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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 24, 1997
BRANDYWINE REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) file number) Identification Number)
10 CAMPUS BOULEVARD, NEWTOWN SQUARE, PENNSYLVANIA 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
Page 1 of 6 pages
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 24, 1997, Brandywine Operating Partnership, L.P.
(the "Operating Partnership"), a limited partnership of which Brandywine Realty
Trust (the "Company") is the sole general partner, acquired a portfolio of five
office buildings (collectively, the "Acquired Properties") containing an
aggregate of approximately 290,000 net rentable square feet, as more fully
described below:
1. 1120 Executive Plaza, Mt. Laurel, New Jersey, containing
approximately 95,124 net rentable square feet. As of January 24, 1997, this
property was 95.44% leased to seven (7) tenants at an average annual rental per
leased square foot of $16.38.
2. 1000 Howard Boulevard, Mt. Laurel Corporate Park, Mt.
Laurel, New Jersey, containing approximately 105,312 net rentable square feet.
As of January 24, 1997, this property was 99.56% leased to four (4) tenants at
an average annual rental per leased square foot of $20.56.
3. Building 2, Executive Court Business Park, Evesham
Township, New Jersey, containing approximately 37,517 net rentable square feet.
As of January 24, 1997, this property was 95.07% leased to twelve (12) tenants
at an average annual rental per leased square foot of $14.59.
4. Building 4A, Executive Court Business Campus, Evesham
Township, New Jersey, containing approximately 24,687 net rentable square feet.
As of January 24, 1997, this property was 90.61% leased to six (6) tenants at an
average annual rental per leased square foot of $11.30.
5. Building 4(B), Executive Court Business Campus, Evesham,
New Jersey, containing approximately 26,982 net rentable square feet. As of
January 24, 1997, this property was 82.84% leased to two (2) tenants at an
average annual rental per leased square foot of $10.59.
The net purchase price for the Acquired Properties totaled
$31,299,721. The Operating Partnership paid the purchase price as follows: (i)
$7,000,000 was paid through a borrowing under the revolving credit facility
previously established with Smith Barney Mortgage Capital Group, Inc., and
NationsBank, N.A., (ii) $12,156,557.72 was paid through an assumption by the
Operating Partnership of mortgage indebtedness encumbering 1120 Executive Plaza
and 1000 Howard Boulevard, Mt. Laurel Corporate Park, held by Sun Life Assurance
Company of Canada (U.S.) ("Sun Life"), and (iii) the balance, including closing
expenses, was paid with existing cash reserves.
The debt held by Sun Life encumbering 1120 Executive Plaza
carried an outstanding principal balance of $6,137,968 as of January 24, 1997,
with principal and accrued interest paid through December 31, 1996; the next
installment of principal and interest being due
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February 1, 1997. Interest is payable at the contract rate of 9.875% per annum,
with monthly installments of principal and interest payable in the amount of
$69,353 each. The loan matures on March 1, 2002, and requires the payment of a
specified premium for prepayment.
The debt held by Sun Life encumbering 1000 Howard Boulevard,
Mt. Laurel Corporate Park carried an outstanding principal balance of $6,018,589
as of January 24, 1997, with principal and accrued interest paid through
December 31, 1996, the next installment of principal and interest being due
February 1, 1997. Interest is payable at the contract rate of 9.25% per annum,
with monthly installments of principal and interest payable in the amount of
$66,897 each. The loan matures on November 1, 2004 and requires the payment of a
specified premium for prepayment. The Operating Partnership's assumption of the
aforesaid debt was specifically approved by Sun Life.
In consideration for purchasing the Acquired Properties, the
Company also acquired from MLCP Associates Limited Partnership an option to
acquire a parcel of land containing approximately 8 acres, located in the Mt.
Laurel Corporate Park, Mt. Laurel, New Jersey, immediately adjacent to the 1000
Howard Boulevard property described above. The purchase price for the option
property is $1,000,000, and the option may be exercised at any time during the
Initial Option Period which expires July 23, 1999. The Operating Partnership has
the right to extend the Option Period until June 30, 2000, by paying an
extension fee of $100,000, and upon such other terms and conditions as are set
forth in the Option Agreement dated as of January 24, 1997. The Option Property
is currently unimproved.
The sellers of the Acquired Properties, 1120 Associates
Limited Partnership, a Delaware limited partnership, by Palomino Corporation,
its general partner, MLCP Associates Limited Partnership, a Delaware limited
partnership, by MLCP General Corporation, its general partner, and Executive
Court Associates Limited Partnership, a Delaware limited partnership, by
Palomino Corporation, its general partner, are parties unaffiliated with the
Company and the Operating Partnership. The purchase price for the Acquired
Properties was determined by arm's-length negotiation between the Company and
the sellers.
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The table set forth below shows certain information regarding
rental rates and lease expirations for the Acquired Properties.
Scheduled Lease Expirations
(The Acquired Properties)
<TABLE>
<CAPTION>
Number of Leases Rentable Square
Expiring Within Footage Subject to Final Annualized Base Percentage of Total Final
Year of the Year at Expiring Rent From Acquired Annualized Base Rent From
Lease Acquired Leases at Acquired Properties Acquired Properties
Expiration Properties(1) Properties Under Expiring Leases(2) Under Expiring Leases
- ---------- ------------- ---------- ------------------------ ---------------------
<S> <C> <C> <C> <C>
1997 6 54,007 998,887 21.06%
1998 5 7,919 90,949 1.92%
1999 5 14,493 160,401 3.38%
2000 6 137,021 2,432,347 51.27%
2001 7 23,209 288,133 6.07%
2002 2 13,306 268,110 5.65%
2003
2004
2005
2006 and 1 26,070 504,976 10.65%
thereafter
Total 32 276,025 4,743,803 100.00%
=========== ============== ============ =================
</TABLE>
- ---------------------
(1) A lease is considered to expire if, and at any time, it is terminable
by the tenant without payment of penalty or premium.
(2) "Final Annualized Base Rent" for each lease scheduled to expire
represents the cash rental rate in the final month prior to expiration
multiplied by twelve.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. The Financial
Statements of the Acquired Properties will be included in an amendment to this
Form 8-K by no later than March 30, 1997.
(b) Pro Forma Financial Information. Pro Forma financial information
will be included in an amendment to this Form 8-K by no later than March 30,
1997.
(c) Exhibits.
<TABLE>
<S> <C>
10.1 Agreement of Sale - 1120 Executive Plaza, Mount Laurel Corporate Park,
Executive Court and Option Parcel.
10.2 Assumption, Modification and Release Agreement - 1120 Executive
Plaza.
10.3 Assumption, Modification and Release Agreement - 1000 Howard
Boulevard, Mt. Laurel, New Jersey.
10.4 Option Agreement - Lot 8, Block 1104, Mount Laurel, New Jersey.
10.5 Sun Life Mortgage Note - 1120 Associates Limited Partnership.
10.6 Sun Life Mortgage and Security Agreement - 1120 Associates Limited
Partnership.
10.7 Sun Life Letter - 1120 Associates Limited Partnership.
10.8 Sun Life Mortgage Note - MLCP Associates Limited Partnership.
10.9 Sun Life Mortgage and Security Agreement - MLCP Associates Limited
Partnership.
10.10 Sun Life Letter - MLCP Associates Limited Partnership.
</TABLE>
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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.
BRANDYWINE REALTY TRUST
Date: February 7, 1997 By: /s/ Gerard H. Sweeney
----------------------------------
Title: President and Chief Executive
Officer
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EXHIBIT 10.1
AGREEMENT OF SALE
1120 Executive Plaza, Mt. Laurel Corporate Park, Executive Court and
Option Parcel
AGREEMENT OF SALE made this 20th day of January, 1997, between
BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust, its assignee
or nominee, having its principal office at 16 Campus Boulevard, Suite 150,
Newtown Square, Pennsylvania 19073 ("Buyer"), and 1120 ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership, having its principal office at 4A
Eves Drive, Marlton, New Jersey 08053 ("1120"), MLCP ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership, having its principal office at 4A
Eves Drive, Marlton, New Jersey 08053 ("MLCP"), and EXECUTIVE COURT ASSOCIATES
LIMITED PARTNERSHIP, a Delaware limited partnership, having its principal
office at 4A Eves Drive, Marlton, New Jersey 08053 ("ECA") (collectively, but
specifically not jointly and severally, 1120, MLCP and ECA shall be referred
to hereunder as "Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. 1120 is the owner of a certain parcel of land comprising
approximately 7.86 acres, together with the building and improvements thereon,
including a four story office building containing approximately 95,124 net
rentable square feet, commonly known as 1120 Executive Plaza, Mount Laurel, New
Jersey, being Lot 3 of Block 1301 and Lots 1, 2 and 3 of Block 1306.01; and
B. MLCP is the owner of a certain parcel of land comprising
approximately 6.34 acres, together with the building and improvements thereon,
including a four story office building containing approximately 105,312 net
rentable square feet, commonly known as the Mt. Laurel Corporate Park, Mt.
Laurel, New Jersey being Lot 1.01 of Block 1104, and a certain undeveloped
parcel of land comprising approximately 8 acres, being Lot 8 of Block 1104 (the
"Option Parcel") as more fully described on Exhibit A-2-B; and
C. ECA is the owner of a certain parcel of land comprising
approximately 9.88 acres, together with three buildings and improvements
thereon, including a two story office building containing approximately 37,857
net rentable square feet commonly known as Building 2, a one story office
building containing approximately 24,687 net rentable square feet commonly
known as Building 4A, and a one story office building containing approximately
27,031 net rentable square feet commonly known as Building 4B, all such
buildings being commonly known as the Executive Court, Evesham Township, New
Jersey, being Lots 1 and 2 of Block 2.05; and
D. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the property referred to in this Agreement, upon the terms and
conditions set forth herein.
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TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and with the preceding Background paragraphs incorporated by
reference, the parties hereto, intending to he legally bound hereby, covenant
and agrees as follows:
1. PROPERTY BEING SOLD.
Each of 1120, MLCP and ECA, as the case may be, with respect
to their particular assets, shall sell, transfer and convey to Buyer on the
Closing Date (as hereinafter defined),
1.1 Real Property.
1.1.1. 1120's fee simple interest in the
approximately 7.86 acre parcel of land, all as more fully described on Exhibit
"A-1", with the building and improvements thereon, including the four story,
approximately 95,124 net rentable square foot office building, commonly known
as 1120 Executive Plaza, Mount Laurel, New Jersey, being Lot 3 of Block 1301
and Lots 1, 2 and 3 of Block 1306.01, and all of 1120's right, title, and
interest, if any, in all easements, licenses, rights of way, privileges,
hereditaments, appurtenances, and rights to any land lying in the beds of any
street, road or avenue, open or proposed, adjoining thereto, and inuring to the
benefit of said land (hereinafter collectively referred to as the "1120
Premises"); and
1.1.2. MLCP's fee simple interest in (a) the
approximately 6.34 acre parcel of land, all as more fully described on Exhibit
"A-2-A", with the building and improvements thereon, including the four story,
approximately 105,312 net rentable square foot office building, commonly known
as Mt. Laurel Corporate Park, Mount Laurel, New Jersey, being Lot 3 of Block
1104, together with all of MLCP"s right, title and interest, if any, in all
easements, licenses, rights of way, privileges, hereditaments, appurtenances,
and rights to any land lying in the beds of any street, road or avenue, open or
proposed, adjoining thereto, and inuring to the benefit of said land described
above, together with a perpetual easement for the use of Howard Boulevard as a
means of ingress, egress and regress to and from the foregoing, and a perpetual
easement for the use of such portion of MLCP"s remaining property as shall be
necessary to utilize all of the parking spaces depicted on the survey prepared
by Abbington and Associates heretofore delivered by Seller to Buyer, to the
extent that such parking spaces are located outside of the perimeter
description of record of the MLCP Premises (hereinafter collectively referred
to as the "MLCP Premises"). Buyer shall assume responsibility to maintain
Howard Boulevard until such time as either Seller or any other persons or
parties shall commence development or otherwise utilize Howard Boulevard, or
any portion thereof, as a means of access to any other property, at which time
Buyer, Seller and such third party (if any) shall amend and restate the
existing covenant(s) of record allocating among Buyer, Seller and such other
third parties the responsibilities to repair and maintain Howard Boulevard and
addressing other issues including without limitation, approval rights (re:
architectural review, landscaping, common areas and other matters), use
restrictions, insurance, cost allocation issues,
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and other matters. Any such amendatory documentation or new covenant(s) of
record shall be in form satisfactory to Buyer and Seller. The covenants set
forth in this Section shall survive delivery of the Deeds and Closing
hereunder.
1.1.3. ECA"s fee simple interest in the parcel of
land comprising approximately 9.88 acres, all as more fully described on
Exhibit "A-3", together with three buildings and improvements thereon,
including a two story office building containing approximately 37,857 net
rentable square feet commonly known as Building 2, a one story office building
containing approximately 24,687 net rentable square feet commonly known as
Building 4A, and a one story office building containing approximately 27,031
net rentable square feet commonly known as Building 4B, all such buildings
being commonly known as the Executive Court, Evesham Township, New Jersey,
being Lots 1 and 2 of Block 2.05, and all of ECA"s right, title and interest,
if any, in all of the easements, licenses, rights of way, privileges,
hereditaments, appurtenances, and rights to any land lying in the beds of any
street, road or avenue, open or proposed, adjoining thereto, and inuring to the
benefit of said land (hereinafter collectively referred to as the "ECA
Premises"); and
1.2 Personal Property. All of 1120's, MLCP's and ECA's,
as the case may be, with respect to their particular assets, equipment,
fixtures, machinery and personalty of every description attached to or used in
connection with the 1120 Premises (and not owned by tenants under leases of
the 1120 Premises), the MLCP Premises (and not owned by tenants under leases
of the MLCP Premises) and the ECA Premises (and not owned by tenants under
leases of the ECA Premises), including, without limitation, those listed on,
the Schedule of Inventory attached hereto as Exhibit "B-1" as to 1120, Exhibit
"B-2, as to MLCP, "Exhibit "B-3" as to ECA, and all renderings, flags, and to
the extent assignable and in such Seller"s possession, intangible personal
property owned by such Seller and used in connection with the ownership,
operation and maintenance of the Property (as defined below), including
without limitation, all contract rights, guaranties and warranties of any
nature, all architects", engineers", surveyors" and other real estate
professionals" plans, specifications, certifications, contracts, reports, data
or other technical descriptions, reports or audits (including, without
limitation, all environmental, structural and mechanical inspection reports),
and all marketing materials ("Contract Documents"), all governmental permits,
licenses, certificates, and approvals in connection with the ownership of the
1120 Premises, the MLCP Premises and the ECA Premises, as the case may be
("Licenses"), all escrow accounts, deposits (excluding, ratably, any escrows
and deposits held by Mt. Laurel Township in connection with the portion of the
land owned by MLCP not being sold hereunder), instruments, documents of title,
general intangibles, data and business records pertaining to the 1120 Premises,
the MLCP Premises and the ECA Premises, as the case may be and all of each
Seller's rights, claims, and causes of action if any, to the extent they are
assignable, under any warranties and/or guarantees of manufacturers,
contractors or installers, all rights against tenants and others relating to
the 1120 Premises, the MLCP Premises and the ECA Premises and the operation or
maintenance thereof, including to the extent applicable, any warranties from
any previous owners of the 1120 Premises, the MLCP Premises and the ECA
Premises (hereinafter referred to as "1120 Personal Property", the "MLCP
Personal Property" and the "ECA Personal Property", as the case may be); and
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1.3 Leases. All leases, licenses and other occupancy
agreements for all of the 1120 Premises, the MLCP Premises and the ECA Premises
and, except as otherwise set forth herein, all prepaid rent and unapplied
security deposits (the "1120 Leases", the "MLCP Leases" and the "ECA Leases" as
the case may be); and
1.4 Right to Names. Any and all right, title and
interest of Seller, if any, and without representation or warranty, in and to
the name "1120 Executive Plaza", "Mt. Laurel Corporate Park", "Executive Court"
and each Seller"s right, if any, without representation or warranty, to all
printing styles, trademarks and logos regarding the foregoing (collectively,
the "1120 Names", the "MLCP Names" and the "ECA Names" as the case may be).
The 1120 Premises, 1120 Personal Property, 1120
Leases and 1120 Names are sometimes hereinafter referred to as "1120 Property."
The MLCP Premises, the MLCP Personal Property, MLCP Leases and the MLCP Names
are sometimes hereinafter referred to as "MLCP Property." The ECA Premises, the
ECA Personal Property, ECA Leases and the ECA Names are sometimes hereinafter
referred to as "ECA Property." The 1120 Property, the MLCP Property and the ECA
Property are sometimes referred to herein collectively as the "Property".
2. PURCHASE PRICE AND MANNER OF PAYMENT.
2.1 Purchase Price. Buyer shall pay the total sum of
Thirty Two Million, One Hundred Fifty Thousand Dollars ($32,150,000)
(hereinafter referred to as the "Purchase Price") subject to adjustments as set
forth herein.
2.2 Manner of Payment. The Purchase Price shall be paid
in the following manner:
2.2.1 Deposit. By delivery, upon Seller's
execution and delivery of this Agreement, of Buyer's wire transfer of
immediately available funds in the amount of One Million Dollars $1,000,000 to
Sherman, Silverstein, Kohl, Rose & Podolsky (hereinafter referred to as "Escrow
Agent" or "Escrowee"). This sum, and all other sums paid by Buyer to the Escrow
Agent under this Agreement (hereinafter referred to as the "Deposit") shall be
non-refundable, except as specified under Section 13.1 and 13.3 hereof, and
shall be held by Escrow Agent in a federally-insured, segregated money market
account at an institution to be designated by Buyer and Seller until
termination or consummation of this Agreement. Interest on the Deposit shall be
credited to Buyer at Closing, or paid to the party otherwise entitled to the
Deposit in the event of the termination of this Agreement prior to Closing.
2.2.2 Assumption of Sun Loan; Cash Balance. The
balance by assumption of outstanding debt owed to Sun Life Assurance Company of
Canada (U.S.) ("Sun") by (i) 1120 pursuant to that certain Note and security
therefor dated March 17, 1995 in the original principal amount of $6,500,000
(the "1120 Debt") and (ii) MLCP pursuant to that certain Note and security
therefor dated October 19, 1994 in the original principal amount of $6,500,000
(the "MLCP Debt") (the 1120 Debt and the MLCP Debt are collectively, but
specifically not
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jointly and severally, referred to as the "Sun Loans"), and the remainder to be
delivered to the Seller on the Closing Date, by wire transfer of immediately
available funds, in the amount by which the Purchase Price exceeds the sum of
(i) the Deposit, and (ii) the outstanding principal balance and accrued and
unpaid interest, if any, on the Sun Loans as of the Closing Date, subject to
adjustments and apportionments as set forth in the Agreement.
3. TITLE. On the Closing Date, each of 1120, MLCP and ECA with
respect to its assets, shall convey to Buyer good and marketable fee simple
title to the 1120 Premises, the MLCP Premises and the ECA Premises, as the
case may be, subject only to those rights of way, easements, covenants
restrictions, and objections to title (hereinafter "1120 Permitted Exceptions"
with respect to the 1120 Premises, the "MLCP Permitted Exceptions" with
respect to the MLCP Premises and the "ECA Permitted Exceptions" with respect
to the ECA Premises) listed on Exhibit "C-1" hereto regarding the 1120
Premises, Exhibit "C-2" hereto regarding the MLCP Premises and Exhibit "C-3"
hereto regarding the ECA Premises and subject to the rights of tenants listed
on the rent roll attached hereto as Exhibit "D-1" regarding the 1120 Premises,
Exhibit "D-2" hereto regarding the MLCP Premises and Exhibit "D-3" hereto
regarding the ECA Premises, all of which title shall be insurable at regular
rates by Commonwealth Land Title Insurance Company ("Title Company") under an
ALTA 1970 Form B (Revised 10/17/70 and 3/30/84) title insurance policy ("Title
Policy"), with the endorsements and affirmative insurance specified in Section
12.2.1.10 below.
4. COVENANTS. In addition to the covenants contained in the
other Sections of this Agreement, between the date hereof and Closing, each of
1120, MLCP and ECA with respect to its assets, covenants that it shall:
4.1 Maintenance. At all times prior to the Closing Date,
maintain the 1120 Property, the MLCP Property and the ECA Property, as the case
may be, in good condition and repair, reasonable wear and tear and damage by
casualty excepted, operate the 1120 Property, the MLCP Property and the ECA
Property, as the case may be, in the same manner as it is currently being
operated, and pay except as specifically set forth herein in the normal course
of business prior to Closing, all sums due for work, materials or service
furnished or otherwise incurred in the ownership and operation prior to
Closing.
4.2 Alterations. Not make or permit to be made any
alterations, improvements or additions to the 1120 Property, the MLCP Property
and the ECA Property, as the case may be, without the prior written consent of
Buyer, which consent shall not be unreasonably withheld or delayed, except
those made by or for tenants pursuant to the right to do so under their Leases,
or by such Seller if required by applicable law or ordinance, or as required
under any Lease, subject to the provisions of Section 4.7 below..
4.3 Lease. Except as specifically set forth in Section 14.5
below, not enter into any new Lease, nor amend, modify or terminate any
existing Lease without Buyer's consent, such consent not to be unreasonably
withheld.
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4.4 Security Deposits. Not apply any Tenant's security
deposit to the discharge of such Tenant's obligations, without Buyer's consent,
such consent not to be unreasonably withheld.
4.5 Bill Tenants. Timely bill all Tenants for all rent
billable under Leases, and use its commercially reasonable efforts consistent
with Seller"s existing practices to collect any rent in arrears.
4.6 Notice to Buyer. Notify Buyer promptly of the
occurrence of any of the following: (i) a fire or other casualty causing
damage to the 1120 Property, the MLCP Property and the ECA Property, as the
case may be, or any portion of the foregoing; (ii) receipt of written notice
of eminent domain proceedings or condemnation of or affecting the 1120
Property, the MLCP Property or the ECA Property, as the case may be or any
portion thereof; (iii) receipt of notice from any governmental authority or
insurance underwriter relating to the condition, use or occupancy of the 1120
Property, the MLCP Property and the ECA Property, as the case may be, or any
portion of the foregoing, or any real property adjacent to any of the
foregoing, or setting forth any requirements with respect thereto; (iv)
receipt or delivery of any written default or termination notice or claim of
offset or defense to the payment of rent from any tenant; (v) receipt of any
written notice of default from the holder of any lien or security interest in
or encumbering the 1120 Property, the MLCP Property or the ECA Property, as
the case may be, or any portion thereof; or (vi) written notice of any actual
or threatened litigation against 1120, MLCP or ECA or affecting or relating to
the 1120 Property, the MLCP Property or the ECA Property, as the case may be
or any portion thereof.
4.7 Comply with Leases. Perform all material
obligations of the landlord as required by the 1120 Leases, the MLCP Leases
and the ECA Leases, as the case may be, or by any order or direction of any
governmental authority having jurisdiction thereof, provided that if the cost
to perform any such governmental obligations (the "Seller Compliance Costs")
exceeds $90,000 in the aggregate, Seller shall have the right to terminate
this Agreement if Buyer is unwilling to pay for the costs of such obligations
in excess of $90,000, in which event the Deposit and Buyer's reasonably
documented Transaction Costs (as hereinafter defined) shall be returned to
Buyer and neither party shall owe any further obligation hereunder to the other;
provided, however, if the Seller Compliance Costs exceed $90,000 in the
aggregate, and Buyer agrees to pay for the second $90,000 of such costs, the
remaining cost of such Seller Compliance Costs above $180,000, if any, shall be
evenly shared by Buyer and Seller, provided that in no event shall Seller be
obligated to pay more than $180,000.00 in the aggregate in connection with the
Seller Compliance Costs (e.g., if the total Seller Compliance Costs equal
$200,000 and Buyer agrees to pay for the second $90,000, the additional $20,000
above the $180,000 shall be shared by Buyer and Seller, so that Seller shall be
responsible for $100,000 and Buyer shall be responsible for $100,000). The
parties acknowledge and agree that Buyer is under no obligation to agree to pay
for any Seller Compliance Costs, but that the aforesaid cost allocation
mechanism is an agreed upon compromise in order to permit Buyer to avoid
Seller"s termination of this Agreement. Seller"s obligation to incur Seller
Compliance Costs and the limitations thereto hereinabove specified shall
expressly not apply to any tenant improvement costs or expenses, and
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any other costs or expenses incurred by Seller in discharging any lease
obligations (except to the extent such lease obligations relate to governmental
compliance issues noted above).
4.8 No New Agreements. Except for agreements which can be
terminated on not more than thirty (30) days' notice, not enter into any other
agreements which affect the 1120 Property, the MLCP Property and the ECA
Property or the transactions contemplated by this Agreement, without the prior
written consent of Buyer, which consent shall not be unreasonably withheld or
delayed; and, except for the Sun Loans and the Permitted Exceptions, not permit
the creation of any liability which shall bind Buyer or the 1120 Property, the
MLCP Property or the ECA Property after Closing.
4.9 Tax Disputes. Notify Buyer of any tax assessment
disputes (pending or threatened) with respect to the 1120 Property, the MLCP
Property and the ECA Property, as the case may be, prior to Closing, and not
agree to any changes in the real estate tax assessment, nor settle, withdraw
or otherwise compromise any pending claims with respect to prior tax
assessments, without Buyer's prior written consent. If any proceedings shall
result in any reduction of assessment and/or tax for the tax year in which the
Closing occurs, it is agreed that the amount of tax savings or refund for such
tax year, less the reasonable fees and disbursements in connection with such
proceedings, shall be apportioned between the parties as of the date real
estate taxes are apportioned under this Agreement. Any reduction relating to
tax years prior to 1997 shall be payable to 1120, MLCP or ECA, as appropriate.
4.10 No Removal of Personalty. Not remove any
non-consumable Personal Property from the 1120 Property, the MLCP Property and
the ECA Property without replacing it with similar personal property which is
new or of equal or better quality.
5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to
enter into this Agreement, each of 1120, MLCP and ECA, solely with respect to
itself, and not with respect to the other entities constituting the Seller,
hereby represents and warrants to Buyer that the following representations and
warranties are true now, and where the representation specifically provides,
will be true at Closing:
5.1 Seller's Authority For Binding Agreement.
5.1.1. 1120 represents and warrants that: (i) 1120
is a duly authorized and validly existing partnership formed under the laws of
the State of Delaware and is duly qualified to do business in the State of New
Jersey, (ii) 1120 has full power, right and authority to own its properties, to
carry on its business as now conducted, and to enter into and fulfill its
obligations under this Agreement, (iii) each of the persons executing this
Agreement on behalf of 1120 is authorized to do so, (iv) this Agreement is the
valid and legally binding obligation of 1120, enforceable against 1120 in
accordance with its terms, (v) the execution and delivery of this Agreement and
compliance with its terms will not conflict with or result in the breach of any
law, judgement, order, writ, injunction, decree, rule or regulation, or
conflict with or result in the
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breach of any other agreement, document or instrument to which 1120 is a party
or by which it or the 1120 Property is bound or affected.
5.1.2. MLCP represents and warrants that: (i) MLCP
is a duly authorized and validly existing partnership formed under the laws of
the State of Delaware and is duly qualified to do business in the State of New
Jersey, (ii) MLCP has full power, right and authority to own its properties, to
carry on its business as now conducted, and to enter into and fulfill its
obligations under this Agreement, (iii) each of the persons executing this
Agreement on behalf of MLCP is authorized to do so, (iv) this Agreement is the
valid and legally binding obligation of MLCP, enforceable against MLCP in
accordance with its terms, (v) the execution and delivery of this Agreement and
compliance with its terms will not conflict with or result in the breach of any
law, judgement, order, writ, injunction, decree, rule or regulation, or
conflict with or result in the breach of any other agreement, document or
instrument to which MLCP is a party or by which it or the MLCP Property is
bound or affected.
5.1.3. ECA represents and warrants that: (i) ECA is
a duly authorized and validly existing partnership formed under the laws of the
State of Delaware and is duly qualified to do business in the State of New
Jersey, (ii) ECA has full power, right and authority to own its properties, to
carry on its business as now conducted, and to enter into and fulfill its
obligations under this Agreement, (iii) each of the persons executing this
Agreement on behalf of ECA is authorized to do so, (iv) this Agreement is the
valid and legally binding obligation of ECA, enforceable against ECA in
accordance with its terms, (v) the execution and delivery of this Agreement and
compliance with its terms will not conflict with or result in the breach of any
law, judgement, order, writ, injunction, decree, rule or regulation, or
conflict with or result in the breach of any other agreement, document or
instrument to which ECA is a party or by which it or the ECA Property is bound
or affected.
The representations contained in this Section 5.1 shall be true at and as of
Closing.
5.2 Employment on "At-Will" Basis. There are no
employees of 1120, MLCP or ECA and Buyer assumes no obligations or
responsibilities whatsoever for any employees of 1120, MLCP or ECA. The
representation contained in this Section 5.2 shall be true at and as of Closing.
5.3 Service Contracts.
5.3.1. 1120 represents and warrants that, to the
best of its knowledge, Exhibit "E-1" attached hereto is a complete list of all
existing service, equipment, supply and maintenance contracts with respect to
or affecting the 1120 Property, (the "1120 Service Contracts"). 1120 has not
received any written notice of default or breach by 1120 in the terms of any of
such Service Contracts. To 1120's knowledge, 1120 has performed, and at Closing
shall have performed, all obligations which it has under said 1120 Service
Contracts.
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5.3.2. MLCP represents and warrants that, to the
best of its knowledge Exhibit "E-2" attached hereto is a complete list of all
existing service, equipment, supply and maintenance contracts with respect to
or affecting the MLCP Property, (the "MLCP Service Contracts"). MLCP has not
received any written notice of default or breach by MLCP in the terms of any of
such Service Contracts. To MLCP"s knowledge, MLCP has performed, and at Closing
shall have performed, all obligations which it has under said MLCP Service
Contracts.
5.3.3. ECA represents and warrants that, to the
best of its knowledge, Exhibit "E-3" attached hereto is a complete list of all
existing service, equipment, supply and maintenance contracts with respect to
or affecting the ECA Property, (the "ECA Service Contracts"). ECA has not
received written notice of default or breach by ECA in the terms of any of such
Service Contracts. To ECA"s knowledge, ECA has performed, and at Closing shall
have performed, all obligations which it has under said ECA Service Contracts.
The 1120 Service Contracts, the MLCP Service Contracts and the ECA Service
Contracts shall be referred to collectively as the "Service Contracts".
Anything herein contained to the contrary notwithstanding, except with respect
to the CSC (as hereinafter defined) premises which shall be governed by Section
14 hereof, each of 1120, MLCP and ECA represent, warrant, covenant and agree
that all existing management agreements and exclusive leasing agreements shall
be terminated as of Closing, Seller having fully paid and discharged any and
all obligations accruing thereunder, and Buyer shall assume no liability under
or in respect of any such agreements.
Other than the representations regarding receipt of written notices of default,
which, to the extent not true and correct at Closing shall be noted in writing
by Seller to Buyer before Closing, the representations contained in this
Section 5.3 shall be true at and as of Closing.
5.4 Condemnation. None of 1120, MLCP, or ECA, with
respect to its particular assets has received any written notice of any pending
condemnation or eminent domain proceeding pending with regard to any part of
the 1120 Property, the MLCP Property and the ECA Property, and to the best of
each of 1120's, MLCP"s and ECA"s knowledge with respect to its particular
asset, no such proceedings are proposed.
5.5 No Lawsuits.
5.5.1. Except as set forth on Exhibit F-1, 1120 has
received no written notice of any claims, lawsuits or proceedings
(collectively, "Suits") pending, and to the best of 1120's knowledge, there are
no Suits threatened against or relating to 1120 or the 1120 Property, or which
could affect them, or either of them, in any court or before any governmental
agency, except for actions for possession, damages and or rent, if any, against
defaulted tenants as disclosed in Exhibit "F-1".
5.5.2. Except as set forth on Exhibit F-2, MLCP
has received no written notice of any Suits pending, and to the best of MLCP's
knowledge, there are no Suits threatened
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against or relating to MLCP or the MLCP Property, or which could affect them,
or either of them, in any court or before any governmental agency, except for
actions for possession, damages and or rent, if any, against defaulted tenants
as disclosed in Exhibit "F-2".
5.5.3. Except as set forth on Exhibit F-3, ECA has
received no written notice of any Suits pending, and to the best of ECA"s
knowledge, there are no Suits threatened against or relating to ECA or the ECA
Property, or which could affect them, or either of them, in any court or before
any governmental agency, except for actions for possession, damages and or
rent, if any, against defaulted tenants as disclosed in Exhibit "F-3".
The representations contained in this Section 5.5 shall be true at and as of
Closing.
5.6 No Tax Assessments. Each of 1120, MLCP and ECA have
not received written notice of any public improvements in the nature of off-site
improvements, or otherwise, which have been ordered to be made and/or which
have not heretofore been assessed, and, to 1120's, MLCP"s and ECA"s knowledge,
there are no special or general assessments currently affecting or pending
against the 1120 Property, the MLCP Property and the ECA Property, as the case
may be, except as set forth in the Title Binder. The representations contained
in this Section 5.6 shall be true at and as of Closing.
5.7 Leases.
5.7.1. 1120 represents and warrants that there are
no oral or written leases or rights of occupancy or grants or claims of right,
title or interest in any portion of the Premises other than the leases (the
"1120 Leases") listed on the rent roll attached hereto as Exhibit "D-1".
Exhibit "D-1" identifies (i) each tenant of the 1120 Premises, (ii) the date of
that tenant's lease, (iii) the expiration date of that tenant's lease, (iv) the
annual and monthly minimum rental charge, the tenant's share of building
operating costs (including, without limitation, taxes) and any and all costs,
expenses and other charges payable by the tenant under the 1120 Lease, (v)
arrearages, if any, and whether the latest rent due has been paid, (vi) the
amount of prepaid rent, if any, (vii) the amount or description of any
concessions, allowances, rebates, refunds, escrow or security deposits made by
the tenant under said tenant's Lease; (vii) any options to renew, extend,
purchase, cancel or terminate; (viii) any defaults, outstanding notices of
defaults of any kind or nature whatsoever, claims of defaults or similar claim
under Leases, and (ix) all unpaid tenant improvement allowances and/or unpaid
leasing commissions. No tenant has advised 1120 in writing that 1120 is in
default under any of the 1120 Leases, or asserted any written claim or basis
for any claim for free or reduced rent or right of setoff against the landlord
or the rent under the 1120 Leases, and 1120 and its agent have no actual
knowledge of any default or any event which has taken place which, with the
passage of time, or the delivery of notice, or both, could become an event of
default. 1120 has the sole right to collect rents under the Leases, and except
with respect to the Sun Loan, neither such right nor any of the Leases has been
assigned, pledged, hypothecated or otherwise encumbered by 1120. To the best of
1120's knowledge, each of the 1120 Leases is valid and subsisting and in full
force and effect, the tenant is in actual possession in the normal course, and
the rents set forth in Exhibit "D-1" are the actual rents, income and charges
being collected by 1120 under the 1120 Leases. Any tenant improvements which
1120 is
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obligated to complete pursuant to any Lease (or any unsigned lease proposal or
lease amendment), all as set forth on the attached Schedule of Tenant
Improvements, has been completed as of this date or shall be assumed by Buyer
at and as of Closing, and all costs for completed work have been or shall be
paid by 1120. Buyer shall assume the responsibility for all tenant improvement
work required to be completed by the landlord under any 1120 which has not been
completed by 1120 prior to Closing and which is specifically set forth on the
Schedule of Tenant Improvements. At Closing, Buyer shall receive a credit
against the Purchase Price in the amount of the Tenant Improvements shown on
the Schedule of Tenant Improvements as such relates to the completion of
unfinished tenant work at the 1120 Property. No tenant or other person has any
right or option to acquire the 1120 Property, or any part thereof, or to 1120
knowledge to terminate any of the rights currently appurtenant to the 1120
Premises. No tenant of the 1120 Premises under any of the 1120 Leases has, and
shall not at Closing have, prepaid any rent under any of the 1120 Leases for
more than one (1) month. Except as otherwise set forth on Exhibit "D-1", no
security deposits by tenants have heretofore been returned or applied to
charges against the tenants.
5.7.2. MLCP represents and warrants that there are
no oral or written leases or rights of occupancy or grants or claims of right,
title or interest in any portion of the Premises other than the leases (the
"MLCP Leases") listed on the rent roll attached hereto as Exhibit "D-2".
Exhibit "D-2" identifies (i) each tenant of the MLCP Premises, (ii) the date of
that tenant's lease, (iii) the expiration date of that tenant's lease, (iv) the
annual and monthly minimum rental charge, the tenant's share of building
operating costs (including, without limitation, taxes) and any and all costs,
expenses and other charges payable by the tenant under the MLCP Lease, (v)
arrearages, if any, and whether the latest rent due has been paid, (vi) the
amount of prepaid rent, if any, (vii) the amount or description of any
concessions, allowances, rebates, refunds, escrow or security deposits made by
the tenant under said tenant's Lease; (vii) any options to renew, extend,
purchase, cancel or terminate; (viii) any defaults, outstanding notices of
defaults of any kind or nature whatsoever, claims of defaults or similar claim
under Leases, and (ix) all unpaid tenant improvement allowances and/or unpaid
leasing commissions. No tenant has advised MLCP in writing that MLCP is in
default under any of the MLCP Leases, or asserted any written claim or basis
for any claim for free or reduced rent or right of setoff against the landlord
or the rent under the MLCP Leases, and MLCP and its agent have no actual
knowledge of any default or any event which has taken place which, with the
passage of time, or the delivery of notice, or both, could become an event of
default. MLCP has the sole right to collect rents under the MLCP Leases, and
except with respect to the Sun Loan, neither such right nor any of the MLCP
Leases has been assigned, pledged, hypothecated or otherwise encumbered by
MLCP. To the best of MLCP's knowledge, each of the MLCP Leases is valid and
subsisting and in full force and effect, the tenant is in actual possession in
the normal course, and the rents set forth in Exhibit "D- 2" are the actual
rents, income and charges being collected by MLCP under the MLCP Leases. Any
tenant improvements which MLCP is obligated to complete pursuant to any Lease
(or any unsigned lease proposal or lease amendment), all as set forth on the
attached Schedule of Tenant Improvements, has been completed as of this date or
shall be assumed by Buyer at and as of Closing, and all costs for completed
work have been or shall be paid by MLCP. Buyer shall assume the responsibility
for all tenant improvement work required to be completed by the landlord under
any MLCP which has not been completed by MLCP prior
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to Closing and which is specifically set forth on the Schedule of Tenant
Improvements. At Closing, Buyer shall receive a credit against the Purchase
Price in the amount of the Tenant Improvements shown on the Schedule of Tenant
Improvements as such relates to the completion of unfinished tenant work at the
MLCP Property. No tenant or other person has any right or option to acquire the
MLCP Property, or any part thereof, or to MLCP' s knowledge to terminate any of
the rights currently appurtenant to the MLCP Premises. No tenant of the MLCP
Premises under any of the MLCP Leases has, and shall not at Closing have,
prepaid any rent under any of the MLCP Leases for more than one (1) month.
5.7.3. ECA represents and warrants that there are
no oral or written leases or rights of occupancy or grants or claims of right,
title or interest in any portion of the Premises other than the leases (the
"ECA Leases") listed on the rent roll attached hereto as Exhibit "D-3". Exhibit
"D-3" identifies (i) each tenant of the ECA Premises, (ii) the date of that
tenant's lease, (iii) the expiration date of that tenant's lease, (iv) the
annual and monthly minimum rental charge, the tenant's share of building
operating costs (including, without limitation, taxes) and any and all costs,
expenses and other charges payable by the tenant under the ECA Lease, (v)
arrearages, if any, and whether the latest rent due has been paid, (vi) the
amount of prepaid rent, if any, (vii) the amount or description of any
concessions, allowances, rebates, refunds, escrow or security deposits made by
the tenant under said tenant's Lease; (vii) any options to renew, extend,
purchase, cancel or terminate; (viii) any defaults, outstanding notices of
defaults of any kind or nature whatsoever, claims of defaults or similar claim
under Leases, and (ix) all unpaid tenant improvement allowances and/or unpaid
leasing commissions. No tenant has advised ECA in writing that ECA is in
default under any of the ECA Leases, or asserted any written claim or basis for
any claim for free or reduced rent or right of setoff against the landlord or
the rent under the ECA Leases, and ECA and its agent have no actual knowledge
of any default or any event which has taken place which, with the passage of
time, or the delivery of notice, or both, could become an event of default. ECA
has the sole right to collect rents under the Leases neither such right nor any
of the ECA Leases has been assigned, pledged, hypothecated or otherwise
encumbered by ECA except as additional collateral for the existing mortgage
upon the ECA Premises which shall be satisfied at Closing. To the best of ECA's
knowledge, each of the ECA Leases is valid and subsisting and in full force and
effect, the tenant is in actual possession in the normal course, and the rents
set forth in Exhibit "D-3" are the actual rents, income and charges being
collected by ECA under the ECA Leases. Any tenant improvements which ECA is
obligated to complete pursuant to any Lease (or any unsigned lease proposal or
lease amendment), all as set forth on the attached Schedule of Tenant
Improvements, has been completed as of this date or shall be assumed by Buyer
at and as of Closing, and all costs for completed work have been or shall be
paid by ECA. Buyer shall assume the responsibility for all tenant improvement
work required to be completed by the landlord under any ECA which has not been
completed by ECA prior to Closing and which is specifically set forth on the
Schedule of Tenant Improvements. At Closing, Buyer shall receive a credit
against the Purchase Price in the amount of the Tenant Improvements shown on
the Schedule of Tenant Improvements as such relates to the completion of
unfinished tenant work at the ECA Property. No tenant or other person has any
right or option to acquire the ECA Property, or any part thereof, or to ECA's
knowledge to terminate any of the rights currently appurtenant to the ECA
Premises. No tenant of the ECA Premises under any of the ECA Leases has, and
shall not at Closing have, prepaid
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any rent under any of the ECA Leases for more than one (1) month. Except as
otherwise set forth on Exhibit "D-3", no security deposits by tenants have
heretofore been returned or applied to charges against the tenants. The parties
acknowledge and agree that Buyer hereby grants Columbia Investment Builders,
Inc. ("CIB") the right, on ECA"s standard form lease, to lease the 2,368 square
foot space where CIB is currently located in the ECA Property for a two year
term commencing February 1, 1997, with two, one year renewal options
exercisable on 3 months prior written notice, for a Base Rent of $12 per square
foot on a full service basis excluding tenant electric charges which will be
billed separately during the initial term and the two, one (1) year renewal
terms.
The representations contained in this Section 5.7 shall be true at and as of
Closing.
5.8 Compliance with Law.
5.8.1 None of 1120, MLCP nor ECA have received
any outstanding written notices of any violations issued by governmental
authority having jurisdiction over the 1120 Property, the MLCP Property and the
ECA Property, as the case may be.
5.8.2 To the best of 1120's knowledge and except
as otherwise shown on that certain Environmental Report prepared by Lippincott,
Jacobs & Gouda dated March, 1995 (the "1120 Report"), no Hazardous Substances
(defined below) and no Hazardous Wastes (defined below) are present on the
Property including, without limitation, asbestos, flammable substances,
explosives, radioactive materials, hazardous wastes, toxic substances,
pollutants, pollution, contaminant, polychlorinated byphenyls ("PCBs"), urea
formaldehyde foam insulation, radon, corrosive, irritant, biologically
infectious materials, petroleum product, garbage, refuse, sludge, hazardous or
waste materials, except to the extent such substances or materials are used in
the ordinary course of 1120's business or that of any Tenant in accordance with
all applicable laws, and there has, to the best of 1120"s knowledge, been no
use of the 1120 Property that may, under any federal, state or local
environmental statute, ordinance or regulation, require, at any time, any
closure or cessation of the use or occupancy of the 1120 Property and/or
impose, at any time, upon the owner of the 1120 Property any clean-up or other
monetary obligation. 1120 has received no written notice that it has been
identified in any litigation, administrative proceeding or investigation as a
responsible party or potentially responsible party for any liability for
clean-up costs, natural resource damages or other damages or liability for
prior disposal or release of Hazardous Substances, Hazardous Wastes or other
environmental pollutants or contaminants, and no lien or superlien has been
recorded, filed or otherwise asserted against any real or personal property of
1120 for any clean-up costs or other responses costs incurred in connection
with any environmental contamination that is attributable, in whole or in part,
to 1120. For purposes of this Agreement, "Hazardous Substances" means those
elements and compounds which are designated as such in Section 101(14) of the
Comprehensive Response, Compensation and Liability Act (CERCLA), 42 U.S.C.
Section 9601 (14), as amended, all petroleum products and by-products, and any
other hazardous substances as that term may be further defined in all
applicable federal, state and local laws including the New Jersey Industrial
Site Recovery Act, as amended ("ISRA"); and "Hazardous Wastes" means any
hazardous waste, residential or household waste, solid waste, or other waste as
defined in applicable federal, state and local laws
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including the New Jersey Industrial Site Recovery Act, as amended ("ISRA").
1120 has not received any summons, citation, directive, letter or other
communication, written or oral, from any governmental or quasi-governmental
authority concerning any intentional or unintentional action or omission on
1120's part which (a) resulted in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous
Wastes, or (b) related in any way to the generation, storage, transport,
treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best
of 1120's knowledge, there are no underground or above-ground storage tanks
located on the 1120 Property.
5.8.3 To the best of MLCP's knowledge and except
as otherwise shown on that certain Environmental Report prepared by GHR
Consulting Services, Inc. dated September 13, 1994 (the "MLCP Report"), no
Hazardous Substances and no Hazardous Wastes are present on the Property
including, without limitation, asbestos, flammable substances, explosives,
radioactive materials, hazardous wastes, toxic substances, pollutants,
pollution, contaminant, polychlorinated byphenyls ("PCBs"), urea formaldehyde
foam insulation, radon, corrosive, irritant, biologically infectious materials,
petroleum product, garbage, refuse, sludge, hazardous or waste materials,
except to the extent such substances or materials are used in the ordinary
course of MLCP's business or that of any Tenant in accordance with all
applicable laws, and there has, to the best of MLCP"s knowledge, been no use of
the MLCP Property that may, under any federal, state or local environmental
statute, ordinance or regulation, require, at any time, any closure or
cessation of the use or occupancy of the MLCP Property and/or impose, at any
time, upon the owner of the MLCP Property any clean-up or other monetary
obligation. MLCP has received no written notice that it has been identified in
any litigation, administrative proceeding or investigation as a responsible
party or potentially responsible party for any liability for clean-up costs,
natural resource damages or other damages or liability for prior disposal or
release of Hazardous Substances, Hazardous Wastes or other environmental
pollutants or contaminants, and no lien or superlien has been recorded, filed
or otherwise asserted against any real or personal property of MLCP for any
clean-up costs or other responses costs incurred in connection with any
environmental contamination that is attributable, in whole or in part, to MLCP.
MLCP has not received any summons, citation, directive, letter or other
communication, written or oral, from any governmental or quasi-governmental
authority concerning any intentional or unintentional action or omission on
MLCP's part which (a) resulted in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous
Wastes, or (b) related in any way to the generation, storage, transport,
treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best
of MLCP's knowledge, other than that certain above ground storage tank
servicing Conrail with respect to which MLCP has not received written notice of
any violations of applicable laws, there are no underground or above-ground
storage tanks located on the MLCP Property.
5.8.4 To the best of ECA's knowledge and except
as otherwise shown on that certain Environmental Report prepared by Environ
Corp. dated October 2, 1992 (the "ECA Report"), no Hazardous Substances and no
Hazardous Wastes are present on the Property including, without limitation,
asbestos, flammable substances, explosives, radioactive materials, hazardous
wastes, toxic substances, pollutants, pollution, contaminant, polychlorinated
byphenyls ("PCBs"), urea formaldehyde foam insulation, radon, corrosive,
irritant, biologically
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infectious materials, petroleum product, garbage, refuse, sludge, hazardous or
waste materials, except to the extent such substances or materials are used int
he ordinary course of ECA's business or that of any Tenant in accordance with
all applicable laws, and there has, to the best of ECA"s knowledge, been no use
of the ECA Property that may, under any federal, state or local environmental
statute, ordinance or regulation, require, at any time, any closure or
cessation of the use or occupancy of the ECA Property and/or impose, at any
time, upon the owner of the ECA Property any clean-up or other monetary
obligation. ECA has received no written notice that it has been identified in
any litigation, administrative proceeding or investigation as a responsible
party or potentially responsible party for any liability for clean-up costs,
natural resource damages or other damages or liability for prior disposal or
release of Hazardous Substances, Hazardous Wastes or other environmental
pollutants or contaminants, and no lien or superlien has been recorded, filed
or otherwise asserted against any real or personal property of ECA for any
clean-up costs or other responses costs incurred in connection with any
environmental contamination that is attributable, in whole or in part, to ECA.
ECA has not received any summons, citation, directive, letter or other
communication, written or oral, from any governmental or quasi-governmental
authority concerning any intentional or unintentional action or omission on
ECA's part which (a) resulted in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous
Wastes, or (b) related in any way to the generation, storage, transport,
treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best
of ECA's knowledge, there are no underground or above-ground storage tanks
located on the ECA Property.
Subject to the provisions of Section 4.7 above, the representations contained
in Section 5.8.1 shall be true at and as of Closing. The representations
contained in Sections 5.8.2, 5.8.3 and 5.8.4 shall be true at and as of
Closing.
5.9 Insurance. Exhibits "G-1", "G-2", and "G-3" attached
hereto contain a true and correct description of all insurance policies
affecting the 1120 Property, the MLCP Property and the ECA Property
respectively, and the operation thereon. All of said insurance policies shall
remain in full force and effect until the completion of Closing hereunder. None
of 1120, MLCP nor ECA have received any written notice from any insurance
company board of fire underwriters or rating organization (or other body
exercising similar functions) (i) claiming any defects or deficiencies which
have not been addressed and fully cured or corrected, or (ii) requesting the
performance of any repairs, alterations or other work which have not been
performed, or (iii) claiming any default which, if not corrected, would result
in a cancellation of insurance coverage. The representations contained in this
Section 5.9 shall be true at and as of Closing.
5.10 Intentionally Omitted.
5.11 No Brokers. Except as set forth on Exhibit "D", no
brokerage or leasing commission or other compensation is now, or will at
Closing be, due or payable to any person, firm, corporation, or other entity
with respect to or on account of any of the Leases, or any extensions or
renewals thereof. The representations contained in this Section 5.11 shall be
true at and as of Closing.
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5.12 Utilities. To the best of 1120's, MLCP"s and ECA"s
knowledge, all installation, connection and "tap-in" charges for utilities
servicing their respective properties have been paid for in full. The
representations contained in this Section 5.12 shall be true at and as of
Closing.
5.13 Permits, Approvals and Certificates. To the best of
1120's, MLCP"s and ECA"s knowledge with respect to their particular assets, all
required certificates of occupancy for the 1120 Property, the MLCP Property and
the ECA Property and for separately demised spaces at the aforesaid, and all
other licenses, permits, authorizations and approvals necessary for the
operation of the aforesaid, have been validly issued and are in good standing
as of the Closing Date. All charges and fees for all of the foregoing have been
paid in full. Subject to the provisions of Section 4.7 above, the
representations contained in this Section 5.13 shall be true at and as of
Closing.
5.14 Good Title to Property. 1120 represents and warrants
that to the best of its knowledge, it holds good and marketable, indefeasible
fee simple title to the 1120 Property, free and clear of liens and
encumbrances, other than the 1120 Debt and the 1120 Permitted Exceptions. MLCP
represents and warrants that, to the best of its knowledge it holds good and
marketable, indefeasible fee simple title to the MLCP Property, free and clear
of liens and encumbrances, other than the MLCP Debt and the MLCP Permitted
Exceptions. ECA represents and warrants that to the best of its knowledge it
holds good and marketable, indefeasible fee simple title to the ECA Property,
free and clear of liens and encumbrances, other than the ECA Permitted
Exceptions. The representations contained in this Section 5.14 shall be true at
and as of Closing.
5.15 All Taxes and Assessments Paid. Each of 1120, MLCP
and ECA, with respect to its assets, will have paid prior to Closing, all
taxes and assessments, including assessments payable in installments, which
are to become due and payable prior to Closing and/or a lien on the 1120
Property, the MLCP Property and the ECA Property, except for taxes for the
current year which shall be prorated at Closing and except for installments of
current assessments which become due and payable after Closing which shall be
the sole responsibility of Buyer. The representations contained in this
Section 5.15 shall be true at and as of Closing.
5.16 FIRPTA. None of 1120, MLCP nor ECA are a "foreign
person" as such term is defined in Section 1445(f)(3) of the Internal Revenue
Code of 1954, as amended (the "Code"). The representations contained in this
Section 5.16 shall be true at and as of Closing.
5.17 Intentionally Omitted.
5.18 Construction Liens. To the best of 1120's, MLCP"s and
ECA"s knowledge, except as set forth on the Tenant Improvement Schedule no work
has been performed or is in progress at, and no materials have been furnished
to the 1120 Property, the MLCP Property and the ECA Property, as the case may
be, which, though not presently the subject of, might give rise to
construction, mechanic's, materialmen's, or other liens against the 1120
Property, the MLCP Property or the ECA Property or any portion thereof, except
that for
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which full and complete payment has been or will be made prior to Closing or
for which releases have been obtained. If any lien for any such work is filed
before or after Closing, Seller shall promptly discharge the same. The
representations contained in this Section 5.17 shall be true at and as of
Closing.
5.19 Inventory Schedule. The Schedule of Inventory
contains a correct and complete list of personal property owned by each of
1120, MLCP and ECA and located at or used in connection with the operation of
the 1120 Property, the MLCP Property and the ECA Property. The representations
contained in this Section 5.19 shall be true at and as of Closing.
5.20 Charges, Fees and Assessments. To the best of 1120's,
MLCP's and ECA's as the case may be, any and all applicable charges, fees and
assessments and any and all other sums due under declarations, cross-easements
and like agreements to which the 1120 Property, the MLCP Property and the ECA
Property or any portion thereof may be subject, have been paid, and, to the
best of 1120's, MLCP"s and ECA"s knowledge, no special assessments thereunder
are pending, and all consents and approvals required to be obtained under any
such declarations, cross-easements and like agreements (other than the Sun
Loan) have been obtained pursuant to the requirements of such documentation.
The representations contained in this Section 5.20 shall be true at and as of
Closing.
5.21 Rights to Purchase. There are no outstanding
agreements, options, rights of first refusal, conditional sales agreements or
other agreements or arrangements, whether oral or written, regarding the
purchase and sale of the 1120 Property, the MLCP Property and the ECA Property,
or which otherwise affect any portion of or all the foregoing. Without
limiting the generality of the foregoing, any and all option rights of Clinton
Corporation granted or referred to in that certain lease between 1120 and
Computer Sciences Corporation, have since expired by their terms and are no
longer valid or enforceable. The representations contained in this Section
5.21 shall be true at and as of Closing.
5.22 No Outstanding Obligations. To the best of 1120's,
MLCP's and ECA"s knowledge, as the case may be, except as set forth on the
Tenant Improvement Schedule, all debts, liabilities, and obligations of each of
1120, MLCP and ECA arising out of the construction, ownership, and operation of
the 1120 Property, the MLCP Property and the ECA Property, as the case may be,
including, but not limited to, construction costs, taxes, accounts payable and
the like, have been paid as they became due and payable and shall continue to
be so paid from the date hereof until the Closing Date. To the best of 1120's,
MLCP's and ECA's knowledge, as the case may be, no debts, liabilities, claims,
or obligations (whether known or unknown, accrued, absolute, contingent, or
otherwise) affecting the 1120 Property, the MLCP Property and the ECA Property,
other than the Sun Loans which is currently being paid and is not subject to
any defaults, shall be outstanding as of the Closing Date. The representations
contained in this Section 5.22 shall be true at and as of Closing.
5.23 Access. To the best of 1120's, MLCP's and ECA's
knowledge, all curb cut and street opening permits or licenses required for
vehicular access to and from the 1120 Property, the MLCP Property and the ECA
Property to any adjoining public street have been
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obtained and paid for by 1120, MLCP or ECA, as the case may be, and all of the
foregoing shall be in full force and effect at the Closing. Seller will provide
Buyer with an opportunity to review its files containing all conditional and
permanent zoning, site plan, subdivision, building, housing, safety, fire and
health approvals, including, without limitation, the local governmental
applications, resolutions and approvals supporting the same, if any, relating
to the 1120 Property, the MLCP Property and the ECA Property. The
representations contained in this Section 5.23 shall be true at and as of
Closing.
5.24 Abatement Programs. To the best of 1120's, MLCP's and
ECA's knowledge, as the case may be, none of the 1120 Property, the MLCP
Property and the ECA Property are subject to an written tax abatement program
or reduction of assessment agreements, which provides for an increase in
assessment at the expiration of the applicable abatement period. The
representations contained in this Section 5.24 shall be true at and as of
Closing.
5.25 Development Agreements. To the best of 1120's, MLCP's
and ECA's knowledge, as the case may be, each of 1120, MLCP and ECA are in
material compliance with and each of them have fully paid and discharged all
obligations arising under any and all development, tri-party and like
agreements, and any and all other agreements with county, municipal and other
governmental and quasi-governmental agencies and authorities respecting the
ownership, development and operation of the 1120 Property, the MLCP Property
and the ECA Property, as the case may be, and all portions thereof. The
representations contained in this Section 5.25 shall be true at and as of
Closing.
5.26 Structural Representation.
5.26.1. To the best of 1120"s knowledge, except as
otherwise set forth on that a certain structural engineering report prepared by
Architecture/Design Alliance, Inc. ("AAI") and dated December 2, 1994 (the
"1120 Structural Report"), all building and improvements situate on the 1120
Premises, and all appurtenant systems, including, without limitation, the roof,
the HVAC, plumbing, electrical and mechanical systems and equipment are in good
working order and condition, and there are no material patent or latent defects
therein. 1120 is aware of no material repairs, alterations or other work other
than ordinary maintenance, which is required to be performed in order to
maintain the structural integrity of the building and improvements, and the
efficient operation and good operating condition of the appurtenant systems and
equipment.
5.26.2. To the best of MLCP"s knowledge, except as
otherwise set forth on that a certain structural engineering report prepared by
AAI and dated October 13, 1994 (the "MLCP Structural Report"), all building and
improvements situate on the MLCP Premises, and all appurtenant systems,
including, without limitation, the roof, the HVAC, plumbing, electrical and
mechanical systems and equipment are in good working order and condition, and
there are no material patent or latent defects therein. MLCP is aware of no
material repairs, alterations or other work other than ordinary maintenance,
which is required to be performed in order to maintain the structural integrity
of the building and improvements, and the efficient operation and good
operating condition of the appurtenant systems and equipment.
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5.26.3. To the best of ECA"s knowledge, except as
otherwise set forth on that a certain structural engineering report prepared by
Edward Kuljian Associates and dated October 12, 1992 (the "ECA Structural
Report"), all building and improvements situate on the ECA Premises, and all
appurtenant systems, including, without limitation, the roof, the HVAC,
plumbing, electrical and mechanical systems and equipment are in good working
order and condition, and there are no material patent or latent defects
therein. ECA is aware of no material repairs, alterations or other work other
than ordinary maintenance which is required to be performed in order to
maintain the structural integrity of the building and improvements, and the
efficient operation and good operating condition of the appurtenant systems and
equipment.
The representations contained in this Section 5.26 shall be true at and as of
Closing.
5.27 Correct Copies of Documents. Where copies of any
documents have been delivered by Seller to Buyer, whether prior to or pursuant
to this Agreement, such copies: (i) are exact copies of the originals of said
documents, as executed and delivered by all of the parties thereto; (ii) to the
best of each of 1120's, MLCP"s and ECA"s knowledge, constitute, in each case,
the entire agreement between the parties thereto with respect to the subject
matter thereof, and the original instruments in the form delivered to Buyer,
are now in full force and effect, and valid and enforceable in accordance with
their respective terms, and no party thereto is in default, and no claim of
default by any party has been made or is now pending and there does not now
exist any default which, after either the giving of notice or the passing of
time, or both, will or may constitute a default, or would excuse performance by
any party thereto; and (iii) have not been changed or amended except for
amendments, if any, specifically referred to therein. The representations
contained in this Section 5.27 shall be true at and as of Closing.
When used throughout this Section 5, the phrase "knowledge" and "to
the best knowledge" as used herein shall be deemed to mean the actual knowledge
of Joseph D. Gonnelli and R. Brian Jackson.
6. POSSESSION. Possession of each of the 1120 Premises, the
MLCP Premises and the ECA Premises is to be given to Buyer, subject to the
right of tenants under the Leases on the Closing Date, by delivery of the
Deeds, and all keys, combinations and security codes at Closing.
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.
7.1 Title Binder. On or before the execution of this
Agreement Seller made available to Buyer, Seller"s most recently dated title
commitment for the 1120 Property, the MLCP Property and the ECA Property
(complete with copies of all exceptions to title), and Buyer shall secure a
current title commitment (the "Title Binder") from the Commonwealth Land Title
Insurance Company. At Closing, Seller, so long as such amount does not exceed
$500,000.00 in the aggregate, shall pay all monetary liens (other than the Sun
Loans), which are not 1120 Permitted Exceptions, MLCP Permitted Exceptions or
ECA Permitted Exceptions. If such amount does exceed $500,000, and Buyer is
unwilling to pay such excess to discharge such
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liens in excess of $500,000, then either party may terminate this Agreement,
whereupon, the Deposit and Buyer"s reasonably documented Transaction Costs (as
defined below) shall be immediately refunded to Buyer.
7.2 Survey. Seller has provided Buyer with a copy of
Seller"s most recent 1120 Property, MLCP Property and ECA Property surveys.
7.3 Physical Inspection. Buyer shall have the right to
continue its physical and mechanical inspection, measurement and audit of the
1120 Property, the MLCP Property and the ECA Property and an inspection of all
books and records and financial information pertaining thereto, and Seller
shall cooperate with Buyer and shall furnish to Buyer such information,
materials and documents as Buyer may reasonably request and shall have its
accountant available throughout such period to assist in Buyer's inspection and
review. The inspection, audit and measurement of the 1120 Property"s, MLCP
Property"s and ECA Property's operation, condition and maintenance shall
include, without limitation, such title, survey, environmental and engineering
inspections, reviews and assessments that Buyer deems appropriate. Buyer agrees
that it shall not unreasonably interfere with tenants in performing its
inspection. If Buyer exercises its rights under the provisions of this
subsection, it shall (i) provide Seller with prior verbal notice of Buyer"s
entry, (ii) keep the 1120 Property, the MLCP Property and the ECA Property free
of any liens or third-party claims resulting therefrom except as may be
required by applicable law; (iii) maintain adequate liability insurance in an
amount of not less than $1,000,000.00 for a single occurrence and $50,000.00
for property damage which insurance shall name 1120, MLCP and ECA as an
additional insured; (iv) indemnify 1120, MLCP and ECA against any liability or
expense for injuries to or death of persons or damage to property arising from
the exercise of the rights hereunder that are not the result of any act or
omission of 1120, MLCP or ECA or their respective agents, employees or
contractors and (v) if Closing does not occur for any reason other than 1120's,
MLCP"s or ECA"s breach or default, restore as nearly as practicable the
Property substantially to its condition immediately before such exercise. The
indemnification and restoration provisions of this subsection shall survive the
termination of this Agreement.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer shall survive Closing and the delivery
of the Deeds for the statute of limitations pertaining thereto. The
representations and warranties of Seller set forth in Sections 5.1, 5.2, 5.6,
5.8.1, 5.11, 5.16, 5.21 and 5.24 shall survive Closing and delivery of the
Deed for the applicable period of the statute of limitations pertaining
thereto. The representations and warranties of Seller set forth in Sections
5.3, 5.5, 5.7 (except as set forth below), 5.8.2, 5.8.3, 5.8.4, 5.18, 5.19,
5.20, 5.22, 5.23, 5.25, 5.26 and 5.27 shall survive Closing and delivery of
the Deed for six (6) months from Closing. The representations and warranties
of Seller set forth in Sections 5.12 and 5.13 shall survive Closing and
delivery of the Deed for a three (3) month period from Closing.
Notwithstanding anything contained in this Agreement to the contrary, except
as expressly set forth in this Agreement, none of 1120, MLCP and ECA makes any
representation, either prior to or at the Closing, with respect to the
condition or character of the 1120 Property, the MLCP Property or the ECA
Property or the use or uses to which the foregoing may be put. Buyer
acknowledges that Buyer has or will carefully and
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thoroughly examine, inspect and investigate the 1120 Property, the MLCP
Property and the ECA Property, and 1120's, MLCP"s and ECA"s operations (as to
manner, income and expenses); and Buyer is purchasing the same on the basis of
such examination, inspection and investigation and not in reliance on any
representation or warranty of 1120, MLCP or ECA or any agent, employee or
representative of any of them of any kind or nature whatsoever, except as
specifically set forth herein. Accordingly, subject to the representations and
warranties contained herein and in Seller"s Documents, if Buyer closes
hereunder, Buyer hereby agrees to accept all of the assets being acquired by
Buyer hereunder, whether realty, personalty or mixed, on an absolutely and
unconditionally "as is" basis at the time of Closing. Notwithstanding the time
period for survival with respect to Section 5.7, if prior to the expiration of
such period, Seller delivers to Buyer an estoppel certificate on Buyer"s
prescribed form, which certificate confirms Seller"s representations under
Section 5 of this Agreement, Seller shall be released from all liability with
respect to its representations as they pertain to such tenancy.
9. FIRE OR OTHER CASUALTY.
9.1 Maintain Insurance. Seller shall maintain in effect
until the Closing Date the insurance policies (or like policies) now in effect
with respect to the Premises and Personal Property as set forth in Exhibits
"G-1", "G-2" and "G-3".
9.2 Minimal Damage. If prior to the Closing Date any
portion of the Property is damaged or destroyed by fire or other casualty, and
the cost of repair or restoration thereof shall be $250,000 or less (as
established by good faith estimates obtained by Buyer), this Agreement shall
remain in force.
9.3 Substantial Damage. If prior to the Closing Date any
portion of the Property is damaged or destroyed by fire or other casualty, and
the cost of repair or restoration thereof shall be more than $250,000 (as
established by good faith estimates obtained by Buyer), Buyer may terminate
this Agreement by giving written notice thereof to Seller, and if this
Agreement is so terminated, then the Deposit shall be immediately refunded to
Buyer, and thereafter neither party shall have any further liability hereunder
thereafter. If Buyer does not so terminate this Agreement, it shall remain in
full force and effect, and the provisions of Section 9.4 below shall apply.
9.4 Closing After Substantial Damage. So long as this
Agreement shall remain in force under Section 9.2 or 9.3, then (i) all proceeds
of insurance plus the amount of deductible under Seller's insurance policy,
shall be credited to Buyer against the Purchase Price payable by Buyer at
Closing, and (ii) all unpaid claims and rights in connection with losses shall
be assigned to Buyer at Closing, including the right to adjust any such loss.
9.5 Rent Insurance. All rental loss insurance and the
proceeds thereof allocable to any period subsequent to Closing shall be paid or
assigned to Buyer at Closing.
10. CONDEMNATION. If, prior to the Closing Date, all or any
material portion of the 1120 Premises, the MLCP Premises or the ECA Premises
(being any taking affecting any
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building or any other taking involving 10% or more of the 1120 Premises, the
MLCP Premises or the ECA Premises or their respective parking areas) is taken
by eminent domain or a notice of any eminent domain proceedings with respect to
the aforesaid or any part thereof is received by the Seller, then Seller shall
within five (5) days thereafter give notice thereof to Buyer and Buyer shall
have the option to (a) complete the purchase hereunder or (b) if such taking,
in Buyer's sole and absolute discretion, adversely affects the Premises or its
current economic viability, terminate this Agreement, in which event the
Deposit shall be immediately refunded to Buyer, and this Agreement shall be
null and void. Buyer shall deliver written notice of its election to the Seller
within two (2) days after the date upon which the Buyer receives written notice
of such eminent domain proceedings. If notice of condemnation is received by
Buyer and it fails to deliver said written notice of its election within said
time period, such failure shall constitute a waiver by Buyer of its right to
terminate this Agreement. If this Agreement is not so terminated, Buyer shall
be entitled to all awards or damages by reason of any exercise of the power of
eminent domain or condemnation with respect to or for the taking of the
Premises or any portion thereof, and until such time as closing has occurred,
or this Agreement terminates. Any negotiation for, or agreement to, and all
contests of any offers and awards relating to eminent domain proceedings shall
be conducted with the joint approval and consent of the Seller and the Buyer.
11. Expense Allocations.
11.1 Seller shall pay for all applicable realty transfer
taxes related to the execution, delivery and recording of the Deeds, Bills of
Sale, and other Closing Documents, and all related recording charges.
11.2 Subject to Section 13.3, Buyer shall pay for Buyer's
title examination for Buyer's title examination and premiums and for Buyer"s
due diligence expenses, including survey, structural analysis and environmental
analysis.
11.3 Buyer and Seller shall be responsible for paying
their own attorney's fees in connection with this transaction.
11.4 Buyer and Seller shall equally bear the cost and
expense incurred in connection with the assumption of the Sun Loan, including
but not limited to, any assumption fees, Sun"s attorney"s fees, recording
costs and other costs related thereto.
12. CLOSING.
12.1 Time and Date and Place. The Closing on the sale of
the Property (herein referred to as the "Closing") shall take place on January
24, 1997 at 9:00 a.m. at the offices of Pepper, Hamilton & Scheetz, Suite 500,
457 Haddonfield Road, Cherry Hill, New Jersey. Notwithstanding the foregoing,
Buyer may extend the outside date for Closing to January 29, 1997 upon prior
written notice to Seller on or before January 23, 1997. Time is of the essence
in this Agreement. Notwithstanding the foregoing, either party shall have the
option to extend the
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Closing three times, each for a period of ten (10) days, solely in the event
that the Seller has not obtained the consent of Sun as required in this
Agreement.
12.2 Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
12.2.1 Seller's Documents and Other Items. Each
of 1120, MLCP and ECA with respect to its assets shall execute and deliver or
cause to be executed and delivered to Buyer in proper form for recording:
12.2.1.1 Deeds. A bargain and sale
deed with covenants against grantor"s acts prepared by Buyer's counsel in form
acceptable to Seller (the "Deed"), conveying the 1120 Premises, the MLCP
Premises and the ECA Premises to Buyer, duly executed by Seller for recording.
The Deed description shall be based upon the metes and bounds description
attached as Exhibit "A-1" for the 1120 Premises, as Exhibit "A-2" for the MLCP
Premises and as Exhibit "A-3" for the ECA Premises, in addition, if Buyer
requests that Seller convey the 1120 Premises, the MLCP Premises or the ECA
Premises by the metes and bounds description shown on the new survey, if any,
obtained by Buyer, Seller covenants to execute a Quit Claim Deed for such new
description.
12.2.1.2 Special Warranty Bills of
Sale. A special warranty bill of sale prepared by Buyer"s counsel in form
acceptable to Seller, assigning, conveying and transferring to Buyer, all of
the Personal Property.
12.2.1.3 Original Leases. All
original Leases, tenant files, tenant correspondence and repair records.
12.2.1.4 Original Licenses,
Contract Documents and Other Personal Property. All original Licenses, Contract
Documents, and other Personal Property described in Section 1.2 of this
Agreement to the extent in Seller"s possession.
12.2.1.5 Assignment of Leases. An
assignment and assumption agreement with indemnities consistent with this
Agreement, prepared by Buyer"s counsel in form acceptable to Seller (the
"Assignment"), duly executed by Seller and Buyer, assigning, conveying and
transferring to Buyer the Leases.
12.2.1.6 Assignment of Licenses,
Contract Documents and Other Personal Property. An assignment agreement with
indemnities consistent with this Agreement prepared by Buyer"s counsel, in form
acceptable to Seller, assigning, conveying and transferring to Buyer, to the
extent they are assignable, the Licenses, Contracts Documents and Other
Personal Property, including, specifically, the Names, without representation
or warranty.
12.2.1.7 FIRPTA Certificates. All
certificate(s) required under Section 1445 of the Code.
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12.2.1.8 Tenant Letter. Letters to
each tenant advising of the change in ownership and directing the payment of
rent to such party as the Buyer shall designate, said letter to be in form
acceptable to Buyer.
12.2.1.9 Intentionally Omitted.
12.2.1.10 Title Insurance
Certificates. Such affidavits of title or other certifications as shall be
required by the Title Company to insure Buyer's title to the Premises as set
forth in Section 3, and to provide affirmative endorsements (a) against
construction liens and (b) parties in possession other than tenants under the
Leases.
12.2.1.11 Certified Rent Roll. A
certified schedule of Tenant Leases, containing all information required to be
set forth in Exhibit "D", which schedule is correct and complete as of the date
of Closing.
12.2.1.12 Seller Certificate. A
written certification confirming that as of Closing confirming that the
representations and warranties which are required to be true at and as of
Closing, are true at and as of Closing.
12.2.1.13 Organization
Certifications. Confirmation of the good standing and existence of Seller and
its general partner and the due authority of those executing for them,
including, without limitation, the following documents issued no earlier than
30 days prior to Closing: (a) good standing certificate in state of
organization and in the State in which the Property are located, (b)
partnership agreement, (c) a certificate from the secretary of the corporation
or managing general partner of the partnership confirming the incumbency of the
signatories and the current force and effect of the resolution authorizing
their execution of the documents required under this Agreement.
12.2.1.14 Keys. All keys,
combinations and security codes for all locks and security devices on the
Property;
12.2.1.15 Intentionally Omitted.
12.2.1.16 Intentionally Omitted.
12.2.1.17 Mortgagee Estoppel.
Seller shall deliver to Buyer a Mortgagee Estoppel in the form reasonably
specified by Buyer as executed by Sun, confirming, among other items, (i) the
list of Sun Loan documents, (ii) the interest rate payable thereon and the
maturity date thereof, (iii) the outstanding principal balance and accrued and
unpaid interest thereon, and the status and amount of all tax, insurance and
other applicable escrows (if any) as of the Closing Date (iv) that no default
or event of default exists by the Borrower thereunder and that there exists no
facts or circumstances, which with the delivery of notice and the passage of
time, or either, would constitute a default or event of default, (v) that Sun
has not sold, assigned, participated or transferred the debt or any interest
therein, and (vi) that the assumption of the Sun
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Loan by Brandywine Operating Partnership, L.P., as nominee of Buyer, has been
approved by all requisite boards, committees and other authorities at Sun.
12.2.1.18 ISRA Non-Applicability
Letter. A written non- applicability letter issued within 30 days prior to
Closing by the New Jersey Department of Environmental Protection stating that
the transaction and the Property is not subject to ISRA.
Collectively, the documents set forth in Section
12.2.1 shall be referred to as "Seller"s Documents".
12.2.2 Buyer's Documents. Buyer shall deliver or
cause to be delivered to Seller:
12.2.2.1 The amounts required to be
paid to Seller pursuant to this Agreement;
12.2.2.2 Confirmation of the
existence and subsistence of Buyer, and the authority of those executing for
Buyer, including, without limitation, the following documents issued no earlier
than thirty (30) days prior to Closing: (a) good standing certificate in State
of Maryland, (b) Buyer"s Amendment and Restatement of Declaration of Trust
filed on August 27, 1996, as amended, (c) a certificate from any officer of
Buyer confirming the incumbency of the signatories and the current force and
effect of the resolution authorizing their execution of the documents required
under this Agreement.
12.2.3 Title Insurance. As a condition to Buyer's
obligations at Closing, Title Company or a substitute title insurance company
licensed to do business in New Jersey shall furnish Buyer at Closing with the
Title Policy, in the form approved by Buyer pursuant to Section 3, in the full
amount of the Purchase Price, wherein the Title Company shall insure fee simple
title to the Property in Buyer as of the Closing Date containing no exceptions
to title other than the Sun Loan and the Permitted Exceptions.
12.2.4 Necessary Documents. Buyer and Seller
shall execute and deliver such other documents and instruments as may be
reasonably necessary to complete the transaction contemplated by this
Agreement.
13. DEFAULT; REMEDIES
13.1.1 Prior to title passing and the completion
of Closing, in the event of 1120's, MLCP"s or ECA"s default hereunder, Buyer"s
sole remedies shall be that of (i) specific performance with abatement of the
Purchase Price to the extent of liens of a fixed or ascertainable amount
(subject to the dollar limitation contained in Section 7.1), or (ii)
termination of this Agreement and return of the Deposit, in no event shall
Buyer be entitled to damages of any kind or nature;
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13.1.2 Prior to title passing and
completion of Closing, with respect to any representations or warranties of
1120, MLCP and ECA contained in this Agreement, Buyer"s obligations hereunder
are contingent upon such representations and/or warranties contained in this
Agreement being true and correct as of the date hereof and where the context
indicates, as of the date of Closing, but recision of this Agreement and return
of the Deposit, shall be Buyer"s exclusive remedy for any breach of any
representation and/or warranty by 1120, MLCP, and ECA.
13.1.3 Notwithstanding the foregoing, in
the event of a willful or intentional breach of a covenant, obligation or
warranty by 1120, MLCP or ECA under this Agreement or if 1120, MLCP or ECA
makes a willful or intentional material misrepresentation in this Agreement,
Buyer shall be entitled to terminate this Agreement and to the return of the
Deposit and Buyer"s reasonably documented Transaction Costs sustained by Buyer
in connection with this Agreement; and the foregoing shall be Buyer"s sole
remedies under this subparagraph.
13.1.4 Subsequent to title passing and
completion of Closing, Buyer shall have recourse against 1120, MLCP and ECA
for its reasonably documented actual damages, sustained solely for 1120's,
MLCP"s and ECA"s breach of representations and warranties which survive
Closing, which breach is discovered by Buyer after Closing; the right to
pursue said recourse shall expire and terminate, as to any right on which
action has not then been initiated, at the expiration of the survival periods
set forth herein.
13.2 Buyer recognizes that the 1120 Property, the MLCP
Property and the ECA Property will be removed by Seller from the market during
the existence of this Agreement and that if this purchase and sale is not
consummated because of Buyer's default Seller shall be entitled to compensation
for such detriment. Seller and Buyer acknowledge that it is extremely difficult
and impracticable ascertain the extent of the detriment, and to avoid this
problem, Seller and Buyer agree that if the purchase and sale contemplated in
this Agreement is not consummated because of Buyer's default under this
Agreement, Seller shall be entitled to retain the Deposit as its sole and
liquidated damages. The parties agree that the sum stated above as liquidated
damages shall be in lieu of any other relief to which Seller might otherwise be
entitled, Seller hereby specifically waiving any and all rights which it may
have to damages or specific performance as a result of Buyer's default under
this Agreement.
13.3 Buyer"s Out-of-Pocket Costs. In the event of Seller"s
breach or default in accordance with Section 13.1.3 then, in any such event,
upon termination by Buyer hereunder, in addition to receiving the immediate
return of the Deposit, anything in the Agreement contained to the contrary
notwithstanding, Buyer shall also receive from Seller, upon demand, Buyer"s
actual, documented out-of-pocket costs and expenses associated with this
Agreement and Buyer"s anticipated acquisition of the Property including,
without limitation, Buyer"s reasonable counsel fees and costs, title expenses,
survey costs, financial and accounting due diligence, Buyer"s structural
inspection of the Property and Buyer"s environmental assessment of the
Property, and other costs and expenses associated with Buyer"s due diligence,
(collectively, "Transaction Costs"). The foregoing list is not intended to be
exclusive, but representative of the costs and expenses that the parties
anticipate that Buyer will incur in anticipation of this
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transaction. Seller"s maximum reimbursement liability under this Section 13
shall not exceed $60,000 in the aggregate.
14. CONDITIONS PRECEDENT TO CLOSING.
The obligations of Buyer hereunder are subject to the
fulfillment of the following conditions prior to or on the Closing Date (any
one of which may be waived in whole or in part by Buyer at or prior to the
Closing) and in the event any of the conditions are not complied with, Buyer
may terminate this Agreement by notifying the Seller and Escrow Agent and
thereupon shall be refunded the Deposit and thereafter this Agreement shall be
null and void:
14.1 Correctness of Warranties and Representations. The
warranties and representations made by Seller which are specifically required
to be true and correct at and as of Closing shall be true and correct on the
Closing Date in all material respects as though such representations and
warranties were made on the Closing Date, except (i) immaterial variations
which occur in the ordinary course of Seller"s business which do not materially
affect Buyer"s valuation of the 1120 Property, MLCP Property or the ECA
Property or (ii) provided Buyer closes, any matter or occurrence within Buyer"s
actual knowledge prior to Closing shall not be construed as a failure of the
condition set forth in this Section 14.1.
14.2 Compliance with Terms and Conditions. Each of 1120,
MLCP and ECA shall have performed and complied in all material respects with
all of the terms and conditions required by this Agreement to be performed and
complied with by it prior to or on the Closing Date, including delivery of all
of the Seller Documents.
14.3 Buyer's Review of Structural and Environmental
Status, Fleer Corp. and ECA Title. Buyer shall be satisfied by 5:00 p.m. on
Thursday, January 23, 1997, time being of the essence, with Buyer"s review of
Buyer"s structural engineering, environmental investigations, the status of
Fleer Corp."s outstanding lease obligations (including the possible
implications of Fleer Corp."s bankruptcy), and the state of title to the ECA
Property, which review shall not reveal any fact, circumstance or information
which in Buyer"s sole judgment may materially and adversely affect the
Property or Buyer"s valuation of the 1120 Property, the MLCP Property and the
ECA Property.
14.4 Estoppel Certificate from Evesham Township and Mt.
Laurel Township. Subject to the provisions of Section 4.7 above, Buyer shall
have received an estoppel certificate from the zoning code enforcement (or
other appropriate) officer of Evesham Township and Mt. Laurel Township,
confirming that no portion of the 1120 Property, the MLCP and the ECA Property
is in violation of any applicable codes, and that each of the foregoing is in
compliance with applicable zoning restrictions.
14.5 Consent of Sun. Seller shall have obtained the
written consent of Sun to the transaction, contemplated by this Agreement in
form and substance reasonably satisfactory to Buyer, and a release of 1120 and
MLCP under the Sun Loans with respect to matters which accrue from and after
Closing. The Buyer shall, at or prior to Closing, execute and deliver such
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<PAGE> 28
assumption agreements and other documents, reasonably acceptable in form and
content to Buyer, required by Sun to effectuate the assumption of the Sun Loan
on the same non-recourse basis as is applicable on the date hereof. At Closing,
Abdelwahabb Sallam ("AS") shall retain all of his obligations under the Master
Lease dated March 15, 1995 (the "Master Lease"), which Master Lease shall be
assigned to Buyer as Master Landlord, provided that the Master Lease shall be
terminated and of no further effect upon the consent of Sun to such termination
and the satisfaction of the conditions to the termination of the Master Lease
as set forth in the 1120 Debt. Buyer hereby appoints 1120 as Buyer's sole and
exclusive agent, without fee, commission or other compensation, for the purpose
of procuring the lease renewal of Computer Sciences Corporation ("CSC"). Buyer
shall execute any lease renewal with CSC procured by 1120 so long as the basic
form thereof is consistent with the present CSC lease, and the new business
terms thereof are sufficient to terminate the Master Lease pursuant to the
provisions of the 1120 Debt. Buyer shall not unreasonably withhold its consent
to any other lease renewal with CSC procured by 1120, provided that the Master
Lease remains effective. In the event that CSC does not renew its lease, if
requested by Seller, the Buyer hereby appoints 1120 as the Buyer's sole and
exclusive agent to procure a substitute tenant for such space without fee,
compensation or commission. Buyer shall execute any lease with any such
substitute tenant(s) procured by 1120 or any other party so long as the
provisions thereof are sufficient to terminate the Master Lease pursuant to the
provisions of the 1120 Debt and so long as such new tenant does not create a
conflict with any exclusive use clauses contained in existing leases at such
time. Buyer shall not unreasonably withhold its consent to any other lease
procured by 1120 or any other party, so long as the Master Lease remains
effective. Notwithstanding anything contained herein to the contrary, the Buyer
shall be solely responsible for any tenant improvement costs related to the
lease renewal with CSC or any substitute tenant(s), provided that the per share
foot cost thereof shall have been approved by Buyer in advance, such approval
not to be unreasonably withheld or delayed. The provisions of this Section 14.5
shall survive Closing.
14.6 Tenant Estoppels and Discussions. Seller shall use
its best efforts to deliver to Buyer estoppel certificates in the form
specified by Buyer from Conrail, Lincoln Technical Institute and ISO
Commercial Risk Services, which estoppel certificates shall affirm Seller"s
representations and warranties with respect to such leases as contained in
Section 5 above. Buyer, with R. Brian Jackson or Joseph Gonnelli, prior to
Closing, shall have had the opportunity to discuss with Fleer Corp., Conrail,
Lincoln Technical Institute and ISO Commercial Risk Services the standard
information to be contained in the above-referenced estoppel certificates and
be reasonably satisfied that the responses confirm that such information
comports with the representations set forth in Section 5 of this Agreement.
15. PRORATIONS.
15.1 Operating Expenses. The following items shall be
prorated at Closing, as of close of business of the day immediately preceding
Closing "Adjustment Date":
15.1.1 Rents. All current collected rent,
additional rent, percentage rent (if any) and all other charges collected under
the Leases shall be apportioned on the Closing Date pro rata on a per diem
basis. If any tenant is in arrears in the payment of rent or additional rent
28
<PAGE> 29
on the Closing Date, rents received from such tenant ninety (90) days after the
Closing Date shall be applied in the following order of priority: (a) to the
Buyer, so long as such tenant is in arrears for current or prior rent arising
after Closing, then (b) to Seller for all rent in arrears prior to the Closing
Date; and then (c) to Buyer with no further claim by Seller thereto. Except as
herein provided, Buyer is not under any obligation to collect rents in arrears
for the benefit of Seller. Any rents which are delinquent or otherwise not paid
at the time of Closing, and collected by Buyer within ninety (90) days after
Closing shall be apportioned as aforesaid and the portion to which Seller is
entitled shall be promptly remitted by Buyer to Seller. Seller shall have no
claim to rents collected ninety (90) days after the Closing Date.
15.1.2 Taxes. Real estate and personal property
taxes, if any, on the basis of the fiscal year for which assessed. If the
Closing shall occur before the tax rate or assessment is fixed, the
apportionment of such real estate and personal property taxes at the Closing
shall be upon the basis of the tax rate for the next preceding year applied to
the latest assessed valuation. Final adjustment will be made upon the actual
tax amount, when determined.
15.1.3 Deposits. Tax and utility company
deposits, if any.
15.1.4 Water and Sewer Charges. Water and sewer
charges and fire protection and inspection services based upon meter readings
to be obtained by Seller effective as of the Adjustment Date, or if not so
obtainable, a date not more than ten (10) days prior to the Adjustment Date,
and the unfixed meter charges based thereon for the intervening period shall be
apportioned on the basis of such last reading. Upon the taking of a subsequent
actual reading, such apportionment shall be readjusted and Seller or Buyer, as
the case may be, will promptly deliver to the other the amount determined to be
so due upon such readjustment. If Seller is unable to furnish such prior
reading, any reading subsequent to the Closing will be apportioned on a per
diem basis from the date of such reading immediately prior thereto and Seller
shall pay the proportionate charges due up to the date of Closing.
15.1.5 Assigned Contracts. Amounts paid or
payable in respect of any service and maintenance contracts assigned to Buyer
in accordance herewith.
15.1.6 Electricity, gas, steam and fuel.
Electricity, gas and steam and fuel oil, if any, based on meter readings or a
fuel company letter showing measurement on the day immediately preceding
Closing, and valued at current prices.
15.1.7 Security Deposits. Buyer shall receive a
check from Seller for the full amount of any security deposits, with accrued
interest, or a credit against the Purchase Price in said amount.
15.2 Future Installments of Taxes. If at Closing, the
Property or any part thereof shall be or shall have been affected by an
assessment or assessments which are or may become payable in installments, then
for purposes of this Agreement, all unpaid installments of any such assessment
shall be paid and discharged by Seller at Closing; provided, however, that
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<PAGE> 30
installments which are not due or payable until after the Closing shall be
assumed by Buyer from and after Closing.
15.3 Application of Prorations. If such prorations
result in a payment due Buyer, the cash payable at Closing shall be reduced by
such sum. If such prorations result in a payment due Seller, the same shall be
paid by wire transfer of immediately available funds at Closing.
15.4 Schedule of Prorations. The parties shall endeavor to
jointly prepare a schedule of prorations for the Property no less than two (2)
days prior to Closing.
15.5 Escalations. With respect to any sums due under
leases for operating expenses incurred by 1120, MLCP or ECA, as the case may
be, and collected by Seller for the calendar year 1996 (the "1996 Expense
Escalations"), Seller shall provide to each tenant a statement of the amount of
the 1996 Expense Escalation due from such tenant, if any, and Seller shall be
entitled to bill such tenants for any amounts owed to such tenants; provided,
that, if Seller, in fact, owes any such tenants amounts based on actual costs
for calendar year 1996, Seller shall promptly pay such amounts to the
applicable tenants upon Seller"s determination of such actual costs. Any 1996
Expense Escalations paid to the Buyer after Closing shall be immediately
remitted to Seller. Seller shall not be entitled to any expense escalations for
the calendar year 1997, and Seller shall credit the Purchase Price with any
such amounts for calendar year 1997 collected as of the Closing.
15.6 Readjustments. The parties shall correct any errors
in prorations as soon after the Closing as amounts are finally determined.
16. BROKERS. Each party hereby represents and warrants to the
other that it has not employed or retained any broker or finder in connection
with the transactions contemplated by this Agreement other than Jackson Cross
Company (the "Broker"), to whom Seller alone shall be responsible to pay any
fee or commission that may be due, and that neither has had any dealings with
any other person or party which may entitle that person or party to a fee or
commission. Each party shall indemnify the other of and from any claims for
commissions by any person or party claiming such commission by or through the
indemnifying party, other than Broker, as to whom Seller alone shall be
responsible.
17. ESCROW AGENT. The parties hereto have requested that the
Deposit be held in escrow by the Escrow Agent to be applied at the Closing or
prior thereto in accordance with this Agreement. The Escrow Agent will deliver
the Deposit to Seller or to Buyer, as the case may be under the following
conditions:
17.1 Payment to Seller. To Seller on the Closing Date upon
the consummation of Closing or if Buyer breaches this Agreement and fails to
close in accordance with the terms and conditions stated herein.
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<PAGE> 31
17.2 Notice of Dispute. If either Seller or Buyer believes
that it is entitled to the Deposit or any part thereof, it shall make written
demand therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a
copy thereof to the other party in the manner specified in Section 18.1 below.
The other party shall have the right to object to the delivery of the Deposit,
by filing written notice of such objections with the Escrow Agent at any time
within three (3) days after the mailing of such copy to it in the manner
specified in Section 18.1 below, but not thereafter. Such notice shall set
forth the basis for objection to the delivery of the Deposit. Upon receipt of
such notice, the Escrow Agent shall promptly deliver a copy thereof to the
party who filed the written demand.
17.3 Escrow Subject to Dispute. In the event the Escrow
Agent shall have received the notice of objection provided for in 17.2 above
of this Section, in the manner and within the time therein prescribed, the
Escrow Agent shall continue to hold the Deposit until (i) the Escrow Agent
receives written notice from both Seller and Buyer directing the disbursement
of the Deposit in which case the Escrow Agent shall then disburse said Deposit
in accordance with said direction, or (ii) litigation arises between Seller
and Buyer, in which event the Escrow Agent shall deposit the Deposit with the
Clerk of the Court in which said litigation is pending, or (iii) the Escrow
Agent takes such affirmative steps as the Escrow Agent may, at the Escrow
Agent's option elect in order to terminate the Escrow Agent's duties including,
but not limited to, deposit in Court and an action for interpleader.
17.4 Escrow Agent's Rights and Liabilities. Escrow Agent
shall not be required to determine questions of fact or law, and may act upon
any instrument or other writing believed by it in good faith to be genuine and
to be signed and presented by the proper person, and shall not be liable in
connection with the performance of any duties imposed upon Escrow Agent by the
provisions of this Agreement, except for Escrow Agent's own willful default or
gross negligence. Escrow Agent shall have no duties or responsibilities except
those set forth herein. Escrow Agent shall not be bound by any modification of
this Agreement, unless the same is in writing and signed by Buyer and Seller,
and, if Escrow Agent's duties hereunder are affected, unless Escrow Agent shall
have given prior written consent thereto. In the event that Escrow Agent shall
be uncertain as to Escrow Agent's duties or rights hereunder, or shall receive
instructions from Buyer or Seller which, in Escrow Agent's opinion, are in
conflict with any of the provisions hereof, Escrow Agent shall be entitled to
hold and apply the Deposit, pursuant to Section 17.3, and may decline to take
any other action.
18. GENERAL PROVISIONS.
18.1 Notices. All notices or other communications
required or permitted to be given under the terms of this Agreement shall be
in writing, and shall be deemed effective when (i) sent by
nationally-recognized overnight courier, (ii) facsimile with original
following by regular mail, (iii) deposited in the United States mail and sent
by certified mail, postage prepaid, addressed, or (iv) personally delivered,
as follows:
18.1.1 If to Buyer, addressed to:
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Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney,
President and Chief Executive Officer
with a copy in each instance to:
Eric L. Stern, Esquire
and Brad A. Molotsky, Esquire
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103
18.1.2 If to Seller, addressed to:
1120 Associates Limited Partnership
4A Eves Drive
Marlton, New Jersey 08053
with a copy in each instance to:
Robert Schwartz, Esquire
Sherman, Silverstein, Kohl, Rose & Podolsky
4300 Haddonfield Road
Suite 311
Pennsauken, New Jersey 08109
or to such-other address or addresses and to the attention of such other person
or persons as any of the parties may notify the other in accordance with the
provisions of this Agreement.
18.2 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
18.3 Entire Agreement. All Exhibits attached to this
Agreement are incorporated herein and made a part hereof. This Agreement
constitutes the entire agreement between the parties hereto and supersedes all
prior negotiations, understandings and agreements of any nature whatsoever with
respect to the subject matter hereof. This Agreement may not be modified or
amended other than by an agreement in writing. The captions included in this
Agreement are for convenience only and in no way define, describe or limit the
scope or intent of the terms of this Agreement.
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18.4 Governing Law. This Agreement shall be construed
and interpreted in accordance with the laws of the State of New Jersey.
18.5 No Recording. This Agreement shall not be recorded
in the Clerk"s Office for Burlington County or in any other office or place of
public record.
18.6 Tender. Tender of Deed by Seller and of the
Purchase Price by Buyer, are hereby mutually waived.
18.7 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
18.8 Further Instruments. Seller will, whenever and as
often as it shall be reasonably request so to do by Buyer, and Buyer will,
whenever and as often as it shall be reasonably requested so to do by Seller,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any and all conveyances, assignments, correction instruments and
all other instruments and documents as may be reasonably necessary in order to
complete the transaction provided for in this Agreement and to carry out the
intent and purposes of this Agreement. All such instruments and documents
shall be satisfactory to the respective attorneys for Buyer and Seller. The
provisions of this Article shall survive the Closing.
18.9 Time. Time is of the essence. In the event the last
day permitted for the performance of any act required or permitted under this
Agreement falls on a Saturday, Sunday, or legal holiday of the United States or
the State of New Jersey, the time for such performance will be extended to the
next succeeding business day. Time periods under this Agreement will exclude
the first day and include the last day of such time period.
18.10 Designation of Nominee; Assignment of Agreement.
Buyer shall have the right to designate Brandywine Operating Partnership, L.P.
to acquire title to the Premises hereunder.
18.11 Effective Date. Whenever the term or phrase
"effective date hereof" or "date hereof" or other similar phrases describing
the date this Agreement becomes binding on Seller and Buyer are used in this
Agreement, such terms or phrases shall mean and refer to the date on which a
counterpart or counterparts of this Agreement executed by Seller and Buyer are
deposited with the Escrow Agent.
18.12 Prevailing Party. To the extent an action, law suit,
hearing or mediation (an "Action") is instituted to enforce a provision of this
Agreement or to obtain the Deposit hereunder, the prevailing party in such
action shall be entitled to reimbursement of its counsel costs and fees in
connection with such Action.
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18.13 Confidentiality. Each of the parties hereto covenants
and agrees to hold the nature, content and the Purchase Price contained herein
in strict confidence, and other than disclosure required by the SEC and except
as may be necessary to comply with this Agreement, neither party shall disclose
the nature, content and the Purchase Price of this Agreement without the
express written consent of the other party.
19. SEC REPORTING (8-K) REQUIREMENTS.
For the period of time commencing on the date hereof and
continuing through the first anniversary of the Closing Date, and without
limitation of other document production otherwise required of Seller hereunder,
Seller shall, from time to time, upon reasonable advance written notice from
Buyer, provide Buyer and its representatives, with access to all financial and
other information pertaining to the period of Seller"s ownership and operation
of the Property, which information is relevant and reasonably necessary, in the
opinion of Buyer"s outside, third party accountants (the "Accountants"), to
enable Buyer and its Accountants to prepare financial statements in compliance
with any or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities
and Exchange Commission (the "Commission"), as applicable; (b) any other rule
issued by the Commission and applicable to Buyer; and (c) any registration
statement, report or disclosure statement filed with the Commission by, or on
behalf of Buyer; provided, however, that in any such event(s), Buyer shall
reimburse Seller for those reasonably documented third party, out-of-pocket
costs and expenses that Seller incurs to comply with the requirements of this
Section 19. Seller acknowledges and agrees that the following is a
representative (but incomplete) description of the information and
documentation that Buyer and the Accountants may require in order to comply
with (a), (b) and (c) above.
20. TAX DEFERRED EXCHANGE. MLCP intends to effectuate a "like-kind
exchange" pursuant to Section 1031 of the Internal Revenue Code, and to utilize
the MLCP Property as "Relinquished Property" and the sale thereof in connection
with such like-kind exchange. The Buyer shall fully cooperate, at no additional
cost to Buyer, with MLCP in effectuating any like-kind exchange, including
Replacement Property or other real property ("Replacement Parcel") identified
by MLCP provided that nothing herein shall require the Buyer to close on or
take title to any Replacement Parcel. MLCP"s effectuation of the like-kind
exchange prior to any closing shall not be a condition or contingency to the
MLCP"s obligations hereunder. MLCP shall be responsible for all costs and
expenses incurred in connection with the effectuation of a like-kind exchange
over and above those Buyer would incur in a straight purchase/sale. MLCP shall
indemnify and hold harmless Buyer form any and all losses, costs, expenses and
damages associated with Buyer"s participation in the exchange transaction. The
MLCP Property subject to this Agreement constitute Relinquished Property in the
Internal Revenue Code Section 1031 exchange.
21. OPTION. MLCP grants Buyer the exclusive right and option to buy
the Option Parcel for a period of 18 months from the Closing Date (the "Initial
Option Termination Date") for a purchase price of $1,000,000. On or before 30
business days prior to the Initial Option Termination Date, Buyer shall have
the one time right, upon payment of a $100,000 non- refundable option fee, to
extend the Option closing date to June 30, 2000. The Option shall be
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memorialized in an Option Agreement, the form of which Option Agreement to be
mutually agreed upon by the parties prior to Closing. If the Buyer exercises
the option to buy the Option Parcel, the Buyer shall close such transaction
within 15 days after notice of the exercise of such option. The transfer of the
title to the Option Parcel shall be by Bargain and Sale Deed with Covenants
Against Grantor's Acts and quit claim assignment of licenses, permits and
approvals and all other Seller rights and interests in and to the Option
Parcel, but shall otherwise be without representation, warranty or recourse of
any kind whatsoever.
22. EXCULPATION.
No recourse shall be had for any obligation of Brandywine
Realty Trust under this Agreement or under any document executed in connection
herewith or pursuant hereto, or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being expressly waived and released by 1120, MLCP
and ECA and all parties claiming by, through or under 1120, MLCP, ECA, and each
of them.
23. ALL OR NOTHING.
Each of 1120, MLCP and ECA's respective obligations hereunder
are expressly subject to and conditioned upon completion of closing under this
Agreement of all, but not less than all of the 1120 Property, the MLCP Property
and the ECA Property. Notwithstanding the foregoing, the obligations of each of
the entities constituting the Seller hereunder are independent of the other's
obligations, and such obligations shall not be joint or several.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
<TABLE>
<CAPTION>
1120 ASSOCIATES LIMITED BRANDYWINE REALTY TRUST,
PARTNERSHIP a Maryland Real Estate Investment Trust
<S> <C>
By: Palomino Corporation, its authorized
general partner
By: /s/ Joseph D. Gonnelli By: /s/ Gerard H. Sweeney
-------------------------------------- ----------------------------------------
Joseph D. Gonnelli, Vice President Gerard H. Sweeney,
President and Chief Executive Officer
MLCP ASSOCIATES LIMITED EXECUTIVE COURT ASSOCIATES
PARTNERSHIP LIMITED PARTNERSHIP
<S> <C>
By: MLCP General Corporation, its authorized By: Palomino Corporation, its authorized
general partner general partner
By: /s/ Joseph D. Gonnelli By: /s/ Joseph D. Gonnelli
-------------------------------- ----------------------------------------
Joseph D. Gonnelli, President Joseph D. Gonnelli, Vice President
</TABLE>
Agreed to by Escrow Agent with regard
to the obligations, terms, covenants
and conditions contained in this
Agreement relating to Escrow Agent.
Sherman, Silverstein, Kohl, Rose & Podolsky, P.A.
By: /s/ Robert Schwartz
----------------------------------
Robert Schwartz, a Shareholder
36
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AGREEMENT OF SALE
INDEX
<TABLE>
<CAPTION>
Section Page
----
<S> <C> <C>
1. PROPERTY BEING SOLD......................................................................................2
1.1 Real Property...................................................................................2
1.2 Personal Property...............................................................................3
1.3 Leases..........................................................................................4
1.4 Right to Names..................................................................................4
2. PURCHASE PRICE AND MANNER OF PAYMENT.....................................................................4
2.1 Purchase Price..................................................................................4
2.2 Manner of Payment...............................................................................4
2.2.1 Deposit................................................................................4
2.2.2 Assumption of Sun Loan; Cash Balance...................................................4
3. TITLE....................................................................................................5
4. COVENANTS................................................................................................5
4.1 Maintenance.....................................................................................5
4.2 Alterations.....................................................................................5
4.3 Lease...........................................................................................5
4.4 Security Deposits...............................................................................6
4.5 Bill Tenants....................................................................................6
4.6 Notice to Buyer.................................................................................6
4.7 Comply with Leases..............................................................................6
4.8 No New Agreements...............................................................................7
4.9 Tax Disputes....................................................................................7
4.10 No Removal of Personalty........................................................................7
5. REPRESENTATIONS AND WARRANTIES...........................................................................7
5.1 Seller's Authority For Binding Agreement........................................................7
5.2 Employment on "At-Will" Basis...................................................................8
5.3 Service Contracts...............................................................................8
5.4 Condemnation....................................................................................9
5.5 No Lawsuits.....................................................................................9
5.6 No Tax Assessments.............................................................................10
5.7 Leases.........................................................................................10
5.8 Compliance with Law............................................................................13
5.9 Insurance......................................................................................15
5.10 Intentionally Omitted..........................................................................15
5.11 No Brokers.....................................................................................15
</TABLE>
i
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<TABLE>
<S> <C> <C>
5.12 Utilities......................................................................................16
5.13 Permits, Approvals and Certificates............................................................16
5.14 Good Title to Property.........................................................................16
5.15 All Taxes and Assessments Paid.................................................................16
5.16 FIRPTA.........................................................................................16
5.17 Intentionally Omitted..........................................................................16
5.18 Construction Liens.............................................................................16
5.19 Inventory Schedule.............................................................................17
5.20 Charges, Fees and Assessments..................................................................17
5.21 Rights to Purchase.............................................................................17
5.22 No Outstanding Obligations.....................................................................17
5.23 Access.........................................................................................17
5.24 Abatement Programs.............................................................................18
5.25 Development Agreements.........................................................................18
5.26 Structural Representation......................................................................18
5.27 Correct Copies of Documents....................................................................19
6. POSSESSION..............................................................................................19
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.........................................................19
7.1 Title Binder...................................................................................19
7.2 Survey.........................................................................................20
7.3 Physical Inspection............................................................................20
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES..............................................................20
9. FIRE OR OTHER CASUALTY..................................................................................21
9.1 Maintain Insurance.............................................................................21
9.2 Minimal Damage.................................................................................21
9.3 Substantial Damage.............................................................................21
9.4 Closing After Substantial Damage...............................................................21
9.5 Rent Insurance.................................................................................21
10. CONDEMNATION............................................................................................21
11. EXPENSE ALLOCATIONS.....................................................................................22
12. CLOSING.................................................................................................22
12.1 Time and Date and Place........................................................................22
12.2 Documents......................................................................................23
12.2.1 Seller's Documents and Other Items....................................................23
12.2.1.1 Deeds................................................................23
12.2.1.2 Special Warranty Bills of Sale.......................................23
12.2.1.3 Original Leases......................................................23
</TABLE>
ii
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<TABLE>
<S> <C> <C>
12.2.1.4 Original Licenses, Contract Documents and Other Personal
Property.............................................................23
12.2.1.5 Assignment of Leases.................................................23
12.2.1.6 Assignment of Licenses, Contract Documents and Other
Personal Property....................................................23
12.2.1.7 FIRPTA Certificates..................................................23
12.2.1.8 Tenant Letter........................................................24
12.2.1.9 .....................................................................24
12.2.1.10 Title Insurance Certificates.........................................24
12.2.1.11 Certified Rent Roll..................................................24
12.2.1.12 Seller Certificate...................................................24
12.2.1.13 Organization Certifications..........................................24
12.2.1.14 Keys.................................................................24
12.2.1.15 Intentionally Omitted................................................24
12.2.1.16 Intentionally Omitted................................................24
12.2.1.17 Mortgagee Estoppel...................................................24
12.2.1.18 ISRA Non-Applicability Letter........................................25
12.2.2 Buyer's Documents....................................................25
12.2.2.1 .............................................................................25
12.2.2.2 .............................................................................25
12.2.3 Title Insurance......................................................25
12.2.4 Necessary Documents..................................................25
13. DEFAULT; REMEDIES.......................................................................................25
13.2....................................................................................................26
13.3 Buyer's Out-of-Pocket Costs.....................................................................26
14. CONDITIONS PRECEDENT TO CLOSING.........................................................................27
14.1 Correctness of Warranties and Representations. ...............................................27
14.2 Compliance with Terms and Conditions...........................................................27
14.3 Buyer's Review of Structural and Environmental Status, Fleer Corp. and ECA
Title..........................................................................................27
14.4 Estoppel Certificate from Evesham Township and Mt. Laurel Township. ...........................27
14.5 Consent of Sun.................................................................................27
15. PRORATIONS..............................................................................................28
15.1 Operating Expenses.............................................................................28
15.1.1 Rents.................................................................................28
15.1.2 Taxes.................................................................................29
15.1.3 Deposits..............................................................................29
15.1.4 Water and Sewer Charges...............................................................29
15.1.5 Assigned Contracts....................................................................29
15.1.6 Electricity, gas, steam and fuel......................................................29
15.1.7 Security Deposits.....................................................................29
15.2 Future Installments of Taxes...................................................................29
</TABLE>
iii
<PAGE> 40
<TABLE>
<S> <C> <C>
15.3 Application of Prorations......................................................................30
15.4 Schedule of Prorations.........................................................................30
15.5 Escalations....................................................................................30
15.6 Readjustments..................................................................................30
16. BROKERS.................................................................................................30
17. ESCROW AGENT............................................................................................30
17.1 Payment to Seller..............................................................................30
17.2 Notice of Dispute..............................................................................31
17.3 Escrow Subject to Dispute......................................................................31
17.4 Escrow Agent's Rights and Liabilities..........................................................31
18. GENERAL PROVISIONS......................................................................................31
18.1 Notices........................................................................................31
18.1.1.........................................................................................31
18.1.2.........................................................................................32
18.2 Binding Effect.................................................................................32
18.3 Entire Agreement...............................................................................32
18.4 Governing Law..................................................................................33
18.5 No Recording...................................................................................33
18.6 Tender.........................................................................................33
18.7 Execution in Counterparts......................................................................33
18.8 Further Instruments............................................................................33
18.9 Time...........................................................................................33
18.10 Designation of Nominee; Assignment of Agreement................................................33
18.11 Effective Date.................................................................................33
18.12 Prevailing Party...............................................................................33
18.13 Confidentiality................................................................................34
19. SEC REPORTING (8-K) REQUIREMENTS.........................................................................34
20. ........................................................................................................34
22. EXCULPATION.............................................................................................35
23. ALL OR NOTHING..........................................................................................35
</TABLE>
iv
<PAGE> 41
Exhibits to Agreement of Sale
<TABLE>
<S> <C> <C>
"A-1" - Legal Description - 1120
"A-2-A" - Legal Description - MLCP
"A-2-B" - Legal Description - Option Parcel
"A-3" - Legal Description - ECA Premises
"B-1" - Schedule of Inventory - 1120
"B-2" - Schedule of Inventory - MLCP
"B-3" - Schedule of Inventory - ECA
"C-1" - Permitted Exceptions - 1120
"C-2" - Permitted Exceptions - MLCP
"C-3" - Permitted Exceptions - ECA
"D-1" - Rent Roll - 1120
"D-2" - Rent Roll - MLCP
"D-3" - Rent Roll - ECA
"E-1" - Service Contracts - 1120
"E-2" - Service Contracts - MLCP
"E-3" - Service Contracts - ECA
"F-1" - Litigation - 11120
"F-2" - Litigation - MLCP
"F-3" - Litigation - ECA
"G-1" - Insurance - 1120
"G-2" - Insurance - MLCP
"G-3" - Insurance - ECA
</TABLE>
Schedule of Tenant Improvements
v
<PAGE> 42
AGREEMENT OF SALE
1120 EXECUTIVE PLAZA,
MT. LAUREL CORPORATE CENTER,
AND
EXECUTIVE CENTER
BETWEEN
BRANDYWINE REALTY TRUST
AND
1120 ASSOCIATES LIMITED PARTNERSHIP,
MLCP ASSOCIATES LIMITED PARTNERSHIP,
AND
EXECUTIVE COURT ASSOCIATES LIMITED
PARTNERSHIP
DATED: JANUARY 20, 1997
vi
<PAGE> 1
EXHIBIT 10.2
ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT
(1120 Executive Plaza)
THIS ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT is
executed this 24th day of January, 1997, by and among 1120 ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership ("1120"), BRANDYWINE OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("BOP") and SUN LIFE
ASSURANCE COMPANY OF CANADA (U.S.) ("Mortgagee").
A. BOP has purchased, or is about to purchase, those certain
premises and the buildings and improvements erected thereon, known as 1120
Executive Plaza, Mt. Laurel, New Jersey, being Lot 3 of Block 1301, and Lots 1,
2 and 3 of Block 1306.01, all as more fully described on Exhibit "A" attached
hereto and made a part hereof ("Premises").
B. On or about March 14, 1995, 1120 executed that certain
Mortgage and Security Agreement secured upon the Premises in the original
principal amount of $6,500,000 (the "Mortgage") for the purpose of securing
the payment of certain indebtedness, together with interest thereon, evidenced
by that certain Mortgage Note executed by Borrower on March 14, 1995, in the
principal amount of $6,500,000 (the "Note"). The loan to 1120 evidenced by the
Note and secured by the Mortgage is sometimes hereinafter referred to as the
"Loan". The Note and the Mortgage, together with any and all other documents
executed by 1120 in connection with the Loan, are sometimes hereinafter
collectively referred to as the "Loan Documents."
C. In connection with the proposed purchase of the Premises by
BOP, BOP has agreed to assume the indebtedness evidenced by the Note on the
terms and conditions stated therein, except as may be modified by the terms of
this Agreement, and Mortgagee has agreed to grant its consent to the transfer of
title to the Premises to BOP, and to offer certain assurances to BOP with
respect to the status of the Loan and the Loan Documents.
NOW, THEREFORE, for Ten ($10.00) Dollars, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, BOP, 1120 and Mortgagee, each intending to be legally bound,
hereby covenant and agree as follows:
1. BOP hereby assumes and agrees to pay the indebtedness
evidenced by the Note, and to be bound by and perform all the covenants of the
Note and Mortgage, at the time and in the manner stated therein. In connection
therewith, BOP shall pay or cause to be paid when due, the principal of, and
interest on, the indebtedness evidenced by the Note, and the principal of, and
interest on, all sums secured by the Mortgage, and shall pay or cause to be
paid when due the charges, fees and all other sums as provided in the Mortgage.
<PAGE> 2
2. Mortgagee hereby consents to the transfer of title
to the Premises to BOP, and agrees that such transfer shall not constitute a
default or an Event of Default under the Note or Mortgage or under any of the
Loan Documents.
3. Mortgagee hereby releases 1120 of and from any and
all liability hereafter accruing as Maker under the Note and as Mortgagor
under the Mortgage. Nothing herein shall be deemed to release Abdelwahabb Sallam
("Sallam") from any obligations arising under that certain Master Lease dated
March 15, 1995 (the "Master Lease"), the Landlord"s interest in which Master
Lease shall be assigned by 1120 to BOP contemporaneously with BOP"s acquisition
of the Property.
4. Mortgagee hereby certifies that (i) it is the
holder and owner of the Note and Mortgage and each of the Loan Documents, and
has not sold, assigned, participated or transferred the Note or Mortgage, or any
interest in the Loan or in any of the Loan Documents, (ii) except for this
Agreement, there has been no amendment, modification or supplement of any kind
or nature in the Note or Mortgage or in any of the Loan Documents from the date
of execution thereof, and Exhibit "B" hereto sets forth a true, correct and
complete list of all of the Loan Documents, (iii) as of the date hereof, the
unpaid principal balance due under the Note is $6,137,968.58 and all interest
required to be paid under the Note through and including December 31, 1996 has
been paid in full to Mortgagee, (iv) there are no charges or other sums due or
owing under the Note and Mortgage or any of the Loan Documents, until the next
regularly scheduled mortgage payment date, being February 1, 1997, (v) interest
is payable on the Loan at the rate of 9.875% per annum, principal and interest
is payable in consecutive monthly installments of $69,353.11 each, and the
maturity date of the Loan is March 1, 2002, (vi) as of January 24, 1997, the
following escrow is maintained by Mortgagee or by its servicing agent: real
estate tax: $15,526.96, and 1120's obligations with respect to funding such
escrow(s) is/are current as of this date, and the Note, the Mortgage and each
of the Loan Documents are in full force and effect in accordance with their
respective terms and, to the best of Mortgagee's knowledge, no default or Event
of Default exists under the Note, the Mortgage or under any of the Loan
Documents, and no event exists which, but for the giving of notice and/or the
passage of time, would constitute a default or Event of Default thereunder.
5. Anything contained in the Note, the Mortgage or in
any of the Loan Documents to the contrary notwithstanding, nothing contained
in any of such documents shall be deemed or construed to restrict in any manner
whatsoever the ability of Brandywine Realty Trust ("BRT") to issue any common
stock or shares of beneficial interest in BRT, or to restrict in any manner the
transferability of shares in BRT or limited partnership units in BOP, or BOP"s
ability to issue additional limited partnership units in accordance with the
provisions of its Agreement of Limited Partnership, as amended from time to
time. Paragraph 3(i) of the Letter Agreement referenced in Exhibit "B" hereto
is agreed to be of no further force or effect.
6. Mortgagee hereby approves Brandywine Realty Services
Corp., as manager of the Property effective as of this date.
-2-
<PAGE> 3
7. Paragraph 25 of the Mortgage is hereby modified by
restating the notice addresses for Mortgagor as follows:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Attention: Gerard H. Sweeney, President and
Chief Executive Officer
with a copy to:
Michael H. Friedman, Esquire
Pepper, Hamilton and Scheetz
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
8. Except as otherwise expressly amended hereby, all of
the terms, conditions and obligations of the Note and Mortgage remain in full
force and effect and unmodified hereby.
9. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and assigns.
10. No recourse shall be had for any obligation of
Brandywine Realty Trust under this Agreement, the Note, the Mortgage or under
any of the Loan Documents, or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability, if there be any, against any past, present or
future trustee, shareholder, officer or employee, being expressly waived and
released by MLCP and by Sun, and by all parties claiming by, through or under
them, or either of them. The foregoing shall not otherwise limit the liability
of Brandywine Realty Trust, to the extent it has such liability, under the
said Loan Documents.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this
Assumption, Modification and Release Agreement, the date first written above.
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware Limited Partnership
By: Palomino Corporation,
its authorized General Partner
By: /s/ Joseph D. Gonnelli
----------------------------------------
Joseph D. Gonnelli, Vice President
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware Limited Partnership
By: Brandywine Realty Trust, a Maryland Real Estate
Investment Trust, General Partner
By: /s/ Gerard H. Sweeney
--------------------------------------
Gerard H. Sweeney, President and
and Chief Executive Officer
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
By: /s/ Jeffrey S. Skerry
------------------------------
Name: Jeffrey S. Skerry
Title: Senior Associate Counsel
-4-
<PAGE> 5
STATE OF :
: SS.
COUNTY OF :
On this day _____of _____________, 1997, before me, a Notary
Public, personally appeared Joseph D. Gonnelli, who acknowledged himself to be
the Vice President of Palomino Corporation, the authorized General Partner of
1120 Associates Limited Partnership, a Delaware limited partnership, and that
he, as such officer, being authorized to do so, executed the foregoing
instrument in the name of the said limited partnership for the purposes therein
con tained, by signing the name of the limited partnership by himself as
President of its authorized General Partner, and desired that the same might be
recorded as such.
WITNESS my hand and seal the day and year aforesaid.
------------------------------
Notary Public
My Commission Expires:
STATE OF :
: SS.
COUNTY OF :
On this _____ day of _____________, 1997, before me, a Notary
Public, personally appeared Gerard H. Sweeney, who acknowledged himself to be
the President and Chief Executive Officer of Brandywine Realty Trust, a
Maryland Real Estate Investment Trust, the authorized General Partner of
Brandywine Operating Partnership, L.P., a Delaware limited partnership, and
that he, as such officer, being authorized to do so, executed the foregoing
instrument in the name of the said limited partnership for the purposes therein
contained, by signing the name of the limited partnership by himself as
President of its authorized General Partner, and desired that the same might be
recorded as such.
WITNESS my hand and seal the day and year aforesaid.
------------------------------
Notary Public
My Commission Expires:
<PAGE> 6
STATE OF :
: SS.
COUNTY :
On this _____ day of _________________, 1997, before me, a
Notary Public, personally appeared _____________________ who acknowledged
himself to be the ________________ of Sun Life Assurance Company of Canada
(U.S.), a ____________________, and that he, as such officer, being authorized
to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of the corporation by himself as such officer, and desired
that the same might be recorded as such.
WITNESS my hand and seal the day and year aforesaid.
------------------------------
Notary Public
My Commission Expires:
<PAGE> 7
EXHIBIT "A"
Legal Description of Property
<PAGE> 8
EXHIBIT "B"
1120 Executive Plaza
1. Commitment Letter dated January 13, 1995 - 1120
Associates/Sun Life Loan No. 790128.
2. Mortgage Note dated March 14, 1995, in the original
principal amount of $6,500,000, from 1120 Associates
Limited Partnership ("Maker") to Sun Life Assurance
Company of Canada (U.S.) ("Holder").
3. Mortgage and Security Agreement made as of March 14,
1995, between 1120 Associates Limited Partnership
("Mortgagor") and Sun Life Assurance Company of
Canada (U.S.) ("Mortgagee") recorded in the
Burlington County Clerk"s Office on March 17, 1995,
in Mortgage Book 5910, Page 3, to secure the sum of
$6,500,000.
4. Assignment of Leases and Agreement between 1120
Associates Limited Partnership and Sun Life
Assurance Company of Canada, a Delaware Corporation
dated March 14, 1995, recorded in the Burlington
County Clerk"s Office on March 17, 1995, in Deed
Book 4931, Page 42.
5. Financing Statement "76911, filed March 21, 1995.
Filed with the Secretary of State March 21, 1995,
file "1625215.
Debtor: 1120 Associates, L.P., 2 Eves Drive
Marlton, NJ 08053
Secured Party: Sun Life Assurance Co., of Canada, U.S.,
One Sun Life Executive Park,
Wellesley Hills, MA 02181
6. Letter Agreement dated March 14, 1995, to 1120
Associates Limited Partnership from Sun Life
Assurance Company of Canada (U.S.)
<PAGE> 1
EXHIBIT 10.3
ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT
(1000 Howard Boulevard, Mt. Laurel, New Jersey)
THIS ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT is
executed this 24th day of January, 1997, by and among MLCP ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership ("MLCP"), BRANDYWINE OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("BOP") and SUN LIFE
ASSURANCE COMPANY OF CANADA (U.S.) ("Mortgagee").
A. BOP has purchased, or is about to purchase, those certain
premises and the buildings and improvements erected thereon, known as 1000
Howard Boulevard, Mt. Laurel, New Jersey, being Lot 1.01 of Block 1104, all as
more fully described on Exhibit "A" attached hereto and made a part hereof
("Premises").
B. On or about October 19, 1994, MLCP executed that certain
Mortgage and Security Agreement secured upon the Premises in the original
principal amount of $6,500,000 (the "Mortgage") for the purpose of securing the
payment of certain indebtedness, together with interest thereon, evidenced by
that certain Mortgage Note executed by Borrower on October 19, 1994, in the
principal amount of $6,500,000 (the "Note"). The loan to MLCP evidenced by the
Note and secured by the Mortgage is sometimes hereinafter referred to as the
"Loan". The Note and the Mortgage, together with any and all other documents
executed by MLCP in connection with the Loan, are sometimes hereinafter
collectively referred to as the "Loan Documents."
C. In connection with the proposed purchase of the Premises by
BOP, BOP has agreed to assume the indebtedness evidenced by the Note on the
terms and conditions stated therein, except as may be modified by the terms of
this Agreement, and Mortgagee has agreed to grant its consent to the transfer
of title to the Premises to BOP, and to offer certain assurances to BOP with
respect to the status of the Loan and the Loan Documents.
NOW, THEREFORE, for Ten ($10.00) Dollars, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, BOP, MLCP and Mortgagee, each intending to be legally bound,
hereby covenant and agree as follows:
1. BOP hereby assumes and agrees to pay the indebtedness
evidenced by the Note, and to be bound by and perform all the covenants of the
Note and Mortgage, at the time and in the manner stated therein. In connection
therewith, BOP shall pay or cause to be paid when due, the principal of, and
interest on, the indebtedness evidenced by the Note, and the principal of, and
interest on, all sums secured by the Mortgage, and shall pay or cause to be
paid when due the charges, fees and all other sums as provided in the Mortgage.
<PAGE> 2
2. Mortgagee hereby consents to the transfer of title to
the Premises to BOP, and agrees that such transfer shall not constitute a
default or an Event of Default under the Note or Mortgage or under any of the
Loan Documents.
3. Mortgagee hereby releases MLCP of and from any and
all liability hereafter accruing as Maker under the Note and as Mortgagor under
the Mortgage.
4. Mortgagee hereby certifies that (i) it is the holder
and owner of the Note and Mortgage and each of the Loan Documents, and has not
sold, assigned, participated or transferred the Note or Mortgage, or any
interest in the Loan or in any of the Loan Documents, (ii) except for this
Agreement, there has been no amendment, modification or supplement of any kind
or nature in the Note or Mortgage or in any of the Loan Documents from the date
of execution thereof, and Exhibit "B" hereto sets forth a true, correct and
complete list of all of the Loan Documents, (iii) as of the date hereof, the
unpaid principal balance due under the Note is $6,018,589.14, and all interest
required to be paid under the Note through and including December 31, 1996 has
been paid in full to Mortgagee, (iv) there are no charges or other sums due or
owing under the Note and Mortgage or any of the Loan Documents, until the next
regularly scheduled mortgage payment date, being February 1, 1997, (v) interest
is payable on the Loan at the rate of 9.25% per annum, principal and interest
is payable in consecutive monthly installments of $66,897.50 each, and the
maturity date of the Loan is November 1, 2004, (vi) as of January 24, 1997, the
following escrows are maintained by Mortgagee or by its servicing agent: real
estate tax: $20,910.48, and MLCP's obligations with respect to funding such
escrow(s) is/are current as of this date, and the Note, the Mortgage and each
of the Loan Documents are in full force and effect in accordance with their
respective terms and, to the best of Mortgagee's knowledge, no default or Event
of Default exists under the Note, the Mortgage or under any of the Loan
Documents, and no event exists which, but for the giving of notice and/or the
passage of time, would constitute a default or Event of Default thereunder.
5. Anything contained in the Note, the Mortgage or in
any of the Loan Documents to the contrary notwithstanding, nothing contained in
any of such documents shall be deemed or construed to restrict in any manner
whatsoever the ability of Brandywine Realty Trust ("BRT") to issue any common
stock or shares of beneficial interest in BRT, or to restrict in any manner the
transferability of shares in BRT or limited partnership units in BOP, or BOP's
ability to issue additional limited partnership units in accordance with the
provisions of its Agreement of Limited Partnership, as amended from time to
time.
6. Mortgagee hereby approves Brandywine Realty Services
Corp., as manager of the Property effective as of this date.
7. Paragraph 25 of the Mortgage is hereby modified by
restating the notice addresses for Mortgagor as follows:
-2-
<PAGE> 3
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Attention: Gerard H. Sweeney, President and
Chief Executive Officer
with a copy to:
Michael H. Friedman, Esquire
Pepper, Hamilton and Scheetz
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
8. Except as otherwise expressly amended hereby, all of
the terms, conditions and obligations of the Note and Mortgage remain in full
force and effect and unmodified hereby.
9. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and assigns.
10. No recourse shall be had for any obligation of
Brandywine Realty Trust under this Agreement, the Note, the Mortgage or under
any of the Loan Documents, or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability, if there be any, against any past, present or
future trustee, shareholder, officer or employee, being expressly waived and
released by MLCP and by Sun, and by all parties claiming by, through or under
them, or either of them. The foregoing shall not otherwise limit the liability
of Brandywine Realty Trust, to the extent it has such liability, under the said
Loan Documents.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this
Assumption, Modification and Release Agreement, the date first written above.
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware Limited Partnership
By: MLCP General Corporation,
its authorized General Partner
By: /s/ Joseph D. Gonnelli
-------------------------------------
Joseph D. Gonnelli, President
Attest: /s/ R. Brian Jackson
----------------------------------
R. Brian Jackson, Secretary
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware Limited Partnership
By: Brandywine Realty Trust, a Maryland Real Estate
Investment Trust, General Partner
By: /s/ Gerard H. Sweeney
-------------------------------------
Gerard H. Sweeney, President and
and Chief Executive Officer
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
By: /s/ Jeffrey J. Skerry
-------------------------------------
Name: Jeffrey J. Skerry
Title: Associate General
-4-
<PAGE> 5
STATE OF :
: SS.
COUNTY OF :
On this day _____of _____________, 1997, before me, a Notary
Public, personally appeared Joseph D. Gonnelli, who acknowledged himself to be
the President of MLCP General Corporation, the authorized General Partner of
MLCP Associates Limited Partnership, a Delaware limited partnership, and that
he, as such officer, being authorized to do so, executed the foregoing
instrument in the name of the said limited partnership for the purposes therein
con tained, by signing the name of the limited partnership by himself as
President of its authorized General Partner, and desired that the same might be
recorded as such.
WITNESS my hand and seal the day and year aforesaid.
------------------------------
Notary Public
My Commission Expires:
STATE OF :
: SS.
COUNTY OF :
On this _____ day of _____________, 1997, before me, a Notary
Public, personally appeared Gerard H. Sweeney, who acknowledged himself to be
the President and Chief Executive Officer of Brandywine Realty Trust, a
Maryland Real Estate Investment Trust, the authorized General Partner of
Brandywine Operating Partnership, L.P., a Delaware limited partnership, and
that he, as such officer, being authorized to do so, executed the foregoing
instrument in the name of the said limited partnership for the purposes therein
contained, by signing the name of the limited partnership by himself as
President of its authorized General Partner, and desired that the same might be
recorded as such.
WITNESS my hand and seal the day and year aforesaid.
-------------------------------
Notary Public
My Commission Expires:
<PAGE> 6
STATE OF :
: SS.
COUNTY :
On this _____ day of _________________, 1997, before me, a
Notary Public, personally appeared _____________________ who acknowledged
himself to be the ________________ of Sun Life Assurance Company of Canada
(U.S.), a ____________________, and that he, as such officer, being authorized
to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of the corporation by himself as such officer, and desired
that the same might be recorded as such.
WITNESS my hand and seal the day and year aforesaid.
-------------------------------
Notary Public
My Commission Expires:
<PAGE> 7
EXHIBIT "A"
Legal Description of Property
<PAGE> 8
EXHIBIT "B"
1000 Howard Boulevard
1. Commitment Letter dated August 9, 1994 - MLCP
Associates, L.P./Sun Life Loan No. 790094, as amended
by letter of Sun Life of Canada (U.S.) dated August
23, 1994 to MLCP Associates Limited Partnership.
2. Mortgage Note dated October 19, 1994, in the original
principal amount of $6,500,000, from MLCP Associates
Limited Partnership ("Maker") to Sun Life Assurance
Company of Canada (U.S.) ("Holder").
3. Mortgage and Security Agreement made as of October
19, 1994, between MLCP Associates, Limited
Partnership ("Mortgagor") and Sun Life Assurance
Company of Canada (U.S.) ("Mortgagee") recorded in
Burlington County Clerk's Office on October 28, 1994,
in Mortgage Book 5775, Page 281.
4. Assignment of Leases and Agreement between MLCP
Associates Limited Partnership, a Delaware Limited
Partnership to Sun Life Assurance Company of Canada,
(U.S.), a Delaware Corporation dated October 19,
1994, recorded in the Burlington County Clerk's
Office on October 28, 1994, in Deed Book 4852, Page
321.
5. Financing Statement #76006, filed October 28, 1994.
Filed with Secretary of State, #1600819, filed
November 1, 1994.
Debtor: MLCP Associates Limited Partnership,
2 Eves Drive, Marlton, NJ 08053.
Secured Party: Sun Life Assurance Company of Canada
(U.S.),
One Sun Life Executive Park, Wellesley
Hills, MA.
6. Letter Agreement dated October 19, 1994 to MLCP
Associates, Limited Partnership from Sun Life
Assurance Company of Canada (U.S.).
<PAGE> 1
EXHIBIT 10.4
OPTION AGREEMENT
(Lot 8, Block 1104, Mt. Laurel, NJ)
THIS OPTION AGREEMENT (the "Agreement") is made as of this
31st day of January, 1997, by and between MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership, having an address at 4 Eves Drive, Marlton, New
Jersey 08053 (hereinafter, "Optionor"), and BRANDYWINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership, having an address c/o Brandywine Realty
Trust, 16 Campus Boulevard, Suite 150, Newtown Square, Pennsylvania 19073
(hereinafter, "Optionee").
Background
A. Optionor is the owner of that certain tract of ground,
comprising approximately 8 acres, located in the Mt. Laurel Corporate Park, Mt.
Laurel, New Jersey, and being identified as Lot 8 of Block 1104, all as more
fully described on Exhibit "A" (the "Property").
B. Optionor desires to grant to Optionee and Optionee desires to
acquire from Optionor an option to purchase the Property upon the terms and
conditions contained herein.
Agreement
The parties hereto, in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, covenant and agree
as follows:
1. Grant of Option. Optionor does hereby grant to
Optionee the right and option (the "Option") to acquire the Property for the
Purchase Price (as defined below) and otherwise upon the terms and conditions
set forth herein. The Optionee may exercise the Option by delivering written
notice to the Optionor in accordance with Section 16 of this Agreement at any
time during the Option Period (as defined below) or during any extension
thereof.
2. Term of Option. The Option may be exercised by
Optionee at any time during the term commencing on the date hereof, and
continuing thereafter until June 30, 1998 (the "Option Period"). Time is of
the essence. Optionor and Optionee understand and agree that the price of the
Option is Ten Dollars ($10.00), which sum, together with the execution of that
certain Agreement of Sale by and among Optionor, certain affiliates of Optionor
and Optionee dated January 21, 1997 (the "Agreement of Sale") and all related
documentation, constitute full and adequate consideration for the Option.
<PAGE> 2
3. Extension of Option Period. Optionee may extend the
Option Period from the expiration thereof through June 30, 2000, by delivering
to Optionor written notice of such extension not later than thirty (30)
business days prior to the expiration of the Option Period, and delivering an
option extension fee of $100,000 (the "Extension Fee") to Optionor, which
Extension Fee shall be the consideration for the extension of the Option and
shall be non- refundable to Optionee except as expressly provided in Section 15
below, but shall nevertheless be applied in reduction of the Purchase Price.
4. Purchase Price. The Purchase Price for the Property
shall be One Million ($1,000,000) Dollars ("Purchase Price"), payable by wire
transfer of immediately available funds at the time of Closing. Optionee shall
be credited at Closing with the Extension Fee if theretofore paid, and the
Purchase Price shall be subject to proration for real estate taxes and water
and sewer rents in the same manner that the purchase price under the Agreement
of Sale was subject to adjustment thereunder.
5. Exclusive Option. At no time during the term of the
Option shall Optionor convey, transfer, sell, lease, option or otherwise
dispose of the Property or any part thereof. No such sale, transfer or other
disposition shall be effective unless this Option shall have first expired or
been terminated.
6. Title. Optionor shall convey title to the Property
to Optionee at Closing by Bargain and Sale Deed with Covenants against
Grantor's Acts (the "Deed"), free and clear of all liens, restrictions,
easements and other encumbrances, except for those set forth on the attached
Exhibit "B" (the "Permitted Encumbrances"). At Closing (as defined below), the
title conveyed by Optionor shall be good and marketable and insurable as such
by any reputable title insurance company licensed to do business in New Jersey
and selected by the Optionor, at such company's regular rates, pursuant to a
standard ALTA owner's form of policy, free of all exceptions, other than the
Permitted Encumbrances.
7. Closing. The closing of the transaction contemplated
herein ("Closing") shall take place at 10:00 a.m. on the fifteenth (15th) day
following the date Optionee gives notice of its exercise of the Option, or
sooner by mutual agreement of the parties hereto (the "Closing Date"). Time is
of the essence. If said fifteenth (15th) day shall not be a business day, then
the Closing shall occur on the first business day thereafter. For purposes
hereof, a "business day" shall mean any day other than a day on which
commercial banks in the State of New Jersey are required or permitted by law to
close. The Closing shall occur at the offices of Pepper, Hamilton & Scheetz,
Suite 500, LibertyView Building, 457 Haddonfield Road, Cherry Hill, New Jersey
08002, or at such other location as the parties may mutually agree.
8. Deliveries at Closing. At Closing, Optionor and
Optionee shall execute and deliver the documents and agreements enumerated on
Exhibit "C" hereto.
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<PAGE> 3
9. Transfer Taxes. Seller shall pay for all applicable
realty transfer taxes related to the execution, delivery and recording of the
Deed and other closing documents, and all related recording charges.
10. Representations and Warranties of Optionor. In order
to induce Optionee to enter into this Agreement, Optionor hereby represents and
warrants to Optionee that the following representations and warranties are true
now, and to the extent specifically set forth herein, will be true at Closing
(except that immaterial changes which occur in the ordinary course of Seller's
business which do not materially affect Optionee's valuation of the Property
or, provided Optionee closes, any matter or occurrence within Optionee's actual
knowledge prior to Closing, shall not be considered to render such
representation untrue at and as of Closing):
10.1 Authorization. Optionor is a duly authorized
and validly existing partnership formed under the laws of the State of Delaware
and is duly qualified to do business in the State of New Jersey, (ii) Optionor
has full power, right and authority to own its properties, to carry on its
business as now conducted, and to enter into and fulfill its obligations under
this Agreement, (iii) each of the persons executing this Agreement on behalf of
Optionor is authorized to do so, (iv) this Agreement is the valid and legally
binding obligation of Optionor, enforceable against Optionor in accordance with
its terms, (v) the execution and delivery of this Agreement and compliance with
its terms will not conflict with or result in the breach of any law, judgement,
order, writ, injunction, decree, rule or regulation, or conflict with or result
in the breach of any other agreement, document or instrument to which Optionor
is a party or by which it or the Property is bound or affected. The
representation and warranty contained herein shall be true and correct at and
as of Closing.
10.2 Employment. There are no employees of
Optionor, and Optionee assumes no obligations or responsibilities whatsoever
for any employees. The representation and warranty contained herein shall be
true and correct at and as of Closing.
10.3 Contracts. Except as disclosed in the
Agreement of Sale, there are no service, equipment, supply or maintenance
contracts with or affecting the Property. The representation and warranty
contained herein shall be true and correct at and as of Closing.
10.4 No Lawsuits. Except as disclosed in the
Agreement of Sale, Optionor has received no written notice of any claims,
lawsuits or proceedings pending, and to the best of Optionor's knowledge, there
are no claims, lawsuits or proceedings threatened against or relating to
Optionor or the Property, or which could affect them, or either of them, in any
court or before any governmental agency.
10.5 Leases. There are no oral or written leases,
licenses or rights of occupancy or, to the best of Optionor's knowledge, any
grants or claims of right, title or interest in any portion of the Property.
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<PAGE> 4
10.6 Good Title to Property. To the best of
Optionor's knowledge, Optionor holds good and marketable, indefeasible fee
simple title to the Property, free and clear of liens and encumbrances, other
than the Permitted Exceptions.
10.7 FIRPTA. Optionor is not a "foreign person"
as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of
1954, as amended (the "Code").
10.8 Rights to Purchase. There are no outstanding
agreements, options, rights of first refusal, conditional sales agreements or
other agreements or arrangements, whether oral or written, regarding the
purchase and sale of the Property.
When used in this Section 10, the phrase "knowledge" and "to
the best knowledge", shall be deemed to mean the actual knowledge of Joseph D.
Gonnelli and R. Brian Jackson.
11. Representations of Optionee. Optionee represents and
warrants as of the date of this Agreement as follows:
(a) Optionee has full power and authority to
enter into this Agreement and to perform all obligations hereunder.
(b) The performance by Optionee of Optionee's
obligations under this Agreement will not violate any law, result in any
breach, constitute a default under, or require any consent pursuant to any
contract or other agreement, lease, license or permit to which optionee is a
party, or require Optionee to obtain the consent of any person, entity or
governmental authority.
12. Representations Limited. All representations and
warranties made by the parties in this Agreement shall survive the execution of
this Agreement and the consummation of the transactions contemplated hereunder
for a period of six (6) months from the Closing Date, and claims made prior to
the expiration of such six (6) month period shall survive if not resolved
within such six (6) month period.
13. Condition of Premises. Except as expressly set forth
herein, Optionor makes no representations with respect to the condition or
character of the Property or the use or uses to which the foregoing may be put.
Optionee shall be afforded the opportunity to examine, inspect and test the
Property and Optionee, if it exercises the Option, shall automatically and
without further action, and except as herein otherwise provided, be deemed to
have released Optionor from all responsibility and liability regarding the
condition or utility of the Property. Except for Optionor's representations,
warranties, covenants and agreements as are herein expressly provided, OPTIONEE
SHALL PURCHASE THE PROPERTY IN "AS IS - WHERE IS" CONDITION AT CLOSING. If
Optionee intends to exercise its rights to inspect and examine the physical
condition of the Property, it shall (i) provide Optionor with prior verbal
notice of Optionee's entry, (ii) keep the Property free of any liens or
third-party claims resulting therefrom except as may be required by applicable
law; (iii) maintain adequate liability insurance in an
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<PAGE> 5
amount of not less than $1,000,000.00 for a single occurrence and $50,000 for
property damage, which insurance shall name Optionor as an additional insured;
(iv) indemnify Optionor against any liability or expense for injuries to or
death of persons or damage to property arising from the exercise of the rights
hereunder that are not the result of any act or omission of the Optionee or its
agents, employees or contractors and (v) if Closing does not occur for any
reason other than Optionor's breach or default, restore as nearly as
practicable the Property substantially to its condition immediately before such
exercise. The indemnification and restoration provisions of this subsection
shall survive the termination of this Agreement.
14. Brokers. Optionor and Optionee each represent and
affirm to the other that neither has made any agreement or taken any action
which may cause any broker or finder to become entitled to a commission as a
result of the transaction contemplated by this Agreement. Each of the parties
hereto agrees to indemnify, defend and hold the other harmless against any
claims, demands, suits, judgments or liabilities which arise by reason of a
breach of the foregoing representation. The provisions of this Section shall
survive the Closing or other termination of this Agreement.
15. DEFAULT; REMEDIES
15.1 Prior to title passing and the completion of
Closing, in the event of Optionor's default hereunder, Optionee's sole remedies
shall be that of (i) specific performance, with abatement of the Purchase Price
to the extent of liens of a fixed or ascertainable amount, or (ii) termination
of this Agreement and return of the Extension Fee, if theretofore paid; in no
event shall Optionee be entitled to damages of any kind or nature;
15.2 Prior to title passing and completion of
Closing, with respect to any representations or warranties of Optionor
contained in this Agreement, Optionee's obligations hereunder are contingent
upon such representations and/or warranties contained in this Agreement being
true and correct as of the date hereof and, where the context specifically
provides, as of the date of Closing, but recision of this Agreement and return
of the Extension Fee, if theretofore paid, shall be Optionee's exclusive remedy
for any breach of any representation and/or warranty by Optionor.
15.3 Notwithstanding the foregoing, in the event of
a willful or intentional breach of a covenant, obligation or warranty by
Optionor under this Agreement, or if Optionor makes a willful or intentional
material misrepresentation in this Agreement, Optionee shall be entitled to
terminate this Agreement and to the return of the Extension Fee, if theretofore
paid, and Optionee's reasonably documented Transaction Costs (as hereinafter
defined) sustained by Optionee in connection with this Agreement; and the
foregoing shall be Optionee's sole remedies under this subparagraph.
15.4 Subsequent to title passing and completion of
Closing, Optionee shall have recourse against Optionor for its reasonably
documented actual damages, sustained solely
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<PAGE> 6
for Optionor's breach of representations and warranties which survive Closing,
which breach is discovered by Optionee after Closing; the right to pursue said
recourse shall expire and terminate, as to any right on which action has not
then been initiated, at the expiration of the survival periods set forth
herein.
15.5 Optionee recognizes that the Property will be
removed by Optionor from the market during the existence of this Agreement and
that if after the Initial Option Term, the term hereof shall have been extended
by Optionee as hereinabove provided, and thereafter, the option hereby granted
shall not be exercised by Optionee, or the option shall be exercised but
Closing is not consummated because of Optionee's default, then, in either such
event, Optionor shall be entitled to retain the Extension Fee as its sole and
liquidated damages. The parties agree that the sum stated above as liquidated
damages shall be in lieu of any other relief to which Optionor might otherwise
be entitled, Optionor hereby specifically waiving any and all rights which it
may have to damages or specific performance as a result of Optionee's default
under this Agreement.
15.6 Optionee's Out-of-Pocket Costs. In the event
of Optionor's breach or default in accordance with Section 15.3 then, in any
such event, upon termination by Optionee hereunder, in addition to receiving
the immediate return of the Extension Fee, anything in the Agreement contained
to the contrary notwithstanding, Optionee shall also receive from Optionor,
upon demand, Optionee's actual, documented out-of-pocket costs and expenses
associated with this Agreement and Optionee's anticipated acquisition of the
Property including, without limitation, Optionee's reasonable counsel fees and
costs, title expenses, survey costs, financial and accounting due diligence,
Optionee's environmental assessment of the Property, and other costs and
expenses associated with Optionee's due diligence (collectively, "Transaction
Costs"). The foregoing list is not intended to be exclusive, but
representative of the costs and expenses that the parties anticipate that
Optionee will incur in anticipation of this transaction. Optionor's maximum
reimbursement liability under this Section 15 shall not exceed $10,000 in the
aggregate.
16. Notices. All notices, requests and other
communications under this Agreement, to be effective, shall be in writing and
shall be sent by certified mail, return receipt requested, or by overnight
delivery by recognized courier, addressed as follows:
If to Optionor:
MLCP Associates Limited Partnership
4 Eves Drive
Marlton, New Jersey 08053
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<PAGE> 7
With a copy to:
Robert E. Schwartz, Esquire
Sherman, Silverstein, Kohl,
Rose & Podolsky
4300 Haddonfield Road
Suite 311
Pennsauken, New Jersey 08109
If to Optionee:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
and Chief Executive Officer
With a copy to:
Eric L. Stern, Esquire and
Brad A. Molotsky, Esquire
Pepper, Hamilton & Scheetz
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
17. Recording. At the request of either party, this
Agreement or a memorandum thereof may be recorded in the Office of the Clerk in
and for Burlington County, New Jersey. In such instance, a termination of
Memorandum of Option Agreement (the "Termination") shall be delivered by
Optionee to Optionor's legal counsel Sherman, Silverstein, Kohl, Rose &
Podolsky, ATTN: Robert E. Schwartz, Esquire, as Escrow Agent, to be held in
escrow. Upon the expiration or sooner termination of the term of this
Agreement (including any extension(s) thereto), Escrow Agent is hereby
authorized to release the Termination for recording in the said Clerk's Office,
but only after Escrow Agent shall have first delivered to Optionee notice of
its intention to do so, and the failure of Optionee, or its agent, to object to
such recording within ten (10) days next following the receipt of such notice
by Optionee, by return notice in writing to Optionor and Escrow Agent, in the
manner specified in this Agreement.
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<PAGE> 8
18. Miscellaneous.
(a) Entire Agreement; Merger. This Agreement
together with the Exhibits attached hereto embodies and constitutes the entire
understanding between the parties with respect to the transactions contemplated
herein, and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are merged into this
Agreement. Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument in writing
signed by the party against which the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument.
(b) Time of the Essence. Time is of the essence
as to the performance of all terms and conditions of this Agreement.
(c) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
Jersey.
(d) Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, legal representatives, successors
and assigns.
(e) Headings. All headings are for convenience
only, and shall not be used in construing any of the provisions of this
Agreement.
(f) Counterparts. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original.
(g) Non-Recourse. No recourse shall be had for
any obligation of Brandywine Realty Trust ("BRT") hereunder or under any
document executed in connection herewith or pursuant hereto, or for any claim
based thereon or otherwise in respect thereof, against any past, present or
future trustee, shareholder, officer or employee of BRT, whether by virtue of
any statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being expressly waived and released by
Optionor and all parties claiming by, through or under Optionor.
-8-
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed, sealed
and delivered this Agreement the day and year first above written.
OPTIONOR:
--------
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MLCP General Corporation,
its authorized general partner
By: /s/ Joseph D. Gonnelli
-------------------------------------------
Name: Joseph D. Gonnelli
Title: President
[Corporate Seal]
OPTIONEE:
--------
BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
By: BRANDYWINE REALTY TRUST, a Maryland
Real Estate Investment Trust, its general partner
By: /s/ Gerard H. Sweeney
-------------------------------------------
Gerard H. Sweeney,
President and Chief
Executive Officer
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<PAGE> 10
The address of the above named Optionee is:
c/o Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, Pennsylvania 19073
By: /s/ Gerard H. Sweeney
----------------------------------
On behalf of the Optionee
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<PAGE> 11
EXHIBIT "A"
Legal Description
<PAGE> 12
EXHIBIT "B"
Permitted Exceptions
<PAGE> 13
EXHIBIT "C"
Documents
I. Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
A. Optionor's Documents and Other Items. Optionor shall
execute and deliver or cause to be executed and delivered to Optionee, in
proper form for recording:
(i) Deed. A Bargain and Sale Deed with Covenants
Against Grantor's Acts prepared by Optionee's counsel in form acceptable to
Optionor (the "Deed"), conveying the Property, duly executed by Optionor for
recording. The Deed description shall be based upon the metes and bounds
description attached as Exhibit "A". In addition, if Optionee requests that
Optionor convey the Premises by the metes and bounds description shown on the
new survey, if any, obtained by Optionee, Optionor covenants to execute a Quit
Claim Deed for such new description.
(ii) Original Licenses, Contract Documents and Other
Personal Property. All original Licenses, Contract Documents, and other
Personal Property (of the type described in Section 1.2, of the Agreement of
Sale) if any, and to the extent in Optionor's possession and as applicable to
the Property, and any assignment thereof, without representation or warranty.
(iii) FIRPTA Certificates. All certificate(s)
required under Section 1445 of the Code.
(iv) Title Insurance Certificates. Such
affidavits of title or other certifications as shall be required by the Title
Company to insure Optionee's title to the Property as set forth in Section 6 of
the within Agreement, and to provide affirmative endorsements against
construction liens.
(v) Optionor Certificate. A written certification
confirming that as of Closing that the representations and warranties which are
required to be true at and as of Closing, are true at and as of Closing.
(vi) Organization Certifications. Confirmation of
the good standing and existence of Optionor and its general partner and the due
authority of those executing for them, including, without limitation, the
following documents issued no earlier than 30 days prior to Closing: (a) good
standing certificate in state of organization and in the State in which the
Property are located, (b) partnership agreement, (c) a certificate from the
secretary of the corporation or managing general partner of the partnership
confirming the incumbency of the signatories and the current force and effect
of the resolution authorizing their execution of the documents required under
this Agreement.
<PAGE> 14
B. Optionee's Documents. Optionee shall deliver or
cause to be delivered to Optionor:
(i) The amounts required to be paid to Optionor
pursuant to this Agreement;
(ii) Confirmation of the existence and
subsistence of Optionee, and the authority of those executing for Optionee,
including, without limitation, the following documents issued no earlier than
thirty (30) days prior to Closing: (a) good standing certificate in State of
Maryland, (b) Optionee's Amendment and Restatement of Declaration of Trust
filed on August 27, 1996, as amended, (c) a certificate from any officer of
Optionee confirming the incumbency of the signatories and the current force and
effect of the resolution authorizing their execution of the documents required
under this Agreement.
C. Necessary Documents. Optionee and Optionor shall
execute and deliver such other documents and instruments as may be reasonably
necessary to complete the transaction contemplated by this Agreement.
<PAGE> 15
[OPTIONOR'S ACKNOWLEDGMENT]
STATE OF :
: SS.
COUNTY OF :
On this, the _____ day of __________, 1997, before me, a
Notary Public in and for the State and County aforesaid, the undersigned
officer, personally appeared __________________, who acknowledged himself to be
the __________________ of MLCP General Corporation, the authorized General
Partner of MLCP Associates Limited Partnership, a Delaware limited partnership,
and that he as such ___________________, of the authorized General Partner,
being authorized to do so, executed the foregoing instrument on behalf of the
said limited partnership for the purposes therein contained.
------------------------------------
NOTARY PUBLIC
My Commission Expires:
===============================================
[OPTIONEE'S ACKNOWLEDGMENT]
STATE OF :
: SS.
COUNTY OF :
On the _______ day of _____________, 1997, before me a Notary
Public in and for the State and County aforesaid, the undersigned officer,
personally appeared Gerard H. Sweeney, who acknowledged himself to be the
President of Brandywine Realty Trust, the authorized managing general partner
of Brandywine Operating Partnership, L.P., a Delaware limited partnership, and
that he, as President of the authorized General Partner, being authorized as to
do, executed the foregoing instrument on behalf of the said limited partnership
for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
------------------------------------
NOTARY PUBLIC
My Commission Expires:
<PAGE> 1
EXHIBIT 10.5
MORTGAGE NOTE
$6,500,000.00 Dated: March 14, 1995
1120 ASSOCIATES LIMITED PARTNERSHIP
(hereinafter called "Maker")
to
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(hereinafter called "Holder")
FOR VALUE RECEIVED, 1120 ASSOCIATES LIMITED PARTNERSHIP, a
Delaware limited partnership (the "Maker"), promises to pay to the order of SUN
LIFE ASSURANCE COMPANY OF CANADA (U.S.), a Delaware corporation, its successors
and assigns (the "Holder"), in lawful money of the United States of America,
the sum of SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000.00) (the
"Loan") as follows:
1. The principal balance of the Loan shall bear interest at
the rate of nine and seven-eighths percent (9.875%) per annum (the "Accrual
Rate"). The principal balance and interest thereon shall be payable in
consecutive monthly installments of $69,353.11 (based on amortization of the
principal balance of the Loan over a hypothetical fifteen year term) commencing
on the first day of the second calendar month after disbursement of the Loan,
and continuing on the first day of each month thereafter, such amount being
first applied to interest and then to the reduction of principal. Interest for
the period from the date the Loan is funded until the first day of the
following calendar month shall be payable on the date hereof. Interest will be
computed according to the Bankers Rule, i.e., the actual amount of days x rate
of interest x principal/360. The entire balance of principal and all interest
outstanding hereunder shall be due and payable on March 1, 2002 ("Maturity
Date").
<PAGE> 2
2. Prepayment of the Loan shall not be permitted during the
first forty-eight (48) months of the Loan term. Prepayment in full only of the
principal of the Loan will be permitted at any time during the last thirty-six
(36) months of the Loan term upon thirty (30) days' prior written notice to
Holder. Such prepayment shall be accompanied by additional interest
("Additional Interest") equal to the greater of (i) one percent (1%) of the
unpaid principal balance of the Loan on the date of prepayment, or (ii) that
amount which is calculated as of the date of the prepayment as follows: (A) the
Prepayment Treasury Yield (as defined below) is subtracted from 9.875%, and the
difference (but not less than 0) is (B) divided by twelve, and the quotient
thereof is then (C) multiplied by the then outstanding balance of the Loan to
determine the monthly payment differential, and (D) the present value of the
series of monthly payment differentials for the number of whole and partial
months from the prepayment date to the maturity date is determined using the
Prepayment Treasury Yield as the discount rate and compounding monthly, and (E)
the present values of such monthly payment differentials are added together.
The term "Prepayment Treasury Yield" means the yield which would be available
if the proceeds of the prepayment were invested on the date of the prepayment
in a debt obligation of the United States Treasury (other than a Flower Bond)
having a maturity most closely equivalent to that of the Loan (and if more than
one Treasury obligation has the same maturity, then the obligation offering the
highest yield), as determined by quotations published in The Wall Street
Journal on the date five (5) business days before the prepayment. If the
difference between 9.875% and the Prepayment Treasury Yield is less than 0, the
Additional Interest shall equal one percent (1%) of the unpaid principal
balance of the Loan. For purposes of calculating Additional Interest, the
first month of the Loan term shall begin on the first day of the first calendar
month after the date
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<PAGE> 3
hereof. Notwithstanding the foregoing, prepayment in full only of the
principal of the Loan will be permitted during the last three (3) months of the
Loan term upon five (5) days' prior written notice to Holder without Additional
Interest. Partial prepayment shall not be permitted at any time.
3. All payments due hereunder shall be made at the offices
of Sun Life Assurance Company of Canada (U.S.), One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02181, or elsewhere, as shall be directed by
written notice by any holder hereof.
4. Maker acknowledges that the failure of Maker to make any
payment within five (5) days after the payment is due and payable will cause
Holder to incur additional expense in servicing the indebtedness evidenced by
this Note, the precise measure of which expense is not susceptible to exact
determination. Accordingly, it is further agreed that Holder may collect a
late charge of four percent (4%) of each payment more than five (5) days in
arrears, which Maker agrees is a reasonable basis on which to cover the extra
expense involved in handling delinquent payments. This shall not be construed
to obligate Holder to accept any overdue installment nor to limit Holder's
rights and remedies for Maker's default, as hereinafter set forth.
5. This Note accompanies and is secured, inter alia, by a
Mortgage and Security Agreement of even date herewith (the "Mortgage"), made
and executed by Maker upon real estate and the building and improvements
thereon known as 1120 State Route 73, situate on approximately 7.835 acres of
land located in Mount Laurel Township, Burlington County, New Jersey, as more
particularly identified in the Mortgage (the "Mortgaged Property"), and by an
Assignment of Leases and Agreement of even date herewith (the "Assignment of
Leases"), made and executed by Maker with respect to the Mortgaged Property.
(This Note, the Mortgage, the
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<PAGE> 4
Assignment of Leases and any other documents executed by Maker to Holder in
connection herewith are hereinafter referred to collectively as the "Loan
Documents"). All of the terms of the Loan Documents are incorporated herein by
reference and Maker does hereby covenant and agree to comply with all of the
terms, conditions and provisions of the Loan Documents. Any Event of Default
under any of the Loan Documents shall constitute an Event of Default under this
Note.
6. Maker agrees that if Maker shall, without in each
instance obtaining the prior written consent of Holder, sell, transfer, or
convey (herein all called "transfer") the Mortgaged Property or any interest
therein (other than leases of portions of the Mortgaged Property in the
ordinary course of Maker's business made in accordance with the terms of the
Assignment of Leases, and otherwise as expressly permitted in any written
agreement between Holder and Maker) whether voluntarily or by operation of law,
then, at the option of Holder, the maturity of this Note shall be advanced to
the date of such transfer, whereupon the obligations of Maker evidenced by this
Note shall immediately be due and payable. For purposes of this paragraph, any
transfer of partnership interests in Maker, other than as expressly permitted
in any written agreement between Holder and Maker, shall constitute a transfer
of the Mortgaged Property.
7. This Note, the Mortgage, the Assignment of Leases and
the other Loan Documents shall evidence and secure any future loans or advances
that may be made to or on behalf of Maker by Holder, at any time or times
hereafter intended by Maker and Holder to be so evidenced and secured, as well
as any sums paid by Holder pursuant to the terms of the Mortgage, and any such
loans, advances or payments shall be added to and shall bear interest at the
Default Rate (as hereinafter defined). The parties expressly agree that this
Note shall have the
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full force, effect and benefits of a note to secure advances of money, the lien
of which advances relate to the date of this Note.
8. The occurrence of any of the following shall constitute
an Event of Default hereunder: Maker's failure to make payment of any
installment of principal or interest or any other sum within five (5) business
days of the date on which such installment or sum is due under this Note
(provided that Holder will only grant such 5-day grace period twice in any
twelve-month period, and any failure thereafter to make a payment on the due
date shall constitute an Event of Default without any grace period); or Maker's
nonperformance of, or noncompliance with, any of the other agreements,
conditions, covenants, provisions or stipulations contained in this Note, for a
period of twenty (20) days after written notice thereof to Maker (provided that
if such nonperformance or noncompliance cannot reasonably be cured within
twenty (20) days, an Event of Default shall not occur hereunder if Maker
initiates curing the nonperformance or noncompliance within such 20-day period
and diligently pursues such cure to completion within a reasonable time
thereafter, not to exceed ninety (90) days after such written notice); or the
occurrence of an Event of Default under the Mortgage, the Assignment of Leases
or any of the other Loan Documents. Upon the occurrence of an Event of Default
hereunder,
(a) the interest rate payable hereunder during the
continuance of the Event of Default shall be at a rate (the "Default Rate")
three (3%) percent in excess of the Accrual Rate.
(b) The entire unpaid balance of the principal debt,
additional loans or advances and all other sums paid by Holder to or on behalf
of Maker pursuant to the terms of this Note or the Mortgage, together with
unpaid interest thereon and the Acceleration Premium (as defined below), shall
at the option of the Holder and without notice become immediately due and
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<PAGE> 6
payable. The term "Acceleration Premium" shall refer to an amount equal to the
greater of (i) three percent (3%) of the unpaid principal balance of the Loan
on the date of acceleration, or (ii) that amount which is calculated as of the
date of the acceleration as follows: (A) the Acceleration Treasury Yield (as
defined below) is subtracted from 9.875%, and the difference (but not less than
0) is (B) divided by twelve, and the quotient thereof then (C) multiplied by
the then outstanding balance of the Loan to determine the monthly payment
differential, and (D) the present value of the series of monthly payment
differentials for the number of whole and partial months from the prepayment
date to the maturity date is determined using the Acceleration Treasury Yield
as the discount rate and compounding monthly, and (E) the present values of
such monthly payment differentials are added together. The term "Acceleration
Treasury Yield" means the yield which would be available if the proceeds of the
acceleration were invested on the date of the acceleration in a debt obligation
of the United States Treasury (other than a Flower Bond) having a coupon
interest rate and maturity most closely equivalent to that of the Loan, as
determined by quotations published in The Wall Street Journal on the date five
(5) business days before the acceleration. If the difference between 9.875%
and the Acceleration Treasury Yield is less than 0, the Acceleration Premium
shall equal three percent (3%) of the unpaid principal balance of the Loan.
9. Maker waives the benefit of any laws which now or
hereafter might authorize the stay of any execution to be issued on any
judgment recovered on this Note or the exemption of any property from levy or
sale thereunder. Maker also waives and releases unto Holder and its attorney,
all errors, defects and imperfections whatsoever in the entering of any
judgment or any process or proceedings relating thereto.
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<PAGE> 7
10. Maker hereby waives presentment for payment, demand,
protest, notice of protest, and of dishonor and nonpayment of this Note, and
consents that Holder may extend the time of payment or otherwise modify the
terms of payment of any part or the whole of the debt evidenced by this Note,
at the request of any person holding title to the Mortgaged Property described
in the Mortgage, and such consent shall not alter or diminish the liability of
any person hereunder.
11. The remedies of this Note, the Mortgage, the Assignment
of Leases and the other Loan Documents providing for the enforcement of the
payment of the principal sum thereby secured, together with interest thereon,
and for the performance of the covenants, conditions, and agreements herein and
therein contained, are cumulative and concurrent and may be pursued singly or
successively or together, at the sole discretion of Holder, and may be
exercised as often as occasion therefor shall occur. The waiver by Holder or
failure to enforce any covenant or condition of this Note, the Mortgage, the
Assignment of Leases or any of the other Loan Documents, or to declare any
Event of Default thereunder or hereunder, shall not operate as a waiver of any
subsequent Event of Default or affect the right of Holder to exercise any right
or remedy not expressly waived in writing.
12. Maker shall pay the cost of any revenue, tax or other
stamps now or hereafter required by law, at any time to be affixed to this Note
or the Mortgage (other than Holder's income taxes), and if any taxes hereafter
be imposed with respect to debts secured, Maker agrees to pay to Holder upon
demand the amount of such taxes, and hereby waives any contrary provisions of
any laws or rules of court now or hereafter in effect.
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13. Notwithstanding anything to the contrary herein
contained, the liability of Maker hereunder shall be limited to and enforceable
only out of the Mortgaged Property and the rents, issues and profits therefrom,
and the lien of any judgment shall be restricted thereto and shall not extend
to Maker, Holder waiving any right Holder may have to claim a deficiency
judgment against Maker; provided, however, that Maker and its general partner
shall not be exonerated or exculpated from, and shall be liable for, any
deficiency, loss or damage suffered by Holder as a result of any security
deposits received or held by Maker, any rent received or held by Maker after an
Event of Default, or any rent prepaid more than one month in advance; or from
failure by Maker to properly account to Holder as mortgagee for any proceeds of
insurance or condemnation proceeds as required by the Mortgage; or from repairs
required by the Mortgaged Property following a casualty for which insurance
proceeds are not available due to a violation of Section 10 of the Mortgage; or
from fraud, material misrepresentation or bad faith by Maker; or from waste of
the Mortgaged Property; or from delinquent taxes or assessments; or from
Maker's violation of, or failure to perform its obligations under, Section
4(b)-(j) or Section 20 of the Mortgage. Nothing in this paragraph, however,
shall limit Holder's right against any tenants under leases assigned to Holder
as additional security, or against any other collateral securing Maker's
obligations hereunder, now or hereafter mortgaged, pledged or assigned by Maker
or anyone else to Holder. (a) Notwithstanding any provision contained in
this Note, Maker's liability for payment of interest shall not exceed the
limits imposed by applicable usury law. If any provision contained herein
requires interest payments for any period in excess of the then legally
permitted maximum rate, such provision shall automatically be deemed to require
interest payments for such period at the then legally permitted maximum rate.
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14. Maker represents and warrants that the Loan evidenced
by this Note and secured by the Mortgage, the Assignment of Leases and the
other Loan Documents was obtained solely for the purpose of carrying on or
acquiring a business or commercial transaction.
15. The unenforceability or invalidity of any one or more of
the provisions, clauses, sentences and/or paragraphs hereof shall not render
any other provisions, clauses, sentences and/or paragraphs herein contained
unenforceable or invalid.
16. This obligation shall bind Maker and Maker's heirs,
representatives, successors and assigns, and the benefit hereof shall inure to
Holder and its successors and assigns. The word "Holder" whenever occurring
herein shall be deemed and taken to include each successive Holder hereof, and
the word "Maker" whenever occurring herein shall be deemed and taken to include
the plural, and all the covenants, waivers, warrants, promises and releases by,
and obligations or liabilities imposed upon, Maker shall bind them jointly and
severally and their, and each of their, heirs, personal representatives,
successors and assigns.
17. The parties intend that this Note shall be construed in
accordance with and governed by the laws, including the conflict of law rules,
of the State of New Jersey.
19. MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION ARISING UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS.
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IN WITNESS WHEREOF, and intending to be legally bound hereby,
Maker has caused this instrument to be duly executed the day and year first
above written.
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Palomino Corporation, a Pennsylvania corporation,
general partner
By: /s/ Joseph D. Gonnelli
----------------------------------------------
Joseph D. Gonnelli, Vice President
Attest: /s/ R. Brian Jackson
-----------------------------------------
R. Brian Jackson, Secretary
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EXHIBIT 10.6
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT
IS MADE as of the 14th day of March, 1995,
BETWEEN
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
(hereinafter called "Mortgagor"),
AND
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
a Delaware corporation
(hereinafter called "Mortgagee").
Mortgagor has executed and delivered to Mortgagee a certain
Mortgage Note (hereinafter called the "Note") of even date herewith, payable to
the order of Mortgagee in the principal sum of Six Million Five Hundred
Thousand Dollars ($6,500,000.00), lawful money of the United States of America,
and has provided therein for payment of additional moneys loaned or advanced
thereunder by Mortgagee, together with interest thereon (including Additional
Interest and the Acceleration Premium, as defined in the Note) at the rate
provided in the Note, in the manner and at the times therein set forth,
containing certain other terms and conditions, all of which are specifically
incorporated herein by reference.
NOW, THEREFORE, in consideration of such debt or principal sum
and as security for the payment of the same and interest as aforesaid, together
with all other sums payable hereunder or under the terms of the Note, and for
performance of the agreements, conditions, covenants, provisions and
stipulations contained herein, Mortgagor does grant, bargain, sell, release,
mortgage and convey unto Mortgagee, its successors and assigns:
ALL THAT CERTAIN tract or piece of ground, situate at and
known as 1120 State Route 73, Mount Laurel Township, Burlington County, New
Jersey, as more particularly described in Exhibit "A" attached hereto, and
TOGETHER WITH:
(1) any and all buildings and improvements erected or
hereafter erected thereon;
(2) any and all fixtures, appliances, machinery and
equipment, and other articles of personal property, belonging to Mortgagor, at
any time now or hereafter installed in, attached to or situated in or upon the
above described real estate or the buildings and improvements to be erected
thereon, or used or intended to be used in connection with the real estate, or
in the operation of the buildings and improvements, plant, business or dwelling
situate thereon, whether or not the personal property is or shall be affixed
thereto; including, without limitation of the foregoing, all furniture,
furnishings, floor coverings, household appliances, office equipment, and
articles of interior decoration; all screens, awnings, venetian blinds,
shutters, shades, storm windows and storm doors; all kitchen cabinets, mirrors,
mantles; all office, restaurant, bar, kitchen and laundry fixtures, utensils,
appliances, and equipment; all cleaning, venti lation, refrigerating, vending,
incinerating, waste disposal, communications, alarms, fire prevention and fire
extinguishing systems, apparatus and equipment; all television, radio and other
musical equipment; all passenger and freight elevators, escalators and
machinery and equipment pertaining thereto; all building materials, equipment
and machinery; all pipes, conduits, pumps, boilers, tanks, motors, engines and
furnaces; all heating, lighting, sprinkling, plumbing, air conditioning,
gas-burning, oil-burning, and electric fixtures, machinery and equipment of
whatsoever kind and nature;
<PAGE> 2
(3) all building materials, fixtures, building machinery
and building equipment delivered on site to the real estate during the course
of, or in connection with, construction of any repairs of or renovations to the
buildings and improvements;
(4) any and all tenements, hereditaments and
appurtenances belonging to the real estate or any part thereof hereby mortgaged
or intended so to be, or in any way appertaining thereto, and all streets,
alleys, passages, ways, water courses and all easements and covenants now
existing or hereafter created for the benefit of the Mortgagor or any
subsequent owner or tenant of the mortgaged real estate over ground adjoining
the mortgaged real estate and all rights to enforce the maintenance thereof,
and all other rights, liberties and privileges of whatsoever kind or character,
and the reversions and remainders, income, rents, issues and profits arising
therefrom, and all the estate, right, title, interest, property, possession,
claim and demand whatsoever, at law or in equity, of the Mortgagor in and to
the real estate or any part thereof; and
(5) all right, title and interest of Mortgagor in and to:
(A) all present and future leases between
Mortgagor, as landlord, and any occupant of the Mortgaged Property, as tenant
(which present and future leases, and Mortgagor's interest thereunder, are
herein referred to as the "Leases"); and
(B) all rents, issues and profits payable under
the Leases and under any future renewals, amendments or modifications thereof.
(All of the above-mentioned real estate, buildings, improvements, fixtures,
machinery, equipment, tenements, hereditaments appurtenances, Leases and other
property interests are sometimes collectively referred to herein as the
"Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property hereby conveyed or
mentioned and intended so to be, unto Mortgagee, its successors and assigns, to
its own use forever.
PROVIDED, HOWEVER, that if Mortgagor shall pay to Mortgagee
the aforesaid debt or principal sum, including additional loans or advances and
all other sums payable by Mortgagor to Mortgagee hereunder and under the terms
of the Note, together with interest thereon (including Additional Interest
and/or Acceleration Premium), and shall keep and perform each of the covenants,
conditions and agreements hereinafter set forth until such sums have been paid,
then this Mortgage and the estate hereby granted and conveyed shall become
void.
THIS MORTGAGE is executed and delivered subject to the
following covenants, conditions and agreements:
1. WARRANTIES OF MORTGAGOR
Mortgagor warrants and agrees:
(a) that Mortgagor presently possesses an unencumbered
fee simple title to the real estate described in Exhibit "A" hereto (the
"Land"), except for those title objections not removed from Title Policy No.
F-38350 issued by First American Title Insurance Company to Mortgagee insuring
the lien of this Mortgage; that this Mortgage is a valid and enforceable first
lien on the Land, subject only to the aforesaid title objections; and that
Mortgagee shall, subject to Mortgagor's right of possession prior to default,
quietly enjoy and possess the Mortgaged Property. Mortgagor shall preserve
such title and the validity and priority of the lien hereof and shall forever
warrant and defend the same to Mortgagee against the claims of all parties and
persons whomsoever; and
(b) that Mortgagor is, and will hereafter be, the sole
owner of the landlord's interest in the Leases; and that the Leases are and
will be valid and subsisting leases of the real property demised thereby for
the terms therein set forth and subject to the provisions set forth therein;
and
(c) that Mortgagor shall make, execute, acknowledge and
deliver in form reasonably satisfactory to Mortgagee all such further or other
instruments or assurances as may at any time hereafter be reasonably desired or
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<PAGE> 3
required by Mortgagee for more fully and effectually granting, assigning,
transferring and setting over the Mortgaged Property and Mortgagor's interest
in the Leases hereby mortgaged, or intended so to be, unto Mortgagee for the
purpose aforesaid, and Mortgagor will pay all costs of recording or filing any
such statements or documents in such public offices as Mortgagee may reasonably
require.
2. PAYMENT AND PERFORMANCE
(a) Mortgagor shall pay to Mortgagee, in accordance with
the terms of the Note and this Mortgage, the principal and interest (including
Additional Interest and Acceleration Premium, if any), and other sums therein
set forth; and shall perform and comply with all the agreements, conditions,
covenants, provisions and stipulations of the Note and this Mortgage. THE
AMOUNT SECURED BY THIS MORTGAGE SHALL EXPRESSLY INCLUDE ALL ADVANCES MADE
HEREUNDER OR COSTS OTHERWISE INCURRED HEREUNDER OR IN CONNECTION WITH THE LOAN
BY MORTGAGEE TO PROTECT THE SECURITY FOR THE LOAN, INCLUDING, WITHOUT
LIMITATION, ADVANCES MADE AND COSTS INCURRED BY MORTGAGEE FOR TAXES, INSURANCE
PREMIUMS, AND ENVIRONMENTAL INSPECTIONS (WHETHER UNDERTAKEN BEFORE OR AFTER AN
EVENT OF DEFAULT OR A FORECLOSURE HEREUNDER, PROVIDED THAT ENVIRONMENTAL
INSPECTIONS WILL ONLY BE UNDERTAKEN BY MORTGAGEE BEFORE AN EVENT OF DEFAULT IF
MORTGAGEE HAS REASONABLE GROUNDS TO SUSPECT THE EXISTENCE OF A POTENTIAL
ENVIRONMENTAL PROBLEM). The parties expressly agree that this Mortgage shall
have the full force, effect, and benefits of a mortgage to secure such advances
of money, the lien of which advances shall relate to the date of this Mortgage.
This Mortgage shall secure not only existing indebtedness, but also all
Additional Interest, all Acceleration Premium and all future advances, whether
such advances are obligatory or to be made at the option of Mortgagee, or
otherwise, to the same extent as if such future advances were made on the date
hereof.
(b) Mortgagor will not violate any term or covenant
contained in the Assignment of Leases and Agreement of even date herewith
(hereinafter called the "Assignment of Leases"), delivered to Mortgagee as
additional security with respect to the Leases.
3. PAYMENT OF CHARGES
From time to time until the debt and interest are fully paid,
Mortgagor shall:
(a) Pay and discharge, when and as the same shall become
due and payable, all real estate and other taxes, assessments, sewer and water
rents, and other charges and claims assessed or levied from time to time by any
lawful authority upon any part of the Mortgaged Property and which shall or
might have priority in lien or payment to the debt secured hereby;
(b) Pay all ground rents reserved from the Mortgaged
Property and pay and discharge, or bond, all mechanics' liens or judgments
which may be filed against the Mortgaged Property;
(c) Pay and discharge any documentary stamp or other tax,
including interest and penalties thereon, if any, now or hereafter becoming
payable on the Note evidencing the debt secured hereby, or on this Mortgage, or
on the underlying indebtedness;
(d) Provide, renew and maintain in effect by paying the
necessary premiums and charges thereon, such policies of hazard and liability
insurance with such companies as Mortgagee may from time to time require
pursuant to Section 10; and
(e) Promptly submit to Mortgagee evidence of the due and
punctual payment of all the foregoing charges.
4. MAINTENANCE OF MORTGAGED PROPERTY
(a) Mortgagor shall abstain from and shall not permit the
commission of waste in or about the Mortgaged Property; shall not remove or
demolish, or alter the structural character of, any building erected at any
time on the Mortgaged Property, without the prior written consent of Mortgagee;
and shall not permit the Mortgaged Property to become deserted or unguarded,
and shall maintain the Mortgaged Property in good condition and repair,
reasonable wear and tear and damage by fire or other casualty excepted.
Mortgagee, or its agent, shall have the right to enter upon
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the Mortgaged Property upon reasonable prior notice for the purpose of
inspecting the order, condition and repair of the buildings and improvements
erected thereon. Mortgagor represents and warrants that, to the best of
Mortgagor's knowledge, the Mortgaged Property complies with all applicable
laws, ordinances, regulations and orders relating to the Mortgaged Property,
including, without limitation, all environmental and wetlands laws, issued by
all Federal, state, municipal and other governmental authorities. Mortgagor
shall promptly comply with all future laws, ordinances, regulations and orders
relating to the Mortgaged Property by all federal, state, municipal and other
governmental authorities.
(b) Mortgagor warrants and represents that, to the best
of Mortgagor's knowledge:
(i) no hazardous substances (as "hazardous
substances" is defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601(14),
as amended by the Superfund Amendments and Re-authorization Act of 1986 (Pub.
L. No. 99-499, 100 Stat. 1613 (1986) (SARA)) or hazardous waste or solid waste
(as defined in 40 CFR Section 261) are present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(ii) no polychlorinated biphenyls (PCBs) or
substances containing PCBs, no asbestos or materials containing asbestos, no
gasoline, kerosene or other hydrocarbons, no pesticides, herbicides or
radioactive materials and no urea formaldehyde foam insulation has been stored,
used or installed or is otherwise present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(iii) no portion of the Mortgaged Property
lies in or constitutes a wetland or floodplain;
(iv) no radon gas or radioactive decay
products of radon gas, in a concentration above 4 picocuries/liter, are present
on the Mortgaged Property;
(v) no underground or above-ground storage
tanks are present on the Mortgaged Property;
(vi) Mortgagor has not received any notice
that Mortgagor has been identified in any litigation, administrative proceeding
or investigation as a responsible party for any liability under CERCLA, SARA,
or any other Federal, state or municipal law, ordinance or regulation;
(vii) The Mortgaged Property has never been
used by previous owners and/or operators to refine, produce, store, handle,
transfer, process or transport "Hazardous substances," as such term is defined
in N.J.S.A. 58:10-23.11b(k), and Mortgagor has not used in the past, nor does
Mortgagor intend to use in the future, the Mortgaged Property for the purpose
of refining, producing, storing, handling, transferring, processing or
transporting "Hazardous substances" (as above defined). Mortgagor has retained
Lippincott Engineering Associates ("Consultant") to conduct a complete and
thorough on-site inspection of the Mortgaged Property, to determine the
presence of "Hazardous substances" (as defined above), and the Consultant found
no evidence of the presence of such "Hazardous substances" on or in the
Mortgaged Property.
(c) Mortgagor shall not commit or allow to occur, and has
not received a summons, citation, directive, letter or other communication,
written or oral, from the New Jersey Department of Environmental Protection and
Energy concerning, any intentional or unintentional action or omission on
Mortgagor's part resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of "Hazardous substances" (as above
defined) into the waters or onto the lands of the State of New Jersey, or into
the waters outside the jurisdiction of the State of New Jersey, resulting in
damage to the lands, waters, fish, shellfish, wildlife, biota, air and other
resources owned, managed, held in trust or otherwise controlled by the State of
New Jersey.
(d) Should Mortgagor commit or allow to occur any
intentional or unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping of
"Hazardous substances" (as above defined) into the waters or onto the lands of
the State of New Jersey, or into the waters outside the jurisdiction of the
State of New Jersey, resulting in damage to the lands, waters, fish, shellfish,
wildlife, biota, air or other resources owned, managed or held in trust or
otherwise controlled by the State of New Jersey, without having obtained a
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permit issued by the appropriate governmental authorities, Mortgagor shall
promptly clean up such spill, leak, etc. in accordance with the provisions of
the New Jersey Spill Compensation and Control Act.
(e) The Mortgaged Property is not and has not been used
as a "Major facility," as such term is defined in N.J.S.A. 58:10-23.11b(l), and
the Mortgaged Property will not be used as a "Major facility" after completion
of any construction, renovation, restoration and other developmental work which
Mortgagor intends to undertake thereon. If Mortgagor hereafter becomes an
owner or operator of a "Major facility", then Mortgagor shall furnish the New
Jersey Department of Environment Protection and Energy with all the information
required by N.J.S.A.58:10-23.11d2, and Mortgagor shall duly file or cause to
be duly filed with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return and shall pay or make
provision for the payment of all taxes due therewith, all in accordance with
and pursuant to N.J.S.A. 58:10-23.11h.
(f) No lien has been attached to any revenues or to the
Mortgaged Property as a result of the chief executive of the New Jersey Spill
Compensation Fund expending monies from such fund pursuant to N.J.S.A.
58:10-23.11(g) and/or to pay for "Cleanup and removal costs," as such term is
defined in N.J.S.A. 58:10-23.11b(d). In the event that there shall be filed a
lien against the Mortgaged Property by the New Jersey Department of
Environmental Protection and Energy, pursuant to the provisions of N.J.S.A.
58:10-23.11f(f), as a result of the chief executive of the New Jersey Spill
Compensation Fund having expended monies from such fund pursuant to N.J.S.A.
58:10-23.11g, and/or to pay for "Cleanup and removal costs" (as defined above),
then Mortgagor shall, within sixty (60) days from the date that Mortgagor is
given notice that the lien has been placed against the Mortgaged Property or
within such shorter period of time in the event that the State of New Jersey
has commenced steps to cause the Mortgaged Property to be sold pursuant to the
lien, either (i) pay the claim and remove the lien from the Mortgaged Property,
or (ii) furnish (A) a bond satisfactory to Mortgagee in the amount of the claim
out of which the lien arises, (B) a cash deposit in the amount of the claim out
of which the lien arises, or (C) other security satisfactory to Mortgagee in an
amount sufficient to discharge the claim out of which the lien arises.
(g) Mortgagor is not required to furnish the New Jersey
Department of Environmental Protection and Energy with the information required
by N.J.S.A. 58:10-23.11d2, with respect to the Mortgaged Property or any other
real property owned and/or operated by Mortgagor and located in New Jersey.
(h) In connection with the purchase of the Mortgaged
Property and any other real property acquired by Mortgagor on or after January
1, 1984, Mortgagor required that the seller of the real property, including the
Mortgaged Property, comply with the provisions of the New Jersey Industrial
Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) and the seller did comply
therewith. A copy of a Nonapplicability Letter received by Mortgagor from such
seller has been supplied to Mortgagee.
(i) Mortgagor hereby agrees that in the event the
provisions of the New Jersey Industrial Site Recovery Act, become applicable to
the Mortgaged Property subsequent to the date hereof, Mortgagor shall give
prompt written notice thereof to the Mortgagee and shall take immediate
requisite action to insure full compliance with such Act.
(j) Mortgagor shall not permit or allow the Mortgaged
Property to be used in a manner so as to be considered an "Industrial
establishment," as such term is defined in N.J.S.A. 13:1K-8(f), without the
prior express written consent of the Mortgagee.
5. PAYMENTS BY MORTGAGEE
In the event Mortgagor neglects or refuses to pay the charges
mentioned in Section 3 above, or fails to maintain the buildings and
improvements and to comply with applicable regulations, as aforesaid, Mortgagee
may do so, at its sole option, and add the cost thereof to the principal debt
secured hereby, and collect the same as a part of the principal debt, together
with interest thereon at the Default Rate, as provided in the Note secured
hereby. In addition to any other debt or obligation secured hereby, this
Mortgage shall secure unpaid balances of advances made with respect
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to the Mortgaged Property for the payment of taxes, assessments, insurance
premiums, or costs incurred for the protection of the Mortgaged Property
(including, without limitation, inspection costs).
6. SECONDARY FINANCING
Except as expressly set forth herein or in any other written
agreement between Mortgagor and Mortgagee, Mortgagor covenants and agrees not
to create, nor permit to accrue, upon all or any part of the Mortgaged
Property, any debt, lien or charge other than the lien of this Mortgage,
without the prior written consent of Mortgagee, which consent may be withheld
in Mortgagee's sole and absolute discretion.
7. TRANSFER OF TITLE
Except as expressly set forth herein or in any other written
agreement between Mortgagor and Mortgagee, without the prior written consent of
Mortgagee (which consent, except as expressly set forth hereafter, may be
withheld in Mortgagee's sole and absolute discretion), Mortgagor shall not
voluntarily, or involuntarily, or by operation of law, sell, transfer, convey,
lease, or in any other manner change the ownership of, or title to, all or any
portion of the Mortgaged Property, or of any interest therein, legal or
equitable, or any shares or interests in any partnership or corporation having
an ownership interest in the Mortgaged Property, except for individual leases
of space in the Mortgaged Property upon terms as set forth in the Assignment of
Leases.
8. CONDEMNATION
In the event of any condemnation or taking of any part of the
Mortgaged Property by eminent domain, alteration of the grade of any street, or
other injury to, or decrease in value of, the Mortgaged Property by any public
or quasi-public authority or corporation, all proceeds (that is, the award or
agreed compensation for the damages sustained) shall be applicable first to
payment of the indebtedness secured hereby. No settlement for the damages
sustained shall be made by Mortgagor without Mortgagee's prior written
approval. Mortgagor shall continue to pay the installments of principal,
interest and other charges until payment of the proceeds shall have been
received by the Mortgagee. All of the proceeds shall be applied in the order
and in the amounts that Mortgagee, in Mortgagee's sole discretion, may elect,
to the payment of principal (whether or not then due and payable), interest on
any sums secured by this Mortgage, or toward payment to the Mortgagor, on such
terms as the Mortgagee may specify, to be used for the sole purpose of
altering, restoring or rebuilding any part of the Mortgaged Property which may
have been altered, damaged or destroyed as a result of the taking, alteration
of grade or other injury to the Mortgaged Property.
9. TAXES, ASSESSMENTS AND CHARGES
(a) Mortgagor shall, in addition to and concurrently with
the monthly installments of interest, pay to the Mortgagee installments of
casualty insurance premiums and taxes and assessments assessed or levied upon
the Mortgaged Property, as well as all taxes for which any party in whom title
to the Mortgaged Property shall or may hereafter vest, may be or become liable
under any present or future law of the United States of America or of the State
of New Jersey and which, under the provisions of such laws, may be or become a
lien upon the Mortgaged Property or have priority in payment of the mortgage
debt out of the proceeds of any judicial sale of the Mortgaged Property. Such
installments shall be equal respectively to 1/12 of the annual amount of such
premiums, taxes and assessments as are estimated by Mortgagee and shall be held
by Mortgagee to pay premiums, assessments and taxes when due. No amount so
paid shall be deemed to be trust funds but may be commingled with general funds
of Mortgagee, and no interest shall be payable thereon. If, pursuant to any
provision of this Mortgage, the whole amount of the unpaid principal debt
becomes due and payable, Mortgagee shall have the right, at its election, to
apply any amount so held against the entire indebtedness secured hereby.
Notwithstanding the foregoing, Mortgagee waives the right to collect
installments of insurance premiums prior to an Event of Default hereunder.
(b) Mortgagor hereby assigns to Mortgagee, as further
collateral for the full prompt payment and performance of all of Mortgagor's
obligations hereunder, all of Mortgagor's right, title and interest in any and
all proceeds of or claims to rebates, refunds, and abatements of real estate
and personal property taxes pertaining to the
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Mortgaged Property, or any portion thereof, with respect to tax periods arising
at any time prior to the discharge hereof, even though such taxes may relate to
periods before the execution hereof.
10. INSURANCE
Mortgagor shall keep the Mortgaged Property continuously
insured against loss or damage by fire, with extended coverage, and against
other hazards as Mortgagee may reasonably require, with insurance companies
(having a Best's rating of A-:VIII) reasonably satisfactory to Mortgagee, and
in such total amount as Mortgagee may require from time to time, but not
exceeding the full replacement value thereof. Without limiting the foregoing,
such policies of insurance shall be All Risk Replacement Cost Insurance, with
Agreed Amount Endorsement or similar affirmative endorsement that the coverage
limits will prevent Mortgagor or Mortgagee from becoming a co-insurer in the
event of a partial loss. Mortgagor shall also maintain rental insurance in an
amount equal to one year's gross income, boiler insurance (if any building has
a boiler), and commercial general liability insurance with limits and coverages
acceptable to Mortgagee. All policies, including policies for any amounts
carried in excess of the required minimum and policies not specifically
required by Mortgagee, shall be in form reasonably satisfactory to Mortgagee,
shall be maintained in full force and effect, shall be assigned and delivered
to Mortgagee, with premiums prepaid, as collateral security for payment of the
indebtedness secured hereby, shall be endorsed with a standard mortgagee clause
in favor of Mortgagee, not subject to contribution, and shall provide for at
least ten (10) days' prior written notice of cancellation to Mortgagee. If the
insurance, or any part thereof, shall expire or be withdrawn, or become void by
reason of Mortgagor's breach of any condition thereof, or become void or unsafe
by reason of the failure or impairment of the capital of any company in which
the insurance may then be carried, or if for any reason whatever the insurance
shall be unsatisfactory to Mortgagee, Mortgagor shall place new insurance on
the Mortgaged Property satisfactory to Mortgagee. All renewal policies, with
premiums paid, shall be delivered to Mortgagee at least thirty (30) days before
expiration of the old policies. In the event of loss, Mortgagor will give
immediate written notice thereof to Mortgagee, and Mortgagee may make proof of
loss if not made promptly by Mortgagor. Each insurance company concerned is
hereby authorized and directed to make payment under such insurance, including
return of the unearned premiums, directly to Mortgagee instead of to Mortgagor
and Mortgagee jointly, and Mortgagor appoints Mortgagee, irrevocably, as
Mortgagor's attorney-in-fact to endorse any draft therefor. Mortgagee shall
have the right to retain and apply the proceeds of any such insurance,
including any unearned premiums, at its election, to reduction of the
indebtedness secured hereby, or to restoration or repair of the property
damaged. If Mortgagee becomes the owner of the Mortgaged Property or any part
thereof by foreclosure or otherwise, such policies, including all right, title
and interest of the Mortgagor thereunder, shall become the absolute property of
Mortgagee.
11. SECURITY AGREEMENT
(a) This Mortgage constitutes a security agreement under
the New Jersey Uniform Commercial Code and creates a security interest in the
personal property included in the Mortgaged Property and the proceeds thereof.
Mortgagor represents and warrants that all such personal property (other than
personal property of individual tenants) is owned by Mortgagor free and clear
of all security interests, and all such personal property and replacements of,
substitutions for and additions to such personal property shall be owned (and
not leased) by Mortgagor free and clear of all security interests. Mortgagor
shall execute, deliver, file and refile any financing statements or other
security agreements Mortgagee may require from time to time to confirm the lien
of this Mortgage with respect to such property. Without limiting the foregoing,
Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor
to execute, deliver and file such instruments for and on behalf of Mortgagor.
Mortgagee, pursuant to the appropriate provisions of the Code, shall have an
option to proceed with respect to both the real property and personal property
included in the Mortgaged Property in accordance with its rights, powers and
remedies with respect to the real property, in which event the default
provisions of the Code shall not apply. The parties agree that if Mortgagee
shall elect to proceed with respect to the personal property separately from
the real property, fifteen (15) days' notice of the sale of the personal
property shall constitute reasonable notice. The expenses of retaking,
holding, preparing the sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, attorneys' fees and legal expenses incurred by
Mortgagee. Mortgagor agrees that, without the prior written consent of
Mortgagee, Mortgagor will not remove or permit to be removed from the Mortgaged
Property any of the personal property, except that so long as no Event of
Default has occurred hereunder, Mortgagor shall be permitted to sell or
otherwise dispose of the personal property when obsolete, worn out, inadequate,
unserviceable or unnecessary for use in the operation of the Mortgaged
Property, but only upon replacing the same or substituting for the same other
personal property at least equal in value and utility to the initial value and
utility of that disposed of and in such a manner that such replacement or
substituted personal property
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shall be subject to the security interest created hereby and that the security
interest of Mortgagee shall be perfected and first in priority, it being
expressly understood and agreed that all replacements, substitutions and
additions to the per sonal property shall be and become immediately subject to
the security interest of this Mortgage and covered hereby.
(b) The Mortgaged Property includes goods which are or
are to become fixtures and this Mortgage is intended to serve as a fixture
filing under Section 9-313 of the New Jersey Uniform Commercial Code.
12. FINANCIAL STATEMENTS
No later than June 1 each year, Mortgagor shall, at its sole
cost and expense, furnish to Mortgagee an annual financial statement of
Mortgagor, covering only the Mortgaged Property, prepared and certified by an
independent certified public accountant acceptable to Mortgagee. Mortgagor
shall also furnish to Mortgagee in addition to and simultaneous with the
financial statements, a statement reflecting the complete rental status of the
Mortgaged Property, which shall include the name of each tenant, the area in
square feet occupied by such tenant and the rental being paid, and, at any time
upon request therefor, such other information regarding occupancy and current
rentals as Mortgagee may require.
13. DECLARATION OF NO SET-OFF
Within five (5) business days after a written request to do so
by Mortgagee, Mortgagor shall certify to Mortgagee or to any proposed assignee
of this Mortgage, in a writing duly acknowledged, the amount of principal,
interest and other charges then owing on the obligation secured by this
Mortgage and whether there are any set-offs or defenses against it.
14. EVENTS OF DEFAULT
Each of the following shall constitute an event of default
hereunder ("Event of Default"):
(a) Failure of Mortgagor to pay any installment of
principal or interest or any other sum within five (5) business days of the
date on which such installment or sum is due under the Note, this Mortgage or
the Assignment of Leases (provided that Mortgagee will only grant such 5-day
grace period twice in any twelve-month period, and any failure thereafter to
make a payment on the due date shall constitute an Event of Default without any
grace period).
(b) Mortgagor's nonperformance of or noncompliance with,
for a period of twenty (20) days after written notice shall have been given to
Mortgagor, any of the other agreements, conditions, covenants, representations,
provisions or stipulations contained in the Note, this Mortgage or the
Assignment of Leases (provided that if such nonperformance or noncompliance
cannot reasonably be cured within twenty (20) days, an Event of Default shall
not occur hereunder if Mortgagor initiates curing the nonperformance or
noncompliance within such 20-day period and diligently pursues such cure to
completion within a reasonable time thereafter, not to exceed ninety (90) days
after such written notice).
(c) Any assignment for the benefit of creditors made by
Mortgagor.
(d) Appointment of a receiver, liquidator or trustee of
the Mortgagor or of any of the property of Mortgagor, insolvency of the
Mortgagor or the adjudication of Mortgagor as a bankrupt or the filing by the
Mortgagor (or against the Mortgagor if the same shall not be discharged within
60 days) of any case or petition for the bankruptcy, reorganization or
arrangement of Mortgagor pursuant to the Federal Bankruptcy Code or any similar
statute, or the institution of any proceeding for the dissolution or
liquidation of Mortgagor.
(e) Any material default by Mortgagor under any of the
Leases affecting the Mortgaged Property;
(f) Any dissolution, merger or change in legal form or
status of Borrower under applicable Delaware or New Jersey law.
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(g) Any warranty, representation or other statement made
by or on behalf of Mortgagor in or pursuant to this Mortgage (including,
without limitation, any financial statement delivered pursuant to Section 12)
proves to be false, incorrect or misleading in any material and adverse
respect.
(h) Entry of a final judgment not covered by insurance in
excess of $25,000 against Mortgagor or any person constituting Mortgagor, and
if, within thirty (30) days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal, or if, within
thirty (30) days after the expiration of any such stay, such judgment shall not
have been discharged.
(i) For purposes of this subsection, the word "Mortgagor"
shall include the persons named as Mortgagor herein, and any subsequent owner
of the Mortgaged Property; and for purposes of subsections (c), (d), (g) and
(h) hereof, the word "Mortgagor" shall include the general partners of
Mortgagor. All grace periods contained herein and in the Note or any of the
other documents evidencing or securing the Note shall run concurrently and not
consecutively.
15. REMEDIES
(a) Upon the happening of any Event of Default, the
entire unpaid balance of the principal, the accrued interest, the Acceleration
Premium (determined as set forth in the Note), and all other sums secured by
this Mortgage shall become immediately due and payable, at the option of
Mortgagee, without notice or demand.
(b) When the entire indebtedness shall become due and
payable, either because of maturity or because of the occurrence of any Event
of Default, or otherwise, then forthwith:
(i) Foreclosure: Mortgagee may institute
an action of mortgage foreclosure against the Mortgaged Property, or take such
other action, at law or in equity, for the enforcement of this Mortgage and
realization on the mortgage security or any other security herein or elsewhere
provided for, as the law may allow, and may proceed therein to final judgment
and execution for the entire unpaid balance of the principal debt, with
interest at the Default Rate stipulated in the Note to the date of such
judgment, and thereafter at the same rate (but if not permissible, then at the
highest judgment rate permitted by law), together with all other sums due by
Mortgagor in accordance with the provisions of the Note and this Mortgage,
including all sums which may have been loaned by Mortgagee to Mortgagor after
the date of this Mortgage, and all sums which may have been advanced by
Mortgagee for taxes, water or sewer rents, charges or claims, insurance,
inspection fees or repairs to the Mortgaged Property, all costs of suit, and a
reasonable attorney's commission for collection; and
(ii) Possession: Mortgagee may enter into
possession of the Mortgaged Property, with or without legal action; collect
therefrom all rentals (which term shall also include sums payable for use and
occupation), and, after deducting all costs of collection and administration
expense, apply the net rentals to the payment of taxes, water and sewer rents,
charges and claims, insurance premiums and all other carrying charges, and to
the inspection (including, without limitation, environmental inspection),
maintenance, repair or restoration of the Mortgaged Property, or on account and
in reduction of the principal or interest, or both, hereby secured, in such
order and amounts as Mortgagee, in Mortgagee's sole discretion, may elect; and
for that purpose, Mortgagor hereby assigns to Mortgagee all rentals due and to
become due under any Lease or rights to use and occupation of the Mortgaged
Property hereafter created, as well as all rights and remedies provided in such
Lease or at law or in equity for the collection of the rentals, and agrees to
confirm the aforesaid assignment by such collateral document or documents as
Mortgagee may require.
(c) Upon a foreclosure sale, the Mortgaged Property may
be sold as a single parcel or as any number of separate parcels, at Mortgagee's
option, and Mortgagor for itself and anyone claiming by, through or under it,
further hereby agrees that Mortgagee shall in no manner, in law or in equity,
be limited, except as herein provided, in the exercise of its rights in the
Mortgaged Property or in any other security hereunder or otherwise appertaining
to the Note or any other obligation secured by this Mortgage, whether by any
statute, rule or precedent which may otherwise require such security to be
marshalled in any manner, and Mortgagor, for itself and others as aforesaid,
hereby expressly waives and releases any right to or benefit thereof.
(d) Mortgagor hereby expressly waives and releases: (i)
all benefit that might accrue to Mortgagor by virtue of any present or future
law exempting the Mortgaged Property, or any part of the proceeds arising
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from any sale thereof, from attachment, levy or sale on execution, or providing
for any appraisement, valuation, stay of execution, exemption from civil
process, redemption or extension of time for payment, and (ii) unless
specifically required herein, all notices of Mortgagor's default or of
Mortgagee's election to exercise, or Mortgagee's actual exercise of, any option
or remedy under the Note or any security documents. Neither Mortgagor nor any
other person now or hereafter obligated for payment of all or any part of the
indebtedness secured hereby shall be relieved of such obligations by reason of
the failure of Mortgagee to comply with any request of Mortgagor or of any
other person so obligated to take action to foreclose on this Mortgage or
otherwise enforce any provisions of any security documents or the Note, or by
reason of the release, regardless of consideration, of all or any part of the
security held for the debt secured hereby, or by reason of any agreement or
stipulation between any subsequent owner of the Mortgaged Property and
Mortgagee extending the time of payment or modifying the terms of this Mortgage
or the Note without first having obtained the consent of Mortgagor or such
other persons; and in the latter event, Mortgagor and all other such persons
shall continue to be liable to make payment according to the terms of any such
extension or modification agreement, unless expressly released and discharged
in writing by Mortgagee. Mortgagee may release, regardless of consideration,
any part of the security held for the debt secured hereby without, as to the
remainder of the security, in any way impairing or affecting the lien of this
Mortgage or its priority over any subordinate lien. For payment of the debt
secured hereby, Mortgagee may resort to any other security therefor held by
Mortgagee in such order and manner as Mortgagee may elect.
(e) Mortgagor expressly waives the equity of redemption,
statutory right of redemption, dower and homestead and all other rights and
exemptions of every kind in and to the Mortgaged Property, and agrees that the
purchaser or purchasers of the Mortgaged Property shall have an absolute title
in fee simple.
(f) Mortgagee shall have, in addition to other rights and
remedies available at law or in equity, the rights and remedies of a Secured
Party under the New Jersey Uniform Commercial Code. Mortgagee may elect to
foreclose such of the property subject to the lien hereof as then comprise
fixtures pursuant either to the laws applicable to foreclosure of an interest
in real estate or to that applicable to personal property under the Uniform
Commercial Code.
(g) In addition to the foregoing, Mortgagee shall be
entitled to apply for the appointment of a receiver. Mortgagee shall not be
required to give any notice of application for the appointment of a receiver
and shall be entitled to such appointment without regard to the adequacy of any
security for the mortgaged debt or the solvency or insolvency of any person
obligated for the payment thereof, and such receiver shall be entitled to take
possession of the Mortgaged Property from the owner, tenants and/or occupants
of the whole or any part thereof and to collect and receive the rents and
profits and the value of the use and occupation of the Mortgaged Property or
any part thereof from the then owner, tenants and/or occupants thereof for the
benefit of the Mortgagee.
(h) Mortgagee shall have the right, from time to time,
after an Event of Default, to bring an appropriate action to recover any sums
required to be paid by Mortgagor under the terms of this Mortgage, as they
become due, without regard to whether or not the principal indebtedness or any
other sums secured by the Note and this Mortgage shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action of mortgage
foreclosure, or any other action, for any default by Mortgagor existing at the
time the earlier action was commenced.
(i) All rights and remedies granted or otherwise
available to Mortgagee shall be cumulative and concurrent and may be pursued
singly, successively or together at Mortgagee's sole option, and may be
exercised from time to time and as often as occasion therefor shall occur until
the indebtedness hereby secured with all interest thereon is paid in full.
16. OTHER MORTGAGES OR DEEDS OF TRUST
If Mortgagor shall fail to pay any installment of principal or
interest required under any other mortgage or deed of trust on the Mortgaged
Property (if permitted by Mortgagee), whether subordinate or prior to the lien
of this Mortgage, or shall fail to pay any tax, governmental levy or charge or
insurance premium, or to make any other payment required to be paid by
Mortgagor under such mortgage or deed of trust, at the time and in the manner
provided therein; or if Mortgagor shall fail to perform or observe any other
term, covenant, condition or obligation required to be performed or observed by
Mortgagor therein, then without limiting the generality of any other provision
of this Mortgage, and without waiving or releasing Mortgagor from any of its
obligations hereunder, Mortgagee shall have the right, but shall be under no
obligation, to pay any such installment of principal or interest and/or any
such tax, levy, premium, charge, or other payment, and may perform any other
act or take such action as may be appropriate to cause
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such other term, covenant, condition or obligation to be promptly performed or
observed on behalf of Mortgagor, to the end that Mortgagor's right in, to and
under such mortgage or deed of trust shall be kept unimpaired and free from
default. Mortgagee and any person designated by Mortgagee shall have, and is
hereby granted, the right to enter upon the Mortgaged Property at any time and
from time to time for the purpose of taking any such action, and all monies
expended by Mortgagee in connection therewith (including but not limited to,
legal expenses and disbursements), together with interest thereon at the
Default Rate provided for in the Note secured hereby from the date of each
expenditure, shall be paid by Mortgagor to Mortgagee forth with upon demand by
Mortgagee, and shall be secured by this Mortgage. Mortgagee shall have, in
addition to any other right or remedy, the same rights and remedies in the
event of default or nonpayment under any such mortgage or deed of trust as in
the case of a default by Mortgagor in the payment of any installment of
principal or interest due and payable hereunder.
17. PREPAYMENT
Mortgagor may prepay this Mortgage only on the terms and
conditions set forth in the Note.
18. LEASES; ESCROWS FOR LEASE TERMINATION
(a) Mortgagor covenants and agrees that Mortgagor will
not, without the prior written consent of Mortgagee (which consent may be
withheld in Mortgagee's sole discretion):
(i) receive or collect rents (other than
the customary security deposit) from any tenant, subtenant, undersubtenant or
other occupant of the Mortgaged Property for a period of more than one month in
advance; or
(ii) assign the rents, or any part thereof,
of the Mortgaged Property to any person or entity other than Mortgagee; or
(iii) enter into any lease for minimum
rentals less than those approved in writing by Mortgagee or for length of term
less than that approved in writing by Mortgagee; or
(iv) enter into any lease other than that
which is in form and content substantially the same as the form of lease
approved in writing by Mortgagee.
(b) Mortgagor covenants and agrees to perform and to
observe all the material agreements imposed upon Mortgagor under any leases of
or occupancy agreements for the Mortgaged Property or any portions thereof, and
not to do, or to permit to be done, anything to impair the security thereof; if
any of such leases shall require security deposits, to establish if required by
law an interest-bearing security deposit account in accordance with such law,
and to deposit all security deposits therein, and to maintain true and accurate
records of all security deposits received, and to pay interest thereon, if the
same be required by law or by the terms of the leases; and to comply with all
requirements of law concerning security deposits received.
(c) (i) In the event that any Lease is
terminated hereafter and payments or damages of any kind are received by
Mortgagor in connection with such termination (collectively, "Termination
Proceeds"), such Termination Proceeds shall immediately be paid over to GMAC
Mortgage Corporation, or such other agent as Mortgagee shall designate in
writing, to be held in escrow and released for tenant improvement work upon
receipt by Mortgagee of an executed replacement Lease acceptable to Mortgagee
with a term of at least five (5) years and with a rent acceptable to Mortgagee
based on then-current market conditions. Termination Proceeds shall be held in
an interest bearing account, with interest to follow principal. If no tenant
improvement work is required under such approved replacement Lease, the
escrowed payments shall be released to Mortgagor upon occupancy of the leased
space by the tenant under the approved replacement Lease.
(ii) Notwithstanding the provisions of
subsection (c)(i) above, if Computer Sciences Corporation ("CSC") terminates
its current lease ("CSC Lease"), Mortgagor shall pay into escrow with GMAC
Mortgage Corporation the sum of $75,000 per month for each of the three
consecutive calendar months beginning sixty (60) days after receipt of the
termination notice ("CSC Proceeds"). If CSC subsequently resumes or extends
the CSC Lease, the CSC Proceeds shall be returned to Mortgagor. The CSC
Proceeds shall be held in an interest bearing
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account, with interest to follow principal. The CSC Proceeds shall be released
for tenant improvement work, in amount equal to the lesser of $10.00 per square
foot or the actual cost thereof, upon receipt by Mortgagee of an executed
replacement Lease acceptable to Mortgagee with a term of at least five (5)
years and with a gross rent of at least $18.00 per square foot, or with such
other terms as shall be acceptable to Mortgagee based on then-current market
conditions. The provisions of this subsection (c)(ii) shall terminate and
expire upon renewal by Computer Sciences Corporation of the CSC Lease for a
renewal term of at least five (5) years on financial terms at least as
favorable to Mortgagor as those in the CSC Lease.
(iii) Upon the occurrence of an Event of
Default hereunder, and notwithstanding the provisions of Section 28, all
Termination Proceeds and CSC Proceeds then being held by GMAC Mortgage
Corporation or any other agent designated by Mortgagee shall immediately be
released to Mortgagee and applied to any amounts due the Mortgagee following
such an Event of Default.
19. MANAGEMENT OF MORTGAGED PROPERTY
During the term of this Mortgage, the Mortgaged Property shall
be managed, at all times, by a manager (the "Manager") reasonably satisfactory
to Mortgagee, which Manager shall be controlled by Mortgagor. Any substitute
Manager or change in arrangements for leasing and management must be approved
in writing by Mortgagee prior to such substitution or change being effected.
Mortgagor covenants and agrees that this Section 19 is of the essence of this
Mortgage and that Mortgagee will be prejudiced by a violation hereof in that
Mortgagee is relying upon the expertise and business acumen of the Manager.
20. INDEMNIFICATION OF MORTGAGEE
Mortgagor hereby agrees to and does hereby indemnify, protect,
defend and save harmless Mortgagee and its officers, directors, employees,
agents, attorneys and shareholders from and against any and all losses,
damages, expenses or liabilities of any kind or nature and from any suits,
claims or demands, including reasonable counsel fees incurred in investigating
or defending such claims, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Mortgage and
the transactions contemplated herein, including, but not limited to, (a)
disputes between any architect, general contractor, subcontractor, materialman
or supplier, or on account of any act or failure to act by Mortgagee in
connection with this Mortgage, or (b) losses, damages, expenses or liabilities
sustained by Mortgagee pursuant to any provisions contained in any federal,
state or local environmental law, ordinance, rule or regulation, or (c) any
violation of the covenants and representations contained in Section 4(b)-(j)
hereof. THE INDEMNIFICATION OBLIGATIONS OF MORTGAGOR UNDER THIS SECTION 20(b)
AND (c) SHALL NOT BE SUBJECT TO THE LIMITATIONS OF LIABILITY SET FORTH IN
SECTION 28 HEREOF OR IN THE NOTE. In case any action shall be brought against
Mortgagee based upon any of the above and in respect to which indemnity may be
sought against Mortgagor, Mortgagee shall promptly notify Mortgagor in writing,
and Mortgagor shall assume the defense thereof, including the employment of
counsel selected by Mortgagor and satisfactory to Mortgagee, the payment of all
costs and expenses and the right to negotiate and consent to settlement. Upon
determination made by Mortgagee, Mortgagee shall have the right to employ
separate counsel in any such action and to participate in the defense thereof.
Mortgagor shall not be liable for any settlement of any such action effected
without its consent, but if settled with Mortgagor's consent, or if there be a
final judgment for the claimant in any such action, Mortgagor agrees to
indemnify and save harmless Mortgagee from and against any loss or liability by
reason of such settlement or judgment.
21. IMPOSITION OF TAX
Mortgagor covenants and agrees to pay and discharge when due
any taxes, fees or other charges imposed by any Federal, State or local
authority, including interest and penalties thereon, if any, or thereafter
becoming payable on this Mortgage or the Note secured hereby (excluding any
Federal or state income taxes of Mortgagee). Mortgagor further covenants and
agrees to pay upon demand all fees, charges or taxes (excluding any Federal or
state income taxes of Mortgagee), if any, and interest and penalties thereon,
if any, imposed on Mortgagee as a condition or as a result of the making of
this loan in the State of New Jersey.
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22. MISCELLANEOUS
(a) No delay or failure of Mortgagee to exercise any
right or option herein given or reserved shall constitute a waiver of such
right or estop Mortgagee from afterwards exercising such option, and
contracting to pay by Mortgagee of anything Mortgagor has herein agreed to pay
shall not constitute a waiver of the default of Mortgagor in failing to make
such payments and shall not estop Mortgagee from foreclosing this Mortgage on
account of such failure of Mortgagor. The rights, options, powers and remedies
herein provided shall be cumulative and no one or more of them shall be
exclusive of the other or others, or of any right or remedy now or hereafter
given or allowed by law.
(b) Mortgagor waives the benefit of any appraisement laws
of the State of New Jersey.
23. EXTENSIONS AND MODIFICATIONS
No extension or indulgence granted to Mortgagor, and no
alteration, change or modification of the Note consented or agreed to by
Mortgagee, and no other act or omission of Mortgagee, including the taking of
additional security or the release or subordination of any security, shall
constitute a release of the lien and obligation of this Mortgage or be
interposed as a defense against the enforcement of this Mortgage, except a
writing signed by Mortgagee which constitutes an express, effective release and
satisfaction of the Note.
24. NO THIRD PARTY BENEFICIARIES
The parties do not intend the benefits of this Mortgage to
inure to any third party, except for the successors and assigns of Mortgagee.
Notwithstanding anything contained herein or in the Note, or any other document
executed in connection herewith, or any conduct or course of conduct by either
or both of the parties hereto, or their respective affiliated companies, agents
or employees, before or after the execution hereof, this Mortgage shall not be
construed as creating any rights, claims or causes of action in favor of any
person or entity other than Mortgagor and Mortgagee.
25. NOTICES
All notices, requests and demands upon the respective parties
hereto shall be effective when hand delivered to such party at the address set
forth below, or if sent by overnight delivery service, on the next business
day, or if sent by United States mail, postage prepaid, registered or certified
mail, on the second business day after the day on which mailed or sent,
addressed to such party as follows:
To Mortgagee: Sun Life Assurance Company
of Canada (U.S.)
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attention: Virginia M. Ayers,
Sr. Property Investments Officer
With copies to: John Cannon, Assistant Vice President
GMAC Mortgage Corporation
8360 Old York Road
Elkins Park, PA 19117
Gregory Kleiber, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street
Philadelphia, PA 19103
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<PAGE> 14
To Mortgagor: 1120 Associates Limited Partnership
2 Eves Drive
Marlton, New Jersey 08053
With a copy to: Robert E. Schwartz, Esquire
Sherman, Silverstein, Kohl, Rose & Podolsky
4300 Haddonfield Road, Suite 311
Pennsauken, NJ 08109
or to such other address as may be furnished in writing for such purpose.
26. COMMERCIAL LOAN
Mortgagor represents and warrants that the loan secured by
this Mortgage was obtained solely for the purpose of carrying on or acquiring a
business or commercial investment.
27. NO AGENCY, JOINT VENTURE OR PARTNERSHIP BETWEEN
MORTGAGOR AND MORTGAGEE
This Mortgage shall not be construed as a partnership, joint
venture, other business entity formation, lease or sale. Mortgagee is not now
a partner or joint venturer with Mortgagor in any respect or for any purpose in
the conduct of Mortgagor's business. Mortgagor is not the agent,
representative, partner of, or joint venturer with Mortgagee and will act
accordingly. This Mortgage shall not be construed to make Mortgagee liable to
any person or persons for goods or services furnished to the Mortgaged
Property, or for debts or claims accruing therefrom against Mortgagor. There
shall be no contractual relation, either express or implied, between Mortgagee
and any person or per sons supplying any work or materials to the Mortgaged
Property.
28. LIMITED LIABILITY
The liability of Mortgagor hereunder shall be limited to and
enforceable only out of the Mortgaged Property and the rents, issues and
profits therefrom, and the lien of any judgment shall be restricted thereto and
shall not extend to Mortgagor, Mortgagee waving any right Mortgagee may have to
claim a deficiency judgment against Mortgagor; provided, however, that
Mortgagor and Mortgagor's general partner shall not be exonerated or exculpated
from, and shall be liable for, any deficiency, loss or damage suffered by
Mortgagee as a result of any security deposits received or held by Mortgagor,
any rent received or held by Mortgagor after an Event of Default, or any rent
prepaid more than one month in advance; or from Mortgagor's failure to properly
account to Mortgagee for any proceeds of insurance or condemnation proceeds as
required by this Mortgage; or from repairs required by the Mortgaged Property
following a casualty for which insurance proceeds are not available due to a
violation of Section 10 hereof; or from fraud, material misrepresentation or
bad faith by Mortgagor; or from waste of the Mortgaged Property; or from
delinquent taxes or assessments; or from Mortgagor's violation of, or failure
to perform its obligations under, Section 4(b)-(j) or Section 20(b) or (c) of
this Mortgage. Nothing in this subsection, however, shall limit Mortgagee's
rights against any tenants under leases assigned to Mortgagee as additional
security or against any other collateral securing Mortgagor's obligations, now
or hereafter mortgaged, pledged or assigned by Mortgagor or anyone else to
Mortgagee.
29. COUNSEL FEES
(a) If Mortgagee becomes a party to any suit or
proceeding affecting the Mortgaged Property or title thereto, the lien created
by this Mortgage or Mortgagee's interest therein, or if Mortgagee engages
counsel to collect any of the indebtedness or to enforce performance of the
agreements, conditions, covenants, provisions or stipulations of this Mortgage
or the Note, Mortgagee's costs, expenses and reasonable counsel fees, whether
or not suit is instituted, shall be paid to Mortgagee by Mortgagor, on demand,
with interest at the Default Rate set forth in the Note, and until paid, they
shall be deemed to be part of the indebtedness evidenced by the Note and
secured by this Mortgage.
(b) Regardless of whether any proceeds of the loan
evidenced by the Note have been disbursed, this Mortgage also secures the
payment of all loan commissions, service charges, reasonable attorney's fees,
liquidated damages, expenses and advances due to or incurred by Mortgagee in
connection with the loan transaction intended to be
-14-
<PAGE> 15
secured hereby, all in accordance with the application of, and the Loan
Commitment issued to and accepted by, Mortgagor in connection with the loan.
30. PARTIAL INVALIDITY
The unenforceability or invalidity of any one or more
provisions, clauses, sentences, and/or paragraphs hereof shall not render any
other provisions, clauses, sentences and/or paragraphs herein contained
unenforceable or invalid.
31. BINDING EFFECT
The covenants, conditions and agreements contained in this
Mortgage shall bind, and the benefits thereof shall inure to, the respective
parties hereto and their respective heirs, personal representatives, successors
and assigns. If Mortgagor is at any time constituted by more than one person,
the obligations of each such person shall be joint and several.
32. SURVIVAL OF COMMITMENT
The covenants, conditions and agreements contained in
Mortgagee's Loan Commitment to Mortgagor dated January 13, 1995, shall survive
the execution hereof, and any breach or violation thereof by Mortgagor shall
con stitute an Event of Default hereunder.
33. GOVERNING LAW
This Mortgage shall be construed in accordance with and
governed by the laws of the State of New Jersey.
34. AMENDMENT
This Mortgage cannot be changed, modified or amended except by
agreement in writing signed by the party against whom enforcement of the
change, modification or amendment is sought.
35. CAPTIONS
The captions preceding the text of the sections of this
Agreement are used solely for convenience of reference and shall not affect the
meaning or construction of this Mortgage.
36. WAIVER
Mortgagor hereby waives the right to trial by jury in any
action by Mortgagee to enforce Mortgagee's rights under the Note, this Mortgage
or any other document evidencing or securing the Note.
37. ACKNOWLEDGMENT
MORTGAGOR ACKNOWLEDGES THAT THIS MORTGAGE CONTAINS A WAIVER OF
TRIAL BY JURY IN SECTION 36.
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<PAGE> 16
WITNESS the due execution hereof the day and year first above
written.
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Palomino Corporation, a Pennsylvania corporation,
general partner
By: /s/ Joseph D. Gonnelli
--------------------------------------------
Joseph D. Gonnelli, Vice President
Attest: /s/ R. Brian Jackson
----------------------------------------
R. Brian Jackson, Secretary
-16-
<PAGE> 17
State of New Jersey, County of __________
I am an officer authorized to take acknowledgments and proofs in this
state.
On March __, 1995, __________________________ ("Witness") appeared
before me in person. The Witness was duly sworn by me according to law under
oath and stated and proved to my satisfaction that:
1. The Witness is the (Assistant) Secretary of the corporation
that executed this document ("Corporation").
2. _______________, the officer who signed this document, is the
President of the corporation ("Corporate Officer").
3. The making, signing, sealing, and delivery of this document
have been duly authorized by a proper resolution of the Board of Directors of
the Corporation.
4. The Witness knows the corporate seal of the Corporation. The
seal affixed to this document is the corporate seal of the Corporation. The
seal was affixed to this document by the Corporate Officer. The Corporate
Officer signed and delivered this document as and for the voluntary act and
deed of the Corporation. All of this was done in the presence of the Witness
who signed this document as attesting witness. The Witness signs this proof to
attest to the truth of these facts.
Sworn to and signed before me on the date written above.
Witness:
-----------------------
Name:
--------------------------
Notary:
-----------------------
Name:
-------------------------
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<PAGE> 1
EXHIBIT 10.7
March 14, 1995
1120 Associates Limited Partnership
2 Eves Drive
Marlton, New Jersey 08053
Re: $6,500,000 Loan from Sun Life Assurance Company of
Canada (U.S.) ("Loan")
Dear Sir:
This letter sets forth certain agreements between Sun Life Assurance
Company of Canada (U.S.) ("Mortgagee") and 1120 Associates Limited Partnership
("Mortgagor"), regarding (i) the release by Mortgagee of condemnation award
proceeds following a taking or condemnation and insurance proceeds following a
casualty, (ii) transfers of partnerships interests and the property encumbered
by the Mortgage ("Mortgaged Property"), and (iii) subordinate indebtedness.
Capitalized terms used herein have the same meaning as set forth in the
Mortgage and Security Agreement of even date herewith from 1120 Associates
Limited Partnership to us (the "Mortgage").
1. (a) Notwithstanding anything to the contrary set forth in
Section 8 of the Mortgage, Mortgagee agrees that (provided no Event of Default
has occurred under the Mortgage or under the Note or any other document given
as collateral security for the Note, and subject to the provisions of
subsection (c) below) in the event of a con demnation or taking, Mortgagee will
make available to Mortgagor the proceeds received by it for purposes of
restoration of the Mortgaged Property on the following terms and conditions:
(i) prior to the commencement of
restoration, the contracts, contractors, and plans and specifications for the
restoration shall have been approved by Mortgagee, and Mortgagee, at its
option, shall be provided with a surety bond insuring satisfactory completion
of the restoration, such insurance and bond to be in form acceptable to
Mortgagee;
(ii) at the time of any disbursement
Mortgagor shall not be in default hereunder, no mechanics' or materialmen's
liens shall have been filed and remain undischarged (or unbonded if contested
in good faith) and a satisfactory bringdown of title insurance shall be
delivered to Mortgagee;
(iii) disbursements shall be made from time to
time in an amount not exceeding the cost of the work completed since the last
disbursement, upon approval by Mortgagee's engineer and receipt of satisfactory
evidence of the stage of completion and of performance of the work in good and
workmanlike manner in accordance with the contracts, plans and specifications;
(iv) the restoration fund shall be deposited
in an escrow account with Mortgagee; and
(v) such restoration and the disbursement of
the restoration fund shall be otherwise effected in accordance with the
provisions of Mortgagee's standard building loan agreement.
(b) Prior to the commencement of restoration, or at any
time thereafter, if the estimated cost of restoration, as reasonably determined
by Mortgagee, exceeds the amount of proceeds paid on account of the cost of
such restoration, the amount of such excess shall be paid by Mortgagor to
Mortgagee in cash or by means of other security satisfactory to Mortgagee, and
shall be added to the restoration fund.
(c) If no restoration is necessary, or if the Mortgaged
Property cannot be restored to a condition functionally similar to its
condition prior to the taking within one hundred eighty (180) days, or if any
material Lease is terminated by the tenant as a result of such condemnation,
Mortgagee, at its sole option, shall apply all or part of the proceeds to
reduce the outstanding principal indebtedness secured hereby, and shall pay
over to Mortgagor the balance not so applied (if any).
<PAGE> 2
(d) If, prior to the receipt of the proceeds by
Mortgagee, the Mortgaged Property shall have been sold on foreclosure of the
Mortgage, Mortgagee shall have the right to receive the proceeds to the extent
of:
(i) any deficiency found to be due to
Mortgagee in connection with the foreclosure sale, with interest thereon, at
the Default Rate set forth in the Note, and
(ii) reasonable counsel fees, costs and
disbursements incurred by Mortgagee in connection with the collection of the
proceeds.
(e) If the amount of the initial award of damages for the
total condemnation is insufficient to pay in full the indebtedness secured
hereby with interest and other appropriate charges, Mortgagee shall have the
right to prosecute to final determination or settlement an appeal or other
appropriate proceedings in the name of Mortgagee or Mortgagor, for which
Mortgagee is hereby appointed irrevocably as attorney-in-fact for Mortgagor.
In that event, the reasonable expenses of the proceedings, including reasonable
counsel fees, shall be paid first out of the proceeds, and only the excess, if
any, paid to the Mortgagee shall be credited against the amounts due under this
Mortgage.
(f) Nothing herein shall limit the rights otherwise
available to Mortgagee, at law or in equity, including the right to intervene
as a party to any condemnation proceedings.
2. (a) Notwithstanding anything to the contrary set forth in
Section 10 of the Mortgage, Mortgagee agrees that (provided that no Event of
Default has occurred under the Mortgage or under the Note or any other document
given as collateral security for the Note, and provided that the Mortgaged
Property can, in Mortgagee's opinion, be restored to its condition on the date
hereof within 180 days following the casualty) in the event of such loss or
damage or casualty, Mortgagee will make available the proceeds received by it
for purposes of restoration of the Mortgaged Property on the following terms
and conditions:
(i) prior to the commencement of
restoration, the contracts, contractors, and plans and specifications for the
restoration shall have been approved by Mortgagee, and Mortgagee, at its
option, shall be provided with a surety bond insuring satisfactory completion
of the restoration, such insurance and bond to be in form reasonably acceptable
to Mortgagee;
(ii) at the time of any disbursement
Mortgagor shall not be in default under the Mortgage, no mechanics' or
materialmen's liens shall have been filed and remain undischarged (or unbonded
if contested in good faith) and a satisfactory bringdown of title insurance
shall be delivered to Mortgagee;
(iii) disbursements shall be made from time to
time in an amount not exceeding the cost of the work completed since the last
disbursement, upon approval by Mortgagee's engineer and receipt of satisfactory
evidence of the stage of completion and of performance of the work in good and
workmanlike manner in accordance with the contracts, plans and specifications;
(iv) the restoration fund shall be deposited
in an escrow account with Mortgagee; and
(v) such restoration and the disbursement of
the restoration fund shall be otherwise effected in accordance with the
provisions of Mortgagee's standard building loan agreement.
(b) Prior to the commencement of restoration, or at any
time thereafter, if the estimated cost of restoration, as reasonably determined
by Mortgagee, exceeds the amount of proceeds paid on account of the cost of
such restoration, the amount of such excess shall be paid by Mortgagor to
Mortgagee in cash or by means of other security satisfactory to Mortgagee, and
shall be added to the restoration fund.
(c) If no restoration is necessary, Mortgagee, at its
sole option, shall apply all or part of the insurance proceeds to reduce the
outstanding principal indebtedness secured hereby, and shall pay over to
Mortgagor the balance not so applied (if any).
3. Notwithstanding anything to the contrary set forth in Section
7 of the Mortgage, (i) limited partnership interests in Mortgagor, and shares
or partnership interests in the entities composing Mortgagor, may be
transferred by
2
<PAGE> 3
the existing partners without Mortgagee's consent, but with prior written
notice to Mortgagee, so long as Dr. A.M.H.M. Sallam and Lulua Sallam remaining
controlling shareholders of Palomino Corporation, which shall at all times
remain the general partner of Mortgagor, and (ii) Mortgagee shall not
unreasonably withhold its consent to a one-time transfer of the Mortgaged
Property to a purchaser approved by Mortgagee, in its sole discretion, as to
financial strength, reputation and experience in owning and operating
commercial real estate; provided, however, that any such consent shall be
conditioned upon (A) receipt by Mortgagee from Mortgagor of a transfer fee
equal to one and one-half percent (1.5%) of the then-outstanding principal
balance, and (B) Mortgagor's payment of all costs and expenses, including
without limitation Mortgagee's legal fees, incurred in connection with such
transfer.
4. Notwithstanding the restrictions in Section 6 of the Mortgage:
(a) Mortgagor may grant a subordinate mortgage
("Subordinate Mortgage") to secure a standard amortizing loan ("Subordinate
Loan") from a financial institution approved in advance by Mortgagee, provided
that the amount of the Subordinate Loan shall not exceed $200,000. The
Subordinate Mortgage may not be granted until Mortgagee has approved in writing
the identity of the lender as set forth above. Any such lender shall further
be required to execute a Subordination Agreement in form reasonably approved by
Mortgagee. Mortgagor shall pay all costs and expenses, including without
limitation Mortgagee's legal fees, incurred by Mortgagee in connection with
such Subordinate Loan.
(b) In the event that the Mortgaged Property is
transferred in accordance with the requirements of Section 3 above, the
purchaser of the Mortgaged Property shall be permitted to grant a subordinated
purchase money mortgage ("Subordinate Purchase Mortgage") to secure a purchase
money loan from Mortgagor, or from a financial institution approved in advance
by Mortgagee, with terms and conditions approved in advance by Mortgagee
("Subordinated Purchase Loan") in an amount which, when added to the unpaid
principal balance of the loan secured by this Mortgage, shall not exceed
seventy five percent (75%) of the purchase price of the Mortgaged Property.
The Subordinate Purchase Mortgage may not be granted until Mortgagee has
approved in writing the identity of the lender and the terms and conditions as
set forth above. Any such lender shall further be required to execute a
Subordination Agreement in form reasonably approved by Mortgagee. Mortgagor
shall pay all costs and expenses, including without limitation Mortgagee's
legal fees, incurred by Mortgagee in connection with such Subordinate Purchase
Loan.
5. Dr. A.M.H.M. Sallam shall execute and deliver to Mortgagee on
the date hereof a Master Lease of the Computer Sciences Corporation premises
for a term of six (6) years, at the same rent as the CSC Lease but not less
than $18.50 per square foot gross, and otherwise on the same terms and
conditions as the CSC Lease. Any default by Dr. Sallam under such Master Lease
shall be an Event of Default under the Note and Mortgage. The provisions of
this subsection 5 shall terminate and expire upon renewal by Computer Sciences
Corporation of the CSC Lease for a renewal term of at least five (5) years on
financial terms at least as favorable to Mortgagor as those in the CSC Lease.
Please acknowledge your agreement to these terms by executing a copy of this
letter.
SUN LIFE ASSURANCE COMPANY OF
CANADA (U.S.)
By: /s/ Jeffrey J. Skerry
-----------------------------------------------
Jeffrey J. Skerry, Associate Counsel
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Palomino Corporation, a Pennsylvania corporation,
general partner
By: /s/ Joseph D. Gonnelli
---------------------------------------
Joseph D. Gonnelli, Vice President
Attest: /s/ R. Brian Jackson
----------------------------------
R. Brian Jackson
3
<PAGE> 1
EXHIBIT 10.8
MORTGAGE NOTE
$6,500,000.00 Dated: October 19, 1994
MLCP ASSOCIATES LIMITED PARTNERSHIP
(hereinafter called "Maker")
to
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(hereinafter called "Holder")
FOR VALUE RECEIVED, MLCP ASSOCIATES LIMITED PARTNERSHIP, a
Delaware limited partnership (the "Maker"), promises to pay to the order of SUN
LIFE ASSURANCE COMPANY OF CANADA (U.S.), a Delaware corporation, its successors
and assigns (the "Holder"), in lawful money of the United States of America,
the sum of SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000.00) (the
"Loan") as follows:
1. The principal balance of the Loan shall bear interest
at the rate of nine and one-quarter percent (9.25%) per annum (the "Accrual
Rate"). The principal balance and interest thereon shall be payable in
consecutive monthly installments of $66,897.50 (based on amortization of the
principal balance of the Loan over a hypothetical fifteen year term) commencing
on the first day of the second calendar month after disbursement of the Loan,
and continuing on the first day of each month thereafter, such amount being
first applied to interest and then to the reduction of principal. Interest for
the period from the date the Loan is funded until the first day of the
following calendar month shall be payable on the date hereof. Interest will be
computed according to the Bankers Rule, i.e., the actual amount of days x rate
of interest x principal/360. The entire balance of principal and all interest
outstanding hereunder shall be due and payable on November 1, 2004 ("Maturity
Date").
2. Prepayment of the Loan shall not be permitted during
the first sixty (60) months of the Loan term. Prepayment in full only of the
principal of the Loan will be permitted at any time during the last sixty (60)
months of the Loan term upon thirty (30) days' prior written notice to Holder.
Such prepayment shall be accompanied by additional interest ("Additional
Interest") equal to the greater of (i) one percent (1%) of the unpaid principal
balance of the Loan on the date of prepayment, or (ii) that amount which is
calculated as of the date of the prepayment as follows: (A) the Prepayment
Treasury Yield (as defined below) is subtracted from 9.25%, and the difference
(but not less than 0)
<PAGE> 2
is (B) divided by twelve, and the quotient thereof is then (C) multiplied by
the then outstanding balance of the Loan to determine the monthly payment
differential, and (D) the present value of the series of monthly payment
differentials for the number of whole and partial months from the prepayment
date to the maturity date is determined using the Prepayment Treasury Yield as
the discount rate and compounding monthly, and (E) the present values of such
monthly payment differentials are added together. The term "Prepayment
Treasury Yield" means the yield which would be available if the proceeds of the
prepayment were invested on the date of the prepayment in a debt obligation of
the United States Treasury (other than a Flower Bond) having a maturity most
closely equivalent to that of the Loan (and if more than one Treasury
obligation has the same maturity, then the obligation offering the highest
yield), as determined by quotations published in The Wall Street Journal on the
date five (5) business days before the prepayment. If the difference between
9.25% and the Prepayment Treasury Yield is less than 0, the Additional Interest
shall equal one percent (1%) of the unpaid principal balance of the Loan. For
purposes of calculating Additional Interest, the first month of the Loan term
shall begin on the first day of the first calendar month after the date hereof.
Notwithstanding the foregoing, prepayment in full only of the principal of the
Loan will be permitted during the last three (3) months of the Loan term upon
five (5) days' prior written notice to Holder without Additional Interest.
Partial prepayment shall not be permitted at any time.
3. All payments due hereunder shall be made at the
offices of Sun Life Assurance Company of Canada (U.S.), One Sun Life Executive
Park, Wellesley Hills, Massachusetts 02181, or elsewhere, as shall be directed
by written notice by any holder hereof.
4. Maker acknowledges that the failure of Maker to make
any payment within five (5) days after the payment is due and payable will
cause Holder to incur additional expense in servicing the indebtedness
evidenced by this Note, the precise measure of which expense is not susceptible
to exact determination. Accordingly, it is further agreed that Holder may
collect a late charge of four percent (4%) of each payment more than five (5)
days in arrears, which Maker agrees is a reasonable basis on which to cover the
extra expense involved in handling delinquent payments. This shall not be
construed to obligate Holder to accept any overdue installment nor to limit
Holder's rights and remedies for Maker's default, as hereinafter set forth.
-2-
<PAGE> 3
5. This Note accompanies and is secured, inter alia, by
a Mortgage and Security Agreement of even date herewith (the "Mortgage"), made
and executed by Maker upon real estate and the building and improvements
thereon known as 1000 Howard Boulevard, situate on approximately 6.34 acres of
land located in Mount Laurel Township, Burlington County, New Jersey, as more
particularly identified in the Mortgage (the "Mortgaged Property"), and by an
Assignment of Leases and Agreement of even date herewith (the "Assignment of
Leases"), made and executed by Maker with respect to the Mortgaged Property.
(This Note, the Mortgage, the Assignment of Leases and any other documents
executed by Maker to Holder in connection herewith are hereinafter referred to
collectively as the "Loan Documents"). All of the terms of the Loan Documents
are incorporated herein by reference and Maker does hereby covenant and agree
to comply with all of the terms, conditions and provisions of the Loan
Documents. Any Event of Default under any of the Loan Documents shall
constitute an Event of Default under this Note.
6. Maker agrees that if Maker shall, without in each
instance obtaining the prior written consent of Holder, sell, transfer, or
convey (herein all called "transfer") the Mortgaged Property or any interest
therein (other than leases of portions of the Mortgaged Property in the
ordinary course of Maker's business made in accordance with the terms of the
Assignment of Leases, and otherwise as expressly permitted in Section 7 of the
Mortgage) whether voluntarily or by operation of law, then, at the option of
Holder, the maturity of this Note shall be advanced to the date of such
transfer, whereupon the obligations of Maker evidenced by this Note shall
immediately be due and payable. For purposes of this paragraph, any transfer
of partnership interests in Maker, other than as expressly permitted in Section
7 of the Mortgage, shall constitute a transfer of the Mortgaged Property.
7. This Note, the Mortgage, the Assignment of Leases and
the other Loan Documents shall evidence and secure any future loans or advances
that may be made to or on behalf of Maker by Holder, at any time or times
hereafter intended by Maker and Holder to be so evidenced and secured, as well
as any sums paid by Holder pursuant to the terms of the Mortgage, and any such
loans, advances or payments shall be added to and shall bear interest at the
Default Rate (as hereinafter defined). The parties expressly agree that this
Note shall have the full force, effect and benefits of a note to secure
advances of money, the lien of which advances relate to the date of this Note.
8. The occurrence of any of the following shall
constitute an Event of Default hereunder: Maker's failure to make payment of
any installment of principal or interest or any other sum within five (5)
business days
-3-
<PAGE> 4
of the date on which such installment or sum is due under this Note (provided
that Holder will only grant such 5-day grace period twice in any twelve-month
period, and any failure thereafter to make a payment on the due date shall
constitute an Event of Default without any grace period); or Maker's
nonperformance of, or noncompliance with, any of the other agreements,
conditions, covenants, provisions or stipulations contained in this Note, for a
period of twenty (20) days after written notice thereof to Maker (provided that
if such nonperformance or noncompliance cannot reasonably be cured within
twenty (20) days, an Event of Default shall not occur hereunder if Maker
initiates curing the nonperformance or noncompliance within such 20-day period
and diligently pursues such cure to completion within a reasonable time
thereafter, not to exceed ninety (90) days after such written notice); or the
occurrence of an Event of Default under the Mortgage, the Assignment of Leases
or any of the other Loan Documents. Upon the occurrence of an Event of Default
hereunder,
(a) the interest rate payable hereunder during the
continuance of the Event of Default shall be at a rate (the "Default Rate")
three (3%) percent in excess of the Accrual Rate.
(b) The entire unpaid balance of the principal debt,
additional loans or advances and all other sums paid by Holder to or on behalf
of Maker pursuant to the terms of this Note or the Mortgage, together with
unpaid interest thereon and the Acceleration Premium (as defined below), shall
at the option of the Holder and without notice become immediately due and
payable. The term "Acceleration Premium" shall refer to an amount equal to the
greater of (i) three percent (3%) of the unpaid principal balance of the Loan
on the date of acceleration, or (ii) that amount which is calculated as of the
date of the acceleration as follows: (A) the Acceleration Treasury Yield (as
defined below) is subtracted from 9.25%, and the difference (but not less than
0) is (B) divided by twelve, and the quotient thereof then (C) multiplied by
the then outstanding balance of the Loan to determine the monthly payment
differential, and (D) the present value of the series of monthly payment
differentials for the number of whole and partial months from the prepayment
date to the maturity date is determined using the Acceleration Treasury Yield
as the discount rate and compounding monthly, and (E) the present values of
such monthly payment differentials are added together. The term "Acceleration
Treasury Yield" means the yield which would be available if the proceeds of the
acceleration were invested on the date of the acceleration in a debt obligation
of the United States Treasury (other than a Flower Bond) having a coupon
interest rate and maturity most closely equivalent to that of the Loan, as
determined by quotations
-4-
<PAGE> 5
published in The Wall Street Journal on the date five (5) business days before
the acceleration. If the difference between 9.25% and the Acceleration
Treasury Yield is less than 0, the Acceleration Premium shall equal three
percent (3%) of the unpaid principal balance of the Loan.
9. Maker waives the benefit of any laws which now or
hereafter might authorize the stay of any execution to be issued on any
judgment recovered on this Note or the exemption of any property from levy or
sale thereunder. Maker also waives and releases unto Holder and its attorney,
all errors, defects and imperfections whatsoever in the entering of any
judgment or any process or proceedings relating thereto.
10. Maker hereby waives presentment for payment, demand,
protest, notice of protest, and of dishonor and nonpayment of this Note, and
consents that Holder may extend the time of payment or otherwise modify the
terms of payment of any part or the whole of the debt evidenced by this Note,
at the request of any person holding title to the Mortgaged Property described
in the Mortgage, and such consent shall not alter or diminish the liability of
any person hereunder.
11. The remedies of this Note, the Mortgage, the
Assignment of Leases and the other Loan Documents providing for the enforcement
of the payment of the principal sum thereby secured, together with interest
thereon, and for the performance of the covenants, conditions, and agreements
herein and therein contained, are cumulative and concurrent and may be pursued
singly or successively or together, at the sole discretion of Holder, and may
be exercised as often as occasion therefor shall occur. The waiver by Holder
or failure to enforce any covenant or condition of this Note, the Mortgage, the
Assignment of Leases or any of the other Loan Documents, or to declare any
Event of Default thereunder or hereunder, shall not operate as a waiver of any
subsequent Event of Default or affect the right of Holder to exercise any right
or remedy not expressly waived in writing.
12. Maker shall pay the cost of any revenue, tax or other
stamps now or hereafter required by law, at any time to be affixed to this Note
or the Mortgage (other than Holder's income taxes), and if any taxes hereafter
be imposed with respect to debts secured, Maker agrees to pay to Holder upon
demand the amount of such taxes, and hereby waives any contrary provisions of
any laws or rules of court now or hereafter in effect.
13. Notwithstanding anything to the contrary herein
contained, the liability of Maker hereunder shall be limited to and enforceable
only out of the Mortgaged Property and the rents, issues and profits therefrom,
and
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<PAGE> 6
the lien of any judgment shall be restricted thereto and shall not extend to
Maker, Holder waiving any right Holder may have to claim a deficiency judgment
against Maker; provided, however, that Maker and its general partner shall not
be exonerated or exculpated from, and shall be liable for, any deficiency, loss
or damage suffered by Holder as a result of any security deposits received or
held by Maker, any rent received or held by Maker after an Event of Default, or
any rent prepaid more than one month in advance; or from failure by Maker to
properly account to Holder as mortgagee for any proceeds of insurance or
condemnation proceeds as required by the Mortgage; or from repairs required by
the Mortgaged Property following a casualty for which insurance proceeds are
not available due to a violation of Section 10 of the Mortgage; or from fraud,
material misrepresentation or bad faith by Maker; or from waste of the
Mortgaged Property; or from delinquent taxes or assessments; or from Maker's
violation of, or failure to perform its obligations under, Section 4(b)-(j) or
Section 20 of the Mortgage. Nothing in this paragraph, however, shall limit
Holder's right against any tenants under leases assigned to Holder as
additional security, or against any other collateral securing Maker's
obligations hereunder, now or hereafter mortgaged, pledged or assigned by Maker
or anyone else to Holder.
14. Notwithstanding any provision contained in this Note,
Maker's liability for payment of interest shall not exceed the limits imposed
by applicable usury law. If any provision contained herein requires interest
payments for any period in excess of the then legally permitted maximum rate,
such provision shall automatically be deemed to require interest payments for
such period at the then legally permitted maximum rate.
15. Maker represents and warrants that the Loan evidenced
by this Note and secured by the Mortgage, the Assignment of Leases and the
other Loan Documents was obtained solely for the purpose of carrying on or
acquiring a business or commercial transaction.
16. The unenforceability or invalidity of any one or more
of the provisions, clauses, sentences and/or paragraphs hereof shall not render
any other provisions, clauses, sentences and/or paragraphs herein contained
unenforceable or invalid.
17. This obligation shall bind Maker and Maker's heirs,
representatives, successors and assigns, and the benefit hereof shall inure to
Holder and its successors and assigns. The word "Holder" whenever occurring
herein shall be deemed and taken to include each successive Holder hereof, and
the word "Maker" whenever occurring herein shall be deemed and taken to include
the plural, and all the covenants, waivers, warrants, promises and releases
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<PAGE> 7
by, and obligations or liabilities imposed upon, Maker shall bind them jointly
and severally and their, and each of their, heirs, personal representatives,
successors and assigns.
18. The parties intend that this Note shall be construed
in accordance with and governed by the laws, including the conflict of law
rules, of the State of New Jersey.
19. MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION ARISING UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
Maker has caused this instrument to be duly executed the day and year first
above written.
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MLCP General Corporation, a
New Jersey corporation, general partner
By: /s/ Joseph D. Gonnelli
---------------------------------------
Joseph D. Gonnelli, President
Attest: /s/ R. Brian Jackson
----------------------------------
R. Brian Jackson, Secretary
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<PAGE> 1
EXHIBIT 10.9
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT
IS MADE as of the 19th day of October, 1994,
BETWEEN
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
(hereinafter called "Mortgagor"),
AND
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
a Delaware corporation
(hereinafter called "Mortgagee").
Mortgagor has executed and delivered to Mortgagee a certain
Mortgage Note (hereinafter called the "Note") of even date herewith, payable to
the order of Mortgagee in the principal sum of Six Million Five Hundred
Thousand Dollars ($6,500,000.00), lawful money of the United States of America,
and has provided therein for payment of additional moneys loaned or advanced
thereunder by Mortgagee, together with interest thereon (including Additional
Interest and the Acceleration Premium, as defined in the Note) at the rate
provided in the Note, in the manner and at the times therein set forth,
containing certain other terms and conditions, all of which are specifically
incorporated herein by reference.
NOW, THEREFORE, in consideration of such debt or principal sum
and as security for the payment of the same and interest as aforesaid, together
with all other sums payable hereunder or under the terms of the Note, and for
performance of the agreements, conditions, covenants, provisions and
stipulations contained herein, Mortgagor does grant, bargain, sell, release,
mortgage and convey unto Mortgagee, its successors and assigns:
ALL THAT CERTAIN tract or piece of ground, situate at and
known as 1000 Howard Boulevard, Mount Laurel Township, Burlington County, New
Jersey, as more particularly described in Exhibit "A" attached hereto, and
TOGETHER WITH:
(1) any and all buildings and improvements erected or
hereafter erected thereon;
(2) any and all fixtures, appliances, machinery and
equipment, and other articles of personal property, belonging to Mortgagor, at
any time now or hereafter installed in, attached to or situated in or upon the
above described real estate or the buildings and improvements to be erected
thereon, or used or intended to be used in connection with the real estate, or
in the operation of the buildings and improvements, plant, business or dwelling
situate thereon, whether or not the personal property is or shall be affixed
thereto; including, without limitation of the foregoing, all furniture,
furnishings, floor coverings, household appliances, office equipment, and
articles of interior decoration; all screens, awnings, venetian blinds,
shutters, shades, storm windows and storm doors; all kitchen cabinets, mirrors,
mantles; all office, restaurant, bar, kitchen and laundry fixtures, utensils,
appliances, and equipment; all cleaning, venti lation, refrigerating, vending,
incinerating, waste disposal, communications, alarms, fire prevention and fire
extinguishing systems, apparatus and equipment; all television, radio and other
musical equipment; all passenger and freight elevators, escalators and
machinery and equipment pertaining thereto; all building materials, equipment
and
<PAGE> 2
machinery; all pipes, conduits, pumps, boilers, tanks, motors, engines and
furnaces; all heating, lighting, sprinkling, plumbing, air conditioning,
gas-burning, oil-burning, and electric fixtures, machinery and equipment of
whatsoever kind and nature;
(3) all building materials, fixtures, building machinery
and building equipment delivered on site to the real estate during the course
of, or in connection with, construction of any repairs of or renovations to the
buildings and improvements;
(4) any and all tenements, hereditaments and
appurtenances belonging to the real estate or any part thereof hereby mortgaged
or intended so to be, or in any way appertaining thereto, and all streets,
alleys, passages, ways, water courses and all easements and covenants now
existing or hereafter created for the benefit of the Mortgagor or any
subsequent owner or tenant of the mortgaged real estate over ground adjoining
the mortgaged real estate and all rights to enforce the maintenance thereof,
and all other rights, liberties and privileges of whatsoever kind or character,
and the reversions and remainders, income, rents, issues and profits arising
therefrom, and all the estate, right, title, interest, property, possession,
claim and demand whatsoever, at law or in equity, of the Mortgagor in and to
the real estate or any part thereof; and
(5) all right, title and interest of Mortgagor in and to:
(A) all present and future leases between
Mortgagor, as landlord, and any occupant of the Mortgaged Property, as tenant
(which present and future leases, and Mortgagor's interest thereunder, are
herein referred to as the "Leases"); and
(B) all rents, issues and profits payable under
the Leases and under any future renewals, amendments or modifications thereof.
(All of the above-mentioned real estate, buildings, improvements, fixtures,
machinery, equipment, tenements, hereditaments appurtenances, Leases and other
property interests are sometimes collectively referred to herein as the
"Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property hereby conveyed or
mentioned and intended so to be, unto Mortgagee, its successors and assigns, to
its own use forever.
PROVIDED, HOWEVER, that if Mortgagor shall pay to Mortgagee
the aforesaid debt or principal sum, including additional loans or advances and
all other sums payable by Mortgagor to Mortgagee hereunder and under the terms
of the Note, together with interest thereon (including Additional Interest
and/or Acceleration Premium), and shall keep and perform each of the covenants,
conditions and agreements hereinafter set forth until such sums have been paid,
then this Mortgage and the estate hereby granted and conveyed shall become
void.
THIS MORTGAGE is executed and delivered subject to the
following covenants, conditions and agreements:
1. WARRANTIES OF MORTGAGOR
Mortgagor warrants and agrees:
(a) that Mortgagor presently possesses an unencumbered
fee simple title to the real estate described in Exhibit "A" hereto (the
"Land"), except for those title objections not removed from Title Policy No. F
38238 issued by First American Title Insurance Company to Mortgagee insuring
the lien of this Mortgage; that this Mortgage is a valid and enforceable first
lien on the Land, subject only to the aforesaid title objections; and that
Mortgagee shall, subject to Mortgagor's right of possession prior to default,
quietly enjoy and possess the Mortgaged Property. Mortgagor shall preserve
such title and the validity and priority of the lien hereof and shall forever
warrant and defend the same to Mortgagee against the claims of all parties and
persons whomsoever; and
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<PAGE> 3
(b) that Mortgagor is, and will hereafter be, the sole
owner of the landlord's interest in the Leases; and that the Leases are and
will be valid and subsisting leases of the real property demised thereby for
the terms therein set forth and subject to the provisions set forth therein;
and
(c) that Mortgagor shall make, execute, acknowledge and
deliver in form reasonably satisfactory to Mortgagee all such further or other
instruments or assurances as may at any time hereafter be reasonably desired or
required by Mortgagee for more fully and effectually granting, assigning,
transferring and setting over the Mortgaged Property and Mortgagor's interest
in the Leases hereby mortgaged, or intended so to be, unto Mortgagee for the
purpose aforesaid, and Mortgagor will pay all costs of recording or filing any
such statements or documents in such public offices as Mortgagee may reasonably
require.
2. PAYMENT AND PERFORMANCE
(a) Mortgagor shall pay to Mortgagee, in accordance with
the terms of the Note and this Mortgage, the principal and interest (including
Additional Interest and Acceleration Premium, if any), and other sums therein
set forth; and shall perform and comply with all the agreements, conditions,
covenants, provisions and stipulations of the Note and this Mortgage. THE
AMOUNT SECURED BY THIS MORTGAGE SHALL EXPRESSLY INCLUDE ALL ADVANCES MADE
HEREUNDER OR COSTS OTHERWISE INCURRED HEREUNDER OR IN CONNECTION WITH THE LOAN
BY MORTGAGEE TO PROTECT THE SECURITY FOR THE LOAN, INCLUDING, WITHOUT
LIMITATION, ADVANCES MADE AND COSTS INCURRED BY MORTGAGEE FOR TAXES, INSURANCE
PREMIUMS, AND ENVIRONMENTAL INSPECTIONS (WHETHER UNDERTAKEN BEFORE OR AFTER AN
EVENT OF DEFAULT OR A FORECLOSURE HEREUNDER, PROVIDED THAT ENVIRONMENTAL
INSPECTIONS WILL ONLY BE UNDERTAKEN BY MORTGAGEE BEFORE AN EVENT OF DEFAULT IF
MORTGAGEE HAS REASONABLE GROUNDS TO SUSPECT THE EXISTENCE OF A POTENTIAL
ENVIRONMENTAL PROBLEM). The parties expressly agree that this Mortgage shall
have the full force, effect, and benefits of a mortgage to secure such advances
of money, the lien of which advances shall relate to the date of this Mortgage.
This Mortgage shall secure not only existing indebtedness, but also all
Additional Interest, all Acceleration Premium and all future advances, whether
such advances are obligatory or to be made at the option of Mortgagee, or
otherwise, to the same extent as if such future advances were made on the date
hereof.
(b) Mortgagor will not violate any term or covenant
contained in the Assignment of Leases and Agreement of even date herewith
(hereinafter called the "Assignment of Leases"), delivered to Mortgagee as
additional security with respect to the Leases.
3. PAYMENT OF CHARGES
From time to time until the debt and interest are fully paid,
Mortgagor shall:
(a) Pay and discharge, when and as the same shall become
due and payable, all real estate and other taxes, assessments, sewer and water
rents, and other charges and claims assessed or levied from time to time by any
lawful authority upon any part of the Mortgaged Property and which shall or
might have priority in lien or payment to the debt secured hereby;
(b) Pay all ground rents reserved from the Mortgaged
Property and pay and discharge, or bond, all mechanics' liens or judgments
which may be filed against the Mortgaged Property;
(c) Pay and discharge any documentary stamp or other tax,
including interest and penalties thereon, if any, now or hereafter becoming
payable on the Note evidencing the debt secured hereby, or on this Mortgage, or
on the underlying indebtedness;
(d) Provide, renew and maintain in effect by paying the
necessary premiums and charges thereon, such policies of hazard and liability
insurance with such companies as Mortgagee may from time to time require
pursuant to Section 10; and
(e) Promptly submit to Mortgagee evidence of the due and
punctual payment of all the foregoing charges.
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<PAGE> 4
4. MAINTENANCE OF MORTGAGED PROPERTY
(a) Mortgagor shall abstain from and shall not permit the
commission of waste in or about the Mortgaged Property; shall not remove or
demolish, or alter the structural character of, any building erected at any
time on the Mortgaged Property, without the prior written consent of Mortgagee;
and shall not permit the Mortgaged Property to become deserted or unguarded,
and shall maintain the Mortgaged Property in good condition and repair,
reasonable wear and tear and damage by fire or other casualty excepted.
Mortgagee, or its agent, shall have the right to enter upon the Mortgaged
Property upon reasonable prior notice for the purpose of inspecting the order,
condition and repair of the buildings and improvements erected thereon.
Mortgagor represents and warrants that, to the best of Mortgagor's knowledge,
the Mortgaged Property complies with all applicable laws, ordinances,
regulations and orders relating to the Mortgaged Property, including, without
limitation, all environmental and wetlands laws, issued by all Federal, state,
municipal and other governmental authorities. Mortgagor shall promptly comply
with all future laws, ordinances, regulations and orders relating to the
Mortgaged Property by all federal, state, municipal and other governmental
authorities.
(b) Mortgagor warrants and represents that, to the best
of Mortgagor's knowledge:
(i) no hazardous substances (as "hazardous
substances" is defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601(14),
as amended by the Superfund Amendments and Re-authorization Act of 1986 (Pub.
L. No. 99-499, 100 Stat. 1613 (1986) (SARA)) or hazardous waste or solid waste
(as defined in 40 CFR Section 261) are present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(ii) no polychlorinated biphenyls (PCBs) or
substances containing PCBs, no asbestos or materials containing asbestos, no
gasoline, kerosene or other hydrocarbons, no pesticides, herbicides or
radioactive materials and no urea formaldehyde foam insulation has been stored,
used or installed or is otherwise present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(iii) no portion of the Mortgaged Property
lies in or constitutes a wetland or floodplain;
(iv) no radon gas or radioactive decay
products of radon gas, in a concentration above 4 picocuries/liter, are present
on the Mortgaged Property;
(v) no underground or above-ground storage
tanks are present on the Mortgaged Property;
(vi) Mortgagor has not received any notice
that Mortgagor has been identified in any litigation, administrative proceeding
or investigation as a responsible party for any liability under CERCLA, SARA,
or any other Federal, state or municipal law, ordinance or regulation;
(vii) The Mortgaged Property has never been
used by previous owners and/or operators to refine, produce, store, handle,
transfer, process or transport "Hazardous substances," as such term is defined
in N.J.S.A. 58:10-23.11b(k), and Mortgagor has not used in the past, nor does
Mortgagor intend to use in the future, the Mortgaged Property for the purpose
of refining, producing, storing, handling, transferring, processing or
transporting "Hazardous substances" (as above defined). Mortgagor has retained
GHR Consulting Services, Inc. ("Consultant") to conduct a complete and thorough
on-site inspection of the Mortgaged Property, to determine the presence of
"Hazardous substances" (as defined above), and the Consultant found no evidence
of the presence of such "Hazardous substances" on or in the Mortgaged Property.
(c) Mortgagor shall not commit or allow to occur, and has
not received a summons, citation, directive, letter or other communication,
written or oral, from the New Jersey Department of Environmental Protection and
Energy concerning, any intentional or unintentional action or omission on
Mortgagor's part resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of "Hazardous substances" (as above
defined) into the waters or onto the lands of the State of New Jersey, or into
the waters outside the jurisdiction of the State of New
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<PAGE> 5
Jersey, resulting in damage to the lands, waters, fish, shellfish, wildlife,
biota, air and other resources owned, managed, held in trust or otherwise
controlled by the State of New Jersey.
(d) Should Mortgagor commit or allow to occur any
intentional or unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping of
"Hazardous substances" (as above defined) into the waters or onto the lands of
the State of New Jersey, or into the waters outside the jurisdiction of the
State of New Jersey, resulting in damage to the lands, waters, fish, shellfish,
wildlife, biota, air or other resources owned, managed or held in trust or
otherwise controlled by the State of New Jersey, without having obtained a
permit issued by the appropriate governmental authorities, Mortgagor shall
promptly clean up such spill, leak, etc. in accordance with the provisions of
the New Jersey Spill Compensation and Control Act.
(e) The Mortgaged Property is not and has not been used
as a "Major facility," as such term is defined in N.J.S.A. 58:10-23.11b(l), and
the Mortgaged Property will not be used as a "Major facility" after completion
of any construction, renovation, restoration and other developmental work which
Mortgagor intends to undertake thereon. If Mortgagor hereafter becomes an
owner or operator of a "Major facility", then Mortgagor shall furnish the New
Jersey Department of Environment Protection and Energy with all the information
required by N.J.S.A.58:10-23.11d2, and Mortgagor shall duly file or cause to
be duly filed with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return and shall pay or make
provision for the payment of all taxes due therewith, all in accordance with
and pursuant to N.J.S.A. 58:10-23.11h.
(f) No lien has been attached to any revenues or to the
Mortgaged Property as a result of the chief executive of the New Jersey Spill
Compensation Fund expending monies from such fund pursuant to N.J.S.A.
58:10-23.11(g) and/or to pay for "Cleanup and removal costs," as such term is
defined in N.J.S.A. 58:10-23.11b(d). In the event that there shall be filed a
lien against the Mortgaged Property by the New Jersey Department of
Environmental Protection and Energy, pursuant to the provisions of N.J.S.A.
58:10-23.11f(f), as a result of the chief executive of the New Jersey Spill
Compensation Fund having expended monies from such fund pursuant to N.J.S.A.
58:10-23.11g, and/or to pay for "Cleanup and removal costs" (as defined above),
then Mortgagor shall, within sixty (60) days from the date that Mortgagor is
given notice that the lien has been placed against the Mortgaged Property or
within such shorter period of time in the event that the State of New Jersey
has commenced steps to cause the Mortgaged Property to be sold pursuant to the
lien, either (i) pay the claim and remove the lien from the Mortgaged Property,
or (ii) furnish (A) a bond satisfactory to Mortgagee in the amount of the claim
out of which the lien arises, (B) a cash deposit in the amount of the claim out
of which the lien arises, or (C) other security satisfactory to Mortgagee in an
amount sufficient to discharge the claim out of which the lien arises.
(g) Mortgagor is not required to furnish the New Jersey
Department of Environmental Protection and Energy with the information required
by N.J.S.A. 58:10-23.11d2, with respect to the Mortgaged Property or any other
real property owned and/or operated by Mortgagor and located in New Jersey.
(h) In connection with the purchase of the Mortgaged
Property and any other real property acquired by Mortgagor on or after January
1, 1984, Mortgagor required that the seller of the real property, including the
Mortgaged Property, comply with the provisions of the New Jersey Industrial
Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) and the seller did comply
therewith. A copy of a Nonapplicability Letter received by Mortgagor from such
seller has been supplied to Mortgagee.
(i) Mortgagor hereby agrees that in the event the
provisions of the New Jersey Industrial Site Recovery Act, become applicable to
the Mortgaged Property subsequent to the date hereof, Mortgagor shall give
prompt written notice thereof to the Mortgagee and shall take immediate
requisite action to insure full compliance with such Act.
(j) Mortgagor shall not permit or allow the Mortgaged
Property to be used in a manner so as to be considered an "Industrial
establishment," as such term is defined in N.J.S.A. 13:1K-8(f), without the
prior express written consent of the Mortgagee.
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<PAGE> 6
5. PAYMENTS BY MORTGAGEE
In the event Mortgagor neglects or refuses to pay the charges
mentioned in Section 3 above, or fails to maintain the buildings and
improvements and to comply with applicable regulations, as aforesaid, Mortgagee
may do so, at its sole option, and add the cost thereof to the principal debt
secured hereby, and collect the same as a part of the principal debt, together
with interest thereon at the Default Rate, as provided in the Note secured
hereby. In addition to any other debt or obligation secured hereby, this
Mortgage shall secure unpaid balances of advances made with respect to the
Mortgaged Property for the payment of taxes, assessments, insurance premiums,
or costs incurred for the protection of the Mortgaged Property (including,
without limitation, inspection costs).
6. SECONDARY FINANCING
(a) Mortgagor covenants and agrees not to create, nor
permit to accrue, upon all or any part of the Mortgaged Property, any debt,
lien or charge other than the lien of this Mortgage, without the prior written
consent of Mortgagee, which consent may be withheld in Mortgagee's sole and
absolute discretion.
(b) Notwithstanding the restrictions in subsection (a)
above, Mortgagor may grant a subordinate mortgage ("Subordinate Mortgage") to
secure a loan for working capital costs such as commissions and tenant
improvements ("Subordinate Loan") from a financial institution approved in
advance by Mortgagee, provided that the amount of the Subordinate Loan shall
not exceed the lesser of (A) $750,000 or (B) that amount which, when added to
the unpaid principal balance of the loan secured by this Mortgage, shall not
exceed seventy five percent (75%) of the fair market value of the Mortgaged
Property at the time the Subordinate Loan is made, as determined by an MAI
appraisal satisfactory to Mortgagee. The Subordinate Mortgage may not be
granted until Mortgagee has approved in writing the identity of the lender and
the appraisal as set forth above. Any such lender shall further be required to
execute a Subordination Agreement in form reasonably approved by Mortgagee.
Mortgagor shall pay all costs and expenses, including without limitation
Mortgagee's legal fees, incurred by Mortgagee in connection with such
Subordinate Loan.
(c) Notwithstanding the restrictions in subsection (a)
above, in the event that the Mortgaged Property is transferred in accordance
with the requirements of Section 7(b)(ii) below, the purchaser of the Mortgaged
Property shall be permitted to grant a subordinated purchase money mortgage
("Subordinate Purchase Mortgage") to secure a purchase money loan from
Mortgagor, or from a financial institution approved in advance by Mortgagee,
with terms and conditions approved in advance by Mortgagee ("Subordinated
Purchase Loan") in an amount which, when added to the unpaid principal balance
of the loan secured by this Mortgage, shall not exceed seventy five percent
(75%) of the purchase price of the Mortgaged Property. The Subordinate
Purchase Mortgage may not be granted until Mortgagee has approved in writing
the identity of the lender and the terms and conditions as set forth above.
Any such lender shall further be required to execute a Subordination Agreement
in form reasonably approved by Mortgagee. Mortgagor shall pay all costs and
expenses, including without limitation Mortgagee's legal fees, incurred by
Mortgagee in connection with such Subordinate Purchase Loan.
7. TRANSFER OF TITLE
(a) Without the prior written consent of Mortgagee (which
consent, except as expressly set forth hereafter, may be withheld in
Mortgagee's sole and absolute discretion), Mortgagor shall not voluntarily, or
involuntarily, or by operation of law, sell, transfer, convey, lease, or in any
other manner change the ownership of, or title to, all or any portion of the
Mortgaged Property, or of any interest therein, legal or equitable, or any
shares or interests in any partnership or corporation having an ownership
interest in the Mortgaged Property, except for individual leases of space in
the Mortgaged Property upon terms as set forth in the Assignment of Leases.
(b) Notwithstanding the foregoing, (i) limited
partnership interests in Mortgagor may be transferred by the existing partners
without Mortgagee's consent, but with prior written notice to Mortgagee, so
long as Dr. M.H.M. Sallam and Lulua Sallam remaining controlling shareholders
of MLCP General Corporation, the general partner of Mortgagor, and (ii)
Mortgagee shall not unreasonably withhold its consent to a one-time transfer of
the Mortgaged Property to a purchaser approved by Mortgagee as to financial
strength, reputation and experience in owning and operating commercial real
estate; provided, however, that any such consent shall be conditioned upon (A)
receipt by
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<PAGE> 7
Mortgagee from Mortgagor of a transfer fee equal to one and one-half percent
(1.5%) of the then-outstanding principal balance, and (B) Mortgagor's payment
of all costs and expenses, including without limitation Mortgagee's legal fees,
incurred in connection with such transfer.
8. CONDEMNATION
In the event of any condemnation or taking of any part of the
Mortgaged Property by eminent domain, alteration of the grade of any street, or
other injury to, or decrease in value of, the Mortgaged Property by any public
or quasi-public authority or corporation, all proceeds (that is, the award or
agreed compensation for the damages sustained) shall be applicable first to
payment of the indebtedness secured hereby. No settlement for the damages
sustained shall be made by Mortgagor without Mortgagee's prior written
approval. Mortgagor shall continue to pay the installments of principal,
interest and other charges until payment of the proceeds shall have been
received by the Mortgagee. All of the proceeds shall be applied in the order
and in the amounts that Mortgagee, in Mortgagee's sole discretion, may elect,
to the payment of principal (whether or not then due and payable), interest on
any sums secured by this Mortgage, or toward payment to the Mortgagor, on such
terms as the Mortgagee may specify, to be used for the sole purpose of
altering, restoring or rebuilding any part of the Mortgaged Property which may
have been altered, damaged or destroyed as a result of the taking, alteration
of grade or other injury to the Mortgaged Property.
9. TAXES, ASSESSMENTS AND CHARGES
(a) Mortgagor shall, in addition to and concurrently with
the monthly installments of interest, pay to the Mortgagee installments of
casualty insurance premiums and taxes and assessments assessed or levied upon
the Mortgaged Property, as well as all taxes for which any party in whom title
to the Mortgaged Property shall or may hereafter vest, may be or become liable
under any present or future law of the United States of America or of the State
of New Jersey and which, under the provisions of such laws, may be or become a
lien upon the Mortgaged Property or have priority in payment of the mortgage
debt out of the proceeds of any judicial sale of the Mortgaged Property. Such
installments shall be equal respectively to 1/12 of the annual amount of such
premiums, taxes and assessments as are estimated by Mortgagee and shall be held
by Mortgagee to pay premiums, assessments and taxes when due. No amount so
paid shall be deemed to be trust funds but may be commingled with general funds
of Mortgagee, and no interest shall be payable thereon. If, pursuant to any
provision of this Mortgage, the whole amount of the unpaid principal debt
becomes due and payable, Mortgagee shall have the right, at its election, to
apply any amount so held against the entire indebtedness secured hereby.
Notwithstanding the foregoing, Mortgagee waives the right to collect
installments of insurance premiums prior to an Event of Default hereunder.
(b) Mortgagor hereby assigns to Mortgagee, as further
collateral for the full prompt payment and performance of all of Mortgagor's
obligations hereunder, all of Mortgagor's right, title and interest in any and
all proceeds of or claims to rebates, refunds, and abatements of real estate
and personal property taxes pertaining to the Mortgaged Property, or any
portion thereof, with respect to tax periods arising at any time prior to the
discharge hereof, even though such taxes may relate to periods before the
execution hereof.
10. INSURANCE
Mortgagor shall keep the Mortgaged Property continuously
insured against loss or damage by fire, with extended coverage, and against
other hazards as Mortgagee may reasonably require, with insurance companies
(having a Best's rating of A-:VIII) reasonably satisfactory to Mortgagee, and
in such total amount as Mortgagee may require from time to time, but not
exceeding the full replacement value thereof. Without limiting the foregoing,
such policies of insurance shall be All Risk Replacement Cost Insurance, with
Agreed Amount Endorsement or similar affirmative endorsement that the coverage
limits will prevent Mortgagor or Mortgagee from becoming a co-insurer in the
event of a partial loss. Mortgagor shall also maintain rental insurance in an
amount equal to one year's gross income, boiler insurance (if any building has
a boiler), and commercial general liability insurance with limits and coverages
acceptable to Mortgagee. All policies, including policies for any amounts
carried in excess of the required minimum and policies not specifically
required by Mortgagee, shall be in form reasonably satisfactory to Mortgagee,
shall be
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maintained in full force and effect, shall be assigned and delivered to
Mortgagee, with premiums prepaid, as collateral security for payment of the
indebtedness secured hereby, shall be endorsed with a standard mortgagee clause
in favor of Mortgagee, not subject to contribution, and shall provide for at
least ten (10) days' prior written notice of cancellation to Mortgagee. If the
insurance, or any part thereof, shall expire or be withdrawn, or become void by
reason of Mortgagor's breach of any condition thereof, or become void or unsafe
by reason of the failure or impairment of the capital of any company in which
the insurance may then be carried, or if for any reason whatever the insurance
shall be unsatisfactory to Mortgagee, Mortgagor shall place new insurance on
the Mortgaged Property satisfactory to Mortgagee. All renewal policies, with
premiums paid, shall be delivered to Mortgagee at least thirty (30) days before
expiration of the old policies. In the event of loss, Mortgagor will give
immediate written notice thereof to Mortgagee, and Mortgagee may make proof of
loss if not made promptly by Mortgagor. Each insurance company concerned is
hereby authorized and directed to make payment under such insurance, including
return of the unearned premiums, directly to Mortgagee instead of to Mortgagor
and Mortgagee jointly, and Mortgagor appoints Mortgagee, irrevocably, as
Mortgagor's attorney-in-fact to endorse any draft therefor. Mortgagee shall
have the right to retain and apply the proceeds of any such insurance,
including any unearned premiums, at its election, to reduction of the
indebtedness secured hereby, or to restoration or repair of the property
damaged. If Mortgagee becomes the owner of the Mortgaged Property or any part
thereof by foreclosure or otherwise, such policies, including all right, title
and interest of the Mortgagor thereunder, shall become the absolute property of
Mortgagee.
11. SECURITY AGREEMENT
(a) This Mortgage constitutes a security agreement under
the New Jersey Uniform Commercial Code and creates a security interest in the
personal property included in the Mortgaged Property and the proceeds thereof.
Mortgagor represents and warrants that all such personal property (other than
personal property of individual tenants) is owned by Mortgagor free and clear
of all security interests, and all such personal property and replacements of,
substitutions for and additions to such personal property shall be owned (and
not leased) by Mortgagor free and clear of all security interests. Mortgagor
shall execute, deliver, file and refile any financing statements or other
security agreements Mortgagee may require from time to time to confirm the lien
of this Mortgage with respect to such property. Without limiting the foregoing,
Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor
to execute, deliver and file such instruments for and on behalf of Mortgagor.
Mortgagee, pursuant to the appropriate provisions of the Code, shall have an
option to proceed with respect to both the real property and personal property
included in the Mortgaged Property in accordance with its rights, powers and
remedies with respect to the real property, in which event the default
provisions of the Code shall not apply. The parties agree that if Mortgagee
shall elect to proceed with respect to the personal property separately from
the real property, fifteen (15) days' notice of the sale of the personal
property shall constitute reasonable notice. The expenses of retaking,
holding, preparing the sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, attorneys' fees and legal expenses incurred by
Mortgagee. Mortgagor agrees that, without the prior written consent of
Mortgagee, Mortgagor will not remove or permit to be removed from the Mortgaged
Property any of the personal property, except that so long as no Event of
Default has occurred hereunder, Mortgagor shall be permitted to sell or
otherwise dispose of the personal property when obsolete, worn out, inadequate,
unserviceable or unnecessary for use in the operation of the Mortgaged
Property, but only upon replacing the same or substituting for the same other
personal property at least equal in value and utility to the initial value and
utility of that disposed of and in such a manner that such replacement or
substituted personal property shall be subject to the security interest created
hereby and that the security interest of Mortgagee shall be perfected and first
in priority, it being expressly understood and agreed that all replacements,
substitutions and additions to the per sonal property shall be and become
immediately subject to the security interest of this Mortgage and covered
hereby.
(b) The Mortgaged Property includes goods which are or
are to become fixtures and this Mortgage is intended to serve as a fixture
filing under Section 9-313 of the New Jersey Uniform Commercial Code.
12. FINANCIAL STATEMENTS
No later than June 1 each year, Mortgagor shall, at its sole
cost and expense, furnish to Mortgagee an annual financial statement of
Mortgagor, covering only the Mortgaged Property, prepared and certified by an
independent certified public accountant acceptable to Mortgagee. Mortgagor
shall also furnish to Mortgagee in addition
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to and simultaneous with the financial statements, a statement reflecting the
complete rental status of the Mortgaged Property, which shall include the name
of each tenant, the area in square feet occupied by such tenant and the rental
being paid, and, at any time upon request therefor, such other information
regarding occupancy and current rentals as Mortgagee may require.
13. DECLARATION OF NO SET-OFF
Within five (5) business days after a written request to do so
by Mortgagee, Mortgagor shall certify to Mortgagee or to any proposed assignee
of this Mortgage, in a writing duly acknowledged, the amount of principal,
interest and other charges then owing on the obligation secured by this
Mortgage and whether there are any set-offs or defenses against it.
14. EVENTS OF DEFAULT
Each of the following shall constitute an event of default
hereunder ("Event of Default"):
(a) Failure of Mortgagor to pay any installment of
principal or interest or any other sum within five (5) business days of the
date on which such installment or sum is due under the Note, this Mortgage or
the Assignment of Leases (provided that Mortgagee will only grant such 5-day
grace period twice in any twelve-month period, and any failure thereafter to
make a payment on the due date shall constitute an Event of Default without any
grace period).
(b) Mortgagor's nonperformance of or noncompliance with,
for a period of twenty (20) days after written notice shall have been given to
Mortgagor, any of the other agreements, conditions, covenants, representations,
provisions or stipulations contained in the Note, this Mortgage or the
Assignment of Leases (provided that if such nonperformance or noncompliance
cannot reasonably be cured within twenty (20) days, an Event of Default shall
not occur hereunder if Maker initiates curing the nonperformance or
noncompliance within such 20-day period and diligently pursues such cure to
completion within a reasonable time thereafter, not to exceed ninety (90) days
after such written notice).
(c) Any assignment for the benefit of creditors made by
Mortgagor.
(d) Appointment of a receiver, liquidator or trustee of
the Mortgagor or of any of the property of Mortgagor, insolvency of the
Mortgagor or the adjudication of Mortgagor as a bankrupt or the filing by the
Mortgagor (or against the Mortgagor if the same shall not be discharged within
60 days) of any case or petition for the bankruptcy, reorganization or
arrangement of Mortgagor pursuant to the Federal Bankruptcy Code or any similar
statute, or the institution of any proceeding for the dissolution or
liquidation of Mortgagor.
(e) Any material default by Mortgagor under any of the
Leases affecting the Mortgaged Property, provided that so long as the Lease
with Consolidated Rail Corporation ("Conrail") dated May 25, 1990, as amended
("Conrail Lease") is in effect, this provision shall apply only to the Conrail
Lease, but shall apply to all of the Leases if Conrail ceases to be a tenant;
(f) Any dissolution, merger or change in legal form or
status of Borrower under applicable Delaware or New Jersey law.
(g) Any warranty, representation or other statement made
by or on behalf of Mortgagor in or pursuant to this Mortgage (including,
without limitation, any financial statement delivered pursuant to Section 12)
proves to be false, incorrect or misleading in any material and adverse
respect.
(h) Entry of a final judgment not covered by insurance in
excess of $25,000 against Mortgagor or any person constituting Mortgagor, and
if, within thirty (30) days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal, or if, within
thirty (30) days after the expiration of any such stay, such judgment shall not
have been discharged.
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<PAGE> 10
(i) For purposes of this subsection, the word "Mortgagor"
shall include the persons named as Mortgagor herein, and any subsequent owner
of the Mortgaged Property; and for purposes of subsections (c), (d), (g) and
(h) hereof, the word "Mortgagor" shall include the general partners of
Mortgagor. All grace periods contained herein and in the Note or any of the
other documents evidencing or securing the Note shall run concurrently and not
consecutively.
15. REMEDIES
(a) Upon the happening of any Event of Default, the
entire unpaid balance of the principal, the accrued interest, the Acceleration
Premium (determined as set forth in the Note), and all other sums secured by
this Mortgage shall become immediately due and payable, at the option of
Mortgagee, without notice or demand.
(b) When the entire indebtedness shall become due and
payable, either because of maturity or because of the occurrence of any Event
of Default, or otherwise, then forthwith:
(i) Foreclosure: Mortgagee may institute
an action of mortgage foreclosure against the Mortgaged Property, or take such
other action, at law or in equity, for the enforcement of this Mortgage and
realization on the mortgage security or any other security herein or elsewhere
provided for, as the law may allow, and may proceed therein to final judgment
and execution for the entire unpaid balance of the principal debt, with
interest at the Default Rate stipulated in the Note to the date of such
judgment, and thereafter at the same rate (but if not permissible, then at the
highest judgment rate permitted by law), together with all other sums due by
Mortgagor in accordance with the provisions of the Note and this Mortgage,
including all sums which may have been loaned by Mortgagee to Mortgagor after
the date of this Mortgage, and all sums which may have been advanced by
Mortgagee for taxes, water or sewer rents, charges or claims, insurance,
inspection fees or repairs to the Mortgaged Property, all costs of suit, and a
reasonable attorney's commission for collection; and
(ii) Possession: Mortgagee may enter into
possession of the Mortgaged Property, with or without legal action; collect
therefrom all rentals (which term shall also include sums payable for use and
occupation), and, after deducting all costs of collection and administration
expense, apply the net rentals to the payment of taxes, water and sewer rents,
charges and claims, insurance premiums and all other carrying charges, and to
the inspection (including, without limitation, environmental inspection),
maintenance, repair or restoration of the Mortgaged Property, or on account and
in reduction of the principal or interest, or both, hereby secured, in such
order and amounts as Mortgagee, in Mortgagee's sole discretion, may elect; and
for that purpose, Mortgagor hereby assigns to Mortgagee all rentals due and to
become due under any Lease or rights to use and occupation of the Mortgaged
Property hereafter created, as well as all rights and remedies provided in such
Lease or at law or in equity for the collection of the rentals, and agrees to
confirm the aforesaid assignment by such collateral document or documents as
Mortgagee may require.
(c) Upon a foreclosure sale, the Mortgaged Property may
be sold as a single parcel or as any number of separate parcels, at Mortgagee's
option, and Mortgagor for itself and anyone claiming by, through or under it,
further hereby agrees that Mortgagee shall in no manner, in law or in equity,
be limited, except as herein provided, in the exercise of its rights in the
Mortgaged Property or in any other security hereunder or otherwise appertaining
to the Note or any other obligation secured by this Mortgage, whether by any
statute, rule or precedent which may otherwise require such security to be
marshalled in any manner, and Mortgagor, for itself and others as aforesaid,
hereby expressly waives and releases any right to or benefit thereof.
(d) Mortgagor hereby expressly waives and releases: (i)
all benefit that might accrue to Mortgagor by virtue of any present or future
law exempting the Mortgaged Property, or any part of the proceeds arising from
any sale thereof, from attachment, levy or sale on execution, or providing for
any appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment, and (ii) unless specifically
required herein, all notices of Mortgagor's default or of Mortgagee's election
to exercise, or Mortgagee's actual exercise of, any option or remedy under the
Note or any security documents. Neither Mortgagor nor any other person now or
hereafter obligated for payment of all or any part of the indebtedness secured
hereby shall be relieved of such obligations by reason of the failure of
Mortgagee to comply with any request of Mortgagor or of any other person so
obligated to take action to foreclose on this Mortgage or otherwise enforce any
provisions of any security documents or the Note, or
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<PAGE> 11
by reason of the release, regardless of consideration, of all or any part of
the security held for the debt secured hereby, or by reason of any agreement or
stipulation between any subsequent owner of the Mortgaged Property and
Mortgagee extending the time of payment or modifying the terms of this Mortgage
or the Note without first having obtained the consent of Mortgagor or such
other persons; and in the latter event, Mortgagor and all other such persons
shall continue to be liable to make payment according to the terms of any such
extension or modification agreement, unless expressly released and discharged
in writing by Mortgagee. Mortgagee may release, regardless of consideration,
any part of the security held for the debt secured hereby without, as to the
remainder of the security, in any way impairing or affecting the lien of this
Mortgage or its priority over any subordinate lien. For payment of the debt
secured hereby, Mortgagee may resort to any other security therefor held by
Mortgagee in such order and manner as Mortgagee may elect.
(e) Mortgagor expressly waives the equity of redemption,
statutory right of redemption, dower and homestead and all other rights and
exemptions of every kind in and to the Mortgaged Property, and agrees that the
purchaser or purchasers of the Mortgaged Property shall have an absolute title
in fee simple.
(f) Mortgagee shall have, in addition to other rights and
remedies available at law or in equity, the rights and remedies of a Secured
Party under the New Jersey Uniform Commercial Code. Mortgagee may elect to
foreclose such of the property subject to the lien hereof as then comprise
fixtures pursuant either to the laws applicable to foreclosure of an interest
in real estate or to that applicable to personal property under the Uniform
Commercial Code.
(g) In addition to the foregoing, Mortgagee shall be
entitled to apply for the appointment of a receiver. Mortgagee shall not be
required to give any notice of application for the appointment of a receiver
and shall be entitled to such appointment without regard to the adequacy of any
security for the mortgaged debt or the solvency or insolvency of any person
obligated for the payment thereof, and such receiver shall be entitled to take
possession of the Mortgaged Property from the owner, tenants and/or occupants
of the whole or any part thereof and to collect and receive the rents and
profits and the value of the use and occupation of the Mortgaged Property or
any part thereof from the then owner, tenants and/or occupants thereof for the
benefit of the Mortgagee.
(h) Mortgagee shall have the right, from time to time,
after an Event of Default, to bring an appropriate action to recover any sums
required to be paid by Mortgagor under the terms of this Mortgage, as they
become due, without regard to whether or not the principal indebtedness or any
other sums secured by the Note and this Mortgage shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action of mortgage
foreclosure, or any other action, for any default by Mortgagor existing at the
time the earlier action was commenced.
(i) All rights and remedies granted or otherwise
available to Mortgagee shall be cumulative and concurrent and may be pursued
singly, successively or together at Mortgagee's sole option, and may be
exercised from time to time and as often as occasion therefor shall occur until
the indebtedness hereby secured with all interest thereon is paid in full.
16. OTHER MORTGAGES OR DEEDS OF TRUST
If Mortgagor shall fail to pay any installment of principal or
interest required under any other mortgage or deed of trust on the Mortgaged
Property (if permitted by Mortgagee), whether subordinate or prior to the lien
of this Mortgage, or shall fail to pay any tax, governmental levy or charge or
insurance premium, or to make any other payment required to be paid by
Mortgagor under such mortgage or deed of trust, at the time and in the manner
provided therein; or if Mortgagor shall fail to perform or observe any other
term, covenant, condition or obligation required to be performed or observed by
Mortgagor therein, then without limiting the generality of any other provision
of this Mortgage, and without waiving or releasing Mortgagor from any of its
obligations hereunder, Mortgagee shall have the right, but shall be under no
obligation, to pay any such installment of principal or interest and/or any
such tax, levy, premium, charge, or other payment, and may perform any other
act or take such action as may be appropriate to cause such other term,
covenant, condition or obligation to be promptly performed or observed on
behalf of Mortgagor, to the end that Mortgagor's right in, to and under such
mortgage or deed of trust shall be kept unimpaired and free from default.
Mortgagee and any person designated by Mortgagee shall have, and is hereby
granted, the right to enter upon the Mortgaged Property at any time and from
time to time for the purpose of taking any such action, and all monies expended
by Mortgagee in connection therewith (including but not limited to, legal
expenses and disbursements),
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together with interest thereon at the Default Rate provided for in the Note
secured hereby from the date of each expenditure, shall be paid by Mortgagor to
Mortgagee forth with upon demand by Mortgagee, and shall be secured by this
Mortgage. Mortgagee shall have, in addition to any other right or remedy, the
same rights and remedies in the event of default or nonpayment under any such
mortgage or deed of trust as in the case of a default by Mortgagor in the
payment of any installment of principal or interest due and payable hereunder.
17. PREPAYMENT
Mortgagor may prepay this Mortgage only on the terms and
conditions set forth in the Note.
18. LEASES
(a) Mortgagor covenants and agrees that Mortgagor will
not, without the prior written consent of Mortgagee (which consent may be
withheld in Mortgagee's sole discretion):
(i) receive or collect rents (other than
the customary security deposit) from any tenant, subtenant, undersubtenant or
other occupant of the Mortgaged Property for a period of more than one month in
advance; or
(ii) assign the rents, or any part thereof,
of the Mortgaged Property to any person or entity other than Mortgagee; or
(iii) enter into any lease for minimum
rentals less than those approved in writing by Mortgagee or for length of term
less than that approved in writing by Mortgagee, provided that so long as the
Lease with Consolidated Rail Corporation ("Conrail") dated May 25, 1990, as
amended ("Conrail Lease") is in effect, this restriction shall apply only to
the Conrail Lease, but shall apply to all of the Leases if Conrail ceases to be
a tenant; or
(iv) enter into any lease other than that
which is in form and content substantially the same as the form of lease
approved in writing by Mortgagee.
(b) Mortgagor covenants and agrees to perform and to
observe all the material agreements imposed upon Mortgagor under any leases of
or occupancy agreements for the Mortgaged Property or any portions thereof, and
not to do, or to permit to be done, anything to impair the security thereof; if
any of such leases shall require security deposits, to establish if required by
law an interest-bearing security deposit account in accordance with such law,
and to deposit all security deposits therein, and to maintain true and accurate
records of all security deposits received, and to pay interest thereon, if the
same be required by law or by the terms of the leases; and to comply with all
requirements of law concerning security deposits received.
(c) In the event that any Lease is terminated hereafter
and payments or damages of any kind are received by Mortgagor in connection
with such termination (collectively, "Termination Proceeds"), such Termination
Proceeds shall immediately be paid over to GMAC Mortgage Corporation, or such
other agent as Mortgagee shall designate in writing, to be held in escrow and
released for tenant improvement work upon receipt by Mortgagee of an executed
replacement Lease acceptable to Mortgagee with a term of at least three (3)
years and with a rent comparable to the terminated Lease. If no tenant
improvement work is required under such approved replacement Lease, the
escrowed payments shall be released to Mortgagor upon occupancy of the leased
space by the tenant under the approved replacement Lease.
19. MANAGEMENT OF MORTGAGED PROPERTY
During the term of this Mortgage, the Mortgaged Property shall
be managed, at all times, by a manager (the "Manager") reasonably satisfactory
to Mortgagee, which Manager shall be controlled by Mortgagor. Any substitute
Manager or change in arrangements for leasing and management must be approved
in writing by Mortgagee prior to such substitution or change being effected.
Mortgagor covenants and agrees that this Section 19 is of the
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essence of this Mortgage and that Mortgagee will be prejudiced by a violation
hereof in that Mortgagee is relying upon the expertise and business acumen of
the Manager.
20. INDEMNIFICATION OF MORTGAGEE
Mortgagor hereby agrees to and does hereby indemnify, protect,
defend and save harmless Mortgagee and its officers, directors, employees,
agents, attorneys and shareholders from and against any and all losses,
damages, expenses or liabilities of any kind or nature and from any suits,
claims or demands, including reasonable counsel fees incurred in investigating
or defending such claims, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Mortgage and
the transactions contemplated herein, including, but not limited to, (a)
disputes between any architect, general contractor, subcontractor, materialman
or supplier, or on account of any act or failure to act by Mortgagee in
connection with this Mortgage, or (b) losses, damages, expenses or liabilities
sustained by Mortgagee pursuant to any provisions contained in any federal,
state or local environmental law, ordinance, rule or regulation, or (c) any
violation of the covenants and representations contained in Section 4(b)-(j)
hereof. THE INDEMNIFICATION OBLIGATIONS OF MORTGAGOR UNDER THIS SECTION 20(b)
AND (c) SHALL NOT BE SUBJECT TO THE LIMITATIONS OF LIABILITY SET FORTH IN
SECTION 28 HEREOF OR IN THE NOTE. In case any action shall be brought against
Mortgagee based upon any of the above and in respect to which indemnity may be
sought against Mortgagor, Mortgagee shall promptly notify Mortgagor in writing,
and Mortgagor shall assume the defense thereof, including the employment of
counsel selected by Mortgagor and satisfactory to Mortgagee, the payment of all
costs and expenses and the right to negotiate and consent to settlement. Upon
determination made by Mortgagee, Mortgagee shall have the right to employ
separate counsel in any such action and to participate in the defense thereof.
Mortgagor shall not be liable for any settlement of any such action effected
without its consent, but if settled with Mortgagor's consent, or if there be a
final judgment for the claimant in any such action, Mortgagor agrees to
indemnify and save harmless Mortgagee from and against any loss or liability by
reason of such settlement or judgment.
21. IMPOSITION OF TAX
Mortgagor covenants and agrees to pay and discharge when due
any taxes, fees or other charges imposed by any Federal, State or local
authority, including interest and penalties thereon, if any, or thereafter
becoming payable on this Mortgage or the Note secured hereby (excluding any
Federal or state income taxes of Mortgagee). Mortgagor further covenants and
agrees to pay upon demand all fees, charges or taxes (excluding any Federal or
state income taxes of Mortgagee), if any, and interest and penalties thereon,
if any, imposed on Mortgagee as a condition or as a result of the making of
this loan in the State of New Jersey.
22. MISCELLANEOUS
(a) No delay or failure of Mortgagee to exercise any
right or option herein given or reserved shall constitute a waiver of such
right or estop Mortgagee from afterwards exercising such option, and
contracting to pay by Mortgagee of anything Mortgagor has herein agreed to pay
shall not constitute a waiver of the default of Mortgagor in failing to make
such payments and shall not estop Mortgagee from foreclosing this Mortgage on
account of such failure of Mortgagor. The rights, options, powers and remedies
herein provided shall be cumulative and no one or more of them shall be
exclusive of the other or others, or of any right or remedy now or hereafter
given or allowed by law.
(b) Mortgagor waives the benefit of any appraisement laws
of the State of New Jersey.
23. EXTENSIONS AND MODIFICATIONS
No extension or indulgence granted to Mortgagor, and no
alteration, change or modification of the Note consented or agreed to by
Mortgagee, and no other act or omission of Mortgagee, including the taking of
additional security or the release or subordination of any security, shall
constitute a release of the lien and obligation of this Mortgage or be
interposed as a defense against the enforcement of this Mortgage, except a
writing signed by Mortgagee which constitutes an express, effective release and
satisfaction of the Note.
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<PAGE> 14
24. NO THIRD PARTY BENEFICIARIES
The parties do not intend the benefits of this Mortgage to
inure to any third party, except for the successors and assigns of Mortgagee.
Notwithstanding anything contained herein or in the Note, or any other document
executed in connection herewith, or any conduct or course of conduct by either
or both of the parties hereto, or their respective affiliated companies, agents
or employees, before or after the execution hereof, this Mortgage shall not be
construed as creating any rights, claims or causes of action in favor of any
person or entity other than Mortgagor and Mortgagee.
25. NOTICES
All notices, requests and demands upon the respective parties
hereto shall be effective when hand delivered to such party at the address set
forth below, or if sent by overnight delivery service, on the next business
day, or if sent by United States mail, postage prepaid, registered or certified
mail, on the second business day after the day on which mailed or sent,
addressed to such party as follows:
To Mortgagee: Sun Life Assurance Company
of Canada (U.S.)
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attention: Virginia M. Ayers,
Sr. Property Investments Officer
With copies to: John Cannon, Assistant Vice President
GMAC Mortgage Corporation
8360 Old York Road
Elkins Park, PA 19117
Gregory Kleiber, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street
Philadelphia, PA 19103
To Mortgagor: MLCP Associates Limited Partnership
2 Eves Drive
Marlton, New Jersey 08053
With a copy to: Robert E. Schwartz, Esquire
Sherman, Silverstein, Kohl, Rose & Podolsky
4300 Haddonfield Road, Suite 311
Pennsauken, NJ 08109
or to such other address as may be furnished in writing for such purpose.
26. COMMERCIAL LOAN
Mortgagor represents and warrants that the loan secured by
this Mortgage was obtained solely for the purpose of carrying on or acquiring a
business or commercial investment.
27. NO AGENCY, JOINT VENTURE OR PARTNERSHIP BETWEEN
MORTGAGOR AND MORTGAGEE
This Mortgage shall not be construed as a partnership, joint
venture, other business entity formation, lease or sale. Mortgagee is not now
a partner or joint venturer with Mortgagor in any respect or for any purpose in
the
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<PAGE> 15
conduct of Mortgagor's business. Mortgagor is not the agent, representative,
partner of, or joint venturer with Mortgagee and will act accordingly. This
Mortgage shall not be construed to make Mortgagee liable to any person or
persons for goods or services furnished to the Mortgaged Property, or for debts
or claims accruing therefrom against Mortgagor. There shall be no contractual
relation, either express or implied, between Mortgagee and any person or per
sons supplying any work or materials to the Mortgaged Property.
28. LIMITED LIABILITY
The liability of Mortgagor hereunder shall be limited to and
enforceable only out of the Mortgaged Property and the rents, issues and
profits therefrom, and the lien of any judgment shall be restricted thereto and
shall not extend to Mortgagor, Mortgagee waving any right Mortgagee may have to
claim a deficiency judgment against Mortgagor; provided, however, that
Mortgagor and Mortgagor's general partner shall not be exonerated or exculpated
from, and shall be liable for, any deficiency, loss or damage suffered by
Mortgagee as a result of any security deposits received or held by Mortgagor,
any rent received or held by Mortgagor after an Event of Default, or any rent
prepaid more than one month in advance; or from Mortgagor's failure to properly
account to Mortgagee for any proceeds of insurance or condemnation proceeds as
required by this Mortgage; or from repairs required by the Mortgaged Property
following a casualty for which insurance proceeds are not available due to a
violation of Section 10 hereof; or from fraud, material misrepresentation or
bad faith by Mortgagor; or from waste of the Mortgaged Property; or from
delinquent taxes or assessments; or from Mortgagor's violation of, or failure
to perform its obligations under, Section 4(b)-(j) or Section 20(b) or (c) of
this Mortgage. Nothing in this subsection, however, shall limit Mortgagee's
rights against any tenants under leases assigned to Mortgagee as additional
security or against any other collateral securing Mortgagor's obligations, now
or hereafter mortgaged, pledged or assigned by Mortgagor or anyone else to
Mortgagee.
29. COUNSEL FEES
(a) If Mortgagee becomes a party to any suit or
proceeding affecting the Mortgaged Property or title thereto, the lien created
by this Mortgage or Mortgagee's interest therein, or if Mortgagee engages
counsel to collect any of the indebtedness or to enforce performance of the
agreements, conditions, covenants, provisions or stipulations of this Mortgage
or the Note, Mortgagee's costs, expenses and reasonable counsel fees, whether
or not suit is instituted, shall be paid to Mortgagee by Mortgagor, on demand,
with interest at the Default Rate set forth in the Note, and until paid, they
shall be deemed to be part of the indebtedness evidenced by the Note and
secured by this Mortgage.
(b) Regardless of whether any proceeds of the loan
evidenced by the Note have been disbursed, this Mortgage also secures the
payment of all loan commissions, service charges, reasonable attorney's fees,
liquidated damages, expenses and advances due to or incurred by Mortgagee in
connection with the loan transaction intended to be secured hereby, all in
accordance with the application of, and the Loan Commitment issued to and
accepted by, Mortgagor in connection with the loan.
30. PARTIAL INVALIDITY
The unenforceability or invalidity of any one or more
provisions, clauses, sentences, and/or paragraphs hereof shall not render any
other provisions, clauses, sentences and/or paragraphs herein contained
unenforceable or invalid.
31. BINDING EFFECT
The covenants, conditions and agreements contained in this
Mortgage shall bind, and the benefits thereof shall inure to, the respective
parties hereto and their respective heirs, personal representatives, successors
and assigns. If Mortgagor is at any time constituted by more than one person,
the obligations of each such person shall be joint and several.
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<PAGE> 16
32. SURVIVAL OF COMMITMENT
The covenants, conditions and agreements contained in
Mortgagee's Loan Commitment to Mortgagor dated August 23, 1994, shall survive
the execution hereof, and any breach or violation thereof by Mortgagor shall
con stitute an Event of Default hereunder.
33. GOVERNING LAW
This Mortgage shall be construed in accordance with and
governed by the laws of the State of New Jersey.
34. AMENDMENT
This Mortgage cannot be changed, modified or amended except by
agreement in writing signed by the party against whom enforcement of the
change, modification or amendment is sought.
35. CAPTIONS
The captions preceding the text of the sections of this
Agreement are used solely for convenience of reference and shall not affect the
meaning or construction of this Mortgage.
36. WAIVER
Mortgagor hereby waives the right to trial by jury in any
action by Mortgagee to enforce Mortgagee's rights under the Note, this Mortgage
or any other document evidencing or securing the Note.
37. ACKNOWLEDGEMENT
MORTGAGOR ACKNOWLEDGES THAT THIS MORTGAGE CONTAINS A WAIVER OF
TRIAL BY JURY IN SECTION 36.
WITNESS the due execution hereof the day and year first above
written.
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MLCP General Corporation, a
New Jersey corporation, general partner
By: /s/ Joseph D. Gonnelli
-----------------------------------------
Joseph D. Gonnelli, President
Attest: /s/ R. Brian Jackson
------------------------------------
R. Brian Jackson, Secretary
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<PAGE> 17
State of New Jersey, County of __________
I am an officer authorized to take acknowledgements and proofs in this
state.
On ____________, 1994, __________________________ ("Witness") appeared
before me in person. The Witness was duly sworn by me according to law under
oath and stated and proved to my satisfaction that:
1. The Witness is the (Assistant) Secretary of the corporation
that executed this document ("Corporation").
2. _______________, the officer who signed this document, is the
President of the corporation ("Corporate Officer").
3. The making, signing, sealing, and delivery of this document
have been duly authorized by a proper resolution of the Board of Directors of
the Corporation.
4. The Witness knows the corporate seal of the Corporation. The
seal affixed to this document is the corporate seal of the Corporation. The
seal was affixed to this document by the Corporate Officer. The Corporate
Officer signed and delivered this document as and for the voluntary act and
deed of the Corporation. All of this was done in the presence of the Witness
who signed this document as attesting witness. The Witness signs this proof to
attest to the truth of these facts.
Sworn to and signed before me on the date written above.
Witness:
-----------------------
Name:
--------------------------
Notary:
-----------------------
Name:
-------------------------
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<PAGE> 1
EXHIBIT 10.10
October 19, 1994
MLCP Associates Limited Partnership
2 Eves Drive
Marlton, New Jersey 08053
Re: $6,500,000 Loan from Sun Life Assurance Company of
Canada (U.S.) ("Loan")
Dear Sir or Madam:
This letter sets forth certain agreements between Sun Life Assurance
Company of Canada (U.S.) ("Mortgagee") and MLCP Associates Limited Partnership
("Mortgagor"), regarding the release by Mortgagee of condemnation award
proceeds following a taking or condemnation and insurance proceeds following a
casualty. Capitalized terms used herein have the same meaning as set forth in
the Mortgage and Security Agreement of even date herewith from MLCP Associates
Limited Partnership to us (the "Mortgage").
1. (a) Notwithstanding anything to the contrary set forth in
Section 8 of the Mortgage, Mortgagee agrees that (provided no Event of Default
has occurred under the Mortgage or under the Note or any other document given
as collateral security for the Note, and subject to the provisions of
subsection (c) below) in the event of a con demnation or taking, Mortgagee will
make available to Mortgagor the proceeds received by it for purposes of
restoration of the Mortgaged Property on the following terms and conditions:
(i) prior to the commencement of restoration, the
contracts, contractors, and plans and specifications for the restoration shall
have been approved by Mortgagee, and Mortgagee, at its option, shall be
provided with a surety bond insuring satisfactory completion of the
restoration, such insurance and bond to be in form acceptable to Mortgagee;
(ii) at the time of any disbursement Mortgagor
shall not be in default hereunder, no mechanics' or materialmen's liens shall
have been filed and remain undischarged (or unbonded if contested in good
faith) and a satisfactory bringdown of title insurance shall be delivered to
Mortgagee;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon approval by Mortgagee's engineer and receipt of satisfactory
evidence of the stage of completion and of performance of the work in good and
workmanlike manner in accordance with the contracts, plans and specifications;
(iv) the restoration fund shall be deposited in an
escrow account with Mortgagee; and
(v) such restoration and the disbursement of the
restoration fund shall be otherwise effected in accordance with the provisions
of Mortgagee's standard building loan agreement.
(b) Prior to the commencement of restoration, or at any
time thereafter, if the estimated cost of restoration, as reasonably determined
by Mortgagee, exceeds the amount of proceeds paid on account of the cost of
such restoration, the amount of such excess shall be paid by Mortgagor to
Mortgagee in cash or by means of other security satisfactory to Mortgagee, and
shall be added to the restoration fund.
(c) If no restoration is necessary, or if the Mortgaged
Property cannot be restored to a condition functionally similar to its
condition prior to the taking within one hundred eighty (180) days, or if any
material Lease is terminated by the tenant as a result of such condemnation,
Mortgagee, at its sole option, shall apply all or part of the proceeds to
reduce the outstanding principal indebtedness secured hereby, and shall pay
over to Mortgagor the balance not so applied (if any).
<PAGE> 2
(d) If, prior to the receipt of the proceeds by
Mortgagee, the Mortgaged Property shall have been sold on foreclosure of the
Mortgage, Mortgagee shall have the right to receive the proceeds to the extent
of:
(i) any deficiency found to be due to Mortgagee
in connection with the foreclosure sale, with interest thereon, at the Default
Rate set forth in the Note, and
(ii) reasonable counsel fees, costs and
disbursements incurred by Mortgagee in connection with the collection of the
proceeds.
(e) If the amount of the initial award of damages for the
total condemnation is insufficient to pay in full the indebtedness secured
hereby with interest and other appropriate charges, Mortgagee shall have the
right to prosecute to final determination or settlement an appeal or other
appropriate proceedings in the name of Mortgagee or Mortgagor, for which
Mortgagee is hereby appointed irrevocably as attorney-in-fact for Mortgagor.
In that event, the reasonable expenses of the proceedings, including reasonable
counsel fees, shall be paid first out of the proceeds, and only the excess, if
any, paid to the Mortgagee shall be credited against the amounts due under this
Mortgage.
(f) Nothing herein shall limit the rights otherwise
available to Mortgagee, at law or in equity, including the right to intervene
as a party to any condemnation proceedings.
2. (a) Notwithstanding anything to the contrary set forth in
Section 10 of the Mortgage, Mortgagee agrees that (provided that no Event of
Default has occurred under the Mortgage or under the Note or any other document
given as collateral security for the Note, and provided that the Mortgaged
Property can, in Mortgagee's opinion, be restored to its condition on the date
hereof within 180 days following the casualty) in the event of such loss or
damage or casualty, Mortgagee will make available the proceeds received by it
for purposes of restoration of the Mortgaged Property on the following terms
and conditions:
(i) prior to the commencement of restoration, the
contracts, contractors, and plans and specifications for the restoration shall
have been approved by Mortgagee, and Mortgagee, at its option, shall be
provided with a surety bond insuring satisfactory completion of the
restoration, such insurance and bond to be in form reasonably acceptable to
Mortgagee;
(ii) at the time of any disbursement Mortgagor
shall not be in default under the Mortgage, no mechanics' or materialmen's
liens shall have been filed and remain undischarged (or unbonded if contested
in good faith) and a satisfactory bringdown of title insurance shall be
delivered to Mortgagee;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon approval by Mortgagee's engineer and receipt of satisfactory
evidence of the stage of completion and of performance of the work in good and
workmanlike manner in accordance with the contracts, plans and specifications;
(iv) the restoration fund shall be deposited in an
escrow account with Mortgagee; and
(v) such restoration and the disbursement of the
restoration fund shall be otherwise effected in accordance with the provisions
of Mortgagee's standard building loan agreement.
(b) Prior to the commencement of restoration, or at any
time thereafter, if the estimated cost of restoration, as reasonably determined
by Mortgagee, exceeds the amount of proceeds paid on account of the cost of
such restoration, the amount of such excess shall be paid by Mortgagor to
Mortgagee in cash or by means of other security satisfactory to Mortgagee, and
shall be added to the restoration fund.
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<PAGE> 3
(c) If no restoration is necessary, Mortgagee, at its
sole option, shall apply all or part of the insurance proceeds to reduce the
outstanding principal indebtedness secured hereby, and shall pay over to
Mortgagor the balance not so applied (if any).
Please acknowledge your agreement to these terms by executing a copy of this
letter.
SUN LIFE ASSURANCE COMPANY OF
CANADA (U.S.)
By:
-----------------------------------------
MLCP ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MLCP General Corporation, a
New Jersey corporation, general partner
By: /s/ Joseph D. Gonnelli
------------------------------------------
Joseph D. Gonnelli, President
Attest: /s/ R. Brian Jackson
-------------------------------------
R. Brian Jackson, Secretary
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