sunriseseniorliving.com

 

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PropCo Agreement

(Sellers' Process Agent)

with a copy to:

Sunrise Senior Living Inc.
Attention: Edward Burnett
7900 Westpark Drive, Suite 900
22102 McLean, VA
USA
Fax: +1 (703) 744-1644
Email: edward.burnett@sunriseseniorliving.com

with further copy to:

Kirkland & Ellis International LLP
Attention: Frank Becker / Dr. Martin Ströhmann
Maximilianstr. 11
80539 Munich
Germany
Fax: +49 (0)89 2030 6100
Email: frank.becker@kirkland.com / martin.stroehmann@kirkland.com.

25.4           THE PROPCO BUYERS HEREBY APPOINT AS RECIPIENT FOR THE INITIATION
OF LEGAL PROCEEDINGS OR SERVICES TO BE MADE IN PENDING LEGAL PROCEEDINGS
(EMPFANGS- UND ZUSTELLUNGSBEVOLLMÄCHTIGTER) AS WELL AS FOR THE RECEIPT OF ANY
NOTICES HEREUNDER

SHI Management GmbH
Mühlbaurstrasse 1
81677 Munich
Germany
Fax: +49(0)89 5523-9629
Email: j.lindner@shi-management.de / w.grimm@shi-management.de.

(PropCo Buyers' Process Agent)

with a copy to:

CMS Hasche Sigle
Attention: Oliver Thurn
Nymphenburger Strasse 12
80335 Munich
Germany
Fax: +089 23807 40664
Email: oliver.thurn@cms-hs.com

 

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PropCo Agreement

25.5           ANY RIGHTS OF THE SELLERS OR THE PROPCO BUYERS HEREUNDER MAY ONLY
BE EXERCISED, UNLESS OTHERWISE SET FORTH HEREIN, BY THE SELLERS’ OR THE PROPCO
BUYERS’ PROCESS AGENT AS THE CASE MAY BE, IN EACH CASE ACTING FOR ALL THE
SELLERS OR THE PROPCO BUYERS. DECLARATIONS TO BE MADE TOWARDS ANOTHER PARTY
SHALL BE DEEMED TO BE MADE IF MADE TOWARDS THE SELLERS’ PROCESS AGENT OR THE
PROPCO BUYERS’ PROCESS AGENT AS THE CASE MAY BE.

25.6           THE RECEIPT OF COPIES OF NOTICES HEREUNDER BY THE PARTIES’
ADVISORS WILL NOT CONSTITUTE OR SUBSTITUTE THE RECEIPT OF SUCH NOTICES BY THE
PARTIES THEMSELVES.

25.7           IN ADDITION TO THE APPOINTMENT OF SELLERS' PROCESS AGENT, THE
SELLERS HEREBY INDIVIDUALLY GRANT TO SSLI AND MANCO A POWER OF ATTORNEY, EACH
ENTITLED TO ACT ALONE, UNDER RELEASE FROM THE RESTRICTIONS OF SELF-DEALING
(§ 181 BGB) FOR THE PURPOSE OF ISSUING AND RECEIVING ALL DECLARATIONS, AGREEING
TO ANY AMENDMENTS OR SETTLEMENTS, AND TAKING ANY OTHER MEASURES OR ACTIONS
UNDER, OR IN CONNECTION WITH, THIS PROPCO AGREEMENT AND ITS IMPLEMENTATION.

26.               IMPLEMENTATION, POWER OF ATTORNEY

26.1           THE NOTARY IS HEREBY INSTRUCTED TO IMPLEMENT THE PROPERTY
PURCHASE AGREEMENT (PART A, BUT EXCLUDING CLAUSE 20), INCLUDING WITHOUT
LIMITATION TO APPLY FOR THE REGISTRATION OF THE PRIORITY NOTICES AS SET FORTH IN
CLAUSE 9.1. HE SHALL OBTAIN AND ACCEPT ON BEHALF OF ALL PARTIES THE NECESSARY
REGULATORY APPROVALS AND STATEMENTS, IN PARTICULAR PURSUANT TO THE BUILDING CODE
(BAUGESETZBUCH). IF A PREEMPTION RIGHT IS EXERCISED OR A REGULATORY APPROVAL IS
REFUSED OR GRANTED SUBJECT TO ANY ADDITIONAL REQUIREMENT OR CONDITION, THE
RELEVANT NOTIFICATION MUST BE SERVED UPON THE PARTIES. THE NOTARY IS NOT
AUTHORIZED TO ACCEPT ANY SUCH NOTIFICATION. A COPY TO THE NOTARY IS REQUESTED.
THE SELLERS SHALL OBTAIN SUCH DOCUMENTS FORESEEN AND IN THE FORM AS SET FORTH IN
CLAUSE 3.7.1

26.2           THE NOTARY IS HEREBY FURTHER INSTRUCTED, UPON RECEIPT FROM ANY OF
THE PARTIES OF EVIDENCE OF THE FULFILLMENT OF THE MERGER CONDITION CONTAINED IN
CLAUSE 20, TO FORWARD SUCH EVIDENCE TO THE OTHER PARTIES.

26.3           THE PARTIES AUTHORIZE THE NOTARY TO FILE, AMEND AND WITHDRAW
APPLICATIONS TO THE LAND REGISTRY. THE PARTIES WAIVE THEIR OWN APPLICATION
RIGHT.

26.4           THIS AUTHORIZATION MAY ONLY BE USED VIS-À-VIS THE NOTARY OR HIS
OFFICIALLY APPOINTED SUBSTITUTE OR NOTARIES ASSOCIATED IN PARTNERSHIP WITH HIM.
THE CANCELLATION OF ALL CHARGES ON REAL PROPERTY ENTERED IN THE LAND REGISTER
WILL BE CONSENTED TO UPON APPLICATION FOR FULFILLMENT (VOLLZUGSANTRAG).

27.               NOTARIAL INSTRUCTIONS

27.1           THE NOTARY ADVISED THE PARTIES THAT

27.1.1        TITLE TO THE PROPERTIES PASSES TO PROPCO BUYERS ONLY UPON ITS
ENTRY IN THE LAND REGISTER WHICH MAY BE APPLIED FOR ONLY AFTER PAYMENT OF ALL
FEES AND COSTS, ISSUANCE OF THE CLEARANCE CERTIFICATE ACC. TO GRERWSTG
(GRUNDERWERBSTEUERLICHE UNBEDENKLICHKEITSBESCHEINIGUNG) FROM THE TAX AUTHORITY
AND AFTER ALL APPROVALS REQUIRED FOR THIS PROPCO AGREEMENT AND ALL DECLARATIONS
OF THE MUNICIPALITY

 

 

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PropCo Agreement

               ABOUT THE NON-EXISTENCE OR NON-EXERCISE OF THE PRE-EMPTION RIGHT
PURSUANT TO THE BUILDING CODE BEEN ISSUED;

27.1.2        ALL AGREEMENTS MUST BE NOTARIZED (§ 311 B BGB) AND THAT IN CASE OF
VIOLATION OF THIS SECTION THE WHOLE PROPCO AGREEMENT MAY BE INVALID;

27.1.3        THE PROPERTY IS SUBJECT TO LIABILITY FOR PUBLIC CHARGES PAST DUE
AND THAT, TOWARDS THE CREDITORS OF SUCH CHARGES, THE PARTIES ARE JOINTLY LIABLE
FOR PAYMENT OF REAL ESTATE TRANSFER TAX (GRUNDERWERBSTEUER) AND THE COSTS OF
THIS PROPCO AGREEMENT; AND

27.1.4        HE DID NOT ADVISE ON THE TAX IMPLICATIONS OF THIS PROPCO AGREEMENT
AND DOES NOT ASSUME ANY LIABILITY IN THIS REGARD.

28.               EXPENSES AND REAL ESTATE TRANSFER TAX

28.1           THE NOTARIAL AND LAND REGISTER FEES AND REAL ESTATE TRANSFER
TAXES (GRUNDERWERBSSTEUER) RELATING TO THIS DEED AND ITS EXECUTION WILL BE BORNE
BY THE RELEVANT PROPCO BUYER. THE EXPENSES OF ANY RELEASE FROM ENCUMBRANCES WILL
BE BORNE BY THE RELEVANT SELLER. EACH PARTY SHALL PAY ITS COSTS IN RELATION TO
THE LAND REGISTRY AND NOTARY COSTS IMMEDIATELY.

28.2        Any and all internal costs incurred by either Party regarding the
merger control proceedings pursuant to Clause 19 will be borne by the respective
Party on its own account. Any and all filing fees or other amounts payable to
the relevant competition authorities (especially the FCO) will be born by the
PropCo Buyers.

28.3           THE FEES OF THEIR RESPECTIVE EXTERNAL TAX CONSULTANTS AND LEGAL
ADVISORS WILL BE BORNE BY EACH OF THE PARTIES THEMSELVES.

29.               WRITTEN FORM

Any modifications to as well as the cancellation of this PropCo Agreement and
the Escrow Agreement must be in written form, unless notarial form is required
by law. Any amendments that could adversely impact the Lender Banks' interest in
the rights assigned to them by the Sellers under this PropCo Agreement requires
the respective Lender Banks' consent. This also applies to any modification and
cancellation of this provision.

30.               LIABILITY, ASSIGNMENT OF RIGHTS, THIRD PARTY RIGHTS,
SET-OFF/NET-OFF

30.1           IT IS HEREBY EXPRESSLY STATED THAT EACH SELLER AND EACH PROPCO
BUYER ASSUMES LIABILITIES UNDER AND IN CONNECTION WITH THIS PROPCO AGREEMENT
ONLY WITH RESPECT TO THE PURCHASE OBJECT (E.G. PROPERTIES, FF&E ETC. AS THE CASE
MAY BE) SOLD OR ACQUIRED BY ITSELF AND ONLY UP TO SUCH AN AMOUNT CALCULATED
APPLYING THE PROPORTION OF (X) THE AGGREGATE CONSIDERATION PAYABLE FOR THE
PURCHASE OBJECTS SOLD OR ACQUIRED BY THE PROPCO BUYER IN QUESTION TO (Y) THE
AGGREGATE CONSIDERATION PAYABLE FOR ALL PURCHASE OBJECTS IN QUESTION UNDER THIS
PROPCO AGREEMENT. ALL LIABILITIES, REGARDLESS THEIR NATURE, OF EACH SELLER,
HOLDCO, MANCO, SSLI AND EACH PROPCO BUYER OUT OF AND IN CONNECTION WITH THIS
PROPCO AGREEMENT ARE SOLE INDIVIDUAL LIABILITIES AND NOT JOINT AND SEVERAL. ANY
JOINT AND SEVERAL LIABILITY OF THE SELLERS, HOLDCO, MANCO, SSLI AND/OR THE

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PropCo Agreement

               PROPCO BUYERS NEEDS TO BE STATED EXPLICITLY AS JOINT AND SEVERAL
IN THIS PROPCO AGREEMENT TO BE APPLICABLE (TEIL- ABER NICHT GESAMTSCHULDNER UND
TEIL- ABER NICHT GESAMTGLÄUBIGER).

NONE OF THE PROPCO BUYERS SHALL BE DEEMED AGENT (§ 278 GERMAN CIVIL CODE
(BÜRGERLICHES GESETZBUCH; BGB) OR ASSISTANT (VERRICHTUNGSGEHILFE) OF ANOTHER
PROPCO BUYER AND ANY LIABILITY TO THIS EXTENT IS EXCLUDED.

30.2           NO PARTY MAY ASSIGN ANY RIGHT OR CLAIM UNDER THIS PROPCO
AGREEMENT TO A THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF ALL OTHER
PARTIES OTHER THAN (I) TO ANY AFFILIATE, (II) TO THE LENDER BANKS OR (III) THE
ASSIGNMENT OF THE RESIDUAL INTERESTS UNDER THE DOWN PAYMENT, ESCROW ACCOUNT I
AND ESCROW ACCOUNT II TO THE BANKS AND FINANCIAL INSTITUTIONS THAT ARE LENDERS
OF THE BANK DEBT.

30.3           THIS PROPCO AGREEMENT ONLY GRANTS RIGHTS TO THE PARTIES AND DOES
NOT CONSTITUTE A CONTRACT FOR THE BENEFIT OF THIRD PARTIES (VERTRAG ZUGUNSTEN
DRITTER) OR A CONTRACT WITH PROTECTIVE EFFECT FOR THIRD PARTIES (VERTRAG MIT
SCHUTZWIRKUNG FÜR DRITTE), OTHER THAN THE RIGHTS OF THE OPCO TRANSFEREES
RELATING TO THE ESCROW ACCOUNT I AND ESCROW ACCOUNT II CREATED HEREBY, WHICH
ESCROW ACCOUNTS SHALL SERVE AS SECURITY FOR CLAIMS OF OPCO TRANSFEREES UNDER THE
OPCO AGREEMENT.

30.4           EXCEPT AS OTHERWISE PROVIDED FOR IN THIS PROPCO AGREEMENT, NO
PARTY IS ENTITLED TO SET-OFF (AUFRECHNEN) OR NET-OFF (VERRECHNEN) AGAINST ANY
CLAIMS OF ANY OTHER PARTY OTHER THAN UNDER OR IN CONNECTION WITH THIS PROPCO
AGREEMENT OR TO EXERCISE A RIGHT OF RETENTION (ZURÜCKBEHALTUNGSRECHT).

31.               CHOICE OF LAW

This Agreement is governed by the substantive law of the Federal Republic of
Germany with the exclusion of the UN-CISG-Convention and German conflict of laws
rules.

32.               JURISDICTION

Munich will be the exclusive venue unless another venue is stipulated by
mandatory law.

33.               ENTIRE AGREEMENT

This PropCo Agreement and the documents referred to in it constitute the full
understanding of the Parties and the complete and exclusive statements of the
terms and conditions of the Parties’ agreements relating to the subject matter
hereof and supersedes any and all prior agreements and understandings, whether
written or oral, that may exist between the Parties with respect to the subject
matter of this PropCo Agreement or parts thereof. There are no side agreements
to this PropCo Agreement.

34.               INTERPRETATION

The headings in this PropCo Agreement do not affect the interpretation thereof.
Wherever this PropCo Agreement includes English terms after which either in the
same provision or elsewhere in this PropCo Agreement German terms have been
inserted in brackets and/or italics, the respective German terms alone and not
the English terms are authoritative for the interpretation of the respective
term.

 

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PropCo Agreement

35.               SEVERABILITY CLAUSE

Should any provision of this PropCo Agreement be or become invalid, ineffective
or unenforceable as a whole or in part, the validity, effectiveness and
enforceability of the remaining provisions will not be affected thereby. Any
such invalid, ineffective or unenforceable provision will be deemed replaced by
such valid, effective and enforceable provision as comes closest to the economic
intent and purpose of such invalid, ineffective or unenforceable provision as
regards subject-matter, amount, time, place and extent. The aforesaid applies
mutatis mutandis to any gap in this PropCo Agreement.

36.               LANGUAGE

This PropCo Agreement is being notarized in the English language only, except
those parts of this agreement which are bilangual

 

Legal Connection

 

Rechtlicher Zusammenhang

The sale of the Properties as shown in Annex 1.1 of the notarial deed of the
Notary Dr. Michael Bohrer dated 22 and 25 May 2010 (deed number 1915/2010 (the
content of such deed, which was available during today's notarization and
annexation has been waived), the allocation of associated movable assets (in
particular furniture, fixture and equipment and inventory; FF&E), the lease of
the Property as well as the FF&E as well as the transfer of those agreements
connected with such businesses, in particular the employment relationships and
other rights and claims, are all legally connected and regardless of in which
agreement contained and are notarized by the acting Notary herewith. Legally
connected are therefore eight lease agreements, the OpCo Agreement and the
PropCo Agreement; the acting Notary is herewith authorized by deeds erected on
his own behalf to specify the respective deed numbers.

 

Die Veräußerung des in Annex 1.1 der Urkunde des Notars Dr. Michael Bohrer vom
22. und 25.05.2010, URNr. 1915/2010 (der Inhalt jener Urkunde, deren Urschrift
heute aufliegt, ist allseits bekannt; erneute Verlesung und Beifügung sind
verzichtet) beschriebenen Grundstückseigentums, der jenen Grundstückseigentum
zugeordneten beweglichen Sachen (insbesondere Einrichtung, Ausrüstung und
Inventar - zusammenfassend nachfolgend auch "Inventar" genannt -), die
Verpachtung des Grundstückseigentums und des Inventars, sowie die Überleitung
der auf diese Objekte bezogenen Verträge, insbesondere auch Arbeitsverhältnisse
und sonstige Rechte und Rechtspositionen stehen im rechtlichen Zusammenhang und
werden zugleich mit gegenwärtigem Geschäft vereinbart und durch den amtierenden
Notar beurkundet. Im Zusammenhang stehen somit insgesamt acht Pachtverträge, das
OpCo Agreement sowie das PropCo Agreement; der beurkundende Notar wird hiermit
ermächtigt, durch Eigenurkunde zu bezeichnen, zu welchen Urkundennummern die
sonach im Zusammenhang stehenden Verträge registriert sind.

 

 

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PropCo Agreement

Der Käufer, die TMW Pramerica Property Investment GmbH, erwirbt den
Kaufgegenstand gem. Abschn. 2 für das Grundstückssondervermögen der Pflegeheim
Spezialfonds I.

 

Der Käufer, die TMW Pramerica Property Investment GmbH,

bewilligt und beantragt

zeitgleich mit der Umschreibung des Eigentums im Grundbuch in Abt. II
einzutragen:

 

„Der eingetragene Eigentümer darf gemäß § 26 Abs. 1 Nr. 3 und 4 des
Investmentgesetztes (InvG) über zum Immobilien-Sondervermögen gehörende
Immobilien nur mit Zustimmung der jeweiligen Depotbank für das Sondervermögen
„Pflegeheim Spezialfonds I“ verfügen bzw. solche Immobilien nur mit Zustimmung
der jeweiligen Depotbank für das Sondervermögen „Pflegeheim Spezialfonds I.“
belasten.“

 

The above recording was read by/in the presence of the Notary to those present
and approved by them and signed by the persons appeared as well as of the Notary
as set forth below.

 

                                                                                  

                                                                                               /s/
Dr. Michael Bohrer

/s/ Dr. Martin Ströhmann

/s/ Dr. Kai Terstiege

/s/ Edward Frantz

/s/ Jochen Lindner

/s/ Wolfgang Grimm

/s/ Jobst Beckmann

/s/ Dr. Ulrich Nack

 

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