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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
___________________
June 2, 1995
(Date of Report; Date of Earliest Event Reported)
PRUDENTIAL REALTY TRUST
(Exact Name of Registrant as specified in its Charter)
Massachusetts 1-8965 22-6400284
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
Prudential Plaza, Newark, New Jersey 07102
(Address of Principal Executive Offices) (Zip Code)
(201) 802-4302
(Registrant's telephone no., including area code)
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Items 1-4. Not Applicable.
Item 5. Other Events.
In continuation of the process that the Trust began in
December, 1994 of evaluating all strategic options available to maximize
the value of the Trust to its shareholders as the Trust approaches its
scheduled liquidation date, the Trust entered into a Purchase and Sale
Agreement (the "Agreement"), dated June 7, 1995, with Security Capital
Industrial Trust, a Maryland real estate investment trust ("Buyer"), for
the sale of the Trust's Park 100 property located in Indianapolis, Indiana
("Park 100"). The purchase price for Park 100 is $39.2 million, which is
payable in cash (the "Purchase Price").
The closing of the sale of Park 100 (the "Closing") is to occur
no later than ten (10) days after the expiration of a 45-day due diligence
period (such period to commence on the date of the Agreement), subject to
extensions as provided therein. Closing is contingent upon the
satisfactory completion of the due diligence review by Buyer and other
customary conditions for transactions of this nature.
Buyer deposited $1,000,000 in cash as earnest money ("Earnest
Money") with an escrow agent on June 8, 1995. At and upon the Closing, the
escrow agent will pay the Earnest Money, including interest thereon, if
any, to Seller or to the party entitled to receive the Earnest Money in
accordance with the terms of the Agreement.
If all of the conditions to Buyer's obligations to purchase
Park 100 have been satisfied or waived by Buyer and if Buyer fails to
consummate the transaction for any reason other than the Trust's default or
the exercise by Buyer of an express right of termination as provided for in
the Agreement, the Trust's sole remedy is to terminate the Agreement and to
retain the Earnest Money as liquidated damages. If the Trust does not
consummate the sale of Park 100 for any reason other than the default of
Buyer or the exercise by Buyer of a right of termination as provided for in
the Agreement, the Earnest Money will be refunded to Buyer. If Buyer
terminates the Agreement due to certain circumstances set forth in the
Agreement, the Trust shall reimburse Buyer for all out-of-pocket costs and
expenses, including reasonable attorney's fees, incurred by Buyer up to a
maximum reimbursement amount of $150,000 in connection with the preparation,
negotiation and execution of the Agreement and Buyer's due diligence review of
Park 100.
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Buyer will retain $1,000,000 of the Purchase Price at the
Closing until the period for which any and all claims which could be
subject to indemnification by the Trust has terminated (the "Holdback").
Pursuant to the terms of the Agreement, the Trust will indemnify Buyer for
all Losses (as defined in the Agreement) incurred by Buyer as a result of
any litigation pending or threatened before any court wherein an
adverse judgment would (a) prevent consummation of any of the transactions
contemplated in the Agreement, (b) cause any of such transactions to be
rescinded following consummation or (c) adversely affect the right of Buyer
to own and operate Park 100 or to achieve the benefits of the transaction.
Such indemnity is not limited to the amount of the Holdback or to any other
amount.
In addition, on June 2, 1995, in furtherance of the Board's
desire to comply with the long-standing policy and intent of the Trust and
in accordance with the Declaration, the Board adopted a series of
resolutions to effect the liquidation and termination of the Trust,
effective immediately prior to completion of the sale of Park 100 (the
"Resolutions"). The Resolutions, among other things, authorize certain
officers of the Trust to sell Park 100 and to sell or otherwise liquidate
the remaining Properties of the Trust upon such terms as may be approved by
a majority of the Unaffiliated Trustees (as defined in the Declaration),
and require that, after paying or adequately providing for the payment of
all liabilities of the Trust, the Trustees shall distribute the remaining
Trust Estate (as defined in the Declaration), in cash or in kind or partly
each, among the shareholders of the Trust according to their respective
rights under the Declaration.
The sale of Park 100, together with the potential sales of the
other two Trust properties at prices equal to the highest cash bids
received to date, could result in a distribution to holders of Income
Shares upon liquidation of approximately $5.00 per Income Share. There
would be no available distribution to holders of Capital Shares. This
assumes liquidation takes place in December 1995, and includes estimates
for commissions and state and local taxes related to the sales, and other
expenses related to the liquidation of the Trust.
Copies of the Agreement and the Resolutions are filed as
Exhibits 2.1 and 2.2 hereto, respectively, and are incorporated herein by
reference. The foregoing
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descriptions of the Agreement and the resolutions are qualified in their
entirety by reference to the text of such documents.
Item 6. Not Applicable.
Item 7. Financial Statements,
Pro Forma Financial Information and Exhibits.
(a)-(b) Not applicable.
(c) Exhibits Required by Item 601 of Regulation S-K.
Exhibit
No.
2.1 Purchase and Sale Agreement, dated June 7, 1995,
among Prudential Realty Trust and Security Capital
Industrial Trust.
2.2 Resolutions of the Board of Trustees of Prudential
Realty Trust, dated June 2, 1995, adopting a Plan of
Complete Liquidation.
Item 8. Not Applicable
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: June 20, 1995
PRUDENTIAL REALTY TRUST
By: /s/ James W. McCarthy
Name: James W. McCarthy
Title: Vice President, Comptroller,
and Principal Accounting Officer
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EXHIBIT INDEX
Sequential
Exhibit No. Description Page No.
2.1 Purchase and Sale Agreement, dated June 7,
1995, among Prudential Realty Trust and
Security Capital Industrial Trust.
2.2 Resolutions of the Board of Trustees of
Prudential Realty Trust, dated June 2, 1995,
adopting a Plan of Complete Liquidation.
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EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
[Park 100 Portfolio, Indianapolis, Indiana]
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Seller: PRUDENTIAL REALTY TRUST, a
Massachusetts business trust.
(b) Purchaser: SECURITY CAPITAL INDUSTRIAL TRUST, a
Maryland real estate investment trust.
(c) Date of this Agreement: The latest date of execution by the
Seller or the Purchaser, as indicated
on the signature page.
(d) Purchase Price: $39.2 million.
(e) Earnest Money: $1.0 million, including interest, if
any, thereon.
(f) Holdback: $1.0 million, which is the portion of
the Purchase Price to be retained by
Purchaser at the Closing until the
period for which any and all claims
which could be subject to
indemnification by the Seller pursuant
to Article 8 has terminated and all
such claims have been finally
determined and paid whether through
judicial proceedings or settlement.
(g) Due Diligence Period: The period ending 45 days after the
Date of this Agreement.
(h) Closing Date: As agreed between Seller and Purchaser
but no later than 10 days after the Due
Diligence Period, subject to extension
as provided herein. All extension
periods for
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the Closing provided herein shall run concurrently, not consecutively.
(i) Title Company: Chicago Title Insurance Company
Frank Jansen
700 South Flower Street, Suite 920
Los Angeles, California 90017
Telephone: 213/488-4346
Facsimile: 213/891-0834
(j) Escrow Agent: Chicago Title Insurance Company
101 West Ohio Street
Suite 300
Indianapolis, Indiana 46204
Attn: Allen Kolb
Telephone: 317/684-3809
Facsimile: 317/684-3921
1.2 Property. Subject to the terms and conditions of this
agreement ("Agreement"), Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase from Seller the property ("Property") described as
follows:
(a) The "Real Property," being the lands described in Exhibit A
attached hereto together with (i) all improvements located thereon
("Improvements"), (ii) all and singular the rights, benefits, privileges,
easements, tenements, hereditaments, and appurtenances thereon or in
anywise appertaining to such real property, and (iii) without warranty all
right, title, and interest of Seller in and to all strips and gores and any
land lying in the bed of any street, road or alley, open or proposed,
adjoining such real property.
(b) The landlord's interest in the "Leases," being all leases of
the Improvements, including leases which may be made by Seller after the
date hereof and prior to Closing as permitted by this Agreement.
(c) The "Tangible Personal Property," being all equipment,
machinery, furniture, furnishings, supplies and other tangible personal
property owned by Seller, and Seller's interest in any such property leased
by Seller, now or hereafter located in and used in connection with the
operation, ownership or management of the Real Property.
(d) Seller's interest in the "Intangible Personal Property," being
all intangible personal property related to the Real Property, to the
extent such property is assignable without expense to Seller including,
without limitation: all trade names and
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trade marks associated with the Real Property including Seller's rights and
interests in the name of the Real Property to the extent, if any, Seller
has any such rights; the plans and specifications and other architectural
and engineering drawings for the Improvements; warranties; contract rights
related to the construction, operation, ownership, or management of the
Real Property (but excluding Seller's obligations thereunder except those
expressly assumed pursuant to this Agreement); governmental permits,
approvals and licenses (to the extent assignable); and telephone exchange
numbers (to the extent assignable).
1.3 Earnest Money. No later than 1 business day after the Date of
this Agreement Purchaser shall deposit the Earnest Money with the Escrow
Agent. The Escrow Agent shall pay the Earnest Money to Seller at and upon
the Closing, or otherwise, to the party entitled to receive the Earnest
Money in accordance with this Agreement. The Earnest Money shall be held
and disbursed by the Escrow Agent pursuant to that Earnest Money Escrow
Agreement which the parties have executed simultaneously with this
Agreement.
If all of the conditions to Purchaser's obligation to purchase the
Property have been satisfied or waived in writing by Purchaser and if
Purchaser should fail to consummate this transaction for any reason other
than Seller's default or the exercise by Purchaser of an express right of
termination granted herein, Seller's sole remedy in such event shall be to
terminate this Agreement and to retain the Earnest Money as liquidated
damages, Seller waiving all other rights or remedies in the event of such
default by Purchaser. The parties acknowledge that Seller's actual damages
in the event of a default by Purchaser under this Agreement will be
difficult to ascertain, and that such liquidated damages represent the
parties' best estimate of such damages. Purchaser shall be entitled to all
remedies at law or in equity in the event of Seller's default, including
the remedy of specific performance. The Earnest Money shall promptly be
returned to Purchaser in the event of a Seller default hereunder (but not
as Purchaser's sole remedy in such event) or if Purchaser elects to
terminate this Agreement pursuant to an express right herein granted or
failure of a condition. Purchaser must exercise any right of termination
as to all the Property and may not terminate this Agreement as to only a
portion of the Property.
In the event Seller should fail or be unable to consummate the
transactions contemplated hereunder for any reason other than the default
of Purchaser hereunder or the transaction fails to close due to the
exercise by Purchaser of a right of termination hereunder, in addition to
any other remedies that may be available to Purchaser pursuant to this
Agreement, the Earnest Money shall be refunded to Purchaser. If Purchaser
terminates this Agreement pursuant to Paragraph 5.2(d), in addition to any
other reimbursement right hereunder, Seller shall reimburse Purchaser upon
demand and presentment of paid invoices for all out of pocket costs and
expenses, including reasonable attorneys' fees, incurred by Purchaser up to
a maximum reimbursement
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amount of $150,000 in connection with the preparation, negotiation and
execution of this Agreement, Purchaser's due diligence review of the
Property and otherwise in connection with the transactions contemplated
hereunder ("Due Diligence Costs"). This $150,000 limitation does not apply
to reimbursement for any Losses (defined in Article 8) other than for Due
Diligence Costs reimbursable pursuant to the preceding sentence.
ARTICLE 2: INSPECTION
2.1 Seller's Delivery of Specified Documents. Beginning on June 5,
1995 and with all access and deliveries completed by June 7, 1995 or as
otherwise provided herein (with Purchaser having continuing access to the
Property Information to and through the Closing Date), Seller shall deliver
or provide access to Purchaser at a location in either New York City or
Indianapolis the following with respect to the Property, to the extent not
heretofore delivered to Purchaser (collectively, the "Property
Information"):
(a) Rent Roll. A current rent roll and delinquency report
(individually, "Rent Roll", collectively, the "Rent Rolls");
(b) Operating Statements. Operating statements of the Property for
the 36 months preceding April 30, 1995 ("Operating Statements");
(c) Tax Statements. Copies or a summary of ad valorem tax
statements relating to the Property for the current year or other current
tax period (if available) and for the 24 months preceding the Agreement;
(d) Leases. Copies of all Leases (including all amendments and
guarantees);
(e) Tenant Information. To the extent available, copies of
financial statements of all tenants under Leases covering the two years
prior to this Agreement, information relative to tenant payment history,
and all tenant correspondence. Any such information in Seller's possession
is located in and will be made available to Purchaser at Seller's property
management office in Indianapolis.
(f) Service Contracts. A list together with copies of all
management, service, supply, equipment rental, and other contracts related
to the operation of the Property ("Service Contracts"). The list may be
provided by June 13, 1995;
(g) Maintenance Records. All available maintenance work orders for
the 12 months preceding this Agreement;
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(h) List of Capital Improvements. By June 13, 1995, a list of all
capital improvements known to the Seller and performed on the Property
within the 24 months preceding this Agreement;
(i) Environmental Documents. Any environmental reports in Seller's
possession related to the Property; any written claims, notices, demands,
suits or other communication in Seller's possession relating to any alleged
violation of any federal, state or local law or regulation relating to the
environment, health or safety, or any recognized environmental condition
(as hereinafter defined) with respect to the Property or other properties
in Park 100 Business Park currently or previously owned by the Seller; and
(j) Plans and Specifications. All construction plans and
specifications in Seller's possession relating to the original development
of the Property and any major capital repairs or tenant improvements. Any
such information in Seller's possession is located in and will be made
available to Purchaser at Seller's property management office in
Indianapolis.
Seller shall provide to Purchaser any documents described above and
coming into Seller's possession or produced by Seller after the initial
delivery above and to continue to provide same during the pendency of this
Agreement.
2.2 Due Diligence. Purchaser shall have through the last day of
the Due Diligence Period in which to examine, inspect, and investigate the
Property. Notwithstanding anything to the contrary in this Agreement,
Purchaser may terminate this Agreement by giving notice of termination to
Seller on or before the applicable date and time indicated for any of the
following reasons:
(a) Net Operating Income and Leases. Purchaser may terminate this
Agreement on or before 5:00 p.m. EST, June 12, 1995 if Purchaser has
determined, acting in good faith, that any of the following is not
satisfactory to Purchaser: (i) net operating income for Leases in
place for the periods indicated as set forth in the "J.P. Morgan
Descriptive Memorandum ("Memorandum"), Exhibit IV-1: Consolidated
Cash Flow Projections for 1995", employing the method of calculation
set forth in the Memorandum (ii) the existence and magnitude of
tenant defaults or delinquencies as of June 12, 1995; or (iii)
material provisions in any of the Leases.
(b) Environmental Investigation. Purchaser may terminate this
Agreement on or before the expiration of the Due Diligence Period
unless Purchaser concludes that there is no recognized environmental
condition affecting the Property. For purposes of this subparagraph
(b) a "recognized environmental condition" is that defined by the
"American Society for Testing and Materials Standard Practice
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for Environmental Site Assessments: Phase I Site Assessment Process (E
1527-93)" (the "ASTM Phase I Standard") as the presence or likely presence
of any hazardous substances or petroleum products on or in the vicinity of
the Property under conditions that indicate an existing release or a past
release or an imminent threat of a release of any hazardous substances or
petroleum products into structures on the Property or into the ground,
groundwater or surface water of the Property. The term "recognized
environmental condition" includes hazardous substances or petroleum
products even under conditions in compliance with laws. The term
"recognized environmental condition" is not intended to include de minimis
conditions that generally do not (and with the passage of time, will not)
present a material risk of harm to public health or the environment and
that generally would not be (and with the passage of time, would not
become) the subject of an enforcement action if brought to the attention of
appropriate governmental agencies. For purposes of this Agreement,
"recognized environmental conditions" also includes, without limitation,
the presence of asbestos, radon or electromagnetic fields under
circumstances that represent a threat or potential threat to human health
or the environment. The definitions for hazardous substances, petroleum
products and asbestos set forth in the ASTM Phase I Standard are
incorporated by reference.
Promptly after completion of Purchaser's environmental review,
Purchaser shall provide written notice to Seller of any recognized
environmental conditions affecting the Property. Seller shall have
seven days after receipt of such notice in which to elect, by written
notice to Purchaser, to remediate or cure any recognized
environmental condition so identified. If Seller so elects, Seller
shall have a period of 90 days following the date of its notice to
Purchaser (the "Cure Period") in which to effect a remediation or
cure, and the Closing Date shall be delayed to the extent necessary
to allow a full 90-day Cure Period. Following notice from Seller
that a remediation or cure has been effected and completed, Purchaser
shall have a period of 30 days thereafter in which to determine
whether the recognized environmental condition(s) have been
remediated or cured, and the Closing Date shall be delayed to the
extent necessary to allow a full 30-day review period. A recognized
environmental condition shall be considered remediated or cured if it
no longer constitutes a recognized environmental condition and
requires no further investigation, remediation, monitoring,
maintenance or other action to prevent such condition from becoming a
recognized environmental condition in the future.
(c) Repairs and Replacements. If the good faith estimated cost of
repairs and replacements to the Property (including but not limited
to repairs and replacements required to bring the Property into
compliance with applicable laws) recommended by Purchaser's
architectural and engineering consultants exceeds $400,000, and if
Purchaser requests Seller to grant it a credit against
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the Purchase Price for such excess or a portion thereof, and if Purchaser
and Seller, after negotiating in good faith, are unable to agree within 10
days on the amount of the credit, then: (i) if Purchaser initially
requested a credit not exceeding $400,000, Purchaser, but not Seller, may
elect to terminate the Agreement; and (ii) if Purchaser initially requested
a credit exceeding $400,000, then either Purchaser or Seller may terminate
this Agreement. In addition to its termination right set forth in this
subparagraph (c) above, Purchaser may terminate this Agreement if its
architectural and engineering consultants or attorneys reasonably determine
that the Property or any portion thereof is not in material compliance with
all laws, including, without limitation, laws regulating the use and
occupancy of the Property or any portion thereof, and such noncompliance
cannot be remedied by money; provided, however, that Purchaser may not
terminate this Agreement unless it shall have provided written notice to
the Seller of such noncompliance and Seller shall have failed to cure or
correct such noncompliance within 90 days after Seller's receipt of such
notice, and the Closing Date shall be extended, if necessary, to allow a
full 90-day period in which to effect such cure.
If this Agreement terminates pursuant to any provision of this
Paragraph 2.2, the Earnest Money shall be refunded to Purchaser immediately
upon request, and all further rights and obligations of the parties under
this Agreement shall terminate, except pursuant to any provisions hereof
which expressly survive any such termination.
2.3 Access. Purchaser shall have reasonable access to the Property
for the purpose of conducting surveys, architectural, engineering,
geotechnical, and environmental inspections and tests (including invasive
testing such as without limitation soil and groundwater testing), and any
other inspections, studies, or tests reasonably required by Purchaser.
Purchaser shall keep the Property free and clear of any liens and will
indemnify, defend, and hold Seller harmless from all claims and liabilities
asserted against Seller as a result of any such entry by Purchaser, its
agents, employees, or representatives. If any inspection or test disturbs
the Property, Purchaser will restore the Property to the same condition as
existed prior to any such inspection or test. Purchaser and its agents,
employees, and representatives shall have a continuing right of reasonable
access to the Property during the pendency of this Agreement with the right
to examine and make copies of all books and records and other materials
relating to the Property in Seller's or its property manager's possession
and the right to conduct a "walk-through" of the Property prior to the
Closing upon appropriate notice to tenants as permitted under the Leases.
In the course of its investigations Purchaser may make inquiries to third
parties ("Third Parties") including, without limitation, tenants, lenders,
contractors, property managers, parties to Service Contracts, and
municipal, local, and other government officials and representatives,
subject to Seller's consent to each such inquiry, which consent shall not
be unreasonably withheld. Purchaser shall notify Seller of any meetings it
wishes
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to hold with Third Parties and shall provide the Seller with the
opportunity to be present at such meetings. The obligations of the
Purchaser under this paragraph shall survive any termination of the
Agreement.
2.4 Tenant Estoppels. Seller shall endeavor to secure and deliver
to Purchaser, no later than 5 business days before the expiration of the
Due Diligence Period estoppel certificates from tenants under all Leases in
the form of Exhibit C attached hereto or if the tenant will not sign the
estoppel certificate initially delivered to it, in such form as the tenant
is required to provide under its Lease, provided that each estoppel
certificate must be in writing, signed by the tenant, providing the
following information: (1) that the Lease is in full force and effect and
unmodified or, if modified, stating the nature of the modification; (2) the
date to which rent has been paid; (3) that there are not, to tenant's
knowledge, any uncured defaults or specifying defaults, if any, that are
claimed. Purchaser's obligation to close the transaction contemplated
under this Agreement is subject to the condition that as of Closing: (i)
estoppel certificates executed by tenants under Leases covering not less
than 75 percent of the rentable floor area of the Property, including
specifically not less than 10 of the 12 existing Leases and all new Leases
covering 25,000 square feet or more of floor area, and estoppel
certificates in the form of Exhibit C executed by the Seller for the
balance of the space, all such estoppel certificates being consistent with
the information in the Memorandum, the results of Purchaser's
investigations pursuant to Paragraph 2.2(a), the Rent Rolls and the
representations of Seller in Paragraph 7.1, have been delivered to
Purchaser; and (ii) there has been no monetary defaults, bankruptcies or
similar proceedings that have occurred since the date of the applicable
estoppel certificates that could potentially result in a loss of net annual
operating income from the Property of $130,000, in the aggregate, as
compared to the net operating income of the Property according to the
results of Purchaser's investigation pursuant to Paragraph 2.2(a) and
taking into account the net effect of any net increases in net operating
income resulting from new Leases entered into pursuant to Paragraph 4.4.
2.5 Service Contracts. During the Due Diligence Period the parties
will endeavor to agree as to which Service Contracts Purchaser will assume
and which Service Contracts will be terminated by Seller at Closing.
Purchaser will assume the obligations arising from and after the Closing
Date under those Service Contracts that were entered into in the ordinary
course of business and that are not in default as of the Closing Date or
which Seller and Purchaser have agreed will be not terminated. Seller
shall terminate at Closing all Service Contracts that are not so assumed.
Seller shall terminate at Closing, and Purchaser shall not assume, any
property management agreement affecting the Property.
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ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Promptly after the
date of this Agreement Seller shall cause to be prepared for the Property
and delivered to Purchaser and its counsel: (i) current, effective
commitments for title insurance ("Title Commitments") issued by the Title
Company, in the amount of the Purchase Price, with Purchaser as the
proposed insured and (ii) current ALTA-ACSM Urban surveys of the Property
("Surveys"), prepared by one or more surveyors licensed in the state of
Indiana and reasonably satisfactory to Purchaser, each which Survey shall
include a certification addressed to Purchaser, in the form attached hereto
as Exhibit B; and (iii) copies of Uniform Commercial Code searches in the
name of Seller and the Property issued by the Title Company or a search
company acceptable to Purchaser ("UCC Searches"). Since the Property
consists of a number of separate parcels or tracts of property, a separate
title commitment and survey will be prepared for each parcel or tract.
3.2 Title Review and Cure. During the period ending 12 business
days after receipt by Purchaser of the Title Commitments, Surveys and UCC
Searches ("Title Review Period"), Purchaser shall review title to the
Property as disclosed by the Title Commitments and the Surveys. Seller,
without any obligation to incur any cost or expense except as provided
below, will cooperate with Purchaser in curing any objections Purchaser may
have to title to the Property. Seller shall have no obligation to cure
title objections except mechanic's and materialman's liens created by
Seller, its agents or contractors and contractual liens voluntarily entered
into by Seller. Purchaser may terminate this Agreement before the end of
the Title Review Period if Seller does not agree to remove liens that
Seller is not so required to remove. Seller agrees to remove any
exceptions or encumbrances to title which are created by Seller after the
date of this Agreement. Purchaser may terminate this Agreement by notice
to Seller before the end of the Title Review Period if title to the
Property (and matters affecting the Property as disclosed by the Title
Commitments and the Surveys) and the endorsements and exclusions to the
Title Policy are not satisfactory to Purchaser, acting in good faith, and
by notice to Seller after expiration of the Title Review Period if the
Title Company revises any Title Commitment after the expiration of the
Title Review Period to add material exceptions, or to modify exceptions in
any material respect, or to add to or modify in any material respect the
conditions to obtaining any endorsement requested by Purchaser during the
Title Review Period if such additions, modifications or deletions are not
acceptable to Purchaser and are not removed by the Closing Date. If this
Agreement is terminated pursuant to the preceding sentence, the Earnest
Money shall promptly be returned to Purchaser.
3.3 Delivery of Title Policy at Closing. At the Closing, as a
condition to Purchaser's obligation to close, the Title Company shall
deliver to Purchaser a 1992 ALTA Owner's Policy of Title Insurance covering
the Property ("Title Policy") issued
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by the Title Company, with modifications or deletions of standard
exceptions as follows: (1) rights or claims of parties in possession not
shown by public records (limited to right of possession of tenants under
Leases), (2) encroachments, overlaps, boundary line disputes and matters
that would be disclosed by an accurate survey and inspection of the
premises (limited to those matters disclosed in the Surveys), (3)
easements, or claims of easements, not shown by the public records
(deleted), (4) any lien, or right of lien, for services, labor, or material
heretofore or hereinafter furnished, imposed by law, and not shown by the
public records (deleted), (5) taxes or special assessments that are not
shown as existing liens by the public records (limited to taxes not yet due
and payable), containing the endorsements and modifications to the
exclusions that during the Title Review Period the Title Company agreed to
issue, dated the date and time of the recording of the Deed(s) (defined
below) in the amount of the Purchase Price, insuring Purchaser as owner of
good, marketable and indefeasible fee simple title to the Property(ies),
subject only to the Permitted Exceptions. The term "Permitted Exceptions"
with respect to the Property shall mean the specific exceptions (exceptions
that are not part of the promulgated title insurance form) in the Title
Commitments that the Title Company has not agreed to insure over or remove
from such Title Commitments and that Seller is not required to remove as
provided above, real estate taxes not yet due and payable, and tenants in
possession as tenants only under the Leases or subleases without any option
to purchase or acquire an interest in the Property or any portion thereof.
The Permitted Exceptions shall apply only to the applicable portions of the
Property as indicated in the Title Commitments. Seller shall execute at
Closing an affidavit reasonably satisfactory to the Title Company so that
the Title Company can delete or modify the standard printed exceptions as
set forth above.
3.4 Title and Survey Costs. The cost of the Survey, including any
necessary revisions, and up to $14,000 for the premium for the Title Policy
shall be paid by Seller. (Purchaser paying any premium in excess of
$14,000).
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Performance under Leases and Service Contracts. During the
pendency of this Agreement, Seller will perform its material obligations
under Leases and Service Contracts and other agreements that may affect any
of the Property.
4.2 New Contracts. During the pendency of this Agreement, Seller
will not enter into any contract that will be an obligation affecting any
of the Property subsequent to the Closing except contracts entered into in
the ordinary course of business that are terminable without cause on 30-
days notice.
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4.3 Listings and Other Offers. During the pendency of this
Agreement, Seller will not enter into any contracts or agreements (whether
binding or not) regarding any disposition of any of the Property except
contracts or agreements entered into in the ordinary course of business
with respect to the Tangible Personal Property or the Intangible Personal
Property.
4.4 Leasing Arrangements. During the pendency of this Agreement,
Seller will not amend, terminate or enter into any Lease without
Purchaser's prior written consent in each instance, which consent Purchaser
shall not unreasonably delay or withhold. At the Closing, Purchaser shall
agree to assume the payment for commissions and tenant improvements in
connection with any Lease consented to by Purchaser pursuant to this
Paragraph 4.4, provided the amount of the commission and tenant
improvements was disclosed to Purchaser by Seller in obtaining such
consent.
4.5 Removal and Replacement of Tangible Personal Property. Seller
will not remove any Tangible Personal Property except as may be required
for necessary repair or replacement, and replacement shall be of equal
quality and quantity as existed as of the time of its removal.
4.6 Damage. Risk of loss for the Property up to and including the
Closing Date shall be borne by Seller. In the event the Property or a
portion thereof is materially damaged or destroyed, Purchaser may, at its
option, by notice to Seller given within 10 days after Purchaser is
notified by Seller of such damage or destruction (and if necessary the
Closing Date shall be extended to give Purchaser the full 10-day period to
make such election): (i) terminate this Agreement, in which case the
Earnest Money shall be immediately returned to Purchaser or (ii) proceed
under this Agreement, receive any insurance proceeds (including any rent
loss insurance applicable to any period on and after the Closing Date) due
Seller as a result of such damage or destruction and assume responsibility
for such repair, and Purchaser shall receive a credit at Closing for the
reasonable cost to complete the repair of any uninsured damage or for any
deductible or coinsured amount under said insurance policies. "Materially
damaged" means damage reasonably exceeding (in the aggregate for all
property damaged) $1.0 million for insured damage and $500,000 for
uninsured damage. If Purchaser elects (ii) above, Seller will cooperate
with Purchaser after the Closing to assist Purchaser in obtaining the
insurance proceeds from Seller's insurers. Purchaser may extend the
Closing Date up to 90 days in order to obtain a written settlement
agreement and assignment of insurance proceeds with Seller's insurer. If
the Property is not materially damaged, then Purchaser shall not have the
right to terminate this Agreement as to such Property, but Seller shall at
its cost repair the damage before the Closing in a manner reasonably
satisfactory to Purchaser or if repairs cannot be completed before the
Closing, credit Purchaser at Closing for the reasonable cost to complete
the repair. Purchaser shall not be entitled to terminate pursuant to
clause (i) above if Seller agrees either to repair and restore the damaged
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<PAGE> 12
property to its previous condition or to credit the Purchase Price for the
cost of such repair and restoration provided in either case that the
potential loss of net operating income to Purchaser as a result of lost
rent from existing tenants arising from the damage, when added to the loss
of annual net operating income under clause (ii) of Paragraph 2.4, would
cause the total amount of lost annual net operating income from Leases in
place to exceed $130,000. The Closing Date may be extended up to 90 days
in order to permit Seller to complete any repair or restoration.
4.7 Condemnation. By notice to Seller given within 10 days after
Purchaser receives notice of material proceedings in eminent domain that
are contemplated, threatened or instituted against the Property or any
portion thereof by any body having the power of eminent domain, and if
necessary the Closing Date shall be extended to give Purchaser the full 10-
day period to make such election, Purchaser may: (i) terminate this
Agreement in which case the Earnest Money shall be immediately returned to
Purchaser; or (ii) proceed under this Agreement in which event Seller
shall, at the Closing, assign to Purchaser its entire right, title and
interest in and to any condemnation award, and Purchaser shall have the
sole right during the pendency of this Agreement to negotiate and otherwise
deal with the condemning authority in respect of such matter. A proceeding
is material only if the damage to the owner of the area taken is reasonably
expected to exceed $1.0 million (in aggregate for all condemnation
proceedings), whether or not the offer from the condemning authority or
actual award exceeds $1.0 million. Damage includes the land actually taken
and any diminution in the value of the remaining property as a result of
such taking, including, without limitation, loss in value due to a portion
of any remainder of the property constituting a legal nonconformity or if
the potential loss of net operating income to Purchaser as a result of lost
rent from existing tenants arising from the taking, when added to the loss
of net operating income under clause (ii) of Paragraph 2.4, would cause the
total amount of lost annual net operating income from Leases in place to
exceed $130,000.
ARTICLE 5: CLOSING
5.1 Closing. The consummation of the transaction contemplated
herein ("Closing") shall occur on the Closing Date at the Seller's or its
attorney's office in New York City, New York.
5.2 Conditions to the Parties' Obligations to Close. In addition
to all other conditions set forth herein, the obligation of Seller, on the
one hand, and Purchaser, on the other hand, to consummate the transactions
contemplated hereunder shall be contingent upon the following:
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<PAGE> 13
(a) The other party's representations and warranties contained
herein shall be true and correct as of the date of this Agreement and the
Closing Date. For purposes of this clause (a), a representation shall be
false if the factual matter that is the subject of the representation is
false notwithstanding any lack of knowledge or notice to the party making
the representation;
(b) As of the Closing Date, the other party shall have performed
its obligations hereunder and all deliveries to be made at Closing have
been tendered;
(c) The consummation of the transaction would not violate, or
subject a party to liability under, the Employee Retirement Income Security
Act of 1974, as amended;
(d) There shall exist no pending order or decree issued by any
court or administrative agency restraining or prohibiting the consummation
of the transactions contemplated hereby. Seller, at its election, may
suspend Purchaser's right to terminate this Agreement pursuant to this
subparagraph (d) above for up to 90 days if it attempts in good faith by
appropriate proceedings to lift or remove such order or decree to enable
the Closing to occur within such 90 day period;
(e) There shall exist no pending or threatened action, suit or
proceeding with respect to the other party before or by any court or
administrative agency, which is not otherwise covered by the indemnity set
forth in Article 8, and which, if determined adversely, would (i) prevent
the consummation of the transactions contemplated hereby, (ii) cause any of
the transactions to be rescinded following consummation, or (iii) adversely
affect the right of Purchaser to own, operate, encumber or transfer the
Property or any portion thereof.
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with the Closing hereunder has not been
satisfied as of the Closing Date, such party may, in its sole discretion,
terminate this Agreement by delivering written notice to the other party on
or before the Closing Date, or elect to close, notwithstanding the non-
satisfaction of such condition, in which event such party shall be deemed
to have waived any such condition provided that in no event shall Purchaser
be deemed to have waived any rights or benefits under Paragraph 5.2(d) or
Article 8. Nothing in the foregoing shall relieve a party from any
liability it would otherwise have if the failure of a party to satisfy a
condition also constitutes a default by such party hereunder.
5.3 Seller's Deliveries in Escrow. At least one business day prior
to the Closing Date, Seller shall deliver in escrow to the Escrow Agent the
following with respect to each Property then subject to this Agreement:
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<PAGE> 14
(a) Deed. One or more special warranty deeds (warranting title
against any party claiming by, through or under Seller) in form provided
for under the law of the State of Indiana or otherwise in conformity with
the custom in such jurisdiction and mutually satisfactory to the parties,
executed and acknowledged by Seller, conveying to Purchaser good,
indefeasible and marketable fee simple title to the Real Property, subject
only to the Permitted Exceptions applicable to the Real Property (the
"Deed(s)"). In addition to the Permitted Exceptions, the Deed shall be
expressly subject to: (i) all zoning and building laws, ordinances, maps,
resolutions and regulations of all governmental authorities having
jurisdiction which affect the Property and use and improvement thereof; and
(ii) any state of facts which an accurate survey made of the Real Property
at the time of Closing would show. The Deeds must be delivered in escrow
one business day before the Closing to the Title Company offices located in
the counties in which the Property is located so that they can be recorded
on the Closing Date;
(b) Assignment of Leases, Service Contracts, and Personal Property.
An Assignment of Leases, Service Contracts, and Personal Property in the
form of Exhibit D attached hereto, executed and acknowledged by Seller,
vesting in Purchaser good title to the property described therein free of
any claims except for the Permitted Exceptions to the extent applicable;
(c) Notice to Tenants. A notice to each tenant in the form of
Exhibit E attached hereto.
(d) State Law Disclosures. Such disclosures and reports, required
by applicable state and local law in connection with the conveyance of real
property;
(e) FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit executed by Seller. If Seller fails to provide the necessary
affidavit and/or documentation of exemption on the Closing Date, Purchaser
may proceed with withholding provisions as provided by law;
(f) Tenant Estoppels. Estoppel certificates satisfying the
conditions in Paragraph 2.4, dated (or recertified and updated as of a
date) not earlier than the Date of this Agreement, and in no event earlier
than 60 days before the Closing Date if the Closing Date is extended as
provided herein;
(g) Authority. Evidence of existence, organization, and authority
of Seller and the authority of the person executing documents on behalf of
Seller reasonably satisfactory to Purchaser and the Title Company;
(h) Opinion. An opinion of Seller's counsel, Goodwin, Procter &
Hoar, in form and substance reasonably acceptable to Purchaser and its
counsel, which shall
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<PAGE> 15
address the existence, organization and authority of Seller and the
authority of the person executing documents on behalf of the Seller and the
compliance by Seller with its governing documents; and
(i) Additional Documents. Any additional documents that Purchaser,
the Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement.
5.4 Purchaser's Deliveries in Escrow. Except as specified below,
at least one business day prior to the Closing Date, Purchaser shall
deliver in escrow to the Escrow Agent the following:
(a) Purchase Price. On the Closing Date, the Purchase Price, less
the Earnest Money that is applied to the Purchase Price, and less the
Holdback, plus or minus applicable prorations, deposited by Purchaser with
the Escrow Agent in immediate, same-day federal funds wired for credit into
the Escrow Agent's escrow account. The Purchase Price, as adjusted, shall
be delivered to Seller immediately after confirmation of proper recordation
of the Deeds;
(b) Assignment of Leases, Service Contracts and Personal Property.
Execution by Purchaser of the Assignment of Leases, Service Contracts and
Personal Property;
(c) State Law Disclosures. Such disclosures and reports required
by applicable state and local law in connection with the conveyance of real
property; and
(d) Additional Documents. Any additional documents that Seller,
the Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement.
5.5 Closing Statements/Escrow Fees. At least one business day
prior to the Closing Date, Seller and Purchaser shall deposit with the
Escrow Agent executed closing statements consistent with this Agreement in
form required by the Escrow Agent. The Escrow Agent's escrow fee shall be
divided equally between and paid by Seller and Purchaser. All costs of
recording the Deeds and other conveyance documents (excluding the cost of
recording any documents required to clear title) shall be paid by the
Purchaser.
5.6 Title Policy. The Escrow Agent shall deliver to Purchaser the
Title Policy pursuant to Paragraph 3.3.
5.7 Possession. At the Closing, Seller shall deliver to Purchaser
possession of the Property subject only to the Permitted Exceptions
applicable to such Property.
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<PAGE> 16
5.8 Delivery of Books and Records. Immediately after the Closing,
Seller shall package for delivery to the offices of Purchaser's property
manager in Indianapolis, Indiana the original Leases, and, to the extent
available, copies or originals of all books and records of account,
contracts, copies of correspondence with tenants and suppliers, receipts
for deposits, unpaid bills and other papers or documents which pertain to
the Property together with all advertising materials, booklets, keys and
other items, if any, used in the operation of the Property acquired by
Purchaser, and the original "as-built" plans and specifications and all
other available plans and specifications. Purchaser shall arrange for
actual delivery at its expense of the documents to its offices in
Indianapolis, Indiana.
5.9 Close of Escrow. Upon satisfaction or completion of the
foregoing conditions and deliveries, the parties shall direct the Escrow
Agent to immediately record and deliver the documents described above to
the appropriate parties and make disbursements according to the closing
statements executed by Seller and Purchaser.
ARTICLE 6: PRORATIONS
6.1 Prorations. The items in subparagraphs (a) through (c) of this
Paragraph 6.1 shall be prorated between Seller and Purchaser as of the
close of the day immediately preceding the Closing Date for the Property:
(a) Taxes and Assessments. General real estate taxes and
assessments imposed by governmental authority ("Taxes") and any assessments
by private covenant constituting a lien or charge on the Property for the
then-current calendar year or other current tax period not yet due and
payable. If the Closing occurs prior to the receipt by Seller of the tax
bill for the calendar year or other applicable tax period in which the
Closing occurs, Purchaser and Seller shall prorate Taxes for such calendar
year or other applicable tax period based upon the most recent
ascertainable assessed values and tax rates. If a Property has not been
assessed on a completed basis but will be for the current year or other
applicable tax period, the parties shall complete the proration based upon
an assessed value equal to the Purchase Price allocable to such Property.
(b) Collected Rent. All collected rent and other income (and any
applicable state or local tax on rent) under Leases, but excluding payments
for Operating Costs. Seller shall be charged with any rentals collected by
Seller before Closing but applicable to any period of time after Closing.
Uncollected rent and other income shall not be prorated. If Purchaser
collects delinquencies after Closing, Purchaser shall apply such rent to
the obligations owing Purchaser for its period of ownership, remitting the
balance, if any, to Seller. Purchaser shall bill and attempt to collect
such delinquent rent in the ordinary course of business, but shall not be
obligated to engage a collection agency or take legal action to collect any
delinquencies. Seller shall not
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<PAGE> 17
have the right to seek collection of any rents delinquent for any period
prior to the Closing.
(c) Operating Costs. Seller, as landlord under the Leases, is
currently collecting from tenants under the Leases additional rent to cover
Taxes, insurance, utilities (to the extent not paid directly by tenants),
common area maintenance and other operating costs and expenses
(collectively, "Operating Costs") incurred by Seller in connection with the
ownership, operation, maintenance and management of the Property. At
Closing, Purchaser shall receive a credit or debit (the debit being
calculated only with respect to tenants who are then current under their
Leases) equal to the amount of the payments made by tenants in respect of
Operating Costs for the period for which such Operating Costs were
collected less the amount actually and properly paid by Seller during this
same period of time for Operating Cost items. Amounts actually and
properly paid by Seller during such period shall be calculated on the basis
of amounts actually paid by Seller through the 23rd day of the month that
immediately precedes the Closing Date (the "Cut-Off Date"), and shall be
estimated for the period from the Cut-Off Date to the Closing Date by
adding an amount equal to the product of (i) the average daily amount paid
by Seller, being (a) the amounts actually paid by Seller through the Cut-
Off Date, divided by (b) the number of days in 1995 through the Cut-Off
Date, and (ii) the number of days from the Cut-Off Date to the Closing
Date. Payments in arrears made by tenants on the basis of actual costs for
the period preceding the Cut-Off Date and from the Cut-Off Date to the
Closing Date shall be calculated and estimated in the same manner.
Operating Costs that are not paid by tenants either directly or reimbursed
under the Leases shall be prorated. In lieu of any post-Closing adjustment
for Operating Costs, at Closing Purchaser shall receive a credit for
estimated disallowable expenses payable to tenants after annual or other
periodic Operating Cost adjustment following the Closing. This credit will
be determined by assuming that Operating Costs for the first six months of
1995 will be consistent for the remainder of 1995 and applying the same
percentage adjustment for disallowable expenses as was used in the
reconciliation for 1994 Operating Costs.
(d) Leasing Commissions. On or before the Closing Date, except as
provided pursuant to Paragraph 4.4, Seller shall pay in full all leasing
commissions due to leasing or other agents for the current remaining term
of each Lease; provided, however, that if any leasing agent will not accept
such payment, then Purchaser shall assume the obligation to pay such
leasing commissions and shall be entitled to a credit against the Purchase
Price at Closing in an amount equal to the then-unpaid leasing commissions
and Purchaser shall assume, in writing, the commission agreements, if any,
and the obligation to pay any leasing commissions due thereunder after the
Closing Date, including any obligation for the payment of a leasing
commission due as a result of the renewal of any Lease or the expansion of
lease space occupied by any tenant pursuant to an express provision set
forth in any such Lease or a commission agreement covering such Lease.
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<PAGE> 18
6.2 Tenant Deposits. All tenant security deposits (and interest
thereon if required by law or contract to be earned thereon) shall be
transferred or credited to Purchaser at Closing. At Closing Purchaser
shall assume Seller's obligations related to tenant security deposits but
only to the extent they are properly credited or transferred to Purchaser.
6.3 Utility Deposits. Seller shall receive a credit for the amount
of deposits, if any, with utility companies that are transferable and that
are assigned to Purchaser at the Closing.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material
inducement to Purchaser to execute this Agreement and consummate this
transaction, Seller represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized and
is validly existing as a Massachusetts business trust, and Seller is in
good standing and is qualified to do business in the State of Indiana.
Seller has the full right, authority and power to own its properties and to
conduct its business.
(b) Authorization. The Seller has the requisite power to enter
into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance by the Seller of this Agreement and all
of the documents to be delivered by Seller at the Closing and the
consummation of the transactions contemplated hereby have been duly
authorized and approved by its Board of Trustees and no further action on
the part of the Seller is necessary to authorize the execution, delivery
and performance by the Seller of this Agreement. This Agreement and all of
the documents to be delivered by Seller at the Closing do and will
constitute valid and binding agreements of the Seller enforceable in
accordance with their terms, except to the extent that their enforceability
may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
(c) No Contravention. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
compliance with the terms, conditions or provisions of this Agreement will
be a violation of any of the terms, conditions or provisions of the
Seller's Declaration of Trust or Bylaws or of any material agreement or
instrument to which the Seller is a party or by which the Seller or any of
its material properties may be bound, or constitute a default or create a
right of termination or acceleration thereunder, or result in the creation
or imposition
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<PAGE> 19
of any security interest, mortgage, lien, charge or encumbrance of any
nature whatsoever upon the Seller or any of its properties or assets.
(d) Consents. No consent, approval, authorization, order,
registration, filing or qualification of or with any (a) governmental
authority, (b) stock exchange on which the securities of the Seller are
traded or (c) other person (whether acting in any individual, fiduciary or
other capacity) is required to be made or obtained by the Seller for the
execution, delivery and performance by the Seller of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, any approval of any class of security holders of the Seller.
(e) Conflicts and Pending Actions or Proceedings. There is no
agreement to which Seller is a party or, to Seller's knowledge, binding on
Seller which is in conflict with this Agreement. No court, tribunal or
agency shall have issued an order, enjoining, restraining or prohibiting
this Agreement or the complete consummation of the transactions
contemplated hereby.
(f) Leases and Rent Roll. The documents constituting the Leases
that are delivered to Purchaser pursuant to Paragraph 2.1 are true, correct
and complete copies of the Leases and all amendments and guarantees.
(g) Service Contracts. The list of Service Contracts is true,
correct, and complete in all material respects. Neither Seller nor, to
Seller's knowledge, any other party is in default under any Service
Contract.
(h) Operating Statements. The Operating Statements show all
material items of income and expense (operating and capital) incurred in
connection with Seller's ownership, operation, and management of the
Property for the periods indicated and are true, correct, and complete in
all material respects. The Operating Statements are materially inaccurate
if, in the aggregate, annual net operating income disclosed thereunder
exceeds the actual annual net operating income for the periods indicated by
$130,000 or more.
(i) Notice of Violations or Defects. To the best of Seller's
knowledge, Seller has received no written notice that any Property or the
use thereof violates any governmental law or regulation or any covenants or
restrictions encumbering such Property.
7.2 Purchaser's Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this
transaction, Purchaser represents and warrants to Seller that:
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<PAGE> 20
(a) Organization and Authority. Purchaser has been duly organized
and is validly existing as a Maryland real estate investment trust, in good
standing in the State of Maryland, and as of the Closing Date either the
Purchaser or its Affiliate to which the Property will be conveyed will be
qualified to do business in the State of Indiana. Purchaser has the full
right and authority and has obtained any and all consents required therefor
to enter into this Agreement and to consummate or cause to be consummated
the sale. This Agreement and all of the documents to be delivered by
Purchaser at the Closing have been and will be authorized and properly
executed and will constitute the valid and binding obligations of
Purchaser, enforceable in accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser's knowledge binding on Purchaser which
is in conflict with this Agreement. There is no action or proceeding
pending or to Purchaser's knowledge, threatened, against Purchaser or which
challenges or impairs Purchaser's ability to execute or perform its
obligations under this Agreement.
7.3 Survival of Representations and Warranties. The representations
and warranties set forth in this Article 7 are made as of the date of this
Agreement and are remade as of the Closing Date and shall not survive the
Closing.
7.4 DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN THIS
AGREEMENT OR IN ANY DOCUMENT EXECUTED PURSUANT TO OR IN CONNECTION WITH
THIS AGREEMENT, THIS SALE AND CONVEYANCE IS MADE, AND PURCHASER AGREES TO
ACCEPT POSSESSION OF THE PROPERTY, ON AN AS-IS BASIS WITH NO RIGHT OF SET-
OFF OR REDUCTION IN PURCHASE PRICE AND SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, AS TO
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY, THE STATE OF REPAIR OF THE PROPERTY, OR WITH RESPECT TO SOIL
CONDITIONS OR THE PRESENCE OR RELEASE OF HAZARDOUS MATERIALS. THIS
DISCLAIMER DOES NOT EFFECT AN ASSUMPTION OF ANY LIABILITY BY PURCHASER AND
IT SHALL NOT BE CONSTRUED TO WAIVE ANY RIGHTS OF CONTRIBUTION OR INDEMNITY
OR OTHERWISE AFFECT THE LIABILITIES OF THE PARTIES TO EACH OTHER OR TO
THIRD PARTIES UNDER ENVIRONMENTAL LAWS.
ARTICLE 8: INDEMNIFICATION
8.1 Indemnification, General. Seller agrees to indemnify, defend
with counsel reasonably satisfactory to Purchaser in accordance with
Paragraph 9.14, save and hold Purchaser and its subsidiaries and Affiliates
harmless from and against and
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<PAGE> 21
compensate them for any and all Losses (as defined below) received,
incurred or sustained by them, or any of them, to the extent to which they
arise out of or result from any suit, action or proceeding pending or
threatened before any court, tribunal or agency wherein any security holder
of Seller or any party seeking to acquire control of Seller, whether by
means of a tender offer, proxy solicitation or otherwise, is seeking or
threatens to seek (a) any judgment, decree, order or injunction which, if
determined adversely, would (i) prevent consummation of any of the
transactions to this Agreement, (ii) cause any of such transactions to be
rescinded following consummation or (iii) adversely affect the right of
Purchaser or its permitted assignees under this Agreement to own, operate,
encumber or transfer the Property; or (b) any damages from Purchaser, its
subsidiaries, or its Affiliates by reason of the transactions contemplated
hereby; provided, that the foregoing indemnity shall not apply to any
actions of Purchaser which constitute bad faith or fraud. For purposes of
this Article 8, "Losses" shall mean assessments, damages, liabilities,
expenses, fees, judgments or deficiencies of any nature whatsoever
(including, without limitation, any unpaid taxes due from the Seller and
reasonable attorneys' fees and other costs and expenses incident to any
suit, action or proceeding including those incurred in connection with the
enforcement of this Agreement), but shall not include any consequential
damages or damages for benefit of the bargain beyond the indemnitee's
expenditures and incurred obligations. This indemnity is not limited to
the amount of the Holdback or to any other amount except that recovery may
not be made under this indemnity for Due Diligence Costs in excess of
$150,000 in circumstances where they are reimbursable pursuant to Paragraph
1.3 in connection with Purchaser's termination pursuant to Paragraph
5.2(d).
8.2 Survival of Indemnity. Regardless of whether this Agreement is
otherwise terminated, the indemnity of the Seller set forth in Paragraph
8.1 above shall survive for six months from the date of this Agreement, or
if later, four months from the date of Closing, notwithstanding the
establishment of a shorter period by any applicable statute of limitations,
the provisions of which are hereby waived, provided that liability with
respect to any matters as to which a claim is made within such periods, as
applicable, shall continue until finally determined and paid, whether
through judicial proceedings or by settlement.
8.3 Set-Off; Release of Holdback. Any amount or amounts owing from
the Seller to Purchaser under this Article 8 may be paid to Purchaser by
set-off dollar for dollar against the Holdback Amount (as defined herein),
to the extent such amounts are sufficient, without prejudice to Purchaser's
right to pursue any other remedies at law or in equity in the event such
amounts are insufficient. The Holdback Amount shall equal, at any time,
(a) the Holdback plus (b) interest on the outstanding balance of the
Holdback, less any previous amounts offset against such Holdback under this
Paragraph 8.3, at a rate equal to the sixty (60) day LIBOR (London Inter-
Bank Offered Rate) in effect from time to time plus one-quarter of one
percent (0.25%), from the
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Closing Date to the date the outstanding balance of the Holdback Amount is
paid to Seller or fully applied by set-off under this Paragraph 8.3. If
the survival period of this indemnity under Paragraph 8.2 shall have
terminated without any suit, action or proceeding described in Paragraph
8.1 having been instituted, Purchaser shall forthwith pay, on the first
business day following such termination, to Seller the remaining balance
of the Holdback Amount by wire transfer of immediately available funds to
an account previously designated in writing by Seller. If any such suit,
action or proceeding has been instituted, then final settlement of the
Holdback Amount shall be made upon final settlement or judgment of such
suit, action or proceeding, after all appeals have been concluded or have
expired. At least on a quarterly basis and at the time of settlement of
the Holdback Amount or termination of the indemnity, whichever is earlier,
Purchaser shall provide Seller with an accounting of all Losses as to which
there has been an off-set against the Holdback Amount. Seller shall have
the right to make reasonable requests for additional information to verify
such accounting, and Seller may notify Purchaser within 60 days of any such
accounting that it disagrees with amounts accounted for by Purchaser as
Losses and set-off against the Holdback Amount; in such event, Seller and
Purchaser agree to meet promptly to attempt to resolve in good faith such
disagreements.
ARTICLE 9: MISCELLANEOUS
9.1 Parties Bound. Neither party may assign this Agreement without
the prior written consent of the other, and any such prohibited assignment
shall be void; provided that Purchaser may assign this Agreement without
Seller's consent to an Affiliate. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective legal
representatives, successors, assigns, heirs, and devisees of the parties.
For the purposes of this paragraph, the term "Affiliate" means (a) an
entity that directly or indirectly controls, is controlled by or is under
common control with the Purchaser or (b) an entity at least a majority of
whose economic interest is owned by Purchaser; and the term "control" means
the power to direct the management of such entity through voting rights,
ownership or contractual obligations. No assignment shall relieve the
assignor from any liability hereunder.
9.2 Headings. The article and paragraph headings of this Agreement
are for convenience only and in no way limit or enlarge the scope or
meaning of the language hereof.
9.3 Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the
remainder of this Agreement shall be deemed valid and operative, and effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The failure by either party to enforce against the other any
term or provision of this Agreement shall be deemed not
<PAGE>
<PAGE> 23
to be a waiver of such party's right to enforce against the other party the
same or any other such term or provision.
9.4 Governing Law. Except where the laws of Indiana are
mandatorily applicable, this Agreement shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of
New York.
9.5 Survival. The following provisions of this Agreement shall
survive the Closing and shall not be deemed to be merged into or waived by
the instruments of Closing: 1.3, 2.3, 4.6 (with respect to Seller's
agreement to cooperate to assist in collecting insurance), 5.2, 5.8,
6.1(b), 7.4, Article 8 and Article 9.
9.6 No Third Party Beneficiary. This Agreement is not intended to
give or confer any benefits, rights, privileges, claims, actions or
remedies to any person or entity as a third party beneficiary, decree, or
otherwise.
9.7 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against
whom enforcement is sought.
9.8 Time. Time is of the essence in the performance of this
Agreement.
9.9 Confidentiality. Between the date hereof and for a period
ending 1 year after the Closing Date, neither Seller nor Purchaser will
release or cause or permit to be released any press notices, or publicity
(oral or written) or advertising promotion relating to, or otherwise
announce or disclose or cause or permit to be announced or disclosed, in
any manner whatsoever, the terms, conditions or substance of this Agreement
or press release relating thereto without first obtaining the written
consent of the other party, which consent shall not be unreasonably
withheld. Nothing in this Paragraph 9.9 shall preclude any party from
(a) discussing the substance or any relevant details of such transactions
with any of its attorneys, accountants, professional consultants, lenders,
partners, investors, or any prospective lender, partner or investor, as the
case may be; or (b) making such disclosures as required by applicable
federal, state and local law, rule and regulation, court order or rule or
regulation of the New York Stock Exchange, including without limitation,
governmental regulatory, disclosure, tax and reporting requirements, but
each party shall consult with the other party, acting in good faith, as to
the contents of any such disclosure described in this clause (b) prior to
dissemination. In addition to any other remedies available to a party,
each party shall have the right to seek equitable relief, including without
limitation injunctive relief or specific performance, against the other
party in order to enforce the provisions of this Paragraph 9.9.
<PAGE>
<PAGE> 24
9.10 Attorneys' Fees. Should either party employ attorneys to
enforce any of the provisions hereof, the party losing in any final
judgment agrees to pay the prevailing party all reasonable costs, charges
and expenses, including reasonable attorneys' fees, expended or incurred in
connection therewith.
9.11 Notices. All notices required or permitted hereunder shall be
in writing and shall be served on the parties at the following address:
If to Seller: Prudential Realty Trust
c/o The Prudential Insurance Company of America
Attn: Richard Flohr
751 Broad Street
Newark, New Jersey 07102-3777
Telephone: 201/802-4302
Facsimile: 201/824-7639
With a copy to: The Prudential Insurance Company of America
Attn: Donna Dellechiaie
Associate Regional Counsel
Law Department
Newark Realty Group Office
Gateway III - 14th Floor
Newark, New Jersey 07102
Telephone: 201/802-5412
Facsimile: 201/802-7040
If to Purchaser: c/o Security Capital Industrial Trust
Attn: M. Marc Jason
14100 East 35th Place, Suite 100
Aurora, Colorado 80011
Telephone: 303/576-2671
Facsimile: 303/576-2602
With a copy to: Security Capital Industrial Trust
Attn: Walter C. Rakowich
4900 Blazer Parkway
Dublin, Ohio 43017
Telephone: 614/793-3070
Facsimile: 614/793-3071
<PAGE>
<PAGE> 25
With a copy to: Mayer, Brown & Platt
Attn: George Ruhlen
141 East Palace Avenue
Santa Fe, New Mexico 87501
Telephone: 505/820-8185
Facsimile: 505/820-7334
Any such notices shall be either (a) sent by certified mail, return
receipt requested, in which case notice shall be deemed delivered three
business days after deposit, postage prepaid in the U.S. Mail, (b) sent by
overnight delivery using a nationally recognized overnight courier, in
which case it shall be deemed delivered one business day after deposit with
such courier, (c) sent by telefax, in which case notice shall be deemed
delivered upon transmission of such notice, or (d) sent by personal
delivery. The above addresses may be changed by written notice to the
other party; provided, however, that no notice of a change of address shall
be effective until actual receipt of such notice. Copies of notices are
for informational purposes only, and a failure to give or receive copies of
any notice shall not be deemed a failure to give notice.
9.12 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event
after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included,
unless such last day is a Saturday, Sunday or legal holiday, in which event
the period shall run until the end of the next day which is neither a
Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 6 p.m. Denver, Colorado time.
9.13 Information and Audit Cooperation. At Purchaser's request, at
any time before the Closing, Seller agrees to provide to the Purchaser's
designated independent auditor access to the books and records of each
Property and all related information regarding the period for which
Purchaser is required to have such Property audited under the regulations
of the Securities and Exchange Commission, and a representation letter
regarding the books and records of each Property in substantially the form
of Exhibit F attached hereto in connection with the normal course of
auditing such Property in accordance with generally accepted auditing
standards. The representation letter may be signed by the manager of the
Property. The Purchaser agrees to indemnify and hold harmless the Seller
from any claim, damage, loss, or liability to which Seller is at any time
subjected by person who is not a party to this agreement as a result of its
compliance with this paragraph.
9.14 Procedure for Indemnity. The following provisions govern
actions for indemnity under this Agreement. Promptly after receipt by an
indemnitee of notice of any claim, such indemnitee will, if a claim in
respect thereof is to be made against the
<PAGE>
<PAGE> 26
indemnitor, deliver to the indemnitor written notice thereof and the
indemnitor shall have the right to assume the defense thereof with counsel
mutually satisfactory to the parties (it being agreed, for these purposes,
that Sullivan & Cromwell, Goodwin, Procter & Hoar and Mayer, Brown & Platt
are mutually satisfactory); provided, however, that an indemnitee may at
its expense participate in the defense, and that an indemnitee shall have
the right to retain its own counsel, with the fees and expenses to be paid
by the indemnitor, if the counsel retained by the indemnitor would be
inappropriate due to actual or potential differing interests between such
indemnitee and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnitor within
a reasonable time of notice of any such claim shall relieve such indemnitor
of any liability to the indemnitee under this indemnity only if and to the
extent that such failure is prejudicial to its ability to defend such
action, and the omission so to deliver written notice to the indemnitor
will not relieve it of any liability that it may have to any indemnitee
other than under this indemnity. The indemnitor shall have the right to
settle any action, without the consent of the indemnitee, which is or may
be subject to a claim for indemnification hereunder so long as such
settlement involves a full release of the indemnitee and any of its
applicable subsidiaries and affiliates and does not involve more than the
payment of money (any other terms of settlement shall be subject to the
indemnitee's reasonable approval). If an indemnitee settles a claim
without the prior written consent of the indemnitor, then the indemnitor
shall be released from liability with respect to such claim unless the
indemnitor has unreasonably withheld such consent.
9.15 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, and all of such counterparts shall constitute one Agreement. To
facilitate execution of this Agreement, the parties may execute and
exchange by telephone facsimile counterparts of the signature pages.
9.16 Section 1031 Exchange. Purchaser may consummate the purchase
of any portion of the Property as part of a so-called like kind exchange
(an "Exchange") pursuant to Sec. 1031 of the Internal Revenue Code of 1986,
as amended (the "Code"), provided that: (i) the Closing shall not be
delayed or affected by reason of an Exchange nor shall the consummation or
accomplishment of the Exchange be a condition precedent or condition
subsequent to Purchaser's obligations under this Agreement; (ii) Purchaser
shall effect any Exchange through a qualified intermediary and Seller shall
not be required to take an assignment of the purchase agreement for the
exchange property or be required to acquire or hold title to any real
property for purposes of consummating any Exchange; and (iii) Purchaser
shall pay any additional costs that would not otherwise have been incurred
by Purchaser or Seller had Purchaser not consummated its purchase through
an Exchange. Seller shall not by this agreement or acquiescence to any
Exchange (1) have its rights under this Agreement affected or diminished in
any manner or (2) be responsible for compliance with or be
<PAGE>
<PAGE> 27
deemed to have warranted to Purchaser that any Exchange in fact complies
with Sec. 1031 of the Code.
9.17 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by
Seller to Purchaser at Closing, Seller agrees to perform, execute and
deliver, but without any obligation to incur any additional liability or
expense, on or after the Closing any further deliveries and assurances as
may be reasonably necessary to consummate the transactions contemplated
hereby or to further perfect the conveyance, transfer and assignment of the
Property to Purchaser.
9.18 Exculpation Provisions. Prudential Realty Trust is a voluntary
association established under the laws of the Commonwealth of Massachusetts
by a Declaration of Trust dated June 19, 1985, which together with all
amendments thereto, is on file with the Secretary of State of the
Commonwealth of Massachusetts. The obligations of the Prudential Realty
Trust are not personally binding upon, nor shall resort be made to the
private property of any of the trustees, shareholders, officers, employees
or agents of Prudential Realty Trust, but the property of Prudential Realty
Trust shall be bound.
Security Capital Industrial Trust is a Maryland real estate
investment trust. The obligations of Security Capital Industrial Trust are
not personally binding upon nor shall resort be made to the private
property of any of the trustees, shareholders, officers, employees or
agents of Security Capital Industrial Trust, but only the property of
Security Capital Industrial Trust shall be bound.
<PAGE>
<PAGE> 28
SIGNATURE PAGE TO
AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
PRUDENTIAL REALTY TRUST
AND
SECURITY CAPITAL INDUSTRIAL TRUST
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year written below.
PRUDENTIAL REALTY TRUST
By: /s/ Joseph M. Selzer
Name: Joseph M. Selzer
Title: Vice President
Dated: June 7, 1995
"Seller"
SECURITY CAPITAL INDUSTRIAL TRUST
By: /s/ M. Marc Jason
Name: M. Marc Jason
Title: Vice President
Dated: June 7, 1995
"Purchaser"
<PAGE>
<PAGE> 29
AGREEMENT OF PURCHASE AND SALE
FOR PARK 100 PORTFOLIO, INDIANAPOLIS, INDIANA
EXHIBITS
A - Legal Description of Real Property
B - Survey Certification
C - Estoppel Certificate
D - Assignment of Leases, Service Contracts and Personal Property
E - Notice to Tenants
F - Audit Letter
<PAGE>
<PAGE> 30
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
The Property consists of the following properties at the indicated
addresses. The parties will attach to or supplement this Agreement with
legal descriptions within 5 business days.
Park 100 Industrial Portfolio
Indianapolis, Indiana
Street Addresses
Building 1: 8545-87 Zionsville Road
Building 2: 8501-43 Zionsville Road
Building 3: 8201-43 Zionsville Road
Building 6: 5303-31 West 86th Street
Building 7: 5333-67 West 86th Street
Building 8: 5371-99 West 86th Street
Building 11: 8501 Moller Road
Building 12: 5621 West 85th Street
Building 14: 8111 Zionsville Road
Building 19: 5427 West 84th Street
Building 20: 5845 West 82nd Street
Building 23: 7916-68 Zionsville Road
Building 24: 5636-5762 West 79th Street
Building 29: 7951-53 Zionsville Road
Building 30: 8102-76 Zionsville Road
Building 33: 5951-55 West 80th Street
<PAGE>
<PAGE> 31
Building 35: 5850 West 80th Street
Building 41: 7941-97 Allison Avenue
<PAGE>
<PAGE> 32
EXHIBIT B
CERTIFICATION
To: Security Capital Industrial Trust, SCI North Carolina Limited
Partnership, and _____________ Title Insurance Company:
This is to certify that this map or plat and the survey on which it is
based were made on the date shown below of the premises described in
___________ Title Insurance Company Title Commitment No. ________ dated
___________ and in accordance with "Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys," jointly established and adopted by ALTA
and ACSM in 1992, as defined therein and includes Items 1, 2, 3, 4, 6, 7(a),
8, 9, 10, 11, and 13 of Table A thereof and meets the accuracy requirements
of an Urban Survey, as defined therein;
The survey correctly shows the zone designation of any area shown as being
within a Special Flood Hazard Area according to current Federal Emergency
Management Agency Maps which make up a part of the National Flood Insurance
Administration Report; Community No. ______, Panel No. _______ dated
___________.
The subject property has ingress and egress to and from
________________________________ which is a paved, public right-of-way.
[Surveyor's Name]
By ____________________
Date ____________________
Registered Land Surveyor No. __________
Date of Survey: _______________________
Date of Last Revision: ________________
<PAGE>
<PAGE> 33
EXHIBIT C
ESTOPPEL CERTIFICATE
TO: _________________________________
14100 East 35th Place, Suite 100
Aurora, Colorado 80011
The undersigned, the tenant ("Tenant") under a certain lease
agreement, a true copy of which is attached hereto as Exhibit A ("Lease"),
does hereby certify as follows:
(a) The Tenant is a _______________ [entity].
(b) The Lease is presently in full force and effect and
unmodified except as may be evidenced by written instrument attached as
part of Exhibit A. The landlord ("Landlord") is
_____________________________.
(c) The lease term has commenced and full rental is now
accruing thereunder. The Lease is for a total term of ____________________
(______) years beginning _____________, 19___, and ending
__________________, 19___, with ________ (______) options to extend for
______________ (__________) years each, unless sooner terminated or
extended pursuant to the provisions of the Lease, and the Lease has not
been in any respect modified, altered or amended and contains the entire
agreement between Landlord and Tenant.
(d) The Tenant has accepted possession of the leased premises
under the Lease and any improvements required by the terms of the Lease to
be made by the Landlord have been completed to the satisfaction of the
Tenant. The Tenant presently occupies ________
______________________________________ [street address], comprising
______________ [total square feet] square feet of space, and is paying
$______________ [rental amount] per ______ as rental to Landlord under the
Lease. The estimated additional rent payable pursuant to the Lease on
account of real estate taxes, insurance, common area maintenance expenses
and operating expenses in the amount of $_______________ has been paid
through and including _________________, 19_____. [Tenant pays Tenant's
proportionate share of the increase in property taxes and insurance over
the base year/amount ___________________. Tenant pays Tenant's full
proportionate share of the common area expenses.] OR [Tenant pays Tenant's
full proportionate share of the property
<PAGE>
<PAGE> 34
taxes, insurance, and common area expenses.] (Select the appropriate
expense reimbursement language.)
(e) No rent under said lease has been paid more than ______
(______) days in advance of its due date. Landlord is not in any respect
in default in the performance of the terms and provisions of the Lease, nor
to Tenant's knowledge, is there now any fact or condition which, with
notice or lapse of time or both, will become such a default. Tenant is not
in any respect in default of the Lease (nor is there now any fact or
condition which, with notice or lapse of time or both, will become such a
default), and Tenant has not assigned, transferred, or hypothecated its
interest under the Lease.
(f) The Tenant, as of this date, has no claim, charge,
defense or offset under the Lease or otherwise, against rents or other
charges due or to become due thereunder. As of the date hereof, Tenant has
not asserted any such offset or credit.
(g) Tenant has not made any payment to Landlord as a security
deposit or rental deposit except any payment expressly provided for in the
Lease as follows: _____________________________ [describe amount and nature
of payment].
(h) Except as stated otherwise herein, Tenant does not have
any right to renew or extend the term of the Lease, nor does Tenant have
any option or preferential right to purchase all or any part of the leased
premises or all or any part of the building and premises of which the
leased premises are a part, nor any right, title or interest with respect
to the leased premises other than as Tenant under the Lease. There are no
understandings, contracts, agreements or commitments of any kind whatsoever
with respect to the Lease except as expressly provided in the Lease.
The foregoing provisions may be relied on by and shall inure to
the benefit of the addressees set forth above and their successors,
assigns, and mortgagees and shall be binding upon the undersigned and its
successors and assigns.
DATED:___________________ 19__.
____________________________________
By__________________________________
____________________________________
(Name) (Title)
<PAGE>
<PAGE> 35
EXHIBIT D
ASSIGNMENT OF LEASES, SERVICE CONTRACTS AND PERSONAL PROPERTY
This instrument is executed and delivered pursuant to that certain
Agreement of Purchase and Sale ("Agreement") dated ________________ between
Prudential Realty Trust, a Massachusetts business trust ("Seller") and
___________________________, a _______________________ ("Purchaser")
covering the real property described in Exhibit A attached hereto ("Real
Property").
1. Assignment and Assumption. For good and valuable consideration
Seller hereby assigns, transfers, sets over and conveys to Purchaser, and
Purchaser hereby accepts:
(a) Leases. All of the landlord's right, title and interest in and
to the tenant leases ("Leases") covering the Real Property as set forth on
the Rent Roll attached hereto as Exhibit B, and Purchaser hereby assumes
all of the landlord's obligations under the Leases arising from and after
the Closing Date (as defined in the Agreement) but as to the landlord's
obligations with regard to security deposits and other deposits only to the
extent the security deposits and other deposits have been transferred or
credited to Purchaser;
(b) Tangible Personalty. All of the furniture, fixtures,
equipment, interior appliances, machines, apparatus, supplies and personal
property of every nature and description and all replacements thereof now
owned by Seller (including any interest in such property that is leased by
Seller) and located in or on the property except any such personal property
belonging to tenants under the Leases;
(c) Intangible Personalty. All the right, title and interest of
Seller in and to any and all of the intangible personal property related to
the Real Property to the extent such property is assignable without expense
to Seller, including, without limitation, all trade names and trademarks
associated with the Real Property including Seller's interest in the name
of the Real Property to the extent, if any, Seller has any such rights to
trademarks, the plans and specifications and other architectural and
engineering drawings for the Real Property and improvements located on the
Real Property; warranties; contract rights related to the construction,
operation, ownership or management of the Real Property (but excluding
Seller's obligations under contracts except those expressly assumed in this
instrument); governmental permits, approvals and licenses to the extent
assignable; and telephone exchange numbers (if assignable); and
<PAGE>
<PAGE> 37
(d) Service Contracts. The service contracts described in Exhibit
C attached hereto, and Purchaser hereby assumes the obligations of Seller
under such service contracts arising from and after the Closing Date.
2. Warranty. Seller warrants and defends title to the above-
described property unto Purchaser, its successors and assigns, against any
person or entity claiming, or to claim, the same or any part thereof by,
through or under the Seller, but not otherwise, subject only to the
Permitted Exceptions as defined in the Agreement.
SELLER:
By:
Name:
Title:
PURCHASER:
By:
Name:
Title:
[ACKNOWLEDGEMENT]
<PAGE>
<PAGE> 38
EXHIBIT E
(LETTERHEAD)
NOTICE TO TENANTS
[Date]
[Name]
[Address]
[City/State/ZIP]
Re: Property Address
City, State
Dear [Tenant]:
Please be advised that the premises of which you are a tenant at the
above referenced property, and the landlord's interest in your lease, were
purchased on [Date], by ________________________, a
__________________________. Any security deposits were transferred to
__________________________. All payments, rent and otherwise, should be
made payable to: and directed to:
[Company Name]
[Address]
[City, State, ZIP]
[Contact]
Any notices, required to be sent pursuant to your lease, and any
inquiries or concerns should be sent and/or directed to: (with copy to)
14100 East 35th Place, Suite 100
Aurora, Colorado 80011
Attention: Asset Management
Very truly yours,
[Seller's Name]
By:
By:
<PAGE>
<PAGE> 39
EXHIBIT F
AUDIT LETTER
__________________________
__________________________
__________________________
Dear Sirs:
We are writing at your request to confirm our understanding that your
audit of the statement of operating income for the year ended
______________, 199_, was made for the purpose of expressing an opinion as
to whether the statement of operating income presents fairly, in all
material respects, the results of operations of [Name of Project] in
conformity with generally accepted accounting principles. These
representations are made exclusively to [Auditor] and not to the buyer of
the Project or any other third party and only relate to the period in the
above year during which the undersigned was the owner of the subject
Project. In connection with your ______________, 199_ audit we confirm, to
the best of our knowledge and belief without any duty of inquiry or
investigation, with respect to our daily operations, the following
representations made during your audit:
1. We have made available to you all financial records and related data
concerning this Project, which are in our possession.
2. We are not aware of any:
a. Irregularities involving any member of management that could
have a materially adverse effect on the statement of operating
income.
b. Notices of violations of laws or regulations, the effects of
which should be considered for disclosure in the financial
statements or as a basis for recording a loss contingency.
c. Material events that have occurred subsequent to _____________,
19__ to the subject Project during which the undersigned was
the owner of the subject Project that would require adjustment
to the books and records of the subject Project and/or
disclosure to the statement of operating income.
3. To the best of our knowledge, we [the owner of the Project, if the
property manager is signing] have complied with all material aspects
of contractual agreements relating to the subject Project (e.g.,
management contracts) that would have a material effect on the
statement of operating income in the event of noncompliance.
[ ]
By:
Name:
Title:
<PAGE> 1
EXHIBIT 2.2
RESOLUTIONS OF THE BOARD OF TRUSTEES OF
PRUDENTIAL REALTY TRUST
JUNE 2, 1995
At a meeting of the Board of Trustees of Prudential Realty
Trust via telephone conference call on June 2, 1995, Richard Boyle, Francis
Bryant and Jeffrey Danker, representing a quorum of the Board of Trustees,
adopted the following resolutions:
WHEREAS, pursuant to Article V of the Declaration of Trust,
dated June 19, 1985 and amended August 20, 1985 (the "Declaration"), it is
the policy of the Trust to hold the Trust's investments in interests in
real property for a period of approximately 10-1/2 years from its inception
unless such period is otherwise extended;
WHEREAS, in the judgment of the Board of Trustees of the Trust
it is deemed advisable and for the benefit of the shareholders of the Trust
in accordance with their interests as set forth in the Declaration that the
Trust should be liquidated and terminated;
WHEREAS, the Trust has authorized the proper officers of the
Trust to enter into a contract for the sale of the Trust's Park 100
property in Indianapolis, Indiana ("Park 100");
WHEREAS, the completion of the sale of Park 100 would result in
the aggregate appraised values of the remaining Real Estate Investments (as
defined in the Declaration) being less than the stated value plus accrued
and unpaid dividends at such time of the remaining outstanding Income
Shares;
WHEREAS, pursuant to the Declaration, upon such occurrence, the
Trustees must then adopt a plan of complete liquidation and dissolution of
the Trust, pursuant to Section 337 (or any relevant successor provisions)
of the Internal Revenue Code, as amended, effective immediately prior to
completion of the sale of Park 100;
NOW THEREFORE BE IT RESOLVED, that a plan of liquidation be,
and it hereby is, formulated and adopted to
effect such liquidation and termination of the Trust, effective immediately
prior to completion of the sale of Park 100, in accordance with the
following resolutions;
RESOLVED, that the proper officers of the Trust be, and they
hereby are, authorized to enter into a contract for the sale of Park 100
upon substantially the terms and conditions reviewed with the Board of
Trustees;
<PAGE>
<PAGE> 2
RESOLVED, that the proper officers of the Trust be, and they
hereby are, authorized to sell or otherwise liquidate any and all of the
remaining properties of the Trust which in their judgment should be sold or
liquidated to facilitate the liquidation of the Trust at prices and upon
terms hereafter approved by a majority of the Unaffiliated Trustees (as
defined in the Declaration) of the Trust;
RESOLVED, that after paying or adequately providing for the
payment of all liabilities of the Trust, the Trustees shall distribute the
remaining Trust Estate, in cash or in kind or partly each, among the
shareholders according to their respective rights under the Declaration;
RESOLVED, that after termination of the Trust and distribution
to the shareholders, the proper officers of the Trust be, and they hereby
are, authorized and directed to execute and lodge among the records of the
Trust an instrument in writing setting forth the fact of such termination
and such distribution, shall file a copy of such instrument with the
Secretary of State of the Commonwealth of Massachusetts, and shall prepare
and make all other filings necessary to effectuate the liquidation and
termination of the Trust;
RESOLVED, that the actions provided for in the foregoing
resolutions providing for the complete liquidation of the Trust, and the
distribution of its assets be commenced as soon as practicable, and that
such assets be distributed and the liquidation be completed in an orderly
fashion within a period of approximately 18 months in order to achieve a
complete liquidation of the Trust by the end of the quarter in which the
twelfth anniversary after the effective date of the Registration Statement
(as defined in the Declaration) shall fall; and
<PAGE>
<PAGE> 3
RESOLVED, that the proper officers of the Trust be, and they
hereby are, authorized and directed to pay all such fees and taxes and do
or cause to be done such other acts and things as may be necessary,
convenient, advisable or appropriate in order to carry out the liquidation
and termination of the Trust and to fully effectuate the purposes of the
foregoing resolutions and the Declaration.
Dated: June 2, 1995 /s/ Donna M. Dellechiaie
Donna M. Dellechiaie
Acting Secretary
The undersigned members of the Board of Trustees of Prudential
Realty Trust hereby confirm, ratify and approve in all respects the
foregoing resolutions.
/s/ Joseph Selzer /s/ Thomas Murray
Joseph Selzer Thomas Murray
Trustee Trustee
