SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 1997
SALIENT 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12588 23-2280922
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organizational) File Number) Identification No.)
P. O. BOX 1498, READING, PENNSYLVANIA 19603
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 856-5500
<PAGE>
Item 2. Disposition of Assets.
On July 31, 1997, Salient 3 Communications, Inc.
(Nasdaq:NMS/STCIA) sold its real estate complex, Green Hills
Corporate Center, for $40 Million, substantially all in cash. The
Company anticipates an after tax gain of approximately $7 million.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Pro Forma Unaudited Consolidated Condensed Statement of Operation
has not been presented due to the fact that the Company elected
discontinued operations for its real estate operations during the first
quarter of 1997.
(b) Pro Forma Unaudited Consolidated Condensed Balance
Sheet as of July 4, 1997
(c) Exhibit 2. Agreement of Sale for Green Hills Corporate Center between
Brandywine Realty Trust and Salient 3 Communications Inc.
<PAGE>
Salient 3 Communications, Inc. and Subsidiaries
Introduction to Pro Forma Unaudited Consolidated Condensed Balance Sheet
On July 31, 1997, the Company sold its real estate complex, Greens Hills
Corporate Center, for $40 million, substantially all in cash.
The following Pro Forma Unaudited Consolidated Condensed Balance Sheet
as of July 4, 1997 assumes the sale was consummated on July 4, 1997.
Pro Forma Statement of Operations have not been presented due to the fact
that the Company elected discontinued operations for this subsidiary
during the first quarter of 1997.
<PAGE>
Salient 3 Communications, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Condensed
Balance Sheet
As of July 4, 1997
(000's)
<TABLE>
Consolidated Pro Forma Consolidated
Historical Adjustments Pro Forma
ASSETS
Current assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 1,802 $ 36,800 (A) $ 2,658
Accounts receivable, net of allowance (35,944) (B)
for doubtful accounts of $1,878 and
$1,565, respectively 19,820 19,820
Inventories 21,382 21,382
Deferred income taxes 3,891 3,891
Other current assets 4,780 500 (C) 5,280
Net assets held for sale 38,614 (23,500) (D) 15,114
------ ------ ------
Total current assets 90,289 (22,144) 68,145
Property, plant and equipment, at cost: 41,172 41,172
Less accumulated depreciation and
amortization 19,312 19,312
------ ------
21,860 21,860
Deferred income taxes 8,105 8,105
Other assets - 1,000 (C) 1,000
Intangible assets 45,564 45,564
Total Assets $165,818 $ (21,144) $144,674
======= ====== =======
<PAGE>
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 9,044 $ (9,044) (B) $ -
Accounts payable 7,235 7,235
Salaries and wages 1,494 1,494
Income taxes, currently payable 1,937 7,862 (E) 9,799
Estimated liability for contract losses 1,471 1,471
Other accrued liabilities 8,230 8,230
------ ----- ------
Total current liabilities 29,411 (1,182) 28,229
Long-term debt 38,317 (26,900) (B) 11,417
Other long-term liabilities 5,141 5,141
Self-insured retention 2,409 2,409
Stockholders' equity:
Common stock 8,985 8,985
Capital in excess of par value 38,047 38,047
Warrants outstanding 1,665 1,665
Retained earnings 82,430 6,938 (F) 89,368
Foreign currency translation adjustment 100 100
Deferred Compensation-restricted stock (799) (799)
Treasury stock (39,888) (39,888)
------ ----- ------
90,540 6,938 97,478
Total Liabilities and Stockholders' Equity $165,818 $ (21,144) $144,674
======= ====== =======
</TABLE>
Notes to Pro Forma Unaudited Condensed Balance Sheet as of July 4, 1997
(A) To reflect the cash proceeds net of acquisition costs.
(B) To repay working capital and acquisition lines of credit.
(C) To record note receivable due from the buyer.
(D) To remove net assets sold.
(E) To accrue income taxes due on sale.
(F) To record the gain on sale.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Salient 3 Communications, Inc.
/s/ Paul H. Snyder
Paul H. Snyder
Senior Vice President
and Chief Financial Officer
August 13, 1997
<PAGE>
<EX-2>
AGREEMENT OF SALE INDEX
Section
I. PROPERTY BEING SOLD
A. Real Property
B. Personal Property
C. Leases
D. Right to Names
II. PURCHASE PRICE AND MANNER OF PAYMENT
A. Purchase Price
B. Manner of Payment
1. Deposit
2. Additional Deposit
3. Cash at Closing
4. Purchase Money Mortgage
C. Allocation
III. TITLE
IV. COVENANTS
A. Maintenance
B. Alterations
C. Lease
D. Security Deposits
E. Bill Tenants
F. Notice to Buyer
G. Update Rent Roll
H. Comply with Leases
I. No New Agreements
J. Tax Disputes
K. No Removal of Personalty
V. REPRESENTATIONS AND WARRANTIES
A. Certain Definitions
B. Organization
C. Authority
D. Consents and Approvals
E. Litigation
F. Absence of Certain Changes or Events; Material Agreements
G. No Violation of Law
H. Brokers or Finders
I. Real Estate
J. Taxes.
K. Compliance with Laws and Recorded Declarations
L. Absence of Undisclosed Liabilities and Contractual
Obligations
M. Leases
N. Condemnation or Governmental Proceedings
O. Insurance.
P. No Defaults.
Q. Significant Agreements
R. Service Contracts
S. Right to Cancel
T. Required Improvements
U. Subdivided Parcel
V. Environmental.
W. Zoning.
X. Flood Plain.
A. Organization
B. Consents and Approvals
C. Litigation
D. Absence of Certain Changes or Events; Material Agreements
E. No Violation of Law
F. Brokers or Finders
VI. POSSESSION
VII. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY
A. Title Binder
B. Survey
C. Physical Inspection
1. Contracts, Licenses, Permits
2. Utility Costs
3. Inventory
4. Three Years' Maintenance Expenses
5. Three Years' Tax Bills
7. Schedule of Violations
8. Schedule of Notices
9. Schedule of Replacements and Repairs
10. Zoning, Site Plan, Subdivision Plan or Plat
11. Takings or Changes
12. Tax Assessments, Appeals and Increases
13. Litigation
14. Insurance Policies
D. Seller's Failure to Deliver
E. Notification of Certain Matters
F. Board of Trustees Approval
VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
IX. FIRE OR OTHER CASUALTY
A. Maintain Insurance
B. Minimal Damage
C. Substantial Damage
D. Closing After Substantial Damage
E. Rent Insurance
X. CONDEMNATION
XI. EXPENSE ALLOCATIONS
XII. CLOSING
A. Time and Date and Place
B. Documents
1. Seller's Documents and Other Items
2. Buyer's Documents
3. Title Insurance
4. Necessary Documents
XIII. DEFAULT; REMEDIES
XIV. CONDITIONS PRECEDENT TO CLOSING
A. Correctness of Warranties and Representations.
C. Buyer's Satisfaction with Inspection
D. Trustee Approval.
E. Estoppels
F. Lease With Seller
XV. PRORATIONS
A. Operating Expenses
1. Taxes
2. Sewer Rents
3. Permit Fees
4. Operating Costs
5. Rents
6. Security Deposits
7. Project Contracts
B. Custom and Practice
C. Future Installments of Taxes
D. Application of Prorations
E. Schedule of Prorations
F. Escalations
G. Readjustments
H. Indemnification for Seller's Tax Obligations.
XVI. BROKERS
XVII. ESCROW AGENT.
A. Payment to Seller
B. Notice of Dispute
C. Escrow Subject to Dispute
D. Escrow Agent's Rights and Liabilities
XVIII. GENERAL PROVISIONS
A. Notices
B. Binding Effect
C. Entire Agreement.
D. Governing Law
E. No Recording
F. Tender
G. Execution in Counterparts
H. Further Instruments
I. Time
J. Designation of Nominee; Assignment of Agreement
K. Effective Date
L. Time for Acceptance
M. Confidentiality
N. Delivery of Documents
XIX. SEC REPORTING (8-K) REQUIREMENTS
XX. INDEMNIFICATION
XXI. EXCULPATION.
The exhibits and schedule listed below are not included in this filing, but
will be furnished to the Commission upon request.
EXHIBITS TO AGREEMENT OF SALE
"A" - Legal Description
"B" - Schedule of Inventory
"C" - Permitted Encumbrances
"D" - Rent Roll
"E" - Significant Agreements/Service Contracts
"F" - Insurance
"G" - Operating Statements
"H" - Estoppel Certificate Form
"I-1" - Purchase Money Note
"I-2" - Purchase Money Mortgage
"J" - Lease between Seller and Buyer
SCHEDULE TO AGREEMENT OF SALE
Schedule 2.3 - Allocation of Purchase Price
<PAGE>
AGREEMENT OF SALE
AGREEMENT OF SALE made this 26 day of June, 1997, between
BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust, its
assignee or nominee, having its principal office at 16 Campus Boulevard,
Suite 150, Newtown Square, Pennsylvania 19073 ("Buyer"), and SALIENT 3
COMMUNICATIONS, INC., a corporation, having its principal office at P.O.
Box 1498, Reading, PA 19603 ("Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. Seller is the owner of a certain tract of land
containing approximately 192 acres, together with the buildings and
improvements thereon, including five buildings containing approximately
574,241 net rentable square feet, commonly known as 100 Gundy, 200 Gundy,
100 Davis, 300 Gundy and 100 Kachel Boulevard located in Cumru and Robeson
Townships, Berks County, Pennsylvania; and
B. Seller desires to sell to Buyer and Buyer desires to
purchase from Seller the property referred to in this Agreement, upon the
terms and conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and with the preceding Background paragraphs
incorporated by reference, the parties hereto, intending to he legally
bound hereby, covenant and agrees as follows:
I. PROPERTY BEING SOLD.
Seller shall sell, transfer and convey to Buyer on the
Closing Date (as hereinafter defined),
A. Real Property. Fee simple interest in the parcels of
land, all as more fully described on Exhibit "A", with the building and
improvements thereon, including the five buildings containing
approximately 574,241 net rentable square feet, commonly known as 100
Gundy, 200 Gundy, 100 Davis, 300 Gundy and 100 Kachel Boulevard located in
Cumru and Robeson Townships, Berks County, Pennsylvania, and all of the
easements, licenses, rights of way, privileges, hereditaments,
appurtenances, and rights to any land lying in the beds of any street,
road or avenue, open or proposed, adjoining thereto, and inuring to the
benefit of said land (hereinafter collectively referred to as the
"Premises"); and
B. Personal Property. All equipment, fixtures, machinery
and personalty of every description attached to or used in connection with
the Premises (and not owned by tenants under leases of the Premises),
including, without limitation, those listed on the Schedule of Inventory
attached hereto as Exhibit "B", all artwork, renderings, flags, awnings,
trade dress, and all assignable intangible personal property owned by
Seller and used in connection with the ownership, operation and
maintenance of the land, improvements and other property, including
without limitation, all contract rights, guaranties and warranties of any
nature, all architects', engineers', surveyors' and other real estate
professionals' plans, specifications, certifications, contracts, reports,
data or other technical descriptions, reports or audits (including,
without limitation, all environmental, structural and mechanical
inspection reports), and all marketing materials ("Contract Documents"),
all governmental permits, licenses, certificates, and approvals in
connection with the ownership of the Premises ("Licenses"), all escrow
accounts, deposits, instruments, documents of title, general intangibles,
all computers, computer software programs and data and business records
pertaining to the Premises, and all of Seller's rights, claims, and causes
of action if any, to the extent they are assignable, under any warranties
and/or guarantees of manufacturers, contractors or installers, all rights
against tenants and others relating to the Premises or the operation or
maintenance thereof, including to the extent applicable, any warranties
from any previous owners of the Premises (hereinafter collectively
referred to as "Personal Property"); and
C. Leases. All leases, licenses and other occupancy
agreements for any part of the Premises, and all prepaid rent and
unapplied security deposits (the "Leases"); and
D. Right to Names. Any and all right, title and interest
of Seller in and to the name "Green Hills Corporate Center", and the right
to all printing styles, trademarks and logos ("Name").
The Premises, Personal Property, Leases and Name are
sometimes hereinafter referred to as "Property."
II. PURCHASE PRICE AND MANNER OF PAYMENT.
A. Purchase Price. Buyer shall pay the total sum of Forty
Million Dollars ($40,000,000.00) (hereinafter referred to as the
"Purchase Price") subject to adjustment, on a per diem basis.
B. Manner of Payment. The Purchase Price shall be paid in
the following manner:
1. Deposit. By delivery, upon Seller's execution
and delivery of this Agreement, of Buyer's good check in the amount of
$100,000.00 to the Title Company (hereinafter referred to as "Escrow
Agent" or "Escrowee"). This sum, the sum specified in Section II.B.(2)
below, and all other sums paid by Buyer to the Escrow Agent under this
Agreement (hereinafter referred to as the "Deposit") shall be held by
Escrow Agent in a federally-insured, segregated money market account at an
institution to be designated by Buyer until termination or consummation of
this Agreement. Interest on the Deposit shall be credited to Buyer at
Closing, or paid to the party otherwise entitled to the Deposit in the
event of the termination of this Agreement prior to Closing.
2. Additional Deposit. By delivery, within two (2)
business days next following the Inspection Period Expiration Date (as
hereinafter defined in Section VII.C.), of Buyer's good check in the
amount of $50,000.00.
3. Cash at Closing. Thirty-eight Million Three
Hundred Fifty Thousand Dollars ($38,350,000) by delivery to Seller on the
Closing Date, by bank cashier's, title company, or certified check, or by
wire transfer, in the amount of Thirty-eight Million Three Hundred Fifty
Thousand Dollars $38,350,000.00, subject to adjustment as herein provided.
4. Purchase Money Mortgage. One Million Five
Hundred Thousand Dollars ($1,500,000) by delivery to Seller on the Closing
Date of Buyer's Purchase Money Mortgage evidenced by Buyer's Note
substantially in the form of Exhibit "I-1" attached hereto and made a part
hereof (the "Note") and secured by a mortgage encumbering the Premises
substantially in the form of Exhibit "I-2") attached hereto and made a
part hereof (the "Mortgage"). The Note will bear interest at the rate of
five (5%) percent per annum. Principal under the Note will be paid in
three annual installments each in the amount of Five Hundred Thousand
Dollars ($500,000), payable on the first, second and third anniversaries
of the Closing Date. The Note will be non-recourse to Buyer. Seller
agrees to subordinate the Mortgage to an institutional first mortgage
securing a line of credit extended to Buyer provided that such line of
credit is also secured by mortgages encumbering a majority of the
properties other than the Premises owned directly or indirectly by Buyer.
In lieu of subordinating the Mortgage to an institutional first mortgage,
Seller shall have the right to confine the lien of the Mortgage to the
undeveloped portions of the Premises in which event the Mortgage will
remain as a first mortgage encumbering the undeveloped portions of the
Premises until the Note is paid in full.
C. Allocation. The Purchase Price shall be allocated
between realty and personalty in the manner provided on Schedule 2.3
attached hereto.
III. TITLE. On the Closing Date, Seller shall convey to Buyer
good and marketable fee simple title to the Premises subject only to those
rights of way, easements, covenants restrictions, and objections to title
(hereinafter "Permitted Exceptions") listed on Exhibit "C" hereto, unless
identified by Buyer as "Title Objections" as hereinafter provided, and
subject to the rights of tenants listed on the rent roll attached hereto
as Exhibit "D", which title shall be insurable at regular rates by a
reputable title insurance company ("Title Company") under an ALTA 1970
Form B (Revised 10/17/70 and 3/30/84) title insurance policy ("Title
Policy"), with the endorsements and affirmative insurance specified in
Section XII.B.(j) below. Seller and Buyer consent to use, at Buyer's
option, Commonwealth Land Title Insurance Company, Lawyers Title Insurance
Corporation or First American Title Insurance Company as the Title
Company.
IV. COVENANTS. In addition to the covenants contained in the
other Sections of this Agreement, Seller covenants that it shall:
A. Maintenance. At all times prior to the Closing Date,
maintain the Property in good condition and repair, reasonable wear and
tear alone excepted, operate the Property with first class management
practices and leasing standards, and pay in the normal course of business
prior to Closing, all sums due for work, materials or service furnished or
otherwise incurred in the ownership and operation prior to Closing.
B. Alterations. Not make or permit to be made any
alterations, improvements or additions to the Property without the prior
written consent of Buyer, except those made by tenants pursuant to the
right to do so under their Leases, or by Seller if required by applicable
law or ordinance, or as required under any Lease.
C. Lease. Not enter into any new Lease, nor amend, modify
or terminate any existing Lease without Buyer's consent.
D. Security Deposits. Not apply any Tenant's security
deposit to the discharge of such Tenant's obligations, without Buyer's
consent.
E. Bill Tenants. Timely bill all Tenants for all rent
billable under Leases, and use its best efforts to collect any rent in
arrears.
F. Notice to Buyer. Notify Buyer promptly of the
occurrence of any of the following:
1. a fire or other casualty causing damage to the
Property, or any portion thereof;
2. receipt of notice of eminent domain proceedings
or condemnation of or affecting the Property, or any portion thereof;
3. receipt of notice from any governmental authority
or insurance underwriter relating to the condition, use or occupancy of
the Property, or any portion thereof, or any real property adjacent to any
of the Property, or setting forth any requirements with respect thereto;
4. receipt or delivery of any default or termination
notice or claim of offset or defense to the payment of rent from any
tenant;
5. receipt of any notice of default from the holder
of any lien or security interest in or encumbering the Property, or any
portion thereof;
6. a change in the occupancy of the leased portions
of the Property;
7. notice of any actual or threatened litigation
against Seller or affecting or relating to the Property, or any portion
thereof; or
8. the commencement of any strike, lock-out, boycott
or other labor trouble affecting the Property, or any portion thereof.
G. Update Rent Roll. Provide Buyer with monthly updates
of the rent roll attached as Exhibit "D", each warranted by Seller to be
true, correct and complete, with a final update as of one day prior to the
Closing Date, also warranted by Seller to be true, correct and complete.
H. Comply with Leases. Perform all obligations of the
landlord as required by the Leases or by any order or direction of any
governmental authority having jurisdiction thereof, and to the extent
required by law or by any of the Leases, maintain all security deposits
held under all Leases in a segregated account, with interest thereon as
required.
I. No New Agreements. Except for agreements which can be
terminated on not more than thirty (30) days' notice, not enter into any
other agreements which affect the Property or the transactions
contemplated by this Agreement, without the prior written consent of
Buyer, and not permit the creation of any liability which shall bind Buyer
or the Premises after Closing.
J. Tax Disputes. Notify Buyer of any tax assessment
disputes (pending or threatened) prior to Closing, and not agree to any
changes in the real estate tax assessment, nor settle, withdraw or
otherwise compromise any pending claims with respect to prior tax
assessments, without Buyer's prior written consent. If any proceedings
shall result in any reduction of assessment and/or tax for the tax year in
which the Closing occurs, it is agreed that the amount of tax savings or
refund for such tax year, less the reasonable fees and disbursements in
connection with such proceedings, shall be apportioned between the parties
as of the date real estate taxes are apportioned under this Agreement.
The parties agree that from and after the execution and
delivery of this Agreement, Buyer shall have the right to appeal the
current tax assessment of each tax parcel comprising the Premises. Buyer
shall consult with Seller prior to filing tax appeal documents, and shall
afford Seller reasonable advance notice prior to any public hearings or
proceedings at which said appeal will be considered. Seller agrees that
Buyer may file such appeals in its name or in Seller's name, as may be
required, and Seller shall cooperate with Buyer in the prosecution of such
appeal; provided, however, that Buyer agrees to pay the reasonable legal
fees incurred by Seller, if any, in connection with furnishing such
cooperation.
K. No Removal of Personalty. Not remove any non-
consumable Personal Property from the Premises without replacing it with
similar personal property, new and of equal or better quality.
V. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to
enter into this Agreement, Seller hereby represents and warrants to Buyer
that the following representations and warranties are true now and will be
true at Closing except as set forth on a Disclosure Schedule delivered by
Seller concurrently with the execution and delivery of this Agreement (the
"Seller Schedule"):
A. Certain Definitions. As used in this Agreement,
"Seller Material Adverse Effect" shall mean any fact, condition, event,
development or occurrence which, individually or when taken together with
all other such facts, conditions, events, developments or occurrences, has
had or could reasonably be expected to have a material adverse effect on
the ability of Seller to consummate the transactions contemplated hereby.
B. Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as
now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority would not have a
Seller Material Adverse Effect. Seller is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except
where the failure to be so duly qualified or licensed and in good standing
would not have a Seller Material Adverse Effect. Seller has heretofore
made available to Buyer a complete and correct copy of the charter and by-
laws or comparable organizational documents, each as amended to date, of
Seller. Such charters, by-laws and comparable organizational documents
are in full force and effect. Seller is not in violation of any provision
of its charter, by-laws or comparable organizational documents, except for
such violations that would not have a Seller Material Adverse Effect.
C. Authority. Seller has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance
of this Agreement by Seller and the consummation by Seller of the other
transactions contemplated hereby have been duly authorized by the Board of
Directors of Seller, and no other corporate proceedings on the part of
Seller are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Seller and constitutes a valid and binding obligation of
Seller, enforceable against it in accordance with its terms.
D. Consents and Approvals. None of the execution,
delivery or performance of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby and compliance by Seller
with any of the provisions hereof will (i) conflict with or result in any
breach of any provisions of the charter or by-laws or comparable
organizational documents of Seller, (ii) require any filing by Seller
with, or any permit, authorization, consent or approval to be obtained by
Seller of, any court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or
administrative agency or commission (a "Governmental Entity") (except
where the failure to obtain such permits, authorizations, consents,
approvals or to make such filings would not have a Seller Material Adverse
Effect), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under,
or result in the creation of any lien or other encumbrance on any property
or asset of Seller pursuant to, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract,
agreement, franchise, permit, concession or other instrument, obligation,
understanding, commitment or other arrangement to which Seller is a party
or by which it or any of its properties or assets may be bound or affected
(each, a "Contract"), including, without limitation, the Leases, (iv)
result in the triggering of any right of first refusal or other right
under any stockholder, partnership or joint venture agreement to which
Seller is a party or (v) violate any order, writ, injunction, decree,
statute, ordinance, rule or regulation applicable to Seller except, in the
case of clauses (iii), (iv) and (v), for violations, breaches or defaults
which would not have a Seller Material Adverse Effect.
E. Litigation. There is no suit, claim, action,
proceeding or investigation pending (in which service of process has been
received by an employee of Seller) or, to the knowledge of Seller,
threatened against Seller or with respect to the Property before any
Governmental Entity which, if adversely determined, individually or in the
aggregate would have a Seller Material Adverse Effect. Seller is not
subject to any outstanding order, writ, injunction or decree which,
insofar as can be reasonably foreseen, individually or in the aggregate,
in the future would have a Seller Material Adverse Effect.
F. Absence of Certain Changes or Events; Material
Agreements. Since September 30, 1996, Seller has conducted its business
only in the ordinary and usual course consistent with past practice, and
there has not been any change or development, or combination of changes or
developments, which have a Seller Material Adverse Effect. As of the date
of this Agreement, Seller has not become a party to any agreement or
amendment to an existing agreement which would be required to be filed by
Seller as an exhibit to its next Annual Report on Form 10-K, except for
this Agreement. The transactions contemplated by this Agreement will not
require the consent from or the giving of notice to a third party pursuant
to the terms, conditions or provisions of any Contract to which Seller is
a party or by which it is bound.
G. No Violation of Law. To its knowledge, Seller is not
in violation of, or is under investigation with respect to, and has not
been given notice or been charged by any Governmental Entity with any
violation of, any law, statute, order, rule, regulation, ordinance or
judgment (including, without limitation, any applicable environmental law,
ordinance or regulation) of any Governmental Entity, except for violations
which, in the aggregate, do not have a Seller Material Adverse Effect.
H. Brokers or Finders. Seller does not have any liability
to any agent, broker, investment banker, financial advisor or other firm
or person for any broker's or finder's fee or any other commission or
similar fee in connection with this Agreement or any of the transactions
contemplated hereby.
I. Real Estate.
1. Included in the Seller Schedule is a description
of all real property constituting the Premises.
2. At the Closing title to the Premises shall be
good and marketable and insurable as such, together with Buyer's right to
use all easements benefitting the Premises and the contiguity of all
pieces or parcels of land, if there be more than one contained therein, by
any reputable title insurance company licensed to do business in
Pennsylvania at regular standard rates, free and clear of all pledges,
liens, claims, security interests, restrictions, encumbrances, easements,
leases, tenancies, claims or rights of use or possession and other title
objections, including any lien or future claim for materials or labor
supplied in improvement of the Premises ("Liens"), excepting only the
Permitted Exceptions:
(a) the matters referred to in the Seller
Schedule, including, without limitation, the Leases;
(b) all terms, covenants, conditions and
restrictions of record not objected to by Buyer during
the Review Period (as defined below);
(c) water lines, sanitary sewer, drainage, gas
distribution line and main, electrical and telephone
easements and rights-of-way of record not objected to
by Buyer during the Review Period;
(d) zoning ordinances, sanitary and building
codes and all statutes, ordinances, regulations, or
other administrative enactments of any municipal
authority having jurisdiction over the Premises not
objected to by Buyer during the Review Period;
(e) real property taxes not yet due and
payable and assessments for improvements not yet due
and payable as of the Closing Date, provided that if
the Premises are affected by any assessment that is or
may become payable in annual installments, of which one
or more is then payable or has been paid, then for the
purposes of this Agreement, any such assessment shall
be deemed a lien on the Premises and shall be paid and
discharged by Seller at or prior to Closing; and
(f) any state of facts that an accurate survey
of the Premises would disclose not objected to by Buyer
during the Review Period.
3. Included in the Seller Schedule is a description
of all leases and other possessory agreements pertaining to the Premises
(collectively, the "Leases"). Each of the Leases is valid, binding and in
full force and effect, all rent and other sums payable by or to Seller
thereunder are current within applicable notice and grace periods, no
notice of default or termination under any Lease has been given or
received by Seller that describes a default that has not been cured and,
to Seller's knowledge, except as identified on the Seller Schedule, no
event has occurred that would, with the giving of notice or the passage of
time or both, constitute a default under any of the Leases.
4. Included in the Seller Schedule is a description
of all environmental reports known to Seller that affect the Premises, and
Seller has delivered a complete copy of each such report to Buyer. Except
as set forth therein or otherwise in the Seller Schedule, Seller has no
knowledge of the presence or release of any toxic substance or hazardous
material or of any other environmental condition or contamination in or
from the Premises. In addition, the validity of Buyer's right to use all
easements benefitting the Premises and the contiguity of all pieces or
parcels of land, if there be more than one, shall be so insurable without
additional premium.
5. The Premises are in good repair, order and
condition in all material respects, subject to ordinary wear and tear. To
the best of Seller's knowledge without independent investigation, there is
no material latent or patent structural, mechanical or other significant
defect or deficiency in the improvements.
6. Seller has received no notices, oral or written,
and has no reason to believe, that any Government Entity having
jurisdiction over the Premises intends to exercise the power of eminent
domain or similar power with respect to all or any part of the Premises.
Seller has not received any notice of violation of law or ordinance with
respect to the Premises that will remain uncorrected at Closing.
J. Taxes.
1. There are no liens for Taxes upon the Premises,
except for liens for Taxes not yet due.
2.
2. The Premises constitute separate tax parcels that
are separately assessed for real estate tax purposes; to Seller's
knowledge there is no proceeding pending for the adjustment of the
assessed valuation of all or any portion of the Premises; to Seller's
knowledge the Premises have been assessed and real estate taxes have been
paid on the basis of the value of all improvements as completed; there is
no abatement in effect with respect to all or any portion of the real
estate taxes; the real estate tax bills previously delivered by Seller to
Buyer and initialled by Seller and Buyer for identification are true and
complete copies of all bills for taxes levied against or on account of the
Premises or any rent or income from the Premises since January 1, 1994;
and to the best of Seller's knowledge, there are no proposed reassessments
of any of the Premises by any taxing authority and there are no threatened
or pending special assessments or other actions or proceedings (other than
county-wide reassessments and/or the usual increases in mileage rates that
may be under consideration by the taxing authorities in the jurisdictions
where the Premises are located) that could reasonably be expected to give
rise to an increase in real property taxes or assessments against any of
the Premises.
3. "Taxes" shall mean any and all taxes, charges,
fees, levies or other assessments, including, without limitation, real or
personal property, transfer and recording taxes, fees and charges, imposed
by any taxing authority (whether domestic or foreign including, without
limitation, any state, county, local or foreign government or any
subdivision or taxing agency thereof (including a United States
possession)), whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest
whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes,
charges, fees, levies or other assessments.
K. Compliance with Laws and Recorded Declarations. Except
as disclosed on the Seller Schedule, no notice or communication of any
kind has been issued to Seller by any governmental authority, insurance
regulatory body or other person stating or alleging that the Premises or
any business or activity conducted thereon, is in violation of any
applicable law, rule or regulation, including without limitation, zoning,
building, health or fire codes or that the Premises were being used or
operated without first obtaining any applicable license, permit,
certificate, entitlement, grant of right or other item or document. To
the best of Seller's knowledge, Seller has complied with all laws and
requirements of insurance bodies applicable to the ownership, leasing, use
and operation of the Premises and secured all required consents and
approvals and obtained all licenses, permits, certificates and other
documents required by applicable law for the completion, ownership,
leasing, use and occupancy of the Premises. Seller has not taken any
action that would (or failed to take any action, the omission of which
would) result in the revocation or suspension of such licenses, permits,
certificates, entitlements, grants of right and other items and documents,
and Seller has not received any notice of any violation from any federal,
state or municipal entity or notice of an intention by any such governmen-
tal entity to revoke any certificate of occupancy or other certificate,
license, permit, entitlement or grant of right issued by it in connection
with the ownership, use and occupancy of any of the Premises that in each
case has not been cured or otherwise resolved to the satisfaction of such
governmental entity. Seller has not received or been informed in writing
of the receipt of any written notice which is still in effect that there
is, and, to the best of Seller's knowledge, there does not exist, any
violation of a condition or agreement contained in any easement,
restrictive covenant or any similar instrument or agreement affecting the
Premises, or any portion thereof. To the best of Seller's knowledge, (i)
any and all charges and other assessments under declarations and like
agreements to which any of the Premises are subject have been paid and no
special assessments thereunder against any of the Premises are pending,
and (ii) all consents and approvals required to be obtained under such
declarations and like agreements with respect to the Premises have been
obtained.
L. Absence of Undisclosed Liabilities and Contractual
Obligations. Except for (i) liabilities disclosed in the Seller Schedule,
(ii) liabilities arising in the ordinary course of business which, if
material (individually or in the aggregate), are disclosed in Seller
Schedule, (iii) liabilities at the date hereof which are specifically
disclosed or otherwise reflected in the Exhibits attached to this
Agreement and (iv) current liabilities incurred in the ordinary course of
business after the date hereof, Seller has no, and the Premises are not
subject to liabilities of any nature, whether matured or unmatured, fixed
or contingent, which could reasonably be expected to have, individually or
in the aggregate, a Seller Material Adverse Effect. None of the Premises
is cross-defaulted and/or cross-collateralized with any other properties
other than among the Premises.
M. Leases. The rent roll attached hereto as Exhibit "D"
(the "Rent Roll") lists each of the Leases in effect with respect to the
Premises as the same have been amended or modified; there are no leases,
licenses or other rights of occupancy affecting any of the Premises except
for the Leases. Seller has made available to Buyer complete copies of all
of the documents that constitute the Leases. The Leases are in full force
and effect and, except as set forth on the Rent Roll, (A) to the best of
Seller's knowledge, no uncured Event of Default (as defined in such
Leases), has occurred and is continuing under any such Lease, no tenant
has asserted a defense to, offset or claim against its rent or the
performance of its obligations under its Lease and no tenant has asserted
a default on the part of the landlord which would give it the right to
terminate its Lease or set off against rent, (B) other than as set forth
in a Lease, there are no rights of first refusal on, or options to
purchase, any of the Premises, or any right to a participation interest
(whether of profits, sale or refinancing proceeds, or calculated based on
fair market value) with respect to any such property, in favor of any
tenant, (C) there are no proposed modifications to any Lease that would
reduce (i) the space leased to any tenant, (ii) the amount of any tenant's
rent or (iii) the term of any lease, (D) other than as set forth in a
Lease, no free rent or other rent concession is due any tenant under the
Leases for periods after the Closing Date, (E) other than as set forth in
a Lease, no landlord under a Lease is required to provide tenant
improvements or refurbishments with respect thereto after the Closing Date
(other than any tenant improvements that the landlord may be required to
construct if an expansion option provided in a Lease is exercised), and
(F) other than as set forth in a Lease, no tenant under a Lease has the
option to terminate its lease prior to the stated expiration date; and,
except as set forth on the Seller Schedule, Seller has received no written
notice or, to the best of Seller's knowledge, any other notice, whether or
not in writing, that any tenant as of the date hereof intends to vacate
the Premises or attempt to abrogate its lease other than at the expiration
of the term thereof. Except for (i) security deposits, (ii) the first
full month's rent, whether or not the term of a Lease has commenced, or
(iii) rents paid by tenants on an estimated basis, including, but not
limited to, pass-throughs for additional or increased operating expenses
and real estate taxes, no prepayments of rent more than thirty (30) days
in advance have been made under the Leases. All decorating, repairs,
alterations or other work required to be performed by the landlord under
each of the Leases prior to the date hereof, or the cost of any such work
performed by the tenant and to be reimbursed by the landlord prior to the
date hereof, has been performed or reimbursed, as applicable. No rent or
security deposits under the Leases have been assigned or encumbered.
There are no agreements or understandings, written or oral, with any of
the tenants other than as set forth in the Leases or otherwise set forth
on the Rent Roll. All brokerage commissions and other compensation and
fees payable by reason of the Leases have been paid in full, except as set
forth in the Seller Schedule. Except as set forth on the Seller Schedule,
all tenants under Leases are in actual possession of their leased
premises. Seller has no obligation to pay rent or satisfy any other
obligation of any tenant under any Lease for space in any other building,
or to purchase any tenant's leasehold estate in any other building, or to
contribute to any tenant for unfinished tenant leasehold improvements
other than those listed on the Seller Schedule.
N. Condemnation or Governmental Proceedings. No eminent
domain, condemnation, incorporation, annexation or moratorium or similar
proceeding has been commenced or, to the best of Seller's knowledge,
threatened by an authority having the power of eminent domain to condemn
any part of the Premises. To the best of Seller's knowledge without
independent investigation, there are no pending or threatened governmental
rules, regulations, plans, studies or efforts, or court orders or
decisions, which do or could adversely affect the use or value of the
Premises for their present use.
O. Insurance. Exhibit "F" attached hereto lists the
insurance policies relating to the Premises or any part thereof carried by
Seller; all such policies are in full force and effect, and will be
continued or renewed with the existing coverages and policy limits until
the Closing Date, and all premiums thereunder have been paid to the extent
due, and will be paid until the Closing Date; and no notice of
cancellation has been received with respect thereto and, to the best
knowledge of Seller, no cancellation is threatened.
P. No Defaults. Seller is not in default of any
Significant Agreement (as herein defined) and, to the best of Seller's
knowledge, no event has occurred which with the giving of notice or
passage of time would become a default under any such Significant
Agreement.
Q. Significant Agreements. To the best of Seller's
knowledge, there are no Significant Agreements other than as set forth on
Exhibit "E" attached hereto and made a part hereof. For purposes hereof,
"Significant Agreement" means and includes any of the following to which
Seller is a party and by which all or any portion of the Premises may be
subject or bound, in each such case as amended and currently in effect,
inclusive of any waivers relating thereto:
1. all agreements, instruments and documents
(excluding the Leases and Service Contracts) with respect to the Premises
evidencing, securing, or pertaining to the contractual obligations of a
person that involve annual payments or receipts in excess of $10,000;
2. all leases where Seller is the lessee (including
capital leases), contracts, agreements or commitments (whether written or
oral) that are not terminable without penalty on not more than thirty (30)
days notice and that involve annual gross payments or receipts in excess
of $10,000;
3. all ground leases where Seller is a ground
lessee; and
4. all reciprocal easement agreements affecting the
Premises except as are set forth as Permitted Exceptions.
Each of the Significant Agreements is valid and
binding and in full force and effect, enforceable against the parties
thereto in accordance with its terms.
R. Service Contracts. All service agreements, if any,
with respect to the maintenance and operation of the Premises are set
forth on Exhibit "E" attached hereto and made a part hereof ("Service
Contracts"); all Service Contracts are terminable by Seller within not
more than thirty (30) days. Seller shall terminate any management
agreement with respect to the Premises effective on the Closing Date.
S. Right to Cancel. Except as set forth on the Seller
Schedule, to the best of Seller's knowledge, no condition exists which,
with the giving of notice or the passage of time, or both, would
constitute a default by Seller, thereby permitting any party to cancel its
obligations under any Significant Agreement benefitting the Premises.
T. Required Improvements. To the best of Seller's
knowledge, all alterations, improvements, or other work required to have
been completed by Seller under any reciprocal easement agreement or
development or similar agreement with any municipality or other
governmental authority which relates to, or otherwise affects the
Premises, and to which Seller is a party has heretofore been completed and
paid for in full.
U. Subdivided Parcel. The Premises are an independent
unit which do not now rely on any facilities or facilities of
municipalities or public utility and water companies located on any
property not included in the Premises to fulfill any municipal or
governmental requirement or for the furnishing to the Premises of any
essential building systems or utilities.
V. Environmental. To the best of Seller's knowledge and
except as may be set forth on the Seller Schedule:
1. The Premises and all operations conducted thereon
are now and always have been in compliance with all federal, state, and
local statutes, ordinances, regulations, rules, standards, and
requirements of common law concerning or relating to industrial hygiene
and the protection of health and the environment (collectively, "the
Environmental Laws"). There are no conditions on, about, beneath or
arising from the Premises which might give rise to liability, the
imposition of a statutory lien or require "Response," "Removal" or
"Remedial Action," as defined herein, under any of the Environmental Laws.
As used in this Agreement, the terms "Response," "Removal" and "Remedial
Action" shall be defined with reference to Sections 101(23) - 101 (25) of
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act
("SARA"), 42 U.S.C. ss 9601(23) - 9601(25).
2. "Hazardous Substances," as defined below, have
never been used, handled, generated, processed, treated, stored,
transported to or from, released, discharged, or disposed of on, about or
beneath the Premises. There are no transformers containing or
contaminated with PCB's or storage tanks above or below the Premises.
There is no asbestos or asbestos containing material on the Premises or in
any Building.
3. As used in this Section, the term "Hazardous
Substance" shall mean any substance regulated under any of the
Environmental Laws including, without limitation, any substance which is:
(A) gasoline, petroleum products, explosives, radioactive materials,
including by-products, source and/or other nuclear material or solid
waste, asbestos or asbestos-containing material or polychlorinated
biphenyls or related or similar material; (B) defined, designated or
listed as a "Hazardous Substance" pursuant to Sections 307 and 311 of the
Clean Water Act, 33 U.S.C. ss 1317, 1321, Section 101(14) of CERCLA, 42
U.S.C. s 9601 or Section 103 of the Pennsylvania Hazardous Sites Cleanup
Act, 35 Pa. C.S.A. s 6020.103; (C) listed in the United States Department
of Transportation Hazardous Material Table, 49 C.F.R. s 172.101; (D)
defined, designated or listed as a "Hazardous Waste" pursuant to Section
1004(5) of the Resource and Conservation and Recovery Act, 42 U.S.C.
6903(5) or Section 103 of the Pennsylvania Solid Waste Management Act, 35
Pa. C.S.A. s 6018.103; or (E) regulated under the Pennsylvania Clean
Streams Law, 35 Pa. C.S.A. s 691.1-691.1001, and in the regulations
adopted and publications promulgated pursuant thereto.
4. Seller has not received notice or actual or
constructive knowledge of: (A) any claim, demand, investigation,
enforcement, Response, Removal, Remedial Action or other governmental or
regulatory action instituted or threatened against Seller or the Premises
pursuant to any of the Environmental Laws; (B) any claim, demand, suit or
action made or threatened by any person against Seller or the Premises
relating to any form of damage, loss or injury resulting from, or claimed
to result from, any Hazardous Substance on, about, beneath or arising from
the Premises or any alleged violation of the Environmental Laws; and (C)
any communication to or from any governmental or regulatory agency arising
out of or in connection with Hazardous Substances on, about, beneath,
arising from or generated at the Premises, including without limitation,
any notice of violation, citation, complaint, order, directive, request
for information or response thereto, notice letter, demand letter or
compliance schedule. If discovered prior to Closing, Seller shall
immediately advise Buyer of any of the claims or communications listed in
clauses (A) through (C) above and also shall immediately advise Buyer of
the discovery of any Hazardous Substances on, about, beneath, or arising
from the Premises or the discovery of any condition on, about, beneath, or
arising from the Premises which might give rise to liability, the
imposition of a statutory lien or require Response, Removal or Remedial
Action under any of the Environmental Laws.
W. Zoning. To the best of Seller's knowledge, the current
zoning classification of the Premises under the Zoning Code of Cumru
Township is "Highway Commercial" and under the Zoning Code of Robeson
Township is "Light Industrial" and the construction, operation and use of
the buildings and other improvements constituting the Premises do not
violate any zoning, subdivision, building or similar law, ordinance,
order, regulation or recorded plat or any certificate of occupancy issued
for the Premises; no zoning variances, special exceptions or zoning board
of adjustment certificates were issued for the construction of the
Premises or for its present use; and the buildings and improvements on the
Premises are not non-conforming uses or structures.
X. Flood Plain. To the best of Seller's knowledge without
independent investigation, no portion of the Premises is located within an
area designated as a flood hazard area or an area which will require the
purchase of flood insurance for the obtaining of any federally insured or
federally related loan; except as set forth on the Seller Schedule, no
portion of the Premises is located in any area constituting a "wetland."
Buyer represents and warrants to Seller as follows, except as set
forth on a Disclosure Schedule delivered by Buyer concurrently with the
execution and delivery of this Agreement (the "Buyer Schedule"):
K. Organization. Buyer is a real estate investment trust
duly formed and existing under and by virtue of the laws of the State of
Maryland and is in good standing with the State Department of Assessments
and Taxation of Maryland and has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Buyer
Material Adverse Effect. As used in this Agreement, "Buyer Material
Adverse Effect" shall mean any fact, condition, event, development or
occurrence which, individually or when taken together with all other such
facts, conditions, events, developments or occurrences, has had or could
reasonably be expected to have a material adverse effect on the ability of
Buyer to consummate the transactions contemplated hereby. But in no case
shall include the effects of facts, conditions, events, developments or
occurrences that are generally applicable in (1) the commercial real
estate industry, (ii) the United States economy or credit markets, or
(iii) the United States securities markets. Buyer is duly qualified or
licensed to do business and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except
where the failure to be so duly qualified or licensed and in good standing
would not in the aggregate have a Buyer Material Adverse Effect. Buyer
has heretofore made available to Seller a complete and correct copy of the
Declaration of Trust and by-laws or comparable organizational documents,
each as amended to date, of Buyer. Such Declaration of Trust, by-laws and
comparable organizational documents are in full force and effect. Buyer
is not in violation of any provision of its Declaration of Trust,
partnership agreement, charter, by-laws or comparable organizational
documents, except for such violations that would not, individually or in
the aggregate, have a Buyer Material Adverse Effect.
L. Consents and Approvals. The execution, delivery or
performance of this Agreement by Buyer; the consummation by Buyer of the
transactions contemplated hereby; and the compliance by Buyer with any of
the provisions hereof will not (i) conflict with or result in any breach
of any provision of the Declaration of Trust or Bylaws of Buyer, (ii)
require any filing by Buyer or its Subsidiaries with, or permit,
authorization, consent or approval of, any Governmental Entity to be
obtained by Buyer (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not
have a Buyer Material Adverse Effect), or (iii) violate any order, writ,
injunction, decree, statute, ordinance, rule or regulation applicable to
Buyer except, in the case of clause (iii), for violations, breaches or
defaults which would not have a Buyer Material Adverse Effect.
M. Litigation. There is no suit, claim, action,
proceeding or investigation pending (in which service of process has been
received by an employee of Buyer) or, to the knowledge of Buyer,
threatened against Buyer before any Governmental Entity which, if
adversely determined, individually or in the aggregate would have a Buyer
Material Adverse Effect. Buyer is not subject to any outstanding order,
writ, injunction or decree which, insofar as can be reasonably foreseen,
individually or in the aggregate, in the future would have a Buyer
Material Adverse Effect.
N. Absence of Certain Changes or Events; Material
Agreements. Since December 31, 1996, Buyer has conducted its business
only in the ordinary and usual course consistent with past practice, and
there has not been any change or development, or combination of changes or
developments, which have a Buyer Material Adverse Effect. The
transactions contemplated by this Agreement will not constitute a change
of control under or require the consent from or the giving of notice to a
third party pursuant to the terms, conditions or provisions of any
Contract to which Buyer is a party or by which it is bound.
O. No Violation of Law. To its knowledge, Buyer is not in
violation of, or, under investigation with respect to, or been given
notice or been charged by any Governmental Entity with any violation of,
any law, statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental law,
ordinance or regulation) of any Governmental Entity, except for violations
which, in the aggregate, do not have a Buyer Material Adverse Effect.
P. Brokers or Finders. Buyer does not have any liability
to any agent, broker, investment banker, financial advisor or other firm
or person for any broker's or finder's fee or any other commission or
similar fee in connection with this Agreement or any of the transactions
contemplated hereby.
VI. POSSESSION. Possession of the Premises is to be given to
Buyer, subject to the right of tenants under the Leases on the Closing
Date, by delivery of the Deed, and all keys, combinations and security
codes at Closing.
VII. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.
A. Title Binder. Buyer has secured a current title
commitment (the "Title Binder") from the Title Company, and shall have
until the Inspection Period Expiration Date (as hereinafter defined in
Section VII.(C) to examine the condition of title, including the terms and
provisions of all items and documents referred to in the Title Binder, and
all information regarding title as disclosed on the Survey (hereinafter
defined), and to approve or disapprove the same. If Buyer shall
disapprove the condition of title, such disapproval shall be set forth in
a notice given to Seller (the "Disapproval Notice") identifying the
condition of title to the Property or any of the terms, provisions or
contents of said items, documents or Survey which are disapproved by Buyer
(the "Title Objections"). Subject to the provisions of the succeeding
portion of this Section VII.A., Seller shall have until the date which is
ten (10) days after the date of the Disapproval Notice (the "Title Cure
Expiration Date") in which to cure or eliminate all items which Buyer
disapproves in the Disapproval Notice, and to furnish evidence
satisfactory to Buyer and the Title Company that all such items have been
cured or eliminated or that arrangements have been made with the Title
Company and any parties in interest to cure or eliminate the same at or
prior to the Closing. If Seller fails to remove any Title Objection in
accordance with the provisions of the immediately preceding sentence,
Buyer, nevertheless, may elect (at or prior to the Closing) to consummate
the transaction provided for in this Agreement subject to any such Title
Objection(s) as may exist as of the Closing with a credit against the
Purchase Price equal to the sum necessary to remove such Title
Objection(s), and Seller shall remain liable (which liability shall
survive the Closing) for the cost of removing any such Title Objection in
excess of the credit granted against the cash portion of the Purchase
Price, and Seller shall reimburse Buyer for any and all costs, claims,
damages, obligations, liabilities and expenses (including, without
limitation, reasonable legal fees and expenses) incurred by Buyer with
respect to the Title Objection(s). If Buyer shall not so elect, Buyer may
terminate this Agreement by notice in writing to Seller, whereupon the
Deposit shall be immediately refunded to Buyer, and this Agreement shall
be null and void, and the parties hereto shall be relieved of all further
obligations and liability under this Agreement.
B. Survey. Within five (5) business days after the date
of this Agreement, Buyer shall order a current survey of Property (the
"Survey"), prepared by a duly licensed land surveyor acceptable to Buyer.
The Survey shall be currently dated, shall show the location on the
Property of all buildings and improvements, building and set-back lines,
easements, rights-of-way, encroachments, elevations between public roads
providing access to the Property, and the boundary of the Property, and
other such matters affecting the Property whether physically apparent from
the ground, of record in public offices, or otherwise, and shall contain a
legal description of the boundaries of the Premises by metes and bounds
which shall include a reference to the recorded plat, if any. The
surveyor shall certify to Buyer and to the Title Company and to any lender
making a loan to Buyer secured by the Property that the Survey is correct
and was made on the ground; and that there are no visible discrepancies,
conflicts, encroachments, overlapping of improvements, violations of set-
back lines, easements, rights-of-way or other such matters affecting the
Property except as are shown on the Survey, and that the Survey conforms
to all ACTA/ACSM and Pennsylvania Land Title Association standards and
requirements for a Class A Survey. Any and all recorded matters shown on
said Survey shall be legibly identified by appropriate volume and page
recording references with dates of recording noted. Buyer shall have
until the Inspection Period Expiration Date to approve or disapprove the
material contained thereon. If Buyer shall disapprove such Survey, such
disapproval shall be set forth in a Disapproval Notice as hereinabove
provided in Section VII.A., and the provisions of Section VII.A. with
respect to Disapproval Notices shall apply.
C. Physical Inspection. For a period (the "Inspection
Period") commencing on the second (2nd) business day next following the
date upon which Buyer shall receive from Seller a fully-executed
counterpart of this Agreement, and expiring twenty (20) days thereafter
(such date is herein referred to as the "Inspection Period Expiration
Date"), Buyer shall have the right to have performed a physical and
mechanical inspection, measurement and audit of the Property, and Seller
shall cooperate with Buyer and shall furnish to Buyer such information,
materials and documents as Buyer may reasonably request. The inspection,
audit and measurement of the Property's operation, condition and
maintenance shall include, without limitation, such environmental and
engineering inspections, reviews and assessments that Buyer deems
appropriate. In the event Seller shall fail to deliver or make available
any item or information material to Buyer's review of the Property and
required to be delivered or made available pursuant to the terms of this
Section within five (5) business days next following the date upon which
Buyer shall receive from Seller a fully-executed counterpart of this
Agreement, then at Buyer's election, the Inspection Period Expiration Date
(and the Closing Date) shall be extended by one day for each day that the
delivery or availability of such item is delayed. If Buyer, at Buyer's
sole and absolute discretion, shall find such inspection(s) to be
unsatisfactory for any reason whatsoever, Buyer shall have the right, at
its option, to terminate this Agreement on or before the Inspection Period
Expiration Date, and upon such termination, the Deposit shall be
immediately refunded to the Buyer, and thereupon the parties hereto shall
have no further liabilities one to the other with respect to the subject
matter of this Agreement. Buyer agrees that it shall not unreasonably
interfere with tenants in performing its inspection. Buyer further agrees
that (i) all such activity shall be done in a good and workmanlike manner
and the Property shall at all times be kept in a safe condition, (ii)
immediately after each such survey, assessment or evaluation, Buyer shall
restore to their prior condition those portions of the Premises disturbed
or damaged by Buyer's activity, (iii) Buyer shall defend, indemnify and
save Seller harmless from and against all claims, actions, suits, damages,
losses, costs and expenses (including, without limitation, attorneys'
fees) instituted against or incurred by Seller as a result of or relating
to any activity on the Premises by Buyer, its agents, employees,
designees, representatives and independent contractors, and (iv) if
requested by Seller, Buyer shall provide Seller with a certificate of
comprehensive general liability insurance, in form, in an amount and
issued by a carrier reasonably acceptable to Seller, insuring Seller from
all risks and loss associated with Buyer's exercise of its rights
hereunder. During the Inspection Period, Buyer and its agents, employees,
designees, representatives and independent contractors also shall have the
right, at Buyer's expense, to perform such other due diligence
investigations regarding the Property as Buyer deems necessary, including,
without limitation, title, zoning, municipal code compliance and other
investigations. Buyer may also conduct discussions with the appropriate
local, state and federal agencies, authorities and governmental bodies
regarding the Property. In connection with such inspection, and without
limiting the generality of Seller's obligations hereunder, Seller agrees
to deliver to Buyer, within five (5) days:
1. Contracts, Licenses, Permits. Copies of the
Contract Documents, the Licenses, all building permits, certificates of
occupancy, insurance policies applicable to the Property and any other
documents evidencing rights described in Section I.(B) hereof;
2. Utility Costs. A break-down of utility costs for
the period the Property has been owned by Seller;
3. Inventory. Invoices, bills of sale, and other
evidence supporting the Schedule of Inventory;
4. Three Years' Maintenance Expenses. Information
concerning maintenance costs of the Property for the past three years, or
lesser period, if owned less than three years by the Seller;
5. Three Years' Tax Bills. A copy of tax bills (i)
for the current year, and (ii) if available, for the preceding two years;
6. Three Years' Operating Statements. Statements of
operation of the Property for the past three years, or lesser period, if
owned less than three years by Seller, and like statements for the balance
of such three year period during which operations were by a prior owner,
if available, and if not available, any statements as were received from
such prior owner, and such other and further information as Buyer shall
reasonably require in order to obtain a certified audit of the operation
of the Property prepared in accordance with generally accepted accounting
principles consistently applied, by an independent certified public
accounting firm selected by Buyer;
7. Schedule of Violations. A schedule setting forth
all violations of any law, ordinance, regulation, rule or requirement of
any governmental body having jurisdiction, whether existing or
prospective, of which Seller has received written notice, issued or noted
by any governmental body during the past three years, and copies of any
notices, terminations or correspondence relating thereto;
8. Schedule of Notices. A schedule of any written
demands, requests, requirements or recommendations regarding the
operation, maintenance, repair or replacement of the Property or any
portion thereof, of which Seller has received notice during the past three
years, from the holder of any mortgage or deed of trust or any insurance
company or any board of fire underwriters or real estate associations or
like body, and copies of all correspondence relating thereto;
9. Schedule of Replacements and Repairs. All
documentation in Seller's possession regarding replacements and repairs to
the Property;
10. Zoning, Site Plan, Subdivision Plan or Plat. All
conditional and permanent zoning, site plan, subdivision, building,
housing, safety, fire and health approvals, including, without limitation,
the local governmental applications, resolutions and approvals supporting
the same;
11. Takings or Changes. Copies of all written
notices to Seller of proposed or threatened takings or changes with
respect to the Property or major access roads within a reasonable radius
which would affect the access to the Property, or any portion thereof, by
prospective occupants;
12. Tax Assessments, Appeals and Increases. Copies
of all written notices to Seller of all filed, proposed or threatened tax
assessment appeals or tax assessment increases related to the Premises;
13. Litigation. Copies of all pending and written
notices to Seller of threatened litigation, including litigation involving
tenants, affecting the Property or this transaction;
14. Insurance Policies. Copies of all insurance
policies of Seller related to the Property; and
15. Schedule of Employees. A schedule of all current
employees of the Property, setting forth the name, residence, salary,
hourly wages, benefit package, bonuses, vacation and sick pay and other
prerequisites of their employment.
D. Seller's Failure to Deliver. If Seller shall have
failed to deliver to Buyer all documents required to be delivered under
Section VII.C. hereof, Buyer may, at its option, at any time on or after
such date, but prior to the curing of such failure by Seller, give Seller
a five (5) day written notice specifying such default, and if Seller fails
to cure such default within such five (5) day period, Buyer may terminate
this Agreement, receive the return of the Deposit and pursue any other
remedy available to it pursuant to the provisions hereof.
E. Notification of Certain Matters. Seller shall give
prompt notice to Buyer, and Buyer shall give prompt notice to Seller of
(a) the occurrence, or nonoccurrence, of any event the occurrence, or non-
occurrence, of which would be likely to cause (i) any representation or
warranty contained in this Agreement to be untrue or inaccurate or (ii)
any covenant, condition or agreement contained in this Agreement not to be
complied with or satisfied and (b) any failure of Seller or Buyer, as the
case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section VII.E.
shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
F. Board of Trustees Approval.
1. Buyer's obligations hereunder are contingent upon
Buyer obtaining the requisite authorization and approval of the Board of
Trustees of Buyer with respect to Buyer's execution, delivery and
performance of this Agreement on or before the Inspection Period
Expiration Date. Upon Buyer's obtaining said authorization and approval,
no other proceedings on the part of Buyer will be necessary to authorize
this Agreement or permit Buyer to consummate the transactions so
contemplated herein, and this Agreement will then constitute a valid and
binding obligation of Buyer, enforceable in accordance with its terms.
2. In the event Buyer is unable to obtain said
authorization and approval of the Board of Trustees of Buyer, within the
above referenced period, Buyer shall have the right, at its option, to
terminate this Agreement on or before the Inspection Period Expiration
Date, and upon such termination, the Deposit shall be immediately refunded
to Buyer, and thereupon the parties hereto shall have no further
liabilities to each other with respect to the subject matter of this
Agreement.
VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer and Seller set forth herein shall
survive Closing and delivery of the deed for one (1) year.
IX. FIRE OR OTHER CASUALTY.
A. Maintain Insurance. Seller shall maintain in effect
until the Closing Date the insurance policies (or like policies) now in
effect with respect to the Premises and Personal Property as set forth in
Exhibit "F".
B. Minimal Damage. If prior to the Closing Date any
portion of the Property is damaged or destroyed by fire or other casualty,
and the cost of repair or restoration thereof shall be $50,000 or less (as
established by good faith estimates obtained by Buyer), this Agreement
shall remain in force.
C. Substantial Damage. If prior to the Closing Date any
portion of the Property is damaged or destroyed by fire or other casualty
(a "Property Casualty") and if (i) the cost to repair the same as
reasonably estimated by Seller and Buyer is less than $250,000, this
Agreement shall not terminate as a result of the Property Casualty, Seller
shall have no obligation to repair or restore the Property Casualty and
Buyer shall receive at Closing a credit against the Purchase Price in the
amount reasonably estimated by Seller and Buyer as the cost to fully
repair and restore the Property Casualty.
If a Property Casualty occurs prior to Closing and the cost
to repair the same as reasonably estimated by Seller and Buyer is more
than $250,000, or such damage results in the termination of the Lease with
Penske Truck Leasing Co., LP, UGI Utilities, Inc., Gilbert/Commonwealth,
Inc. or Parsons Power, Buyer may terminate this Agreement by giving notice
to Seller within thirty (30) days after Buyer receives notice of the
casualty, unless, prior to such date, Seller and Buyer shall have agreed
(it being understood that neither the Seller nor Buyer shall have any
obligation to so agree) to postpone the Closing Date for a period of time
sufficient to permit Seller to fully repair and restore the Property
Casualty prior to Closing. If there is any partial or total damage or
destruction of any portion of the Property, as above set forth, and if
Buyer elects not to terminate this Agreement, then all insurance proceeds
paid or payable to Seller shall belong to Buyer and shall be paid over and
assigned to Buyer at Closing, and Seller shall further execute all
assignments and any other documents or other instruments as Buyer may
reasonably request or as may be necessary to transfer all interest in all
such proceeds to Buyer or to whomever Buyer shall direct.
In the event that the Seller and Buyer are unable to agree on
the amount required to repair or restore the Property Casualty, either
Seller or Buyer may request that the amount to fully repair and restore
the Property Casualty be conclusively determined by an insurance adjuster
selected by Seller and Buyer jointly.
D. Closing After Substantial Damage. So long as this
Agreement shall remain in force under Sections IX.B. or IX.C., then either
(a) (i) all proceeds of insurance collected prior to Closing, plus the
amount of deductible under Seller's insurance policy, shall be adjusted
subject to Buyer's approval and participation in any adjustment, and shall
be credited to Buyer against the Purchase Price payable by Buyer at
Closing, and (ii) all unpaid claims and rights in connection with losses
shall be assigned to Buyer at Closing, or, (b) at Buyer's option, Seller
shall (i) restore the Property by Closing to its condition immediately
preceding the casualty, (ii) remain liable for any damages resulting from
the failure to complete the repair by Closing, and (iii) include Buyer,
and obtain Buyer's approval to, any adjustments made by Seller.
E. Rent Insurance. All rental loss insurance and the
proceeds thereof allocable to any period subsequent to Closing shall be
paid or assigned to Buyer at Closing.
X. CONDEMNATION. If, prior to the Closing Date, all or any
portion of the Premises is taken by eminent domain or a notice of any
eminent domain proceedings with respect to the Premises or any part
thereof is received by Seller, then Seller shall within five (5) days
thereafter give notice thereof to Buyer and Buyer shall have the option to
(a) complete the purchase hereunder or (b) if such taking, in Buyer's sole
and absolute discretion, adversely affects the Premises or its current
economic viability, terminate this Agreement, in which event the Deposit
shall be immediately refunded to Buyer, and this Agreement shall be null
and void. Buyer shall deliver written notice of its election to Seller
within ten (10) days after the date upon which the Buyer receives written
notice of such eminent domain proceedings. If notice of condemnation is
received by Buyer and it fails to deliver said written notice of its
election within said time period, such failure shall constitute a waiver
by Buyer of its right to terminate this Agreement. If this Agreement is
not so terminated, Buyer shall be entitled to all awards or damages by
reason of any exercise of the power of eminent domain or condemnation with
respect to or for the taking of the Premises or any portion thereof, and
until such time as closing has occurred, or this Agreement terminates.
Any negotiation for, or agreement to, and all contests of any offers and
awards relating to eminent domain proceedings shall be conducted with the
joint approval and consent of Seller and Buyer.
XI. EXPENSE ALLOCATIONS.
A. Seller shall pay for one-half of all applicable realty
transfer taxes related to the execution, delivery and recording of the
Deed, Bill of Sale, and other Closing Documents, and all related recording
charges.
B. Buyer shall pay for one-half of all applicable realty
transfer taxes, for Buyer's title examination, and for Buyer's title
examination and premiums.
C. Buyer and Seller shall be responsible for paying their
own attorney's fees in connection with this transaction.
XII. CLOSING.
A. Time and Date and Place. The Closing on the sale of
the Property (herein referred to as the "Closing") shall take place at a
time specified by Buyer in writing to Seller at least five (5) days prior
to the specified Closing Date, but in any event no later than the last to
occur of (i) ten (10) days next following the Inspection Period Expiration
Date, or (ii) July 30, 1997, at the offices of Drinker Biddle & Reath LLP,
1000 Westlakes Drive, Suite 300, Berwyn, PA 19312 commencing at 10:00 a.m.
B. Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
1. Seller's Documents and Other Items. Seller shall
execute and deliver or cause to be executed and delivered to Buyer in
proper form for recording:
(a) Deed. A special warranty deed prepared by
Buyer's counsel in form acceptable to Seller (the
"Deed"), conveying the Premises to Buyer, duly executed
by Seller for recording. The Deed description shall be
based upon the metes and bounds description attached as
Exhibit "A", unless Buyer requests that Seller convey
the Premises by the metes and bounds description shown
on the new survey, if any, obtained by Buyer, in which
event the Premises shall be so conveyed.
(b) Bill of Sale. A bill of sale prepared by
Buyer's counsel in form acceptable to Seller,
assigning, conveying and transferring to Buyer, all of
the Personal Property.
(c) Original Leases. All original Leases,
tenant files, tenant correspondence and repair records.
(d) Original Licenses, Contract Documents and
Other Personal Property. All original Licenses,
Contract Documents, and other Personal Property
described in Section I.B. of this Agreement.
(e) Assignment of Leases. An assignment and
assumption agreement with reciprocal indemnities,
prepared by Buyer's counsel in form acceptable to
Seller (the "Assignment"), duly executed by Seller and
Buyer, assigning, conveying and transferring to Buyer
the Leases.
(f) Assignment of Licenses, Contract
Documents and Other Personal Property. An assignment
agreement prepared by Buyer's counsel, in form
acceptable to Seller, assigning, conveying and
transferring to Buyer the Licenses, Contracts Documents
and Other Personal Property, including, specifically,
the Names.
(g) FIRPTA Certificates. All certificate(s)
required under Section 1445 of the Code.
(h) Tenant Letter. Letters to each tenant
advising of the change in ownership and directing the
payment of rent to such party as the Buyer shall
designate, said letter to be in form acceptable to
Buyer.
(i) Estoppel Certificate from Cumru and
Robeson Townships. A Certification Statement or its
equivalent issued by the zoning officer, building
inspector or other official of the municipality in
which the Property is located stating that the present
use of the Property as an office building complex is
lawful, that there are no violations of record, and
that all conditions and required work have been
performed in order that the Property be a legally
subdivided parcel. Such Statement shall be dated not
earlier than the date hereof. If such Certification
Statement is not available, Seller shall have the
right, but not the obligation, to substitute its own
Certificate and Indemnity in place thereof.
(j) Title Insurance Certificates. Such
affidavits of title or other certifications as shall be
required by the Title Company to insure Buyer's title
to the Premises as set forth in Section III, and to
provide affirmative endorsements (a) against mechanic's
liens, (b) insuring against any violation of existing
covenants, conditions or restrictions, and insuring
that future violation will not result in forfeiture of
title, (c) insuring that all foundations in place as of
the date of such policy are within the lot lines and
applicable set back lines, (d) insuring that the
buildings and structures on the Premises do not
encroach onto adjoining land or onto any easements, (e)
insuring that confirming that there are no
encroachments of improvements from adjoining land onto
the Premises (f) removing any exceptions for matters
which an accurate survey would disclose , and (g)
providing affirmative insurance with respect to such
other matters as Buyer or its lender shall specify.
(k) Updated Rent Roll. An updated schedule of
Leases, containing all information required to be set
forth in Exhibit "D", which schedule is correct and
complete as of the date of closing.
(l) Seller Certificate. A written
certification confirming that as of Closing no
representation or warranty of Seller contained in this
Agreement, nor any document or certificate delivered to
Buyer pursuant to this Agreement or in connection with
the transaction contemplated hereby, contains any
untrue statement of a material fact or knowingly omits
to state a material fact necessary to make any
representation or warranty contained herein misleading.
(m) Organization Certifications. Confirmation
of the good standing and existence of Seller and the
due authority of those executing for them, including,
without limitation, the following documents issued no
earlier than 30 days prior to Closing: (a) good
standing certificate in state of organization and in
the State in which the Premises are located, (b)
articles of incorporation, partnership agreement or
other formation instrument certified by the secretary
of state of the state of incorporation, (c) a
certificate from the secretary of the corporation or
managing general partner of the partnership confirming
the incumbency of the signatories and the current force
and effect of the resolution authorizing their
execution of the documents required under this
Agreement.
(n) Keys. All keys, combinations and security
codes for all locks and security devices on the
Property;
(o) Tax Bills. Current tax bills and, if
available, tax bills for each of the years of Seller's
ownership of the Property;
(p) Tax Reduction Rights. An instrument
assigning to Buyer any claims for the reduction of real
or personal property taxes assessed against any portion
of the Property for the fiscal year in which the
Closing takes place; any refund for such year shall be
prorated when received;
(q) Tenant's Estoppels.
(1) Seller shall use its best efforts to
obtain, and shall deliver to Buyer promptly as
the same are received but in any event no later
than the Closing Date, estoppel certificates
("Tenant Estoppel Certificates") dated no earlier
than thirty (30) days prior to the Closing Date
from all tenants (except as otherwise provided
for herein below in subparagraph (2)) under
Leases (in substantially the form of Exhibit "H"
attached hereto and made a part hereof). In lieu
of delivering such required Tenant Estoppel
Certificates, if Seller shall have attempted in
good faith but shall have been unable to secure
the same, then Seller shall be permitted (but not
obligated) to substitute its own Certificate and
Indemnity, substantially in the form of Exhibit
"H" for each tenant from whom Seller failed to
receive a Tenant Estoppel Certificate.
(2) Notwithstanding anything to the
contrary contained herein, Seller shall obtain
Tenant Estoppel Certificates for the following
tenants: Penske Truck Leasing Co., L.P., UGI
Utilities, Inc. and Parsons Power (the "Required
Tenants"), and in no event shall Seller be
permitted to substitute its own Certificate and
Indemnity for any or all of the Required Tenants.
2. Buyer's Documents. Buyer shall deliver or cause
to be delivered to Seller:
(a) The amounts required to be paid to Seller
pursuant to this Agreement;
(b) Confirmation of the existence and
subsistence of Buyer, and the authority of those
executing for Buyer, including, without limitation, the
following documents issued no earlier than thirty (30)
days prior to Closing: (a) good standing certificate in
State of Maryland, (b) Buyer's Amendment and
Restatement of Declaration of Trust filed on August 27,
1996, as amended, (c) a certificate from any officer of
Buyer confirming the incumbency of the signatories and
the current force and effect of the resolution
authorizing their execution of the documents required
under this Agreement.
3. Title Insurance. As a condition to Buyer's
obligations at Closing, Title Company shall furnish Buyer at Closing with
the Title Policy, in the form approved by Buyer pursuant to Section III,
in the full amount of the Purchase Price, wherein the Title Company shall
insure fee simple title to the Property in Buyer or its designee as of the
Closing Date containing no exceptions to title other than those which have
been approved by Buyer in writing pursuant to Section III hereof and
providing the title endorsements specified in Section XII.B.(1)(j) above.
4. Necessary Documents. Buyer and Seller shall
execute and deliver such other documents and instruments as may be
reasonably necessary to complete the transaction contemplated by this
Agreement.
XIII. DEFAULT; REMEDIES
A. In the event that any of Seller's representations,
warranties or covenants contained in this Agreement are untrue or if
Seller shall have failed to have performed any of the covenants and/or
agreements contained in this Agreement which are to be performed by
Seller, on or before the date set forth in this Agreement for the
performance thereof, or if any of the conditions precedent to Buyer's
obligation to consummate the transaction contemplated by this Agreement
shall have failed to occur, Buyer may, at its option, rescind this
Agreement by giving written notice of such rescission to Seller and Seller
shall immediately thereafter return the Deposit, and thereupon, subject to
the provisions of Section XIII.C. below, the parties shall have no further
liability to each other hereunder. In the alternative, but without
limiting Buyer's right upon any default by Seller hereunder to receive the
prompt return of the Deposit, Buyer may seek to enforce specific
performance of this Agreement.
B. Buyer recognizes that the Property will be removed by
Seller from the market during the existence of this Agreement and that if
this purchase and sale is not consummated because of Buyer's default
Seller shall be entitled to compensation for such detriment. Seller and
Buyer acknowledge that it is extremely difficult and impracticable to
ascertain the extent of the detriment, and to avoid this problem, Seller
and Buyer agree that if the purchase and sale contemplated in this
Agreement is not consummated because of Buyer's default under this
Agreement, Seller shall be entitled to retain the Deposit as liquidated
damages. The parties agree that the sum stated above as liquidated
damages shall be in lieu of any other relief to which Seller might
otherwise be entitled, Seller hereby specifically waiving any and all
rights which it may have to damages or specific performance as a result of
Buyer's default under this Agreement.
C. Buyer's Out-of-Pocket Costs. In the event of Seller's
breach or default hereunder which results in Buyer's termination of this
Agreement, or in the event that Seller shall fail to perform any term,
covenant or agreement, or satisfy any condition herein stipulated
(including, without limitation, a failure of title), then, in any such
event, upon termination by Buyer hereunder, in addition to receiving the
immediate return of the Deposit, anything in the Agreement contained to
the contrary notwithstanding, Buyer shall also receive from Seller, upon
demand, Buyer's actual, documented out-of-pocket costs and expenses
associated with this Agreement and Buyer's anticipated acquisition of the
Property including, without limitation, Buyer's reasonable counsel fees
and costs, title expenses, survey costs, and other costs and expenses
associated with Buyer's due diligence, including, without limitation,
legal, financial and accounting due diligence, Buyer's structural
inspection of the Property and Buyer's environmental assessment of the
Property (collectively, "Transaction Costs"). The foregoing list is not
intended to be exclusive, but represe ntative of the costs and expenses
that the parties anticipate that Buyer will incur in anticipation of this
transaction. Seller's maximum reimbursement liability under this Section
XIII.C. shall not exceed $50,000.00.
XIV. CONDITIONS PRECEDENT TO CLOSING.
The obligations of Buyer hereunder are subject to the
fulfillment of the following conditions prior to or on the Closing Date
(any one of which may be waived in whole or in part by Buyer at or prior
to the Closing) and in the event any of the conditions are not complied
with, Buyer may terminate this Agreement by notifying the Seller and
Escrow Agent and thereupon shall be returned the Deposit and thereafter
this Agreement shall be null and void:
A. Correctness of Warranties and Representations. All of
the representations and warranties of Seller contained in this Agreement
shall have been true and correct when made, and shall be true and correct
on the Closing date with the same effect as if made on and as of the
Closing Date. In the event any representation or warranty is not true and
correct on the Closing Date, Seller shall deliver to Buyer at Closing a
certification explaining in what respects the representation or warranty
is no longer true and correct. In the event Buyer determines, in its sole
and absolute discretion, that the representation or warranty which is no
longer true and correct is a Company Material Adverse Effect, Buyer shall
have the right to (i) terminate this Agreement, or (ii) require as a
condition of closing a specific indemnity from Seller with respect to the
fact disclosed as not being true and correct on the Closing Date.
B. Compliance with Terms and Conditions. Seller shall
have performed and complied with all of the terms and conditions required
by this Agreement to be performed and complied with by it prior to or on
the Closing Date.
C. Buyer's Satisfaction with Inspection. Buyer shall have
notified Seller of Buyer's satisfaction with the title review performed
under Section VII of this Agreement, or shall fail to notify Seller on or
before the Title Review Expiration Date, of Buyer's dissatisfaction with
the results of such review.
D. Trustee Approval. This Agreement and the transactions
contemplated hereby shall have received formal approval of Buyer's Board
of Trustees at a meeting duly called to consider same.
E. Estoppels. Seller shall have delivered to Buyer the
required Estoppels.
F. Lease With Seller. Buyer and Seller shall enter into a
lease substantially in the form attached hereto as Exhibit "J" and made a
part hereof.
XV. PRORATIONS.
A. Operating Expenses. The following items shall be
prorated at Closing, as of close of business of the day immediately
preceding Closing "Adjustment Date":
1. Taxes. Real estate taxes applicable to the
Property for the tax year in which Closing occurs, based on the respective
tax years for which such taxes are assessed and on the most recent
assessment of the Property and the then applicable tax rates. All real
estate taxes, charges and assessments shall be pro rated on a per diem
basis as of midnight of the day preceding the Closing Date, disregarding
any discount or penalty and on the basis of the fiscal year of the
authority levying the same. If any of the same have not been finally
assessed as of the Closing Date for the current fiscal year of the taxing
authority, then the same shall be adjusted at Closing based upon the most
recently issued bills therefor, and shall be re-adjusted immediately when
and if final bills are issued. If any portion of the Property is a net
leased property wherein the tenant(s) have paid or will pay all such
taxes, charges and assessments directly to the person or entity entitled
to receive the same (and not to Seller as landlord under the applicable
Leases), no apportionment shall be made.
2. Sewer Rents. All sewer rents not based on meter
readings. Seller shall cause all utility meters to be read and the
municipalities or utility companies servicing the Property to issue final
bills to Seller as of the date of Closing, and all such bills shall be
paid by Seller.
3. Permit Fees. Fees payable with respect to
assignable permits and governmental approvals;
4. Operating Costs. All items of operating cost or
expense incurred by Seller, including but not limited to utilities and
fuel oil, and reasonably allocable or attributable to periods after
Closing;
5. Rents. All rents collected, both Basic Rents (as
hereinafter defined) and Additional Rents (as hereinafter defined) shall
be deemed to be applied first to the calendar month in which Closing
occurs and thereafter to current rental periods and secondly to satisfy
rental obligations arising from past rental periods prior to the date of
Closing. As used herein, the term "Basic Rents" shall mean all rents and
charges payable by any and all tenants, including, without limitation,
occupancy rents, but excluding Additional Rents. As used herein, the term
"Additional Rents" shall mean any amounts payable by tenants pursuant to
any provisions of such leases relating to escalation and pass-through of
operating and other similar expenses and any provisions therein in respect
of tenant escrows and reimbursements.
Basic Rents shall be apportioned as follows:
(a) Buyer shall receive a credit at Closing
for all Basic Rents actually collected prior to Closing
relating to any period after Closing; and
(b) With respect to Basic Rents uncollected as
of Closing and owed by occupants of the Property at
Closing for any period prior to the calendar month in
which Closing occurs, Seller shall be reimbursed by
Buyer following Buyer's collection of such Basic Rents,
to the extent they are available in accordance with the
provisions hereof, as follows: Buyer shall use its best
efforts to collect such rents, and all amounts
collected by Buyer, net of related costs of collection,
shall be paid to Seller within ten (10) days following
the month of collection until the entire amount of such
uncollected rents shall have been paid. If Buyer is
unable to collect any portion of such Basic Rents
within one hundred eighty (180) days following Closing,
Buyer may elect, with respect to such Basic Rents,
either to (I) assign all such Basic Rents to Seller,
after which Seller may pursue any remedies to collect
such Basic Rents and retain any amounts so collected,
or (II) retain such Basic Rents, in which event Buyer,
within one hundred eighty (180) days following Closing,
shall make a cash payment to Seller of the amount of
such Basic Rents, less Buyer's reasonable expenses
relating to efforts to collect such Basic Rents, after
which any amounts collected by Buyer shall be retained
by Buyer.
Additional Rents shall be apportioned as follows:
(a) With respect to Additional Rents
uncollected at Closing and owed for any period prior to
Closing and not yet billed, Buyer shall submit
appropriate bills to the tenants as soon as is
practicable after Buyer receives sufficient information
from Seller concerning Additional Rents to enable Buyer
to do so. Buyer shall use its best efforts to collect
such Additional Rents for a period of three hundred
sixty-five (365) days after the rentals become due.
Seller's apportioned interest in any amounts collected
by Buyer to the extent such amounts are available in
accordance with the provisions hereof, net of the costs
of collection, shall be paid to Seller within ten (10)
days following receipt thereof. If after the
applicable three hundred sixty-five (365) day period
Buyer has been unable to collect any Additional Rents,
Buyer may elect, with respect to one or more of the
leases one of the two alternatives set forth under
subsection (A)(2) above, with the same related cash
payment or assignment of accounts as is therein
provided;
(b) With respect to Additional Rents billed
and owed by occupants of the Property as of Closing,
Buyer shall use its best efforts to collect such
Additional Rents for a period of one hundred eighty
(180) days after Closing. Any such amounts collected
by Buyer, to the extent available pursuant to the
provisions hereof, net of the costs of collection,
shall be paid to Seller within ten (10) days following
receipt thereof. If after the applicable one hundred
eighty (180) day period Buyer has been unable to
collect Additional Rents, Buyer may elect, with respect
to any one or more of the leases one of the two
alternatives set forth under subsection (A)(2) above,
with the same related cash payment or assignment of
accounts as is therein provided;
(c) Additional Rents shall be allocated over
the period with regard to which such operating expenses
are incurred, notwithstanding the date on which such
Additional Rents become payable; and
(d) If the Premises are entirely net leased
and the tenant(s) pay all Additional Rent directly to
third parties, no apportionments or adjustments shall
be made.
6. Security Deposits. Seller shall deliver to Buyer
at Closing, in cash or by certified check without adjustment, the amounts
of all security deposits which may have been received from tenants,
together with interest thereon which is due to any tenant under the
provisions of any Lease or applicable law.
7. Project Contracts. The unpaid monetary
obligations of Seller under all Contracts shall, as a general matter, be
pro rated on a per diem basis as of midnight of the day preceding the
Closing Date, subject, nevertheless, to the following: With respect to
all leasing, brokerage or other commission agreements relating to Property
Leases, there shall be no apportionment or reimbursement of or for any
leasing fees, commissions or other compensation ("Leasing Fees") which is
in respect of any lease executed prior to the Closing, all of which shall
be and remain the responsibility of Seller, and Seller shall pay the same
when due and shall indemnify and hold Seller harmless from all thereof;
and (ii) provided Closing occurs hereunder, Buyer shall be responsible for
and shall pay when due and indemnify and hold Seller harmless from and
against or reimburse to Seller if Seller has paid any Leasing Fees with
respect thereto, all Leasing Fees which are due and payable subsequent to
Closing on an "as collected" basis or all Leasing Fees which are due and
payable for a renewal term which shall come into effect on or after the
Closing Date; provided, however, Seller shall have disclosed to Buyer the
existence of such Leasing Fee on the Company Schedule. Leasing Fees
apportionable hereunder shall be apportioned and pro rated on a per diem
basis as of midnight of the day preceding the Closing Date and as a
function of (and calculated with respect to) the lease term for which the
same were paid or will become due and payable.
B. Custom and Practice. Except as set forth in this
Agreement, the customs of the State and County in which the Premises are
located shall govern prorations.
C. Future Installments of Taxes. If at Closing, the
Property or any part thereof shall be or shall have been affected by an
assessment or assessments which are or may become payable in installments,
then for purposes of this Agreement, all unpaid installments of any such
assessment, including those which are to become due and payable and to be
liens upon the Property shall be paid and discharged by Seller at Closing.
D. Application of Prorations. If such prorations result
in a payment due Buyer, the cash payable at Closing shall be reduced by
such sum. If such prorations result in a payment due Seller, the same
shall be paid by uncertified check at Closing.
E. Schedule of Prorations. The parties shall endeavor to
jointly prepare a schedule of prorations for the Property no less than
five (5) days prior to Closing.
F. Escalations. At least five (5) days prior to Closing,
Seller shall deliver to Buyer a reasonably detailed statement setting
forth, as of the date of Closing (a) the sums collected from tenants under
Leases on account of or in reimbursement of landlord's operating expenses
and/or any other payments made by tenants to landlord on account of sums
which are attributable to expenses paid or incurred by the landlord
("escalation payments") for the current fiscal year under each such Lease
(whether a lease year or calendar or other year); and (b) the amounts paid
or incurred by Seller during the appropriate fiscal year as aforesaid
which Seller expects will be paid or reimbursed by escalation payments
made by tenants.
If Seller shall have collected escalation payments for
periods prior to Closing, whether pursuant to estimates which were in
excess of the amounts actually required to be paid, or otherwise, there
shall be an adjustment and credit to Buyer at Closing for such excess. If
the charges were not billed or have not been collected as of the date of
Closing, then, when the amount of such escalation payments is determined
and collected by Buyer from tenants, Buyer will, upon collection, remit to
Seller the portion thereof to which Seller is entitled to the date of
Closing. Buyer shall have the right, in good faith, to settle or adjust
any amount of such escalation payments due from any tenant without
Seller's prior consent, provided that such settlement or adjustment
applies ratably to all amounts of escalation payments due from such
tenant.
G. Readjustments. The parties shall correct any errors in
prorations as soon after the Closing as amounts are finally determined.
H. Indemnification for Seller's Tax Obligations. Seller
shall indemnify, defend and save and hold harmless Buyer from any loss,
cost, liability or expense (including, without limitation, reasonable
counsel fees and court costs) incurred, paid or suffered by Buyer arising
out of or by reason of any claim made by the Pennsylvania Department of
Revenue or by any other state taxing or employment authorities asserting
or indicating any claims or possible claims for unpaid taxes, penalties,
interest or court costs related thereto of Seller or any related party,
due the Commonwealth of Pennsylvania or its political subdivisions. The
provisions of this Section XIV.H. shall specifically survive Closing
hereunder.
XVI. BROKERS. Each party hereby represents and warrants to the
other that it has not employed or retained any broker or finder in
connection with the transactions contemplated by this Agreement, and that
neither has had any dealings with any other person or party which may
entitle that person or party to a fee or commission. Each party shall
indemnify the other of and from any claims for commissions by any person
or party claiming such commission by or through the indemnifying party.
XVII. ESCROW AGENT. The parties hereto have requested that the
Deposit be held in escrow by the Escrow Agent to be applied at the Closing
or prior thereto in accordance with this Agreement. The Escrow Agent will
deliver the Deposit to Seller or to Buyer, as the case may be under the
following conditions:
A. Payment to Seller. To Seller on the Closing Date upon
the consummation of Closing;
B. Notice of Dispute. If either Seller or Buyer believes
that it is entitled to the Deposit or any part thereof, it shall make
written demand therefor upon the Escrow Agent. The Escrow Agent shall
promptly mail a copy thereof to the other party in the manner specified in
Section XVIII.A. below. The other party shall have the right to object to
the delivery of the Deposit, by filing written notice of such objections
with the Escrow Agent at any time within ten (10) days after the mailing
of such copy to it in the manner specified in Section XVIII.A. below, but
not thereafter. Such notice shall set forth the basis for objection to
the delivery of the Deposit. Upon receipt of such notice, the Escrow
Agent shall promptly deliver a copy thereof to the party who filed the
written demand.
C. Escrow Subject to Dispute. In the event the Escrow
Agent shall have received the notice of objection provided for in XVII.B.
above, of this Section, in the manner and within the time therein
prescribed, the Escrow Agent shall continue to hold the Deposit until (i)
the Escrow Agent receives written notice from both Seller and Buyer
directing the disbursement of the Deposit in which case the Escrow Agent
shall then disburse said Deposit in accordance with said direction, or
(ii) litigation arises between Seller and Buyer, in which event the Escrow
Agent shall deposit the Deposit with the Clerk of the Court in which said
litigation is pending, or (iii) the Escrow Agent takes such affirmative
steps as the Escrow Agent may, at the Escrow Agent's option elect in order
to terminate the Escrow Agent's duties including, but not limited to,
deposit in Court and an action for interpleader.
D. Escrow Agent's Rights and Liabilities. Escrow Agent
shall not be required to determine questions of fact or law, and may act
upon any instrument or other writing believed by it in good faith to be
genuine and to be signed and presented by the proper person, and shall not
be liable in connection with the performance of any duties imposed upon
Escrow Agent by the provisions of this Agreement, except for Escrow
Agent's own willful default or gross negligence. Escrow Agent shall have
no duties or responsibilities except those set forth herein. Escrow Agent
shall not be bound by any modification of this Agreement, unless the same
is in writing and signed by Buyer and Seller, and, if Escrow Agent's
duties hereunder are affected, unless Escrow Agent shall have given prior
written consent thereto. In the event that Escrow Agent shall be
uncertain as to Escrow Agent's duties or rights hereunder, or shall
receive instructions from Buyer or Seller which, in Escrow Agent's
opinion, are in conflict with any of the provisions hereof, Escrow Agent
shall be entitled to hold and apply the Deposit, pursuant to Section
XVII.C., and may decline to take any other action.
XVIII. GENERAL PROVISIONS.
A. Notices. All notices or other communications required
or permitted to be given under the terms of this Agreement shall be in
writing, and shall be deemed effective when (i) sent by nationally-
recognized overnight courier, (ii) facsimile with original following by
regular mail, or (iii) deposited in the United States mail and sent by
certified mail, postage prepaid, addressed as follows:
If to Buyer, addressed to:
Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney,
President and Chief Executive
Officer
with a copy in each instance to:
John W. Fischer, Esquire
Drinker Biddle & Reath, LLP
1000 Westlakes Drive, Suite 300
Berwyn, PA 19312
If to Seller, addressed to:
Salient 3 Communications, Inc.
P.O. Box 1498
Reading, PA 19603
Attn: Paul Snyder
with a copy in each instance to:
Salient 3 Communications, Inc.
P.O. Box 1498
Reading, PA 19603
Attn: Thomas F. Hafer, Esquire
If to Escrow Agent, addressed to:
Commonwealth Land Title Insurance Company
1700 Market Street
Philadelphia, PA 19103-3990
Attn: M. Gordon Daniels, Esquire
or to such-other address or addresses and to the attention of such other
person or persons as any of the parties may notify the other in accordance
with the provisions of this Agreement.
B. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
C. Entire Agreement. All Exhibits attached to this
Agreement are incorporated herein and made a part hereof. This Agreement
constitutes the entire agreement between the parties hereto and supersedes
all prior negotiations, understandings and agreements of any nature
whatsoever with respect to the subject matter hereof. This Agreement may
not be modified or amended other than by an agreement in writing. The
captions included in this Agreement are for convenience only and in no way
define, describe or limit the scope or intent of the terms of this
Agreement.
D. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the Commonwealth of
Pennsylvania.
E. No Recording. This Agreement shall not be recorded in
the Office for the Recording of Deeds or in any other office or place of
public record.
F. Tender. Tender of Deed by Seller and of the Purchase
Price by Buyer, are hereby mutually waived.
G. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to
be an original as against any party whose signature appears thereon, and
all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
H. Further Instruments. Seller will, whenever and as
often as it shall be reasonably request so to do by Buyer, and Buyer will,
whenever and as often as it shall be reasonably requested so to do by
Seller, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and all conveyances, assignments,
correction instruments and all other instruments and documents as may be
reasonably necessary in order to complete the transaction provided for in
this Agreement and to carry out the intent and purposes of this Agreement.
All such instruments and documents shall be satisfactory to the
respective attorneys for Buyer and Seller. The provisions of this Article
shall survive the Closing.
I. Time. Time is of the essence. In the event the last
day permitted for the performance of any act required or permitted under
this Agreement falls on a Saturday, Sunday, or legal holiday of the United
States or the Commonwealth of Pennsylvania, the time for such performance
will be extended to the next succeeding business day. Time periods under
this Agreement will exclude the first day and include the last day of such
time period.
J. Designation of Nominee; Assignment of Agreement. Buyer
shall have the right to designate one or more of its subsidiaries or
affiliate entities to acquire title to the Premises hereunder.
K. Effective Date. Whenever the term or phrase "effective
date hereof" or "date hereof" or other similar phrases describing the date
this Agreement becomes binding on Seller and Buyer are used in this
Agreement, such terms or phrases shall mean and refer to the date on which
a counterpart or counterparts of this Agreement executed by Seller and
Buyer are deposited with the Escrow Agent.
L. Time for Acceptance. This Agreement shall constitute
an offer to buy or sell the Property, as case may be, on the terms herein
set forth only when executed by the Seller or Buyer. This Agreement may be
accepted by the party receiving such executed Agreement only by executing
this Agreement and delivering an original signed copy hereof to the Escrow
Agent and an originally signed copy hereof to the other party hereto
within five (5) business days after such receipt. Failure to accept in
the manner and within the time specified shall constitute a rejection and
termination of such officer.
M. Confidentiality. Each of the parties hereto covenants
and agrees to hold the nature and content of this Agreement, including
without limitation, the Purchase Price contained herein, in strict
confidence, and other than disclosure required by the SEC and except as
may be necessary to comply with this Agreement, neither party shall
disclose the nature, content or the Purchase Price of this Agreement
without the express written consent of the other party.
N. Delivery of Documents. Promptly upon execution hereof
by the parties hereto, Seller shall deliver to Buyer one (1) copy of this
Agreement, complete with all Exhibits and Schedules.
XIX. SEC REPORTING (8-K) REQUIREMENTS.
For the period of time commencing on the date hereof and
continuing through the first anniversary of the Closing Date, and without
limitation of other document production otherwise required of Seller
hereunder, Seller shall, from time to time, upon reasonable advance
written notice from Buyer, provide Buyer and its representatives, with (I)
access to all financial and other information pertaining to the period of
Seller's ownership and operation of the Property, which information is
relevant and reasonably necessary, in the opinion of Buyer's outside,
third party accountants (the "Accountants"), to enable Buyer and its
Accountants to prepare financial statements in compliance with any or all
of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange
Commission (the "Commission"), as applicable; (b) any other rule issued by
the Commission and applicable to Buyer; and (c) any registration
statement, report or disclosure statement filed with the Commission by, or
on behalf of Buyer; and (II) a representation letter, signed by the
individual(s) responsible for Seller's financial reporting, as prescribed
by generally accepted auditing standards promulgated by the Auditing
Standards Division of the American Institute of Certified Public
Accountants, which representation letter may be required by the
Accountants in order to render an opinion concerning Seller's financial
statements.
XX. INDEMNIFICATION.
Without limitation of any other Seller indemnity obligations
set forth herein, from and after the Closing Date, Seller shall indemnify,
defend and save and hold harmless Buyer, and its respective trustees,
directors, officers and employees, of, from and against any and all loss,
cost, expense, damage, claim, and liability, including reasonable
attorney's fees and court costs, including, without limitation, attorney's
fees and costs associated with the enforcement of Seller's indemnification
obligations (hereinafter collectively, "Losses") which Buyer may suffer or
incur, resulting from, relating to, or arising in whole or in part, from
or out of (i) any misrepresentation or breach of a representation or
warranty by Seller contained in this Agreement; (ii) any failure to
fulfill any covenant or agreement of Seller contained in this Agreement;
(iii) all litigation set forth in this Agreement and on Exhibit "D";
hereto; (iv) all claims relating to the construction, maintenance and
operation of the Property prior to Closing, except that with respect to
any construction related claims such indemnity obligations of Seller shall
cease as of the second anniversary of the Closing hereunder; or (v) any
and all actions, suits, investigations, proceedings, demands, assessments,
audits, judgments, and/or claims arising out of or relating to any of the
foregoing.
Promptly after receipt by Buyer of written notice of the
commencement of any suit, audit, demand, judgment, action, investigation
or proceeding (a "Third Party Action") or promptly after Buyer incurs a
Loss or has knowledge of the existence of a Loss, Buyer will, if a claim
with respect thereto is to be made against Seller due to Seller's
obligation to provide indemnification hereunder, give Seller written
notice of such Loss or the commencement of any Third Party Action;
provided, however, that the failure to provide such notice within a
reasonable period of time shall not relieve Seller of any of its
obligations hereunder. Promptly after receiving such notice, Seller will,
upon notice to Buyer, have the right to assume and control the defense and
settlement of any such Third Party Action at its own cost and expense;
provided, however, that it shall be a condition precedent to the exercise
of such right by Seller that Seller shall agree in writing that the Loss,
or Third Party Action, as the case may be, is properly within the scope of
the indemnification obligation and that as between the parties, Seller
shall be responsible to satisfy and discharge such Third Party Action.
Seller shall not enter into any resolution or other compromise of a Third
Party Action without obtaining the complete release of Buyer for any
liability to all claimants under or pursuant to such Third Party Action.
Buyer shall have the right to participate in any such defense, contest or
other protective action at its own cost and expense.
Notwithstanding the foregoing, Buyer shall have the right to
assume and control the defense and settlement of a Third Party Action (a)
if such action includes claims for equitable relief which, if determined
adversely to Buyer, could reasonably be expected to interfere with its
intended business operations or damage its business reputation or (b) if
Seller fails to do so in a timely manner. In any circumstances in which
Buyer undertakes to control the Third Party Action as provided in this
paragraph, it shall (i) not enter into any resolution or other compromise
involving monetary damages without obtaining the prior written consent of
Seller provided that such written consent may not be withheld if it would
interfere with Buyer's business operation and (ii) keep Seller informed on
an ongoing basis of the status of such Third Party Action and shall
deliver to Seller, copies of all documents related to the Third Party
Action reasonably requested by Seller. Buyer shall act to assure that all
attorneys' fees and expenses incurred in connection therewith are
reasonable.
XXI. EXCULPATION.
No recourse shall be had for any obligation of Buyer under
this Agreement or under any document executed in connection herewith or
pursuant hereto, or for any claim based thereon or otherwise in respect
thereof, against any past, present or future trustee, shareholder, officer
or employee of Buyer, whether by virtue of any statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such
liability being expressly waived and released by the Seller and all
parties claiming by, through or under Seller.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed the day and year first above written.
SALIENT 3 COMMUNICATIONS, INC. BRANDYWINE REALTY TRUST
a Delaware Corporation a Maryland Real Estate Investment Trust
By: /s/ Thomas F. Hafer By: /s/ Gerard H. Sweeney
Thomas F. Hafer Gerard H. Sweeney,
Senior Vice President, President and Chief Executive Officer
General Counsel and Secretary
Agreed to by Escrow Agent with regard
to the obligations, terms, covenants
and conditions contained in this
Agreement relating to Escrow Agent.
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: /s/ Nancy Staino
Nancy Staino
Vice President
