<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 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 No.)
16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On January 5, 1997, the Company consummated the acquisition of a
portfolio of 22 office properties that contain an aggregate of approximately
1.8 million net rentable square feet. In conjunction with its acquisition of
these properties, the Company has agreed to acquire an additional office
building that is currently under construction and that is expected to contain
approximately 209,000 net rentable square feet upon completion during the
first quarter of 1998. The aggregate purchase price for these properties
(including the property under construction) is $229 million. Agreements of
Sale relating to this portfolio acquisition are attached as Exhibits 10.6
through 10.13 under Item 7. The Company has provided additional information
with respect to this acquisition in Item 5 of a Current Report on Form 8-K
filed with the Securities and Exchange Commission on December 17, 1997 (the
"December 17 Form 8-K").
Item 5. Other Events.
(a) On December 31, 1997, the Company, through a wholly-owned subsidiary
(the "BRT Sub") of Brandywine Operating Partnership, L.P., formed a joint
venture known as "Interstate 202 General Partnership" (the "Joint Venture")
to own, develop and operate a project involving the redevelopment of a
building situated on approximately 5 acres of land in Concord Township,
Delaware County, Pennsylvania. The building has previously been used for
retail and office purposes, and the Joint Venture intends to redevelop the
building in 1998 at an estimated cost of approximately $1.0 million, for
office purposes. The Joint Venture was formed as a general partnership
between the BRT Sub (with a 50% interest) and Across The Line, L.P., a
Delaware limited partnership (with a 50% interest). The BRT Sub contributed
approximately $850,000 to the capital of the Joint Venture upon its formation
and agreed to contribute up to an additional $650,000 in connection with the
redevelopment of the building. In addition, the BRT Sub delivered a guaranty
of payment in the amount of $500,000 to secure a bank loan in the amount of
$1.75 million that funded a portion of the purchase price of the building and
related land. The equity contributions of the BRT Sub to the Joint Venture
are entitled to a 10% preferential return. Across The Line, L.P. is
affiliated with the member in two other joint ventures entered into by a
subsidiary of the Company and reported in a Current Report dated October 3,
1997: Christiana Center Operating Company I LLC and Christiana Center
Operating Company II LLC.
(b) On January 5, 1998, the Company replaced its $150 million secured credit
facility with a $300 million unsecured credit facility (the "Credit
Facility"). The Credit Facility enables the Company to borrow funds at a
reduced interest rate equal to the 30, 60, 90 or 180-day LIBOR, plus, in each
case, a range of 100 to 137.5 basis points, depending on the Company's then
existing leverage and debt rating. Alternatively, the Company can borrow
funds at the Prime Rate plus 25 basis points or the Federal Funds Rate plus
50 basis points. As of January 7, 1998, approximately $298.5 million was
outstanding under the Credit Facility bearing interest at the rate of 7.07%
per annum. The Credit Facility matures on January 5, 2001 and is extendable
to January 5, 2002 by the Company in the absence of default and upon payment
of a fee. The Credit Facility requires the Company to maintain compliance
with a number of customary financial and other covenants on an ongoing basis,
including
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leverage ratios based on book value and debt service coverage ratios,
limitations on additional indebtedness, liens and distributions and a minimum
net worth requirement.
To facilitate certain 1998 property acquisitions, on January 5, 1998,
the Company also obtained an additional unsecured credit facility (the
"Additional Credit Facility") permitting advances of up to $100.0 million.
The Additional Credit Facility bears interest at a per annum floating rate
equal to the 30-day LIBOR plus 150 basis points (7.19% as of January 7, 1998)
and matures on May 5, 1998, subject to a 90-day extension upon satisfaction
of certain conditions. As of January 7, 1998, $23.0 million was outstanding
under the Additional Credit Facility.
(c) As of January 2, 1998, the Company entered into five-year employment
agreements with the Chairman of the Board and the President and Chief
Executive Officer at base salaries of $250,000 and $300,000, respectively.
The employment agreements include a provision for a payment equal to three
times annual salary and bonus in the event the employment of the applicable
executive is terminated under certain circumstances, such as following a
change in control. Copies of the employment agreements are attached as
exhibits under Item 7.
(d) As previously reported in the December 17 Form 8-K, the Board of
Trustees of the Company authorized certain equity awards to management of the
Company. These awards consisted of "restricted" common shares of beneficial
interest ("Common Shares") and options exercisable for Common Shares. The
actual number of "restricted" Common Shares and the exercise prices of the
options were based on the closing price of the Common Shares on January 2,
1998.
On the basis of the closing price of the Common Shares on January 2,
1998, which was $25.25, the aggregate number of "restricted" Common Shares
awarded was 443,557. Of these shares, 158,416 and 237,624 were awarded to
the Chairman of the Board and the president and Chief Executive Officer,
respectively, and vest over an eight-year period, subject to acceleration of
vesting upon certain conditions, including a change in control of the
Company, death, disability or a non-renewal of their employment agreements.
The balance of the "restricted" Common Shares were awarded to four other
members of senior management: (i) John M. Adderly, Jr. (21,109 shares);
Anthony A. Nichols, Jr, (15,842 shares); (iii) H. Jeffrey DeVuono (5,283
shares); and Mark S. Kripke (5,283 shares). These shares vest pro-rata over
a five year period, subject to acceleration of vesting upon certain
conditions, including a change in control of the Company, death and
disability.
In addition, ten-year options exercisable (subject to the limitation
noted below) for an aggregate of 2,043,704 Common Shares were awarded to
members of management of the Company. Of these options, 554,034 have a per
share exercise price of $25.25 ("Category I Options"); 740,796 have a per
share exercise price of $27.78 ("Category II Options"); and 748,874 have a
per share exercise price of $29.04 ("Category III Options"). These options
are subject to varying vesting schedules (none of which exceeds five years)
and are subject to acceleration of vesting under certain circumstances,
including a change in control of the Company. Because the Company's current
1997 Long-Term Incentives Plan authorizes only 750,000 Common Shares for
awards thereunder, options exercisable for an aggregate 1,737,261 Common
Shares (including the below referenced options granted to Messrs. Nichols,
Sr. and Sweeney) were awarded subject to receipt of shareholder approval at
the next meeting of the Company's shareholders. In the event these options
are not
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approved by shareholders, the options would convert into share appreciation
rights that would be exercisable during the option term by the holder for a
cash payment based on the spread, if any, between the exercise price
contained in the option and the market price of a Common Share at the time of
the exercise. Mr. Nichols was awarded 197,923 Category I Options, 231,597
Category II Options and 249,438 Category III Options. Mr. Sweeney was
awarded 296,736 Category I Options, 347,222 Category II Options and 374,531
Category III Options.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements relating to the acquisition reported under Item 2
has previously been reported under Item 7 of the December 17 Form 8-K.
(b) Pro Forma Financial Information.
The pro forma financial information relating to the acquisition reported
under Item 2 has previously been reported under Item 7 of the December 17 Form
8-K.
(c) Exhibits.
10.1 Amended and Restated Credit Agreement dated as of January 5, 1998 among
the Company, the Operating Partnership, NationsBank, N.A, and the
guarantors and lenders identified therein.
10.2 Form of Promissory Note
10.3 Form of Revolving Note
10.4 Guaranty Agreement
10.5 General Partnership Agreement of Interstate 202 General Partnership
10.6 Agreement of Purchase and Sale (The Berkshire Group)
10.7 Agreement of Purchase and Sale (Bowpl Park, LLC)
10.8 Agreement of Purchase and Sale (Linden Park Limited Partnership)
10.9 Agreement of Purchase and Sale (Park 80, L.L.C.)
10.10 Agreement of Purchase and Sale (Trend Associates)
10.11 Agreement of Purchase and Sale (University Plaza, L.P.)
10.12 Agreement of Purchase and Sale (Virginia Drive Associates, L.P.)
10.13 Agreement of Purchase and Sale (WHDWA Real Estate Limited Partnership)
10.14 Employment Agreement (Anthony A. Nichols, Sr.)
10.15 Employment Agreement (Gerard H. Sweeney)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Zelenkofske Axelrod & Co., Ltd.
23.3 Consent of Cushman & Wakefield of Pennsylvania, Inc.
<PAGE>
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: January 8, 1998 By: /s/ Gerard H. Sweeney
------------------------
Gerard H. Sweeney
President and Chief Executive Officer
(Principal Executive Officer)
Date: January 8, 1998 By: /s/ Mark S. Kripke
-------------------------
Mark S. Kripke
Chief Financial Officer and Secretary
(Principal Financial and Accounting
Officer)
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
among
BRANDYWINE REALTY TRUST
and
BRANDYWINE OPERATING PARTNERSHIP, L.P.
as Borrowers
and
THE SUBSIDIARIES OF THE BORROWERS
as Guarantors
and
THE LENDERS IDENTIFIED HEREIN
and
NATIONSBANK, N.A.
as Administrative Agent
DATED AS OF JANUARY 5, 1998
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TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . 1
1.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Computation of Time Periods and Other Definition Provisions.. . 21
1.3 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . 21
1.4 Joint Venture Investments.. . . . . . . . . . . . . . . . . . . 22
SECTION 2 CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . .22
2.1 Revolving Loans.. . . . . . . . . . . . . . . . . . . . . . . . 22
2.2 Letter of Credit Subfacility. . . . . . . . . . . . . . . . . . 25
2.3 Joint and Several Liability of the Borrowers. . . . . . . . . . 30
2.4 Appointment of BOP. . . . . . . . . . . . . . . . . . . . . . . 32
2.5 Non-Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT.32
3.1 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2 Place and Manner of Payments. . . . . . . . . . . . . . . . . . 33
3.3 Prepayments.. . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.5 Payment in full at Maturity; Extension of Maturity. . . . . . . 35
3.6 Computations of Interest and Fees.. . . . . . . . . . . . . . . 35
3.7 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . . 36
3.8 Sharing of Payments.. . . . . . . . . . . . . . . . . . . . . . 37
3.9 Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . . 38
3.10 Inability To Determine Interest Rate.. . . . . . . . . . . . . 38
3.11 Illegality.. . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.12 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . 39
3.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.14 Compensation.. . . . . . . . . . . . . . . . . . . . . . . . . 42
3.15 Mitigation; Mandatory Assignment.. . . . . . . . . . . . . . . 43
SECTION 4 GUARANTY. . . . . . . . . . . . . . . . . . . . . . . . . . .43
4.1 Guaranty of Payment.. . . . . . . . . . . . . . . . . . . . . . 43
4.2 Obligations Unconditional.. . . . . . . . . . . . . . . . . . . 44
4.3 Modifications.. . . . . . . . . . . . . . . . . . . . . . . . . 44
4.4 Waiver of Rights. . . . . . . . . . . . . . . . . . . . . . . . 45
4.5 Reinstatement.. . . . . . . . . . . . . . . . . . . . . . . . . 45
4.6 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.7 Limitation of Guaranty. . . . . . . . . . . . . . . . . . . . . 46
4.8 Rights of Contribution. . . . . . . . . . . . . . . . . . . . . 46
i
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SECTION 5 CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . .46
5.1 Closing Conditions. . . . . . . . . . . . . . . . . . . . . . . 46
5.2 Conditions to All Extensions of Credit. . . . . . . . . . . . . 50
SECTION 6 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .51
6.1 Financial Condition.. . . . . . . . . . . . . . . . . . . . . . 51
6.2 No Material Change. . . . . . . . . . . . . . . . . . . . . . . 52
6.3 Organization and Good Standing. . . . . . . . . . . . . . . . . 52
6.4 Due Authorization.. . . . . . . . . . . . . . . . . . . . . . . 52
6.5 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.6 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.7 Enforceable Obligations.. . . . . . . . . . . . . . . . . . . . 53
6.8 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.9 Ownership.. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.10 Indebtedness.. . . . . . . . . . . . . . . . . . . . . . . . . 53
6.11 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.13 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 54
6.14 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . 54
6.15 Organization Structure/Subsidiaries. . . . . . . . . . . . . . 55
6.16 Use of Proceeds; Margin Stock. . . . . . . . . . . . . . . . . 55
6.17 Government Regulation. . . . . . . . . . . . . . . . . . . . . 55
6.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 56
6.19 Solvency.. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.20 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.21 Location of Properties.. . . . . . . . . . . . . . . . . . . . 57
6.22 Disclosure.. . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.23 Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . 58
6.24 No Burdensome Restrictions.. . . . . . . . . . . . . . . . . . 58
SECTION 7 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .58
7.1 Information Covenants.. . . . . . . . . . . . . . . . . . . . . 58
7.2 Financial Covenants.. . . . . . . . . . . . . . . . . . . . . . 62
7.3 Preservation of Existence.. . . . . . . . . . . . . . . . . . . 62
7.4 Books and Records.. . . . . . . . . . . . . . . . . . . . . . . 63
7.5 Compliance with Law.. . . . . . . . . . . . . . . . . . . . . . 63
7.6 Payment of Taxes and Other Indebtedness.. . . . . . . . . . . . 63
7.7 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.8 Maintenance of Assets.. . . . . . . . . . . . . . . . . . . . . 63
7.9 Performance of Obligations. . . . . . . . . . . . . . . . . . . 64
7.10 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 64
7.11 Audits/Inspections.. . . . . . . . . . . . . . . . . . . . . . 64
7.12 Additional Credit Parties. . . . . . . . . . . . . . . . . . . 64
7.13 Interest Rate Protection Agreements. . . . . . . . . . . . . . 65
7.14 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . 65
7.15 Construction.. . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .65
ii
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8.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.2 Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.3 Nature of Business. . . . . . . . . . . . . . . . . . . . . . . 66
8.4 Consolidation and Merger. . . . . . . . . . . . . . . . . . . . 66
8.5 Sale or Lease of Assets.. . . . . . . . . . . . . . . . . . . . 66
8.6 Advances, Investments and Loans.. . . . . . . . . . . . . . . . 66
8.7 Restricted Payments.. . . . . . . . . . . . . . . . . . . . . . 67
8.8 Transactions with Affiliates. . . . . . . . . . . . . . . . . . 67
8.9 Fiscal Year; Organizational Documents.. . . . . . . . . . . . . 67
8.10 Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.11 Other Negative Pledges.. . . . . . . . . . . . . . . . . . . . 68
8.12 Construction and Development.. . . . . . . . . . . . . . . . . 68
SECTION 9 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . .68
9.1 Events of Default.. . . . . . . . . . . . . . . . . . . . . . . 68
9.2 Acceleration; Remedies. . . . . . . . . . . . . . . . . . . . . 71
9.3 Allocation of Payments After Event of Default.. . . . . . . . . 72
SECTION 10 AGENCY PROVISIONS. . . . . . . . . . . . . . . . . . . . . .73
10.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.2 Delegation of Duties.. . . . . . . . . . . . . . . . . . . . . 73
10.3 Exculpatory Provisions.. . . . . . . . . . . . . . . . . . . . 73
10.4 Reliance on Communications.. . . . . . . . . . . . . . . . . . 74
10.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . 74
10.6 Non-Reliance on Administrative Agent and Other Lenders.. . . . 75
10.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 75
10.8 Administrative Agent in Its Individual Capacity. . . . . . . . 76
10.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . .76
11.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.2 Right of Set-Off.. . . . . . . . . . . . . . . . . . . . . . . 77
11.3 Benefit of Agreement.. . . . . . . . . . . . . . . . . . . . . 77
11.4 No Waiver; Remedies Cumulative.. . . . . . . . . . . . . . . . 79
11.5 Payment of Expenses; Indemnification.. . . . . . . . . . . . . 79
11.6 Amendments, Waivers and Consents.. . . . . . . . . . . . . . . 80
11.7 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . 81
11.8 Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.9 Defaulting Lender. . . . . . . . . . . . . . . . . . . . . . . 81
11.10 Survival of Indemnification and Representations and Warranties.81
11.11 Governing Law; Jurisdiction.. . . . . . . . . . . . . . . . . 82
11.12 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 82
11.13 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.14 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 83
11.15 Entirety. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.16 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . 83
11.17 Confidentiality.. . . . . . . . . . . . . . . . . . . . . . . 83
iii
<PAGE>
SCHEDULES
Schedule 1.1(a) Borrowing Base Value
Schedule 1.1(b) Revolving Loan Commitment Percentages
Schedule 1.1(c) Existing Properties
Schedule 2.2(c) Existing Letters of Credit
Schedule 6.15 Organization Structure/Subsidiaries
Schedule 6.18 Environmental Matters
Schedule 6.21 Properties
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Revolving Loan Note
Exhibit 7.1(c) Form of Borrowing Base Certificate
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
iv
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement") is
entered into as of January 5, 1998 among BRANDYWINE REALTY TRUST ("BRT"), a
Maryland real estate investment trust and BRANDYWINE OPERATING PARTNERSHIP, L.P.
("BOP"), a Delaware limited partnership (collectively as the "Borrowers"); the
Subsidiaries of the Borrowers as Guarantors, the Lenders (as defined herein) and
NATIONSBANK, N.A., as Administrative Agent for the Lenders (the "Administrative
Agent").
RECITALS
WHEREAS, BRT, BOP and certain Subsidiaries of BRT and BOP entered into that
certain Revolving Credit Agreement, dated as of November 25, 1996, with Smith
Barney Mortgage Capital Group, Inc. and NationsBank, N.A. (as amended the
"Existing Credit Agreement");
WHEREAS, the Borrowers desire to amend and restate the Existing Credit
Agreement to provide a revolving credit facility in an aggregate amount of up to
$300 million;
WHEREAS, the Guarantors have agreed to unconditionally guarantee all the
obligations of the Borrowers hereunder; and
WHEREAS, the Lenders party hereto have agreed to make the requested amended
and restated revolving credit facility available to the Borrowers on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Adjusted EBITDA" means EBITDA, for the applicable period, less the
greater of (a) the sum of $.50 per square foot for all the Properties plus
the then market rate for management fees in connection with all the
Properties (unless previously deducted in
<PAGE>
calculating EBITDA) or (b) the sum of actual Capital Expenditures incurred
plus actual management fees incurred (unless previously deducted in
calculating EBITDA) plus actual tenant improvements incurred plus actual
leasing commissions incurred, in each case during such period (it being
understood that expenditures associated with Properties under construction
or development do not constitute Capital Expenditures or tenant
improvements for the purpose of this definition).
"Adjusted Property EBITDA" means for the applicable Property, the
Property EBITDA for such Property for the prior four fiscal quarters less
the greater of (a) the sum of $.50 per square foot for such Property plus
the then market rate for management fees in connection with such Property
(unless previously deducted in calculating Property EBITDA for such
Property) or (b) the sum of actual Capital Expenditures incurred plus
actual management fees incurred (unless previously deducted in calculating
Property EBITDA for such Property) plus actual tenant improvements incurred
plus actual leasing commissions incurred, in each case during the prior
four fiscal quarters (it being understood that expenditures associated with
Properties under construction or development do not constitute Capital
Expenditures or tenant improvements for the purpose of this definition).
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means NationsBank, N.A. (or any successor
thereto) or any successor administrative agent appointed pursuant to
Section 10.9.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation, partnership, limited liability company or real
estate investment trust if such Person possesses, directly or indirectly,
the power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation, limited liability
company or real estate investment trust or to vote 10% or more of the
partnership interests of such partnership or (ii) to direct or cause
direction of the management and policies of such corporation or
partnership, whether through the ownership of voting securities, as
managing or general partner, by contract or otherwise.
"Agency Services Address" means NationsBank, N.A., 8300 Greensboro
Drive, Suite 300, McLean, Virginia 22102, Attn.: Eleanor Mitchell-Wharton,
or such other address as may be identified by written notice from the
Administrative Agent to the Borrowers.
"Annualized Adjusted Property EBITDA" means, for the applicable
Property, the Property EBITDA for such Property for the most recent fiscal
quarter multiplied times a fraction equal to 365/the number of days such
Property was owned by a Credit Party during such fiscal quarter less the
greater of (a) the sum of $.50 per square foot for such Property plus the
then market rate for management fees in connection with such Property
(unless previously deducted in calculating Property EBITDA for such
Property) or (b) the sum of
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actual Capital Expenditures incurred plus actual management fees incurred
(unless previously deducted in calculating Property EBITDA for such
Property) plus actual tenant improvements incurred plus actual leasing
commissions incurred, in each case during the prior four fiscal periods (it
being understood that expenditures associated with Properties under
construction or development do not constitute Capital Expenditures or
tenant improvements for the purpose of this definition).
"Applicable Percentage" means:
(a) if (i) BRT or BOP does not have an Unsecured Senior Debt Rating,
or (ii) if BRT or BOP has an Unsecured Debt Rating from S&P that is worse
than BBB-, or (iii) BRT or BOP has an Unsecured Debt Rating from Moody's
that is worse than Baa3, the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
Pricing Level Leverage Applicable Percentage
Ratio for Eurodollar Loans
------------- --------- ----------------------
I < .20 to 1.0 1.15%
II > .20 to 1.0 but
< .30 to 1.0 1.25%
III > .30 to 1.0 1.375%
(b) if BRT or BOP has an Unsecured Senior Debt Rating from either S&P
or Moody's (or both) and neither (a)(ii) nor (a)(iii) above is applicable,
the appropriate applicable percentages corresponding to the Unsecured
Senior Debt Ratings in effect as of the most recent Calculation Date as
shown below:
Pricing Level Unsecured Senior Applicable Percentage
Debt Rating for Eurodollar Loans
------------- ---------------- ----------------------
I BBB or better from 1.00%
S&P, or Baa2 or
better from
Moody's or both if
rated by both
Moody's and S&P
II BBB- from S&P or 1.15%
Baa3 from Moody's
The Applicable Percentage for Revolving Loans shall be determined and
adjusted on the date (each a "Calculation Date") (i) if the Applicable
Percentage is determined pursuant to clause (a) above, five Business Days
after the date on which the Borrowers provide the officer's certificate in
accordance with the provisions of Section 7.1(d); provided that if the
Borrowers fail to provide the officer's certificate required by Section
7.1(d) on or before the date required by Section 7.1(d), the Applicable
Percentage for Revolving Loans from such date shall be based on Pricing
Level III in clause (a) above until such time that an appropriate officer's
certificate is provided
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whereupon the Pricing Level shall be determined by the then current
Leverage Ratio or (ii) if the Applicable Percentage is determined pursuant
to clause (b) above, the date BRT or BOP obtains an Unsecured Senior Debt
Rating from S&P or Moody's or the date there is a change in the Unsecured
Senior Debt Rating of BRT or BOP, in each case after the Borrowers provide
written notice and evidence to the Administrative Agent regarding such
Unsecured Debt Rating. Each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date. Any adjustment in
the Applicable Percentage shall be applicable only to new Revolving Loans
made (and to continuations and conversions of existing Revolving Loans).
The Applicable Percentage on the Closing Date shall be based on Pricing
Level III as set forth in clause (a) above until the first officer's
certificate is delivered pursuant to Section 7.1(d) or BRT or BOP has an
Unsecured Senior Debt Rating from S&P or Moody's.
The Borrowers shall promptly deliver to the Administrative Agent, at
the address set forth on Schedule 11.1 and at the Agency Services Address,
information regarding any change in the Unsecured Senior Debt Rating that
would change the existing Pricing Level as set forth above.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BOP" means Brandywine Operating Partnership, L.P., a Delaware limited
partnership, together with any successors and permitted assigns.
"Borrowers" means BRT and BOP and "Borrower" means either one of them.
"Borrowing Base" means, at any date of determination, the sum of the
Borrowing Base Values for each parcel of Eligible Property.
"Borrowing Base Value" means the value of a parcel of Eligible
Property as determined in accordance with Schedule 1.1(a).
"Bridge Facility" means that certain $100 million promissory note
dated as of the Closing Date executed by the Borrowers in favor of
NationsBank, N.A.
"BRT" means Brandywine Realty Trust, a Maryland real estate investment
trust, together with any successors and permitted assigns.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required
by law or other governmental action to close in McLean, Virginia,
Charlotte, North Carolina or New York, New York; provided that in the case
of Eurodollar Loans, such day is also a day on which dealings between banks
are carried on in U.S. dollar deposits in the London interbank market.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
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"Capital Expenditures" means all expenditures of the Borrowers and
their Subsidiaries which, in accordance with GAAP, would be classified as
Capital Expenditures, including, without limitation, Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capitalization Rate" means, as of the Closing Date, 10.5%; however,
the Capitalization Rate shall be reviewed annually (but not more often than
annually) by the Lenders and shall be subject to adjustment by the Required
Lenders, in their sole discretion, based upon market conditions for
comparable property types; provided that the Capitalization Rate cannot be
adjusted by more than 1.25% annually.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time and demand deposits and certificates of deposit of
(i) any Lender or any of its Affiliates, (ii) any domestic commercial bank
having capital and surplus in excess of $500,000,000 or (iii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements with a bank or trust company (including any of
the Lenders) or securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America in which a Credit Party shall have a perfected
first priority security interest (subject to no other Liens) and having, on
the date of purchase thereof, a fair market value of at least 100% of the
amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events:
(a) any "person" or "group" (within the meaning of Section 13(d) or
14(d) of the Exchange Act) has become, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a Person shall be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire,
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<PAGE>
whether such right is exercisable immediately or only after the passage of
time), by way of merger, consolidation or otherwise, of 20% or more of the
voting power of BRT on a fully-diluted basis, after giving effect to the
conversion and exercise of all outstanding warrants, options and other
securities of BRT convertible into or exercisable for voting power of BRT
(whether or not such securities are then currently convertible or
exercisable); or
(b) (i) BRT fails to directly own at least 75% of the aggregate
ownership interests in BOP or (ii) BRT fails to own, directly or
indirectly, the same or greater percentage of voting power of each of the
Credit Parties (other than BOP) as it owns as of the Closing Date.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Commitments" means the commitment of each Lender with respect to the
Revolving Committed Amount.
"Consolidated GIAV" means, for any period with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, the sum of: (a) for
all Properties owned by a Credit Party on the last day of a fiscal quarter
and for twelve months or more, the Adjusted Property EBITDA for each such
Property divided by the Capitalization Rate; plus (b) for all Properties
owned by a Credit Party on the last day of a fiscal quarter and for less
than twelve months, the Annualized Adjusted Property EBITDA for each such
Property divided by the Capitalization Rate plus (c) all unencumbered cash
and Cash Equivalents of the Credit Parties.
"Credit Documents" means this Credit Agreement, the Notes, and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
"Credit Parties" means the Borrowers and the Guarantors and "Credit
Party" means any one of them.
"Debt Service Coverage Ratio" means the ratio of (a) the sum of (i)
for all Properties owned by a Credit Party on the last day of a fiscal
quarter and for twelve months or more, the Adjusted Property EBITDA for
each such Property plus (ii) for all Properties owned by a Credit Party on
the last day of a fiscal quarter and for less than twelve months, the
Annualized Adjusted Property EBITDA for each such Property to (b) the
Market Funded Debt Payments.
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<PAGE>
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement (but only for so long as
such Loan is not made or such Participation Interest is not purchased), (b)
has failed to pay to the Administrative Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement (but only for
so long as such amount has not been repaid) or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or
to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"EBITDA" means, for any period, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, the sum of (a) Net Income for
such period (excluding the effect of any extraordinary or other
non-recurring gains or losses (including any gain or loss from the sale of
property) or non-cash gains or losses outside of the ordinary course of
business) plus (b) an amount which, in the determination of Net Income for
such period, has been deducted for (i) Interest Expense for such period,
(ii) total federal, state, foreign or other income or franchise taxes for
such period, and (iii) all depreciation and amortization for such period,
all as determined in accordance with GAAP.
"Effective Date" means the date, as specified by the Administrative
Agent, on which the conditions set forth in Section 5.1 shall have been
fulfilled (or waived in the sole discretion of the Lenders) and on which
the initial Loans shall have been made and/or the initial Letters of Credit
shall have been issued.
"Eligible Assignee" means (a) any Lender or any Affiliate or
subsidiary of a Lender and (b) any other commercial bank, financial
institution, institutional lender or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) with total assets
of at least $25 billion, (ii) a long term unsecured debt rating of BBB+ or
better from S&P or its equivalent and (iii) an office in the United States.
"Eligible Property" means, as of any date of determination, (a) the
Existing Properties and (b) any other existing and operating office or
industrial Property either owned directly by a Credit Party or through a
joint venture if such Property satisfies the following criteria: (i) the
Property must not be subject to any Liens (other than Permitted Liens
described in subclauses (a)-(h) of the definition of Permitted Liens), (ii)
the Property must be located within the United States and in a SMSA with a
minimum population of 100,000, (iii) the Property must be connected to
public utilities (unless public utilities are not available), (iv) the
Property must have all improvements located on contiguous parcels of land;
provided that such parcels may be divided by private or dedicated streets,
(v) at least 20 days prior to such Property becoming an Eligible Property
the Lenders shall have received the following: (A) title information,
including evidence of unencumbered title, (B) Phase I environmental study
showing no environmental issues that would require remediation or further
investigation, in either case determined by the Required Lenders to
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<PAGE>
be material, (C) historical operating information (unless otherwise agreed
by the Administrative Agent), (D) rent roll, (E) ground lease, if any, (F)
market data if the Property is located in a new SMSA (unless otherwise
agreed by the Administrative Agent), (G) a structural report of the
Property or in the absence thereof a representation and warranty from the
Borrowers that to the best of their knowledge there exists no structural
defects and (H) copies of all material leases, including any leases that
evidence more than 50,000 square feet or any leases that constitute more
than 50% of a building and (vi) the Property has been approved by the
Required Lenders to be an Eligible Property.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or
written claim whether administrative, judicial or private in nature arising
(a) pursuant to, or in connection with, an actual or alleged violation of,
any Environmental Law, (b) in connection with any Hazardous Material, (c)
from any assessment, abatement, removal, remedial, corrective, or other
response action in connection with an Environmental Law or other order of a
Governmental Authority or (d) from any actual or alleged damage, injury,
threat, or harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal requirement of
any Governmental Authority pertaining to (a) the protection of health,
safety, and the indoor or outdoor environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection or
use of surface water and groundwater or (d) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, release, threatened release, abatement, removal, remediation or
handling of, or exposure to, any hazardous or toxic substance or material
or (e) pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42
USC 6901 et seq., Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as
amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC
2601 et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et
seq., Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et
seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water
Act of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing
or successor law, and any amendment, rule, regulation, order, or directive
issued thereunder.
"Equity Issuance" means any issuance by a Credit Party to any Person
(other than another Credit Party) of shares of its capital stock, common
shares of beneficial interest or other equity interests, including pursuant
to the exercise of options or warrants or pursuant to the conversion of any
debt securities to equity; provided that the definition of Equity Issuance
as used herein shall not include issuances of equity to employees of a
Credit Party
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<PAGE>
to the extent such issuances do not exceed $1,000,000 in any one instance
or $5,000,000, in the aggregate, during the term of this Credit Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated, which
is under common control with a Borrower or any of its Subsidiaries within
the meaning of Section 4001(a)(14) of ERISA, or is a member of a group
which includes a Borrower and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal of a Borrower,
any Subsidiary of a Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as
such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (vi) the complete or partial withdrawal of
a Borrower, any Subsidiary of a Borrower or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under
Section 302(f) of ERISA exist with respect to any Plan; or (viii) the
adoption of an amendment to any Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a rate
determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = London Interbank Offered Rate
----------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time, or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurodollar liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference
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<PAGE>
to which the interest rate of Eurodollar Loans is determined) with
respect to member banks of the Federal Reserve System, whether or not
any Lender has any Eurodollar liabilities subject to such reserve
requirement at that time. Eurodollar Loans shall be deemed to constitute
Eurodollar liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions or
offsets that may be available from time to time to a Lender. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances described
in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
modified, succeeded or replaced from time to time, and the rules and
regulations promulgated thereunder.
"Existing Letters of Credit" means the letters of credit described on
Schedule 2.2(c).
"Existing Properties" means those Properties set forth on Schedule
1.1(c).
"Extension of Credit" means, as to any Lender, the making of a Loan by
such Lender (or a participation therein by a Lender) or the issuance of, or
participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.
"Fed Funds Loan" means a Loan bearing interest based at a rate
determined by reference to the Federal Funds Rate.
"Fee Letter" means that certain letter agreement, dated as of December
12, 1997, between the Administrative Agent and BRT, as amended, modified,
supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means for any period the ratio of (a)
Adjusted EBITDA for such period to (b) the sum of Interest Expense plus
Scheduled Funded Debt Payments plus all dividends on preferred stock plus
Letter of Credit Fees payable pursuant
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to Section 3.4(b)(i) plus non-revenue producing Capital Expenditures (other
than Capital Expenditures for construction and development) for such
period.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Credit Parties and their Subsidiaries for borrowed
money, (b) all purchase money Indebtedness of the Credit Parties and their
Subsidiaries, (c) the principal portion of all obligations of the Credit
Parties and their Subsidiaries under Capital Leases, (d) all obligations,
contingent or otherwise, relative to the face amount of all letters of
credit (other than letters of credit supporting trade payables in the
ordinary course of business), whether or not drawn, and banker's
acceptances issued for the account of the Credit Parties or any of their
Subsidiaries (it being understood that, to the extent an undrawn letter of
credit supports another obligation consisting of Indebtedness, in
calculating aggregated Funded Debt only such other obligation shall be
included), (e) all Guaranty Obligations of the Credit Parties and their
Subsidiaries with respect to Funded Debt of another Person, (f) all Funded
Debt of another entity secured by a Lien on any property of the Credit
Parties and their Subsidiaries whether or not such Funded Debt has been
assumed by the Credit Parties or any of their Subsidiaries, (g) all Funded
Debt of any partnership or unincorporated joint venture to the extent the
Credit Parties or one of their Subsidiaries is legally obligated or has a
reasonable expectation of being liable with respect thereto, net of any
assets of such partnership or joint venture, (h) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product of
the Credit Parties or any of their Subsidiaries where such transaction is
considered borrowed money indebtedness for tax purposes but is classified
as an operating lease in accordance with GAAP, (i) all obligations of the
Credit Parties and their Subsidiaries in respect of interest rate
protection agreements, foreign currency exchange agreements or other
interest or exchange rate or commodity price hedging agreements and (j) all
take out loan commitments to the extent such take out commitment is not
supported by a financial commitment from a third party containing standard
terms and conditions.
"Funds From Operations", when used with respect to any Person, shall
have the meaning given to such term in, and shall be calculated in
accordance with, standards promulgated by the National Association of Real
Estate Investment Trusts in effect from time to time.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.
"Governmental Authority" means any Federal, state, local or provincial
court or governmental agency, authority, instrumentality or regulatory
body.
"Gross Implied Asset Value" means (a) for all Properties owned by a
Credit Party on the last day of a fiscal quarter and for twelve months or
more, the Adjusted Property EBITDA for each such Property divided by the
Capitalization Rate or (b) for all Properties owned by a Credit Party on
the last day of a fiscal quarter and for less than twelve months, the
Annualized Adjusted Property EBITDA for each such Property divided by the
Capitalization Rate.
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"Guarantors" means the Material Subsidiaries of the Borrowers, as set
forth on the signature pages attached hereto, together with each other
Material Subsidiary of the Borrowers that executes a Joinder Agreement.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person
in any manner, whether direct or indirect, and including without limitation
any obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the payment
or purchase of such indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including, without limitation, maintenance agreements, comfort letters,
take or pay arrangements, put agreements or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such other
Person, (c) to lease or purchase property, securities or services primarily
for the purpose of assuring the owner of such Indebtedness or (d) to
otherwise assure or hold harmless the owner of such Indebtedness or
obligation against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein)
be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste defined
or regulated in or under any Environmental Laws.
"Incentive Stock Plan" means the BRT 1997 Long-Term Incentive Plan, as
amended from time to time, and any other equity incentive plan hereafter
established by BRT pursuant to which awards of equity interests in BRT may
be made to employees of BRT or a Subsidiary.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made (c) all obligations of
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person to the extent of the value of
such property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations, other than intercompany items, of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds
of production from, property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (f) all Guaranty
Obligations of such Person, (g) the principal portion of all obligations of
such Person under (i) Capital Leases and (ii) any synthetic lease, tax
retention operating lease,
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off-balance sheet loan or similar off-balance sheet financing product of
such Person where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP, (h) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange agreements,
or other interest or exchange rate or commodity price hedging agreements,
(i) the maximum amount of all performance and standby letters of credit
issued or bankers' acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and required
by the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, and (k) all obligations evidenced by
take out commitments. Subject to the terms of Section 1.4 hereof, the
Indebtedness of any Person shall include the Indebtedness of any
partnership or unincorporated joint venture in which such Person is legally
obligated or has a reasonable expectation of being liable with respect
thereto.
"Initial Revolving Loan Maturity Date" means January 5, 2001.
"Interest Coverage Ratio" means the ratio of (a) Adjusted EBITDA to
(b) Interest Expense.
"Interest Expense" means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, all net interest
expense, whether paid, accrued or capitalized, including the interest
component under Capital Leases, as determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Prime Rate Loans, the last
Business Day of each month and on the Revolving Loan Maturity Date, (b) as
to Fed Funds Loans and Eurodollar Loans on the last day of the applicable
Interest Period and on the Revolving Loan Maturity Date.
"Interest Period" means, (a) as to Eurodollar Loans, a period of one,
two, three or six months' duration and (b) as to Fed Funds Loans, a period
of one to seven days, in each case, as the Borrowers may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Revolving Loan Maturity Date, (c) with respect to Eurodollar
Loans, where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest
Period is to end, such Interest Period shall end on the last Business Day
of such calendar month, and (d) no Interest Period shall extend beyond the
Initial Revolving Loan Maturity Date unless the Revolving Loan Maturity
Date has been extended pursuant to Section 3.5(b).
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"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligation
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person.
"Issuing Lender" means NationsBank, N.A., any successor Administrative
Agent or any other Lender designated by the Administrative Agent.
"Issuing Lender Fees" has the meaning set forth in Section 3.4(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means a letter of credit issued for the account of
a Borrower by the Issuing Lender pursuant to Section 2.2 or any Existing
Letter of Credit, as such letter of credit may be amended, modified,
extended, renewed or replaced.
"Letter of Credit Fees" has the meaning set forth in Section
3.4(b)(i).
"Leverage Ratio" means the ratio of (a) Funded Debt to (b)
Consolidated GIAV.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation,
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" means the Revolving Loans (or a portion of any
Revolving Loan), individually or collectively, as appropriate.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (a)
the rights and obligations of the parties concerned or at risk or (b) any
collateral security for such obligations.
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"LOC Obligations" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(b) the aggregate amount of all drawings under Letters of Credit honored by
an Issuing Lender but not theretofore reimbursed.
"LOC Participants" means the Lenders.
"London Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Telerate Page 3750, the applicable rate shall be the arithmetic mean of all
such rates. If for any reason such rate is not available, the term "London
Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates.
"Mandatory Borrowing" has the meaning set forth in Section 2.2(e).
"Market Funded Debt Payments" means the scheduled debt payments that
would have been due on all Funded Debt of the Credit Parties during the
prior four fiscal quarters assuming a principal mortgage amortization of 25
years and assuming the Market Interest Rate as in effect on the date that
the Market Funded Debt Payments are calculated.
"Market Interest Rate" means an interest rate equal to the greater of
(a) the prior 30 day average of the most recent seven year U.S. Treasury
Note plus 2.00% per annum or (b) 8.75% per annum.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, condition (financial or otherwise) or
prospects of a Credit Party or any of their Subsidiaries, (b) the ability
of a Credit Party to perform its respective obligations under this Credit
Agreement or any of the other Credit Documents, or (c) the validity or
enforceability of this Credit Agreement, any of the other Credit Documents,
or the rights and remedies of the Lenders hereunder or thereunder taken as
a whole.
"Material Subsidiary" means a Subsidiary of a Credit Party in which
such Credit Party owns, directly or indirectly, more than 65% of the capital
stock, partnership interests or other equity interests.
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"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer
Plan) in which a Credit Party or any ERISA Affiliate and at least one
employer other than a Credit Party or any ERISA Affiliate are contributing
sponsors.
"Net Cash Proceeds" means the gross cash proceeds received from an
Equity Issuance net of actual transaction costs payable to third parties.
"Net Income" means, for any period, the net income after taxes for
such period of Credit Parties and their Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Net Worth" means, as of any date, the net worth of Credit Parties and
their Subsidiaries on a consolidated basis, as determined in accordance
with GAAP.
"Non-Excluded Taxes" has the meaning set forth in Section 3.13.
"Note" or "Notes" means the Revolving Loan Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrowers for a Revolving
Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrowers
to continue an existing Eurodollar Loan or Fed Funds Loan to a new Interest
Period or to convert a Eurodollar Loan to a Fed Funds Loans or a Prime Rate
Loan or to convert a Fed Funds Loan to a Prime Rate Loan or a Eurodollar
Loan or to convert a Prime Rate Loan to a Eurodollar Loan or a Fed Funds
Loan , in the form of Exhibit 2.1(e).
"Obligations" means, without duplication, all of the obligations of
the Credit Parties to the Lenders and the Administrative Agent, whenever
arising, under this Credit Agreement, the Notes, or any of the other Credit
Documents to which a Credit Party is a party.
"Participation Interest" means the Extension of Credit by a Lender by
way of a purchase of a participation in any Loans as provided in Section
3.8 or in any Letters of Credit or LOC Obligations as provided in Section
2.2.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
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"Permitted Investments" means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (c) Investments by one Credit Party in another
Credit Party, (d) the acquisition of new Properties; provided that the
Credit Parties may not invest in undeveloped land unless it is adjacent to
or continguous with other assets being acquired or assets already owned or
such land is part of a construction project approved by the Required
Lenders, has all necessary local permits and approvals and construction
will commence within six months of acquisition, (e) earnest money and
similar deposits in respect of Properties made in the ordinary course of
business, (f) Investments in Subsidiaries which are not Credit Parties and
Investments in joint ventures (whether or not Subsidiaries) not to exceed,
in the aggregate at any one time, 15% of Total Assets, (g) Investments not
otherwise described in or covered by the other subclauses of this
definition (including, without limitation, Investments in Persons that are
not Subsidiaries or joint ventures (whether or not Subsidiaries), loans to
officers, directors and employees and repurchases of its capital stock or
other ownership interests (including options, warrants and stock
appreciation rights) by a Borrower or any Subsidiary) provided that (i)
such Investments do not exceed, in the aggregate at any one time, 10% of
Total Assets and (ii) such Investments, together with the Investments
referred to in the previous subclause (f), do not exceed (in the aggregate
at any one time) 20% of Total Assets.
"Permitted Liens" means (a) Liens securing Obligations, (b) Liens for
taxes not yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property
subject to any such Lien is not yet subject to foreclosure, sale or loss on
account thereof), (c) Liens in respect of property imposed by law arising
in the ordinary course of business such as materialmens', mechanics',
warehousemens', carriers', landlords' and other nonconsensual statutory
Liens which are not yet due and payable or which are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof); (d) Liens arising from good faith
deposits in connection with or to secure performance of tenders, bids,
leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business
(other than obligations in respect of the payment of borrowed money), (e)
Liens arising from good faith deposits in connection with or to secure
performance of statutory obligations and surety and appeal bonds, (f)
easements, rights-of-way, restrictions (including zoning restrictions),
matters of plat, minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered property for its intended purposes, (g) judgment Liens that
would not constitute an Event of Default, (h) Liens arising by virtue of
any statutory or common law provision relating to bankers' liens, rights of
setoff or similar rights as to deposit accounts or other funds maintained
with a creditor depository institution, (i) Liens in connection with
Indebtedness permitted by Section 8.1(d); provided that if such Lien is on
a Property that was previously an Eligible Property, the Borrowers shall
give the Administrative Agent prior written notice of the creation of such
Lien and shall deliver a certificate as to compliance with all of the terms
of the Credit Agreement, including but not limited to, the financial
covenants set forth in Section 7.2,
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subsequent to the creation of such Lien, and (j) Liens existing on the date
hereof and identified on Schedule 8.2; provided that no such Lien shall
extend to any property other than the property subject thereto on the
Closing Date.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which a Borrower or
any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in
Charlotte, North Carolina (or such other principal office of the
Administrative Agent as communicated in writing to the Borrowers and the
Lenders) as its Prime Rate. Any change in the interest rate resulting from
a change in the Prime Rate shall become effective as of 12:01 a.m. of the
Business Day on which each change in the Prime Rate is announced by the
Administrative Agent. The Prime Rate is a reference rate used by the
Administrative Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Prime Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Prime Rate.
"Properties" means all real properties owned by the Credit Parties and
their Subsidiaries whether directly or through a joint venture investment.
"Property EBITDA" means, with respect to any Property for the
applicable period, the sum of (a) Net Income of a Credit Party directly
attributable to such Property (excluding the effect of any extraordinary or
other non-recurring gains or losses or non-cash gains or losses outside the
ordinary course of business) plus (b) an amount which in determination of
Net Income of a Credit Party directly attributable to such Property for
such period has been deducted for (i) Interest Expense with respect to such
Property for such period, (ii) total cash payments made with respect to
federal, state, foreign or other income or franchise taxes with respect to
such Property for such period and (iii) all depreciation and amortization
with respect to such Property for such period, all as determined in
accordance with GAAP.
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"REIT" means a real estate investment trust as defined in Sections
856-860 of the Code.
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"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Lenders" means the Administrative Agent together with the
Lenders whose aggregate Credit Exposure (as hereinafter defined)
constitutes at least 66 2/3% of the Credit Exposure of all Lenders at such
time; provided, however, that if any Lender shall be a Defaulting Lender at
such time then there shall be excluded from the determination of Required
Lenders the aggregate principal amount of Credit Exposure of such Lender at
such time. For purposes of the preceding sentence, the term "Credit
Exposure" as applied to each Lender shall mean (a) at any time prior to the
termination of the Commitments, the sum of the Revolving Loan Commitment
Percentage of such Lender multiplied by the Revolving Committed Amount and
(b) at any time after the termination of the Commitments, the sum of (i)
the principal balance of the outstanding Loans of such Lender plus (ii)
such Lender's Participation Interests in the face amount of the outstanding
Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or final, non-appealable determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material property is subject.
"Revolving Committed Amount" means THREE HUNDRED MILLION DOLLARS
($300,000,000).
"Revolving Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Loan Commitment Percentage on
Schedule 1.1(b), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Loan Maturity Date" means the Initial Revolving Loan
Maturity Date or, if extended by the Borrowers pursuant to Section 3.5(b),
January 5, 2002.
"Revolving Loans" means the Revolving Loans made to the Borrowers
pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrowers in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.1(g).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
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"Scheduled Funded Debt Payments" means, as of the date of
determination, for the Credit Parties and their Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal and any
required prepayments on Funded Debt (other than balloon payments), for the
applicable period, ending on the date of determination (including the
principal component of payments due on Capital Leases during the applicable
period ending on the date of determination) plus any letter of credit fees.
"Securities Act" means the Securities Act of 1933, as amended,
modified, succeeded or replaced from time to time, and the rules and
regulations promulgated thereunder.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"SMSA" means Standard Metropolitan Statistical Area as defined by the
United States Census Bureau.
"Solvent" means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in
the normal course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary
course, (c) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such
Person's assets would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which such
Person is engaged or is to engage, (d) the fair value of the assets of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present fair
saleable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities
will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture, limited liability company, trust or other
entity in which such Person directly or indirectly through Subsidiaries has
more than a 50% equity interest at any time.
"Termination Event" means (a) with respect to any Single Employer
Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in
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which it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (c)
the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d)
the institution of proceedings to terminate or the actual termination of a
Plan by the PBGC under Section 4042 of ERISA; (e) any event or condition
which might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of any Credit Party or any
of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
"Total Assets" means all assets of the Credit Parties and their
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
"Unsecured Funded Debt" means all Funded Debt that was incurred, and
continues to be outstanding, without granting a Lien to the creditor
holding such Funded Debt.
"Unsecured Properties" means all Properties that are not subject to a
Lien other than nonconsensual Permitted Liens.
"Unsecured Senior Debt Rating" means a debt rating provided by S&P or
Moody's with respect to the unsecured senior long term debt of BRT or BOP.
"Unused Commitment" means, for any period, the amount by which (a) the
then applicable aggregate Revolving Committed Amount exceeds (b) the daily
average sum for such period of the outstanding aggregate principal amount
of all Revolving Loans plus the aggregate amount of LOC Obligations
outstanding.
"Unused Fees" means the fees payable to the Lenders pursuant to
Section 3.4(a).
1.2 Computation of Time Periods and Other Definition Provisions.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrowers that GAAP has not changed since
the most recent financial statements delivered by the Borrowers to the Lenders
or if GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as
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otherwise expressly provided herein) be made by application of GAAP applied on a
basis consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 6.1 (or, prior to the delivery of the first
financial statements pursuant to Section 6.1, consistent with the financial
statements described in Section 4.1(d)); provided, however, if (a) the Borrowers
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 60 days after delivery of such
financial statements (or after the Lenders have been informed of the change in
GAAP affecting such financial statements, if later), then such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Borrowers to the Lenders as to which no such objection shall
have been made.
1.4 Joint Venture Investments.
With respect to any ownership of a Property by a Credit Party through a
joint venture (a) EBITDA, Adjusted EBITDA, Adjusted Property EBITDA and
Annualized Adjusted Property EBITDA shall be calculated in accordance with such
Credit Party's ownership interest in the net cash flow of such joint venture and
(b) Indebtedness and Funded Debt shall be calculated as follows: (i) if the
Indebtedness of such joint venture is recourse to such Credit Party, then the
amount of such Indebtedness or Funded Debt that is recourse to such Credit
Party, and (ii) if the Indebtedness of such joint venture is not recourse to
such Credit Party, then such Credit Party's pro rata interest in such
Indebtedness or Funded Debt.
SECTION 2
CREDIT FACILITY
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make revolving loans
(each a "Revolving Loan" and collectively the "Revolving Loans") to the
Borrowers, in Dollars, at any time and from time to time, during the period
from and including the Effective Date to but not including the Revolving
Loan Maturity Date or such earlier date if the Revolving Committed Amount
has been terminated as provided herein; provided, however, that (i) the sum
of the aggregate principal amount of Revolving Loans outstanding plus the
aggregate amount of LOC Obligations outstanding shall not exceed the lesser
of (A) the Revolving Committed Amount and (B) the Borrowing Base, (ii) with
respect to each individual Lender, the Lender's pro rata share of
outstanding Revolving Loans plus such Lender's pro rata share of
outstanding LOC obligations shall not exceed such Lender's Revolving Loan
Commitment Percentage of the Revolving Committed Amount, and (iii) the
aggregate principal amount of Revolving Loans advanced for construction and
development of Properties that are not preleased in excess of 85% shall not
exceed at any one time (A) for such Properties that are less than 50%
preleased, $20,000,000 and (B) for all such Properties, $100,000,000.
Subject to the terms of this Credit Agreement (including Section 3.3), the
Borrowers may
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borrow, repay and reborrow Revolving Loans. The Administrative Agent shall
keep a record of the purpose for which each of the Loans was advanced (and
of repayments applied thereto), which record shall be conclusive absent
prima facie error.
(b) Method of Borrowing for Revolving Loans. By no later than 11:00
a.m. (i) one Business Day prior to the date of the requested borrowing of
Revolving Loans that will be Prime Rate Loans or Fed Funds Loans or (ii)
three Business Days prior to the date of the requested borrowing of
Revolving Loans that will be Eurodollar Loans, the Borrowers shall submit a
written Notice of Borrowing in the form of Exhibit 2.1(b) to the
Administrative Agent setting forth (A) the amount requested, (B) whether
such Revolving Loans shall be Prime Rate Loans, Fed Funds Loan or
Eurodollar Loans, (C) with respect to Revolving Loans that will be
Eurodollar Loans or Fed Funds Loan, the Interest Period applicable thereto;
provided, however, that prior to June 30, 1998, or such earlier date as
agreed to by the Administrative Agent, the Borrowers may not, without the
consent of the Administrative Agent, request any Interest Period for
Eurodollar Loans other than a one-month Interest Period, (D) the purpose of
the proceeds of the Revolving Loans and (E) certification that the
Borrowers have complied in all respects with Section 5.2.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Lenders as to
the terms thereof. Each Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the Administrative
Agent by 1:00 p.m. on the date specified in the Notice of Borrowing by
deposit, in Dollars, of immediately available funds at the offices of the
Administrative Agent at its principal office in Charlotte, North Carolina
or at such other address as the Administrative Agent may designate in
writing. The amount of the requested Revolving Loans will then be made
available to the Borrowers by the Administrative Agent by crediting the
account of the Borrowers on the books of such office of the Administrative
Agent, to the extent the amount of such Revolving Loans are made available
to the Administrative Agent.
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Revolving Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations hereunder.
Unless the Administrative Agent shall have been notified by any Lender
prior to the date of any such Revolving Loan that such Lender does not
intend to make available to the Administrative Agent its portion of the
Revolving Loans to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent on the date of such Revolving Loans, and the
Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrowers a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrowers, and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the
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Lender or the Borrowers, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was
made available by the Administrative Agent to the Borrowers to the date
such corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrowers at the applicable rate for such
Revolving Loan pursuant to the Notice of Borrowing and (ii) from a Lender
at the Federal Funds Rate.
(d) Reduction or Termination of Revolving Committed Amount. Upon at
least three Business Days' notice, the Borrowers shall have the right to
permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided that
(i) each partial reduction shall be in an aggregate amount at least equal
to $5,000,000 and in integral multiples of $1,000,000 above such amount and
(ii) no reduction shall be made which would reduce the Revolving Committed
Amount to an amount less than the aggregate amount of outstanding Revolving
Loans plus the aggregate amount of outstanding LOC Obligations. Any
reduction in (or termination of) the Revolving Committed Amount shall be
permanent and may not be reinstated. The Administrative Agent shall
immediately notify the Lenders of any reduction in the Revolving Committed
Amount.
(e) Continuations and Conversions. The Borrowers shall have the
option, on any Business Day, to continue existing Eurodollar Loans or Fed
Funds Loans for a subsequent Interest Period, to convert Prime Rate Loans
or Fed Funds Loans into Eurodollar Loans, to convert Fed Funds Loans into
Prime Rate Loans or Eurodollar Loans or to convert Eurodollar Loans or Fed
Funds Loans into Prime Rate Loans; provided, however, that (i) each such
continuation or conversion must be requested by the Borrowers pursuant to a
written Notice of Continuation/Conversion, in the form of Exhibit 2.1(e),
in compliance with the terms set forth below, (ii) except as provided in
Section 3.11, Eurodollar Loans and Fed Funds Loans may only be continued or
converted on the last day of the Interest Period applicable thereto, (iii)
Eurodollar Loans may not be continued nor may Prime Rate Loans or Fed Funds
Loans be converted into Eurodollar Loans during the existence and
continuation of a Default or Event of Default and (iv) any request to
continue a Eurodollar Loan that fails to comply with the terms hereof or
any failure to request a continuation of a Eurodollar Loan at the end of an
Interest Period shall result in a conversion of such Eurodollar Loan to a
Prime Rate Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrowers no later than
11:00 a.m. (A) one Business Day prior to the date for a requested
conversion of a Eurodollar Loan to a Prime Rate Loan or Fed Funds Loan or
(B) three Business Days prior to the date for a requested continuation of a
Eurodollar Loan or conversion of a Prime Rate Loan or Fed Funds Loan to a
Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which shall
set forth (x) whether the Borrowers wish to continue or convert such Loans
and (y) if the request is to continue a Eurodollar Loan or convert a Loan
to a Eurodollar Loan or Fed Funds Loan, the Interest Period applicable
thereto; provided that prior to June 30, 1998, the Borrowers may not,
without the consent of the Administrative Agent, request any Interest
Period for Eurodollar Loans other than a one-month Interest Period.
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(f) Minimum Amounts/Restrictions on Loans. Each request for a
borrowing, conversion or continuation shall be subject to the requirements
that (i) each Eurodollar Loan shall be in a minimum amount of $1,000,000
and in integral multiples of $100,000 in excess thereof, (ii) each Prime
Rate Loan and Fed Funds Loan shall be in a minimum amount of $500,000 (and
integral multiples of $100,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount, (iii) no more than one Fed
Funds Loan shall be made during any one month, (iv) no more than four Loans
shall be made during any one month and (v) no more than six Eurodollar
Loans shall be outstanding at any one time. For the purposes of this
Section, all Eurodollar Loans with the same Interest Periods beginning on
the same date shall be considered as one Eurodollar Loan, but Eurodollar
Loans with different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
(g) Notes. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrowers to each
Lender in the face amount of its Revolving Loan Commitment Percentage of
the Revolving Committed Amount in substantially the form of Exhibit 2.1(g).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the Issuing
Lender may reasonably require (so long as such terms and conditions do not
impose any financial obligation on or require any Lien (not otherwise
contemplated by this Credit Agreement) to be given by any Credit Party or
conflict with any obligation of, or detract from any action which may be
taken by, any Credit Party or its Subsidiaries under this Credit
Agreement), the Issuing Lender shall from time to time upon request issue
(from the Effective Date to the Revolving Loan Maturity Date and in a form
reasonably acceptable to the Issuing Lender), in Dollars, and the LOC
Participants shall participate in, Letters of Credit for the account of the
Credit Parties; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed FORTY MILLION DOLLARS
($40,000,000), (ii) the sum of the aggregate amount of LOC Obligations
outstanding plus Revolving Loans outstanding shall not exceed the lesser of
(A) the Borrowing Base and (B) the Revolving Committed Amount and (iii)
with respect to each individual LOC Participant, the LOC Participant's pro
rata share of outstanding Revolving Loans plus its pro rata share of
outstanding LOC Obligations shall not exceed such LOC Participant's
Revolving Loan Commitment Percentage of the Revolving Committed Amount.
The Issuing Lender may require the issuance and expiry date of each Letter
of Credit to be a Business Day. Each Letter of Credit shall be either (x)
a standby letter of credit issued to support the obligations (including
pension or insurance obligations), contingent or otherwise, of a Credit
Party or any of its Subsidiaries, or (y) a commercial letter of credit in
respect of the purchase of goods or services by a Credit Party or any of
its Subsidiaries in the ordinary course of business. Except as otherwise
expressly agreed upon by all the LOC Participants, no Letter of Credit
shall have an original expiry date more than one year from the date of
issuance or shall have an expiry date beyond the Revolving Loan Maturity
Date. Each Letter of Credit shall comply with the related LOC Documents.
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(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three Business
Days prior to the requested date of issuance. The Issuing Lender will, at
least quarterly and more frequently upon request, provide to the
Administrative Agent for dissemination to the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding and
any activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the account
party, the beneficiary, the face amount, and the expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will
further provide to the Administrative Agent, promptly upon request, copies
of the Letters of Credit and the other LOC Documents.
(c) Participations.
(i) Each LOC Participant acknowledges and confirms that it has a
Participation Interest in the liability of the Issuing Lender under
each Existing Letter of Credit in an amount equal to its Revolving
Loan Commitment Percentage of such Existing Letters of Credit. The
Credit Parties' reimbursement obligations in respect of each Existing
Letter of Credit, and each LOC Participant's obligations in connection
therewith, shall be governed by the terms of this Credit Agreement.
(ii) Each LOC Participant, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and
each LOC Document related thereto and the rights and obligations
arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Revolving Loan Commitment Percentage of the
obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Revolving Loan Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each LOC Participant's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such LOC Participant shall pay to the Issuing Lender its
Revolving Loan Commitment Percentage of such unreimbursed drawing in
same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) or
(e) hereof. The obligation of each LOC Participant to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrowers to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrowers. Unless the
Borrowers shall promptly notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the
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Borrowers shall be deemed to have requested a Revolving Loan at a per annum
rate equal to the rate for Prime Rate Loans in the amount of the drawing,
the proceeds of which will be used to satisfy the reimbursement
obligations. The Borrowers shall reimburse the Issuing Lender on the day of
drawing under any Letter of Credit either with the proceeds of such
Revolving Loan obtained hereunder or otherwise in same day funds as
provided herein or in the LOC Documents. If the Borrowers shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the
rate for Prime Rate Loans plus two percent (2%). The Borrowers'
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of (but without waiver of) any rights
of set-off, counterclaim or defense to payment the applicable account party
or the Borrowers may claim or have against an Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation, any defense
based on any failure of the applicable account party or the Borrowers to
receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the LOC Participants of the amount of any unreimbursed drawing and
each LOC Participant shall promptly pay to the Issuing Lender, in Dollars
and in immediately available funds, the amount of such LOC Participant's
Revolving Loan Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 p.m.,
otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the day such notice is received. If such LOC
Participant does not pay such amount to the Issuing Lender in full upon
such request, such LOC Participant shall, on demand, pay to the Issuing
Lender interest on the unpaid amount during the period from the date the
LOC Participant received the notice regarding the unreimbursed drawing
until such LOC Participant pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two Business Days of the date
of drawing, the Federal Funds Rate and thereafter at a rate equal to the
Prime Rate. Each LOC Participant's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a LOC
Participant to the Issuing Lender, such LOC Participant shall,
automatically and without any further action on the part of the Issuing
Lender or such LOC Participant, acquire a participation in an amount equal
to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a ratable interest in the Issuing
Lender's claim against the Borrowers with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrowers shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Letter of Credit
(as set forth in clause (d) above), the Administrative Agent shall give
notice to the applicable Lenders that a Revolving Loan has
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been requested or deemed requested in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan borrowing comprised solely
of Prime Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all applicable Lenders (without giving effect to any
termination of the Commitments pursuant to Section 9.2) pro rata based on
each Lender's respective Revolving Loan Commitment Percentage and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each such Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or Event of Default
then exists, (iv) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required hereunder, (v)
the date of such Mandatory Borrowing, or (vi) any reduction in the
Revolving Committed Amount or any termination of the Commitments. In the
event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with respect
to a Credit Party), then each such Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrowers on or
after such date and prior to such purchase) its Participation Interest in
the outstanding LOC Obligations; provided, further, that in the event any
Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid
within two Business Days of such date, the Federal Funds Rate, and
thereafter at a rate equal to the Prime Rate.
(f) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder; provided that the fees to be
paid pursuant to Section 3.4(b)(i) shall only be due if the expiration date
of such Letter of Credit is extended.
(g) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (Publication No. 500 or the most recent
publication, the "UCP"), in which case the UCP may be incorporated therein
and deemed in all respects to be a part thereof.
(h) Responsibility of Issuing Lender. It is expressly understood and
agreed as between the Lenders that the obligations of the Issuing Lender
hereunder to the LOC Participants are only those expressly set forth in
this Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section
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2.2 shall be deemed to prejudice the right of any LOC Participant to
recover from the Issuing Lender any amounts made available by such LOC
Participant to the Issuing Lender pursuant to this Section 2.2 in the event
that it is determined by a court of competent jurisdiction that the payment
with respect to a Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit Agreement
shall govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Credit
Agreement, the Credit Parties hereby agree to protect, indemnify, pay
and save the Issuing Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions, herein called "Government
Acts").
(ii) As between the Credit Parties and the Issuing Lender, the
Credit Parties shall assume all risks of the acts, omissions or misuse
of any Letter of Credit by the beneficiary thereof. The Issuing
Lender shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Credit Party in connection with the application for
and issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a Letter
of Credit to comply fully with conditions required in order to draw
upon a Letter of Credit; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E)
errors in interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required to be delivered
to the Issuing Lender in order to make a drawing under a Letter of
Credit or of the proceeds thereof; and (G) any consequences arising
from causes beyond the control of the Issuing Lender, including,
without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's rights
or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in good
faith, shall not put the Issuing Lender under any resulting
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liability to the Credit Parties. It is the intention of the parties
that this Credit Agreement shall be construed and applied to protect
and indemnify the Issuing Lender against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby
assumed by the Credit Parties, including, without limitation, any and
all risks of the acts or omissions, whether rightful or wrongful, of
any present or future Government Acts. The Issuing Lender shall not,
in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the Issuing
Lender.
(iv) Nothing in this subsection (j) is intended to limit the
reimbursement obligation of the Credit Parties contained in this
Section 2.2. The obligations of the Credit Parties under this
subsection (j) shall survive the termination of this Credit Agreement.
No act or omission of any current or prior beneficiary of a Letter of
Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (j), the Credit Parties shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by
the Issuing Lender arising solely out of the gross negligence or
willful misconduct of the Issuing Lender. Nothing in this Agreement
shall relieve the Issuing Lender of any liability to the Credit
Parties in respect of any action taken by the Issuing Lender which
action constitutes gross negligence or willful misconduct of the
Issuing Lender or a violation of the UCP or Uniform Commercial Code
(as applicable).
2.3 Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by
the Lenders under this Credit Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability
for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations arising
under this Credit Agreement and the other Credit Documents, it being the
intention of the parties hereto that all the Obligations shall be the joint
and several obligations of each of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the obligations hereunder as and when
due or to perform any of such obligations in accordance with the terms
thereof, then in each such event, the other Borrowers will make such
payment with respect to, or perform, such obligation.
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(d) The obligations of each Borrower under the provisions of this
Section 2.3 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets.
(e) Except as otherwise expressly provided herein, to the extent
permitted by law, each Borrower hereby waives notice of acceptance of its
joint and several liability, notice of occurrence of any Default or Event
of Default (except to the extent notice is expressly required to be given
pursuant to the terms of this Credit Agreement), or of any demand for any
payment under this Credit Agreement, notice of any action at any time taken
or omitted by the Administrative Agent or the Lenders under or in respect
of any of the Obligations hereunder, any requirement of diligence and,
generally, all demands, notices and other formalities of every kind in
connection with this Credit Agreement. Each Borrower hereby assents to,
and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations hereunder, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by the
Administrative Agent or the Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Credit Agreement, any and all
other indulgences whatsoever by the Administrative Agent or the Lenders in
respect of any of the Obligations hereunder, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of such Obligations or the addition, substitution or
release, in whole or in part, of any Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any other action or
delay in acting or any failure to act on the part of the Administrative
Agent or the Lenders, including, without limitation, any failure strictly
or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder which might, but for
the provisions of this Section 2.3, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of
its obligations under this Section 2.3, it being the intention of each
Borrower that, so long as any of the Obligations hereunder remain
unsatisfied, the obligations of such Borrower under this Section 2.3 shall
not be discharged except by performance and then only to the extent of such
performance. The obligations of each Borrower under this Section 2.3 shall
not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any reconstruction or similar proceeding with
respect to any Borrower or a Lender. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of
any Borrower or any of the Lenders.
(f) The provisions of this Section 2.3 are made for the benefit of
the Lenders and their successors and assigns, and may be enforced by them
from time to time against any of the Borrowers as often as occasion
therefor may arise and without requirement on the part of the Lenders first
to marshall any of its claims or to exercise any of its rights against the
other Borrower or to exhaust any remedies available to it against the other
Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The
provisions of this Section 2.3 shall remain in effect until all the
Obligations hereunder shall have been paid in full or otherwise
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fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of
this Section 2.3 will forthwith be reinstated and in effect as though such
payment had not been made.
(g) Notwithstanding any provision to the contrary contained herein or
in any of the other Credit Documents, to the extent the obligations of any
Borrower shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal
law relating to fraudulent conveyances or transfers) then the obligations
of such Borrower hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, the Bankruptcy Code).
2.4 Appointment of BOP.
BRT hereby appoints BOP to act as its agent for all purposes under this
Credit Agreement (including, without limitation, with respect to all matters
related to the borrowing and repayment of Loans) and agrees that (i) BOP may
execute such documents on behalf of BRT as BOP deems appropriate in its sole
discretion and BRT shall be obligated by all of the terms of any such document
executed on its behalf, (ii) any notice or communication delivered by the
Administrative Agent or the Lender to BOP shall be deemed delivered to BRT and
(iii) the Administrative Agent or the Lender may accept, and be permitted to
rely on, any document, instrument or agreement executed by BOP on behalf of BRT.
2.5 Non-Recourse.
Notwithstanding anything herein to the contrary, no recourse shall be had
against Brandywine Realty Services Partnership or any past, present or future
shareholder, officer, director or trustee of BRT for any obligation of the
Credit Parties under the Credit Documents, or for any claim based thereon or
otherwise in respect thereof; provided, however, that this Section 2.5 shall not
restrict or limit any claim against any such Person arising out of or occurring
with respect to fraud or any intentional misrepresentation or any act or
omission that is willful or wanton or constitutes gross negligence or willful
misconduct..
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 Interest.
(a) Interest Rate. All Prime Rate Loans shall accrue interest at the
Prime Rate plus one-fourth percent (.25%) per annum. All Fed Funds Loans
shall accrue interest at the Federal Funds Rate plus one-half percent
(.50%) per annum. All Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate.
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(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents (including without limitation
fees and expenses) shall bear interest, payable on demand, at a per annum
rate equal to four percent (4%) plus the rate which would otherwise be
applicable (or if no rate is applicable, then the rate for Prime Rate Loans
plus four percent (4%) per annum); provided that unless the Loans have been
accelerated, interest, including the default rate of interest, shall only
be due and payable on the Interest Payment Dates.
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls
on a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the succeeding Business Day, except that in the case of
Eurodollar Loans where the succeeding Business Day falls in the succeeding
calendar month, then on the preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts to be
made by a Borrower under this Agreement shall be received not later than 2:00
p.m. on the date when due, in Dollars and in immediately available funds, by the
Administrative Agent at its offices in Charlotte, North Carolina or the Issuing
Lender at its applicable address. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrowers shall, at
the time it makes any payment under this Agreement, specify to the
Administrative Agent or Issuing Lender, as applicable, the Loans, Letters of
Credit, fees or other amounts payable by the Borrowers hereunder to which such
payment is to be applied (and in the event that it fails to specify, or if such
application would be inconsistent with the terms hereof, the Administrative
Agent shall, subject to Section 3.7, distribute such payment to the Lenders in
such manner as the Administrative Agent may deem appropriate). The
Administrative Agent will distribute any such payment to the Lenders on the day
received if such payment is received prior to 2:00 p.m.; otherwise the
Administrative Agent will distribute such payment to the Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (subject to accrual of interest and fees for
the period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be prepaid
on three Business Days' prior written notice to the Administrative Agent
and any prepayment of Eurodollar Loans will be subject to Section 3.14 and
(ii) each such partial prepayment of Loans shall be in the minimum
principal amount of $1,000,000 and integral multiples of $100,000 in excess
thereof.
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(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the
aggregate amount of Revolving Loans outstanding plus LOC Obligations
outstanding exceeds the lesser of (A) the Revolving Committed Amount
and (B) the Borrowing Base, the Borrowers shall, within sixty days
thereafter, forward to the Administrative Agent an amount necessary to
be in compliance with Section 2.1(a)(i) (to be applied as set forth in
Section 3.3(c) below); provided that if a prepayment is required under
this Section 3.3(b)(i) due to a change in the Capitalization Rate by
the Administrative Agent, the Borrowers shall have ninety days to
forward to the Administrative Agent an amount necessary to be in
compliance with Section 2.1(a)(i).
(ii) Sale or Refinancing of an Eligible Property. Upon the
consummation of the sale or refinancing of an Eligible Property, the
Borrowers shall immediately forward to the Administrative Agent an
amount necessary to be in compliance with Section 2.1(a)(i) (to be
applied as set forth in Section 3.3(c) below).
(iii) Equity Offerings. Upon receipt by a Borrower or
any of its Subsidiaries of the proceeds from an Equity Issuance, the
Borrowers shall immediately apply the Net Cash Proceeds thereof to the
Bridge Facility until such Bridge Facility is paid in full and
terminated and after payment in full of the Bridge Facility shall
immediately forward 100% of the Net Cash Proceeds (if any) to the
Administrative Agent as a prepayment of the Loans (to be applied as
set forth in Section 3.3(c) below).
(c) Application of Prepayments. All amounts required to be paid
pursuant to Section 3.3(b)(i), (ii) and (iii) above shall be applied first
to Prime Rate Loans, second to Fed Funds Loans and third to Eurodollar
Loans in direct order of Interest Period Maturities. All prepayments
hereunder shall be subject to Section 3.14; provided that prepayments
required to be made pursuant to Section 3.3(b) (ii) or 3.3(b)(iii) that
repay a Eurodollar Loan within 30 days of the last day of its Interest
Period shall not be subject to Section 3.14.
3.4 Fees.
(a) Unused Fees. In consideration of the Revolving Committed Amount
being made available by the Lenders hereunder, the Borrowers agree to pay
to the Administrative Agent, for the pro rata benefit of each Lender (based
on each Lender's Revolving Loan Commitment Percentage of the Revolving
Committed Amount), a fee equal to (i) if the average Unused Commitment
during the prior fiscal quarter is less than 50% of the Revolving Committed
Amount, .20% per annum on the Unused Commitment and (ii) if the average
Unused Commitment during the prior fiscal quarter is equal to or greater
than 50% of the Revolving Committed Amount, .15% per annum on the Unused
Commitment (the "Unused Fees"). The accrued Unused Fees shall commence to
accrue on the Effective Date and shall be due and payable in arrears on the
first day of each fiscal quarter of the
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Borrowers (as well as on the Revolving Loan Maturity Date and on any date
that the Revolving Committed Amount is reduced) for the immediately
preceding fiscal quarter (or portion thereof), beginning with the first of
such dates to occur after the Effective Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fees. In consideration of the issuance of
Letters of Credit hereunder, the Borrowers agree to pay to the Issuing
Lender, for the pro rata benefit of the applicable Lenders (based on
each Lender's Revolving Loan Commitment Percentage of the Revolving
Committed Amount), a fee (the "Letter of Credit Fees") equal to 1.125%
on the average daily maximum amount available to be drawn under each
such Letter of Credit from the date of issuance to the date of
expiration. The Letter of Credit Fees will be payable in full on the
date of issuance of the Letter of Credit.
(ii) Issuing Lender Fees. In addition to the Letter of Credit
Fees payable pursuant to subsection (i) above, the Borrowers shall pay
to the Issuing Lender for its own account, without sharing by the
other Lenders, (A) a fee equal to .125% per annum on the total sum of
the undrawn amounts of all Letters of Credit issued by the Issuing
Lender, such fee to be paid in full on the date of issuance of the
Letter of Credit and (B) the customary charges from time to time to
the Issuing Lender for its services in connection with the issuance,
amendment, payment, transfer, administration, cancellation and
conversion of, and drawings under, Letters of Credit (collectively,
the "Issuing Lender Fees").
(c) Administrative Fees. The Borrowers agree to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrowers and the Administrative Agent in the Fee Letter.
3.5 Payment in full at Maturity; Extension of Maturity.
(a) On the Revolving Loan Maturity Date, the entire outstanding
principal balance of all Revolving Loans and all LOC Obligations, together
with accrued but unpaid interest and all other sums owing with respect
thereto, shall be due and payable in full, unless accelerated sooner
pursuant to Section 9.2.
(b) If on the Initial Revolving Loan Maturity Date (i) no Default or
Event of Default exists and is continuing and (ii) the Borrowers pay to the
Administrative Agent, for the pro rata benefit of the Lenders, an extension
fee equal to one-fifth of one percent (.20%) of the then Revolving
Committed Amount, the Borrowers may elect to extend the Revolving Loan
Maturity Date to January 5, 2002. The Borrowers shall give written notice
to the Administrative Agent of its desire to effect such election at least
30 days, but no more than 90 days, prior to the Initial Revolving Loan
Maturity Date.
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3.6 Computations of Interest and Fees.
(a) Except for Prime Rate Loans which shall be calculated on the
basis of a 365 or 366 day year as the case may be, all computations of
interest and fees hereunder shall be made on the basis of the actual number
of days elapsed over a year of 360 days. Interest shall accrue from and
include the date of borrowing (or continuation or conversion) but exclude
the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to
time in effect. All agreements between the Lenders and the Credit Parties
are hereby limited by the provisions of this paragraph which shall override
and control all such agreements, whether now existing or hereafter arising
and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of
any obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Credit Parties or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans or
any other indebtedness evidenced by any of the Credit Documents does not
include the right to receive any interest which has not otherwise accrued
on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest
paid or agreed to be paid to the Lenders with respect to the Loans shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on
account of such indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing, each payment or prepayment
of principal of any Loan, each payment of fees (other than the
Administrative Fees and the Issuing Lender Fees), each reduction of the
Revolving Committed Amount, and each conversion or continuation of any
Loan, shall (except as otherwise provided in Section
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3.11) be allocated pro rata among the Lenders in accordance with the
respective Revolving Loan Commitment Percentages of such Lenders (or, if
the Commitments of such Lenders have expired or been terminated, in
accordance with the respective principal amounts of the outstanding Loans
and Participation Interests of such Lenders); provided that, if any Lender
shall have failed to pay its applicable pro rata share of any Revolving
Loan, then any amount to which such Lender would otherwise be entitled
pursuant to this Section 3.7 shall instead be payable to the Administrative
Agent until the share of such Loan not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any Lender
pursuant to this Section 3.7 is rescinded or must otherwise be returned by
the Administrative Agent, each Lender shall, upon the request of the
Administrative Agent, repay to the Administrative Agent the amount so paid
to such Lender, with interest for the period commencing on the date such
payment is returned by the Administrative Agent until the date the
Administrative Agent receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after such
request, the Federal Funds Rate, and thereafter, at the Prime Rate plus two
percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each LOC Participant pro
rata in accordance with its Revolving Loan Commitment Percentage; provided
that, if any LOC Participant shall have failed to pay its applicable pro
rata share of any drawing under any Letter of Credit, then any amount to
which such LOC Participant would otherwise be entitled pursuant to this
subsection (b) shall instead be payable to the Issuing Lender until the
share of such unreimbursed drawing not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any LOC
Participant pursuant to this subsection (b) is rescinded or must otherwise
be returned by the Issuing Lender, each LOC Participant shall, upon the
request of the Issuing Lender, repay to the Administrative Agent for the
account of the Issuing Lender the amount so paid to such LOC Participant,
with interest for the period commencing on the date such payment is
returned by the Issuing Lender until the date the Issuing Lender receives
such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal Funds
Rate, and thereafter, the Prime Rate plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a
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right of setoff, banker's lien, counterclaim or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by payment in cash or a repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Credit
Parties agree that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender shall fail to remit to the Administrative Agent
or any other Lender an amount payable by such Lender to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's (or parent corporation's) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrowers and the Administrative
Agent, the Borrowers shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender on an after-tax basis (after
taking into account applicable deductions and credits in respect of the amount
indemnified) for such reduction. Each determination by any such Lender of
amounts owing under this Section shall, absent manifest error, be conclusive and
binding on the parties hereto. This covenant shall survive the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate for such Interest Period, the
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Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter, and will also
give prompt written notice to the Borrowers when such conditions no longer
exist. If such notice is given (a) any Eurodollar Loans requested to be made
on the first day of such Interest Period shall be made as Prime Rate Loans
and (b) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Prime Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrowers have the right to convert Prime Rate Loans
or Fed Funds Loans to Eurodollar Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrowers
and the Administrative Agent (which notice shall be promptly withdrawn whenever
such circumstances no longer exist), (b) the commitment of such Lender hereunder
to make Eurodollar Loans, continue Eurodollar Loans as such and convert a Prime
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time
as it shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Prime Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Prime Rate
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, the Borrowers shall
pay to such Lender such amounts, if any, as may be required pursuant to Section
3.14; provided that no such payments shall be required if the conversion of a
Eurodollar Loan occurs within 30 days of the last day of the Interest Period of
such Eurodollar Loan.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit, any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 3.13 (including Non-Excluded Taxes imposed solely by
reason of any failure of such Lender to comply with its obligations under
Section 3.13(b)) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net income
tax), of such Lender or its applicable lending office, branch, or any
affiliate thereof);
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(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Adjusted Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrowers from such Lender,
through the Administrative Agent, in accordance herewith, the Borrowers shall be
obligated to promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such increased cost or reduced amount receivable, provided that, in any such
case, the Borrowers may elect to convert the Eurodollar Loans made by such
Lender hereunder to Prime Rate Loans by giving the Administrative Agent at least
one Business Day's notice of such election, in which case the Borrowers shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.14. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 3.12, it shall
provide prompt notice thereof to the Borrowers, through the Administrative
Agent, certifying (x) that one of the events described in this Section 3.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 3.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all payments made
by the Borrowers under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured by or
imposed upon the overall net income of any Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall capital or net worth
of any Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes: (i) by the
jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located,
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or in which its principal executive office is located, or any nation within
which such jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax and such
Lender, applicable lending office, branch or affiliate other than a connection
arising solely from such Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Credit Agreement or any
Notes. If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Notes, (A) the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest on any
such other amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the Borrowers shall
be entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
Section 3.13 whenever any Non-Excluded Taxes are payable by the Borrowers, and
(B) as promptly as possible after requested the Borrowers shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrowers showing payment thereof. If the Borrowers fail to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Administrative Agent and
any Lender for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the Borrowers
under this Credit Agreement or Notes to such Lender, deliver to the
Borrowers and the Administrative Agent (x) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it is
entitled to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income
taxes and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding tax;
(B) deliver to the Borrowers and the Administrative Agent
two further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers; and
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(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrowers or the Administrative Agent; or
(ii) in the case of any such Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (A) represent to the Borrowers (for the benefit of the Borrowers
and the Administrative Agent) that it is not a bank within the meaning
of Section 881(c)(3)(A) of the Internal Revenue Code, (B) agree to
furnish to the Borrowers, on or before the date of any payment by the
Borrowers, with a copy to the Administrative Agent, two accurate and
complete original signed copies of Internal Revenue Service Form W-8,
or successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Internal
Revenue Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrowers and the
Administrative Agent two further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by the
Borrowers or the Administrative Agent for filing and completing such
forms), and (C) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrowers, to provide to the Borrowers (for
the benefit of the Borrowers and the Administrative Agent) such other
forms as may be reasonably required in order to establish the legal
entitlement of such Lender to an exemption from withholding with
respect to payments under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender so advises the Borrowers and the Administrative Agent then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 11.3
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required pursuant
to this subsection (b); provided that in the case of a participant of a
Lender, the obligations of such participant of a Lender pursuant to this
subsection (b) shall be determined as if the participant of a Lender were a
Lender except that such participant of a Lender shall furnish all such
required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
3.14 Compensation.
Except as expressly set forth in Section 3.3(c), the Borrowers promise to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrowers in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrowers have given a notice requesting the
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same in accordance with the provisions of this Credit Agreement, (b) default by
the Borrowers in making any prepayment of a Eurodollar Loan after the Borrowers
have given a notice thereof in accordance with the provisions of this Credit
Agreement and (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
minus (ii) the amount of interest (as reasonably determined by such Lender)
which would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.15 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any increased
cost or suspension of the availability of an interest rate under Sections 3.9
through 3.14 inclusive to the greatest extent practicable (including
transferring the Loans to another lending office or affiliate of a Lender)
unless, in the opinion of such Lender, such efforts would be likely to have an
adverse effect upon it. In the event a Lender makes a request to the Borrowers
for additional payments in accordance with Sections 3.9, 3.10, 3.11, 3.12, 3.13
or 3.14 or a Lender becomes a Defaulting Lender, then, provided that no Default
or Event of Default has occurred and is continuing at such time, the Borrowers
may, at their own expense (such expense to include any transfer fee payable to
the Administrative Agent under Section 11.3(b) and any expense pursuant to
Section 3.14), and in their sole discretion, require such Lender to transfer and
assign in whole (but not in part), without recourse (in accordance with and
subject to the terms and conditions of Section 11.3(b)), all of its interests,
rights and obligations under this Credit Agreement to an assignee which shall
assume such assigned obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (a) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
governmental authority and (b) the Borrowers or such assignee shall have paid to
the assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the portion of the Loans
hereunder held by such assigning Lender and all other amounts owed to such
assigning Lender hereunder, including amounts owed pursuant to Sections 3.9
through 3.14.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender, the prompt payment of the
Obligations in full when due
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(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise). This Guaranty is a guaranty of payment and not of collection and is
a continuing guaranty and shall apply to all Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents or any other agreement or instrument referred to
therein, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor. Each Guarantor agrees
that this Guaranty may be enforced by the Lenders without the necessity at any
time of resorting to or exhausting any other security or collateral and without
the necessity at any time of having recourse to the Notes or any other of the
Credit Documents or any collateral, if any, hereafter securing the Obligations
or otherwise and each Guarantor hereby waives the right to require the Lenders
to proceed against the Borrowers or any other Person (including a co-guarantor)
or to require the Lenders to pursue any other remedy or enforce any other right.
Each Guarantor further agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrowers or any other
Guarantor of the Obligations for amounts paid under this Guaranty until such
time as the Lenders have been paid in full, all Commitments under the Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the Obligations
or from exercising any other rights available to it under this Credit Agreement,
the Notes, any other of the Credit Documents, or any other instrument of
security, if any, and the exercise of any of the aforesaid rights and the
completion of any foreclosure proceedings shall not constitute a discharge of
any of any Guarantor's obligations hereunder; it being the purpose and intent of
each Guarantor that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither any Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Borrowers or by reason of the bankruptcy or insolvency of the Borrowers. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance of by the
Administrative Agent or any Lender upon this Guarantee or acceptance of this
Guarantee. The Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee. All dealings between the Borrowers and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. The Guarantors further
agree to all rights of set-off as set forth in Section 11.2.
4.3 Modifications.
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Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Obligations or the
properties subject thereto; (c) the time or place of payment of the Obligations
may be changed or extended, in whole or in part, to a time certain or otherwise,
and may be renewed or accelerated, in whole or in part; (d) the Borrowers and
any other party liable for payment under the Credit Documents may be granted
indulgences generally; (e) any of the provisions of the Notes or any of the
other Credit Documents may be modified, amended or waived; (f) any party
(including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of the
Borrowers or any other party liable for the payment of the Obligations or liable
upon any security therefor may be released, in whole or in part, at, before or
after the stated, extended or accelerated maturity of the Obligations, all
without notice to or further assent by such Guarantor, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrowers by the Lenders; (b) presentment and
demand for payment or performance of any of the Obligations; (c) protest and
notice of dishonor or of default (except as specifically required in the Credit
Agreement) with respect to the Obligations or with respect to any security
therefor; (d) notice of the Lenders obtaining, amending, substituting for,
releasing, waiving or modifying any security interest, lien or encumbrance, if
any, hereafter securing the Obligations, or the Lenders' subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances, if any; and (e) all other notices to which such Guarantor might
otherwise be entitled.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including, without limitation,
reasonable fees of counsel) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, the Obligations may
be declared to be forthwith due and payable as provided in Section 9 (and shall
be deemed to have become
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automatically due and payable in the circumstances provided in Section 9)
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing such Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or such Obligations being deemed to have become automatically due and payable),
such Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in any of
the other Credit Documents, to the extent the obligations of any Guarantor shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with payments
made hereunder, each Credit Party shall have contribution rights against the
other Credit Parties as permitted under applicable law. Such contribution
rights shall be subordinate and subject in right of payment to the obligations
of the Credit Parties under the Credit Documents and no Credit Party shall
exercise such rights of contribution until all Credit Party Obligations have
been paid in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and make
the initial Extensions of Credit is subject to satisfaction of the following
conditions:
(a) Executed Credit Documents. Receipt by the Administrative Agent
of duly executed copies of: (i) this Credit Agreement; (ii) the Notes; and
(iii) all other Credit Documents, each in form and substance reasonably
acceptable to the Administrative Agent in its sole discretion.
(b) Partnership Documents. With respect to each Credit Party that is
a partnership, receipt by the Administrative Agent of the following:
(i) Authorization. Authorization of the general partner(s) of
such Credit Party, as of the Closing Date, approving and adopting the
Credit Documents to be executed by such Credit Party and authorizing
the execution and delivery thereof.
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(ii) Partnership Agreements. Certified copies of the partnership
agreement of such Credit Party, together with all amendments thereto.
(iii) Certificates of Good Standing or Existence.
Certificate of good standing or existence for such Credit Party issued
as of a recent date by its state of organization and each other state
where the failure to qualify or be in good standing could have a
Material Adverse Effect.
(iv) Incumbency. An incumbency certificate of the general
partner(s) of such Credit Party, certified by a secretary or assistant
secretary of such general partner to be true and correct as of the
Closing Date.
(c) Corporate Documents. With respect to each Credit Party that is a
corporation, receipt by the Administrative Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each such Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws of each such Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions approving and
adopting the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary of such Credit Party
to be true and correct and in full force and effect as of the
Effective Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
existence or their equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect and (B) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of such Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Effective Date.
(d) Limited Liability Company Documents. With respect to each Credit
Party that is a limited liability company, receipt by the Administrative
Agent of the following:
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(i) Certificate of Formation. A copy of the certificate of
formation of such Credit Party certified to be true and complete by
the appropriate Governmental Authority of the state or jurisdiction of
its formation and certified by the sole member of such Credit Party to
be true and correct as of the Closing Date.
(ii) LLC Agreement. A copy of the LLC Agreement of such Credit
Party certified by the sole member of such Credit Party to be true and
correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions approving and
adopting the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof.
(iv) Good Standing. Copies of certificates of good standing,
existence of their equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of formation and each
other jurisdiction in which the failure to so qualify and be in good
standing could have a Material Adverse Effect.
(e) Trust Documents. With respect to each Credit Party that is a
REIT, receipt by the Administrative Agent of the following:
(i) Declaration of Trust. A copy of the Declaration of Trust of
such Credit Party certified to be true and complete by the appropriate
Governmental Authority of the state or jurisdiction of its formation
and certified by the trustee of such Credit Party to be true and
correct as of the Closing Date.
(ii) Bylaws. A copy of the Bylaws of such Credit Party certified
by the trustee of such Credit Party to be true and complete as of the
Closing Date.
(iii) Resolutions. Copies of the resolutions of the Board of
Trustees of such Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof.
(iv) Good Standing. Copies of certificates of good standing,
existence of their equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of formation and each
other jurisdiction in which the failure to so qualify and be in good
standing could have a Material Adverse Effect.
(f) Financial Statements. Receipt and approval by the Lenders of:
(i) the consolidated financial statements of the Credit Parties and their
Subsidiaries for each of the three years ending December 31, 1994, 1995 and
1996, to the extent available, including balance sheets and income and cash
flow statements, audited by nationally recognized
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independent public accountants and containing an unqualified opinion of
such firm that such statements present fairly, in all material respects,
the consolidated financial position and results of operations of such
Person, and are prepared in conformity with GAAP, (ii) interim consolidated
financial statements of the Credit Parties and their Subsidiaries for the
nine months ending September 30, 1997, including balance sheets and income
and cash flow statements, accompanied by a certificate of the chief
financial officer of BRT to the effect that such annual Financial
Statements fairly present in all material respects the financial condition
of the Credit Parties and their Subsidiaries and have been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments and (iii) as requested by the Administrative
Agent, historical information on the Existing Properties, certified as true
and correct by the chief financial officer of BRT.
(g) Financial Projections and Other Information. Receipt and
approval by the Lenders of (i) financial projections for the Credit Parties
and their Subsidiaries on a consolidated basis and (ii) summary financial
projections for each Property, for the calendar year ending 1998, in a form
acceptable to the Lenders, and such other financial information as the
Lenders may require.
(h) Opinion of Counsel. Receipt by the Administrative Agent of
opinions (which shall cover, among other things, authority, legality,
validity, binding effect and enforceability), satisfactory to the
Administrative Agent, addressed to the Administrative Agent on behalf of
the Lenders and dated as of the Closing Date, from legal counsel to the
Credit Parties.
(i) Material Adverse Effect. There shall not have occurred a change
since September 30, 1997 that has had or could reasonably be expected to
have a Material Adverse Effect.
(j) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Credit Party or any of
their Subsidiaries that would have or would reasonably be expected to have
a Material Adverse Effect.
(k) Officer's Certificates. The Administrative Agent shall have
received a certificate on behalf of Credit Parties as of the Closing Date
stating that (i) the Credit Parties and each of their Subsidiaries are in
compliance with all existing material financial obligations, (ii) no
action, suit, investigation or proceeding is pending or threatened in any
court or before any arbitrator or governmental instrumentality that
purports to effect a Credit Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding could
have or could be reasonably expected to have a Material Adverse Effect,
(iii) the financial statements and information delivered pursuant to
Section 5.1(f) and (g) were prepared in good faith and using reasonable
assumptions and (iv) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions contemplated
therein to occur on such date, (A) each of the Credit Parties is Solvent,
(B) no Default or Event of Default exists, (C) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all
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material respects, and (D) the Credit Parties and their Subsidiaries are in
compliance with each of the financial covenants set forth in Section 7.2.
(l) Fees and Expenses. Payment by the Borrowers of all fees and
expenses owed by them to the Lenders and the Administrative Agent,
including, without limitation, payment to the Administrative Agent of the
fees set forth herein and in the Fee Letter.
(m) Borrowing Base Certificate. Receipt by the Administrative Agent
of a Borrowing Base Certificate, in the form of Exhibit 7.1(c), dated as
of the Closing Date.
(n) Consents and Approvals. All governmental, shareholder, partner
and third-party consents and approvals necessary or, in the opinion of the
Administrative Agent, desirable in connection with the Loans and the
transactions contemplated under the Credit Documents shall have been duly
obtained and shall be in full force and effect, and a copy of each such
consent or approval shall have been delivered to the Administrative Agent.
(o) Due Diligence. Completion by the Lenders of all due diligence
with respect to the Credit Parties and their Subsidiaries, including, but
not limited to, a review of (i) all existing Funded Debt and (ii) each
Existing Property.
(p) Existing Credit Agreement. Receipt by the Administrative Agent
of satisfactory evidence of the repayment of all loans and obligations
under the Existing Credit Agreement and the termination of the commitments
thereunder.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely requested
by any Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Credit Parties and
their Subsidiaries.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
(a) Delivery of Notice. The Borrowers shall have delivered (i) in
the case of a Loan, a Notice of Borrowing, duly executed and completed, by
the time specified in Section 2.1 and (ii) in the case of any Letter of
Credit, the Issuing Lender shall have received an appropriate request for
issuance in accordance with the provisions of Section 2.2.
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true and
correct in all material respects at and as if made as of such date except
to the extent they expressly relate to an earlier date.
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(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto.
(d) Availability. Immediately after giving effect to the making of
the requested Revolving Loan (and the application of the proceeds thereof),
or the issuance of a Letter of Credit, as the case may be, (i) the sum of
the Revolving Loans outstanding plus LOC Obligations outstanding shall not
exceed the lesser of (A) the Revolving Committed Amount less, for any
Property under construction and development that is less than 50%
preleased, the construction and development costs remaining to be incurred
for such Property unless and until outside construction financing for the
project is obtained (plus the amount of the requested Revolving Loan if
such Revolving Loan is being used for such construction and development
costs) and (B) the Borrowing Base, and (ii) the aggregate principal amount
of Revolving Loans advanced for construction and development of Properties
that are not preleased in excess of 85% shall not exceed (A) for such
Properties that are less than 50% preleased, $20,000,000 and (B) for all
such Properties, $100,000,000.
(e) Development and Construction. If (i) the proceeds of the
requested Revolving Loan are to be used for development and construction of
a Property, the Borrowers have notified the Administrative Agent with
respect thereto and (ii) if, after giving effect to the making of the
requested Revolving Loan, the aggregate principal amount of outstanding
Revolving Loans advanced for construction and development of Properties
exceeds $30,000,000, the Borrowers must have received the approval of the
Required Lenders.
(f) Restrictions on Loans. After giving effect to the making of the
requested Revolving Loan, the Borrowers shall be in compliance with the
terms of Section 2.1(f).
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrowers of the correctness of the matters specified in
subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(d) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated financial condition, results of
operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since September 30, 1997, there has been no
sale, transfer or other disposition by any Credit Party or any of their
Subsidiaries of any material part of the business or property of the Credit
Parties and their Subsidiaries, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any capital
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stock of any other Person) material in relation to the consolidated financial
condition of the Credit Parties and their Subsidiaries, taken as a whole, in
each case, which, is not (i) reflected in the most recent financial statements
delivered to the Lenders pursuant to Section 5.1(d) and Section 7.1 or in the
notes thereto or (ii) otherwise permitted by the terms of this Credit Agreement
and communicated to the Administrative Agent.
6.2 No Material Change.
Since the later of September 30, 1997 or the date of the last Revolving
Loan made under this Credit Agreement, there has been no development or event
relating to or affecting a Credit Party or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect.
6.3 Organization and Good Standing.
Each Credit Party (a) is either a partnership, a corporation, a limited
liability company or a REIT duly organized, validly existing and in good
standing under the laws of the State (or other jurisdiction) of its organization
or formation, (b) is duly qualified and in good standing as a foreign
partnership, a foreign corporation, a foreign limited liability company or a
foreign REIT and authorized to do business in every other jurisdiction unless
the failure to be so qualified, in good standing or authorized would not have or
would not be expected to have a Material Adverse Effect and (c) has the power
and authority to own its properties and to carry on its business as now
conducted and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the power and authority to execute, deliver and
perform this Credit Agreement and the other Credit Documents to which it is a
party and to incur the obligations herein and therein provided for and (b) is
duly authorized to, and has been authorized by all necessary action, to execute,
deliver and perform this Credit Agreement and the other Credit Documents to
which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of or
compliance with the terms and provisions thereof by a Credit Party will (a)
violate or conflict with any provision of its organizational documents, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree or permit applicable to it, (c)
violate, contravene or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, the violation of which would have or would be reasonably expected
to have a Material Adverse Effect, or (d) result in or require the creation of
any Lien upon or with respect to its properties.
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6.6 Consents.
Except for consents, approvals and authorizations which have been obtained,
no consent, approval, authorization or order of, or filing, registration or
qualification with, any court or Governmental Authority or third party in
respect of any Credit Party is required in connection with the execution,
delivery or performance of this Credit Agreement or any of the other Credit
Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 No Default.
No Credit Party, nor any of its Subsidiaries, is in default in any respect
under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would have or would be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred or exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Credit Party and its Subsidiaries is the owner of, and has good and
marketable title to, all of its respective assets and none of such assets is
subject to any Lien other than Permitted Liens. As of the Closing Date, each of
Brandywine Holdings II, Inc. and Brandywine Holdings III, Inc. owns no assets
and will be dissolved in the near future.
6.10 Indebtedness.
The Credit Parties and their Subsidiaries have no Indebtedness except as
otherwise permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Credit Party or any of its Subsidiaries which would have
or would be reasonably expected to have a Material Adverse Effect.
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6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and has paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it or any of its Subsidiaries.
6.13 Compliance with Law.
Each Credit Party, and each of its Subsidiaries, is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
6.14 Compliance with ERISA.
Except as would not result in or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best of each Credit Party's, each Subsidiary of a Credit
Party's and each ERISA Affiliate's knowledge, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no Lien in favor or the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) No Credit Party, Subsidiary of a Credit Party or ERISA Affiliate
has incurred, or, to the best of each such party's knowledge, is reasonably
expected to incur, any
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withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate would become subject to any withdrawal liability under ERISA if
any such party were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No Credit Party,
Subsidiary of a Credit Party or ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within the
meaning of Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best of each such
party's knowledge, reasonably expected to be in reorganization, insolvent,
or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate to
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Credit Party, any Subsidiary of a Credit Party or any
ERISA Affiliate has agreed or is required to indemnify any person against
any such liability.
(e) No Credit Party, Subsidiary of a Credit Party nor any of their
ERISA Affiliates has material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare
plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of
ERISA and Section 4980B of the Code apply has been administered in
compliance in all material respects with such sections.
6.15 Organization Structure/Subsidiaries.
As of the Closing Date, (a) Schedule 6.15 is a complete and accurate
organization chart of the Credit Parties and their Subsidiaries, and (b) no
Credit Party has any Subsidiaries except as set forth on Schedule 6.15.
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.10. None of the proceeds of the Loans will be used in a
manner that would violate Regulation U, Regulation X, Regulation G or Regulation
T.
6.17 Government Regulation.
No Credit Party, nor any of its Subsidiaries, is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, no Credit Party, nor any of its Subsidiaries, is (a) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, or controlled by such a company, or (b) a "holding
company," or a "Subsidiary company" of a "holding
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company," or an "affiliate" of a "holding company" or of a "Subsidiary" or a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended. No director, executive officer or principal shareholder of
a Credit Party or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director," "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as set forth on Schedule 6.18, to the knowledge of the
Credit Parties:
(i) Each of the Properties and all operations at the
Properties are in material compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law
with respect to the Properties or the businesses operated by a Credit
Party or any of its Subsidiaries (the "Businesses"), and there are no
conditions relating to the Businesses or Properties that would be
reasonably expected to give rise to liability under any applicable
Environmental Laws.
(ii) No Credit Party, nor any of its Subsidiaries, has
received any written notice of, or inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials or
compliance with Environmental Laws with regard to any of the
Properties or the Businesses, nor does any Credit Party or any of its
Subsidiaries have knowledge that any such notice is being threatened.
(iii) Hazardous Materials have not been transported or
disposed of from the Properties, or generated, treated, stored or
disposed of at, on or under any of the Properties or any other
location, in each case by, or on behalf or with the permission of, any
Credit Party or any of its Subsidiaries in a manner that would
reasonably be expected to give rise to liability under any applicable
Environmental Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any Credit
Party or any of its Subsidiaries, threatened, under any Environmental
Law to which any Credit Party or any of its Subsidiaries is or will be
named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to any Credit Party or any of its
Subsidiaries, the Properties or the Businesses, in any amount
reportable under the federal Comprehensive Environmental Response,
Compensation and Liability Act or any analogous state law, except
releases in compliance with any Environmental Laws.
(v) There has been no release or threat of release of
Hazardous Materials at or from the Properties, or arising from or
related to the operations (including, without limitation, disposal) of
a Credit Party or any of its Subsidiaries
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in connection with the Properties or otherwise in connection with the Businesses
except in compliance with Environmental Laws.
(vi) None of the Properties contains, or to the best of our
knowledge has previously contained, any Hazardous Materials at, on or
under the Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise to
liability under, Environmental Laws.
(vii) No Credit Party, nor any of its Subsidiaries, has
assumed any liability of any Person (other than another Borrower)
under any Environmental Law.
(b) Each Credit Party, and each of its Subsidiaries, has adopted
procedures that are designed to (i) ensure that each such party, any of its
operations and each of the properties owned or leased by such party remains
in compliance with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that each such party, any of its
operations and each of the properties owned or leased by each such party
may have under applicable Environmental Laws.
6.19 Solvency.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.20 Investments.
All Investments of the Credit Parties and their Subsidiaries are Permitted
Investments.
6.21 Location of Properties.
As of the Closing Date, set forth on Schedule 6.21 is a list of all
Properties (with street address, county and state where located) and the owner
of such Property.
6.22 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading in light of the circumstances in which made;
provided, however, that the Credit Parties make no representation or warranty
regarding the information delivered pursuant to Section 7.1(i).
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6.23 Licenses, etc.
The Credit Parties and their Subsidiaries have obtained, and hold in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted, except where the failure to
obtain the same would not have or would not reasonably be expected to have a
Material Adverse Effect.
6.24 No Burdensome Restrictions.
No Credit Party, nor any of its Subsidiaries, is a party to any agreement
or instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, would have or would be reasonably expected to
have a Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest and fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:
7.1 Information Covenants.
The Borrowers will furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the Credit
Parties, a consolidated balance sheet and income statement of the Credit
Parties and their Subsidiaries as of the end of such fiscal year, together
with related consolidated statements of operations and retained earnings
and of cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants concur)
and shall not be limited as to the scope of the audit or qualified in any
manner.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the Credit
Parties, a consolidated balance sheet and income statement of the Credit
Parties and their Subsidiaries, as of the end of such fiscal quarter,
together with related consolidated statements of operations and retained
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earnings and of cash flows for such fiscal quarter in each case setting
forth in comparative form consolidated figures for (A) the corresponding
period of the preceding fiscal year and (B) management's proposed budget
for such period, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of the chief financial officer of
BOP to the effect that such quarterly financial statements fairly present
in all material respects the financial condition of the Credit Parties and
their Subsidiaries and have been prepared in accordance with GAAP, subject
to changes resulting from audit and normal year-end audit adjustments.
(c) Borrowing Base Certificate. As soon as available and in any
event within 45 days after the end of each fiscal quarter of the Credit
Parties, a Borrowing Base Certificate in the form of Exhibit 7.1(c).
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of BRT, substantially in the form of Exhibit
7.1(d), (i) demonstrating compliance with the financial covenants contained
in Section 7.2 by calculation thereof as of the end of each such fiscal
period, (ii) stating that no Default or Event of Default exists, or if any
Default or Event of Default does exist, specifying the nature and extent
thereof and what action the Borrowers propose to take with respect thereto
and (iii) updating Schedule 6.15 and Schedule 6.21 as appropriate.
(e) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(f) Annual Information and Projections. Within 30 days after the end
of each fiscal year of the Credit Parties, all such financial information
regarding the Credit Parties and their Subsidiaries and specifically
regarding the Properties, as the Administrative Agent shall reasonably
request, including, but not limited to, partnership and joint venture
agreements, property cash flow projections, property budgets, actual and
budgeted capital expenditures, operating statements (current year and
immediately preceding year, if the Property existed as a Property in the
immediately preceding year), mortgage information, rent rolls, lease
expiration reports, leasing status reports, note payable summary, bullet
note summary, equity funding requirements, contingent liability summary,
line of credit summary, line of credit collateral summary, wrap note or
note receivable summary, schedule of outstanding letters of credit, summary
of cash and cash equivalents, projection of management and leasing fees and
overhead budgets.
(g) Auditor's Reports. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to any Credit
Party or any of its
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Subsidiaries in connection with any annual, interim or special audit of the
books of such Credit Party or any of its Subsidiaries.
(h) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Credit Party or any of its Subsidiaries shall send to its shareholders or
partners generally, (ii) copies of all income tax returns filed by a Credit
Party and (iii) upon the written request of the Administrative Agent, all
reports and written information to and from the United States Environmental
Protection Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters; provided, however, that if any
such transmissions are done electronically, the Borrowers shall instead
promptly notify the Administrative Agent of same and provide information on
how to retrieve such information.
(i) Market Information. No later than the thirtieth day following
the end of the second and the fourth fiscal quarter of each fiscal year of
BRT, the Borrowers shall obtain from reliable sources market information
for each SMSA in which an Eligible Property is located and provide copies
of such market information to the Administrative Agent.
(j) Notices. Upon a Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Administrative Agent
immediately of (i) the occurrence of an event or condition consisting of a
Default or Event of Default, specifying the nature and existence thereof
and what action the Credit Parties propose to take with respect thereto,
and (ii) the occurrence of any of the following with respect to any Credit
Party or any of its Subsidiaries (A) the pendency or commencement of any
litigation, arbitral or governmental proceeding against any Credit Party or
any of its Subsidiaries which if adversely determined would have or would
be reasonably expected to have a Material Adverse Effect, (B) the
institution of any proceedings against any Credit Party or any of its
Subsidiaries with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which would have or would
be reasonably expected to have a Material Adverse Effect or (C) the
occurrence of any default or nonpayment of nonrecourse Indebtedness of a
Credit Party in an aggregate principal amount in excess of $10,000,000.
(k) ERISA. Upon a Credit Party or any ERISA Affiliate obtaining
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within five Business Days)
of: (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, a ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against a Credit Party or any ERISA Affiliate, or of a determination that
any Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full
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payment on or before the due date (including extensions) thereof of all
amounts which a Credit Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
have a Material Adverse Effect; together, with a description of any such
event or condition or a copy of any such notice and a statement by the
chief financial officer of a Credit Party briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been or is being taken or is proposed to be taken by a Credit Party or
any ERISA Affiliate with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(l) Environmental.
(i) Subsequent to a notice from any Governmental Authority
that would reasonably cause concern or during the existence of an
Event of Default, and upon the written request of the Administrative
Agent, the Credit Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, an updated
report of an environmental assessment of reasonable scope, form and
depth, including, where appropriate, invasive soil or groundwater
sampling, by a consultant reasonably acceptable to the Administrative
Agent as to the nature and extent of the presence of any Hazardous
Materials on any Property and as to the compliance by the Credit
Parties and with Environmental Laws. If the Credit Parties fail to
deliver such an environmental report within seventy-five (75) days
after receipt of such written request then the Administrative Agent
may arrange for same, and the Credit Parties hereby grant to the
Administrative Agent and its representatives access to the Properties
and a license of a scope reasonably necessary to undertake such an
assessment (including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment arranged for by the
Administrative Agent pursuant to this provision will be payable by the
Credit Parties on demand.
(ii) Each of the Credit Parties and their Subsidiaries will
conduct and complete all investigations, studies, sampling, and
testing and all remedial, removal, and other actions necessary to
address all Hazardous Materials on, from, or affecting any Property to
the extent necessary to be in compliance with all Environmental Laws
and all other applicable federal, state, and local laws, regulations,
rules and policies and with the orders and directives of all
Governmental Authorities exercising jurisdiction over such Property to
the extent any failure would have or would be reasonably expected to
have a Material Adverse Effect.
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(m) Other Information. With reasonable promptness upon any such
request, such other information regarding the Properties or regarding the
business, assets or financial condition of the Credit Parties and their
Subsidiaries as the Administrative Agent or any Lender may reasonably
request.
7.2 Financial Covenants.
(a) Debt Service Coverage Ratio. The Debt Service Coverage Ratio, as
of the end of each fiscal quarter of the Credit Parties, shall be greater
than or equal to 1.50 to 1.0.
(b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
end of each fiscal quarter of Credit Parties for the twelve month period
ending on such date, shall be greater than or equal to 2.25 to 1.0.
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the end of each fiscal quarter of the Credit Parties for the twelve
month period ending on such date, shall be greater than or equal to 1.75 to
1.0.
(d) Net Worth. At all times, the Net Worth of the Credit Parties and
their Subsidiaries on a consolidated basis shall be greater than or equal
to the sum of (i) $300,000,000 plus (ii) 85% of the Net Cash Proceeds from
all Equity Issuances (other than Equity Issuances referred to in the
following subclause (iii)) plus (iii) 85% of the actual increase in Net
Worth (if any) resulting from an Equity Issuance made in connection with an
Incentive Stock Plan.
(e) Leverage Ratio. Subsequent to the earlier of (i) termination of
the Bridge Facility or (ii) 210 days following the Closing Date, the
Leverage Ratio, as of the end of each fiscal quarter of the Credit Parties,
shall be less than or equal to .55 to 1.0.
(f) Unsecured Funded Debt Ratio. Subsequent to the earlier of (i)
termination of the Bridge Facility or (ii) 210 days following the Closing
Date, the ratio of (A) Unsecured Funded Debt to (b) the sum of Gross
Implied Asset Values of all Unsecured Properties, as of the end of each
fiscal quarter of the Credit Parties, shall be less than or equal to .55 to
1.0.
7.3 Preservation of Existence.
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted by Section 8.4; provided that a Credit Party may dissolve if
it has no assets at the time of dissolution. Without limiting the generality of
the foregoing, BRT will do all things necessary to maintain its status as a
REIT.
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7.4 Books and Records.
Each of the Credit Parties will, and will cause its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and will cause its Subsidiaries to, comply
in all material respects with all material laws, rules, regulations and orders,
and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws and ERISA).
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to, pay,
settle or discharge (a) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that a Credit Party or any of its Subsidiaries shall not be required to
pay any such tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) would give rise to an immediate right to
foreclose on a Lien securing such amounts or (ii) would have a Material Adverse
Effect.
7.7 Insurance.
Each of the Credit Parties will, and will cause its Subsidiaries to, at all
times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice.
7.8 Maintenance of Assets.
Each of the Credit Parties will maintain and preserve its Properties and
all other assets in good repair, working order and condition, normal wear and
tear excepted, and will make, or cause to be made, in the Properties and other
assets, from time to time, all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
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7.9 Performance of Obligations.
Each of the Credit Parties will perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound.
7.10 Use of Proceeds.
The Credit Parties will use the proceeds of the Loans solely (a) to acquire
Properties, (b) to renovate existing Properties, (c) to develop and construct
Properties subject to the limitations set forth in this Credit Agreement and (d)
for general working capital in the ordinary course (including the payment of
dividends if such payment is otherwise in compliance with the terms of this
Credit Agreement); provided that it is understood that proceeds of Loans may not
be used to acquire undeveloped land unless such land is adjacent or contiguous
with other assets being acquired or already owned or such land is part of a
construction project approved by the Required Lenders and has all necessary
local permits and approvals and construction will commence within six months of
acquisition. The Credit Parties will use the Letters of Credit solely for the
purposes set forth in Section 2.2(a).
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause its Subsidiaries to, permit representatives appointed by
the Administrative Agent, including, without limitation, independent
accountants, agents, attorneys and appraisers to visit and inspect such Credit
Party's or such Subsidiary's property, including, without limitation, the
Properties, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders, including, without limitation, the performance of valuation
reviews from time to time to assess the composition of the Borrowing Base, and
to discuss all such matters with the officers, employees and representatives of
the Credit Parties and their Subsidiaries.
7.12 Additional Credit Parties.
At any time a Person that is not a Credit Party becomes a Material
Subsidiary of a Credit Party, the Borrowers shall notify the Administrative
Agent and promptly thereafter (but in any event within 30 days after such Person
becomes a Material Subsidiary of a Credit Party) (a) execute a Joinder Agreement
in substantially the same form as Exhibit 7.12, and (b) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, information regarding the
real property owned by such Person, including title and environmental reports,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
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7.13 Interest Rate Protection Agreements.
If for any consecutive period of 30 days or more Eurodollar Loans
constitute less than 75% of the aggregate principal amount of all outstanding
Revolving Loans, then the Borrowers shall enter into interest rate protection
agreements in form and substance acceptable to the Administrative Agent.
7.14 [Intentionally Omitted]
7.15 Construction.
With respect to any construction and development engaged in by the Credit
Parties, the Credit Parties shall or shall cause another Person to: (a) comply
with all applicable regulations and codes and (b) complete all such construction
and development in accordance with approved plans and specifications.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest, fees and other obligations hereunder, have been paid in full and the
Commitments and Letters of Credit hereunder shall have terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness owing from one Credit Party to another Credit Party;
(c) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business;
(d) Indebtedness subject to a Lien not to exceed, in the aggregate at
any one time, 25% of Consolidated GIAV; and
(e) Other unsecured Indebtedness as long as the Credit Parties are
otherwise in compliance with the terms of this Credit Agreement.
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8.2 Liens.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Properties or any other assets of any kind (whether real or personal,
tangible or intangible), whether now owned or after acquired, except for
Permitted Liens.
8.3 Nature of Business.
No Credit Party will, nor will it permit any of its Subsidiaries to, alter
the character of its business from that conducted as of the Closing Date or
engage in any business other than the business conducted as of the Closing Date.
8.4 Consolidation and Merger.
No Credit Party will enter into any transaction of merger or consolidation
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that notwithstanding the foregoing provisions of this
Section 8.4, any Credit Party may be merged or consolidated with or into another
Credit Party; provided that (a) if the transaction is between a Borrower and
another Credit Party such Borrower is the continuing or surviving entity; (b)
the Administrative Agent is given prior written notice of such action, and the
Credit Parties execute and deliver such documents, instruments and certificates
as the Administrative Agent may reasonably request; and (c) after giving effect
thereto no Default or Event of Default exists.
8.5 Sale or Lease of Assets.
No Credit Party will convey, sell, lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business
or assets whether now owned or hereafter acquired other than (a) the sale or
transfer of assets that do not constitute Eligible Properties; (b) the transfer
of assets which constitute a Permitted Investment; (c) the sale of Eligible
Properties by the Credit Parties; provided that (i) prior to such sale or
transfer of an Eligible Property, the Credit Parties notify the Administrative
Agent in writing and provide a certificate as to compliance, after giving effect
to such sale or transfer, with all of the terms of the Credit Agreement,
including but not limited to, the financial covenants set forth in Section 7.2;
(ii) the Borrowers make a prepayment on the outstanding Revolving Loans, if
necessary, as required by Section 3.3(b)(ii) and (iii) at the time of such sale,
and after giving effect thereto, no Default or Event of Default shall exist.
8.6 Advances, Investments and Loans.
Neither the Credit Parties nor any of their Subsidiaries will (a) make any
Investments except for Permitted Investments or (b) so long as Brandywine Realty
Services Partnership ("BRSP") is named in Section 2.5 hereof, make any
Investments in BRSP (whether or not such Investment would otherwise be a
Permitted Investment) or otherwise cause or permit BRSP to be a Subsidiary of
any Credit Party.
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8.7 Restricted Payments.
(a) No Credit Party will, directly or indirectly, declare or pay any
dividends or make any other distribution upon any of its shares of
beneficial interests or any shares of its capital stock of any class or
with respect to any of its partnership interests that exceeds, in the
aggregate, 90% of Funds From Operations earned subsequent to the Effective
Date; provided that (i) any Subsidiary of a Credit Party may pay dividends
or make distributions to its parent and (ii) BRT may pay such dividends as
is necessary to maintain its status as a REIT.
(b) Except as permitted by Section 8.6 and except for the conversion
of partnership units of BOP into cash or into shares of beneficial interest
of BRT, no Credit Party will, nor will it permit any of its Subsidiaries
to, at any time, for cash, purchase, redeem or otherwise acquire or retire
or make any provisions for redemption, acquisition or retirement of any
shares of its capital stock of any class or any warrants or options to
purchase any such shares or with respect to any of its partnership
interests.
8.8 Transactions with Affiliates.
No Credit Party will, nor will it permit any of its Subsidiaries to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than on terms and conditions substantially as favorable as would
be obtainable in a comparable arm's-length transaction with a Person other than
an officer, director, shareholder, Subsidiary or Affiliate.
8.9 Fiscal Year; Organizational Documents.
No Credit Party will (a) change its fiscal year or (b) change its articles
or certificate of incorporation, its bylaws, its declaration of trust, its
limited liability company agreement, its articles or certificate of partnership
or partnership agreement or any other organization or formation documents in any
manner that would have an adverse effect of the rights of the Lenders under the
Credit Documents; provided that (i) BRT may take such action, with prior written
notice to the Administrative Agent, as is necessary to maintain its status as a
REIT and (ii) the Credit Parties will provide prompt written notice of any
change to be made in compliance with the terms of this Section 8.9.
8.10 Limitations.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Person to pay any Indebtedness owed to the
Credit Parties.
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8.11 Other Negative Pledges.
The Credit Parties will not enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given for
some other obligation except as provided under the Credit Documents.
8.12 Construction and Development.
The Credit Parties shall not engage in construction and development
projects in which the total project costs of all such concurrent construction
and development projects exceed, in the aggregate at any one time, $100,000,000
(it being understood and agreed for purposes of this Section 8.12 that a project
shall be considered under construction and/or development until a certificate of
occupancy therefore (or other similar certificate) shall have been issued by the
applicable Governmental Authority).
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. The Credit Parties shall default in the payment (i)
when due of any principal amount of any Loans or any reimbursement
obligation arising from drawings under Letters of Credit or (ii) within
three days of when due of any interest on the Loans or any fees or other
amounts owing hereunder, under any of the other Credit Documents or in
connection herewith.
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.3, 7.10,
7.11, 7.12, 7.14, or 8.1 through 8.12 inclusive; or
(ii) default in the due performance or observance by it of
any term, covenant or agreement contained in Section 7.1 and such
default shall
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continue unremedied for a period of five Business Days after the
earlier of a Credit Party becoming aware of such default or notice
thereof given by the Administrative Agent; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) or (ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 30 days after the earlier of a Credit Party
becoming aware of such default or notice thereof given by the
Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in any
of the other Credit Documents and such default shall continue unremedied
for a period of at least 30 days after the earlier of a Credit Party
becoming aware of such default or notice thereof given by the
Administrative Agent, or (ii) any Credit Document (or any provision of any
Credit Document, including Section 4 of the Credit Agreement) shall fail to
be in full force and effect or any Credit Party shall so assert or any
Credit Document shall fail to give the Administrative Agent and/or the
Lenders the security interests, liens, rights, powers and privileges
purported to be created thereby.
(e) Bankruptcy, etc. The occurrence of any of the following with
respect to any Credit Party or any of its Subsidiaries (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Credit Party or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of any Credit Party or any of its Subsidiaries or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against any Credit Party or any of its Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) any Credit Party or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) any Credit Party or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
(f) Defaults under Other Agreements. With respect to any recourse
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of any Credit Party or any of its Subsidiaries in an aggregate
principal amount in excess of $10,000,000, (i) a Credit Party or one of its
Subsidiaries shall (A) default in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such
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recourse Indebtedness, or (B) default (after giving effect to any
applicable grace period) in the observance or performance of any term,
covenant or agreement relating to such recourse Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or permit, the
holder or holders of such recourse Indebtedness (or trustee or agent on
behalf of such holders) to cause (determined without regard to whether any
notice or lapse of time is required) any such recourse Indebtedness to
become due prior to its stated maturity; or (ii) any such recourse
Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment prior to the stated
maturity thereof; or (iii) any such Indebtedness shall mature and remain
unpaid. With respect to any nonrecourse Indebtedness of any Credit Party or
any of its Subsidiaries in an aggregate principal amount in excess of
$20,000,000, a default in payment (whether by acceleration or otherwise)
shall occur and such payment default is not cured or waived within sixty
days after the occurrence thereof.
(g) Judgments. One or more judgments, orders, or decrees shall be
entered against any one or more of the Credit Party involving a liability
of $10,000,000 or more, in the aggregate (to the extent not paid or covered
by insurance provided by a carrier who has acknowledged coverage), and such
judgments, orders or decrees (i) are the subject of any enforcement
proceeding commenced by any creditor or (ii) shall continue unsatisfied,
undischarged and unstayed for a period ending on the first to occur of (A)
the last day on which such judgment, order or decree becomes final and
unappealable or (B) 20 days.
(h) ERISA Events. The occurrence of any of the following events or
conditions, unless such event or occurrence would not have or be reasonably
expected to have a Material Adverse Effect: (1) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, shall exist with respect to any
Plan, or any lien shall arise on the assets of a Credit Party or any ERISA
Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event shall occur
with respect to a Single Employer Plan, which is, in the reasonable opinion
of the Administrative Agent, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in (i) the
termination of such Plan for purposes of Title IV of ERISA, or (ii) a
Credit Party or any ERISA Affiliate incurring any liability in connection
with a withdrawal from, reorganization of (within the meaning of Section
4241 of ERISA), or insolvency (within the meaning of Section 4245 of ERISA)
of such Plan; or (4) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject a Credit Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which a Credit Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability.
(i) Ownership. There shall occur a Change of Control.
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(j) Management. Gerard Sweeney is no longer active in the management
of the Credit Parties and their Subsidiaries; provided that upon the death
or disability of Gerard Sweeney, the Credit Parties and their Subsidiaries
shall have six months to provide the Administrative Agent with substitute
personnel as replacement; such substitute personnel to be acceptable to the
Administrative Agent in its sole reasonable discretion.
(k) REIT Status. BRT does not maintain its REIT status or is no
longer deemed to be a REIT.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrowers, take any of the following actions
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the Borrowers, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by a Credit Party
to any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(e), they will
immediately pay) to the Administrative Agent additional cash, to be held by
the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account as additional security for the LOC Obligations in
respect of subsequent drawings under all then outstanding Letters of Credit
in an amount equal to the maximum aggregate amount which may be drawn under
all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees, all
reimbursement obligations under Letters of Credit and all other indebtedness or
obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Administrative
Agent or the Lenders, which notice or other action is expressly waived by the
Credit Parties.
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Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent, or any Lender on account of
amounts outstanding under any of the Credit Documents shall be paid over or
delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Administrative Agent in connection with enforcing the rights of the Lenders
under the Credit;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans, and unreimbursed drawings under Letters of Credit, to the payment or
cash collateralization of the outstanding LOC Obligations pro rata, as set
forth below;
SIXTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations) of amounts available to be applied pursuant to
clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above and (c) to the extent that
any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued by undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in a cash collateral
account and applied (x) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all
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other obligations of the types described in clauses "FIFTH" and "SIXTH" above in
the manner provided in this Section 9.3.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
Administrative Agent of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Administrative
Agent, as the agent for such Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated by the
terms hereof and of the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere herein and in the other Credit Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
Documents, or shall otherwise exist against the Administrative Agent. The
provisions of this Section are solely for the benefit of the Administrative
Agent and the Lenders and none of the Credit Parties shall have any rights as a
third party beneficiary of the provisions hereof. In performing its functions
and duties under this Credit Agreement and the other Credit Documents, the
Administrative Agent shall act solely as an agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for any Credit Parties.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties hereunder or under
the other Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
10.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by the Administrative Agent under or
in
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connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency therefor of any of the other Credit Documents, or
for any failure of the Credit Parties to perform their obligations hereunder or
thereunder. The Administrative Agent shall not be responsible to any Lender for
the effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Credit Parties in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Administrative Agent to the Lenders or by or on behalf of the Credit Parties to
the Administrative Agent or any Lender or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Credit Parties. The Administrative Agent is
not a trustee for the Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat each Lender as the owner of its
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent in accordance with Section 11.3(b). The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Credit
Agreement or under any of the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice
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thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent,
NationsBanc Montgomery Securities, Inc. ("NMSI") nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Administrative Agent,
NMSI or any affiliate thereof hereinafter taken, including any review of the
affairs of any Credit Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent or NMSI to any Lender. Each Lender
represents to the Administrative Agent and NMSI that it has, independently and
without reliance upon the Administrative Agent or NMSI or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Credit Parties and made its own decision to make its Loans hereunder and enter
into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent, NMSI or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent and NMSI shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Credit Parties which may
come into the possession of the Administrative Agent, NMSI or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its capacity as
such (to the extent not reimbursed by the Credit Parties and without limiting
the obligation of the Credit Parties to do so), ratably according to their
respective Commitments (or if the Commitments have expired or been terminated,
in accordance with the respective principal amounts of outstanding Loans and
Participation Interest of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following payment in full of the
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in its capacity as such in any way relating to or arising out of this
Credit Agreement or the other Credit Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Administrative
Agent. If any indemnity furnished to the Administrative Agent for any purpose
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shall, in the opinion of the Administrative Agent, be insufficient or become
impaired, the Administrative Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
payment of the Obligations and all other amounts payable hereunder and under the
other Credit Documents.
10.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Credit
Parties as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the Loans made and Letters of Credit issued and all
obligations owing to it, the Administrative Agent shall have the same rights and
powers under this Credit Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
10.9 Successor Agent.
The Administrative Agent may, at any time, resign upon 20 days written
notice to the Lenders. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 45 days after the notice of
resignation, then the retiring Administrative Agent shall select a successor
Administrative Agent provided such successor is a Lender hereunder or an
Eligible Assignee. Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations as the Administrative
Agent, as appropriate, under this Credit Agreement and the other Credit
Documents and the provisions of this Section 10.9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set
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forth on Schedule 11.1, or at such other address as such party may specify by
written notice to the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section
9.2, each Lender is authorized at any time and from time to time, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation, branches, agencies or
Affiliates of such Lender wherever located) to or for the credit or the account
of any Credit Party against obligations and liabilities of such Credit Party to
the Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have made
any demand hereunder and although such obligations, liabilities or claims, or
any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person purchasing
a participation in the Loans and Commitments hereunder pursuant to Section
11.3(c) or 3.8 may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties may
assign and transfer any of its interests (except as permitted by Sections
8.4 or 8.5) without the prior written consent of the Lenders; and provided
further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited
as set forth below in subsections (b) and (c) of this Section 11.3.
Notwithstanding the above (including anything set forth in subsections (b)
and (c) of this Section 11.3), nothing herein shall restrict, prevent or
prohibit any Lender from (A) pledging its Loans hereunder to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank, or (B) granting assignments or participations in such
Lender's Loans and/or Commitments hereunder to its parent company and/or to
any Affiliate of such Lender or to any existing Lender or Affiliate
thereof.
(b) Assignments. In addition to the assignments permitted by Section
11.3(a), each Lender may, with the prior written consent of the Borrowers
and the Administrative Agent (provided that no consent of the Borrowers
shall be required during the existence and continuation of an Event of
Default), which consent shall not be unreasonably withheld or delayed,
assign all or a portion of its rights and obligations hereunder pursuant to
an assignment agreement substantially in the form of Exhibit 11.3 to one or
more Eligible Assignees; provided that (i) any such assignment shall be in
a minimum aggregate amount
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of $10,000,000 of the Commitments and in integral multiples of $1,000,000
above such amount (or the remaining amount of Commitments held by such
Lender) and (ii) each such assignment shall be of a constant, not varying,
percentage of all of the assigning Lender's rights and obligations under
the Commitment being assigned. Any assignment hereunder shall be effective
upon satisfaction of the conditions set forth above and delivery to the
Administrative Agent of a duly executed assignment agreement together with
a transfer fee of $3,500 payable to the Administrative Agent for its own
account. Upon the effectiveness of any such assignment, the assignee shall
become a "Lender" for all purposes of this Credit Agreement and the other
Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. The Borrowers agree that
upon notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with notation
thereon that it is given in substitution for and replacement of the
original Note or Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of any
Credit Party or the performance or observance by any Credit Party of any of
its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee
confirms that it has received a copy of this Credit Agreement, the other
Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Credit Documents; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action on its behalf and to exercise such
powers under this Credit Agreement or any other Credit Document as are
delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the
other Credit Documents are required to be performed by it as a Lender.
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(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall remain a
"Lender" for all purposes under this Credit Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and
the participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Credit Agreement or the other Credit Documents
except to the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any Loans in
which the participant is participating or increase any Commitments with
respect thereto, or (B) postpone the date fixed for any payment of
principal (including the extension of the final maturity of any Loan or the
date of any mandatory prepayment), interest or fees in which the
participant is participating, (iii) sub-participations by the participant
(except to an Affiliate, parent company or Affiliate of a parent company of
the participant) shall be prohibited and (iv) any such participations shall
be in a minimum aggregate amount of $10,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under this Credit
Agreement or the other Credit Documents (the participant's rights against
the selling Lender in respect of such participation to be those set forth
in the participation agreement with such Lender creating such
participation) and all amounts payable by the Credit Parties hereunder
shall be determined as if such Lender had not sold such participation;
provided, however, that such participant shall be entitled to receive
additional amounts under Sections 3.9, 3.12, 3.13 and 3.14 to the same
extent that the Lender from which such participant acquired its
participation would be entitled to the benefit of such cost protection
provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Credit Parties and the
Administrative Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Administrative Agent and NationsBanc Montgomery
Securities, Inc. ("NMSI") in connection with (A) the negotiation, preparation,
execution and delivery, syndication and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Moore & Van Allen,
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special counsel to the Administrative Agent, and (B) any amendment, waiver or
consent relating hereto and thereto including, but not limited to, any such
amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement, and (ii) the Administrative Agent and the Lenders
in connection with (A) enforcement of the Credit Documents and the documents and
instruments referred to therein, including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Administrative Agent and each of the Lenders, and (B) any bankruptcy or
insolvency proceeding of a Credit Party of any of its Subsidiaries, and (b)
indemnify the Administrative Agent, NMSI and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not the Administrative Agent, NMSI or any Lender is a party thereto) related
to (i) the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified), (ii) any Environmental
Claim and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the Credit Parties; provided that
no such amendment, change, waiver, discharge or termination shall without the
consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion thereof or
postpone any other date fixed for any payment of principal (other than in
accordance with Section 3.5(b));
(b) reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase
in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any Default or
Event of Default or a waiver of any mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender);
(e) release a Credit Party from its obligations under the Credit
Documents;
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(f) amend, modify or waive any provision of this Section or Section
3.4(a), 3.4(b), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 5.2, 9.1(a),
11.2, 11.3 or 11.5;
(g) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders; or
(h) consent to the assignment or transfer by a Credit Party of any of
its rights and obligations under (or in respect of) the Credit Documents except
as permitted under Section 8.4.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans and other obligations and the termination of the Commitments
hereunder.
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11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding with
respect to this Agreement or any other Credit Document may be brought
in the courts of the State of North Carolina in Mecklenburg County, or
of the United States for the Western District of North Carolina and,
by execution and delivery of this Credit Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Credit Party further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1, such service to become effective 15 days after such
mailing. Nothing herein shall affect the right of a Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a Credit Party in any
other jurisdiction. Each Credit Party agrees that a final judgment in
any action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner
provided by law; provided that nothing in this Section 11.11(a) is
intended to impair a Credit Party's right under applicable law to
appeal or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight Time, as the case may be, unless specified otherwise.
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11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.16 Binding Effect.
(a) This Credit Agreement shall become effective at such time when
all of the conditions set forth in Section 5.1 have been satisfied or
waived by the Lenders and it shall have been executed by the Credit Parties
and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together,
bear the signatures of each Lender, and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of the Credit Parties, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, LOC Obligations, interest,
fees and other Obligations have been paid in full and all Commitments and
Letters of Credit have been terminated. Upon termination, the Credit
Parties shall have no further obligations (other than the indemnification
provisions that survive) under the Credit Documents; provided that should
any payment, in whole or in part, of the Obligations be rescinded or
otherwise required to be restored or returned by the Administrative Agent
or any Lender, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, then the Credit Documents shall automatically
be reinstated and all amounts required to be restored or returned and all
costs and expenses incurred by the Administrative Agent or Lender in
connection therewith shall be deemed included as part of the Obligations.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
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notified of the confidential nature of the information or (f) any other Person
in connection with any litigation to which any one or more of the Lenders is a
party; and provided further that no Lender shall have any obligation under this
Section 11.17 to the extent any such information becomes available on a
non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.17.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWERS:
BRANDYWINE REALTY TRUST, a Maryland
real estate investment trust
By:
-------------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general partner
By:
----------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive
Officer
<PAGE>
GUARANTORS: LC/N HORSHAM LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
LC/N KEITH VALLEY LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
NICHOLS LANSDALE LIMITED PARTNERSHIP III,
a Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general
partner
NEWTECH III LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general
partner
WITMER OPERATING PARTNERSHIP I, L.P., a
Delaware limited partnership
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
<PAGE>
NEWTECH IV LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
C/N OAKLANDS LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
FIFTEEN HORSHAM, L.P., a Pennsylvania limited
partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
C/N LEEDOM LIMITED PARTNERSHIP II, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
C/N IRON RUN LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N OAKLANDS LIMITED PARTNERSHIP III a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
IRON RUN LIMITED PARTNERSHIP V, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB II, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE DOMINION, L.P., a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE P.M., L.P., a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general
partner
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
BRANDYWINE REALTY SERVICES
CORPORATION, a Pennsylvania corporation
BRANDYWINE ACQUISITIONS, LLC, a
Delaware limited liability company
BRANDYWINE MAIN STREET, LLC, a
Delaware limited liability company
1100 BRANDYWINE, LLC, a
Delaware limited liability company
BRANDYWINE LEASING, LLC, a
Delaware limited liability company
BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE TB II, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE TB III, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE WITMER, LLC, a
Pennsylvania limited liability company
<PAGE>
BRANDYWINE DOMINION, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE P.M., L.L.C., a
Pennsylvania limited liability company
By:
Gerard H. Sweeney
President and Chief Executive Officer of
each of the above-named entities
LENDERS:
NATIONSBANK, N.A., acting in its capacity
as Administrative Agent and individually as a Lender
By:
-------------------------------------------------
Name:
-------------------------------------------------
Title:
-------------------------------------------------
<PAGE>
REVOLVING NOTE
January 5, 1998
FOR VALUE RECEIVED, BRANDYWINE REALTY TRUST, a Maryland real estate
investment trust and BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (collectively, the "Borrowers") hereby, jointly and severally,
promise to pay to the order of NATIONSBANK, N.A. (the "Lender"), at the office
of NationsBank, N.A. (the "Administrative Agent") as set forth in that certain
Amended and Restated Credit Agreement dated as of January 5, 1998 among the
Borrowers, the Subsidiaries of the Borrowers as Guarantors, NationsBank, N.A.,
as Administrative Agent, and the Lenders party thereto (as the same may be
amended, modified, extended or restated from time to time, the "Credit
Agreement"), the aggregate unpaid principal amount of the Revolving Loans made
by the Lender to the Borrowers under the Credit Agreement, in lawful money of
the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Revolving Loan, at such
office, in like money and funds, for the period commencing on the date of such
Revolving Loan until such Revolving Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
and evidences Revolving Loans made by the Lender thereunder. Capitalized terms
used in this Revolving Note and not otherwise defined shall have the respective
meanings assigned to them in the Credit Agreement and the terms and conditions
of the Credit Agreement are expressly incorporated herein and made a part
hereof.
The Credit Agreement provides for the acceleration of the maturity of the
Revolving Loans evidenced by this Revolving Note upon the occurrence of certain
events (and for payment of collection costs in connection therewith) and for
prepayments of Revolving Loans upon the terms and conditions specified therein.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrowers agree to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorney fees. The
date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrowers, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrowers to
make a payment when due of any amount owing hereunder or under this Revolving
Note in respect of the Revolving Loans to be evidenced by this Revolving Note,
and each such recordation or endorsement shall be prima facie evidence of such
information.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA.
<PAGE>
IN WITNESS WHEREOF, the Borrowers have caused this Revolving Note to be executed
as of the date first above written.
BRANDYWINE REALTY TRUST, a Maryland
real estate investment trust
By:
--------------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general partner
By:
---------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive
Officer
<PAGE>
PROMISSORY NOTE
$100,000,000 January 5, 1998
FOR VALUE RECEIVED, Brandywine Realty Trust ("BRT") and Brandywine
Operating Partnership, L.P. (collectively, the "Borrowers"), jointly and
severally, hereby unconditionally promise to pay to NationsBank, N.A.
("Lender"), at its offices located in Charlotte, North Carolina or such other
place as designated by the Lender, the principal sum of ONE HUNDRED MILLION
DOLLARS ($100,000,000) or such lesser principal amount as may be outstanding
from time to time hereunder, in lawful money of the United States of America
and in immediately available funds, together with interest on such principal
amount and such other amounts as may be due and owing hereunder in accordance
with the terms hereof.
This Note is issued upon, and the undersigned acknowledge and agree to,
the following terms and conditions:
1. Definitions. As used herein the following terms shall have the
meanings herein specified unless the context other requires.
"Business Day" means any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in McLean,
Virginia, Charlotte, North Carolina or New York, New York; provided that
in the case of Eurodollar Loans, such day is also a day on which dealings
between banks are carried on in U.S. dollar deposits in the London
interbank market.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Eurodollar Loan" means a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant
to the following formula:
Eurodollar Rate = London Interbank Offered Rate
------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time, or
any successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurodollar liabilities as
that term is defined in
<PAGE>
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Loans is
determined), whether or not any Lender has any Eurodollar liabilities
subject to such reserve requirement at that time. Eurodollar Loans shall
be deemed to constitute Eurodollar liabilities and as such shall be
deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time
to a Lender. The Eurodollar Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means any of the events or circumstances
described in Section 7 hereof.
"Final Maturity Date" means August 5, 1998.
"Guarantors" has the meaning set forth in the Senior Revolving
Credit Agreement.
"Initial Maturity Date" means May 5, 1998.
"Interest Period" means, as to Eurodollar Loans, a period of one
months' duration commencing, in each case, on the date of the borrowing
(including continuations and conversions thereof); provided, however, (a)
if any Interest Period would end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business
Day (except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b)
no Interest Period shall extend beyond the Maturity Date, (c) with
respect to Eurodollar Loans, where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on
the last Business Day of such calendar month, and (d) no Interest Period
shall extend beyond the Initial Maturity Date unless the Maturity Date
has been extended pursuant to Section 4(c) hereof.
"Interest Payment Date" means (a) as to Prime Rate Loans, the last
Business Day of each month and on the Maturity Date, (b) as to Eurodollar
Loans on the last day of the applicable Interest Period and on the
Maturity Date.
"London Interbank Offered Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Telerate Page 3750, the applicable rate shall be the arithmetic mean of
all such rates. If for any reason such rate is not available, the term
"London Interbank Offered Rate" shall mean, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank
2
<PAGE>
offered rate for deposits in U.S. dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however,
if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Maturity Date" means the Initial Maturity Date or if the Initial
Maturity Date is extended in accordance with the terms hereof, the Final
Maturity Date.
"Notice of Borrowing" means a request by the Borrowers for a Loan,
in the form of Exhibit 2(b) attached hereto.
"Notice of Continuation/Conversion" means a request by the Borrowers
to continue an existing Eurodollar Loan to a new Interest Period or to
convert a Eurodollar Loan to a Prime Rate Loan or to convert a Prime Rate
Loan to a Eurodollar Loan, in the form of Exhibit 2(c) attached hereto.
"Prime Rate" means the per annum rate of interest established from
time to time by the Lender at its principal office in Charlotte, North
Carolina (or such other principal office of the Lender as communicated in
writing to the Borrowers) as its Prime Rate. Any change in the interest
rate resulting from a change in the Prime Rate shall become effective as
of 12:01 a.m. of the Business Day on which each change in the Prime Rate
is announced by the Lender. The Prime Rate is a reference rate used by
the Lender in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Prime Rate Loan" means a Loan bearing interest based at a rate
determined by reference to the Prime Rate.
"Senior Revolving Credit Agreement" means that certain $300 million
revolving credit agreement, dated as of the date hereof, among the
Borrowers, the Subsidiaries of the Borrowers as Guarantors, the Lender,
as Administrative Agent, and the other lenders party thereto.
2. The Loans.
(a) Commitment. Subject to the terms and conditions set forth
herein, the Lender agrees to make loans (each a "Loan" and collectively
the "Loans") to the Borrowers, in U.S. dollars, at any time and from time
to time, from the date hereof to but not including the Maturity Date;
provided that the aggregate principal amount of Loans advanced hereunder
cannot exceed $100,000,000.
(b) Method of Borrowing for Loans. By no later than 11:00 a.m. (i)
one Business Day prior to the date of the requested borrowing of Loans
that will be Prime Rate Loans or (ii) three Business Days prior to the
date of the requested borrowing of Loans that will be Eurodollar Loans,
the Borrowers shall submit a written Notice of Borrowing in the
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<PAGE>
form of Exhibit 2(b) attached hereto to the Lender setting forth (A) the
amount requested, (B) whether such Loans shall be Prime Rate Loans or
Eurodollar Loans, and (C) certification that the Borrowers have complied
in all respects with Section 6(b) hereof. The Lender will make the
requested Loan to the Borrowers on the date set forth in the Notice of
Borrowing by crediting the account of the Borrowers on the books of the
Lender.
(c) Continuations and Conversions. The Borrowers shall have the
option, on any Business Day, to continue existing Eurodollar Loans for a
subsequent Interest Period, to convert Prime Rate Loans into Eurodollar
Loans, or to convert Eurodollar Loans into Prime Rate Loans; provided,
however, that (i) each such continuation or conversion must be requested
by the Borrowers pursuant to a written Notice of Continuation/Conversion,
in the form of Exhibit 2(c) attached hereto, in compliance with the terms
set forth below, (ii) Eurodollar Loans may only be continued or converted
on the last day of the Interest Period applicable thereto, (iii)
Eurodollar Loans may not be continued nor may Prime Rate Loans be
converted into Eurodollar Loans during the existence and continuation of
a Default or Event of Default and (iv) any request to continue a
Eurodollar Loan that fails to comply with the terms hereof or any failure
to request a continuation of a Eurodollar Loan at the end of an Interest
Period shall result in a conversion of such Eurodollar Loan to a Prime
Rate Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrowers no later
than 11:00 a.m. (A) one Business Day prior to the date for a requested
conversion of a Eurodollar Loan to a Prime Rate Loan or (B) three
Business Days prior to the date for a requested continuation of a
Eurodollar Loan or conversion of a Prime Rate Loan to a Eurodollar Loan,
in each case pursuant to a written Notice of Continuation/Conversion
submitted to the Lender.
(d) Minimum Amounts/Restrictions on Loans. Each request for a
borrowing, conversion or continuation shall be subject to the
requirements that (i) each Eurodollar Loan shall be in a minimum amount
of $1,000,000 and in integral multiples of $100,000 in excess thereof,
(ii) each Prime Rate Loan shall be in a minimum amount of $500,000 (and
integral multiples of $100,000 in excess thereof) or the remaining amount
available under this Note, (iv) no more than four Loans shall be made
during any one month and (v) no more than six Eurodollar Loans shall be
outstanding at any one time. For the purposes of this Section, all
Eurodollar Loans with the same Interest Periods beginning on the same
date shall be considered as one Eurodollar Loan, but Eurodollar Loans
with different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
(e) Appointment of BOP. BRT hereby appoints BOP to act as its
agent for all purposes under this Note (including, without limitation,
with respect to all matters related to the borrowing and repayment of
Loans) and agrees that (i) BOP may execute such documents on behalf of
BRT as BOP deems appropriate in its sole discretion and BRT shall be
obligated by all of the terms of any such document executed on its
behalf, (ii) any notice or communication delivered by the Lender to BOP
shall be deemed delivered to BRT and (iii) the Lender may accept, and be
permitted to rely on, any document, instrument or agreement executed by
BOP on behalf of a Borrower or BRT.
4
<PAGE>
3. Interest.
(a) Interest Rate. From the date hereof until the Initial Maturity
Date, (i) all Prime Rate Loans shall accrue interest at the Prime Rate
plus .25% and all Eurodollar Loans shall accrue interest at the
Eurodollar Rate plus 1.50%. If the Maturity Date is extended pursuant to
the terms hereof, then from the day after the Initial Maturity Date until
the Final Maturity Date, all Prime Rate Loans shall accrue interest at
the Prime Rate plus .50% and all Eurodollar Loans shall accrue interest
at the Eurodollar Rate plus 1.75%.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing
hereunder (including without limitation fees and expenses) shall bear
interest, payable on demand, at a per annum rate equal to four percent
(4%) plus the rate which would otherwise be applicable (or if no rate is
applicable, then the rate for Prime Rate Loans plus four percent (4%) per
annum).
(c) Interest Payments. Interest on Loans shall be due and payable
in arrears on each Interest Payment Date. If an Interest Payment Date
falls on a date which is not a Business Day, such Interest Payment Date
shall be deemed to be the succeeding Business Day, except that in the
case of Eurodollar Loans where the succeeding Business Day falls in the
succeeding calendar month, then on the preceding Business Day.
(d) Computation of Interest. Except for Prime Rate Loans which
shall be calculated on the basis of a 365 or 366 day year as the case may
be, all computations of interest hereunder shall be made on the basis of
the actual number of days elapsed over a year of 360 days. Interest
shall accrue from and include the date of borrowing (or continuation or
conversion) but exclude the date of payment. It is the intent of the
Lender and the Borrowers to conform to and contract in strict compliance
with applicable usury law from time to time in effect. All agreements
between the Lender and the Borrowers are hereby limited by the provisions
of this paragraph which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or oral.
4. Payments.
(a) Place of Payments. All payments of principal, interest, fees,
expenses and other amounts to be made by a Borrower under this Note shall
be received not later than 2:00 p.m. on the date when due, in U.S.
dollars and in immediately available funds, by the Lender at its offices
in Charlotte, North Carolina. Payments received after such time shall be
deemed to have been received on the next Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the
period of such extension), except that in the case of Eurodollar Loans,
if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day.
5
<PAGE>
(b) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that Eurodollar Loans may only be prepaid on
three Business Days' prior written notice to the Lender and any
prepayment of Eurodollar Loans will be subject to Section 4(d) below.
Prepayments shall be applied first to Prime Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. Loans
repaid hereunder may not be reborrowed.
(c) Payment in full at Maturity; Extension of Maturity.
(i) On the Maturity Date, the entire outstanding principal
balance of all Loans, together with accrued but unpaid interest and
all other sums owing with respect thereto, shall be due and payable
in full, unless accelerated sooner pursuant to Section 8 hereof.
(ii) If on the Initial Maturity Date (A) no Default or Event of
Default exists and is continuing and (B) the Borrowers pay to the
Lender an extension fee equal to one-fourth of one percent (.25%) of
the then principal amount outstanding under this Note, the Borrowers
may elect to extend the Maturity Date to the Final Maturity Date;
provided that if the Borrowers elect to extend the Maturity Date
pursuant to this Section 4(c)(ii), the Lender may, in its sole
discretion, elect to require the Borrowers to provide collateral to
secure its obligations under this Note. The Borrowers shall give
written notice to the Lender of its desire to effect such election
at least 20 days, but no more than 45 days, prior to the Initial
Maturity Date.
(d) Compensation. The Borrowers promise to indemnify the Lender
and to hold the Lender harmless from any loss or expense which the Lender
may sustain or incur as a consequence of (i) default by the Borrowers in
making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrowers have given a notice requesting the same in
accordance with the provisions of this Note, (ii) default by the
Borrowers in making any prepayment of a Eurodollar Loan after the
Borrowers have given a notice thereof in accordance with the provisions
of this Note and (iii) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to (A) the
amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, converted or continued, for the period from the date of
such prepayment or of such failure to borrow, convert or continue to the
last day of the applicable Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein minus (B)
the amount of interest (as reasonably determined by the Lender) which
would have accrued to the Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank
Eurodollar market. The agreements in this section shall survive the
termination of this Note and the payment of the Loans and all other
amounts payable hereunder. Notwithstanding the
6
<PAGE>
foregoing any prepayment of a Eurodollar Loan made in connection with the
requirements of Section 3.3(b)(iii) of the Senior Revolving Credit
Agreement shall not be subject to this Section 4(d).
5. Incorporation by Reference.
(a) Yield Protection. Sections 3.9, 3.10, 3.11 and 3.12 of the
Senior Revolving Credit Agreement are incorporated herein by reference
(including any defined terms contained therein), to the extent
applicable, and shall be binding on the Borrowers as if set forth herein.
(b) Representations and Warranties. All of the representations and
warranties set forth in Section 6 of the Senior Revolving Credit
Agreement are incorporated herein by reference (including any defined
terms contained therein) and made and affirmed by the Borrowers to the
Lender as of the date of this Note and as of such dates as required
pursuant to Section 6(b) hereof.
(c) Covenants. All of the covenants set forth in Section 7 and
Section 8 of the Senior Revolving Credit Agreement are incorporated
herein by reference (including any defined terms contained therein) and
shall be binding on the Borrowers as if set forth herein.
6. Conditions Precedent.
(a) Closing Conditions. The obligation of the Lender to make the
initial Loan under this Note is subject to satisfaction of the following
conditions (in form and substance acceptable to Lender):
(i) Executed Documents. Receipt by the Lender of a duly
executed copy of this Note.
(ii) Guaranty Agreement. Receipt by the Lender of a guaranty
agreement, in form and substance acceptable to the Lender, executed
by the Guarantors (the "Guaranty Agreement").
(iii) Authority Documents. Receipt by the Lender of
documents and certificates from the Borrowers and Guarantors in the
same form and in the same manner as required by Sections 5.1(b),
(c), (d) and (e) of the Senior Revolving Credit Agreement.
(iv) Legal Opinion. Receipt by the Lender of opinions from
counsel to the Borrowers and Guarantors, in form and substance
acceptable to the Lender, addressed to the Lender and dated as of
the date hereof.
(v) Fees and Expenses. All fees and expenses required to be
paid by the Borrowers to the Lender under this Note have been paid
in full.
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<PAGE>
(b) Conditions to Loans. In addition to the conditions precedent
stated elsewhere herein, the Lender shall not be obligated to make Loans
unless:
(i) Delivery of Notice. The Borrowers shall have delivered a
Notice of Borrowing, duly executed and completed, by the time
specified in Section 2(b) hereof.
(ii) Representations and Warranties. The representations and
warranties made by the Borrowers as incorporated herein by reference
are true and correct in all material respects at and as if made as
of such date except to the extent they expressly relate to an
earlier date.
(iii) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect
thereto.
(iv) Availability. After giving effect to the making of the
requested Loan, the aggregate principal amount of Loans advanced
under this Note shall be less than or equal to $100,000,000.
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrowers of the correctness of the matters specified in
subsections (b), (c), and (d) above.
7. Events of Default. An Event of Default shall exist upon the
occurrence of any of the following:
(a) Payments. The Borrowers shall default in the payment (i) when
due of any principal amount of any Loans or (ii) within three days of
when due of any interest on the Loans or any fees or other amounts owing
hereunder.
(b) Senior Revolving Credit Agreement. An Event of Default shall
exist under the terms of the Senior Revolving Credit Agreement.
(c) Guaranty Agreement. An Event of Default shall exist under the
terms of the Guaranty Agreement.
8. Remedies. Upon the occurrence of an Event of Default, the Lender
may (a) declare any commitment to advance Loans under this Note to be
terminated, (b) declare all unpaid principal, accrued but unpaid interest and
all other sums owing under this Note to be immediately due and payable in full
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrowers and/or (c) enforce any and all rights and
interests in accordance with applicable law, including, without limitation,
all rights against the Guarantors and all rights of set-off.
8
<PAGE>
9. Miscellaneous.
(a) Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered by hand, (ii) when transmitted via telecopy
(or other facsimile device), (iii) the Business Day following the day on
which the same has been delivered prepaid to a reputable national
overnight air courier service, or (iv) the third Business Day following
the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address or
telecopy numbers set forth below, or at such other address as such party
may specify by written notice to the other parties hereto; provided,
however, that if any notice is delivered on a day other than a Business
Day then such notice shall not be effective until the next Business Day:
if to the Borrowers: [name of Borrower]
c/o Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, Pennsylvania 19073
Attention: Gerard H. Sweeney
President and Chief Executive Officer
if to the Lender: Cheryl Fitzgerald
NationsBank Real Estate
Structured Debt Group
8300 Greensboro Drive, Suite 300
McLean, Virginia 22102
Phone: (703) 761-8170
Fax: (703) 761-8160
(b) Set-Off. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default and the
commencement of remedies described in Section 8 hereof, the Lender is
authorized at any time and from time to time, without presentment,
demand, protest or other notice of any kind (all of which rights being
hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time
held or owing by the Lender (including, without limitation, branches,
agencies or affiliates of the Lender wherever located) to or for the
credit or the account of any Borrower against obligations and liabilities
of such Borrower to the Lender hereunder, irrespective of whether the
Lender shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made
immediately upon the occurrence of an Event of Default even though such
charge is made or entered on the books of the Lender subsequent thereto.
The Borrowers hereby agree that any person purchasing a
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<PAGE>
participation in the Loans hereunder may exercise all rights of set-off
with respect to its participation interest as fully as if such Person
were the Lender hereunder.
(c) Benefit of Agreement. This Note shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that the Borrowers may not
assign and transfer any of their interests without the prior written
consent of the Lender; and provided further that the Lender may transfer,
assign or grant participations in its rights and/or obligations hereunder
as it deems necessary or appropriate.
(d) No Waiver; Remedies Cumulative. No failure or delay on the
part of the Lender in exercising any right, power or privilege hereunder
and no course of dealing between the Borrowers and the Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies provided herein are cumulative and
not exclusive of any rights or remedies which the Lender would otherwise
have. No notice to or demand on the Borrowers in any case shall entitle
the Borrowers to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Lender to
any other or further action in any circumstances without notice or
demand.
(e) Expenses and Indemnification. The Borrowers agree to: (a) pay
all reasonable out-of-pocket costs and expenses of the Lender in
connection with (i) the negotiation, preparation, execution and delivery
and administration of this Note (including, without limitation, the
reasonable fees and expenses of Moore & Van Allen, special counsel to the
Lender, (ii) any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure
relating to the performance by the Borrowers under this Note, (iii) the
enforcement of this Note, including, without limitation, the reasonable
fees and disbursements of counsel for the Lender, and (iv) any bankruptcy
or insolvency proceeding of a Borrower or any of its Subsidiaries, and
(b) indemnify the Lender, its officers, directors, employees,
representatives and agents from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to,
or by reason of, any investigation, litigation or other proceeding
(whether or not the Lender is a party thereto) related to the entering
into and/or performance of this Note or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of
any other transactions contemplated in this Note, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding
(but excluding any such losses, liabilities, claims, damages or expenses
to the extent incurred by reason of gross negligence or willful
misconduct on the part of the person to be indemnified).
(f) Amendments, Waivers and Consents. Neither this Note nor any of
the terms hereof may be amended, changed, waived, discharged or
terminated unless such
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amendment, change, waiver, discharge or termination is in writing signed
by the Borrowers and the Lender.
(g) Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Note and the
making of the Loans.
(h) Counterparts. This Note may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
(i) Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Note.
(j) Governing Law; Venue.
(i) THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA. Any legal action or proceeding with
respect to this Note may be brought in the courts of the
State of North Carolina in Mecklenburg County, or of the
United States for the Western District of North Carolina,
and, by execution and delivery of this Note, each Borrower
hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the
jurisdiction of such courts. Each Borrower further
irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address
for notices pursuant to Section 9(a). Nothing herein
shall affect the right of the Lender to serve process in
any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a Borrower in
any other jurisdiction.
(ii) Each Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Note brought in
the courts referred to in subsection (i) hereof and hereby
further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding
brought in any such court has been brought in an
inconvenient forum.
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(k) Waiver of Jury Trial. EACH OF THE UNDERSIGNED HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE, ANY OF THE OTHER
DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(l) Severability. If any provision of this Note is determined to
be illegal, invalid or unenforceable, such provision shall be fully
severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal,
invalid or unenforceable provisions.
(m) Entirety. This Note, together with the other documents
referred to herein, represent the entire agreement of the parties hereto
and thereto, and supersede all prior agreements and understandings, oral
or written, if any, including any commitment letters or correspondence.
(n) Non-Recourse. Notwithstanding anything herein to the contrary,
no recourse shall be had against the Brandywine Realty Services
Partnership or any past, present or future shareholder, officer, director
or trustee of BRT for any obligation of the Borrowers hereunder, or for
any claim based thereon or otherwise in respect thereof; provided,
however, that this subparagraph (n) shall not restrict or limit any claim
against any such person arising out of or occurring with respect to fraud
or any intentional misrepresentation or any act or omission that is
willful or wanton or constitutes gross negligence or willful misconduct.
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<PAGE>
This Note is executed as of the date first set forth above.
BRANDYWINE REALTY TRUST, a Maryland
real estate investment trust
By:
--------------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general partner
By:
---------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive
Officer
ACKNOWLEDGED AND AGREED
AS OF THE DATE FIRST
SET FORTH ABOVE
NATIONSBANK, N.A.
By:
----------------------
Name:
--------------------
Title:
-------------------
<PAGE>
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of January 5, 1998 (this "Guaranty"), is
executed and delivered by the undersigned guarantors (each individually a
"Guarantor" and collectively the "Guarantors") in favor of NATIONSBANK, N.A.
(the "Lender") and at the request of Brandywine Realty Trust and Brandywine
Operating Partnership, L.P. (collectively, the "Borrowers"). All capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
such terms in the Note (as defined below).
RECITALS
WHEREAS, the Lender agreed to extend credit to the Borrowers pursuant to
the terms of that certain Promissory Note, dated as of the date hereof, in the
face amount of $100,000,000, given by the Borrowers in favor of the Lender (the
"Note");
WHEREAS, the Lender has required that the Guarantors execute and deliver
this Guaranty as a condition precedent to accepting the Note and agreeing to the
terms thereof;
WHEREAS, because of the direct and indirect benefit to the Guarantors from
the execution and delivery of the Note and from the Loans thereunder to the
Borrowers, the Guarantors have agreed to unconditionally guarantee the payment
to the Lender of the obligations of the Borrowers under the Note in accordance
with the terms set forth below.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of the Guarantors hereby agrees as follows:
AGREEMENT
1. Guaranty of Payment. Subject to Section 17 below, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to the
Lender the prompt payment of the Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise). For the
purposes hereof, the term "Obligations" means any and all indebtedness of the
Borrowers to the Lender under the Note, including, without limitation, all
principal, interest and fees evidenced thereby and all payments made by the
Borrowers to the Lender and subsequently returned by the Lender to any Borrower
or a trustee of any Borrower pursuant to the bankruptcy or insolvency of a
Borrower, together with any other amounts owing under the Note and all other
obligations (including specifically without limitation indemnity obligations) of
the Borrowers under the Note, howsoever evidenced, whether now existing or
hereafter arising, as such Obligations may be modified, extended or renewed from
time to time and any and all expenses (including reasonable fees and
disbursements of legal counsel), reasonable fees and all other reasonable
amounts incurred or paid by or on behalf of the Lender in enforcing
<PAGE>
any rights hereunder. This Guaranty is a guaranty of payment and not of
collection and shall apply to all Obligations whenever arising.
2. Modifications. Each of the Guarantors agrees that (a) all or any part
of the security now or hereafter held for the Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lender shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the
Obligations or the properties subject thereto; (c) the time or place of payment
of the Obligations may be changed or extended, in whole or in part, to a time
certain or otherwise, and may be renewed or accelerated, in whole or in part;
(d) the Borrowers and any other party liable for payment under the Note may be
granted indulgences generally; (e) any of the provisions of the Note may be
modified, amended or waived; (f) any party (including any co-guarantor) liable
for the payment thereof may be granted indulgences or be released; and (g) any
deposit balance for the credit of the Borrowers or any other party liable for
the payment of the Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Obligations, all without notice to or further assent
by such Guarantor, which shall remain bound thereon, notwithstanding any such
exchange, compromise, surrender, extension, renewal, acceleration, modification,
indulgence or release.
3. Waiver of Rights. Each Guarantor expressly waives to the fullest
extent permitted by law: (a) notice of acceptance of this Guaranty by the
Lender and of all extensions of credit to the Borrowers by the Lender; (b)
presentment and demand for payment or performance of any of the Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Note) with respect to the Obligations or with respect to any security
therefor; (d) notice of the Lender obtaining, amending, substituting for,
releasing, waiving or modifying any security interest, lien or encumbrance, if
any, hereafter securing the Obligations, or the Lender's subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances, if any; (e) all other notices to which such Guarantor might
otherwise be entitled; and (f) demand for payment under this Guaranty.
4. Obligations Unconditional. The obligations of the Guarantors hereunder
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of the Note, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lender without
the necessity at any time of resorting to or exhausting any other security or
collateral, if any, and without the necessity at any time of having recourse to
the Note or any collateral, if any, hereafter securing the Obligations or
otherwise and each Guarantor hereby waives the right to require the Lender to
proceed against the Borrowers or any other Person (including a co-guarantor) or
to require the Lender to pursue any other remedy or enforce any other right.
Each Guarantor further agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrowers or any other
Guarantor of the Obligations for amounts paid under this Guaranty until such
time as the Lender has been paid in full, all commitments to advance Loans under
the Note have been terminated and no person or governmental authority shall have
any right to request any return or
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reimbursement of funds from the Lender in connection with monies received under
the Note. Each Guarantor further agrees that nothing contained herein shall
prevent the Lender from suing on the Note or foreclosing its security interest
in or lien on any collateral, if any, securing the Obligations or from
exercising any other rights available to it under the Note or any instrument of
security, if any, and the exercise of any of the aforesaid rights and the
completion of any foreclosure proceedings shall not constitute a discharge of
any Guarantor's obligations hereunder; it being the purpose and intent of each
Guarantor that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither any Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Borrowers or by reason of the bankruptcy or insolvency of the Borrowers. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance of by the
Lender upon this Guaranty or acceptance of this Guaranty. The Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty. All dealings between the Borrowers and any of the Guarantors, on the
one hand, and the Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guaranty. The
Guarantors further agree to all rights of set-off as set forth in Section 6.
5. Attorneys' Fees and Costs of Collection. If at any time or times
hereafter the Lender employs counsel to pursue collection, to intervene, or to
sue for enforcement of this Guaranty or the Note, or to file a petition,
complaint, answer, motion or other pleading in any suit or proceeding relating
to this Guaranty or the Note, then in such event and until paid, all of the
reasonable attorneys' fees relating thereto shall be an additional liability of
the Guarantors to the Lender, payable on demand.
6. Setoff/Security. As security for the Guarantors' obligations
hereunder, each Guarantor agrees that the Lender shall have the right,
immediately and without further action by the Lender, to set off against the
Obligations all money owed by the Lender in any capacity to such Guarantor,
whether or not due, and the Lender shall be deemed to have made a charge against
any such money immediately upon the occurrence of such obligation becoming due
even though such charge is made or entered on the books of the Lender subsequent
thereto.
7. Term of Guaranty. This Guaranty shall be a continuing guaranty and
shall continue in full force and effect until the Obligations are fully paid,
performed and discharged and all commitments of the Lender to the Borrowers have
been terminated. This Guaranty covers all Obligations whether presently
existing and outstanding or arising subsequent to the date hereof including all
amounts advanced by the Lender to the Borrowers in stages or installments.
Notwithstanding the foregoing, the obligations of the Guarantors under this
Guaranty shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any person in respect of the Obligations
is rescinded or must be otherwise restored by the Lender, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel) incurred by
the Lender in connection
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<PAGE>
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
8. Representations and Warranties. Each Guarantor represents, warrants
and covenants to the Lender (i) that such Guarantor is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite power to own its property and conduct its business as
presently contemplated, (ii) that such Guarantor has the capacity or
authorization to enter into this Guaranty and to perform the transactions
contemplated herein, (iii) that this Guaranty is binding upon and enforceable
against such Guarantor (and any successors and assigns), in accordance with its
terms, except that such enforceability may be subject to (a) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity), (iv) that the execution and delivery of this Guaranty does
not violate or constitute a breach of any agreement to which such Guarantor is a
party or of any applicable laws or (v) that there is no litigation, claim,
action or proceeding pending, or, to the best knowledge of such Guarantor,
threatened against such Guarantor which would materially adversely affect the
financial condition of such Guarantor or its ability to fulfill its obligations
hereunder.
9. Event of Default. If (a) an Event of Default exists under the Note,
(b) any of the representations and warranties made by any Guarantor herein are
false in any material respect or (c) any Guarantor fails to perform any of its
obligations under this Guaranty then an Event of Default shall be deemed to
exist.
10. Financial Condition of Borrowers. Each Guarantor represents and
warrants to the Lender that such Guarantor has knowledge of the Borrowers'
financial conditions and affairs and represents and agrees that such Guarantor
will keep so informed while this Guaranty is in force. Each Guarantor agrees
that the Lender will have no obligation to investigate the financial conditions
or affairs of the Borrowers for the benefit of such Guarantor nor to advise such
Guarantor of any fact respecting, or any change in, the financial conditions or
affairs of the Borrowers which might come to the knowledge of the Lender at any
time, whether or not the Lender knows or believes or has reason to know or
believe that any such fact or change is unknown to such Guarantor or might (or
does) materially increase the risk of such Guarantor as a guarantor or might (or
would) affect the willingness of such Guarantor to continue as a guarantor with
respect to the Obligations.
11. Additional Liability of Guarantor. If any Guarantor is or becomes
liable for any indebtedness owing by the Borrowers to the Lender whether by
endorsement or any other means other than under this Guaranty, such liability
shall not be in any manner impaired or reduced hereby but shall have all and the
same force and effect it would have had if this Guaranty had not existed and
such Guarantor's liability hereunder shall not be in any manner impaired or
reduced thereby.
12. Cumulative Rights. All rights of the Lender hereunder or otherwise
arising under any documents executed in connection with or as security for the
Obligations are separate and
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<PAGE>
cumulative and may be pursued separately, successively or concurrently, or not
pursued, without affecting or limiting any other right of the Lender and without
affecting or impairing the liability of any Guarantor.
13. Multiple Counterparts; Pronouns; Captions; Severability. This
Guaranty may be executed in multiple counterparts, each of which shall be deemed
an original but all of which shall constitute but one and the same document.
The pronouns used in this instrument shall be construed as masculine, feminine
or neuter as the occasion may require. Captions are for reference only and in
no way limit the terms of this Guaranty. Invalidation of any one or more of the
provisions of this Guaranty shall in no way affect any of the other provisions
hereof, which shall remain in full force and effect.
14. Successors and Assigns. This Guaranty is intended for and shall inure
to the benefit of the Lender and each and every person who shall from time to
time be or become the owner or holder of any of the Obligations, and each and
every reference herein to "Lender" shall include and refer to each and every
successor or assignee of the Lender at any time holding or owning any part of or
interest in any part of the Obligations. This Guaranty shall be transferable
and negotiable with the same force and effect, and to the same extent, that the
Obligations are transferable and negotiable, it being understood and stipulated
that upon assignment or transfer by the Lender of any of the Obligations the
legal holder or owner of said Obligations (or a part thereof or interest therein
thus transferred or assigned by the Lender) shall (except as otherwise
stipulated by the Lender in its assignment) have and may exercise all of the
rights granted to the Lender under this Guaranty to the extent of that part of
or interest in the Obligations thus assigned or transferred to said person.
Each Guarantor expressly waives notice of transfer or assignment of the
Obligations, or any part thereof, or of the rights of the Lender hereunder.
Failure to give notice will not affect the liability of any Guarantor hereunder.
15. Notices. Except as otherwise expressly provided herein, all notices
and other communications shall have been duly given and shall be effective (i)
when delivered by hand, (ii) when transmitted via telecopy (or other facsimile
device), (iii) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address or telecopy numbers set forth below, or at such other address as
such party may specify by written notice to the other parties hereto; provided,
however, that if any notice is delivered on a day other than a Business Day then
such notice shall not be effective until the next Business Day:
if to the Guarantors: [name of Guarantor]
c/o Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, Pennsylvania 19073
Attention: Gerard H. Sweeney
President and Chief Executive Officer
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<PAGE>
if to the Lender: Cheryl Fitzgerald
NationsBank Real Estate
Structured Debt Group
8300 Greensboro Drive, Suite 300
McLean, Virginia 22102
Phone: (703) 761-8170
Fax: (703) 761-8160
16. Governing Law; Waiver of Jury Trial.
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. Any legal action or proceeding with respect to this
Guaranty may be brought in the courts of the State of North
Carolina in Mecklenburg County, or of the United States for the
Western District of North Carolina, and, by execution and
delivery of this Note, each Guarantor hereby irrevocably accepts
for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Guarantor
further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address for notices pursuant to
Section 15 hereof. Nothing herein shall affect the right of the
Lender to serve process in any other manner permitted by law or
to commence legal proceedings or to otherwise proceed against a
Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought
in an inconvenient forum.
(c) EACH OF THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTY AND ANY OTHER
DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
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<PAGE>
17. Limitation on Guaranty. Notwithstanding anything in this Guaranty to
the contrary, to the extent the obligations of any Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy
Code).
18. Rights of Contribution. The Guarantors agree among themselves that, in
connection with payments made hereunder, each Guarantor shall have contribution
rights against the other Guarantors as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Guarantors under this Guaranty and no Guarantor shall
exercise such rights of contribution until all Obligations have been paid in
full and the commitments to advance Loans under the Note terminated.
19. Non-Recourse. Notwithstanding anything herein to the contrary, no
recourse shall be had against the Brandywine Realty Services Partnership or any
past, present or future shareholder, officer, director or trustee of BRT for any
obligation of the Guarantors hereunder, or for any claim based thereon or
otherwise in respect thereof; provided, however, that this paragraph 19 shall
not restrict or limit any claim against any such person arising out of or
occurring with respect to fraud or any intentional misrepresentation or any act
or omission that is willful or wanton or constitutes gross negligence or willful
misconduct.
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<PAGE>
Each of the undersigned Guarantors has caused this Guaranty to be duly
executed as of the date first above written.
GUARANTORS: LC/N HORSHAM LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
LC/N KEITH VALLEY LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
NICHOLS LANSDALE LIMITED PARTNERSHIP III,
a Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general
partner
NEWTECH III LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general
partner
<PAGE>
WITMER OPERATING PARTNERSHIP I, L.P., a
Delaware limited partnership
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
NEWTECH IV LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
C/N OAKLANDS LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
FIFTEEN HORSHAM, L.P., a Pennsylvania limited
partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
<PAGE>
C/N LEEDOM LIMITED PARTNERSHIP II, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N IRON RUN LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N OAKLANDS LIMITED PARTNERSHIP III a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
IRON RUN LIMITED PARTNERSHIP V, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB II, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE DOMINION, L.P., a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE P.M., L.P., a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general
partner
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
BRANDYWINE REALTY SERVICES
CORPORATION, a Pennsylvania corporation
BRANDYWINE ACQUISITIONS, LLC, a
Delaware limited liability company
BRANDYWINE MAIN STREET, LLC, a
Delaware limited liability company
1100 BRANDYWINE, LLC, a
Delaware limited liability company
BRANDYWINE LEASING, LLC, a
Delaware limited liability company
<PAGE>
BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE TB II, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE TB III, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE WITMER, LLC, a
Pennsylvania limited liability company
BRANDYWINE DOMINION, L.L.C., a
Pennsylvania limited liability company
BRANDYWINE P.M., L.L.C., a
Pennsylvania limited liability company
By:
------------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer of
each of the above-named entities
<PAGE>
Exhibit 10.5
GENERAL PARTNERSHIP AGREEMENT
OF
INTERSTATE 202 GENERAL PARTNERSHIP
BY AND BETWEEN
BRANDYWINE I.S., L.P.
AND
ACROSS THE LINE, L.P.
Dated as of December 31, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
GENERAL PROVISIONS........................................................1
1.1. Interests of Partners...............................................1
1.2. Conduct of Partnership..............................................1
1.3. Name and Principal Place of Business................................2
1.4. Purpose.............................................................2
1.5. Limitation on Purpose...............................................2
1.6. Title to Property...................................................2
1.7. Term................................................................2
1.8. Type of Income......................................................2
ARTICLE 2
CAPITAL CONTRIBUTIONS.....................................................3
2.1. Capital Contributions of Brandywine.................................3
2.2. Capital Contribution of ATL.........................................3
2.3. Additional Capital Contributions....................................3
2.4. Maintenance of Capital Accounts.....................................5
2.5. No Interest.........................................................5
2.6. Revaluation of Partnership Property.................................5
ARTICLE 3
MANAGEMENT................................................................6
3.1. Management..........................................................6
3.2. Manner of Acting....................................................6
3.3. Contact Representatives.............................................7
3.4. Designated Representatives..........................................7
3.5. Bank Accounts and Check Signing Authority...........................8
3.6. Other Fees, Compensation and Reimbursement of Expenses..............8
3.7. Cooperation.........................................................8
ARTICLE 4
THE PARTNERS..............................................................8
4.1. Meeting of Partners.................................................8
4.2. Partnership Records.................................................8
4.3. Duties of Partners..................................................9
4.4. Activities of Partners..............................................9
4.5. Independent Activities of Partners..................................9
4.6. Dealings with the Partnership.......................................9
4.7. Covenant not to Withdraw...........................................10
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES...........................................10
5.1. Representations and Warranties of Partners.........................10
5.2. ATL Representation and Warranty....................................12
ARTICLE 6
INDEMNIFICATION..........................................................12
6.1. Liability..........................................................12
6.2. Partnership Indemnification........................................12
6.3. Partner Indemnification............................................13
ARTICLE 7
TRANSFERS................................................................13
7.1. Transfer Restrictions..............................................13
7.2. Permitted Transfers................................................13
7.3. Conditions of Transfer.............................................13
7.4. Transfers; Recharacterization......................................14
ARTICLE 8
BUY-SELL PROVISIONS......................................................14
8.1. Mutual Disagreement................................................14
8.2. Mandatory Buy-Sell of Interests. .................................15
8.3. Closing of Purchase or Sale........................................15
8.4. Definitions........................................................16
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES........................................16
9.1. Allocations of Profits or Losses...................................16
9.2. Special Allocations................................................16
9.3. Curative Allocations...............................................17
9.4. Allocations for Tax Purposes.......................................17
ARTICLE 10
DISTRIBUTIONS............................................................18
10.1. Net Cash Flow from Operations.....................................18
10.2. Net Cash from Sales or Refinancings...............................18
10.3. Authority to Withhold.............................................18
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING...................................19
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11.1. Books and Records.................................................19
11.2. Fiscal Year. ....................................................19
11.3. Accounting Period.................................................19
11.4. Annual Reports....................................................19
11.5. Quarterly Reports.................................................19
11.6. Preparation of Tax Returns........................................19
11.7. Tax Controversies.................................................20
11.8. Tax Elections.....................................................20
ARTICLE 12
DISSOLUTION AND LIQUIDATION..............................................20
12.1. Dissolution.......................................................20
12.2. Bankruptcy of a Partner...........................................21
12.3. Liquidation.......................................................21
12.4. No Liquidating Distributions in Kind..............................21
12.5. Non-Recourse......................................................22
ARTICLE 13
[OMITTED]................................................................22
ARTICLE 14
MISCELLANEOUS............................................................22
14.1. Amendments........................................................22
14.2. Notice............................................................22
14.3. Filing with SEC...................................................23
14.4. Governing Law.....................................................24
14.5. Severability......................................................24
14.6. Binding Effect....................................................24
14.7. Titles and Captions...............................................24
14.8. No Third Party Rights.............................................24
14.9. Time is of Essence................................................24
14.10. Further Assurances...............................................24
14.11. Legal Representation.............................................24
14.12. Entire Agreement.................................................24
14.13. Counterparts......................................................24
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GENERAL PARTNERSHIP AGREEMENT
OF
INTERSTATE 202 GENERAL PARTNERSHIP
THIS GENERAL PARTNERSHIP AGREEMENT (the "Agreement") is made and
entered into as of the 31st day of December, 1997 by and between Brandywine
I.S., L.P., a Pennsylvania limited partnership ("Brandywine"), and Across The
Line, L.P., a Delaware limited partnership ("ATL" and, together with
Brandywine, the "Partners"), each as a general partner of Interstate 202
General Partnership (the "Partnership").
Capitalized terms used in this Agreement shall have the meanings set
forth on Exhibit A attached hereto unless they are otherwise defined in the
preamble, the Background or the particular section in this Agreement in which
they are used.
BACKGROUND
The Partners desire to form the Partnership as a general partnership
under the provisions of the Pennsylvania Uniform Partnership Act, as amended,
for the purpose of acquiring the Land, and developing and operating the
Project, which will be owned, leased and operated by the Partnership for the
production of income.
This Agreement sets forth the understanding between the Partners
with respect to the terms and conditions of the acquisition, ownership,
development and operation of the Land and the Project, and the distribution
of proceeds received from the ownership and/or disposition thereof.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the Partners, intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE 1
GENERAL PROVISIONS
1.1. Interests of Partners. The respective Percentage Interests of
Brandywine and ATL in the Partnership are set forth on Exhibit B attached
hereto.
1.2. Conduct of Partnership. The Partners as partners by this Agreement
desire to form the Partnership as a general partnership under the laws of the
Commonwealth of Pennsylvania solely for the purpose set forth in this
Agreement, and in connection therewith desire to set forth their agreements
and understandings as stated in this Agreement. The Partners agree that the
Partnership shall be operated pursuant to the terms and conditions set forth
in this Agreement, and to the extent not inconsistent therewith, the Act.
The Partners agree to execute or cause the Partnership to execute any
filings, including filings with respect to any fictitious names of the
Partnership, and to do any other acts as may be necessary or appropriate to
comply with the laws of operation of a general
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partnership in the Commonwealth of Pennsylvania and any other jurisdiction in
which the Partnership may conduct business.
1.3. Name and Principal Place of Business. The name of the Partnership
is "INTERSTATE 202 GENERAL PARTNERSHIP" or such other name as the Partners
from time to time may select. The principal place of business of the
Partnership shall be c/o Brandywine Realty Trust, 16 Campus Boulevard, Suite
150, Newtown Square, PA 19073, or such other place as the Partners from time
to time may determine.
1.4. Purpose. The sole purpose of the Partnership shall be to own,
develop, manage, operate, maintain and lease the Project in accordance with
the terms of this Agreement. In connection therewith, the Partnership shall
have the authority to do all things necessary and appropriate with respect to
its ownership of the Project in order to develop, construct, manage, operate,
maintain and lease the Project.
1.5. Limitation on Purpose. The Partnership shall exist solely for the
purpose specified in Section 1.4 hereof and, unless the Partners unanimously
agree in writing otherwise, the Partnership shall not engage in any other
business. The Partners do not intend, and this Agreement shall not be deemed
to create, any joint venture, partnership, or other arrangement by and
between the Partners with respect to any business or activities of any
Partner other than the business and activities specifically contemplated by
Section 1.4. No Partner shall have the power to bind the other Partner
except with respect to the business of the Partnership as specifically set
forth in this Agreement, and no Partner shall be authorized or empowered to
execute, deliver or perform any agreements, acts, transactions or matters on
behalf of the Partnership or the other Partner without the consent of the
other Partner unless otherwise expressly provided in this Agreement.
1.6. Title to Property. All property owned by the Partnership, whether
real or personal, tangible or intangible, including the Project, shall be
owned by the Partnership as an entity and in the name of the Partnership, and
no Partner shall have any ownership interest in such property. The interest
of all Partners in the Partnership are, for all purposes, personal property.
1.7. Term. The term of the Partnership shall commence upon the execution
of this Agreement and shall continue until the Partnership is terminated in
accordance with Article 12 of this Agreement.
1.8. Type of Income. ATL hereby acknowledges that Brandywine Operating
Partnership, L.P., a Delaware limited partnership ("BOP"), is the sole member
of the sole general partner of Brandywine and that Brandywine Realty Trust
("BRT"), the general partner of BOP, is a real estate investment trust as
defined in Section 856 of the Code, and ATL acknowledges and agrees that as
long as Brandywine is a member of the Partnership, the Partnership shall
manage its affairs in a manner such that the Partnership does not
intentionally earn any income for tax purposes or acquire any assets which
would cause, or could reasonably be expected to cause, BRT to violate any of
the provisions of Section 856 of the Code or cease to remain qualified as a
real estate investment trust
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as defined in Section 856 of the Code; provided that if this Section 1.8
materially and adversely interferes with ATL's realization of cash from the
Partnership or materially and adversely operates to the detriment of ATL's
tax position, ATL may invoke the "buy-sell" provisions in Article 8.
ARTICLE 2
CAPITAL CONTRIBUTIONS
2.1. Capital Contributions of Brandywine. Brandywine shall make a
Capital Contribution to the Partnership at such times and in such manner as
set forth in this Section 2.1.
2.1.1. On the date hereof, Brandywine shall contribute to the
capital of the Partnership cash in the amount of up to Eight Hundred Fifty
Thousand Dollars ($850,000), which cash, together with the proceeds of the
Acquisition Loan, will be used by the Partnership to acquire the Project.
2.1.2. In connection with, and upon the closing of, the
Acquisition Loan, Brandywine shall provide collateral support in the form of
either a letter of credit or guarantee in an aggregate amount of up to
$500,000 to the extent that such collateral support, in the judgment of
Brandywine, (i) is necessary to facilitate the Partnership's procurement of
the Acquisition Loan, or (ii) will result in the Partnership obtaining more
favorable terms and conditions for the Acquisition Loan. The parties
acknowledge and agree that Brandywine's obligation to provide collateral
support under this Section 2.1.2 is expressly conditioned upon the closing of
the Acquisition Loan.
2.1.3. Subsequent to closing of the acquisition of the Project
and in the course of its redevelopment and initial lease-up, it is
anticipated that Brandywine will fund up to but not in excess of Six Hundred
Fifty Thousand Dollars ($650,000) of costs associated with the Project, as
enumerated in the Project Budget.
2.1.4. Brandywine's obligation to make Capital Contributions
under this Section 2.1 (including Sections 2.1.1, 2.1.2, and 2.1.3) shall not
exceed, in the aggregate, One Million Five Hundred Thousand Dollars
($1,500,000) in addition to such amount, if any, as Brandywine shall be
obligated to pay in connection with the collateral support provided by
Brandywine under subsection 2.1.2 above.
2.2. Capital Contribution of ATL. ATL's contribution to the capital of
the Partnership consists of the arrangements it previously undertook to
enable the Partnership to acquire the Project.
2.3. Additional Capital Contributions.
2.3.1. It is not expected that the Partners will be required to
contribute any additional capital to the Partnership other than those Capital
Contributions set forth in Sections 2.1 and 2.2 hereof. In the event,
however, that either Partner (the "Notifying Partner"), in its reasonable
business
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judgment, determines that additional capital is required by the Partnership,
whether for capital expenditures, normal operating expenses, debt service or
otherwise in connection with the Project, then the Notifying Partner shall
give ten (10) days written notice (the "Capital Notice") to the other Partner
(the "Notified Partner") specifying in reasonable detail the amount and
purpose of the additional required capital. If the Notified Partner agrees
within said ten (10) day period that the capital set forth in the Capital
Notice is needed by the Partnership, such additional capital shall be
obtained through bank financing or Additional Capital Contributions, as
mutually determined by the Notified Partner and the Notifying Partner.
2.3.2. If the Notified Partner and the Notifying Partner are
unable to agree within said ten (10) day period as to whether additional
funds are needed by the Partnership or are unable to agree as to whether such
funds should be obtained through bank financing or Additional Capital
Contributions, then the Notifying Partner and the Notified Partner each shall
select a representative who together shall appoint one independent Person,
unrelated to either Partner or its Affiliates and who is experienced in the
real estate development industry and has substantial expertise in the
financial marketplace (the "Advisor"), to determine whether and when
additional funds are needed and/or the manner in which such funds shall be
obtained by the Partnership; provided that, if the Advisor determines that
such additional funds should be obtained from the Partners, then both
Partners shall be required to make an Additional Capital Contribution to the
Partnership as provided in Section 2.3.3 hereof. The Partners hereby agree
that, in either case, the Advisor's determination shall be final and binding
on the Partners.
2.3.3. If additional funds are obtained from the Partners through
Additional Capital Contributions, such contributions shall be made by the
Partners, in cash on the same terms and in the same relative amounts as the
Percentage Interests, within twenty (20) business days after receipt of (a)
the Capital Notice (in the event that the Partners agree to make Additional
Capital Contributions pursuant to Section 2.3.1 hereof) or (b) written notice
from the Advisor (in the event that the procedure under Section 2.3.2 hereof
is utilized).
2.3.4. If Additional Capital Contributions are required to be
made by the Partners under this Section 2.3 and a Partner (the "Defaulting
Partner") fails to advance its pro rata share of such Additional Capital
Contribution, then any amounts advanced by the other Partner (the "Performing
Partner") shall be treated as a loan by the Performing Partner to the
Partnership, and the Performing Partner shall have the right, but not the
obligation, to make a loan to the Partnership in the amount of the Additional
Capital Contribution due from the Defaulting Partner. Any amounts advanced
by the Performing Partner under this Section 2.3.4 whether on its own behalf
or on behalf of the Defaulting Partner shall be treated as a loan (a "Capital
Loan") notwithstanding that such funds may originally have been advanced by
the Performing Partner as an Additional Capital Contribution. All Capital
Loans shall (i) be for a term of five (5) years, (ii) bear annual interest at
a rate of thirteen percent (13%), (iii) be prepayable by the Partnership in
whole or in part without penalty, and (iv) be repaid in full, together with
accrued interest, by the Partnership before any distributions may be made to
any Partner under Sections 10.1, 10.2 or 12.3 hereof. All payments
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received with respect to a Capital Loan shall be applied first against
accrued and unpaid interest thereunder, and then against the outstanding
principal balance thereof.
2.4. Maintenance of Capital Accounts.
2.4.1. The Partnership shall maintain a separate Capital Account for
each Partner in accordance with Treasury Regulations promulgated under
Section 704(b) of the Code, and each Partner's Capital Account shall be as
follows:
(a) Each Partner's Capital Account shall be credited with such
Partner's Capital Contribution, if any, provided that ATL's initial capital
account upon execution of this Agreement shall be zero.
(b) Each Partner's Capital Account shall be (1) increased by
(a) the amount of money contributed by such Partner to the capital of the
Partnership, (b) the Gross Asset Value of any property contributed by such
Partner to the capital of the Partnership (net of liabilities secured by such
contributed property) and (c) the amount of Profits and other items of
Partnership income or gain allocated to such Partner under this Agreement,
and (2) decreased by (a) the amount of money distributed to such Partner by
the Partnership pursuant to this Agreement, (b) the Gross Asset Value of
property distributed to such Partner by the Partnership (net of liabilities
secured by such distributed property) and (c) the amount of Losses and other
items of Partnership deduction, loss or expense allocated to such Partner
under this Agreement.
2.4.2. It is intended that the Capital Accounts shall be determined
and maintained throughout the full term of the Partnership in accordance with
the capital accounting rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv), and that all provisions in this Agreement shall be
interpreted and applied in a manner consistent therewith. In the event that
the Partners determine that it is prudent to modify the manner in which the
Capital Accounts, or any credits or charges thereto, are computed or
maintained in order to comply with such Treasury Regulations, the Partners,
upon agreement, shall make such modifications to the extent necessary to
comply with such Treasury Regulations.
2.5. No Interest. No Partner shall be entitled to interest on that
Partner's Capital Contributions or Capital Account except as otherwise
provided in this Agreement.
2.6. Revaluation of Partnership Property. Upon the agreement of the
Partners, the Capital Accounts of the Partners may be adjusted to reflect a
revaluation of the property of the Partnership in accordance with, and at
such times as specified in, Treasury Regulation Section 1.704-1(b)(2)(iv)(f);
provided that any adjustments hereunder shall be made in accordance with and
to the extent provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)
and (g).
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ARTICLE 3
MANAGEMENT
3.1. Management. The management of the Partnership shall be vested in
the Partners as set forth in this Article 3. Each Partner, subject to the
terms, conditions, restrictions and limitations contained in this Agreement,
will possess all of the powers and rights of a general partner under the Act
except that no Partner acting alone shall be authorized or empowered to
undertake any action or make any decision on behalf of the Partnership or in
connection with the Project unless otherwise specifically provided in this
Agreement or specifically delegated to such Partner and set forth in this
Agreement or a Collateral Agreement. Each Partner acknowledges and agrees
that it intends to actively participate in the management of the Partnership
and its operations.
3.2. Manner of Acting.
3.2.1. Where this Agreement specifically requires the vote,
consent or determination of the Partners and/or in order for the Partnership
to undertake any action, including without limitation, a Major Action (as
defined in this Section 3.2), the approval at a duly convened meeting or by
written consent in lieu of a meeting of a Partner or Partners holding a
majority of Interests shall be required. For purposes of this Agreement, a
"Major Action" shall mean and include decisions and undertakings relating to:
(a) the construction and completion of the Project, including
construction contracts, schedules and budgets;
(b) any loans, borrowings, financing or refinancing in
connection with the Project, including without limitation,
the Construction Loan and the Permanent Loan;
(c) the form and substance of the Development Agreement, if any,
the Exclusive Leasing Agency Agreement and the Management
Agreement (each of which will constitute a Collateral
Agreement upon the execution and delivery thereof);
(d) the annual operating budget and business plan for the
Project;
(e) the sale, conveyance, transfer, assignment, ground lease,
hypothecation or disposition of the Project;
(f) leases for occupancy of space in the Project by tenants,
including without limitation, rents, escalations, allowances
and other business terms;
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(g) any contract or agreement giving rise to a financial
commitment or obligation of the Partnership in excess of
$5,000;
(h) the employment of employees and/or agents in connection with
the operation and management of the Project;
(i) the admission of any additional Partners;
(j) the selection of and change of accountants or auditors for
the Partnership; and
(k) significant tax elections required or permitted pursuant to
the Code and/or applicable law of any taxing authority to
which the Partnership is subject.
3.3. Contact Representatives. Each Partner shall designate and appoint
one or more individuals who shall be the contact person (a "Contact
Representative") for such Partner and each of whom who shall be authorized by
such Partner to act on its behalf in the performance of this Agreement and
who shall be authorized to make decisions in connection with Major Actions on
behalf of such Partner. Brandywine hereby designates and appoints each of
Anthony A. Nichols, Sr. and Gerard H. Sweeney as its initial Contact
Representatives, and ATL hereby designates and appoints Brock J. Vinton as
its initial Contact Representative. A Partner appointing an individual as a
Contact Representative may, at any time, appoint and designate a new Contact
Representative(s), provided that such Partner shall notify the other Partner
of such new appointment or designation within a reasonable time after such
appointment.
3.4. Designated Representatives.
3.4.1. The Partners acknowledge and agree that while Partnership
decisions generally shall be made by the Partners as set forth in Section 3.2
hereof, certain functions in connection with the daily operation and
management of the Project shall, subject to the limitations set forth in this
Section 3.4 or a Collateral Agreement, be delegated to individuals, employees
or agents of the Partnership as determined by the Partners holding a majority
of the Interests (any such designated individuals, employees or agents being
referred to herein as a "Designated Representative"). The Partners hereby
designate Brock J. Vinton as the Designated Representative during the initial
redevelopment of the Project, subject to the right of the Partners to revoke
such designation.
3.4.2.Any Designated Representative appointed hereunder shall have
the specific power and authority set forth in this Agreement, in an
employment agreement, if any, with the Partnership in a Collateral Agreement
and as otherwise delegated to such Designated Representative by the Partners
holding a majority of the Interests; provided that any Designated
Representative shall operate the Partnership subject to (i) basic policy
decisions adopted by the Partners in accordance with this Agreement, (ii)
specific limitations and requirements of this Agreement and any other
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agreement executed by and between a Designated Representative and the
Partnership and (iii) limitations imposed under the Act. Notwithstanding any
provision in this Agreement or any other agreement to the contrary, no
Designated Representative shall have the authority, either individually or
acting in conjunction with other Designated Representatives, to do any act,
make any decision, or engage in any transaction which requires the approval
of the Partners as set forth in Section 3.2 hereof.
3.5. Bank Accounts and Check Signing Authority. The Partners shall open
and maintain a bank account at a financial institution agreeable to the
Partners, and all funds from whatever source derived by the Partnership shall
be deposited in such account. Signatories to all Partnership bank accounts
shall be Brock J. Vinton and Gerard H. Sweeney. Checks or withdrawals
in the amount of $5,000 or less shall require the signature of one
signatory and checks or withdrawals in excess of $5,000 shall require the
signature of two signatories.
3.6. Other Fees, Compensation and Reimbursement of Expenses.
3.6.1. Upon the funding of the Acquisition Loan, the Partnership
shall reimburse Brandywine for those costs, fees and expenses set forth on
Schedule 3.6.1 attached hereto.
3.6.2. Upon funding of the Acquisition Loan, the Partnership shall
reimburse ATL for those costs, fees and expenses set forth on Schedule 3.6.2
attached hereto.
3.6.3. Except as otherwise provided in this Section 3.6 or in a
Collateral Agreement, no Partner shall be entitled to receive compensation
for services performed in connection with the management of the Partnership
and no Partner shall be entitled to reimbursement for expenses incurred in
connection with the management of the Partnership.
3.7. Cooperation. The Partners agree to use their respective
commercially reasonable efforts to obtain the Acquisition Loan and to agree
upon the terms and scope of the Project.
ARTICLE 4
THE PARTNERS
4.1. Meeting of Partners. The Partners shall hold meetings on a
quarterly basis or such other periodic basis as the Partners may mutually
agree at such location as the Partners may agree. Any Partner may call for a
meeting by giving ten (10) days prior written notice to the other Partner,
which notice shall specify the purpose of the meeting; provided, however,
that the ten (10) days notice period may be waived by the other Partner.
4.2. Partnership Records. Each Partner shall have access to all books
and records of the Partnership during normal business hours and shall be
entitled, at its own expense, to make copies
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<PAGE>
of such books and records. Each Partner also shall have access to the
Partnership's officers, attorneys and auditors for any reasonable business
purpose.
4.3. Duties of Partners. Subject to Section 4.5, each Partner shall have
a fiduciary duty to the other Partner to take into account the best interests
of the Partnership when exercising its rights under this Agreement, provided
that it shall not be a breach of any Partner's fiduciary duty to exercise any
of its rights under this Agreement.
4.4. Activities of Partners. Except as otherwise expressly provided in
this Agreement or in any Collateral Agreement, no Partner or Affiliate of any
Partner shall be obligated to devote its exclusive time and effort to the
business or affairs of the Partnership, but each Partner shall devote
sufficient time, effort and resources (including employees or agents of such
Partner) to the business or affairs of the Partnership as in its judgment is
reasonably required to fulfill its obligations and role in the Partnership's
businesses and to promote the purposes of the Partnership.
4.5. Independent Activities of Partners. Each Partner (acting on its own
behalf) and its Affiliates may, notwithstanding any implication in any
provision of this Agreement to the contrary, engage in any activities it may
choose, even if such activities constitute the same type of business as the
business of the Partnership or are competitive with the Partnership, and
neither this Agreement nor any activity undertaken pursuant hereto shall
prevent any Partner or its Affiliates from engaging in such activities or
require any Partner to permit the Partnership or any other Partner to
participate in or share in the benefits of such activity.
4.6. Dealings with the Partnership.
4.6.1. Except as otherwise expressly provided in or limited by this
Agreement or a Collateral Agreement, no Partner or Affiliate of any Partner
shall contract and deal with the Partnership as an independent contractor,
employee or as an agent for others, or receive fees or other compensation
from such others or the Partnership, including without limitation, brokerage
fees, commission fees or any other payment on account of the leasing,
operations, management, financing or refinancing in connection with the
Project, unless and until such Partner or the Affiliate of such Partner first
provides the other Partner with the terms of such proposed dealings and
obtains the prior written consent to such dealing, contract or undertaking
from the other Partner.
4.6.2. Notwithstanding Section 4.6.1, and subject to Section 3.2,
each Partner hereby acknowledges and agrees that, in connection with the
transactions contemplated by this Agreement, the Partnership expects to enter
into (a) the Developer's Agreement pursuant to which an Affiliate of ATL
shall perform those functions set forth therein and shall receive for the
performance of such services the fee set forth therein, (b) the Exclusive
Leasing Agency Agreement pursuant to which an Affiliate of ATL shall perform
those functions set forth therein and shall receive for the performance of
such services the fee set forth therein and (c) the Management Agreement
pursuant to which an Affiliate of ATL shall perform those functions set forth
therein and shall receive for the performance of such services the fees set
forth therein.
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4.7. Covenant not to Withdraw. Notwithstanding any provision in the Act,
each Partner hereby covenants and agrees that such Partner has entered into
this Agreement and formed the Partnership based on its expectation that each
Partner will continue as a Partner of the Partnership and carry out the
duties and obligations undertaken by it in this Agreement and the Collateral
Agreements and that, except as otherwise expressly required or permitted
hereby, each Partner hereby covenants and agrees not to, without the consent
of the other Partner (a) file a certificate of dissolution or its equivalent
with respect to such Partner, (b) take any action that would cause the
voluntary Bankruptcy of such Partner, (c) withdraw or attempt to withdraw
from the Partnership, unless pursuant to a Permitted Transfer in accordance
with Section 7.2 hereof, (d) Transfer all or any portion of its Interest in
the Partnership except as otherwise provided in Article 7, Article 8 and
Article 13 hereof, or (e) demand a return of such Partner's Capital
Contribution or Capital Account prior to the dissolution and liquidation of
the Partnership pursuant to Section 12.1 hereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of Partners. By execution and
delivery of this Agreement, each Partner hereby makes to the other Partner
the representations and warranties set forth in this Section 5.1 to the
extent applicable to such Partner. Any and all representations and
warranties set forth in this Section 5.1 shall survive the execution of this
Agreement. For purposes of this Article 5, the term "Partner" shall include
such Partner's Affiliates that are undertaking or performing any services or
activities in connection with the transactions contemplated in this
Agreement, and any representations and warranties made by a Partner hereunder
shall be deemed to include representations and warranties, as appropriate,
with respect to such Affiliates.
5.1.1.Organization. Such Partner is duly organized and formed,
validly existing and in good standing under the laws of the state of its
formation and has all requisite power and authority to own, lease and operate
its property and to carry on its business as of the date hereof and as
contemplated by this Agreement. Each Partner is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to
be so licensed or qualified would have a material adverse effect on its
financial condition or its ability to perform its obligations under this
Agreement or any Collateral Agreement.
5.1.2. Proper Authorization and Power. Each Partner has the
requisite power and authority to execute and deliver this Agreement and each
Collateral Agreement to which it is a party and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and each of the Collateral Agreements, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by
all necessary limited partnership action, and no other action on the part of
the Partner or any Person is necessary to authorize the execution, delivery
and performance of this Agreement or any Collateral Agreement or the
consummation of the transactions contemplated hereby or thereby. This
Agreement and each of the
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Collateral Agreements constitutes a legal, valid and binding obligation of
such Partner enforceable against it in accordance with their respective
terms.
5.1.3. Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement or any of the Collateral
Agreements and the consummation by the Partner of the transactions
contemplated hereby or thereby does not and will not (i) require the consent
or approval of any governmental or regulatory authority or (ii) violate or
conflict with or constitute a default under (a) any provisions of the
partnership agreement of such Partner or any material agreement or instrument
to which such Partner is a party or by which such Partner is made bound or to
which any of its properties or assets is subject, (b) any provisions of any
law, regulation, order, writ, injunction, decree or determination of any
court or governmental or regulatory agency applicable to such Partner, or (c)
any of the provisions of any indenture, mortgage, lease agreement or
instrument to which such Partner is a party or may be bound or to which its
properties or assets are subject.
5.1.4. Litigation. There are no actions, suits, proceedings, or
investigations pending, or to the knowledge of such Partner threatened,
against or affecting such Partner or any of its businesses, assets or
properties, before any court or governmental or regulatory agency which
could, if adversely determined, reasonably be expected to impair such
Partner's ability to perform its obligations under this Agreement or any
Collateral Agreement or to have a material adverse effect on the financial
condition of such Partner.
5.1.5. Investment Representations
(a) Such Partner's Interest in the Partnership is intended to
be and is being acquired solely for its own account for investment and with
no present intention of distributing, reselling, pledging or otherwise
disposing of, all or any part thereof;
(b) Such Partner is aware that Interests in the Partnership
have not been registered under the Securities Act or the applicable state
securities laws or the "Blue Sky" laws of any state, that Interests in the
Partnership cannot be distributed, sold, pledged or otherwise disposed of
unless they are registered thereunder or unless, in the opinion of counsel
satisfactory to the Partnership, an exemption from such registration is
available, and that the Partnership has no intention of so registering
Interests in the Partnership thereunder and is under no obligation to do so
and that accordingly the Partner is able and is prepared to bear the economic
risk that may be associated with respect to its Interest in the Partnership;
(c) Such Partner understands that the Interests are being
offered and sold in reliance upon specific exemptions from the registration
requirements of federal and state securities laws and that the Partnership is
relying upon the truth and accuracy of the representations and warranties set
forth herein in order to determine the applicability of such exemptions and
the suitability of the Partners to acquire Interests; and
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(d) Such Partner agrees that in addition to the other
restrictions on transfer set forth in this Agreement, it will not sell or
otherwise dispose of its Interest unless a registration statement under the
Securities Act shall be in effect with respect thereto and such Partner shall
have complied with all provisions of the Securities Act and all applicable
state securities laws or at the Partnership's request, the Partner shall have
obtained an opinion of counsel that such proposed sale or disposition will
not require registration under the Securities Act or any applicable state
securities laws.
5.2. ATL Representation and Warranty. ATL represents and warrants to
Brandywine that it has engaged in no business other than its acquisition of
the Project and agrees that this representation and warranty shall survive
the execution and delivery of this Agreement and will indemnify Brandywine
against any loss resulting from the inaccuracy of such representation and
warranty.
ARTICLE 6
INDEMNIFICATION
6.1. Liability. No Partner or any Affiliate of any Partner or any
Designated Representative, if appointed pursuant to Section 3.4 hereof, shall
be liable, responsible, accountable in damages or otherwise to the
Partnership or any Partner for any act or failure to act hereunder in
connection with the Partnership and its business or in the operation and
maintenance of the Project unless the act or omission is attributed to gross
negligence, willful misconduct or fraud or constitutes a material breach by
such person of any term or provision of this Agreement or a Collateral
Agreement; provided that nothing in this Section 6.1 is intended to limit,
modify or alter any Partner's liability or obligations under any Collateral
Agreement except to the extent expressly set forth therein.
6.2. Partnership Indemnification. Each Partner and each Affiliate of any
Partner, as well as each Designated Representative appointed pursuant to
Section 3.4 (each of the foregoing being referred to herein as an
"Indemnitee") shall be indemnified, defended and held harmless by the
Partnership to the fullest extent permitted by the Act from and against any
and all losses, claims, damages, liabilities, expenses (including reasonable
attorneys' fees and costs), judgments, fines, settlements, demands, actions,
or suits relating to or arising out of the business of the Partnership or the
operation and maintenance of the Project, or the exercise by the Indemnitee
of any authority conferred on it hereunder or the performance by the
Indemnitee of any of its duties and obligations under this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, no
Indemnitee shall be entitled to indemnification hereunder with respect to any
claim, issue or matter: (i) in respect of which it (or the Partnership as the
result of an act or omission of such Indemnitee) has been adjudged liable for
fraud, gross negligence or willful misconduct; (ii) based upon or relating to
a material breach by it of any term or provision of this Agreement or any
Collateral Agreement; or (iii) for costs or expenses incurred by the
Indemnitee in connection with a claim or action against it by another Partner
that is not related to the Indemnitee's actions under this Agreement.
Notwithstanding this Section 6.2, no Partner shall be entitled to
indemnification by the Partnership
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when or if acting in a capacity with the Partnership as other than a Partner,
in which case, such right to indemnification shall be governed by an
agreement, if any, between the Partnership and the Partner.
6.3. Partner Indemnification. Each Partner (the "Indemnitor Partner")
shall indemnify, defend and hold harmless the other Partner (the "Indemnitee
Partner") from and against any and all losses, claims, damages, liabilities,
expenses (including reasonable attorneys' fees and costs), judgments, fines,
settlements, demands, actions, or suits relating to or arising out of any (i)
fraud, gross negligence or willful misconduct for which the Indemnitor
Partner or any of its Affiliates (or the Partnership as the result of an act
or omission of any of the same) has been adjudged liable; (ii) material
breach by the Indemnitor Partner of any term or provision of this Agreement
or any Collateral Agreement, and (iii) material breach or inaccuracy in any
representation or warranty made by such Indemnitor Partner in this Agreement
or any Collateral Agreement.
ARTICLE 7
TRANSFERS
7.1. Transfer Restrictions. Except as otherwise provided in this
Agreement, no Partner shall make any Transfer of all or any portion of its
Interest, including, without limitation, a Transfer of a right to Profits,
Losses or distributions hereunder, unless and until the other Partner
consents to the Transfer and the transferor Partner and the proposed
Transferee comply with the provisions of this Article 7. Any Transfer in
violation of the requirements of this Agreement shall be null and void ab
initio and of no force or effect whatsoever. Each Partner hereby
acknowledges the reasonableness of the restrictions on Transfer imposed by
this Agreement in view of the Partnership's purpose and the relationship of
the Partners. Accordingly, the restrictions on Transfer set forth herein
shall be specifically enforceable.
7.2. Permitted Transfers. Notwithstanding Section 7.1, a Partner may
Transfer all or any portion of its Interest in the Partnership (i) to another
Partner or (ii) to one of its Affiliates (in each case, a "Permitted
Transfer"), provided that a Permitted Transfer to an Affiliate shall be
required to comply with the provisions of Section 7.3.
7.3. Conditions of Transfer. Notwithstanding Section 7.2 hereof, a
Transfer (including a Permitted Transfer to an Affiliate under Section 7.2)
shall not be allowed unless and until the following conditions precedent are
satisfied, and once satisfied, the Transferee shall succeed to all rights and
be subject to all obligations of the transferring Partner with respect to the
transferred Interest:
7.3.1. all agreements, written consents and all other necessary
documents and instruments shall have been executed and filed and all other
acts shall have been performed which the non-transferring Partner deems
reasonably necessary to make the Transferee a substitute Partner of the
Partnership, including, without limitation, the execution by such Transferee
of a counterpart signature page to this Agreement pursuant to which the
Transferee shall assume any and all
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obligations and have all rights and interests under this Agreement with
respect to the transferred Interest; and
7.3.2. unless otherwise waived by the non-transferring Partner, the
non-transferring Partner shall have received such assurances as may be
necessary or appropriate in the opinion of counsel to the Partnership to
confirm that the Transfer would not (i) violate the Securities Act or any
state securities laws or cause the Partnership to register thereunder; (ii)
cause the Partnership to be treated as other than a partnership for federal
income tax purposes; or (iii) terminate the Partnership for federal income
tax purposes;
7.3.3. unless otherwise waived by the non-transferring Partner, the
non-transferring Partner shall have received such assurances as it deems
necessary or appropriate to confirm that such Transferee has the ability to
perform all of the Transferor's obligations set forth in this Agreement and
the Collateral Agreements, provided that, unless expressly agreed by the
non-transferring Partner, the Transferor shall not be relieved of any of its
liabilities or obligations under this Agreement or any Collateral Agreement;
and
7.3.4. all reasonable expenses incurred by the Partnership and
the non-transferring Partner in connection with the Transfer shall have been
paid by or for the account of the Transferee.
7.4. Transfers; Recharacterization. If any Interest is transferred
during any Fiscal Year in compliance with the provisions of this Agreement,
Profits, Losses, each item thereof, and all other items attributable to such
transferred Interest for such period shall be divided and allocated between
the Transferor and the Transferee by taking into account their varying
interests during the period in accordance with Section 706(d) of the Code,
using any conventions permitted by law and reasonably selected by the
non-transferring Partner.
ARTICLE 8
BUY-SELL PROVISIONS
8.1. Mutual Disagreement. In the event of a Mutual Disagreement and as
expressly provided in Section 1.8 hereof, the Partners shall have the rights
of mandatory purchase and sale provided in this Article 8. For purposes of
this Article 8, "Mutual Disagreement" shall mean the objection by a Partner
holding at least a Fifty (50%) Interest to a Major Action if (i) written
notice of such objection is delivered to the Partner(s) that approved such
Major Action within twenty (20) days of the approval and (ii) the Partner(s)
that approved such Major Action have not addressed the objection to the
satisfaction of the Partner making the objection within twenty (20) days of
receipt of the written objection notice.
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8.2. Mandatory Buy-Sell of Interests.
8.2.1. In the event of a Mutual Disagreement, a Partner (the
"Electing Partner") may deliver to the other Partner (the "Notice Partner") a
written notice (the "Election Notice"), which Election Notice shall include
an irrevocable offer by the Electing Partner either (i) to sell all but not
less than all of the Electing Partner's Interest in the Partnership to the
Notice Partner (the "Offer to Sell"), or (ii) to purchase all, but not less
than all, of the Notice Partner's Interest in the Partnership (the "Offer to
Purchase" and together with the Offer to Sell, the "Offers"). The Election
Notice also shall set forth the Gross Value of the Project to be used in
computing the Net Equity Value of a Partner's Interests. The price at which
a Partner's Interest may be purchased or sold under this Section 8.2 (the
"Buy-Sell Price") is the Net Equity Value of such Partner's Interest
determined as of the date (the "Election Day") of the Election Notice.
8.2.2. For a period ending on the forty-fifth (45th) day following
the Election Day (the "Election Period"), the Notice Partner shall have the
right to accept either the Offer to Sell or the Offer to Purchase. Upon
acceptance by the Notice Partner of one of the Offers, the Electing Partner
and the Notice Partner shall be required to sell or required to purchase, as
the case may be, for the Buy-Sell Price.
8.2.3. If the Notice Partner fails to accept either the Offer to
Sell or the Offer to Purchase within the Election Period, then the Offers
automatically shall expire and be of no force or effect, and the Notice
Partner shall be deemed to have made to the Electing Partner an offer (the
"Counter-Offer") to sell all, but not less than all, of the Notice Partner's
Interest in the Partnership for the Buy-Sell Price. Pursuant to the
Counter-Offer, the Electing Partner shall be obligated to purchase, and the
Notice Partner shall be required to sell, all but not less than all of the
Notice Partner's Interest in the Partnership at the Buy-Sell Price.
8.2.4. The Partner purchasing the Interest under this Section 8.2,
whether pursuant to one of the Offers or the Counter-Offer, as the case may
be, shall be referred to as the "Purchasing Partner" and the Partner selling
such Interest shall be referred to as the "Selling Partner."
8.3. Closing of Purchase or Sale. The closing of the purchase and sale
under Section 8.2 shall occur on a date and time and at a place mutually
agreeable to the Electing Partner and the Notice Partner, provided that such
closing shall not be later than forty-five (45) days after the expiration of
the Election Period; and provided, further, that if the Partners cannot agree
on the place of the closing, the closing shall take place at the law offices
of Pepper Hamilton LLP at the address set forth in Section 16.2 hereof. At
the closing, the Purchasing Partner shall pay to the Selling Partner, by cash
or other immediately available funds, the Buy-Sell Price, and the Selling
Partner shall deliver to the Purchasing Partner good title to its Interest,
free and clear of any liens, claims, encumbrances, security interests or
options, and the Purchasing Partner shall agree to indemnify and hold
harmless the Selling Partner from any and all claims arising in connection
with such Interest that accrue after the date of the closing. At the
closing, the Purchasing Partner and the Selling
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Partner agree to execute such documents and instruments of conveyance as may
be necessary or appropriate to confirm the transactions contemplated hereby.
8.4. Definitions. For purposes of this Article 8, the following terms
shall have the meanings set forth below:
(a) "Gross Value of the Project" shall be the fair market value
of the Project as of the Election Day as determined by the Electing Partner
and set forth in the Election Notice.
(b) "Net Equity Value of a Partner's Interest" shall be, as of
any day, the amount that would be distributed to such Partner in liquidation
of the Partnership pursuant to Section 12.3 hereof if and assuming that the
following first occurred: (i) the Project were sold for the Gross Value of
the Project, (ii) the Partnership paid all apportionments and costs
customarily made and/or paid in the closing of a real estate transaction in
Pennsylvania, (iii) the Partnership paid its accrued, but unpaid liabilities
and established reserves for any contingent liabilities pursuant to Section
12.3.3, including without limitation, the Acquisition Loan and/or the
Permanent Loan (without prepayment premium or penalty), as applicable, and
any Capital Loans and (iv) the Partnership paid in full the Brandywine
Unreturned Capital and the accrued and unpaid Brandywine Preferred Return.
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES
9.1. Allocations of Profits or Losses. After giving effect to the
special allocations set forth in Section 9.2 hereof, (a) Profits for any
Fiscal Year shall be allocated (i) one hundred percent to Brandywine in
respect of the Brandywine Preferred Return to the extent of the excess, if
any, of the cumulative distributions received by Brandywine in respect of the
Brandywine Preferred Return pursuant to Sections 10.1, 10.2 and 12.3.4 from
the date the Brandywine Preferred Return calculation commences to the end of
the Fiscal Year, over the cumulative amounts allocated to Brandywine pursuant
to this Section 9.1 for all prior Fiscal Years, and (ii) thereafter to the
Partners in accordance with their respective Percentage Interests, and (b)
Losses for any Fiscal Year shall be allocated to the Partners in accordance
with their respective Percentage Interests.
9.2. Special Allocations. Notwithstanding anything in this Agreement to
the contrary, the following special allocations shall be made as follows:
9.2.1. All Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Partners in proportion to their respective Percentage
Interests. For purposes of Treasury Regulation Section 1.752-3, all excess
nonrecourse liabilities of the Partnership will be allocated between the
Partners in proportion to their respective Percentage Interests.
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9.2.2.Any items of income, loss, gain or deduction that are
attributable to Partner Nonrecourse Debt shall be allocated to those Partners
who bear the economic risk of loss for such debt in accordance with Treasury
Regulation Section 1.704-2(i).
9.2.3. If there is a net decrease in Minimum Gain for a taxable year
of the Partnership, then, unless and except to the extent that the exceptions
provided in Treasury Regulations Section 1.704-2(f)(2) through (5) are
applicable, before any other allocation is made for such taxable year, each
Partner shall be allocated items of income and gain for such year (and, if
necessary, for subsequent years) in an amount equal to the portion of such
Partner's share of the net decrease in Minimum Gain, as such share is
determined in accordance with Treasury Regulations Section 1.704-2(g)(2).
This Section 9.2.3 is intended to qualify as a "minimum gain chargeback"
under Treasury Regulation Section 1.704-2(f)(1) and shall be interpreted in a
manner consistent therewith.
9.2.4.To the extent that any Partner unexpectedly receives any
adjustment, allocation, or distribution described in subparagraphs (4), (5),
or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), which adjustment,
allocation or distribution creates or increases a deficit in that Partner's
Capital Account, then, items of Partnership income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate the deficit balance in its Capital Account created by such
adjustment, allocation, or distribution as quickly as possible. Any special
allocations of items of income or gain pursuant to this provision shall be
taken into account in computing subsequent allocations of Profits so that the
net amount of any items so allocated and the Profits, Losses and all other
items allocated to each Partner shall, to the extent possible, be equal to
the net amount that would have been allocated to each such Partner pursuant
to the other provisions of this Agreement if such unexpected adjustments,
allocations or distributions had not occurred. The foregoing is intended to
qualify as a "qualified income offset" within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be applied in a manner
consistent with that Treasury Regulation.
9.3. Curative Allocations. The allocations set forth in Sections 9.2
(the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulation Section 1.704-1(b) and 1.704-2.
Notwithstanding any other provision of this Article 9 (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into
account in allocating other items of Partnership income, gain, loss,
deduction or credit among the Partners so that, to the extent possible, the
net amount of such allocations or other items of income, gain, loss,
deduction or credit and the Regulatory Allocations to each Partner shall be
equal to the net amount that would have been allocated to each such Partner
if the Regulatory Allocations had not occurred.
9.4. Allocations for Tax Purposes. In the event the book value of any
Partnership asset differs from its adjusted tax basis (upon contribution,
revaluation or otherwise), all income, gain, loss and deduction with respect
to such asset shall be allocated to the Partners in a manner that takes into
account the variation between such book value and adjusted tax basis for such
property for federal income tax purposes, pursuant to Section 704(c) of the
Code or pursuant to the principles thereof using any reasonable allocation
method (including curative allocations) as may be determined by the
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Partners or, if the Partners so elect, the Partnership's accountants.
Allocations made under this Section 9.4 are made solely for federal, state or
local income tax purposes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profits,
Losses, or other items or distributions pursuant to any provision of this
Agreement.
ARTICLE 10
DISTRIBUTIONS
10.1. Net Cash Flow from Operations. Except as otherwise provided in
Section 12.3 (relating to liquidating distributions) and Section 2.3.4
(relating to Capital Loans), Net Cash Flow from Operations shall be
distributed at such times and in such amounts as the Partners holding a
majority of the Interests shall determine; provided that any distributions of
Net Cash Flow from Operations shall be made in the following order and
priority:
10.1.1. First, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the excess, if any, of (1) the
Brandywine Preferred Return from the commencement of the Partnership to the
date on which the distribution is made over (2) the sum of all prior
distributions to Brandywine in respect of the Brandywine Preferred Return
pursuant to this Section 10.1.1 and Section 10.2.1.
10.1.2. Thereafter, to the Partners in accordance with their
Percentage Interests.
10.2. Net Cash from Sales or Refinancings. Except as otherwise provided
in Section 12.3 (relating to liquidating distributions) and Section 2.3.4
(relating to Capital Loans), Net Cash from Sales or Refinancings, if any,
realized or available to the Partnership shall be distributed as soon as
practicable, as determined by the Partners holding a majority of the
Interests, in the following order and priority:
10.2.1. First, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the excess, if any, of (1) the
Brandywine Preferred Return from the commencement of the Partnership to the
date on which the event giving rise to such Net Cash from Sales or
Refinancings occurred, over (2) the sum of all prior distributions to
Brandywine in respect of the Brandywine Preferred Return pursuant to this
Section 10.2.1 and Section 10.1.1.
10.2.2. Second, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the then Brandywine Unreturned
Capital.
10.2.3. Thereafter, to the Partners in accordance with their
Percentage Interests.
10.3. Authority to Withhold. Upon the written advice of the
Partnership's tax counsel, the Partnership shall be entitled to collect,
withhold and make payments on behalf of or with respect to any Partner's
allocable share of Partnership income or gain, in amounts required to
discharge any
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obligation of the Partnership to withhold or make payments to any
governmental authority with respect to any federal, state, and local tax
liability of such Partner arising as a result of such Partner's Interest in
the Partnership. Any amount withheld pursuant to the foregoing sentence
shall be treated for all purposes of this Agreement as having been paid or
distributed to such Partner and shall reduce, on a dollar for dollar basis,
amounts otherwise payable or distributable to such Partner under this
Agreement. Each Partner hereby agrees to indemnify and hold harmless the
Partnership for, from and against any liability with respect to amounts paid
or withheld under this Section 10.3 on behalf of or with respect to such
Partner.
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING
11.1. Books and Records. The Partnership shall keep or cause to be kept
at its principal place of business appropriate books and records, including
without limitation, the following: (a) true and full financial information
regarding the status of the Project and financial condition of the
Partnership, including without limitation, records of all costs and expenses
incurred, all changes made, all credits made and received, and all income
derived in connection with the business of the Partnership; (b) promptly
after becoming available, a copy of the Partnership's federal, state and
local income tax returns for each year; (c) a copy of this Agreement; and (d)
other information regarding the affairs of the Partnership as is just and
reasonable.
11.2. Fiscal Year. The Fiscal Year of the Partnership shall be the
calendar year or such other accounting period as shall be required under the
Code or as may be determined by the Partner's holding a majority of the
Interests.
11.3. Accounting Period. Unless otherwise determined by the Partner or
Partners holding a majority of the Interests, the Partnership shall use the
accrual method of accounting in maintaining its books and records and in
preparation of its financial statements for federal income tax purposes.
11.4. Annual Reports. Within forty-five (45) days after the close of
each Fiscal Year, ATL shall cause the Partnership to have prepared, and
furnished to each Partner, audited financial statements, presented in
accordance with generally accepted accounting principles, including without
limitation, copies of (i) the balance sheet of the Partnership, (ii) the
Partnership's income statement, (iii) a statement of the Partnership's cash
flow, (iv) a statement of the Partner's Capital Accounts and (v) a statement
of source and application of funds each as of the last day of the Fiscal Year.
11.5. Quarterly Reports. Within twenty (20) days after the close of each
fiscal quarter, ATL shall cause the Partnership to prepare and furnish to
each Partner quarterly reports of (i) the Partnership's operations, (ii)
quarterly unaudited balance sheets and income statements, and (iii) quarterly
statements of cash flow.
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11.6. Preparation of Tax Returns. Within ninety (90) days after the end
of each Fiscal Year, ATL shall cause the Partnership to arrange for the
preparation and timely filing of all tax returns of the Partnership for
federal, state and local income tax purposes and shall cause to be furnished
to the Partners the tax information reasonably required for federal and state
income tax reporting purposes.
11.7. Tax Controversies. The Partners hereby appoint and designate
Brandywine as the initial Tax Matters Partner, and as Tax Matters Partner,
Brandywine shall authorize and require one of its officers (the "Tax Matters
Representative") to represent the Partnership (at the Partnership's expense)
in connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and
to expend Partnership funds for professional services and costs associated
therewith. Each Partner agrees to cooperate with the Tax Matters
Representative and to do or refrain from doing any or all things reasonably
required by the Tax Matters Representative in conducting those proceedings.
The Tax Matters Representative shall promptly notify the each Partner upon
the receipt of any correspondence from any federal, state or local tax
authorities relating to any examination of the Partnership's affairs.
11.8. Tax Elections. Any and all elections for federal, state and local
tax purposes, including without limitation, any election (i) to adjust the
basis of the Partnership Property pursuant to Code Sections 754, 734(b) and
743(b), or comparable state or local law, in connection with Transfers of
Interests in the Partnership; and (ii) to extend the statute of limitations
for assessment of tax deficiencies against the Partnership and the Partners
with respect to adjustments to the Companies federal, state or local tax
returns shall be mutually made by the Partners.
ARTICLE 12
DISSOLUTION AND LIQUIDATION
12.1. Dissolution. The Partnership shall dissolve upon the earliest to
occur of any of the following:
(a) upon the affirmative written vote of the Partners holding a
majority of the Interests;
(b) upon the sale of the Project and the repayment and
satisfaction in full of any financing undertaken by the
Partnership in respect thereof;
(c) the purchase by one Partner of all of the Interests of the
other Partner pursuant to and in accordance with this
Agreement;
(d) the Bankruptcy of any Partner or the occurrence of any other
action which causes dissolution of the Partnership under the
Act;
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(e) the failure of the partnership to close on the Acquisition
Loan prior to the first anniversary of the date of this
Agreement; or
(f) December 31, 2050.
12.2. Bankruptcy of a Partner. Upon the Bankruptcy of a Partner, the
non-Bankrupt Partner shall have the sole right to manage the Partnership and
to wind up the business and affairs of the Partnership, and the rights of the
Bankrupt Partner shall be limited to the right to share in the profits and
losses and distributions of the Partnership to the extent provided in this
Agreement and the Bankrupt Partner shall not have any right to participate in
the management or operation of the Partnership or in making decisions in
connection with the dissolution and winding up of the Partnership.
12.3. Liquidation. Upon the dissolution of the Partnership, the
Partnership shall cease to carry on its business, except insofar as may be
necessary for the winding up of its business. Upon dissolution of the
Partnership, the Partners shall designate a Person to act as the liquidating
trustee (the "Liquidating Trustee") and the business and affairs of the
Partnership shall be wound up and, subject to Section 12.4 hereof, the
Partnership liquidated as rapidly as business circumstances permit, and the
proceeds thereof shall be distributed (to the extent permitted by applicable
law) in the following order and priority:
12.3.1. To the payment of the debts and liabilities of the
Partnership (other than those to Partners) in the order of priority provided
by law.
12.3.2. To the payment of the expenses of liquidation of the
Partnership in the order of priority provided by law, provided that the
Partnership shall first pay, to the extent permitted by law, liabilities or
debts owed to Partners.
12.3.3. To the setting up of such reserves as the Liquidating
Trustee may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership arising out of or in connection
with the Partnership's business, provided that any such reserve will be held
by the Liquidating Trustee for the purposes of disbursing such reserves in
payment of any of the aforementioned contingencies and at the expiration of
such period as the Liquidating Trustee shall deem advisable (but in no case
to exceed eighteen (18) months from the date of liquidation unless an
extension of time is consented to by the Partners), to distribute the balance
thereafter remaining in the manner hereinafter provided.
12.3.4. The balance of the proceeds, if any, to be distributed on or
before the later of (i) the end of the taxable year during which such
liquidation occurs or (ii) ninety (90) days after the date of such
liquidation, in accordance with and in the order set forth in Section 10.2
hereof.
12.4. No Liquidating Distributions in Kind. The Liquidating Trustee
shall not distribute, and no Partner may demand or receive, property other
than cash in return for a Partner's
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contributions, loans or advances, unless Partners holding at least 75% of the
Interests agree to a distribution in kind to any Partner; provided, however,
that all Partners receive, whether in kind or in cash and whether from the
Partnership or the Partner receiving an in kind distribution, the amount
which such Partner is entitled to receive under Section 12.3.4 hereof.
12.5. Non-Recourse. No recourse shall be had for any of the obligations
of Brandywine hereunder 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 of such
liability being expressly waived and released by ATL any such Person who acts
through ATL
ARTICLE 13
[OMITTED]
ARTICLE 14
MISCELLANEOUS
14.1. Amendments. This Agreement may not be amended, modified or revised
in any manner without the prior written consent of each of the Partners.
14.2. Notice.
14.2.1. All notices, requests and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
delivered to a Partner either personally or by sending a copy thereof by
first class or express mail, postage prepaid, or by telex or TWX (with answer
back received) or courier services, charges prepaid, or by telecopier (with a
copy sent by first class mail), to such Partner's address (or to such party's
telex, TWX, telecopier, or telephone number) as follows:
If to Brandywine:
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
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Attn: Anthony A. Nichols, Sr., Chairman of the Board
or
Gerard H. Sweeney, President and
Chief Executive Officer
Telephone: (610) 325-5600
Facsimile: (610) 325-5682
with a copy to:
Michael H. Friedman, Esquire
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Telephone: (215) 981-4563
Facsimile: (215) 981-4750
If to ATL:
c/o The Commonwealth Group
62 Read's Way
New Castle, Delaware 19720
Attn: Brock J. Vinton, President
with a copy to:
William S. Gee, Esquire
Saul, Ewing, Remick & Saul
P.O. Box 1266
Wilmington, DE 19899-1266
14.2.2. Any such notice, request or communication shall be deemed to
be delivered, given and received for all purposes of this Agreement (i) as of
the date so delivered, if delivered personally or by telecopy to the person
entitled thereto, (ii) three (3) business days after being deposited in the
United States mail, if delivered by first class or express mail, postage
prepaid or (iii) one (1) business day after being deposited with a telegraph
office or courier service for delivery if notice is sent by telegraph or
courier services.
14.3. Filing with SEC. ATL acknowledges that BRT intends to file a copy
of this Agreement as an exhibit to a filing it intends to make with the
Securities and Exchange Commission.
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14.4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania and, to the
maximum extent possible, in such manner as to comply with all of the terms
and conditions of the Act.
14.5. Severability. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, such provision shall be ineffective only to the
extent of such invalidity or unenforceability without invalidating or
affecting the remainder of this Agreement thereby.
14.6. Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Partners and their respective successors and, where
permitted, their assigns and Affiliates.
14.7. Titles and Captions. All article, section and paragraph titles and
captions contained in this Agreement are for convenience only and are not a
part of the context hereof.
14.8. No Third Party Rights. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in,
or obligations to, any other Persons whatsoever.
14.9. Time is of Essence. Time is of the essence in the performance of
each and every obligation herein imposed.
14.10. Further Assurances. Each Partner, upon the request of the other
Partner, shall execute all further instruments and perform all further acts
which are or may become reasonably necessary to effectuate and to carry out
the matters contemplated by this Agreement.
14.11. Legal Representation. Each party to this Agreement acknowledges
that such party is represented by competent legal counsel and that such
counsel has fully reviewed this Agreement. This Agreement shall be construed
in accordance with its fair meaning without any presumption against the party
responsible for drafting this Agreement.
14.12. Entire Agreement. This Agreement, and the agreements attached as
exhibits hereto, contain the entire agreement between the parties hereto and
supersede any and all prior and contemporaneous agreements, arrangements or
understandings between the parties relating to the subject matter hereof. No
oral understandings, oral statements, oral promises or oral inducements
exist. No representations, warranties, covenants or conditions, express or
implied, whether by statute or otherwise, other than as set forth herein,
have been made by the parties hereto.
14.13.Counterparts. This Agreement may be signed in any number of
counterparts, with the same effect as if all of the Partners had signed the
same document. All counterparts shall be construed together and shall
constitute but one and the same agreement. Any and all counterparts may be
executed by facsimile.
-24-
<PAGE>
[SPACE INTENTIONALLY LEFT BLANK]
-25-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this GENERAL
PARTNERSHIP AGREEMENT effective as of the day and year first above written.
PARTNERS:
BRANDYWINE I.S., L.P., a Pennsylvania limited
partnership, by Brandywine I.S., LLC, a Pennsylvania
limited liability company, its sole general partner, by
Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member, by Brandywine
Realty Trust, a Maryland real estate investment trust,
its sole general partner
By: /s/ Gerard H. Sweeney
----------------------------------
Gerard H. Sweeney, President and
Chief Executive Officer
ACROSS THE LINE, L.P., a Delaware limited partnership,
General Partner
By: ACROSS THE LINE, INC., a Delaware corporation
By: /s/ Brock J. Vinton
----------------------------
Brock J. Vinton, President
-26-
<PAGE>
EXHIBIT A
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
DEFINITIONS OF TERMS
The following terms used in this Agreement shall have the meanings
described below:
"Act" shall mean the Pennsylvania Uniform Partnership Act, 15 Pa.
C.S.A. Section 8301 et. seq., as amended from time to time.
"Acquisition Loan" shall mean the loan to be made to the Partnership
in respect of the Project, which shall provide financing for the acquisition of
the Project and related costs approved by the Partners holding a majority of the
Interests.
"Additional Capital Contributions" shall mean, with respect to a
Partner, any additional contributions to the capital of the Partnership made
pursuant to Section 2.3 hereof.
"Advisor" shall have the meaning set forth in Section 2.3.2 hereof.
"Affiliate" shall mean a Person who, with respect to any Partner: (a)
directly or indirectly controls, is controlled by or is under common control
with such Partner; (b) owns or controls ten percent (10%) or more of the
outstanding voting securities of such Partner; or (c) is an officer, director,
member, manager or partner of such Partner.
"Agreement" means this General Partnership Agreement, as it may be
amended, restated or supplemented from time to time.
"Bankruptcy" means, with respect to a Partner, the happening of any of
the following: (a) the making of a general assignment for the benefit of
creditors; (b) the filing of a voluntary petition in bankruptcy or the filing of
a pleading in any court of record admitting in writing an inability to pay debts
as they become due; (c) the entry of an order, judgment or decree by any court
of competent jurisdiction adjudicating such Partner to be bankrupt or insolvent;
(d) the filing of a petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (e) the filing of an answer or other pleading
admitting the material allegations of, or consenting to, or defaulting in
answering, a bankruptcy petition filed against a Partner in any bankruptcy
proceeding; (f) the filing of an application or other pleading or any action
otherwise seeking, consenting to or acquiescing in the appointment of a
liquidating trustee, receiver or other liquidator of all or any substantial part
of a Partner's properties; and (g) the commencement of any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation which has not been
quashed or dismissed within 180 days.
"BOP" shall have the meaning set forth in Section 1.8 hereof.
A-1
<PAGE>
"Brandywine Preferred Return" shall mean the cumulative right given to
Brandywine to receive in respect of each Fiscal Year a sum equal to ten percent
(10%) per annum (determined on the basis of a year of 365 days, for the actual
number of days occurring in the period for which the Brandywine Preferred Return
is being determined, cumulative to the extent not distributed in any quarter
pursuant to Sections 10.1.1 or 10.2.1 hereof, but not compounded) of the average
daily balance of the Brandywine Unreturned Capital from time to time. The
Brandywine Preferred Return shall commence on the date(s) that the Brandywine
contributes capital to the Partnership as set forth in this Agreement and will
terminate when the Brandywine Unreturned Capital has been reduced to zero and
the Brandywine Preferred Return has been paid in full.
"Brandywine Unreturned Capital" shall mean the Capital Contributions
made by the Brandywine pursuant to this Agreement (including, without
limitation, any advances made under the collateral support provided by
Brandywine pursuant to Section 2.1.2 hereof) reduced by cash distributions to
Brandywine made pursuant to Section 10.2.2 hereof.
"BRT" shall have the meaning set forth in Section 1.8 hereof.
"Buy-Sell Price" shall have the meaning set forth in Section 8.2.1
hereof.
"Capital Account" shall mean the accounting record of each Partner's
capital interest in the Partnership maintained pursuant to and in accordance
with Section 2.4 hereof.
"Capital Contribution" shall mean, with respect to a Partner, the
amount of cash and the fair market value of any property contributed by such
Partner to the capital of the Partnership as set forth in this Agreement and,
with respect to Brandywine, also shall include any advances or drawings in
connection with any collateral support provided by Brandywine pursuant to
Section 2.1.2 hereof.
"Capital Notice" shall have the meaning set forth in Section 2.3.1
hereof.
"Code" shall mean the Internal Revenue Code of 1986 (or successor
thereto), as amended from time to time.
"Collateral Agreements" shall mean each of the documents, agreements
and instruments, including without limitation, the Development Agreement, the
Exclusive Leasing Agency Agreement and the Management Agreement, to be executed
and delivered in connection with the consummation of the transactions
contemplated by this Agreement.
"Contact Representative" shall have the meaning set forth in Section
3.3 hereof.
"Defaulting Partner" shall have the meaning set forth in Section 2.3.4
hereof.
"Depreciation" shall mean, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization, or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
Fiscal Year or other period, except that if the Gross Asset
A-2
<PAGE>
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or other cost
recovery deduction for such Fiscal Year or other period bears to such beginning
adjusted tax basis. In the event that the federal income tax depreciation,
amortization, or other cost recovery deduction is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method.
"Designated Representative" shall have the meaning set forth in
Section 3.4 hereof.
"Development Agreement" means an agreement providing for the
development of the Project.
"Electing Partner" shall have the meaning set forth in Section 8.2.1
hereof.
"Election Notice" shall have the meaning set forth in Section 8.2.1
hereof.
"Election Period" shall have the meaning set forth in Section 8.2.2
hereof.
"Exclusive Leasing Agency Agreement" means an agreement providing for
an exclusive leasing agency for the Project.
"Fiscal Year" means the year on which the accounting and federal
income tax records of the Partnership are kept.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, the asset's adjusted basis for federal income tax purposes, except
that (i) where an asset has been revalued on the books of the Partnership the
Gross Asset Value shall be adjusted to reflect such revaluation, (ii) where an
asset has been contributed to the Partnership by a Partner, the Gross Asset
Value shall be its fair market value as established by the Partners and (iii)
the Gross Asset Value of Partnership assets shall be adjusted to reflect
Depreciation taken into account with respect to such assets for purposes of
determining Profits or Losses.
"Gross Value of the Project" shall have the meaning set forth in
Section 8.4 hereof.
"Indemnitee" shall have the meaning as set forth in Section 6.2
hereof.
"Indemnitee Partner" shall have the meaning set forth in Section 6.3
hereof.
"Indemnitor Partner" shall have the meaning as set forth in Section
6.3 hereof.
"Interest" shall mean, with respect to a Partner, such Partner's
interest in the Partnership, as provided in this Agreement.
"Land" shall mean the 5.4-plus minus- acres of land, as presently
improved with a 72,000 S.F.-plus minus- two-story building, located in Chadds
Ford, Delaware County, Pennsylvania, and bearing a street
A-3
<PAGE>
address of 161 Wilmington - West Chester Pike (Route 202), all as more fully
described on Exhibit C attached hereto.
"Liquidating Trustee" shall have the meaning set forth in Section 12.3
hereof.
"Major Action" shall have the meaning set forth in Section 3.2 hereof.
"Management Agreement" means that an agreement providing for the
management of the Project.
"Minimum Gain" shall mean and refer to, at any time, with respect to
all nonrecourse liabilities of the Partnership (within the meaning of Treasury
Regulation Section 1.704-2(b)(3)) the aggregate amount of gain (of whatever
character), if any, that would be realized by the Partnership if it disposed of
(in a taxable transaction) all Partnership Property subject to such liabilities
in full satisfaction thereof, and as further defined in Treasury Regulation
Section 1.704-2(d).
"Mutual Disagreement" shall have the meaning set forth in Section 8.1
hereof.
"Net Cash Flow from Operations" shall mean the gross cash proceeds
from the ownership or operation of the Property (excluding Capital
Contributions, Additional Capital Contributions and proceeds from Capital
Loans), less the portion thereof used to pay or establish reserves for all
Partnership expenses, debt payments, capital improvements, replacements and
contingencies, all as determined by the Partners holding a majority of the
Interests. Net Cash from Operations shall not be reduced by depreciation,
amortization, cost recovery deductions or similar allowances, but shall be
increased by any reductions to reserves previously established.
"Net Cash from Sales or Refinancings" shall mean the net cash proceeds
from all sales or other dispositions of the Property (other than in the ordinary
course of business) and all proceeds realized by the Partnership upon any
refinancing of Partnership indebtedness, less (i) expenses incident to such
refinancing and satisfaction of any indebtedness being refinanced, and (ii) any
portion thereof used to establish reserves, all as determined by the Partners
holding a majority of the Interests. "Net Cash from Sales or Refinancings"
shall include all principal and interest payments with respect to any note or
other obligation received by the Partnership in connection with any sales or
other dispositions of the Property.
"Net Equity Value of a Partner's Interest" shall have the meaning set
forth in Section 8.4(b) hereof.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1).
"Notified Partner" shall have the meaning set forth in Section 2.3.1
hereof.
"Notifying Partner" shall have the meaning set forth in Section 2.3.1
hereof.
A-4
<PAGE>
"Partners" shall have the meaning set forth in the first paragraph of
this Agreement and shall be used where no distinction between the Partners is
required. The term "Partners" shall include any Person that is admitted to the
Partnership as an additional or substitute Partner, in accordance with the terms
of the Agreement.
"Partner Minimum Gain" shall mean an amount determined by computing
with respect to each Partner Nonrecourse Debt, the Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Treasury Regulation Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" shall mean nonrecourse indebtedness of the
Partnership with respect to which any Partner has a direct or indirect risk of
loss, as more fully defined in Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Deduction" shall mean, for each Fiscal Year, the
Partnership deductions which are attributable to Partner Nonrecourse Debt and
are characterized as "partner nonrecourse deductions" under Treasury Regulation
Section 1.704-2(i)(l).
"Percentage Interest" shall mean with respect to a Partner, such
Partner's Interest in the Partnership expressed as a percentage in relation to
the Interests held by the other Partners, as adjusted from time to time by the
admission or withdrawal of Partners for any reason as provided in this Agreement
or as agreed to by the unanimous consent of the Partners and reflected on a
schedule attached hereto as Exhibit B. The initial Percentage Interest of
Brandywine shall be fifty percent (50%) and the initial Percentage Interest of
ATL shall be fifty percent (50%).
"Performing Partner" shall have the meaning set forth in Section 2.3.4
hereof.
"Permanent Loan" shall mean a loan which may hereafter be obtained by
the Partnership, the proceeds of which would be applied to reduce or repay the
Acquisition Loan.
"Permitted Transfer" shall have the meaning set forth in Section 7.2
hereof.
"Person" means an individual, firm, corporation, partnership, limited
liability company, association, estate, trust, pension or profit-sharing plan,
or any other entity.
"Profits" and "Losses" shall mean, for each Fiscal Year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period, as computed for federal income tax purposes and determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss, or deduction required to be stated separately pursuant to
Section 703(a)(l) of the Code shall be included in taxable income or loss), with
the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
shall be added to such taxable income or loss;
A-5
<PAGE>
(b) Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as such expenditures pursuant to Treasury
Regulation Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in
computing Profits or Losses shall be subtracted from such taxable income or
loss;
(c) Gain or loss resulting from any disposition of Partnership
Property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the Property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value.
(d) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing taxable income or loss,
Depreciation shall be taken into account for such Fiscal Year or other period in
computing taxable income or loss;
(e) Notwithstanding any other provision of this definition,
Nonrecourse, Deductions, Partner Nonrecourse Deductions and any items of income,
gain, loss or deduction which are specially allocated pursuant to Section 9.2 of
this Agreement, shall not be taken into account in computing taxable income or
loss; and
(f) In any case where, in accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(e) or (f) Partnership Property is revalued on the
books of the Partnership to reflect its fair market value, the amount of such
revaluation (to the extent not previously taken into account) shall be taken
into account as gain or loss from a taxable disposition of such Property for
purposes of computing taxable income or loss.
"Project" shall mean a to-be-determined project involving the
redevelopment of the existing facility on the Land, and shall include fixtures,
machinery, equipment, and all other improvements hereafter constructed on the
Land, including site improvements and parking facilities, and all equipment,
fixtures, furnishings and other personalty used in connection therewith.
"Project Budget" shall mean a budget prepared by Brandywine
enumerating the costs anticipated to be incurred in consummating the Project.
"Project Costs" shall mean all costs incurred in connection with the
acquisition and development of the Project in accordance with the Project
Budget prepared and agreed to by the Partners holding a majority of the
Interests.
"Property" shall mean the Land and the Project, collectively.
"Regulatory Allocations" shall have the meaning as set forth in
Section 9.3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Tax Matters Partner" means the "tax matters Partner" as defined in
Code Section 6231(a)(7).
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<PAGE>
"Tax Matters Representative" shall have the meaning set forth in
Section 11.7 hereof.
"Transfer" means to sell, assign, transfer, give, donate, pledge,
deposit, alienate, bequeath, devise or otherwise dispose of or encumber all or
any portion of an Interest to any Person other than the Partnership.
"Transferee" shall mean a Person to whom a Transfer is made.
"Transferor" shall mean a Partner making a Transfer under this
Agreement.
"Treasury Regulations" or "Regulations" shall mean pronouncements, as
amended from time to time, or their successor pronouncements, which clarify,
interpret and apply the provisions of the Code, and which are designated as
"Treasury Regulations" by the United States Department of the Treasury.
END OF EXHIBIT A
A-7
<PAGE>
EXHIBIT B
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
PERCENTAGE INTERESTS
PERCENTAGE
Partner INTEREST
------- ------------
Brandywine 50%
ATL 50%
B-1
<PAGE>
EXHIBIT C
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
DESCRIPTION OF THE LAND
C-1
<PAGE>
SCHEDULE 3.6.1
Brandywine Reimbursable Fees
Brandywine shall be reimbursed by the Partnership for:
1. Fees associated with letter of credit or other collateral support provided
pursuant to Section 2.1.2.
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<PAGE>
SCHEDULE 3.6.2
ATL Reimbursable Fees
ATL shall be reimbursed by the Partnership for:
C-3
<PAGE>
Exhibit 10.6
AGREEMENT OF PURCHASE AND SALE
BETWEEN
THE BERKSHIRE GROUP
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.......................................................1
Section 1.2 Terms Generally...................................................5
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale..............................................................6
Section 2.2 Purchase Price....................................................7
Section 2.3 Due Diligence.....................................................9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase......................9
Section 3.2 Conditions to Seller's Obligations to Sell.......................10
Section 3.3 Termination......................................................11
Section 3.4 Waiver by Buyer..................................................11
Section 3.5 [Intentionally Omitted]. ........................................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller.........................11
Section 4.2 Estoppels........................................................13
Section 4.3 Limitation on Claims; Survival of Representations and Warranties.13
Section 4.4 Representations and Warranties of Buyer..........................15
Section 4.5 Buyer's Independent Investigation................................16
i
<PAGE>
Section 4.6 Entry and Indemnity; Limits on Government Contacts...............19
Section 4.7 Release..........................................................20
ARTICLE V
TITLE
Section 5.1 Conveyance of Title..............................................21
Section 5.2 Evidence of Title................................................22
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers..........................................................22
Section 6.2 Expenses.........................................................22
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties..............................23
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent......24
Section 7.3 Seller's Maintenance of the Properties...........................24
Section 7.4 Lease Enforcement................................................25
Section 7.5 Lease Termination Prior to Closing...............................25
Section 7.6 Tenant Notices...................................................25
Section 7.7 Risk of Loss and Insurance Proceeds..............................25
Section 7.8 Notifications....................................................26
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions..............................................26
Section 8.2 Closing..........................................................26
Section 8.3 Deposit of Documents.............................................26
Section 8.4 Estoppel Certificates............................................29
Section 8.5 Prorations.......................................................30
ii
<PAGE>
Section 8.6 Tax Certiorari Proceedings.......................................32
Section 8.7 Tenant Obligations...............................................33
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..........................................................33
Section 9.2 Entire Agreement.................................................34
Section 9.3 Time.............................................................34
Section 9.4 Attorneys' Fees..................................................34
Section 9.5 No Merger........................................................34
Section 9.6 Assignment.......................................................34
Section 9.7 Counterparts.....................................................34
Section 9.8 Governing Law; Jurisdiction and Venue............................35
Section 9.9 Waiver of Trial by Jury..........................................35
Section 9.10 Confidentiality and Return of Documents.........................35
Section 9.11 Interpretation of Agreement.....................................38
Section 9.12 Amendments......................................................38
Section 9.13 No Recording....................................................38
Section 9.14 No Third Party Beneficiary......................................38
Section 9.15 Severability....................................................38
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract....38
Section 9.17 Further Assurances..............................................38
Section 9.18 ]Intentionally Omitted].........................................39
Section 9.19 Exculpation.....................................................39
Section 9.20 Counterparts....................................................39
EXHIBITS
EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B [INTENTIONALLY OMITTED]
EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
iii
<PAGE>
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
iv
<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between The Berkshire Group, a Pennsylvania limited partnership
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
1
<PAGE>
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its representatives on or
about November 21, 1997, and on-site materials made available to Buyer for
inspection.
"Effective Date" shall mean the date of this Agreement.
2
<PAGE>
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leases" shall mean all Existing Leases and New Leases, collectively.
"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering any Real Property which are entered into after the
Effective Date
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in accordance with the terms of this Agreement, as the same may be amended
or modified from time to time in accordance with the terms of this
Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" or "Properties" shall have the meaning set forth in Section
2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" or "Real Properties" shall have the meaning set forth
in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Related Purchase Agreements" shall have the meaning those three
Agreements of Purchase and Sale, each of even date herewith, between Buyer,
as buyer, and one of the following persons, as seller: (i) University
Plaza, LP, a Delaware limited partnership, (ii) Trend Associates, a
Pennsylvania limited partnership and (iii) Park 80, L.L.C., a New Jersey
limited liability company.
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
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"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering any Real Property.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to
be obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise
of such party's sole and absolute discretion.
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ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's
right, title and interest in and to the following: (a) each parcel of land
described in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified
as being owned by Seller on Schedule 2.1.1, together with any and all rights,
privileges and easements appurtenant thereto owned by Seller (including any
rights of Seller as declarant), together with all buildings, improvements and
fixtures (other than fixtures owned or removable by any Tenant or third
party) located thereon (collectively, the "Improvements"; each Fee Parcel,
together with the Improvements thereon, a "Real Property" and, collectively,
the "Real Properties"); (b) [intentionally omitted]; (c) all tangible
personal property not owned or removable by any Tenant or third party, if
any, located on the Real Properties and owned by Seller and used in the
operation or maintenance of any one or more of the Real Properties (the
"Personal Property"); (d) (i) Seller's interest, as landlord, owner or
licensor, in each of the Existing Leases, (ii) Seller's interest, as
landlord, owner or licensor, in any New Leases and (iii) to the extent
assignable, any guarantees, letters of credit or other instruments that
secure or guarantee the performance of the obligations of each Tenant; (e) to
the extent assignable, all service contracts, maintenance contracts,
operating contracts, warranties, guarantees, listing agreements, parking
contracts and like contracts and agreements relating to the Real Properties,
and commission agreements, equipment leases, contracts, subcontracts and
agreements relating to the construction of any unfinished tenant improvements
(collectively, the "Contracts"); (f) to the extent assignable, all warranties
and guaranties made by or received from any third party with respect to any
building, building component, structure, fixture, machinery, equipment or
material situated on any Real Property, or contained in any or comprising a
part of any Improvement or Leasehold Improvement (collectively, the
"Warranties"); (g) to the extent Seller currently has such items in its
possession and to the extent assignable, all (i) preliminary, final and
proposed building plans and specifications (including "as-built" floor plans
and drawings) and tenant improvement plans and specifications for the
Improvements and (ii) surveys, grading plans, topographical maps,
architectural and structural drawings and engineering, soils, seismic,
geologic and architectural reports, studies and tests relating to any Real
Property ((g)(i) and (g)(ii) collectively, the "Records and Plans"); and (h)
to the extent transferable, any intangible personal property now or hereafter
owned by Seller and used in the ownership, use or operation of any one or
more of the Real Properties and/or the Personal Property, excluding materials
or information which in Seller's judgment is privileged or confidential
information, the name of Seller and related names and proprietary computer
equipment, software and systems, but including all (i) licenses, permits,
building inspection approvals, certificates of occupancy, approvals,
subdivision maps and entitlements issued, approved or granted by Governmental
Authorities in connection with a Real Property, (ii) unrecorded covenants,
conditions and restrictions, reciprocal easement agreements, area easement
agreements and other common or planned development agreements or documents
affecting any Real Property and (iii) licenses, consents, easements, rights
of way and approvals
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obtained from private parties to make use of utilities and to ensure
vehicular and pedestrian ingress and egress for any Real Property ((h)(i),
(h)(ii) and (h)(iii) collectively, the "Licenses and Permits") or other
rights relating to the ownership, use or operation of any of the Real
Properties or the Personal Property (collectively, the "Intangible
Property"). Each Real Property together with the Personal Property, the
Leases, the Contracts, the Warranties, the Records and Plans and the
Intangible Property relating thereto are referred to herein as a "Property"
and, collectively, as the "Properties."
Section 2.2 Purchase Price.
(a) The purchase price of the Properties is Seven Million Three
Hundred Fifty Thousand Dollars ($7,350,000) (the "Purchase Price"), subject
to prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial
Deposit Date, Buyer shall deposit by wire transfer (made in accordance with
the wiring instructions set forth on Schedule 2.2.2 attached hereto) of
immediately available funds, in escrow with Commonwealth Land Title Insurance
Company, 1700 Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr.
Gordon Daniels (the "Title Company"), a cash payment in the amount of
$367,000 (the "Deposit"). The Deposit shall be held by the Title Company
pursuant to an escrow agreement among Buyer, Seller and the Title Company in
the form of Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a
part of the Deposit. If the sale of the Properties as contemplated hereunder
is consummated, then the Deposit (including the interest accrued on the
Deposit) shall be paid to Seller at the consummation of the purchase and sale
of the Properties contemplated hereunder (the "Closing") and credited against
the Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the
Title Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO THE
FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO
UNDER THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY
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WRITTEN NOTICE OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE
DEPOSIT SHALL BE IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED
TO REIMBURSE BUYER FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR
(B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE,
IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT
RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE
ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN, AS ITS SOLE
AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY
OBLIGATIONS UNDER SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S
OBLIGATIONS UNDER SECTIONS 6.1 0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time
being of the essence) the full amount of the Initial Deposit or the
Additional Deposit, as the case may be, for any or no reason whatsoever in
accordance with the terms of Section 2.2(b)(i), this Agreement shall
immediately and automatically terminate. Upon any termination of this
Agreement pursuant to this Section 2.2(d) or Section 2.3, no party shall have
any further rights or obligations hereunder, except as provided in Sections
4.6(a), 6.1, 9.4 and 9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and
approved (and all representations and warranties of Seller made herein shall
be subject to and qualified by) all of the Due Diligence Materials.
Notwithstanding anything to the contrary herein, Seller shall have no
liability whatsoever to Buyer with respect to any matter disclosed to or
actually known by Buyer or its agents prior to the Closing Date.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction
(or Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the
transactions contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filing required
to be made with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby shall have been obtained or
made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall
be used) with respect to each Real Property in the form of the title
insurance commitment (each, a "Title Commitment") obtained by Buyer from the
Title Company and delivered to Seller prior to the Effective Date showing
title to such Real Property vested in Buyer, subject only to the Permitted
Exceptions. It shall not be a condition to Closing that Buyer obtain any
endorsements or coverages not set forth in the applicable Title Commitment.
Seller shall be entitled, by notice to Buyer, to adjourn the Closing one or
more times for an aggregate period not to exceed thirty (30) days in order to
remove any exceptions to title that are not Permitted Exceptions. Nothing
contained herein shall require Seller to bring any action or proceeding or
otherwise to incur any expense to correct, discharge or otherwise remove
title exceptions or defects with respect to any Property or to remove, remedy
or comply with any other grounds for Buyer's refusing to approve title,
provided that Seller shall be obligated to remove or discharge, or otherwise
cause the Title Company to omit as an exception to title or to insure against
collection thereof from or against any Property any mortgages or monetary
liens created by Seller, any mechanics' liens or judgment liens that are the
obligation of Seller (as opposed to any Tenant or other third party) and any
liens and encumbrances voluntarily created by Seller in violation of Section
7.1 (collectively, the "Required Deletion Items"). If on the Closing Date
there are any Required Deletion Items, Seller may use any portion of the
Purchase Price payable pursuant to Section 2.2(b) to satisfy same, provided
the Title Company shall omit such lien or encumbrance as an exception to
title.
(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4.
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(e) Each of the documents required to be delivered by Seller
pursuant to Section 8.3 shall have been delivered as provided therein and
Seller shall not otherwise be in material default of its material obligations
hereunder, and all of Seller's representations and warranties contained
herein shall be true and correct in all material respects as of the Closing
Date (except that any representations and warranties which are made as of a
specified date shall be true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the
transactions contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filings required
to be made with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement by Buyer or the consummation by
Buyer of the transactions contemplated hereby shall have been obtained or
made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its
material obligations hereunder.
(e) Each of the documents required to be delivered by Buyer
pursuant to Section 8.3 shall have been delivered as provided therein, and
all of Buyer's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date.
(f) Closing shall have occurred under each of the Related Purchase
Agreements in accordance with the respective terms thereof.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing
Date, then the party to this Agreement whose obligations are conditioned upon
the satisfaction of such condition may in its sole and absolute discretion
terminate this Agreement, subject to Section 2.2(c), by written notice
delivered to the other party at or prior to the occurrence of the Closing.
Upon any termination of this Agreement pursuant to this Section 3.3, no party
shall have any further rights or obligations hereunder, except as provided in
Sections 2.2(c), 4.6(a), 6.1, 9.4 and 9.10(a).
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Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement
and/or (ii) any breach of or inaccuracy in any representation or warranty of
Seller made in this Agreement, nonetheless elects to proceed to Closing,
then, upon the consummation of the Closing, Buyer and/or its Permitted
Assignees shall be deemed to have waived any such default and/or breach or
inaccuracy and shall have no claim against Seller with respect thereto.
Section 3.5 [Intentionally Omitted].
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Properties or all,
or substantially all, of Seller's other assets, (iv) suffered the attachment
or other judicial seizure of any of the Properties or all, or substantially
all, of Seller's other assets, (v) admitted in writing its inability to pay
its debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that
are to be delivered to Buyer at Closing (i) are, or at the time of Closing
will be, duly authorized, executed and delivered by Seller, (ii) do not, and
at the time of Closing will not, violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or any Property
owned by Seller is subject and (iii) constitute (or in the case of Closing
documents will constitute) a valid and legally binding obligation of Seller,
enforceable in accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this
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Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the
performance of Seller's obligations hereunder except as set forth on
Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, all material Contracts and all environmental
and structural reports in the possession of Seller. This representation
shall not be deemed breached by virtue of any Leases or Contracts entered
into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including
the rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent
Rolls")), (i) there are to Seller's knowledge no leases, license agreements
or occupying agreements (or any amendments or supplements thereto)
encumbering, or in force with respect to, any Property (except for any New
Leases entered into after the Effective Date in accordance with Section 7.1)
and (ii) as of the Effective Date, Seller has not received written notice
from any Significant Tenant that Seller has not performed its material
obligations under such Significant Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments
thereto that will be in effect on the Closing Date that are not terminable
without cause or penalty on sixty (60) days notice with respect to any
Property (the "Non-Terminable Contracts") are as set forth in Schedule 4.1.2
(the "Schedule of Contracts") or as entered into in accordance with Section
7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that
is pending or threatened with respect to any Property, except (i) litigation
fully covered by insurance policies (subject to customary deductibles) or
(ii) litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule
4.1.4, Seller has not received any written notice from any Governmental
Authority that all or any portion of any Property is in material violation of
any applicable building codes or any applicable environmental law (relating
to clean-up or abatement), zoning law or land use law, or any other
applicable local, state or federal law or regulation relating to any
Property, which material violation has not been cured or remedied prior to
the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1
attached to this Agreement, Seller has not granted any option or right of
first refusal or first opportunity to any party to acquire any fee or ground
leasehold interest in any portion of any Property.
(m) Employees. Seller will have no employees at Closing, and any
employees
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of Seller existing on the date hereof shall have been terminated by Seller
prior to Closing in accordance with all applicable law, non-compliance with
which could result in a claim against Buyer. Buyer shall not be responsible
for, nor assume any liabilities of Seller regarding, any such employees.
Each of the representations and warranties of Seller contained in
this Section 4.1: (1) is made as of the Effective Date (subject to the
information disclosed in the Due Diligence Materials); (2) other than clauses
(i) and (k) above (which, in the case of clause (i) above, the parties
acknowledge shall be governed by Section 7.7 with respect to events occurring
after the Effective Date) shall be deemed remade by Seller, and shall be true
in all material respects, as of the Closing Date (except that any
representations and warranties which are made as of a specified date, shall
have been true and correct as of such specified date) subject to (A) the
information disclosed in the Due Diligence Materials, (B) litigation that is
not reasonably likely to have a material adverse effect on any Property, and
(C) other matters expressly permitted in this Agreement or otherwise
specifically approved in writing by Buyer; and (3) shall survive the Closing
only as and to the extent expressly provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of
Seller regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel
delivered by Seller pursuant to Section 8.4 shall terminate to the extent
specifically confirmed by a tenant estoppel certificate delivered by a Tenant.
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or
assignments) executed by Seller and delivered to Buyer or any Permitted
Assignee at or in connection with the Closing (collectively, "Closing
Documents"), Seller shall have no liability whatsoever with respect to any
suits, actions, proceedings, investigations, demands, claims, liabilities,
fines, penalties, liens, judgments, losses, injuries, damages, expenses or
costs, including, without limitation, attorneys' and experts' fees and costs
and investigation, and remediation costs (collectively "Claims") under, and
Buyer shall be barred from bringing any Claims with respect to, any of the
representations and warranties contained in this Agreement or in any Closing
Document, except to the extent (and only to the extent) that with respect to
Claims for breach of representations and warranties relating to a specific
Property, the amount of such Claims exceeds Seventy Five Thousand Dollars
($75,000) ("Threshold Amount") and, in such case, such Claims shall only be
valid (and the Seller shall only be liable) for the portion that exceeds the
Threshold Amount; provided, however, notwithstanding any provision to the
contrary herein or in any Closing Document, the total liability of Seller for
any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Seller pursuant to Section 8.4(a)) with respect any
Property shall not exceed two and three quarters percent (2.75%) of the
Purchase Price for the Property. Further notwithstanding any provision to
the contrary herein or in any Closing Document, Seller shall have no
liability with respect to any Claim under any of the representations and
warranties contained in this Agreement or in any
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Closing Document, which Claim relates to or arises in connection with (1) any
Hazardous Materials (except solely to the extent that Seller has breached its
representation in Section 4.1(k)), (2) the physical condition of any Property
(except solely to the extent that Seller has breached its representation in
Section 4.1(k)) or (3) any other matter not expressly set forth in the
Seller's representations and warranties set forth in Section 4.1. Buyer
shall not make any Claim or deliver any Claim Notice unless it in good faith
believes the Claims would exceed the Threshold Amount provided in this
Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Seller contained herein or in any
Closing Document shall survive only until July 6, 1998. Any Claim that Buyer
may have at any time against Seller for a breach of any such representation
or warranty, whether known or unknown, with respect to which a Claim Notice
has not been delivered to Seller on or prior to July 6, 1998 shall not be
valid or effective. For the avoidance of doubt, on July 6, 1998, Seller shall
be fully discharged and released (without the need for separate releases or
other documentation) from any liability or obligation to Buyer, any Permitted
Assignee and/or their successors and assigns with respect to any Claims or
any other matter relating to this Agreement, any Closing Document or the
Property, except solely for those matters that are then the subject of a
pending Claim Notice delivered by Buyer to Seller. Any Claim that Buyer may
have at any time against Seller for a breach of any such representation or
warranty, whether known or unknown, with respect to which a Claim Notice has
been delivered to Seller on or prior to July 6, 1998 may be the subject of
subsequent litigation brought by Buyer against Seller, provided that such
litigation is commenced against Seller on or prior to October 6, 1998. For
the avoidance of doubt, on October 6, 1998, Seller shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Buyer and/or its successors and assigns
with respect to any Claims or any other matter relating to this Agreement,
any Closing Document or the Properties, except solely for those matters that
are the subject of a litigation by Buyer against Seller that is pending on
October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all
documents executed by Buyer that are to be delivered to Seller at Closing (i)
are, or at the time of Closing will be, duly authorized, executed and
delivered by Buyer, (ii) do not, and at the time of Closing will not, violate
any provision of any agreement or judicial order to which Buyer is a party or
to which Buyer or any property owned by Buyer is subject and (iii)
constitutes (or in the case of Closing Documents will constitute) a valid and
legally binding obligation of Buyer, enforceable in accordance with its terms.
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(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of each Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied with such independent investigation (but the foregoing will
not constitute a waiver of any breach of representation or warranty set forth in
Section 4.1 unless such breach is disclosed in the Due Diligence Materials or is
otherwise known by Buyer and/or any Permitted Assignee before the Closing Date
and Buyer and/or such Permitted Assignee(s) elect to proceed with the Closing).
Such independent investigation by Buyer may include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
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(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of such
Real Property, including the presence or absence of Hazardous Materials;
(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of such Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of each Real Property;
(ii) a Rent Roll for each Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for each Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) to the extent in the possession of Seller or Seller's
property manager,
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reports, studies, assessments, investigations and other materials related to the
presence of Hazardous Materials at, on or under each Real Property and the
compliance of such Real Property with all environmental laws, including recent
Phase I (and, in some cases, Phase II) environmental surveys; and
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
each Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to each Real
Property.
(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Properties and the Due Diligence Materials and
has obtained, reviewed and approved a Title Commitment for each Property, (ii)
it is acquiring the Properties based on such independent investigation and
subject to all information disclosed in the Due Diligence Materials (and also in
reliance on Seller's representations and warranties contained herein) and (iii)
Buyer shall have no right to terminate this Agreement based on any further
investigations of the Properties or the Due Diligence Materials. Buyer has
approved of each and every aspect of such Properties. The preceding sentence is
not intended to relieve, and shall not relieve, Seller from any of its
obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of any Real Property or the square footage of
the Improvements thereon or of any tenant space therein, (iii) the development
or income potential, or rights of or relating to, any Real Property, or any Real
Property's use, habitability, merchantability, or fitness, or the suitability,
value or adequacy of such Real Property for any particular purpose, (iv) the
zoning or other legal status of any Real Property or any other public or private
restrictions on the use of such Real Property, (v) the compliance of any Real
Property or its operation with any applicable codes, laws, regulations,
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statutes, ordinances, covenants, conditions and restrictions of any Governmental
Authority or of any other person or entity (including, without limitation, the
Americans with Disabilities Act), (vi) the ability of Buyer to obtain any
necessary governmental approvals, licenses or permits for Buyer's intended use
or development of any Real Property, (vii) the presence or absence of Hazardous
Materials on, in, under, above or about any Real Property or any adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
Improvements, (ix) the condition of title to any Real Property, (x) the Leases,
Contracts or any other agreements affecting any Real Property or the intentions
of any party with respect to the negotiation and/or execution of any lease or
contract with respect to any Real Property, (xi) Seller's ownership of any
Property or any portion thereof or (xii) the economics of, or the income and
expenses, revenue or expense projections or other financial matters, relating
to, the operation of any Real Property. Without limiting the generality of the
foregoing, except as otherwise set forth herein, Buyer expressly acknowledges
and agrees that Buyer is not relying on any representation or warranty of
Seller, nor any partner, officer, employee, attorney, agent or broker of Seller,
whether implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Buyer. Buyer further acknowledges and agrees that Seller is under no
duty to make any inquiry regarding any matter that may or may not be known to
Seller or any partner, officer, employee, attorney, agent or broker of Seller.
This Section 4.5(d) shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto a Real Property, Buyer shall give Seller
reasonable advance notice of such entry and shall conduct such entry and any
inspections in connection therewith so as to minimize, to the greatest extent
possible, interference with Seller's business and the business of the Tenants
and otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any necessary on-site testing, Buyer
shall give Seller written notice thereof, including the identity of the company
or persons who will perform such testing and the proposed scope of the testing
and the party performing the testing. Seller shall approve or disapprove any
proposed testing and the party performing the same within three (3) Business
Days after receipt of
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such notice. If a Buyer Party takes any sample from a Real Property in
connection with any such approved testing, Buyer shall provide to Seller a
portion of such sample being tested to allow Seller, if it so chooses, to
perform its own testing. Seller or its representative may be present to observe
any testing, or other inspection performed on any Real Property. Buyer shall
promptly deliver to Seller copies of any reports relating to any testing or
other inspection of any Real Property performed by or on behalf of any Buyer
Party. Buyer shall maintain, and shall ensure that its contractors maintain,
public liability and property damage insurance insuring the Buyer Parties
against any liability arising out of any entry or inspections of any Real
Property pursuant to the provisions hereof. Such insurance maintained by Buyer
shall be in the amount of Ten Million Dollars ($10,000,000) combined single
limit for injury to or death of one or more persons in an occurrence, and for
damage to tangible property (including loss of use) in an occurrence. The
policy maintained by Buyer shall insure the contractual liability of Buyer
covering the indemnities herein and shall (i) name Seller (and their successors,
assigns and Affiliates) as additional insureds, (ii) contain a cross-liability
provision, and (iii) contain a provision that "the insurance provided by Buyer
hereunder shall be primary and noncontributing with any other insurance
available to Seller." Buyer shall provide Seller with evidence of such
insurance coverage prior to any entry or inspection of any Real Property. Buyer
shall indemnify and hold the Seller Parties harmless from and against any Claims
arising out of or relating to any entry on any Real Property by any Buyer Party,
in the course of performing any inspections, testings or inquiries. The
foregoing indemnity shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of any Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, any Real Property discovered by Buyer's
environmental testing, Buyer shall first provide prior written notice to Seller
and shall not contact any Governmental Authority except in conjunction with
Seller. In addition, if Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to sue, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, LLC members, directors, officers, attorneys, employees and
agents of each of them, and their respective heirs, successors, personal
representatives and assigns (each a "Seller Party", and collectively, the
"Seller Parties") with respect to any and all Claims, whether direct or
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indirect, known or unknown, foreseen or unforeseen, that may arise on account of
or in any way be connected with any Property including, without limitation, the
physical, environmental and structural condition of the related Real Property or
any law or regulation applicable thereto, including, without limitation, any
Claim or matter relating to the use, presence, discharge or release of Hazardous
Materials on, under, in, above or about any Real Property; provided, however,
Buyer does not waive its rights, if any, to recover from, and does not release
or discharge or covenant not to sue Seller for (i) any act that is found by a
court of competent jurisdiction to constitute fraud, (ii) any breach of Seller's
representations or warranties set forth in Section 4.1 or in Seller's estoppel
certificate delivered pursuant to Section 8.4, subject to the limitations and
conditions provided in this Agreement, or (iii) any breach of Seller's
obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for each Property. A copy of each Title Commitment delivered to
Buyer has been delivered to Seller and its counsel. At the Closing, as a
condition precedent to Buyer's obligation to close, Seller shall have delivered
to Buyer a deed for the Real Property in the form of Exhibit A (each, a "Deed"),
each subject to no exceptions other than the following (the "Permitted
Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for such Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of such Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Effective Date;
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(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling the
same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the applicable Property, other than those that
are specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, one or
more 1992 ALTA Owner's Policies of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a 1992
ALTA Owner's Policy, such other required form shall be used) in the aggregate
amount of the Purchase Price for the Properties showing title to each Property
vested in Buyer or its Permitted Assignee or designee, subject only to the
Permitted Exceptions (the "Title Policy").
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder was instrumental in arranging or bringing about
this transaction and that there are no claims or rights for brokerage
commissions or finders' fees in connection with the transactions contemplated
hereby by any person or entity. If any person brings a claim for a commission
or finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the
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Indemnified Party harmless from any and all costs, damages, claims,
liabilities or expenses (including without limitation, reasonable attorneys'
fees and disbursements) incurred by the Indemnified Party in defending
against the claim. The provisions of this Section 6.1 shall survive the
Closing or, if the Closing does not occur, any termination of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease each Real
Property in the ordinary course, on an arm's-length basis and consistent with
Seller's past practices and will not dispose of or encumber any Property, except
for dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring on or before December 30, 1997) and pay all costs and expenses
of the Properties, including without limitation debt service and Real Estate
Taxes.
(b) Seller shall not, without Buyer's consent, enter into any New
Leases or materially modify any Existing Lease. Any consent to be given by
Buyer pursuant to this Section 7.1(b) shall not be unreasonably withheld or
delayed and shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating agreement
or any contract, agreement or other commitment of any sort (including any
contract for capital items or expenditures, but excluding any liens or other
encumbrances on title other than Permitted Exceptions), with respect to any one
or more of the Properties that (A) requires payments to or by Seller in excess
of $50,000 per annum, or the performance of services by Seller the value of
which is in excess of $50,000 per annum and (B) is not terminable without cause
and without penalty on thirty (30) days' notice or less; provided that Seller,
in its good faith but sole discretion, believes such contract is on market terms
and will benefit the applicable Property. At
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least three (3) Business Days prior to becoming legally bound with respect to
any such matter, Seller shall consult with and seek the consent of Buyer, and
shall provide reasonable detail to Buyer (including, at Buyer's request, copies
of the relevant documentation), with respect thereto. Any consent to be given
by Buyer pursuant to this Section 7.1(c) shall not be unreasonably withheld or
delayed and shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell any Property or portion thereof without Buyer's
prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting any Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for the
costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at Closing equal to the amounts so paid. Free rent periods provided for
in Leases entered into by Seller prior to October 9, 1997 that occur, in
whole or in part, after the Closing Date shall be for the account of, and
borne by, Buyer without adjustment to the Purchase Price at closing. The
provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Properties. Between the
Effective Date and the Closing Date, Seller shall (a) maintain each Real
Property in substantially the same manner as prior hereto pursuant to Seller's
normal course of business, subject to reasonable wear and tear and further
subject to the occurrence of any damage or destruction to such Real Property by
casualty or other causes or events beyond the control of Seller; provided,
however, that
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Seller's maintenance obligations under this Section 7.3 shall not include any
obligation to make capital expenditures not incurred in Seller's normal course
of business or any other expenditures not incurred in Seller's normal course of
business; (b) continue to maintain its existing insurance coverage; and (c) not
grant any voluntary liens or encumbrances affecting such Property other than
Permitted Exceptions of the type described in clauses (i) and (ix) of
Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by any Tenant, provided, that
(i) with respect to delinquent rents, Seller may (to the extent permitted under
the Lease) apply Tenant security deposits held by Seller only to rents that are
thirty (30) days or more past due and (ii) with respect to any application by
Seller of Tenant security deposits held by Seller, Seller will deliver, in
connection with any such application, written notice to the affected Tenant(s)
indicating that their security deposits have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
related Real Properties or destruction of any improvements thereon or
condemnation of any portion of any Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or repair
of any Property. Seller has provided Buyer with a certificate of insurance for
Seller's casualty insurance policy so that Buyer can confirm its satisfaction
with such policy. Seller agree that it will maintain such policy in full force
and effect until the Closing. If the proceeds or awards have not been collected
as of the Closing, then such proceeds or awards shall be assigned to Buyer,
except to the extent needed to reimburse Seller for sums it reasonably expended
prior to the Closing for the restoration or repair of such Property.
Notwithstanding the foregoing, (i) Seller shall not settle, compromise or
otherwise stipulate any award or recovery in
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connection with any damage, destruction or condemnation, in each case if such
damage, destruction or condemnation impairs the value of a Property by at least
$250,000 without the prior written approval of Buyer, which approval shall not
be unreasonably withheld, (ii) Buyer shall have the right to participate in any
such settlement or other proceedings, and (iii) if the amount of the damage or
destruction as described in this Section 7.7 exceeds ten percent (10%) of the
Purchase Price for a Property, then Buyer may, at its option to be exercised
within five (5) Business Days of Seller's written notice of the occurrence of
the damage or destruction, either terminate this Agreement or consummate the
purchase for the full Purchase Price as required by the terms hereof. If Buyer
elects to terminate this Agreement, then the Deposit shall be immediately
returned to Buyer and neither party shall have any further rights or obligations
hereunder except to the extent set forth in Sections 4.6(a), 6.1, 9.4 and
9.10(a). If Buyer elects to proceed with the purchase, then upon the Closing,
Buyer shall be entitled to a credit against the Purchase Price and shall receive
an assignment of any uncollected proceeds or awards, all as set forth in this
Section 7.7 above. The provisions of this Section 7.7 shall survive the
Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to any of the
Properties of which Seller obtains actual knowledge by written notice, any
notices of violations of any legal requirements relating to any of the
Properties received by Seller, any litigation of which Seller obtains actual
knowledge by written notice that arises out of the ownership of any of the
Properties unless fully covered by insurance (subject to customary deductibles),
and any other matters that would materially affect Seller's representations and
warranties hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually
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agree upon in writing (the "Closing Date"), in either case, with time being of
the essence. Except as otherwise permitted under this Agreement, such date and
time may not be extended without the prior written approval of both Seller and
Buyer.
Section 8.3 Deposit of Documents.
(a) On or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
(i) a duly executed and acknowledged Deed for the Real Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for each
Property in the form attached hereto as Exhibit E (each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for each Property in the form attached hereto as Exhibit F (each, an
"Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for each
Property in the form attached hereto as Exhibit G (each, an "Assignment of
Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Properties;
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
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(b) On or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Properties.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for the Real Property, (ii)
the Title Company shall deliver to Buyer all other documents and instruments
received by it which, in accordance with the terms of this Agreement, are to be
delivered by Seller to Buyer on the Closing Date, and (iii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement are to be delivered by Buyer to
Seller on the Closing Date. Buyer and Seller shall each deposit such other
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the purchase and sale of the
Properties in accordance with the terms hereof; provided, that Seller shall not
be required to provide any indemnities or affidavits or to escrow any funds
other than the Seller's Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Properties in Seller's possession, a set of keys to each Real
Property and originals (or copies, if originals are not
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available) of any other items in Seller's possession relating to the use,
ownership, operation, maintenance, leasing, repair, alteration, management or
development of the Real Properties, on the Closing Date (at such location as
Buyer and Seller shall mutually agree). Following the Closing, Buyer shall make
all Leases, Contracts, other documents, books, records and any other materials
in its possession, to the extent the same relate to the period of Seller's
ownership of the Properties, available to Seller or its representatives for
inspection and/or copying at Buyer's offices (at Seller's sole cost and expense)
at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from each Tenant substantially in the
form attached hereto as Exhibit J; provided, however, that if a form of estoppel
certificate is attached to or otherwise prescribed in a particular lease
document, that form (the "Prescribed Form") shall be deemed to be acceptable to
Buyer in the event that any Tenant is unwilling to sign the form attached hereto
as Exhibit J. It shall be a condition to Buyer's obligation to close the sale
and purchase of a Property that on or before the Closing Seller delivers to
Buyer tenant estoppel certificates substantially in the form attached hereto as
Exhibit J (or in the Prescribed Form, if applicable) from (i) Tenants occupying
seventy five percent (75%) of the total leased square footage of the Properties;
and (ii) Significant Tenants occupying seventy five percent (75%) of the total
leased square footage covered by such Significant Tenants' Leases (with respect
to each of preceding clauses (i)-(ii), the "Required Percentage"); provided,
however, if Seller is unable to obtain the aforesaid tenant estoppel
certificates from Tenants or Significant Tenants (as the case may be) occupying
the Required Percentage, Seller may, but shall not be obligated to, provide a
certificate to Buyer, with respect to such missing estoppel certificates, as
chosen by Seller, to the effect that (except as disclosed in the Due Diligence
Materials or in the Leases to which such estoppels relate): (i) to Seller's
knowledge the Leases for those Tenants or Significant Tenants (as the case may
be) are in full force and effect; (ii) the amount of the Tenants' or Significant
Tenants' security deposits; (iii) the dates through which rent has been paid;
(iv) neither Seller nor, to Seller's knowledge, any of those Tenants or
Significant Tenants (as the case may be) is in default thereunder; (v) a true,
correct and complete copy of the Leases are attached; (vi) the Leases expire on
the dates specified and are not subject to any renewal or extension options,
except as specified, and (viii) there are no options to purchase or rights of
first refusal except as specified. Buyer shall be obligated to accept Seller's
certification in lieu of any missing estoppel certificates. Seller's
representations and warranties in the certificate shall survive the Closing,
provided that (i) Buyer must give Seller a Claim Notice with respect to any
claim it may have against Seller for a breach of any such representation and
warranty by July 6, 1998, and must commence litigation (if any) relating to such
Claim Notice not later than October 6, 1998 (and any claim that Buyer may have
that is not so asserted, or litigation by Buyer that is not so commenced, shall
be barred and not be valid or effective and Seller shall have no liability
whatsoever with respect thereto) and (ii) any certificate delivered by Seller
pursuant to this Section 8.4 shall cease to survive the Closing to the extent
specifically confirmed by a tenant estoppel certificate delivered by a Tenant or
a Significant Tenant. In no event shall the minimum thresholds to Buyer's
recovery set forth in Section 4.3(a) apply to any certificates delivered by
Seller (but Buyer's recovery under any such certificates shall
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be limited by the maximum limitations set forth in Section 4.3(a)).
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on any Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement; annual permits and/or inspection fees
(calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of each Property (other than
any Leasing Costs and free rent which shall be prorated as provided in Section
7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on the
Closing Date, on the basis of a 365-day year, with Buyer deemed the owner of the
Properties on the entire Closing Date. Rent which is due but uncollected as of
the Closing Date shall not be adjusted. On the Closing Date, Seller shall
deliver to Buyer a schedule of all such past due but uncollected rent owed by
tenants. Buyer agrees to cause the amount of such rental arrears to be included
in the first bills thereafter submitted by Buyer to such tenants after the
Closing Date. Any rents collected from a tenant after the Closing Date shall be
applied first to the month in which the Closing Date occurs, next to any rents
payable by such tenant after the Closing Date and thereafter to any arrearage
owed by such tenant on the Closing Date in the inverse order of maturity.
Additional rent payments (and estimated additional rent payments) actually paid
by tenants prior to Closing attributable to real estate taxes and operating
costs shall be adjusted as of the Closing Date. Additional rent payments (and
estimated additional rent payments) attributable to real estate taxes and
operating costs to be paid by tenants after the Closing shall be adjusted upon
receipt by Buyer. The adjustments of additional rent payments shall be based
upon the number of days in the period for which such payment relates that are
before or after the Closing Date. In no event will Buyer be entitled to receive
any payments on or under the promissory notes or other agreements referred to in
Section 8.7. Buyer shall use reasonable efforts until October 6, 1998 to
collect any delinquent rents that accrued prior to the Closing Date (but Seller
shall have the right to commence and pursue litigation against any Tenant to
collect delinquent rents and/or expense reimbursements, provided that Seller may
not seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
any Property has been assessed for property taxes purposes at such rates as
would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of such Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller,
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Buyer hereby agrees to pay all such taxes and to indemnify and save Seller
harmless from and against all claims and liability for such taxes. Such
indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other party
a sum of money based on proration(s) calculated after the Closing Date shall
promptly pay said sum to the other party, together with interest thereon at the
rate of two percent (2%) per annum over the Prime Rate from the Closing Date to
the date of payment, if payment is not made within ten (10) days after delivery
of a bill therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing occurs,
then the proration of such taxes shall be based upon the rate and assessments
for the preceding calendar year, and such proration shall be adjusted between
Seller and Buyer as soon as reasonably practicable after such tax rate or
assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Properties to permit Seller to review
Buyer's proration statements. Seller shall have sixty (60) days after receipt
of Buyer's calculations to accept or contest such prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller and Buyer
shall pay one-half of the realty transfer taxes payable with respect to the
deed. Seller and Buyer shall each be responsible for paying their respective
attorneys' fees and costs. Buyer and Seller agree that, given the de minimis
amount of Personal Property included within the Properties, no portion of the
Purchase Price is allocable or attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in a
manner (or otherwise take a position) inconsistent with the Purchase Prices set
forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior
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to the Closing Date and to receive and retain any refunds on account of such
Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of any Property for any tax year which, in
accordance with the laws and regulations applicable to such Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to any Property, (i) Seller shall retain all rights
(subject to any rights of Tenants under their Leases) with respect to any tax
year ending prior to the tax year (and all refunds relating thereto) in which
the Closing Date occurs, and shall have the sole right to participate in and
settle any proceeding relating thereto (provided, that such settlement does not
affect the assessed tax value for any subsequent tax year), and (ii) Buyer shall
have all rights (subject to any rights of Tenants under their Leases) with
respect to any tax year (and all refunds relating thereto) which ends after the
Closing Date; provided, however, that if the proceeding is for a tax year in
which the Closing Date occurs, such settlement shall not be made without Buyer's
prior consent, which consent shall not be unreasonably withheld or delayed.
With respect to any such proceeding for a tax year in which the Closing Date
occurs (whether commenced by Seller or Buyer), any refund or credit of taxes for
such tax year shall be applied first to the unreimbursed out-of-pocket expenses,
including reasonable counsel fees, necessarily incurred in obtaining such refund
or credit, and second, to any Tenant entitled to same, and the balance shall be
apportioned between Seller and Buyer as of the Closing Date in accordance with
the proportion of the applicable tax year occurring before and after the Closing
Date. In each case, the party which prosecuted the proceeding shall deliver to
the other copies of receipted tax bills and any decision or settlement agreement
evidencing the reduction in taxes. If any refund shall be received by Seller
which is for the account of Buyer as provided in this Section 8.6, then Seller
shall hold Buyer's share thereof in trust for Buyer and, promptly upon receipt
thereof, pay such share to Buyer or any other party entitled to same as provided
above. If any refund shall be received by Buyer which is for the account of
Seller as provided in this Section 8.6, then Buyer shall hold Seller's share
thereof in trust for Seller and, promptly upon receipt thereof, pay such share
to Seller or any other party entitled to same as provided above. Each party
shall execute any and all consents or other documents as may be reasonably
necessary to be executed by such party so as to permit the other party to
commence or continue any tax certiorari proceeding which such other party is
authorized to commence or continue pursuant to the terms of this Section 8.6, or
to collect any refund or credit with respect to any such tax proceeding. The
provisions of this Section 8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other
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agreements (other than the Leases) delivered to Seller that evidence, deal with
or otherwise relate solely to a Tenant's rental or expense reimbursement
obligations under its Lease that, as of the Closing Date, are or were past due,
shall not be conveyed to Buyer and shall be retained by Seller. Seller agrees
that in enforcing its rights against Tenants under any such promissory notes or
other agreements, Seller will not seek to exercise any remedies that may be
available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's audited
financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by a commercial
overnight courier that guarantees next day delivery and provides a receipt, or
(d) by legible facsimile (followed by hard copy delivered in accordance with
preceding subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: The Berkshire Group
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery). Notices may be given by
attorneys for the notifying partner.
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Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party, and are superseded and replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Properties but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the case
may be, of one or more of the Properties and Seller shall convey at Closing such
Property or Properties (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Seller and the
other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE
PARTIES RECOGNIZE THAT, WITH RESPECT TO SOME OF THE PROPERTIES, IT MAY BE
NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN ASPECTS OF THE LAWS OF OTHER
STATES IN ORDER TO CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT
HERETO. THE PARTIES AGREE TO COMPLY WITH SUCH OTHER LAWS TO THE EXTENT
NECESSARY TO CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTIES. IT IS THE
PARTIES' INTENT THAT THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO EACH
PROPERTY IN A MANNER THAT RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving this
Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of all
federal and state courts sitting in the Commonwealth of Pennsylvania and consent
that any order, process, notice of motion or other application to or by any such
court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided that a
reasonable time for appearance is allowed, and Buyer and Seller agree that such
courts shall have the exclusive jurisdiction over any such suit, action or
proceeding commenced by any party. In furtherance of such agreement, Buyer and
Seller agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the Commonwealth of Pennsylvania and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s) and
their Affiliates and representatives for review and inspection, Buyer (on behalf
of itself, any Permitted Assignee(s), and their respective Affiliates and
representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
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(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Properties, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Properties as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Properties and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation
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Material are proprietary in nature and that Seller and its Affiliates would
suffer significant and irreparable harm in the event of the misuse or disclosure
of the Evaluation Material. Without affecting any other rights or remedies that
either party may have, Buyer acknowledges and agrees that Seller shall be
entitled to seek the remedies of injunction, specific performance and other
equitable relief for any breach, threatened breach or anticipatory breach of the
provisions of this agreement by Buyer or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Properties (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member, partner, officer, director or
employee of Seller or counsel to or accountants of Seller solely for their use
and on a need-to-know basis, provided that such Persons are notified of Seller's
confidentiality obligations hereunder, (b) with the prior consent of Buyer, or
(c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request and
(iii) if disclosure is required or deemed advisable, reasonably cooperate with
Buyer (at no cost to Seller) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded such Confidential
Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular
36
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shall include the plural and vice versa and the use of the masculine shall
include the feminine and the neuter. The term "person" shall include any
individual, partnership, joint venture, corporation, trust, limited liability
company, unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 [Intentionally Omitted].
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
37
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Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
38
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The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: The Berkshire Group, a Pennsylvania
limited partnership
By: GH Berkshire, Ltd., its
general partner
By: _________________________
Name:
Title
39
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EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $367,500 (the "Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and The Berkshire Group ("Seller"), the provisions of which
(including, without limitation, the defined terms) are hereby incorporated
herein by reference. The Deposit shall be paid to Seller by Escrowee at the
time of Closing under the Agreement, or if Closing does not take place,
distributed in accordance with the terms of the Agreement. Escrowee shall,
immediately upon receipt of the Deposit, deposit same in an interest bearing,
money market type escrow account with a federally insured bank or savings and
loan association located in Philadelphia, Pennsylvania. All interest which
shall accrue on the Deposit shall be payable in accordance with the Agreement.
Escrowee shall pay such interest to such party contemporaneously with Escrowee's
payment of the Deposit. Seller and Buyer agree that Escrowee is an escrow
holder only and is merely responsible for the safekeeping of the Deposit and
interest and shall not be required to determine questions of fact or law. If
Escrowee shall receive notice of a dispute as to the disposition of the Deposit
or the interest, then Escrowee shall not distribute the Deposit or interest
except in accordance with written instructions signed by both Buyer and Seller.
Pending resolution of any such dispute, Escrowee is authorized to pay the
Deposit and interest into court. If Escrowee pays the Deposit and interest into
court, it shall be discharged from all further obligations hereunder. This
Escrow Agreement shall be governed by the laws of the state of New York.
Seller's Federal Tax ID Number is 23-2539286.
Buyer's Federal Tax ID Number is 23-2862640.
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IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable consideration,
each intending to be legally bound and to bind their respective successors and
assigns, have caused this Escrow Agreement to be executed and delivered as of
December 15, 1997.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: THE BERKSHIRE GROUP, a Pennsylvania
limited partnership
By: GH Berkshire, Ltd., its
general partner
By: _________________________
Name:
Title:
2
<PAGE>
Exhibit 10.7
AGREEMENT OF PURCHASE AND SALE
BETWEEN
BOWPL PARK, LLC
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.......................................................1
Section 1.2 Terms Generally...................................................6
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale..............................................................6
Section 2.2 Purchase Price....................................................7
Section 2.3 Due Diligence. ...................................................9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase......................9
Section 3.2 Conditions to Seller's Obligations to Sell.......................11
Section 3.3 Termination......................................................12
Section 3.4 Waiver by Buyer..................................................12
Section 3.5 [Intentionally omitted]..........................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller.........................12
Section 4.2 Estoppels........................................................15
Section 4.3 Limitation on Claims; Survival of Representations and Warranties.15
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Section 4.4 Representations and Warranties of Buyer..........................16
Section 4.5 Buyer's Independent Investigation................................17
Section 4.6 Entry and Indemnity; Limits on Government Contacts...............20
Section 4.7 Release..........................................................22
ARTICLE V
TITLE
Section 5.1 Conveyance of Title..............................................22
Section 5.2 Evidence of Title................................................24
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers..........................................................24
Section 6.2 Expenses.........................................................24
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property................................24
Section 7.2 [Intentionally omitted.].........................................26
Section 7.3 Seller's Maintenance of the Property.............................26
Section 7.4 Lease Enforcement................................................26
Section 7.5 Lease Termination Prior to Closing...............................26
Section 7.6 Tenant Notices...................................................26
Section 7.7 Risk of Loss and Insurance Proceeds..............................26
Section 7.8 Notifications....................................................27
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions..............................................27
ii
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Section 8.2 Closing..........................................................28
Section 8.3 Deposit of Documents.............................................28
Section 8.4 Estoppel Certificates............................................30
Section 8.5 Prorations.......................................................31
Section 8.6 Tax Certiorari Proceedings.......................................33
Section 8.7 Tenant Obligations...............................................34
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..........................................................35
Section 9.2 Entire Agreement.................................................36
Section 9.3 Time.............................................................36
Section 9.4 Attorneys' Fees..................................................36
Section 9.5 No Merger........................................................36
Section 9.6 Assignment.......................................................36
Section 9.7 Counterparts.....................................................37
Section 9.8 Governing Law; Jurisdiction and Venue............................37
Section 9.9 Waiver of Trial by Jury..........................................37
Section 9.10 Confidentiality and Return of Documents.........................38
Section 9.11 Interpretation of Agreement.....................................40
Section 9.12 Amendments......................................................40
Section 9.13 No Recording....................................................40
Section 9.14 No Third Party Beneficiary......................................40
Section 9.15 Severability....................................................40
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract....41
Section 9.17 Further Assurances..............................................41
Section 9.18 [Intentionally omitted].........................................41
Section 9.19 Exculpation.....................................................41
Section 9.20 Counterparts....................................................41
EXHIBITS
EXHIBIT A REAL PROPERTY DEED
EXHIBIT B [INTENTIONALLY OMITTED]
EXHIBIT C INTENTIONALLY OMITTED
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EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTION
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
iv
<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between BOWPL Park, LLC, a Maryland limited liability company
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
<PAGE>
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Construction Contract" shall mean that certain Design/Building and
Development Agreement, dated May 3, 1997, between GMH Development Group,
Inc. ("Contractor") and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
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"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, materials delivered to Buyer and its representatives on or
about November 21, 1997 and on-site materials made available to Buyer for
inspection.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Lease" shall mean that certain Lease Agreement, dated May
30, 1997, as amended by letter agreement dated May 22, 1997, between
Seller, as landlord, and Ameridata, Inc., as tenant, as the same may be
amended or modified from time to time in accordance with Section 7.1(b) of
this Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
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"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" shall have the meaning set forth in Section 2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" shall have the meaning set forth in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Related Purchase Agreements" shall mean those four Agreements of
Purchase and Sale, each of even date herewith, between Buyer, as buyer,
and one of the following persons, as seller: (i) The Berkshire Group, a
Pennsylvania limited partnership, (ii) University Plaza, LP, a Delaware
limited partnership, (iii) Trend Associates, a Pennsylvania limited
partnership and (iv) Park 80, L.L.C., a New Jersey limited liability
company.
4
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"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant under the Existing Lease.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
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<PAGE>
(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by Tenant or any third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, the "Real Property"); (b) [intentionally omitted]; (c) all
tangible personal property not owned or removable by any Tenant or third party,
if any, located on the Real Property and owned by Seller and used in the
operation or maintenance of the Real Property (the "Personal Property"); (d) (i)
Seller's interest, as landlord in the Existing Lease and (ii) to the extent
assignable, any guarantees, letters of credit or other instruments that secure
or guarantee the performance of the obligations of Tenant; (e) to the extent
assignable, all service contracts, maintenance contracts, operating contracts,
warranties, guarantees, listing agreements, parking contracts and like contracts
and agreements relating to the Real Properties, and commission agreements,
equipment leases, contracts, subcontracts and agreements relating to the
construction of any unfinished tenant improvements (collectively, the
"Contracts"); (f) to the extent assignable, all warranties and guaranties made
by or received from any third party with respect to any building, building
component, structure, fixture, machinery, equipment or material situated on the
Real Property, or contained in any or comprising a part of any Improvement or
Leasehold Improvement (collectively, the "Warranties"); (g) to the extent Seller
currently has such items in its possession and to the extent assignable, all (i)
preliminary, final and proposed building plans and specifications (including
"as-built" floor plans and drawings) and tenant improvement plans and
specifications for the Improvements, and (ii) surveys, grading plans,
topographical maps, architectural and structural drawings and engineering,
soils, seismic, geologic and architectural reports, studies and tests relating
to the Real Property ((g)(i) and (g)(ii) collectively, the "Records and Plans");
and (h) to the extent transferable, any intangible personal property now or
hereafter owned by Seller and used in the ownership, use or operation of the
Real Property and/or the Personal Property, excluding materials or information
which in Seller's judgment is privileged or confidential information, the name
of Seller and related names and proprietary computer equipment, software and
systems, but including all (i) licenses, permits,
6
<PAGE>
building inspection approvals, certificates of occupancy, approvals, subdivision
maps and entitlements issued, approved or granted by Governmental Authorities in
connection with the Real Property, (ii) unrecorded covenants, conditions and
restrictions, reciprocal easement agreements, area easement agreements and other
common or planned development agreements or documents affecting the Real
Property and (iii) licenses, consents, easements, rights of way and approvals
obtained from private parties to make use of utilities and to ensure vehicular
and pedestrian ingress and egress for the Real Property ((h)(i), (h)(ii) and
(h)(iii) collectively, the "Licenses and Permits") or other rights relating to
the ownership, use or operation of the Real Property or the Personal Property
(collectively, the "Intangible Property"). The Real Property, together with the
Personal Property, the Leases, the Contracts, the Warranties, the Records and
Plans and the Intangible Property relating thereto are referred to herein as a
"Property".
Section 2.2 Purchase Price.
(a) The purchase price of the Property is Sixteen Million Three
Hundred Fifty Dollars ($16,350,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 1700
Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Gordon Daniels
(the "Title Company"), a cash payment in the amount of $817,500. The Deposit
shall be held by the Title Company pursuant to an escrow agreement among Buyer,
Seller and the Title Company in the form of Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Property as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Property contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the Title
Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE
FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR
7
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SELLER'S INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT
SHALL BE RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL
BE THE RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTY IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO UNDER
THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY WRITTEN NOTICE
OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE DEPOSIT SHALL BE
IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED TO REIMBURSE BUYER
FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR (B) CONTINUE THIS
AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE, IN WHICH LATTER EVENT
BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT RETURN OF THE DEPOSIT AND
SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE ABOVE THE DEPOSIT INTO ESCROW.
(ii) IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED AS A RESULT OF A DEFAULT BY
BUYER HEREUNDER, THEN, AS ITS SOLE AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE
DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S
DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER
NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES
EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY
PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF
THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT
BUYER'S INDEMNITY OBLIGATIONS UNDER SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR
SELLER'S OBLIGATIONS UNDER SECTIONS 6.1 OR 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever in accordance with
the terms of Section 2.2(b)(i), this Agreement shall immediately and
automatically terminate. Upon any termination of this Agreement pursuant to
this Section 2.2(d) or Section 2.3, no party shall have any further rights or
obligations hereunder, except as provided in Sections 4.6(a), 6.1, 9.4 and
9.10(a).
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Section 2.3 Due Diligence. Buyer has reviewed, accepted and approved
(and all representations and warranties of Seller made herein shall be subject
to and qualified by) all of the Due Diligence Materials. Notwithstanding
anything to the contrary herein, Seller shall have no liability whatsoever to
Buyer with respect to any matter disclosed to or actually known by Buyer or its
agents prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Property is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to the Property.
(b) All consents required to be obtained from, or filing required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Seller or the consummation by Seller
of the transactions contemplated hereby shall have been obtained or made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall be
used) with respect to the Real Property in the form of the title insurance
commitment (each, a "Title Commitment") obtained by Buyer from the Title Company
and delivered to Seller prior to the effective date, showing title to the Real
Property vested in Buyer, subject only to the Permitted Exceptions. It shall
not be a condition to Closing that Buyer obtain any endorsements or coverages
not set forth in the applicable Title Commitment. Seller shall be entitled, by
notice to Buyer, to adjourn the Closing one or more times for an aggregate
period not to exceed thirty (30) days in order to remove any exceptions to title
that are not Permitted Exceptions. Nothing contained herein shall require
Seller to bring any action or proceeding or otherwise to incur any expense to
correct, discharge or otherwise remove title exceptions or defects with respect
to the Property or to remove, remedy or comply with any other grounds for
Buyer's refusing to approve title, provided that Seller shall be obligated to
remove or discharge, or otherwise cause the Title Company to omit as an
exception to title or to insure against collection thereof from or against the
Property any mortgages or monetary liens created by Seller, any mechanics' liens
or judgment liens that are the obligation of Seller (as
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opposed to Tenant or other third party) and any liens and encumbrances
voluntarily created by Seller in violation of Section 7.1 (collectively, the
"Required Deletion Items"). If on the Closing Date there are any Required
Deletion Items, Seller may use any portion of the Purchase Price payable
pursuant to Section 2.2(b) to satisfy same, provided the Title Company shall
omit such lien or encumbrance as an exception to title.
(d) Buyer shall have received the estoppel certificate required by
Section 8.4.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
(g) Seller shall have substantially completed construction of the
"Lessor's Improvements" (as defined in the Existing Lease), excluding punch list
items, and the Commencement Date under (and as defined in) the Existing Lease
shall have occurred.
(h) GMH Development Group, Inc., Contractor under that certain
Design/Build and Development Agreement dated May 30th 1997 with Seller, shall
have delivered to Buyer a written acknowledgment that it has been paid all
amounts due and owing under such agreement other than final retainage amounts
and amounts on account of the completion of "punch list" items then remaining to
be completed as agreed upon with Seller.
(i) Subject to Buyer's rights under Section 7.1(b) below, Seller and
Tenant shall have executed and delivered a Lease Amendment Agreement to the
Existing Lease.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Property is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to the Property.
(b) All consents required to be obtained from, or filings required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of
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this Agreement by Buyer or the consummation by Buyer of the transactions
contemplated hereby shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
(f) Closing shall have occurred under each of the Related Purchase
Agreements in accordance with the respective terms thereof.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 [Intentionally omitted]
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Property or all, or
substantially all, of Seller's other assets, (iv) suffered the attachment or
other judicial seizure of the Property or all, or substantially all, of Seller's
other assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or composition to its
creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that are
to be delivered to Buyer at Closing (i) are, or at the time of Closing will be,
duly authorized, executed and delivered by Seller, (ii) do not, and at the time
of Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or the Property owned by Seller is
subject and (iii) constitute (or in the case of Closing documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of the Existing Lease, all material Contracts and all environmental and
structural reports in the
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possession of Seller. This representation shall not be deemed breached by
virtue of any Leases or Contracts entered into after the Effective Date in
accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, the Property and (ii) as of the Effective Date, Seller has not
received written notice from Tenant that Seller has not performed its material
obligations under the Existing Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty (60) days notice with respect to the Property (the
"Non-Terminable Contracts") are as set forth in Schedule 4.1.2 (the "Schedule of
Contracts") or as entered into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of the
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to the Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of the Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to the Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of the Property.
(m) Employees. Seller will have no employees at Closing, and any
employees of Seller existing on the date hereof shall have been terminated by
Seller prior to Closing in accordance with all applicable law, non-compliance
with which could result in a claim against Buyer. Buyer will not be responsible
for, nor assume any liabilities of Seller regarding, any such employees.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence
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Materials); (2) other than clauses (i) and (k) above (which, in the case of
clause (i) above, the parties acknowledge shall be governed by Section 7.7 with
respect to events occurring after the Effective Date) shall be deemed remade by
Seller, and shall be true in all material respects, as of the Closing Date
(except that any representations and warranties which are made as of a specified
date, shall have been true and correct as of such specified date) subject to
(A) the information disclosed in the Due Diligence Materials, (B) litigation
that is not reasonably likely to have a material adverse effect on the Property,
and (C) other matters expressly permitted in this Agreement or otherwise
specifically approved in writing by Buyer; and (3) shall survive the Closing
only as and to the extent expressly provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4 shall terminate to the extent specifically
confirmed by a tenant estoppel certificate delivered by Tenant.
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to the Property, the amount of such
Claims exceeds $150,000 ("Threshold Amount") and, in such case, such Claims
shall only be valid (and the Seller shall only be liable) for the portion that
exceeds the Threshold Amount; provided, however, notwithstanding any provision
to the contrary herein or in any Closing Document, the (i) total liability of
Seller for any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Seller pursuant to Section 8.4(a)) with respect the
Property shall not exceed two and three quarters percent (2.75%) of the Purchase
Price. Further notwithstanding any provision to the contrary herein or in any
Closing Document, Seller shall have no liability with respect to any Claim under
any of the representations and warranties contained in this Agreement or in any
Closing Document, which Claim relates to or arises in connection with (1) any
Hazardous Materials (except solely to the extent that Seller has breached its
representation in Section 4.1(k)), (2) the physical condition of the Property
(except solely to the extent that Seller has breached its representation in
Section 4.1(k)) or (3) any other matter not expressly set forth in the Seller's
representations and warranties set forth in Section 4.1. Buyer shall not make
any Claim or
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deliver any Claim Notice unless it in good faith believes the Claims would
exceed the Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement, the
representations and warranties of Seller contained herein or in any Closing
Document shall survive only until July 6, 1998. Any Claim that Buyer may have
at any time against Seller for a breach of any such representation or warranty,
whether known or unknown, with respect to which a Claim Notice has not been
delivered to Seller on or prior to July 6, 1998 shall not be valid or effective.
For the avoidance of doubt, on July 6, 1998, Seller shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Buyer, any Permitted Assignee and/or their
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the Property, except solely for those
matters that are then the subject of a pending Claim Notice delivered by Buyer
to Seller. Any Claim that Buyer may have at any time against Seller for a
breach of any such representation or warranty, whether known or unknown, with
respect to which a Claim Notice has been delivered to Seller on or prior to July
6, 1998 may be the subject of subsequent litigation brought by Buyer against
Seller, provided that such litigation is commenced against Seller on or prior to
October 6, 1998. For the avoidance of doubt, on October 6, 1998, Seller shall
be fully discharged and released (without the need for separate releases or
other documentation) from any liability or obligation to Buyer and/or its
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the Property, except solely for those
matters that are the subject of a litigation by Buyer against Seller that is
pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or the
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing Documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or
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substantially all, of Buyer's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Buyer's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally. As of
the Closing Date, Buyer will have sufficient funds to pay the Purchase Price and
consummate the transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied with such independent investigation (but the foregoing will
not constitute a waiver of any breach of representation or warranty set forth in
Section 4.1 unless such breach is disclosed in the Due Diligence Materials or is
otherwise known by Buyer and/or any Permitted Assignee before the Closing Date
and Buyer and/or such Permitted Assignee(s) elect to proceed with the Closing).
Such independent investigation by Buyer may include, without limitation:
(i) all matters relating to title to the Property;
(ii) all matters relating to governmental and other legal
requirements with respect to the Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
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(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Real Property;
(iv) the physical condition of the Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of the Real
Property, including the presence or absence of Hazardous Materials;
(v) any easements and/or access rights affecting the Real
Property;
(vi) the Leases with respect to the Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
significance affecting the Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of the Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Property and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, the Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of the Real Property;
(ii) [intentionally deleted];
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for the Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
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(vi) to the extent in the possession of Seller or Seller's
property manager, reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under the
Real Property and the compliance of the Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys; and
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
the Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to the Real
Property.
(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Property and the Due Diligence Materials and
has obtained, reviewed and approved a Title Commitment for the Property, (ii) it
is acquiring the Property based on such independent investigation and subject to
all information disclosed in the Due Diligence Materials (and also in reliance
on Seller's representations and warranties contained herein) and (iii) Buyer
shall have no right to terminate this Agreement based on any further
investigations of the Property or the Due Diligence Materials. Buyer has
approved each and every aspect of the Property. The preceding sentence is not
intended to relieve, and shall not relieve, Seller from any of its obligations
under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE THE PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING THE PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of the Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of the Real Property or the square footage of
the Improvements thereon or of any tenant space therein, (iii) the development
or income potential, or rights of or relating to, the Real Property, or the Real
Property's use, habitability, merchantability, or fitness, or the suitability,
value or
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adequacy of the Real Property for any particular purpose, (iv) the zoning or
other legal status of the Real Property or any other public or private
restrictions on the use of the Real Property, (v) the compliance of the Real
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any Governmental
Authority or of any other person or entity (including, without limitation, the
Americans with Disabilities Act), (vi) the ability of Buyer to obtain any
necessary governmental approvals, licenses or permits for Buyer's intended use
or development of the Real Property, (vii) the presence or absence of Hazardous
Materials on, in, under, above or about the Real Property or any adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
Improvements, (ix) the condition of title to the Real Property, (x) the Leases,
Contracts or any other agreements affecting the Real Property or the intentions
of any party with respect to the negotiation and/or execution of any lease or
contract with respect to the Real Property, (xi) Seller's ownership of the
Property or any portion thereof or (xii) the economics of, or the income and
expenses, revenue or expense projections or other financial matters, relating
to, the operation of the Real Property. Without limiting the generality of the
foregoing, except as otherwise set forth herein, Buyer expressly acknowledges
and agrees that Buyer is not relying on any representation or warranty of
Seller, nor any partner, officer, employee, attorney, agent or broker of Seller,
whether implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Buyer. Buyer further acknowledges and agrees that Seller is under no
duty to make any inquiry regarding any matter that may or may not be known to
Seller or any partner, officer, employee, attorney, agent or broker of Seller.
This Section 4.5(d) shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF THE PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto the Real Property, Buyer shall give
Seller reasonable advance notice of such entry and shall conduct such entry and
any inspections in connection therewith so as to minimize, to the greatest
extent possible, interference with Seller's business and the business of the
Tenants
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and otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any necessary on-site testing, Buyer
shall give Seller written notice thereof, including the identity of the company
or persons who will perform such testing and the proposed scope of the testing
and the party performing the testing. Seller shall approve or disapprove any
proposed testing and the party performing the same within three (3) Business
Days after receipt of such notice. If a Buyer Party takes any sample from the
Real Property in connection with any such approved testing, Buyer shall provide
to Seller a portion of such sample being tested to allow Seller, if it so
chooses, to perform its own testing. Seller or its representative may be
present to observe any testing, or other inspection performed on the Real
Property. Buyer shall promptly deliver to Seller copies of any reports relating
to any testing or other inspection of the Real Property performed by or on
behalf of any Buyer Party. Buyer shall maintain, and shall ensure that its
contractors maintain, public liability and property damage insurance insuring
the Buyer Parties against any liability arising out of any entry or inspections
of the Real Property pursuant to the provisions hereof. Such insurance
maintained by Buyer shall be in the amount of Ten Million Dollars ($10,000,000)
combined single limit for injury to or death of one or more persons in an
occurrence, and for damage to tangible property (including loss of use) in an
occurrence. The policy maintained by Buyer shall insure the contractual
liability of Buyer covering the indemnities herein and shall (i) name Seller
(and their successors, assigns and Affiliates) as additional insureds,
(ii) contain a cross-liability provision, and (iii) contain a provision that
"the insurance provided by Buyer hereunder shall be primary and noncontributing
with any other insurance available to Seller." Buyer shall provide Seller with
evidence of such insurance coverage prior to any entry or inspection of the Real
Property. Buyer shall indemnify and hold the Seller Parties harmless from and
against any Claims arising out of or relating to any entry on the Real Property
by any Buyer Party, in the course of performing any inspections, testings or
inquiries. The foregoing indemnity shall survive the Closing, or, if the
Closing does not occur, beyond the termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of the Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, the Real Property discovered by Buyer's
environmental testing, Buyer shall first provide prior written notice to Seller
and shall not contact any Governmental Authority except in conjunction with
Seller. In addition, if Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
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Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for
itself and any successors and assigns of Buyer (including, without
limitation, any Permitted Assignee), waives its right to recover from, and
forever releases and discharges, and covenants not to sue, Seller, Seller's
Affiliates, Seller's asset manager, any lender to Seller, the partners,
trustees, shareholders, LLC members, controlling persons, directors,
officers, attorneys, employees and agents of each of them, and their
respective heirs, successors, personal representatives and assigns (each a
"Seller Party", and collectively, the "Seller Parties") with respect to any
and all Claims, whether direct or indirect, known or unknown, foreseen or
unforeseen, that may arise on account of or in any way be connected with the
Property including, without limitation, the physical, environmental and
structural condition of the Real Property or any law or regulation applicable
thereto, including, without limitation, any Claim or matter relating to the
use, presence, discharge or release of Hazardous Materials on, under, in,
above or about the Real Property; provided, however, Buyer does not waive its
rights, if any, to recover from, and does not release or discharge or
covenant not to sue Seller for (i) any act that is found by a court of
competent jurisdiction to constitute fraud, (ii) any breach of Seller's
representations or warranties set forth in Section 4.1 or in Seller's
estoppel certificate delivered pursuant to Section 8.4, subject to the
limitations and conditions provided in this Agreement, or (iii) any breach of
Seller's obligations set forth in this Agreement that expressly survive
Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for the Property. A copy of each Title Commitment delivered to
Buyer has been delivered to Seller and its counsel. At the Closing, as a
condition precedent to Buyer's obligation to close, Seller shall have
delivered to Buyer a deed for the Property in the form of Exhibit A (each, a
"Deed"), each subject to no exceptions other than the following (the
"Permitted Exceptions"):
(i) Interests and rights of Tenant under the Existing Lease,
including, without limitation, those Tenant purchase rights listed on
Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special
improvement district or local improvement district bonds);
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(iii) Any exceptions, exclusions and other matters set forth
in or disclosed by the Title Commitment for the Real Property or other
documents made available to Buyer and any other exceptions to title that
would be disclosed by an inspection and/or survey of the Real Property,
including those disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer.
(v) Any lien or encumbrance encumbering the Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling
the same;
(vi) Such other exceptions as the Title Company shall commit
to insure over in a manner reasonably satisfactory to Buyer, without any
additional cost to Buyer, whether such insurance is made available in
consideration of payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to the Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance
with the foregoing shall be evidenced by the Title Company issuing, or to
committing to issue, at Closing, upon payment of the applicable premium
therefor, a 1992 ALTA Owner's Policy of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a
1992 ALTA Owner's Policy, such other required form shall be used) in the
amount of the Purchase
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Price showing title to the Property vested in Buyer or its Permitted Assignee
or designee, subject only to the Permitted Exceptions (the "Title Policy").
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to
each other that no broker or finder was instrumental in arranging or bringing
about this transaction and that there are no claims or rights for brokerage
commissions or finders' fees in connection with the transactions contemplated
hereby by any person or entity. If any person brings a claim for a commission
or finder's fee based upon any contact, dealings or communication with Buyer
or Seller, then the party through whom such person makes its claim shall
defend the other party (the "Indemnified Party") from such claim, and shall
indemnify the Indemnified Party and hold the Indemnified Party harmless from
any and all costs, damages, claims, liabilities or expenses (including
without limitation, reasonable attorneys' fees and disbursements) incurred by
the Indemnified Party in defending against the claim. The provisions of this
Section 6.1 shall survive the Closing or, if the Closing does not occur, any
termination of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will (i) substantially perform its obligations under
the Existing Lease, (ii) operate, maintain, repair and lease the Real
Property in the ordinary course, on an arm's-length basis and consistent with
Seller's past practices and (iii) will not dispose of or encumber the
Property, except for dispositions of personal property in the ordinary course
of business or as otherwise permitted by Section 7.1 or Section 7.3. Without
limiting the foregoing, Seller shall, in the ordinary course, enforce the
Existing Lease in all material respects, perform in all material respects all
of landlord's obligations under the Lease and pay all costs and expenses of
the Property, including without limitation debt service and Real Estate Taxes.
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(b) Seller shall not, without the Buyer's consent, amend or modify
the Existing Lease. Any consent to be given by Buyer pursuant to this
Section 7.1(b) shall not be unreasonably withheld or delayed and shall be
deemed granted if Buyer does not respond in writing to Seller's request for
consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating
agreement or any contract, agreement or other commitment of any sort
(including any contract for capital items or expenditures, but excluding any
liens or other encumbrances on title other than Permitted Exceptions), with
respect to the Property that (A) will survive Closing, (B) requires payments
to or by Seller in excess of $50,000 per annum, or the performance of
services by Seller the value of which is in excess of $50,000 per annum and
(C) is not terminable without cause and without penalty on thirty (30) days'
notice or less; provided that Seller, in its good faith but sole discretion,
believes such contract is on market terms and will benefit the Property. At
least three (3) Business Days prior to becoming legally bound with respect to
any such matter, Seller shall consult with and seek the consent of Buyer, and
shall provide reasonable detail to Buyer (including, at Buyer's request,
copies of the relevant documentation), with respect thereto. Any consent to
be given by Buyer pursuant to this Section 7.1(c) shall not be unreasonably
withheld or delayed and shall be deemed granted if Buyer does not respond in
writing to Seller's request for consent within three (3) Business Days.
(d) Except for agreements entered into in accordance with this
Section 7.1, Seller shall not enter into any agreement to create a lien or
encumbrance on the Property without Buyer's prior written consent (which
consent shall not be unreasonably withheld or delayed with respect to any
utility or similar easement necessary for the operation of a Property, and
which shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell the Property or portion thereof without
Buyer's prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting the Property (other than Contracts terminable on 30
days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
Section 7.2 [Intentionally omitted.]
Section 7.3 Seller's Maintenance of the Property. Between the
Effective Date and the Closing Date, Seller shall (a) cause the Contractor to
substantially perform its obligations under the Construction Contract; (b)
continue to maintain its existing insurance coverage; and (c)
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not grant any voluntary liens or encumbrances affecting the Property other
than Permitted Exceptions of the type described in clauses (i) and (ix) of
Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of
Section 7.1, prior to the Closing Date, Seller shall have the right, but not
the obligation, to enforce the rights and remedies of the landlord under the
Existing Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or
damage incurred by Seller by reason of any defaults by Tenant.
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of Tenant or the termination of the Existing Lease or the removal of
Tenant by reason of a default by Tenant (by summary proceedings or otherwise)
or by operation of the terms of the Existing Lease or New Lease shall not
affect the obligations of Buyer under this Agreement in any manner or entitle
Buyer to a reduction in, or credit or allowance against, the Purchase Price
or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to Tenant. Such notice shall disclose
that the Property has been sold to Buyer and that, after the Closing, all
rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Property for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
Real Property or destruction of any improvements thereon or condemnation of
any portion of the Property, provided that upon the Closing, there shall be a
credit against the Purchase Price due hereunder equal to the amount of any
insurance proceeds or condemnation awards collected by Seller as a result of
any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or
repair of the Property. Seller has provided Buyer with a certificate of
insurance for Seller's casualty insurance policy so that Buyer can confirm
its satisfaction with such policy. Seller agree that it will maintain such
policy in full force and effect until the Closing. If the proceeds or awards
have not been collected as of the Closing, then such proceeds or awards shall
be assigned to Buyer, except to the extent needed to reimburse Seller for
sums it reasonably expended prior to the Closing for the restoration or
repair of the Property. Notwithstanding the foregoing, (i) Seller shall not
settle, compromise or otherwise stipulate any award or recovery in connection
with any damage, destruction or condemnation, in each case if such damage,
destruction or condemnation impairs the value of the Property by at least
$250,000 without the prior written approval of Buyer, which approval shall
not be unreasonably withheld, (ii) Buyer shall have the right to participate
in any such settlement or other proceedings, and (iii) if the amount of the
damage or destruction as described in this Section 7.7 exceeds ten percent
(10%) of the Purchase Price, then Buyer may, at its option to be exercised
within five (5)
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Business Days of Seller's written notice of the occurrence of the damage or
destruction, either terminate this Agreement or consummate the purchase for
the full Purchase Price as required by the terms hereof. If Buyer elects to
terminate this Agreement, then the Deposit shall be immediately returned to
Buyer and neither party shall have any further rights or obligations
hereunder except to the extent set forth in Sections 4.6(a), 6.1, 9.4 and
9.10(a). If Buyer elects to proceed with the purchase, then upon the
Closing, Buyer shall be entitled to a credit against the Purchase Price and
shall receive an assignment of any uncollected proceeds or awards, all as set
forth in this Section 7.7 above. The provisions of this Section 7.7 shall
survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation,
environmental, zoning or other land-use regulation proceedings relating to
the Property of which Seller obtains actual knowledge by written notice, any
notices of violations of any legal requirements relating to the Property
received by Seller, any litigation of which Seller obtains actual knowledge
by written notice that arises out of the ownership of the Property unless
fully covered by insurance (subject to customary deductibles), and any other
matters within the actual knowledge of Daniel Jagoe or Robert Nowicki and
that would materially affect Seller's representations and warranties
hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement
with the Title Company, and this instrument shall serve as the instructions
to the Title Company as the escrow holder for consummation of the purchase
and sale contemplated hereby. Seller and Buyer agree to execute such
reasonable additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control, unless a contrary intent is expressly
indicated in such supplementary instructions.
Section 8.2 Closing. The Closing hereunder shall be held and
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the offices of Seller's counsel (or such other
location as the parties may agree) at 10:00 A.M. (Eastern Standard Time) on
February 18, 1998 or such earlier or later date and time as Buyer and Seller
may mutually agree upon in writing (the "Closing Date"), in either case, with
time being of the essence. Except as otherwise permitted under this
Agreement, such date and time may not be extended without the prior written
approval of both Seller and Buyer.
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Section 8.3 Deposit of Documents.
(a) On or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location
as the parties may agree) Seller shall deposit into escrow with the Title
Company the following items (pursuant to escrow instructions reasonably
acceptable to Seller and Buyer):
(i) a duly executed and acknowledged Deed for the Real Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale in the form
attached hereto as Exhibit E (each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and
Assumption of Leases in the form attached hereto as Exhibit F (each, an
"Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and
Assumption of Contracts, Warranties and Guaranties and Other Intangible
Property in the form attached hereto as Exhibit G (each, an "Assignment of
Contracts");
(vii) a duly executed counterpart of an agreement designating
the Title Company as the "Reporting Person" for the transaction contemplated
hereby pursuant to Section 6045(e) of the Federal Code and the regulations
promulgated thereunder, substantially in the form of Exhibit H attached
hereto (the "Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable
state and local law in connection with the conveyance of the Property;
(ix) the Seller's affidavit to the Title Company, in the form
of Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code,
and on which Buyer is entitled to rely, that Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
(b) On or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into
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escrow with the Title Company the following items (pursuant to escrow
instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate
and Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with
the conveyance of the Property.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in
accordance with the wiring instructions set forth on Schedule 2.2.1) in an
amount equal to the sum of (i) the Purchase Price and (ii) the amount (if
any) of the costs, expenses and adjustments payable by Buyer under this
Agreement. The amount of the funds to be wired to the Title Company's escrow
account shall be reduced by the Deposit (including all interest thereon).
After Seller's confirmation of receipt of the Purchase Price (as reduced by
the costs, expenses, prorations and adjustments payable by Seller under this
Agreement) by wire transfer of federal funds by the Title Company to one or
more accounts designated by Seller: (i) the Title Company shall be authorized
to record the Deed for the Real Property, (ii) the Title Company shall
deliver to Buyer all other documents and instruments received by it which, in
accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with
the terms of this Agreement are to be delivered by Buyer to Seller on the
Closing Date. Buyer and Seller shall each deposit such other instruments as
are reasonably required by the Title Company or otherwise required to close
the escrow and consummate the purchase and sale of the Property in accordance
with the terms hereof; provided, that Seller shall not be required to provide
any indemnities or affidavits or to escrow any funds other than the Seller's
Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence
files of the Real Property in Seller's possession, a set of keys to the Real
Property and originals (or copies, if originals are not
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available) of any other items in Seller's possession relating to the use,
ownership, operation, maintenance, leasing, repair, alteration, management or
development of the Real Property, on the Closing Date (at such location as
Buyer and Seller shall mutually agree). Following the Closing, Buyer shall
make all Leases, Contracts, other documents, books, records and any other
materials in its possession, to the extent the same relate to the period of
Seller's ownership of the Property, available to Seller or its
representatives for inspection and/or copying at Buyer's offices (at Seller's
sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from the Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the event that any Tenant is unwilling to sign the
form attached hereto as Exhibit J. It shall be a condition to Buyer's
obligation to close the sale and purchase of the Property that on or before
the Closing Seller delivers to Buyer such tenant estoppel certificate
substantially in the form attached hereto as Exhibit J (or in the Prescribed
Form, if applicable). If Seller is unable to obtain the aforesaid tenant
estoppel certificates from Tenants, Seller may, but shall not be obligated
to, provide a certificate to Buyer, with respect to such missing estoppel
certificates, as chosen by Seller, to the effect that (except as disclosed in
the Due Diligence Materials or in the Lease): (i) to Seller's knowledge the
Lease is in full force and effect; (ii) the amount of the Tenants' or
Significant Tenants' security deposits; (iii) the dates through which rent
has been paid; (iv) neither Seller nor, to Seller's knowledge, any of those
Tenants or Significant Tenants (as the case may be) is in default thereunder;
(v) a true, correct and complete copy of the Leases are attached; (vi) the
Lease expires on the date specified and is not subject to any renewal or
extension options, except as specified, and (viii) there are no options to
purchase or rights of first refusal except as specified. Buyer shall be
obligated to accept Seller's certification in lieu of any missing estoppel
certificate. Seller's representations and warranties in the certificate
shall survive the Closing, provided that (i) Buyer must give Seller a Claim
Notice with respect to any claim it may have against Seller for a breach of
any such representation and warranty by July 6, 1998, and must commence
litigation (if any) relating to such Claim Notice not later than October 6,
1998 (and any claim that Buyer may have that is not so asserted, or
litigation by Buyer that is not so commenced, shall be barred and not be
valid or effective and Seller shall have no liability whatsoever with respect
thereto) and (ii) any certificate delivered by Seller pursuant to this
Section 8.4 shall cease to survive the Closing to the extent specifically
confirmed by a tenant estoppel certificate delivered by Tenant. In no event
shall the minimum thresholds to Buyer's recovery set forth in Section 4.3(a)
apply to any certificates delivered by Seller (but Buyer's recovery under any
such certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
Section 8.5 Prorations.
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(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on the Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement; annual permits and/or inspection fees
(calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of the Property (other
than any Leasing Costs and free rent which shall be prorated as provided in
Section 7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on
the Closing Date, on the basis of a 365-day year, with Buyer deemed the owner
of the Property on the entire Closing Date. Rent which is due but
uncollected as of the Closing Date shall not be adjusted. On the Closing
Date, Seller shall deliver to Buyer a schedule of all such past due but
uncollected rent owed by tenants. Buyer agrees to cause the amount of such
rental arrears to be included in the first bills thereafter submitted by
Buyer to such tenants after the Closing Date. Any rents collected from a
tenant after the Closing Date shall be applied first to the month in which
the Closing Date occurs, next to any rents payable by such tenant after the
Closing Date and thereafter to any arrearage owed by such tenant on the
Closing Date in the inverse order of maturity. Additional rent payments (and
estimated additional rent payments) actually paid by tenants prior to Closing
attributable to real estate taxes and operating costs shall be adjusted as of
the Closing Date. Additional rent payments (and estimated additional rent
payments) attributable to real estate taxes and operating costs to be paid by
tenants after the Closing shall be adjusted upon receipt by Buyer. The
adjustments of additional rent payments shall be based upon the number of
days in the period for which such payment relates that are before or after
the Closing Date. In no event will Buyer be entitled to receive any payments
on or under the promissory notes or other agreements referred to in Section
8.7. Buyer shall use reasonable efforts until October 6, 1998 to collect any
delinquent rents that accrued prior to the Closing Date (but Seller shall
have the right to commence and pursue litigation against Tenant to collect
delinquent rents and/or expense reimbursements, provided that Seller may not
seek as a remedy in any such litigation the termination of any Leases or the
dispossession of Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to
be returned to Tenants under Leases shall be credited against the Purchase
Price (and Seller shall be entitled to retain such security deposits). In
the event the Property has been assessed for property taxes purposes at such
rates as would result in reassessment (i.e., "escape assessment" or
"roll-back taxes") based upon the change in land usage or ownership of the
Property resulting from or after the consummation of the transactions
described in this Agreement, as between Buyer and Seller,
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Buyer hereby agrees to pay all such taxes and to indemnify and save Seller
harmless from and against all claims and liability for such taxes. Such
indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other
party a sum of money based on proration(s) calculated after the Closing Date
shall promptly pay said sum to the other party, together with interest
thereon at the rate of two percent (2%) per annum over the Prime Rate from
the Closing Date to the date of payment, if payment is not made within ten
(10) days after delivery of a bill therefor. If the real estate and/or
personal property tax rate and assessments have not been set for the calendar
year in which the Closing occurs, then the proration of such taxes shall be
based upon the rate and assessments for the preceding calendar year, and such
proration shall be adjusted between Seller and Buyer as soon as reasonably
practicable after such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer
shall permit Seller and its representatives and auditors during regular
business hours and upon reasonable prior written notice to have reasonable
access to the books and records in the possession of Buyer or any party to
whom Buyer has given custody of the same relating to the Property to permit
Seller to review Buyer's proration statements. Seller shall have sixty (60)
days after receipt of Buyer's calculations to accept or contest such
prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all
endorsements thereto, and Surveys and Survey updates, and all costs of any
appraisal, engineering and environmental reports not delivered by Seller.
Buyer and Seller shall divide evenly and pay all transfer, recordation,
excise and deed taxes payable with respect to this transaction. Seller and
Buyer shall each be responsible for paying their respective attorneys' fees
and costs. Buyer and Seller agree that, given the de minimis amount of
Personal Property included within the Property, no portion of the Purchase
Price is allocable or attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Property in a
manner (or otherwise take a position) inconsistent with the Purchase Prices
set forth herein.
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(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and
retain any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5
shall survive the Closing until October 6, 1998 (except with respect to
prorations of taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby
authorized, but not obligated, to (a) commence (prior to the Closing Date) or
continue (after the Effective Date and after the Closing Date) any proceeding
for the reduction of the assessed valuation of the Property for any tax year
which, in accordance with the laws and regulations applicable to the
Property, requires that, to preserve the right to bring a tax certiorari
proceeding with respect to such tax year, such proceeding be commenced prior
to the Closing Date and (b) endeavor to settle any such proceeding in
Seller's discretion. After the Closing, with respect to the Property, (i)
Seller shall retain all rights (subject to any rights of Tenants under their
Leases) with respect to any tax year ending prior to the tax year (and all
refunds relating thereto) in which the Closing Date occurs, and shall have
the sole right to participate in and settle any proceeding relating thereto
(provided, that such settlement does not affect the assessed tax value for
any subsequent tax year), and (ii) Buyer shall have all rights (subject to
any rights of Tenants under their Leases) with respect to any tax year (and
all refunds relating thereto) which ends after the Closing Date; provided,
however, that if the proceeding is for a tax year in which the Closing Date
occurs, such settlement shall not be made without Buyer's prior consent,
which consent shall not be unreasonably withheld or delayed. With respect to
any such proceeding for a tax year in which the Closing Date occurs (whether
commenced by Seller or Buyer), any refund or credit of taxes for such tax
year shall be applied first to the unreimbursed out-of-pocket expenses,
including reasonable counsel fees, necessarily incurred in obtaining such
refund or credit, and second, to Tenant entitled to same, and the balance
shall be apportioned between Seller and Buyer as of the Closing Date in
accordance with the proportion of the applicable tax year occurring before
and after the Closing Date. In each case, the party which prosecuted the
proceeding shall deliver to the other copies of receipted tax bills and any
decision or settlement agreement evidencing the reduction in taxes. If any
refund shall be received by Seller which is for the account of Buyer as
provided in this Section 8.6, then Seller shall hold Buyer's share thereof in
trust for Buyer and, promptly upon receipt thereof, pay such share to Buyer
or any other party entitled to same as provided above. If any refund shall
be received by Buyer which is for the account of Seller as provided in this
Section 8.6, then Buyer shall hold Seller's share thereof in trust for Seller
and, promptly upon receipt thereof, pay such share to Seller or any other
party entitled to same as provided above. Each party shall execute any and
all consents or other documents as may be reasonably necessary to be executed
by such party so as to permit the other party to commence or continue any tax
certiorari proceeding which such other party is authorized to commence or
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<PAGE>
continue pursuant to the terms of this Section 8.6, or to collect any refund
or credit with respect to any such tax proceeding. The provisions of this
Section 8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein
that may be construed to the contrary (including, without limitation, Section
8.5), promissory notes or other agreements (other than the Leases) delivered
to Seller that evidence, deal with or otherwise relate solely to a Tenant's
rental or expense reimbursement obligations under its Lease that, as of the
Closing Date, are or were past due, shall not be conveyed to Buyer and shall
be retained by Seller. Seller agrees that in enforcing its rights against
Tenants under any such promissory notes or other agreements, Seller will not
seek to exercise any remedies that may be available to it under the affected
Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's
audited financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b)
by certified mail, postage prepaid, return receipt requested, (c) by a
commercial overnight courier that guarantees next day delivery and provides a
receipt, or (d) by legible facsimile (followed by hard copy delivered in
accordance with preceding subsections (a)-(c)), and such notices shall be
addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: 15 North 32nd Associates
c/o GMH Associates, Inc.
33
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353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
with a copy to: Reed Smith Shaw & McClay
2500 One Liberty Place
1650 Market Street
Philadelphia, PA 19103-7301
Attention: Stephen M. Lyons, III
Facsimile No.: (215) 851-1420
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt
(or refusal by the intended recipient to accept delivery). Notices may be
given by attorneys for the notifying partner.
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains
all representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect
to the subject matter hereof. Any correspondence, memoranda or agreements
between the parties, including, without limitation, or any oral or written
statements made by Seller, its Affiliates, employees or agents, are not
binding on or enforceable against any party, and are superseded and replaced
in total by this Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of
each of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs
and expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without
limitation, court costs (including costs of any trial or appeal therefrom)
and reasonable attorneys' fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with
the transfer of title to the Property but shall remain in effect until
fulfilled.
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Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate
any Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the
case may be, of one or more of the Property and Seller shall convey at
Closing the Property (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including
the obligations to pay the Purchase Price at Closing and to indemnify Seller
and the other Seller Parties in accordance with the terms hereof. Subject to
the limitations described herein, this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES RECOGNIZE
THAT IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN ASPECTS OF
THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE THE PURCHASE AND SALE OF THE
PROPERTY PURSUANT HERETO. THE PARTIES AGREE TO COMPLY WITH SUCH OTHER LAWS
TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE AND SALE OF THE PROPERTY.
IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO
THE PROPERTY IN A MANNER THAT RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving
this Agreement, Buyer and Seller hereby expressly submit to the jurisdiction
of all federal and state courts sitting in the Commonwealth of Pennsylvania
and consent that any order, process, notice of motion or other application to
or by any such court or a judge thereof may be served within or without such
court's jurisdiction by registered mail or by personal service, provided that
a reasonable time for appearance is allowed, and Buyer and Seller agree that
such courts shall have the exclusive jurisdiction over any such suit, action
or proceeding commenced by any party. In furtherance of such agreement,
Buyer and Seller agree upon the request of the other party to discontinue (or
agree to the discontinuance of) any such suit, action or proceeding pending
in any other jurisdiction.
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(c) Buyer and Seller each hereby irrevocably waive any objection
that it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement brought in any
federal or state court sitting in the Commonwealth of Pennsylvania and hereby
further irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON,
UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS,
DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF
THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s)
and their Affiliates and representatives for review and inspection, Buyer (on
behalf of itself, any Permitted Assignee(s), and their respective Affiliates
and representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Property, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Property as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
36
<PAGE>
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Property and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing
it shall not issue any press release or public statement (a "Release") with
respect to the transactions
37
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contemplated by this Agreement without the prior consent of all parties to
this Agreement, except to the extent required by law or the regulations of
the Securities and Exchange Commission or the New York Stock Exchange, and
(ii) after the Closing, any Release issued by Seller or Buyer shall be
subject to the review and approval of all such parties (which approval shall
not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to
the issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release,
Buyer cannot release any information concerning Seller without Seller's prior
written consent.
(c) Seller agrees for a period of one (1) year after the Closing
Date not to disclose capitalization rates and rates of return relating to the
Property (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member, partner, officer, director or
employee of Seller or counsel to or accountants of Seller solely for their
use and on a need-to-know basis, provided that such Persons are notified of
Seller's confidentiality obligations hereunder, (b) with the prior consent of
Buyer, or (c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request
and (iii) if disclosure is required or deemed advisable, reasonably cooperate
with Buyer (at no cost to Seller) in any attempt it may make to obtain an
order or other assurance that confidential treatment will be accorded such
Confidential Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and
shall not be construed to affect the meaning of any provision contained
herein. Where the context so requires, the use of the singular shall include
the plural and vice versa and the use of the masculine shall include the
feminine and the neuter. The term "person" shall include any individual,
partnership, joint venture, corporation, trust, limited liability company,
unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any
memorandum or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
38
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Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held
by a court of competent jurisdiction to be invalid, unenforceable or void,
the remainder of this Agreement and such provisions as applied to other
persons, places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract with respect to the purchase
and sale of the Property. The parties shall be legally bound with respect to
the purchase and sale of the Property pursuant to the terms of this Agreement
only if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully
executed and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such other documents and do any and all other acts as may be
necessary to carry out the intent and purpose of this Agreement.
Section 9.18 [Intentionally omitted]
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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 Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind
Buyer and Seller as if they had executed the same counterpart.
39
<PAGE>
[Signatures on following page]
40
<PAGE>
The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: -------------------------------------------
Gerard H. Sweeney
President
Seller: BOWPL PARK, LLC
15 NORTH 32ND ASSOCIATES,
a Pennsylvania limited partnership
By: GENERAL ELECTRIC CREDIT
EQUITIES, INC. its general partner
By: -------------------------------------------
Name:
Title
41
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EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $817,500 (the "Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and BOWPL Park, LLC ("Seller"), the provisions of which
(including, without limitation, the defined terms) are hereby incorporated
herein by reference. The Deposit shall be paid to Seller by Escrowee at the
time of Closing under the Agreement, or if Closing does not take place,
distributed in accordance with the terms of the Agreement. Escrowee shall,
immediately upon receipt of the Deposit, deposit same in an interest bearing,
money market type escrow account with a federally insured bank or savings and
loan association located in Philadelphia, Pennsylvania. All interest which
shall accrue on the Deposit shall be in accordance with the Agreement.
Escrowee shall pay such interest to such party contemporaneously with
Escrowee's payment of the Deposit. Seller and Buyer agree that Escrowee is
an escrow holder only and is merely responsible for the safekeeping of the
Deposit and interest and shall not be required to determine questions of fact
or law. If Escrowee shall receive notice of a dispute as to the disposition
of the Deposit or the interest, then Escrowee shall not distribute the
Deposit or interest except in accordance with written instructions signed by
both Buyer and Seller. Pending resolution of any such dispute, Escrowee is
authorized to pay the Deposit and interest into court. If Escrowee pays the
Deposit and interest into court, it shall be discharged from all further
obligations hereunder. This Escrow Agreement shall be governed by the laws
of the state of New York.
Seller's Federal Tax ID Number is 23-2899025.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable
consideration, each intending to be legally bound and to bind their
respective successors and assigns, have caused this Escrow Agreement to be
executed and delivered as of _______________.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: -------------------------------------------
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: -------------------------------------------
Gerard H. Sweeney
President
Seller: BOWPL PARK, LLC
15 NORTH 32ND ASSOCIATES,
a Pennsylvania limited partnership
By: GENERAL ELECTRIC CREDIT
EQUITIES, INC. its general partner
By: -------------------------------------------
Name:
Title
<PAGE>
Exhibit 10.8
AGREEMENT OF PURCHASE AND SALE
BETWEEN
LINDEN PARK LIMITED PARTNERSHIP
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.......................................................1
Section 1.2 Terms Generally...................................................6
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale..............................................................6
Section 2.2 Purchase Price....................................................7
Section 2.3 Due Diligence.....................................................9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase......................9
Section 3.2 Conditions to Seller's Obligations to Sell.......................11
Section 3.3 Termination......................................................11
Section 3.4 Waiver by Buyer..................................................12
Section 3.5 [Intentionally Omitted]..........................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller.........................12
Section 4.2 Estoppels........................................................14
Section 4.3 Limitation on Claims; Survival of Representations and Warranties.14
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Section 4.4 Representations and Warranties of Buyer..........................16
Section 4.5 Buyer's Independent Investigation................................17
Section 4.6 Entry and Indemnity; Limits on Government Contacts...............20
Section 4.7 Release..........................................................21
ARTICLE V
TITLE
Section 5.1 Conveyance of Title..............................................22
Section 5.2 Evidence of Title................................................23
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers..........................................................24
Section 6.2 Expenses.........................................................24
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property...............................24
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent......26
Section 7.3 Seller's Maintenance of the Property............................26
Section 7.4 Lease Enforcement................................................26
Section 7.5 Lease Termination Prior to Closing...............................27
Section 7.6 Tenant Notices...................................................27
Section 7.7 Risk of Loss and Insurance Proceeds..............................27
Section 7.8 Notifications....................................................28
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions..............................................28
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<PAGE>
Section 8.2 Closing..........................................................28
Section 8.3 Deposit of Documents.............................................29
Section 8.4 Estoppel Certificates............................................31
Section 8.5 Prorations.......................................................32
Section 8.6 Tax Certiorari Proceedings.......................................34
Section 8.7 Tenant Obligations...............................................35
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..........................................................36
Section 9.2 Entire Agreement.................................................37
Section 9.3 Time.............................................................37
Section 9.4 Attorneys' Fees..................................................37
Section 9.5 No Merger........................................................37
Section 9.6 Assignment.......................................................37
Section 9.7 Counterparts.....................................................37
Section 9.8 Governing Law; Jurisdiction and Venue............................38
Section 9.9 Waiver of Trial by Jury..........................................38
Section 9.10 Confidentiality and Return of Documents.........................39
Section 9.11 Interpretation of Agreement.....................................41
Section 9.12 Amendments......................................................41
Section 9.13 No Recording....................................................41
Section 9.14 No Third Party Beneficiary......................................41
Section 9.15 Severability....................................................41
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract....41
Section 9.17 Further Assurances..............................................42
Section 9.18 [Intentionally Omitted].........................................42
Section 9.19 Exculpation.....................................................42
Section 9.20 Counterparts....................................................42
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<PAGE>
EXHIBITS
EXHIBIT A Real Property DEED
EXHIBIT B [INTENTIONALLY OMITTED ]
EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTION
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
-iv-
<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between Linden Park Limited Partnership, a Delaware limited
partnership ("Seller"), and Brandywine Operating Partnership, L.P., a
Delaware limited partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
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"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its
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representatives on or about November 21, 1997 and on-site materials made
available to Buyer for inspection.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leases" shall mean all Existing Leases and New Leases, collectively.
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"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering the Real Property which are entered into after the
Effective Date in accordance with the terms of this Agreement, as the same
may be amended or modified from time to time in accordance with the terms
of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property shall have the meaning set forth in Section 2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property"shall have the meaning set forth in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
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"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering the Property.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
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(c) any consent, determination, election or approval required to
be obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise
of such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's
right, title and interest in and to the following: (a) each parcel of land
described in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified
as being owned by Seller on Schedule 2.1.1, together with any and all rights,
privileges and easements appurtenant thereto owned by Seller (including any
rights of Seller as declarant), together with all buildings, improvements and
fixtures (other than fixtures owned or removable by any Tenant or third
party) located thereon (collectively, the "Improvements"; each Fee Parcel,
together with the Improvements thereon, the "Real Property"; (b)
[intentionally omitted]; (c) all tangible personal property not owned or
removable by any Tenant or third party, if any, located on the Real Property
and owned by Seller and used in the operation or maintenance of the Real
Property (the "Personal Property"); (d) (i) Seller's interest, as landlord,
owner or licensor, in each of the Existing Leases, (ii) Seller's interest, as
landlord, owner or licensor, in any New Leases and (iii) to the extent
assignable, any guarantees, letters of credit or other instruments that
secure or guarantee the performance of the obligations of each Tenant; (e) to
the extent assignable, all service contracts, maintenance contracts,
operating contracts, warranties, guarantees, listing agreements, parking
contracts and like contracts and agreements relating to the Real Property,
and commission agreements, equipment leases, contracts, subcontracts and
agreements relating to the construction of any unfinished tenant improvements
(collectively, the "Contracts"); (f) to the extent assignable, all warranties
and guaranties made by or received from any third party with respect to any
building, building component, structure, fixture, machinery, equipment or
material situated on the Real Property, or contained in any or comprising a
part of any Improvement or Leasehold Improvement (collectively, the
"Warranties"); (g) to the extent Seller currently has such items in its
possession and to the extent assignable, all (i) preliminary, final and
proposed building plans and specifications (including "as-built" floor plans
and drawings) and tenant improvement plans and specifications for the
Improvements and (ii) surveys, grading plans, topographical maps,
architectural and structural drawings and engineering, soils, seismic,
geologic and architectural reports, studies and tests relating to the Real
Property ((g)(i) and (g)(ii) collectively, the "Records and Plans"); and (h)
to the extent transferable, any intangible personal property now or hereafter
owned by Seller and used in the ownership, use or operation of the Real
Property and/or the Personal Property, excluding materials or information
which in Seller's judgment is privileged or confidential information, the
name of Seller and related names and
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proprietary computer equipment, software and systems, but including all (i)
licenses, permits, building inspection approvals, certificates of occupancy,
approvals, subdivision maps and entitlements issued, approved or granted by
Governmental Authorities in connection with the Real Property, (ii)
unrecorded covenants, conditions and restrictions, reciprocal easement
agreements, area easement agreements and other common or planned development
agreements or documents affecting the Real Property and (iii) licenses,
consents, easements, rights of way and approvals obtained from private
parties to make use of utilities and to ensure vehicular and pedestrian
ingress and egress for the Real Property ((h)(i), (h)(ii) and (h)(iii)
collectively, the "Licenses and Permits") or other rights relating to the
ownership, use or operation of any of the Real Properties or the Personal
Property (collectively, the "Intangible Property"). The Real Property,
together with the Personal Property, the Leases, the Contracts, the
Warranties, the Records and Plans and the Intangible Property relating
thereto are referred to herein as the "Property".
Section 2.2 Purchase Price.
(a) The purchase price of the Property is Nine Million Five
Hundred Thousand Dollars ($9,500,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial
Deposit Date, Buyer shall deposit by wire transfer (made in accordance with
the wiring instructions set forth on Schedule 2.2.2 attached hereto) of
immediately available funds, in escrow with Commonwealth Land Title Insurance
Company, 1700 Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr.
Gordon Daniels (the "Title Company"), a cash payment in the amount of
$475,000 (the "Deposit"). The Deposit shall be held by the Title Company
pursuant to an escrow agreement among Buyer, Seller and the Title Company in
the form of Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a
part of the Deposit. If the sale of the Property as contemplated hereunder
is consummated, then the Deposit (including the interest accrued on the
Deposit) shall be paid to Seller at the consummation of the purchase and sale
of the Property contemplated hereunder (the "Closing") and credited against
the Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the
Title Company and paid to Seller at the Closing.
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(c) (i) IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE
FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTY IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO
UNDER THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE
DEPOSIT SHALL BE IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED
TO REIMBURSE BUYER FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR
(B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE,
IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT
RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE
ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE PROPERTY IS NOT
CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN, AS ITS SOLE
AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY
OBLIGATIONS UNDER SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S
OBLIGATIONS UNDER SECTIONS 6.1 0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time
being of the essence) the full amount of the Initial Deposit or the
Additional Deposit, as the case may be, for any or no reason whatsoever in
accordance with the terms of Section 2.2(b)(i), this Agreement shall
immediately and automatically terminate. Upon any termination of this
Agreement pursuant to this Section
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2.2(d) or Section 2.3, no party shall have any further rights or obligations
hereunder, except as provided in Sections 4.6(a), 6.1, 9.4 and 9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and
approved (and all representations and warranties of Seller made herein shall
be subject to and qualified by) all of the Due Diligence Materials.
Notwithstanding anything to the contrary herein, Seller shall have no
liability whatsoever to Buyer with respect to any matter disclosed to or
actually known by Buyer or its agents prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Property is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the
transactions contemplated hereby with respect to the Property.
(b) All consents required to be obtained from, or filing required
to be made with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby shall have been obtained or
made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall
be used) with respect to the Real Property in the form of the title insurance
commitment (each, a "Title Commitment") obtained by Buyer from the Title
Company and delivered to Seller prior to the Effective Date, showing title to
the Real Property vested in Buyer, subject only to the Permitted Exceptions.
It shall not be a condition to Closing that Buyer obtain any endorsements or
coverages not set forth in the applicable Title Commitment. Seller shall be
entitled, by notice to Buyer, to adjourn the Closing one or more times for an
aggregate period not to exceed thirty (30) days in order to remove any
exceptions to title that are not Permitted Exceptions. Nothing contained
herein shall require Seller to bring any action or proceeding or otherwise to
incur any expense to correct, discharge or otherwise remove title exceptions
or defects with respect to the Property or to remove, remedy or comply with
any other grounds for Buyer's refusing to approve title, provided that Seller
shall be obligated to
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remove or discharge, or otherwise cause the Title Company to omit as an
exception to title or to insure against collection thereof from or against
the Property any mortgages or monetary liens created by Seller, any
mechanics' liens or judgment liens that are the obligation of Seller (as
opposed to any Tenant or other third party) and any liens and encumbrances
voluntarily created by Seller in violation of Section 7.1 (collectively, the
"Required Deletion Items"). If on the Closing Date there are any Required
Deletion Items, Seller may use any portion of the Purchase Price payable
pursuant to Section 2.2(b) to satisfy same, provided the Title Company shall
omit such lien or encumbrance as an exception to title.
(d) Buyer shall have received estoppel certificates for the Real
Property to the extent required by Section 8.4.
(e) Each of the documents required to be delivered by Seller
pursuant to Section 8.3 shall have been delivered as provided therein and
Seller shall not otherwise be in material default of its material obligations
hereunder, and all of Seller's representations and warranties contained
herein shall be true and correct in all material respects as of the Closing
Date (except that any representations and warranties which are made as of a
specified date shall be true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Property is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the
transactions contemplated hereby with respect to the Property.
(b) All consents required to be obtained from, or filings required
to be made with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement by Buyer or the consummation by
Buyer of the transactions contemplated hereby shall have been obtained or
made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
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(e) Each of the documents required to be delivered by Buyer
pursuant to Section 8.3 shall have been delivered as provided therein, and
all of Buyer's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing
Date, then the party to this Agreement whose obligations are conditioned upon
the satisfaction of such condition may in its sole and absolute discretion
terminate this Agreement, subject to Section 2.2(c), by written notice
delivered to the other party at or prior to the occurrence of the Closing.
Upon any termination of this Agreement pursuant to this Section 3.3, no party
shall have any further rights or obligations hereunder, except as provided in
Sections 2.2(c), 4.6(a), 6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement
and/or (ii) any breach of or inaccuracy in any representation or warranty of
Seller made in this Agreement, nonetheless elects to proceed to Closing,
then, upon the consummation of the Closing, Buyer and/or its Permitted
Assignees shall be deemed to have waived any such default and/or breach or
inaccuracy and shall have no claim against Seller with respect thereto.
Section 3.5 [Intentionally Omitted].
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Property or all,
or substantially all, of Seller's other assets, (iv) suffered the attachment
or other judicial seizure of any of the Property or all, or substantially
all, of Seller's other assets, (v)
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admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that
are to be delivered to Buyer at Closing (i) are, or at the time of Closing
will be, duly authorized, executed and delivered by Seller, (ii) do not, and
at the time of Closing will not, violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or the Property
owned by Seller is subject and (iii) constitute (or in the case of Closing
documents will constitute) a valid and legally binding obligation of Seller,
enforceable in accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to
be obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the
performance of Seller's obligations hereunder except as set forth on
Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, all material Contracts and all environmental
and structural reports in the possession of Seller. This representation
shall not be deemed breached by virtue of any Leases or Contracts entered
into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including
the rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent
Rolls")), (i) there are to Seller's knowledge no leases, license agreements
or occupying agreements (or any amendments or supplements thereto)
encumbering, or in force with respect to, the Property (except for any New
Leases entered into after the Effective Date in accordance with Section 7.1)
and (ii) as of the Effective Date, Seller has not received written notice
from any Significant Tenant that Seller has not performed its material
obligations under such Significant Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments
thereto that will be in effect on the Closing Date that are not terminable
without cause or penalty on sixty (60) days notice with respect to the
Property (the "Non-Terminable Contracts") are as set forth in Schedule 4.1.2
(the "Schedule of Contracts") or as entered into in accordance with Section
7.1.
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(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of the
Property.
(j) Seller has not received written notice of any litigation that
is pending or threatened with respect to the Property, except (i) litigation
fully covered by insurance policies (subject to customary deductibles) or
(ii) litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule
4.1.4, Seller has not received any written notice from any Governmental
Authority that all or any portion of the Property is in material violation of
any applicable building codes or any applicable environmental law (relating
to clean-up or abatement), zoning law or land use law, or any other
applicable local, state or federal law or regulation relating to the
Property, which material violation has not been cured or remedied prior to
the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1
attached to this Agreement, Seller has not granted any option or right of
first refusal or first opportunity to any party to acquire any fee or ground
leasehold interest in any portion of any Property.
(m) Employees. Seller will have no employees at Closing, and any
employees of Seller existing on the date hereof shall have been terminated by
Seller prior to Closing in accordance with all applicable law, non-compliance
with which could result in a claim against Buyer. Buyer shall not be
responsible for, nor assume any liabilities of Seller regarding any such
employees.
Each of the representations and warranties of Seller contained in
this Section 4.1: (1) is made as of the Effective Date (subject to the
information disclosed in the Due Diligence Materials); (2) other than clauses
(i) and (k) above (which, in the case of clause (i) above, the parties
acknowledge shall be governed by Section 7.7 with respect to events occurring
after the Effective Date) shall be deemed remade by Seller, and shall be true
in all material respects, as of the Closing Date (except that any
representations and warranties which are made as of a specified date, shall
have been true and correct as of such specified date) subject to (A) the
information disclosed in the Due Diligence Materials, (B) litigation that is
not reasonably likely to have a material adverse effect on the Property, and
(C) other matters expressly permitted in this Agreement or otherwise
specifically approved in writing by Buyer; and (3) shall survive the Closing
only as and to the extent expressly provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of
Seller regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel
delivered by Seller pursuant to Section 8.4 shall terminate to the extent
specifically confirmed by a tenant estoppel certificate delivered by a Tenant.
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Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or
assignments) executed by Seller and delivered to Buyer or any Permitted
Assignee at or in connection with the Closing (collectively, "Closing
Documents"), Seller shall have no liability whatsoever with respect to any
suits, actions, proceedings, investigations, demands, claims, liabilities,
fines, penalties, liens, judgments, losses, injuries, damages, expenses or
costs, including, without limitation, attorneys' and experts' fees and costs
and investigation, and remediation costs (collectively "Claims") under, and
Buyer shall be barred from bringing any Claims with respect to, any of the
representations and warranties contained in this Agreement or in any Closing
Document, except to the extent (and only to the extent) that (i) with respect
to Claims for breach of representations and warranties relating to the
Property, the amount of such Claims exceeds One Hundred Thousand Dollars
($100,000) ("Threshold Amount") and, in such case, such Claims shall only be
valid (and the Seller shall only be liable) for the portion that exceeds the
Threshold Amount; provided, however, notwithstanding any provision to the
contrary herein or in any Closing Document, the (i) total liability of Seller
for any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Seller pursuant to Section 8.4(a)) with respect
the Property shall not exceed two and three quarters percent (2.75%) of the
Purchase Price. Further notwithstanding any provision to the contrary herein
or in any Closing Document, Seller shall have no liability with respect to
any Claim under any of the representations and warranties contained in this
Agreement or in any Closing Document, which Claim relates to or arises in
connection with (1) any Hazardous Materials (except solely to the extent that
Seller has breached its representation in Section 4.1(k)), (2) the physical
condition of the Property (except solely to the extent that Seller has
breached its representation in Section 4.1(k)) or (3) any other matter not
expressly set forth in the Seller's representations and warranties set forth
in Section 4.1. Buyer shall not make any Claim or deliver any Claim Notice
unless it in good faith believes the Claims would exceed the Threshold Amount
provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Seller contained herein or in any
Closing Document shall survive only until July 6, 1998. Any Claim that Buyer
may have at any time against Seller for a breach of any such representation
or warranty, whether known or unknown, with respect to which a Claim Notice
has not been delivered to Seller on or prior to July 6, 1998 shall not be
valid or effective. For the avoidance of doubt, on July 6, 1998, Seller shall
be fully discharged and released (without the need for separate releases or
other documentation) from any liability or obligation to Buyer, any Permitted
Assignee and/or their successors and assigns with respect to any Claims or
any other matter relating to this Agreement, any Closing Document or the
Property, except solely for those matters that are then the subject of a
pending Claim Notice delivered by Buyer to Seller. Any Claim that Buyer may
have at any time against Seller for a breach of any such representation or
warranty, whether known or unknown, with respect to
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which a Claim Notice has been delivered to Seller on or prior to July 6, 1998
may be the subject of subsequent litigation brought by Buyer against Seller,
provided that such litigation is commenced against Seller on or prior to
October 6, 1998. For the avoidance of doubt, on October 6, 1998, Seller
shall be fully discharged and released (without the need for separate
releases or other documentation) from any liability or obligation to Buyer
and/or its successors and assigns with respect to any Claims or any other
matter relating to this Agreement, any Closing Document or the Property,
except solely for those matters that are the subject of a litigation by Buyer
against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all
documents executed by Buyer that are to be delivered to Seller at Closing (i)
are, or at the time of Closing will be, duly authorized, executed and
delivered by Buyer, (ii) do not, and at the time of Closing will not, violate
any provision of any agreement or judicial order to which Buyer is a party or
to which Buyer or any property owned by Buyer is subject and (iii)
constitutes (or in the case of Closing documents will constitute) a valid and
legally binding obligation of Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of
all, or substantially all, of Buyer's assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally. As of the
Closing Date, Buyer will have sufficient funds to pay the Purchase Price and
consummate the transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings
are required to be made with, any Governmental Authority or third party in
connection with the execution and
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delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in
this Section (i) is made on the Effective Date; (ii) shall be deemed remade
by Buyer and/or its assignee(s), as applicable and appropriate, and shall be
true in all material respects, as of the Closing Date; and (iii) shall
survive the Closing until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied with such independent investigation (but the foregoing
will not constitute a waiver of any breach of representation or warranty set
forth in Section 4.1 unless such breach is disclosed in the Due Diligence
Materials or is otherwise known by Buyer and/or any Permitted Assignee before
the Closing Date and Buyer and/or such Permitted Assignee(s) elect to proceed
with the Closing). Such independent investigation by Buyer may include,
without limitation:
(i) all matters relating to title to the Property;
(ii) all matters relating to governmental and other legal
requirements with respect to the Property, such as taxes, assessments,
zoning, use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Real Property;
(iv) the physical condition of the Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of the
Real Property, including the presence or absence of Hazardous Materials;
(v) any easements and/or access rights affecting the Real
Property;
(vi) the Leases with respect to the Real Property and all
matters in connection therewith, including, without limitation, the ability
of the Tenants thereto to pay the rent;
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(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site
assessment of the Real Property;
(ix) all matters relating to the income and operating or
capital expenses of the Property and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a
Survey of the Real Property;
(ii) a Rent Roll for the Real Property, listing for any
Tenant the name, rent, amount of deposit and prepaid rent, if any, and lease
term and copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for the Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) to the extent in the possession of Seller or Seller's
property manager, reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under the
Real Property and the compliance of the Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys; and
(vii) to the extent in the possession of Seller or Seller's
property manager, copies of (i) the bills issued for the most recent year for
the Real Property for all real estate taxes and assessments, water rates,
water meter charges, sewer rates, sewer charges, and similar matters, imposed
by any Governmental Authority ("Real Estate Taxes") and personal property
taxes and (ii) all notices or documents for any assessments or bonds relating
to the Real Property.
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(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Property and the Due Diligence Materials
and shall have obtained, reviewed and approved a Title Commitment for the
Property, (ii) it is acquiring the Property based on such independent
investigation and subject to all information disclosed in the Due Diligence
Materials (and also in reliance on Seller's representations and warranties
contained herein) and (iii) Buyer shall have no right to terminate this
Agreement based on any further investigations of the Property or the Due
Diligence Materials. Borrower has approved each and every aspect of such
Property. The preceding sentence is not intended to relieve, and shall not
relieve, Seller from any of its obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER
SHALL SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH
ALL FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS
NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM
SELLER, NOR ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF
SELLER, AS TO ANY MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR
ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE
COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION: (i) the quality, nature,
habitability, merchantability, use, operation, value, marketability, adequacy
or physical condition of the Property or any aspect or portion thereof,
including, without limitation, structural elements, foundation, roof,
appurtenances, access, landscaping, parking facilities, electrical,
mechanical, HVAC, plumbing, sewage, and utility systems, facilities and
appliances, soils, geology and groundwater, (ii) the dimensions or lot size
of the Real Property or the square footage of the Improvements thereon or of
any tenant space therein, (iii) the development or income potential, or
rights of or relating to, the Real Property, or the Real Property's use,
habitability, merchantability, or fitness, or the suitability, value or
adequacy of the Real Property for any particular purpose, (iv) the zoning or
other legal status of the Real Property or any other public or private
restrictions on the use of the Real Property, (v) the compliance of the Real
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any
Governmental Authority or of any other person or entity (including, without
limitation, the Americans with Disabilities Act), (vi) the ability of Buyer
to obtain any necessary governmental approvals, licenses or permits for
Buyer's intended use or development of the Real Property, (vii) the presence
or absence of Hazardous Materials on, in, under, above or about the Real
Property or any adjoining or neighboring property, (viii) the quality of any
labor and materials used in any Improvements, (ix) the condition of title to
the Real Property, (x) the Leases, Contracts or any other agreements
affecting the Real Property or the intentions of any party with respect to
the negotiation and/or execution of any lease or contract with respect to
the Real Property, (xi) Seller's ownership of the Property or any portion
thereof or (xii) the economics of, or the income and expenses,
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revenue or expense projections or other financial matters, relating to, the
operation of the Real Property. Without limiting the generality of the
foregoing, except as otherwise set forth herein, Buyer expressly acknowledges
and agrees that Buyer is not relying on any representation or warranty of
Seller, nor any partner, officer, employee, attorney, agent or broker of
Seller, whether implied, presumed or expressly provided at law or otherwise,
arising by virtue of any statute, common law or other legally binding right
or remedy in favor of Buyer. Buyer further acknowledges and agrees that
Seller is under no duty to make any inquiry regarding any matter that may or
may not be known to Seller or any partner, officer, employee, attorney, agent
or broker of Seller. This Section 4.5(d) shall survive the Closing, or, if
the Closing does not occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO THE PROPERTY
OR TO CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY
INSURER. BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF
OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY
OF THE PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE
SAME, ALL AT BUYER'S SOLE COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted
Assignee(s) or any of their agents, employees or contractors (collectively,
the "Buyer Parties" and each a "Buyer Party") onto the Real Property, Buyer
shall give Seller reasonable advance notice of such entry and shall conduct
such entry and any inspections in connection therewith so as to minimize, to
the greatest extent possible, interference with Seller's business and the
business of the Tenants and otherwise in a manner reasonably acceptable to
Seller. Without limiting the foregoing, prior to any entry to perform any
necessary on-site testing, Buyer shall give Seller written notice thereof,
including the identity of the company or persons who will perform such
testing and the proposed scope of the testing and the party performing the
testing. Seller shall approve or disapprove any proposed testing and the
party performing the same within three (3) Business Days after receipt of
such notice. If a Buyer Party takes any sample from the Real Property in
connection with any such approved testing, Buyer shall provide to Seller a
portion of such sample being tested to allow Seller, if it so chooses, to
perform its own testing. Seller or its representative may be present to
observe any testing, or other inspection performed on the Real Property.
Buyer shall promptly deliver to Seller copies of any reports relating to any
testing or other inspection of the Real Property performed by or on behalf
of any Buyer Party. Buyer shall maintain, and shall ensure that its
contractors maintain, public liability and property damage insurance insuring
the Buyer Parties against any liability arising out of any entry or
inspections of
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the Real Property pursuant to the provisions hereof. Such insurance
maintained by Buyer shall be in the amount of Ten Million Dollars
($10,000,000) combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss
of use) in an occurrence. The policy maintained by Buyer shall insure the
contractual liability of Buyer covering the indemnities herein and shall (i)
name Seller (and their successors, assigns and Affiliates) as additional
insureds, (ii) contain a cross-liability provision, and (iii) contain a
provision that "the insurance provided by Buyer hereunder shall be primary
and noncontributing with any other insurance available to Seller." Buyer
shall provide Seller with evidence of such insurance coverage prior to any
entry or inspection of the Real Property. Buyer shall indemnify and hold the
Seller Parties harmless from and against any Claims arising out of or
relating to any entry on the Real Property by any Buyer Party, in the course
of performing any inspections, testings or inquiries. The foregoing indemnity
shall survive the Closing, or, if the Closing does not occur, beyond the
termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, neither Buyer nor any other Buyer Party shall contact any
Governmental Authority regarding any Hazardous Materials on or the
environmental condition of the Real Property without Seller's prior written
consent thereto; provided that if Buyer or Buyer's consultant is
unconditionally obligated by applicable law to notify a Governmental
Authority regarding any Hazardous Materials on, or the environmental
condition of, the Real Property discovered by Buyer's environmental testing,
Buyer shall first provide prior written notice to Seller and shall not
contact any Governmental Authority except in conjunction with Seller. In
addition, if Seller's consent is obtained by Buyer, Seller shall be entitled
to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for
itself and any successors and assigns of Buyer (including, without
limitation, any Permitted Assignee), waives its right to recover from, and
forever releases and discharges, and covenants not to sue, Seller, Seller's
Affiliates, Seller's asset manager, any lender to Seller, the partners,
trustees, shareholders, controlling persons, LLC Members, directors,
officers, attorneys, employees and agents of each of them, and their
respective heirs, successors, personal representatives and assigns (each a
"Seller Party", and collectively, the "Seller Parties") with respect to any
and all Claims, whether direct or indirect, known or unknown, foreseen or
unforeseen, that may arise on account of or in any way be connected with the
Property including, without limitation, the physical, environmental and
structural condition of the Real Property or any law or regulation applicable
thereto, including, without limitation, any Claim or matter relating to the
use, presence, discharge or release of Hazardous Materials on, under, in,
above or about the Real Property; provided, however, Buyer does not waive
its rights, if any, to recover from, and does
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not release or discharge or covenant not to sue Seller for (i) any act that
is found by a court of competent jurisdiction to constitute fraud, (ii) any
breach of Seller's representations or warranties set forth in Section 4.1 or
in Seller's estoppel certificate delivered pursuant to Section 8.4, subject
to the limitations and conditions provided in this Agreement, or (iii) any
breach of Seller's obligations set forth in this Agreement that expressly
survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for the Property. A copy of each Title Commitment delivered to
Buyer has been delivered to Seller and its counsel. At the Closing, as a
condition precedent to Buyer's obligation to close, Seller shall have
delivered to Buyer a deed for the Real Property in the form of Exhibit A
(each, a "Deed"), each subject to no exceptions other than the following (the
"Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under
Existing Leases and New Leases, including, without limitation, those Tenant
purchase rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special
improvement district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth
in or disclosed by the Title Commitment for the Real Property or other
documents made available to Buyer and any other exceptions to title that
would be disclosed by an inspection and/or survey of the Real Property,
including those disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Effective Date;
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments,
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in recordable form, canceling such lien or encumbrance, together with funds
to pay the cost of recording and canceling the same;
(vi) Such other exceptions as the Title Company shall commit
to insure over in a manner reasonably satisfactory to Buyer, without any
additional cost to Buyer, whether such insurance is made available in
consideration of payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance
with the foregoing shall be evidenced by the Title Company issuing, or to
committing to issue, at Closing, upon payment of the applicable premium
therefor, a 1992 ALTA Owner's Policy of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a
1992 ALTA Owner's Policy, such other required form shall be used) in the
amount of the Purchase Price showing title to the Property vested in Buyer
or its Permitted Assignee or designee, subject only to the Permitted
Exceptions (the "Title Policy").
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to
each other that no broker or finder, other GMH Realty, Inc. ("GMH"), whose
fees will be the responsibility of Seller pursuant to a separate agreement
among between GMH and Seller, was instrumental in arranging or bringing about
this transaction and that there are no claims or rights for brokerage
commissions or finders' fees in connection with the transactions contemplated
hereby by any person or entity other than GMH. If any person brings a claim
for a commission or finder's fee based upon any contact, dealings or
communication with Buyer or Seller, then the party through
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whom such person makes its claim shall defend the other party (the
"Indemnified Party") from such claim, and shall indemnify the Indemnified
Party and hold the Indemnified Party harmless from any and all costs,
damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Indemnified
Party in defending against the claim. The provisions of this Section 6.1
shall survive the Closing or, if the Closing does not occur, any termination
of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real
Property in the ordinary course, on an arm's-length basis and consistent with
Seller's past practices and will not dispose of or encumber the Property,
except for dispositions of personal property in the ordinary course of
business or as otherwise permitted by Section 7.1 or Section 7.3. Without
limiting the foregoing, Seller shall, in the ordinary course, negotiate with
prospective Tenants and enter into New Leases (on terms that Seller believes,
in its good faith business judgment, to be market terms), enforce Leases in
all material respects, perform in all material respects all of landlord's
obligations under the Leases (other than Leases that are or that are in the
process of being terminated due to Tenant's default thereunder, provided that
this provision shall not be deemed breached by virtue of Seller's failure to
perform under Leases expiring on or before December 30, 1997) and pay all
costs and expenses of the Property, including without limitation debt
service and Real Estate Taxes.
(b) Seller shall not, without Buyer's consent, enter into any New
Leases or materially modify any Existing Lease. Any consent to be given by
Buyer pursuant to this Section 7.1(b) shall not be unreasonably withheld or
delayed and shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating
agreement or any contract, agreement or other commitment of any sort
(including any contract for capital items or expenditures, but excluding any
liens or other encumbrances on title other than Permitted
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Exceptions), with respect to the Property that (A) requires payments to or by
Seller in excess of $50,000 per annum, or the performance of services by
Seller the value of which is in excess of $50,000 per annum and (B) is not
terminable without cause and without penalty on thirty (30) days' notice or
less; provided that Seller, in its good faith but sole discretion, believes
such contract is on market terms and will benefit the Property. At least
three (3) Business Days prior to becoming legally bound with respect to any
such matter, Seller shall consult with and seek the consent of Buyer, and
shall provide reasonable detail to Buyer (including, at Buyer's request,
copies of the relevant documentation), with respect thereto. Any consent to
be given by Buyer pursuant to this Section 7.1(c) shall not be unreasonably
withheld or delayed and shall be deemed granted if Buyer does not respond in
writing to Seller's request for consent within three (3) Business Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement
to create a lien or encumbrance on the Property without Buyer's prior
written consent (which consent shall not be unreasonably withheld or delayed
with respect to any utility or similar easement necessary for the operation
of the Property, and which shall be deemed granted if Buyer does not respond
in writing to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell the Property or portion thereof without
Buyer's prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting the Property (other than Contracts terminable on 30
days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for
the costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at Closing equal to the amounts so paid. Free rent periods provided for
in Leases entered into by Seller prior to October 9, 1997 that occur, in
whole or in part, after the Closing Date shall be for
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the account of, and borne by, Buyer without adjustment to the Purchase Price
at closing. The provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Property. Between the
Effective Date and the Closing Date, Seller shall (a) maintain the Real
Property in substantially the same manner as prior hereto pursuant to
Seller's normal course of business, subject to reasonable wear and tear and
further subject to the occurrence of any damage or destruction to the Real
Property by casualty or other causes or events beyond the control of Seller;
provided, however, that Seller's maintenance obligations under this Section
7.3 shall not include any obligation to make capital expenditures not
incurred in Seller's normal course of business or any other expenditures not
incurred in Seller's normal course of business; (b) continue to maintain its
existing insurance coverage; and (c) not grant any voluntary liens or
encumbrances affecting such Property other than Permitted Exceptions of the
type described in clauses (i) and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of
Section 7.1, prior to the Closing Date, Seller shall have the right, but not
the obligation, to enforce the rights and remedies of the landlord under any
Lease or New Lease, by summary proceedings or otherwise, and to apply all or
any portion of any security deposits then held by Seller toward any loss or
damage incurred by Seller by reason of any defaults by any Tenant, provided,
that (i) with respect to delinquent rents, Seller may (to the extent
permitted under the Lease) apply Tenant security deposits held by Seller only
to rents that are thirty (30) days or more past due and (ii) with respect to
any application by Seller of Tenant security deposits held by Seller, Seller
will deliver, in connection with any such application, written notice to the
affected Tenant(s) indicating that their security deposits have been or are
being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against,
the Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Property for the full Purchase Price as required by
the terms hereof, without regard to the occurrence or effect of any damage to
the related Real Property or destruction of any improvements thereon or
condemnation of any portion of the Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of
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any insurance proceeds or condemnation awards collected by Seller as a result
of any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or
repair of the Property. Seller has provided Buyer with a certificate of
insurance for Seller's casualty insurance policy so that Buyer can confirm
its satisfaction with such policy. Seller agree that it will maintain such
policy in full force and effect until the Closing. If the proceeds or awards
have not been collected as of the Closing, then such proceeds or awards shall
be assigned to Buyer, except to the extent needed to reimburse Seller for
sums it reasonably expended prior to the Closing for the restoration or
repair of such Property. Notwithstanding the foregoing, (i) Seller shall not
settle, compromise or otherwise stipulate any award or recovery in connection
with any damage, destruction or condemnation, in each case if such damage,
destruction or condemnation impairs the value of the Property by at least
$250,000, without the prior written approval of Buyer, which approval shall
not be unreasonably withheld, (ii) Buyer shall have the right to participate
in any such settlement or other proceedings, and (iii) if the amount of the
damage or destruction as described in this Section 7.7 exceeds ten percent
(10%) of the Purchase Price for the Property, then Buyer may, at its option
to be exercised within five (5) Business Days of Seller's written notice of
the occurrence of the damage or destruction, either terminate this Agreement
or consummate the purchase for the full Purchase Price as required by the
terms hereof. If Buyer elects to terminate this Agreement, then the Deposit
shall be immediately returned to Buyer and neither party shall have any
further rights or obligations hereunder except to the extent set forth in
Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the Closing, Buyer shall be entitled to a credit against
the Purchase Price and shall receive an assignment of any uncollected
proceeds or awards, all as set forth in this Section 7.7 above. The
provisions of this Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation,
environmental, zoning or other land-use regulation proceedings relating to
the Property of which Seller obtains actual knowledge by written notice, any
notices of violations of any legal requirements relating to the Property
received by Seller, any litigation of which Seller obtains actual knowledge
by written notice that arises out of the ownership of the Property unless
fully covered by insurance (subject to customary deductibles), and any other
matters that would materially affect Seller's representations and warranties
hereunder.
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ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement
with the Title Company, and this instrument shall serve as the instructions
to the Title Company as the escrow holder for consummation of the purchase
and sale contemplated hereby. Seller and Buyer agree to execute such
reasonable additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control, unless a contrary intent is expressly
indicated in such supplementary instructions.
Section 8.2 Closing. The Closing hereunder shall be held and
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the offices of Seller's counsel (or such other
location as the parties may agree) at 10:00 A.M. (Eastern Standard Time) on
January 5, 1998 or such earlier or later date and time as Buyer and Seller
may mutually agree upon in writing (the "Closing Date"), in either case, with
time being of the essence. Except as otherwise permitted under this
Agreement, such date and time may not be extended without the prior written
approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) At or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location
as the parties may agree) Seller shall deposit into escrow with the Title
Company the following items (pursuant to escrow instructions reasonably
acceptable to Seller and Buyer):
(i) a duly executed and acknowledged Deed for the Real Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for the
Property in the form attached hereto as Exhibit E (each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for the Property in the form attached hereto as Exhibit F (each, an
"Assignment of Leases");
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(vi) a duly executed counterpart of an Assignment and
Assumption of Contracts, Warranties and Guaranties and Other Intangible
Property for each Fee Property and each Leasehold Property in the form
attached hereto as Exhibit G (each, an "Assignment of Contracts");
(vii) a duly executed counterpart of an agreement designating
the Title Company as the "Reporting Person" for the transaction contemplated
hereby pursuant to Section 6045(e) of the Federal Code and the regulations
promulgated thereunder, substantially in the form of Exhibit H attached
hereto (the "Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable
state and local law in connection with the conveyance of the Property;
(ix) the Seller's affidavit to the Title Company, in the form
of Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code,
and on which Buyer is entitled to rely, that Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
(b) At or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate
and Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with
the conveyance of the Property.
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(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in
accordance with the wiring instructions set forth on Schedule 2.2.1) in an
amount equal to the sum of (i) the Purchase Price and (ii) the amount (if
any) of the costs, expenses and adjustments payable by Buyer under this
Agreement. The amount of the funds to be wired to the Title Company's escrow
account shall be reduced by the Deposit (including all interest thereon).
After Seller's confirmation of receipt of the Purchase Price (as reduced by
the costs, expenses, prorations and adjustments payable by Seller under this
Agreement) by wire transfer of federal funds by the Title Company to one or
more accounts designated by Seller: (i) the Title Company shall be authorized
to record the Deed for the Real Property, (ii) the Title Company shall
deliver to Buyer all other documents and instruments received by it which, in
accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with
the terms of this Agreement are to be delivered by Buyer to Seller on the
Closing Date. Buyer and Seller shall each deposit such other instruments as
are reasonably required by the Title Company or otherwise required to close
the escrow and consummate the purchase and sale of the Property in accordance
with the terms hereof; provided, that Seller shall not be required to provide
any indemnities or affidavits or to escrow any funds other than the Seller's
Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence
files of the Real Property in Seller's possession, a set of keys to the
Real Property and originals (or copies, if originals are not available) of
any other items in Seller's possession relating to the use, ownership,
operation, maintenance, leasing, repair, alteration, management or
development of the Real Property, on the Closing Date (at such location as
Buyer and Seller shall mutually agree). Following the Closing, Buyer shall
make all Leases, Contracts, other documents, books, records and any other
materials in its possession, to the extent the same relate to the period of
Seller's ownership of the Property, available to Seller or its
representatives for inspection and/or copying at Buyer's offices (at Seller's
sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from each Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the event that any Tenant is unwilling to sign the
form attached hereto as Exhibit J. It shall be a condition to Buyer's
obligation to close the sale and purchase of the Property that on or before
the Closing Seller delivers to Buyer tenant estoppel certificates
substantially in the form attached hereto as Exhibit J (or in the Prescribed
Form, if applicable) from (i) Tenants occupying seventy five percent (75%) of
the total leased square footage of the Property; and (ii) Significant
Tenants occupying seventy five percent (75%) of the total leased square
footage covered by such
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Significant Tenants' Leases (with respect to each of preceding clauses
(i)-(ii), the "Required Percentage"); provided, however, if Seller is unable
to obtain the aforesaid tenant estoppel certificates from Tenants or
Significant Tenants (as the case may be) occupying the Required Percentage,
Seller may, but shall not be obligated to, provide a certificate to Buyer,
with respect to such missing estoppel certificates, as chosen by Seller, to
the effect that (except as disclosed in the Due Diligence Materials or in the
Leases to which such estoppels relate): (i) to Seller's knowledge the Leases
for those Tenants or Significant Tenants (as the case may be) are in full
force and effect; (ii) the amount of the Tenants' or Significant Tenants'
security deposits; (iii) the dates through which rent has been paid; (iv)
neither Seller nor, to Seller's knowledge, any of those Tenants or
Significant Tenants (as the case may be) is in default thereunder; (v) a
true, correct and complete copy of the Leases are attached; (vi) the Leases
expire on the dates specified and are not subject to any renewal or extension
options, except as specified, and (viii) there are no options to purchase or
rights of first refusal except as specified. Buyer shall be obligated to
accept Seller's certification in lieu of any missing estoppel certificates.
Seller's representations and warranties in the certificate shall survive the
Closing, provided that (i) Buyer must give Seller a Claim Notice with
respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any
claim that Buyer may have that is not so asserted, or litigation by Buyer
that is not so commenced, shall be barred and not be valid or effective and
Seller shall have no liability whatsoever with respect thereto) and (ii) any
certificate delivered by Seller pursuant to this Section 8.4 shall cease to
survive the Closing to the extent specifically confirmed by a tenant estoppel
certificate delivered by a Tenant or a Significant Tenant. In no event shall
the minimum thresholds to Buyer's recovery set forth in Section 4.3(a) apply
to any certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in Section
4.3(a)).
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on the Property or that is pending and may become
a lien on the Property; water, sewer and utility charges; amounts payable
under any existing Contract, Contract entered into after the Effective Date
and in accordance with this Agreement; annual permits and/or inspection fees
(calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of the Property (other
than any Leasing Costs and free rent which shall be prorated as provided in
Section 7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on
the Closing Date, on the basis of a 365-day year, with Buyer deemed the owner
of the Properties on the entire
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Closing Date. Rent which is due but uncollected as of the Closing Date shall
not be adjusted. On the Closing Date, Seller shall deliver to Buyer a
schedule of all such past due but uncollected rent owed by tenants. Buyer
agrees to cause the amount of such rental arrears to be included in the first
bills thereafter submitted by Buyer to such tenants after the Closing Date.
Any rents collected from a tenant after the Closing Date shall be applied
first to the month in which the Closing Date occurs, next to any rents
payable by such tenant after the Closing Date and thereafter to any arrearage
owed by such tenant on the Closing Date in the inverse order of maturity.
Additional rent payments (and estimated additional rent payments) actually
paid by tenants prior to Closing attributable to real estate taxes and
operating costs shall be adjusted as of the Closing Date. Additional rent
payments (and estimated additional rent payments) attributable to real estate
taxes and operating costs to be paid by tenants after the Closing shall be
adjusted upon receipt by Buyer. The adjustments of additional rent payments
shall be based upon the number of days in the period for which such payment
relates that are before or after the Closing Date. In no event will Buyer be
entitled to receive any payments on or under the promissory notes or other
agreements referred to in Section 8.7. Buyer shall use reasonable efforts
until October 6, 1998 to collect any delinquent rents that accrued prior to
the Closing Date (but Seller shall have the right to commence and pursue
litigation against any Tenant to collect delinquent rents and/or expense
reimbursements, provided that Seller may not seek as a remedy in any such
litigation the termination of any Leases or the dispossession of any Tenant).
Seller agrees to forward any rents received by it after the Closing Date to
Buyer for application in accordance with the provisions hereof. The amount
of any security deposits that are required to be returned to Tenants under
Leases shall be credited against the Purchase Price (and Seller shall be
entitled to retain such security deposits). In the event the Property has
been assessed for property taxes purposes at such rates as would result in
reassessment (i.e., "escape assessment" or "roll-back taxes") based upon the
change in land usage or ownership of such Property resulting from or after
the consummation of the transactions described in this Agreement, as between
Buyer and Seller, Buyer hereby agrees to pay all such taxes and to indemnify
and save Seller harmless from and against all claims and liability for such
taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such
Additional Rents are not finally adjusted between the landlord and tenant
under the applicable Lease until after the end of the 1997 calendar year,
then such prorations shall be calculated as soon as reasonably practicable
after such Additional Rents have been finally adjusted. Either party owing
the other party a sum of money based on proration(s) calculated after the
Closing Date shall promptly pay said sum to the other party, together with
interest thereon at the rate of two percent (2%) per annum over the Prime
Rate from the Closing Date to the date of payment, if payment is not made
within ten (10) days after delivery of a bill therefor. If the real estate
and/or personal property tax rate and assessments have not been set for the
calendar year in which the Closing occurs, then the proration of such taxes
shall be based upon
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the rate and assessments for the preceding calendar year, and such proration
shall be adjusted between Seller and Buyer as soon as reasonably practicable
after such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer
shall permit Seller and its representatives and auditors during regular
business hours and upon reasonable prior written notice to have reasonable
access to the books and records in the possession of Buyer or any party to
whom Buyer has given custody of the same relating to the Property to permit
Seller to review Buyer's proration statements. Seller shall have sixty (60)
days after receipt of Buyer's calculations to accept or contest such
prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all
endorsements thereto, and Surveys and Survey updates, and all costs of any
appraisal, engineering and environmental reports not delivered by Seller.
Buyer shall pay transfer, recordation, excise and deed taxes. Seller and
Buyer shall each be responsible for paying their respective attorneys' fees
and costs. Buyer and Seller agree that, given the de minimis amount of
Personal Property included within the Property, no portion of the Purchase
Price is allocable or attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Property in a
manner (or otherwise take a position) inconsistent with the Purchase Price
set forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and
retain any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5
shall survive the Closing until October 6, 1998 (except with respect to
prorations of taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby
authorized, but not obligated, to (a) commence (prior to the Closing Date) or
continue (after the Effective Date and after the Closing Date) any proceeding
for the reduction of the assessed valuation of the Property for any tax year
which, in accordance with the laws and regulations applicable to such
Property, requires that, to preserve the right to bring a tax certiorari
proceeding with respect to such tax year, such proceeding be commenced prior
to the Closing Date and (b) endeavor to settle any such proceeding in
Seller's discretion. After the Closing, with respect to the Property, (i)
Seller shall retain all rights (subject to any rights of Tenants under their
Leases) with respect to any tax
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year ending prior to the tax year (and all refunds relating thereto) in which
the Closing Date occurs, and shall have the sole right to participate in and
settle any proceeding relating thereto (provided, that such settlement does
not affect the assessed tax value for any subsequent tax year), and (ii)
Buyer shall have all rights (subject to any rights of Tenants under their
Leases) with respect to any tax year (and all refunds relating thereto) which
ends after the Closing Date; provided, however, that if the proceeding is for
a tax year in which the Closing Date occurs, such settlement shall not be
made without Buyer's prior consent, which consent shall not be unreasonably
withheld or delayed. With respect to any such proceeding for a tax year in
which the Closing Date occurs (whether commenced by Seller or Buyer), any
refund or credit of taxes for such tax year shall be applied first to the
unreimbursed out-of-pocket expenses, including reasonable counsel fees,
necessarily incurred in obtaining such refund or credit, and second, to any
Tenant entitled to same, and the balance shall be apportioned between Seller
and Buyer as of the Closing Date in accordance with the proportion of the
applicable tax year occurring before and after the Closing Date. In each
case, the party which prosecuted the proceeding shall deliver to the other
copies of receipted tax bills and any decision or settlement agreement
evidencing the reduction in taxes. If any refund shall be received by Seller
which is for the account of Buyer as provided in this Section 8.6, then
Seller shall hold Buyer's share thereof in trust for Buyer and, promptly upon
receipt thereof, pay such share to Buyer or any other party entitled to same
as provided above. If any refund shall be received by Buyer which is for the
account of Seller as provided in this Section 8.6, then Buyer shall hold
Seller's share thereof in trust for Seller and, promptly upon receipt
thereof, pay such share to Seller or any other party entitled to same as
provided above. Each party shall execute any and all consents or other
documents as may be reasonably necessary to be executed by such party so as
to permit the other party to commence or continue any tax certiorari
proceeding which such other party is authorized to commence or continue
pursuant to the terms of this Section 8.6, or to collect any refund or credit
with respect to any such tax proceeding. The provisions of this Section 8.6
shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein
that may be construed to the contrary (including, without limitation, Section
8.5), promissory notes or other agreements (other than the Leases) delivered
to Seller that evidence, deal with or otherwise relate solely to a Tenant's
rental or expense reimbursement obligations under its Lease that, as of the
Closing Date, are or were past due, shall not be conveyed to Buyer and shall
be retained by Seller. Seller agrees that in enforcing its rights against
Tenants under any such promissory notes or other agreements, Seller will not
seek to exercise any remedies that may be available to it under the affected
Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's
audited financial statements for the 1997 calendar year.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b)
by certified mail, postage prepaid, return receipt requested, (c) by a
commercial overnight courier that guarantees next day delivery and provides a
receipt, or (d) by legible facsimile (followed by hard copy delivered in
accordance with preceding subsections (a)-(c)), and such notices shall be
addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: Linden Park Limited Partnership
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt
(or refusal by the intended recipient to accept delivery). Notices may be
given by attorneys for the notifying partner.
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains
all representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect
to the subject matter hereof. Any correspondence, memoranda or agreements
between the parties, including, without limitation, or any oral or written
statements made by Seller, its Affiliates, employees or agents, are not
binding on or enforceable against any party,
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and are superseded and replaced in total by this Agreement together with the
Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of
each of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs
and expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without
limitation, court costs (including costs of any trial or appeal therefrom)
and reasonable attorneys' fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with
the transfer of title to the Property but shall remain in effect until
fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate
any Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the
case may be, of one or more of the Property and Seller shall convey at
Closing such Property (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including
the obligations to pay the Purchase Price at Closing and to indemnify Seller
and the other Seller Parties in accordance with the terms hereof. Subject to
the limitations described herein, this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES
RECOGNIZE THAT IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN
ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE THE PURCHASE AND
SALE OF SUCH
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PROPERTY PURSUANT HERETO. THE PARTIES AGREE TO COMPLY WITH SUCH OTHER LAWS
TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE AND SALE OF THE PROPERTY.
IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO
THE PROPERTY IN A MANNER THAT RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding
involving this Agreement, Buyer and Seller hereby expressly submit to the
jurisdiction of all federal and state courts sitting in the Commonwealth of
Pennsylvania and consent that any order, process, notice of motion or other
application to or by any such court or a judge thereof may be served within
or without such court's jurisdiction by registered mail or by personal
service, provided that a reasonable time for appearance is allowed, and Buyer
and Seller agree that such courts shall have the exclusive jurisdiction over
any such suit, action or proceeding commenced by any party. In furtherance
of such agreement, Buyer and Seller agree upon the request of the other party
to discontinue (or agree to the discontinuance of) any such suit, action or
proceeding pending in any other jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement
brought in any federal or state court sitting in the Commonwealth of
Pennsylvania and hereby further irrevocably waive any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON,
UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS,
DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF
THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s)
and their Affiliates and representatives for review and inspection, Buyer (on
behalf of itself, any Permitted Assignee(s), and their respective Affiliates
and representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and
other written or oral information, as well as diskettes and other forms
of electronically transmitted data, furnished to Buyer, a Permitted
Assignee, or their respective officers, directors,
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<PAGE>
employees, agents, advisors, Affiliates or representatives (collectively
"Representatives") by Seller or its Affiliates relating to the Property,
as well as written memoranda, notes, analyses, reports, compilations, or
studies prepared by Buyer or its Representatives (in whatever form of
medium) that contain, or are derived from, such information provided by
Seller. Notwithstanding the foregoing, information provided by Seller
shall not constitute "Evaluation Material" if such information (i) is or
becomes generally available to the public other than as a result of a
disclosure by or through Buyer or its Representatives in contravention of
this Section 9.10(a) or (ii) is or becomes available to Buyer from a source
(other than Seller) not bound, to the knowledge of Buyer, by any legal or
contractual obligation prohibiting the disclosure of Evaluation Material by
such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Property as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Property and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
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<PAGE>
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing
it shall not issue any press release or public statement (a "Release") with
respect to the transactions contemplated by this Agreement without the prior
consent of all parties to this Agreement, except to the extent required by
law or the regulations of the Securities and Exchange Commission or the New
York Stock Exchange, and (ii) after the Closing, any Release issued by Seller
or Buyer shall be subject to the review and approval of all such parties
(which approval shall not be unreasonably withheld). If Seller or Buyer is
required by law to issue a Release, such party shall, at least two (2)
Business Days prior to the issuance of the same, deliver a copy of the
proposed Release to the other parties for their review. In response to
inquiries concerning a Release, Buyer cannot release any information
concerning Seller without Seller's prior written consent.
(c) Seller agrees for a period of one (1) year after the Closing
Date not to disclose capitalization rates and rates of return relating to the
Property (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member, partner, officer, director or
employee of Seller or counsel to or accountants of Seller solely for their
use and on a need-to-know basis, provided that such Persons are notified of
Seller's confidentiality obligations hereunder, (b) with the prior consent of
Buyer, or (c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request
and (iii) if disclosure is required or deemed advisable, reasonably cooperate
with Buyer (at no cost to Seller) in any attempt it may make to obtain an
order or other assurance that confidential treatment will be accorded such
Confidential Information.
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<PAGE>
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and
shall not be construed to affect the meaning of any provision contained
herein. Where the context so requires, the use of the singular shall include
the plural and vice versa and the use of the masculine shall include the
feminine and the neuter. The term "person" shall include any individual,
partnership, joint venture, corporation, trust, limited liability company,
unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any
memorandum or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held
by a court of competent jurisdiction to be invalid, unenforceable or void,
the remainder of this Agreement and such provisions as applied to other
persons, places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract with respect to the purchase
and sale of the Property. The parties shall be legally bound with respect to
the purchase and sale of the Property pursuant to the terms of this Agreement
only if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully
executed and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such other documents and do any and all other acts as may be
necessary to carry out the intent and purpose of this Agreement.
Section 9.18 [Intentionally Omitted].
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<PAGE>
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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 Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind
Buyer and Seller as if they had executed the same counterpart.
[Signatures on following page]
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<PAGE>
The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: LINDEN PARK LIMITED PARTNERSHIP,
A Delaware limited partnership
By: GH Linden, Inc., its general partner
By: _________________________
Name:
Title
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<PAGE>
EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $475,000 (the "Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and Linden Park Limited Partnership ("Seller"), the provisions
of which (including, without limitation, the defined terms) are hereby
incorporated herein by reference. The Deposit shall be paid to Seller by
Escrowee at the time of Closing under the Agreement, or if Closing does not
take place, distributed in accordance with the terms of the Agreement.
Escrowee shall, immediately upon receipt of the Deposit, deposit same in an
interest bearing, money market type escrow account with a federally insured
bank or savings and loan association located in Philadelphia, Pennsylvania.
All interest which shall accrue on the Deposit shall be paid in accordance
with the Agreement. Escrowee shall pay such interest to such party
contemporaneously with Escrowee's payment of the Deposit. Seller and Buyer
agree that Escrowee is an escrow holder only and is merely responsible for
the safekeeping of the Deposit and interest and shall not be required to
determine questions of fact or law. If Escrowee shall receive notice of a
dispute as to the disposition of the Deposit or the interest, then Escrowee
shall not distribute the Deposit or interest except in accordance with
written instructions signed by both Buyer and Seller. Pending resolution of
any such dispute, Escrowee is authorized to pay the Deposit and interest
into court. If Escrowee pays the Deposit and interest into court, it shall
be discharged from all further obligations hereunder. This Escrow Agreement
shall be governed by the laws of the state of New York.
Seller's Federal Tax ID Number is 51-0369712.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable
consideration, each intending to be legally bound and to bind their
respective successors and assigns, have caused this Escrow Agreement to be
executed and delivered as of _______________.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: LINDEN PARK LIMITED PARTNERSHIP,
A Delaware limited partnership
By: GH Linden, its general partner
By: _________________________
Name:
Title
<PAGE>
Exhibit 10.9
AGREEMENT OF PURCHASE AND SALE
BETWEEN
PARK 80, L.L.C.
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.3 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. . . . . . . . . . .10
Section 3.2 Conditions to Seller's Obligations to Sell. . . . . . . . . . . .12
Section 3.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 3.4 Waiver by Buyer . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 3.5 [Intentionally Deleted] . . . . . . . . . . . . . . . . . . . . .13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. . . . . . . . . . . . .13
Section 4.2 Estoppels . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 4.3 Limitation on Claims; Survival of Representations and Warranties.15
Section 4.4 Representations and Warranties of Buyer . . . . . . . . . . . . .17
Section 4.5 Buyer's Independent Investigation . . . . . . . . . . . . . . . .18
Section 4.6 Entry and Indemnity; Limits on Government Contacts. . . . . . . .21
Section 4.7 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
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<PAGE>
ARTICLE V
TITLE
Section 5.1 Conveyance of Title . . . . . . . . . . . . . . . . . . . . . . .23
Section 5.2 Evidence of Title . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 6.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties . . . . . . . . . . . . . . .26
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent . . .27
Section 7.3 Seller's Maintenance of the Properties. . . . . . . . . . . . . .28
Section 7.4 Lease Enforcement . . . . . . . . . . . . . . . . . . . . . . . .28
Section 7.5 Lease Termination Prior to Closing. . . . . . . . . . . . . . . .28
Section 7.6 Tenant Notices. . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 7.7 Risk of Loss and Insurance Proceeds . . . . . . . . . . . . . . .29
Section 7.8 Notifications . . . . . . . . . . . . . . . . . . . . . . . . . .29
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions . . . . . . . . . . . . . . . . . . . . . . .30
Section 8.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 8.3 Deposit of Documents. . . . . . . . . . . . . . . . . . . . . . .30
Section 8.4 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . .33
Section 8.5 Prorations. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 8.6 Tax Certiorari Proceedings. . . . . . . . . . . . . . . . . . . .36
Section 8.7 Tenant Obligations. . . . . . . . . . . . . . . . . . . . . . . .37
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<PAGE>
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 9.2 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . .39
Section 9.3 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 9.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 9.5 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 9.6 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 9.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 9.8 Governing Law; Jurisdiction and Venue . . . . . . . . . . . . . .40
Section 9.9 Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . . .40
Section 9.10 Confidentiality and Return of Documents. . . . . . . . . . . . .41
Section 9.11 Interpretation of Agreement. . . . . . . . . . . . . . . . . . .43
Section 9.12 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 9.13 No Recording . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 9.14 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . .43
Section 9.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract . .44
Section 9.17 Further Assurances . . . . . . . . . . . . . . . . . . . . . . .44
Section 9.18 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . .44
Section 9.19 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . .44
Section 9.20 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . .44
EXHIBITS
EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B ASSIGNMENTS OF GROUND LEASES
EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M GROUND LEASE ESTOPPEL CERTIFICATE
EXHIBIT N ESCROW AGREEMENT
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<PAGE>
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.2 LEASEHOLD ESTATES
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
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<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between Park 80, LLC, a New Jersey limited liability company
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Ground Lease" shall have the meaning set forth in
Section 5.1(b).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
<PAGE>
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its
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<PAGE>
representatives on or about November 21, 1997, and on-site materials made
available to Buyer for inspection.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Fee Property" or "Fee Properties" shall have the meaning set forth
in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Ground Lease" shall have the meaning set forth in Section 4.5(b).
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
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<PAGE>
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leasehold Estate" or "Leasehold Estates" shall have meaning set forth
in Section 2.1(b).
"Leasehold Improvements" shall have the meaning set forth in Section
2.1(b).
"Leasehold Improvements Deed" shall have the meaning set forth in
Section 5.1(c).
"Leasehold Property" or "Leasehold Properties" shall have the meaning
set forth in Section 2.1(b).
"Leases" shall mean all Existing Leases and New Leases, collectively.
"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering any Real Property which are entered into after the
Effective Date in accordance with the terms of this Agreement, as the same
may be amended or modified from time to time in accordance with the terms
of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
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"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" or "Properties" shall have the meaning set forth in Section
2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" or "Real Properties" shall have the meaning set forth
in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Related Purchase Agreements" shall mean those three Agreements of
Purchase and Sale, each of even date herewith, between Buyer, as buyer, and
one of the following persons, as seller: (i) The Berkshire Group, a
Pennsylvania limited partnership, (ii) University Plaza, LP, a Delaware
limited partnership, and (iii) Trend Associates, a Pennsylvania limited
partnership.
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant under the Existing Lease.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
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"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by any Tenant or third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, a "Fee Property" and, collectively, the "Fee Properties");
(b) each leasehold estate described in Schedule 2.1.2 attached hereto identified
as being owned by Seller on Schedule 2.1.2, together with any and all rights
appurtenant thereto owned by Seller (each, a "Leasehold Estate" and,
collectively, the "Leasehold Estates"), together with all buildings,
improvements and fixtures (other than fixtures owned or removable by any Tenant
or third party) located thereon (collectively, the "Leasehold Improvements;"
each
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Leasehold Estate, together with the Leasehold Improvements thereon, a "Leasehold
Property" and, collectively, the "Leasehold Properties"); (c) all tangible
personal property not owned or removable by any Tenant or third party, if any,
located on the Real Properties and owned by Seller and used in the operation or
maintenance of any one or more of the Real Properties (the "Personal Property");
(d) (i) Seller's interest, as landlord, owner or licensor, in each of the
Existing Leases, (ii) Seller's interest, as landlord, owner or licensor, in any
New Leases and (iii) to the extent assignable, any guarantees, letters of credit
or other instruments that secure or guarantee the performance of the obligations
of each Tenant; (e) to the extent assignable, all service contracts, maintenance
contracts, operating contracts, warranties, guarantees, listing agreements,
parking contracts and like contracts and agreements relating to the Real
Properties (excluding Leases), and commission agreements, equipment leases,
contracts, subcontracts and agreements relating to the construction of any
unfinished tenant improvements (collectively, the "Contracts"); (f) to the
extent assignable, all warranties and guaranties made by or received from any
third party with respect to any building, building component, structure,
fixture, machinery, equipment or material situated on any Real Property, or
contained in any or comprising a part of any Improvement or Leasehold
Improvement (collectively, the "Warranties"); (g) to the extent Seller currently
has such items in its possession and to the extent assignable, all (i)
preliminary, final and proposed building plans and specifications (including
"as-built" floor plans and drawings) and tenant improvement plans and
specifications for the Improvements and the Leasehold Improvements and (ii)
surveys, grading plans, topographical maps, architectural and structural
drawings and engineering, soils, seismic, geologic and architectural reports,
studies and tests relating to any Real Property ((g)(i) and (g)(ii)
collectively, the "Records and Plans"); and (h) to the extent transferable, any
intangible personal property now or hereafter owned by Seller and used in the
ownership, use or operation of any one or more of the Real Properties and/or the
Personal Property, excluding materials or information which in Seller's judgment
is privileged or confidential information, the name of the Seller and related
names and proprietary computer equipment, software and systems, but including
all (i) licenses, permits, building inspection approvals, certificates of
occupancy, approvals, subdivision maps and entitlements issued, approved or
granted by Governmental Authorities in connection with a Real Property, (ii)
unrecorded covenants, conditions and restrictions, reciprocal easement
agreements, area easement agreements and other common or planned development
agreements or documents affecting any Real Property and (iii) licenses,
consents, easements, rights of way and approvals obtained from private parties
to make use of utilities and to ensure vehicular and pedestrian ingress and
egress for any Real Property ((h)(i), (h)(ii) and (h)(iii) collectively, the
"Licenses and Permits") or other rights relating to the ownership, use or
operation of any of the Real Properties or the Personal Property (collectively,
the "Intangible Property"). Each Fee Property or Leasehold Property is referred
to herein individually as a "Real Property" and all of the foregoing are
referred to herein collectively as the "Real Properties." Each Fee Property and
Leasehold Property, together with the Personal Property, the Leases, the
Contracts, the Warranties, the Records and Plans and the Intangible Property
relating thereto are referred to herein as a "Property" and, collectively, as
the "Properties."
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Section 2.2 Purchase Price.
(a) The purchase price of the Properties is Sixty-Eight Million Two
Hundred Fifty Thousand Dollars ($68,250,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 1700
Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Gordon Daniels
(the "Title Company"), a cash payment in the amount of $3,412,500 (the
"Deposit"). The Deposit shall be held by the Title Company pursuant to an
escrow agreement among Buyer, Seller and the Title Company in the form of
Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Properties as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Properties contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the Title
Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO
THE FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO UNDER
THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY WRITTEN NOTICE
OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE DEPOSIT SHALL BE
IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED TO REIMBURSE BUYER
FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR (B) CONTINUE THIS
AGREEMENT PENDING BUYER'S ACTION
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FOR SPECIFIC PERFORMANCE, IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH
ACTION, SHALL NOT ACCEPT RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT
OF THE PURCHASE PRICE ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE
PROPERTIES IS NOT CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN,
AS ITS SOLE AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED
DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF
A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS
AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE
FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY OBLIGATIONS UNDER
SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S OBLIGATIONS UNDER SECTIONS 6.1
OR 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever in accordance with
the terms of Section 2.2(b)(i), this Agreement shall immediately and
automatically terminate. Upon any termination of this Agreement pursuant to
this Section 2.2(d) or Section 2.3, no party shall have any further rights or
obligations hereunder, except as provided in Sections 4.6(a), 6.1, 9.4 and
9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and approved
(and all representations and warranties of Seller made herein shall be subject
to and qualified by) all of the Due Diligence Materials. Notwithstanding
anything to the contrary herein, Seller shall have no liability whatsoever to
Buyer with respect to any matter disclosed to or actually known by Buyer or its
agents prior to the Closing Date.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filing required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Seller or the consummation by Seller
of the transactions contemplated hereby shall have been obtained or made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall be
used) with respect to each Real Property in the form of the title insurance
commitment (each, a "Title Commitment") obtained by Buyer from the Title Company
and delivered to Seller prior to the Effective Date, showing title to such Real
Property vested in Buyer, subject only to the Permitted Exceptions. It shall
not be a condition to Closing that Buyer obtain any endorsements or coverages
not set forth in the applicable Title Commitment. Seller shall be entitled, by
notice to Buyer, to adjourn the Closing one or more times for an aggregate
period not to exceed thirty (30) days in order to remove any exceptions to title
that are not Permitted Exceptions. Nothing contained herein shall require
Seller to bring any action or proceeding or otherwise to incur any expense to
correct, discharge or otherwise remove title exceptions or defects with respect
to any Property or to remove, remedy or comply with any other grounds for
Buyer's refusing to approve title, provided that Seller shall be obligated to
remove or discharge, or otherwise cause the Title Company to omit as an
exception to title or to insure against collection thereof from or against any
Property any mortgages or monetary liens created by Seller, any mechanics' liens
or judgment liens that are the obligation of Seller (as opposed to any Tenant or
other third party) and any liens and encumbrances voluntarily created by Seller
in violation of Section 7.1 (collectively, the "Required Deletion Items"). If
on the Closing Date there are any Required Deletion Items, Seller may use any
portion of the Purchase Price payable pursuant to Section 2.2(b) to satisfy
same, provided the Title Company shall omit such lien or encumbrance as an
exception to title.
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(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4 and the estoppel certificate from
the ground lessor with respect to each Ground Lease.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filings required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Buyer or the consummation by Buyer
of the transactions contemplated hereby shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
(f) Closing shall have occurred under each of the Related Purchase
Agreements in accordance with the respective terms thereof.
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Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 [Intentionally Deleted]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Properties or all, or
substantially all, of Seller's other assets, (iv) suffered the attachment or
other judicial seizure of any of the Properties or all, or substantially all, of
Seller's other assets, (v) admitted in writing its inability to pay its debts as
they come due, or (vi) made an offer of settlement, extension or composition to
its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
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(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that are
to be delivered to Buyer at Closing (i) are, or at the time of Closing will be,
duly authorized, executed and delivered by Seller, (ii) do not, and at the time
of Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or any Property owned by Seller is
subject and (iii) constitute (or in the case of Closing documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, Ground Leases, all material Contracts and all
environmental and structural reports in the possession of Seller. This
representation shall not be deemed breached by virtue of any Leases or Contracts
entered into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, any Property (except for any New Leases entered into after the
Effective Date in accordance with Section 7.1) and (ii) as of the Effective
Date, Seller has not received written notice from any Significant Tenant that
Seller has not performed its material obligations under such Significant
Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty (60) days notice with respect to any Property (the
"Non-Terminable Contracts") are as set forth in Schedule 4.1.2 (the "Schedule of
Contracts") or as entered into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to any Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
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(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of any Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to any Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of any Property.
(m) Seller is not in material default under any Ground Lease, and, to
Seller's knowledge, each Ground Lease is in full force and effect.
(n) Seller will have no employees at Closing, and any employees of
Seller existing on the date hereof shall have been terminated by Seller prior to
Closing in accordance with all applicable law, non-compliance with which could
result in a claim against Buyer. Buyer shall not be responsible for, nor assume
any liabilities of Seller regarding, any such employees.
(o) The Property is not an "Industrial Establishment" within the
meaning of the Industrial Site Recovery Act of the State of New Jersey, N.J.S.A.
13:1K-8.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence Materials); (2) other than clauses (i) and (k)
above (which, in the case of clause (i) above, the parties acknowledge shall be
governed by Section 7.7 with respect to events occurring after the Effective
Date) shall be deemed remade by Seller, and shall be true in all material
respects, as of the Closing Date (except that any representations and warranties
which are made as of a specified date, shall have been true and correct as of
such specified date) subject to (A) the information disclosed in the Due
Diligence Materials, (B) litigation that is not reasonably likely to have a
material adverse effect on any Property, and (C) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Buyer; and (3) shall survive the Closing only as and to the extent expressly
provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4 shall terminate to the extent specifically
confirmed by a tenant estoppel certificate delivered by a Tenant. The
representation in Section 4.1(m) shall terminate to the extent specifically
confirmed by an estoppel certificate by the ground lessor under the applicable
Ground Lease.
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Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to a specific Property, the amount of
such Claims exceeds Two Hundred Fifty Thousand Dollars ($250,000) ("Threshold
Amount") and, in such case, such Claims shall only be valid (and the Seller
shall only be liable) for the portion that exceeds the Threshold Amount;
provided, however, notwithstanding any provision to the contrary herein or in
any Closing Document, the (i) total liability of Seller for any or all Claims
(inclusive of Claims with respect to any estoppel certificates delivered by
Seller pursuant to Section 8.4(a)) with respect any Property shall not exceed
two and three quarters percent (2.75%) of the Purchase Price. Further
notwithstanding any provision to the contrary herein or in any Closing Document,
Seller shall have no liability with respect to any Claim under any of the
representations and warranties contained in this Agreement or in any Closing
Document, which Claim relates to or arises in connection with (1) any Hazardous
Materials (except solely to the extent that Seller has breached its
representation in Section 4.1(k)), (2) the physical condition of any Property
(except solely to the extent that Seller has breached its representation in
Section 4.1(k)) or (3) any other matter not expressly set forth in the Seller's
representations and warranties set forth in Section 4.1. Buyer shall not make
any Claim or deliver any Claim Notice unless it in good faith believes the
Claims would exceed the Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement, the
representations and warranties of Seller contained herein or in any Closing
Document shall survive only until July 6, 1998. Any Claim that Buyer may have
at any time against Seller for a breach of any such representation or warranty,
whether known or unknown, with respect to which a Claim Notice has not been
delivered to Seller on or prior to July 6, 1998 shall not be valid or effective.
For the avoidance of doubt, on July 6, 1998, Seller shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Buyer, any Permitted Assignee and/or their
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the Properties, except solely for
those matters that are then the subject of a pending Claim Notice delivered by
Buyer to Seller. Any Claim that Buyer may have at any time against Seller for a
breach of any such representation or warranty, whether known or unknown, with
respect to
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which a Claim Notice has been delivered to Seller on or prior to July 6, 1998
may be the subject of subsequent litigation brought by Buyer against Seller,
provided that such litigation is commenced against Seller on or prior to October
6, 1998. For the avoidance of doubt, on October 6, 1998, Seller shall be fully
discharged and released (without the need for separate releases or other
documentation) from any liability or obligation to Buyer and/or its successors
and assigns with respect to any Claims or any other matter relating to this
Agreement, any Closing Document or the Properties, except solely for those
matters that are the subject of a litigation by Buyer against Seller that is
pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing Documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and
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delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of each Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied with such independent investigation (but the foregoing will
not constitute a waiver of any breach of representation or warranty set forth in
Section 4.1 unless such breach is disclosed in the Due Diligence Materials or is
otherwise known by Buyer and/or any Permitted Assignee before the Closing Date
and Buyer and/or such Permitted Assignee(s) elect to proceed with the Closing).
Such independent investigation by Buyer may include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements or the Leasehold Improvements and of each tenant space therein, the
structure, the roof, the paving, the utilities, and all other physical and
functional aspects of such Real Property, including the presence or absence of
Hazardous Materials;
(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
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(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of such Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of each Real Property;
(ii) a Rent Roll for each Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for each Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) to the extent in the possession of Seller or Seller's
property manager, copies of reports, studies, assessments, investigations and
other materials related to the presence of Hazardous Materials at, on or under
each Real Property and the compliance of such Real Property with all
environmental laws, including recent Phase I (and, in some cases, Phase II)
environmental surveys;
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
each Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to each Real
Property; and
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(viii) the ground lease creating each Leasehold Estate (each, a
"Ground Lease").
(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Properties and the Due Diligence Materials and
has obtained, reviewed and approved a Title Commitment for each Property, (ii)
it is acquiring the Properties based on such independent investigation and
subject to all information disclosed in the Due Diligence Materials (and also in
reliance on Seller's representations and warranties contained herein) and (iii)
Buyer shall have no right to terminate this Agreement based on any further
investigations of the Properties or the Due Diligence Materials. Buyer has
approved each and every aspect of such Properties. The preceding sentence is
not intended to relieve, and shall not relieve, Seller from any of its
obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of any Real Property or the square footage of
the Improvements or Leasehold Improvements thereon or of any tenant space
therein, (iii) the development or income potential, or rights of or relating to,
any Real Property, or any Real Property's use, habitability, merchantability, or
fitness, or the suitability, value or adequacy of such Real Property for any
particular purpose, (iv) the zoning or other legal status of any Real Property
or any other public or private restrictions on the use of such Real Property,
(v) the compliance of any Real Property or its operation with any applicable
codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any Governmental Authority or of any other person or entity
(including, without limitation, the Americans with Disabilities Act), (vi) the
ability of Buyer to obtain any necessary governmental approvals, licenses or
permits for Buyer's intended use or development of any Real Property, (vii) the
presence or absence of Hazardous Materials on, in, under, above or about any
Real Property or any adjoining or neighboring property, (viii) the quality of
any labor and materials used in any Improvements or Leasehold Improvements, (ix)
the condition of title to any Real
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Property, (x) the Leases, Contracts or any other agreements affecting any Real
Property or the intentions of any party with respect to the negotiation and/or
execution of any lease or contract with respect to any Real Property, (xi)
Seller's ownership of any Property or any portion thereof or (xii) the economics
of, or the income and expenses, revenue or expense projections or other
financial matters, relating to, the operation of any Real Property. Without
limiting the generality of the foregoing, except as otherwise set forth herein,
Buyer expressly acknowledges and agrees that Buyer is not relying on any
representation or warranty of Seller, nor any partner, officer, employee,
attorney, agent or broker of Seller, whether implied, presumed or expressly
provided at law or otherwise, arising by virtue of any statute, common law or
other legally binding right or remedy in favor of Buyer. Buyer further
acknowledges and agrees that Seller is under no duty to make any inquiry
regarding any matter that may or may not be known to Seller or any partner,
officer, employee, attorney, agent or broker of Seller. This Section 4.5(d)
shall survive the Closing, or, if the Closing does not occur, beyond the
termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto a Real Property, Buyer shall give Seller
reasonable advance notice of such entry and shall conduct such entry and any
inspections in connection therewith so as to minimize, to the greatest extent
possible, interference with Seller's business and the business of the Tenants
and otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any necessary on-site testing, Buyer
shall give Seller written notice thereof, including the identity of the company
or persons who will perform such testing and the proposed scope of the testing
and the party performing the testing. Seller shall approve or disapprove any
proposed testing and the party performing the same within three (3) Business
Days after receipt of such notice. If a Buyer Party takes any sample from a
Real Property in connection with any such approved testing, Buyer shall provide
to Seller a portion of such sample being tested to allow Seller, if it so
chooses, to perform its own testing. Seller or its representative may be
present to observe any testing, or other inspection performed on any Real
Property. Buyer shall promptly deliver to Seller copies of any reports relating
to any testing or other inspection of any
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Real Property performed by or on behalf of any Buyer Party. Buyer shall
maintain, and shall ensure that its contractors maintain, public liability and
property damage insurance insuring the Buyer Parties against any liability
arising out of any entry or inspections of any Real Property pursuant to the
provisions hereof. Such insurance maintained by Buyer shall be in the amount of
Ten Million Dollars ($10,000,000) combined single limit for injury to or death
of one or more persons in an occurrence, and for damage to tangible property
(including loss of use) in an occurrence. The policy maintained by Buyer shall
insure the contractual liability of Buyer covering the indemnities herein and
shall (i) name Seller (and their successors, assigns and Affiliates) as
additional insureds, (ii) contain a cross-liability provision, and (iii) contain
a provision that "the insurance provided by Buyer hereunder shall be primary and
noncontributing with any other insurance available to Seller." Buyer shall
provide Seller with evidence of such insurance coverage prior to any entry or
inspection of any Real Property. Buyer shall indemnify and hold the Seller
Parties harmless from and against any Claims arising out of or relating to any
entry on any Real Property by any Buyer Party, in the course of performing any
inspections, testings or inquiries. The foregoing indemnity shall survive the
Closing, or, if the Closing does not occur, beyond the termination of this
Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of any Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, any Real Property discovered by Buyer's
environmental testing, Buyer shall first provide prior written notice to Seller
and shall not contact any Governmental Authority except in conjunction with
Seller. In addition, if Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to sue, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, LLC members, directors, officers, attorneys, employees and
agents of each of them, and their respective heirs, successors, personal
representatives and assigns (each a "Seller Party", and collectively, the
"Seller Parties") with respect to any and all Claims, whether direct or
indirect, known or unknown, foreseen or unforeseen, that may arise on account of
or in any way be connected with any Property including, without limitation, the
physical, environmental and structural condition of the related Real Property or
any law or
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regulation applicable thereto, including, without limitation, any Claim or
matter relating to the use, presence, discharge or release of Hazardous
Materials on, under, in, above or about any Real Property; provided, however,
Buyer does not waive its rights, if any, to recover from, and does not release
or discharge or covenant not to sue Seller for (i) any act that is found by a
court of competent jurisdiction to constitute fraud, (ii) any breach of Seller's
representations or warranties set forth in Section 4.1 or in Seller's estoppel
certificate delivered pursuant to Section 8.4, subject to the limitations and
conditions provided in this Agreement, or (iii) any breach of Seller's
obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for each Property. A copy of each Title Commitment delivered to
Buyer has been delivered to Seller and its counsel. At the Closing, as a
condition precedent to Buyer's obligation to close, Seller shall have delivered
to Buyer (a) a deed for each Fee Property in the form of Exhibit A for the
applicable jurisdiction (each, a "Deed"), (b) an assignment and assumption for
each Leasehold Estate in the form of Exhibit B (each, an "Assignment of Ground
Lease") and (c) a deed for each Leasehold Improvement in the form of Exhibit C
(each, a "Leasehold Improvements Deed"), each subject to no exceptions other
than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for such Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of such Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
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forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Effective Date.
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling the
same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds, the Assignments of Ground Leases, and the
Leasehold Improvements Deeds shall be deemed to be a full performance and
discharge of every obligation on the part of Seller to be performed under this
Agreement with respect to the applicable Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, one or
more 1992 ALTA Owner's Policies of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a 1992
ALTA Owner's Policy, such other required form shall be used) in the aggregate
amount of the Purchase Price for the Properties showing title to each Property
vested in Buyer or its Permitted Assignee or designee, subject only to the
Permitted Exceptions (the "Title Policy").
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ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder, other than GMH Realty, Inc. ("GMH"), whose fees
will be the responsibility of Seller pursuant to a separate agreement among
between GMH and Seller, was instrumental in arranging or bringing about this
transaction and that there are no claims or rights for brokerage commissions or
finders' fees in connection with the transactions contemplated hereby by any
person or entity other than GMH. If any person brings a claim for a commission
or finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Indemnified Party
in defending against the claim. The provisions of this Section 6.1 shall
survive the Closing or, if the Closing does not occur, any termination of this
Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real Property
in the ordinary course, on an arm's-length basis and consistent with Seller's
past practices and will not dispose of or encumber any Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring on or before December 30, 1997), and the
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ground lessee's obligations under the Ground Leases and pay all costs and
expenses of the Properties, including without limitation debt service and Real
Estate Taxes.
(b) Seller shall in good faith consult with Buyer regarding such
Lease at least three (3) Business Days prior to becoming legally bound with
respect thereto (but Seller shall nevertheless be free to enter such New Lease
without Buyer's approval). After the expiration of the Due Diligence Period,
Seller shall not, without Buyer's consent, enter into any New Leases or
materially modify any Existing Lease. Any consent to be given by Buyer pursuant
to this Section 7.1(b) shall not be unreasonably withheld or delayed and shall
be deemed granted if Buyer does not respond in writing to Seller's request for
consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating agreement
or any contract, agreement or other commitment of any sort (including any
contract for capital items or expenditures, but excluding any liens or other
encumbrances on title other than Permitted Exceptions), with respect to any one
or more of the Properties that (A) requires payments to or by Seller in excess
of $50,000 per annum, or the performance of services by Seller the value of
which is in excess of $50,000 per annum and (B) is not terminable without cause
and without penalty on thirty (30) days' notice or less; provided that Seller,
in its good faith but sole discretion, believes such contract is on market terms
and will benefit the applicable Property. At least three (3) Business Days prior
to becoming legally bound with respect to any such matter, Seller shall consult
with and seek the consent of Buyer, and shall provide reasonable detail to Buyer
(including, at Buyer's request, copies of the relevant documentation), with
respect thereto. Any consent to be given by Buyer pursuant to this
Section 7.1(c) shall not be unreasonably withheld or delayed and shall be deemed
granted if Buyer does not respond in writing to Seller's request for consent
within three (3) Business Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell any Property or portion thereof without Buyer's
prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting any Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
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(g) Prior to the Closing Date, Seller shall not enter into any
amendment, modification or termination of any Ground Lease.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent.
(A) Except as provided in Section 7.2(B) below, if the Closing occurs,
Buyer shall be responsible and shall pay for the costs of tenant improvement
work or allowances, third-party leasing commissions and other leasing costs
(collectively, "Leasing Costs") relating to or arising from (i) those Leases or
modifications of Leases entered into on or after October 9, 1997 (ii) the
exercise by a Tenant of a renewal, expansion or extension option contained in
any Lease, which renewal or extension period commences, or which expansion space
such Tenant first has the right to occupy, on or after October 9, 1997
(notwithstanding that such Tenant may have exercised such option prior to
October 9, 1997 and (iii) any items set forth on Schedule 7.2.1, and any amounts
paid by Seller in respect of such Leasing Costs shall result in an upward
adjustment to the Purchase Price at Closing equal to the amounts so paid. Free
rent periods provided for in Leases entered into by Seller prior to October 9,
1997 that occur, in whole or in part, after the Closing Date shall be for the
account of, and borne by, Buyer without adjustment to the Purchase Price at
closing.
(B) Notwithstanding and without limitation to Section 7.2(A) above,
(i) Seller shall pay all costs identified in Schedule 7.2.1 as "Proposed Seller
Costs" and (ii) Buyer shall pay all costs identified in Schedule 7.2.1 as
"Proposed Buyer Costs." To the extent "Proposed Seller Costs" shall not have
been paid by Seller at Closing, the amount of then unpaid "Proposed Seller
Costs" shall be deducted from the Purchase Price.
(C) The provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Properties. Between the
Effective Date and the Closing Date, Seller shall (a) maintain each Real
Property in substantially the same manner as prior hereto pursuant to Seller's
normal course of business, subject to reasonable wear and tear and further
subject to the occurrence of any damage or destruction to such Real Property by
casualty or other causes or events beyond the control of Seller; provided,
however, that Seller's maintenance obligations under this Section 7.3 shall not
include any obligation to make capital expenditures not incurred in Seller's
normal course of business or any other expenditures not incurred in Seller's
normal course of business; (b) continue to maintain its existing insurance
coverage; and (c) not grant any voluntary liens or encumbrances affecting such
Property other than Permitted Exceptions of the type described in clauses (i)
and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise,
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and to apply all or any portion of any security deposits then held by Seller
toward any loss or damage incurred by Seller by reason of any defaults by any
Tenant, provided, that (i) with respect to delinquent rents, Seller may (to the
extent permitted under the Lease) apply Tenant security deposits held by Seller
only to rents that are thirty (30) days or more past due and (ii) with respect
to any application by Seller of Tenant security deposits held by Seller, Seller
will deliver, in connection with any such application, written notice to the
affected Tenant(s) indicating that their security deposits have been or are
being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
related Real Properties or destruction of any improvements thereon or
condemnation of any portion of any Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or repair
of any Property. Seller has provided Buyer with a certificate of insurance for
Seller's casualty insurance policy so that Buyer can confirm its satisfaction
with such policy. Seller agree that it will maintain such policy in full force
and effect until the Closing. If the proceeds or awards have not been collected
as of the Closing, then such proceeds or awards shall be assigned to Buyer,
except to the extent needed to reimburse Seller for sums it reasonably expended
prior to the Closing for the restoration or repair of such Property.
Notwithstanding the foregoing, (i) Seller shall not settle, compromise or
otherwise stipulate any award or recovery in connection with any damage,
destruction or condemnation, in each case if such damage, destruction or
condemnation impairs the value of a Property by at least $250,000, without the
prior written approval of Buyer, which approval shall not be unreasonably
withheld, (ii) Buyer shall have the right to participate in any such settlement
or other proceedings, and (iii) if the amount of the damage or destruction as
described in this Section 7.7 exceeds ten percent (10%) of the Purchase Price,
then Buyer may, at its option to be exercised within five (5) Business Days of
Seller's written notice of the occurrence of the damage or destruction, either
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terminate this Agreement or consummate the purchase for the full Purchase Price
as required by the terms hereof. If Buyer elects to terminate this Agreement,
then the Deposit shall be immediately returned to Buyer and neither party shall
have any further rights or obligations hereunder except to the extent set forth
in Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the Closing, Buyer shall be entitled to a credit against the
Purchase Price and shall receive an assignment of any uncollected proceeds or
awards, all as set forth in this Section 7.7 above. The provisions of this
Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to any of the
Properties of which Seller obtains actual knowledge by written notice, any
notices of violations of any legal requirements relating to any of the
Properties received by Seller, any litigation of which Seller obtains actual
knowledge by written notice that arises out of the ownership of any of the
Properties unless fully covered by insurance (subject to customary deductibles),
and any other matters within the actual knowledge of Daniel Jagoe or Robert
Nowicki and that would materially affect Seller's representations and warranties
hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"), in either case, with time being of the essence.
Except as otherwise permitted under this Agreement, such date and time may not
be extended without the prior written approval of both Seller and Buyer.
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Section 8.3 Deposit of Documents.
(a) On or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
(i) a duly executed and acknowledged Deed for each Fee
Property;
(ii) a duly executed and acknowledged Assignment of Ground Lease
for each Leasehold Estate (including the Leasehold Improvements on each
Leasehold Estate);
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for each Fee
Property and each Leasehold Property in the form attached hereto as Exhibit E
(each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for each Fee Property and each Leasehold Property in the form attached
hereto as Exhibit F (each, an "Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for each
Fee Property and each Leasehold Property in the form attached hereto as Exhibit
G (each, an "Assignment of Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Properties;
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
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(b) On or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) a duly executed and acknowledged counterpart of an
Assignment of Ground Lease for each Leasehold Estate;
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Properties.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for each Fee Property and
the Assignment of Ground Lease for each Leasehold Estate, (ii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with the
terms of this Agreement are to be delivered by Buyer to Seller on the Closing
Date. Buyer and Seller shall each deposit such other instruments as are
reasonably required by the Title Company or otherwise required to close the
escrow and consummate the purchase and sale of the Properties in accordance with
the terms hereof; provided, that Seller shall not be required to provide any
indemnities or affidavits or to escrow any funds other than the Seller's
Affidavit.
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(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Properties in Seller's possession, a set of keys to each Real
Property and originals (or copies, if originals are not available) of any other
items in Seller's possession relating to the use, ownership, operation,
maintenance, leasing, repair, alteration, management or development of the Real
Properties, on the Closing Date (at such location as Buyer and Seller shall
mutually agree). Following the Closing, Buyer shall make all Leases, Contracts,
other documents, books, records and any other materials in its possession, to
the extent the same relate to the period of Seller's ownership of the
Properties, available to Seller or its representatives for inspection and/or
copying at Buyer's offices (at Seller's sole cost and expense) at reasonable
times and upon reasonable notice.
(e) Seller shall use reasonable efforts to obtain from the State of
New Jersey Department of Environmental Protection and deliver to Buyer a "letter
of non-applicability" with respect to the Property under the New Jersey
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 - 16. If Closing occurs without
such letter having been delivered, Seller shall continue to use reasonable
efforts after closing to obtain such letter.
Section 8.4 Estoppel Certificates. (a) Seller shall use its
reasonable efforts (without incurring any additional expense) to obtain prior to
the Closing Date tenant estoppel certificates from each Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the event that any Tenant is unwilling to sign the form
attached hereto as Exhibit J. It shall be a condition to Buyer's obligation to
close the sale and purchase of a Property that on or before the Closing Seller
delivers to Buyer tenant estoppel certificates substantially in the form
attached hereto as Exhibit J (or in the Prescribed Form, if applicable) from
(i) Tenants occupying seventy five percent (75%) of the total leased square
footage of the Properties; and (ii) Significant Tenants occupying seventy five
percent (75%) of the total leased square footage covered by such Significant
Tenants' Leases (with respect to each of preceding clauses (i)-(ii), the
"Required Percentage"); provided, however, if Seller is unable to obtain the
aforesaid tenant estoppel certificates from Tenants or Significant Tenants (as
the case may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii) the
amount of the Tenants' or Significant Tenants' security deposits; (iii) the
dates through which rent has been paid; (iv) neither Seller nor, to Seller's
knowledge, any of those Tenants or Significant Tenants (as the case may be) is
in default thereunder; (v) a true, correct and complete copy of the Leases are
attached; (vi) the Leases expire on the dates specified and are not subject to
any renewal or extension options, except as specified, and (viii) there are no
options to purchase or rights of first refusal except as specified. Buyer shall
be
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obligated to accept Seller's certification in lieu of any missing estoppel
certificates. Seller's representations and warranties in the certificate shall
survive the Closing, provided that (i) Buyer must give Seller a Claim Notice
with respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any claim
that Buyer may have that is not so asserted, or litigation by Buyer that is not
so commenced, shall be barred and not be valid or effective and Seller shall
have no liability whatsoever with respect thereto) and (ii) any certificate
delivered by Seller pursuant to this Section 8.4 shall cease to survive the
Closing to the extent specifically confirmed by a tenant estoppel certificate
delivered by a Tenant or a Significant Tenant. In no event shall the minimum
thresholds to Buyer's recovery set forth in Section 4.3(a) apply to any
certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
(b) Seller shall use reasonable efforts (without incurring any
additional expense) to obtain prior to the Closing Date an estoppel certificate
from the ground lessor of each Ground Lease, substantially in the form attached
hereto as Exhibit M.
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on any Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement or Ground Lease; annual permits and/or
inspection fees (calculated on the basis of the period covered); and any
other income or expenses relating to the operation and maintenance of each
Property (other than any Leasing Costs and free rent which shall be prorated
as provided in Section 7.2), shall all be prorated as of 12:01 a.m. Eastern
Standard Time on the Closing Date, on the basis of a 365-day year, with Buyer
deemed the owner of the Properties on the entire Closing Date. Rent which is
due but uncollected as of the Closing Date shall not be adjusted. On the
Closing Date, Seller shall deliver to Buyer a schedule of all such past due
but uncollected rent owed by tenants. Buyer agrees to cause the amount of
such rental arrears to be included in the first bills thereafter submitted by
Buyer to such tenants after the Closing Date. Any rents collected from a
tenant after the Closing Date shall be applied first to the month in which
the Closing Date occurs, next to any rents payable by such tenant after the
Closing Date and thereafter to any arrearage owed by such tenant on the
Closing Date in the inverse order of maturity. Additional rent payments (and
estimated additional rent payments) actually paid by tenants prior to Closing
attributable to real estate taxes and operating costs shall
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be adjusted as of the Closing Date. Additional rent payments (and estimated
additional rent payments) attributable to real estate taxes and operating costs
to be paid by tenants after the Closing shall be adjusted upon receipt by Buyer.
The adjustments of additional rent payments shall be based upon the number of
days in the period for which such payment relates that are before or after the
Closing Date. In no event will Buyer be entitled to receive any payments on or
under the promissory notes or other agreements referred to in Section 8.7.
Buyer shall use reasonable efforts until October 6, 1998 to collect any
delinquent rents that accrued prior to the Closing Date (but Seller shall have
the right to commence and pursue litigation against any Tenant to collect
delinquent rents and/or expense reimbursements, provided that Seller may not
seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
any Property has been assessed for property taxes purposes at such rates as
would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of such Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims and liability for
such taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations, or the adjustment of the Purchase Price provided for in Section
7.2(B) hereof, cannot be calculated accurately on the Closing Date, then the
same shall be calculated as soon as reasonably practicable after the Closing
Date, and that if any Tenant is required to pay Additional Rents and such
Additional Rents are not finally adjusted between the landlord and tenant under
the applicable Lease until after the end of the 1997 calendar year, then such
prorations and adjustment shall be calculated as soon as reasonably practicable
after such Additional Rents have been finally adjusted. Either party owing the
other party a sum of money based on proration(s) and adjustment calculated after
the Closing Date shall promptly pay said sum to the other party, together with
interest thereon at the rate of two percent (2%) per annum over the Prime Rate
from the Closing Date to the date of payment, if payment is not made within ten
(10) days after delivery of a bill therefor. If the real estate and/or personal
property tax rate and assessments have not been set for the calendar year in
which the Closing occurs, then the proration of such taxes shall be based upon
the rate and assessments for the preceding calendar year, and such proration
shall be adjusted between Seller and Buyer as soon as reasonably practicable
after such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b) and the adjustment calculated by Section 7.2(B). Seller and its
representatives and auditors shall be afforded the opportunity to review all
underlying financial records and work papers pertaining to
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the preparation of Buyer's proration and adjustment statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Properties to permit Seller to review
Buyer's proration statements. Seller shall have sixty (60) days after receipt
of Buyer's calculations to accept or contest such prorations and adjustment.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller shall pay
transfer deed taxes with respect to the deed. Seller and Buyer shall each be
responsible for paying their respective attorneys' fees and costs. Buyer and
Seller agree that, given the de minimis amount of Personal Property included
within the Properties, no portion of the Purchase Price is allocable or
attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in a
manner (or otherwise take a position) inconsistent with the Purchase Prices set
forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and retain
any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of any Property for any tax year which, in
accordance with the laws and regulations applicable to such Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to any Property, (i) Seller shall retain all rights
(subject to any rights of Tenants under their Leases) with respect to any tax
year ending prior to the tax year (and all refunds relating thereto) in which
the Closing Date occurs, and shall have the sole right to participate in and
settle any proceeding relating thereto (provided, that such settlement does not
affect the assessed tax value for any subsequent tax year), and (ii) Buyer shall
have all rights (subject to any rights of Tenants under their Leases) with
respect to any tax year (and all refunds relating thereto) which ends after the
Closing Date; provided, however, that if the proceeding is for a tax year in
which the Closing Date occurs, such
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settlement shall not be made without Buyer's prior consent, which consent shall
not be unreasonably withheld or delayed. With respect to any such proceeding
for a tax year in which the Closing Date occurs (whether commenced by Seller or
Buyer), any refund or credit of taxes for such tax year shall be applied first
to the unreimbursed out-of-pocket expenses, including reasonable counsel fees,
necessarily incurred in obtaining such refund or credit, and second, to any
Tenant entitled to same, and the balance shall be apportioned between Seller and
Buyer as of the Closing Date in accordance with the proportion of the applicable
tax year occurring before and after the Closing Date. In each case, the party
which prosecuted the proceeding shall deliver to the other copies of receipted
tax bills and any decision or settlement agreement evidencing the reduction in
taxes. If any refund shall be received by Seller which is for the account of
Buyer as provided in this Section 8.6, then Seller shall hold Buyer's share
thereof in trust for Buyer and, promptly upon receipt thereof, pay such share to
Buyer or any other party entitled to same as provided above. If any refund
shall be received by Buyer which is for the account of Seller as provided in
this Section 8.6, then Buyer shall hold Seller's share thereof in trust for
Seller and, promptly upon receipt thereof, pay such share to Seller or any other
party entitled to same as provided above. Each party shall execute any and all
consents or other documents as may be reasonably necessary to be executed by
such party so as to permit the other party to commence or continue any tax
certiorari proceeding which such other party is authorized to commence or
continue pursuant to the terms of this Section 8.6, or to collect any refund or
credit with respect to any such tax proceeding. The provisions of this Section
8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other agreements (other than the Leases) delivered to Seller
that evidence, deal with or otherwise relate solely to a Tenant's rental or
expense reimbursement obligations under its Lease that, as of the Closing Date,
are or were past due, shall not be conveyed to Buyer and shall be retained by
Seller. Seller agrees that in enforcing its rights against Tenants under any
such promissory notes or other agreements, Seller will not seek to exercise any
remedies that may be available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's audited
financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage
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prepaid, return receipt requested, (c) by a commercial overnight courier that
guarantees next day delivery and provides a receipt, or (d) by legible facsimile
(followed by hard copy delivered in accordance with preceding
subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: Park 80, LLC
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
with a copy to: REED SMITH SHAW & McCLAY
2500 One Liberty Place
1650 Market Street
Philadelphia, PA 19103-7301
Attention: Stephen M. Lyons, III
Facsimile No.: (215) 851-1420
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery). Notices may be given by
attorneys for the notifying partner.
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party,
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and are superseded and replaced in total by this Agreement together with the
Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Properties but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the case
may be, of one or more of the Properties and Seller shall convey at Closing such
Property or Properties (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Seller and the
other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
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Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES RECOGNIZE THAT
IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN ASPECTS OF THE LAWS
OF OTHER STATES IN ORDER TO CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTY
PURSUANT HERETO. THE PARTIES AGREE TO COMPLY WITH SUCH OTHER LAWS TO THE EXTENT
NECESSARY TO CONSUMMATE THE PURCHASE AND SALE OF THE PROPERTY. IT IS THE
PARTIES' INTENT THAT THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO EACH
PROPERTY IN A MANNER THAT RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving this
Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of all
federal and state courts sitting in the Commonwealth of Pennsylvania and consent
that any order, process, notice of motion or other application to or by any such
court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided that a
reasonable time for appearance is allowed, and Buyer and Seller agree that such
courts shall have the exclusive jurisdiction over any such suit, action or
proceeding commenced by any party. In furtherance of such agreement, Buyer and
Seller agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the Commonwealth of Pennsylvania and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
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Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s) and
their Affiliates and representatives for review and inspection, Buyer (on behalf
of itself, any Permitted Assignee(s), and their respective Affiliates and
representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Properties, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Properties as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Properties and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable
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assurance that confidential treatment will be accorded to designated
portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Properties (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member,
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<PAGE>
partner, officer, director or employee of Seller or counsel to or accountants of
Seller solely for their use and on a need-to-know basis, provided that such
Persons are notified of Seller's confidentiality obligations hereunder, (b) with
the prior consent of Buyer, or (c) subject to the next sentence, pursuant to
legal, regulatory or administrative process. In the event that Seller shall
receive a request to disclose any Confidential Information under clause (c) of
the preceding sentence, Seller shall (i) promptly notify Buyer thereof,
(ii) consult with Buyer on the advisability of taking steps to resist or narrow
such request and (iii) if disclosure is required or deemed advisable, reasonably
cooperate with Buyer (at no cost to Seller) in any attempt it may make to obtain
an order or other assurance that confidential treatment will be accorded such
Confidential Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation,
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all of the Exhibits and Schedules hereto, and each of Seller and Buyer have
fully executed and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 [Intentionally Omitted].
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
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<PAGE>
The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Name:
Title:
Seller: PARK 80 L.L.C.
By: GH Park, Inc., as member and general
partner in Park/GH L.P., member
By: _________________________
Name:
Title
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EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $3,412,500 (the "Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and Park 80, LLC ("Seller"), the provisions of which (including,
without limitation, the defined terms) are hereby incorporated herein by
reference. The Deposit shall be paid to Seller by Escrowee at the time of
Closing under the Agreement, or if Closing does not take place, distributed in
accordance with the terms of the Agreement. Escrowee shall, immediately upon
receipt of the Deposit, deposit same in an interest bearing, money market type
escrow account with a federally insured bank or savings and loan association
located in Philadelphia, Pennsylvania. All interest which shall accrue on the
Deposit shall be payable in accordance with the Agreement. Escrowee shall pay
such interest to such party contemporaneously with Escrowee's payment of the
Deposit. Seller and Buyer agree that Escrowee is an escrow holder only and is
merely responsible for the safekeeping of the Deposit and interest and shall not
be required to determine questions of fact or law. If Escrowee shall receive
notice of a dispute as to the disposition of the Deposit or the interest, then
Escrowee shall not distribute the Deposit or interest except in accordance with
written instructions signed by both Buyer and Seller. Pending resolution of any
such dispute, Escrowee is authorized to pay the Deposit and interest into
court. If Escrowee pays the Deposit and interest into court, it shall be
discharged from all further obligations hereunder. This Escrow Agreement shall
be governed by the laws of the Commonwealth of Pennsylvania.
Seller's Federal Tax ID Number is 23-2859659.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable consideration,
each intending to be legally bound and to bind their respective successors and
assigns, have caused this Escrow Agreement to be executed and delivered as of
_______________.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Name:
Title:
Seller: PARK 80, LLC
By: GH Park, Inc., as member and general
partner in Park/GH L.P., member
By: _________________________
Name:
Title
<PAGE>
EXHIBIT 10.10
AGREEMENT OF PURCHASE AND SALE
BETWEEN
TREND ASSOCIATES
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions....................................................1
Section 1.2 Terms Generally................................................6
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale...........................................................6
Section 2.2 Purchase Price.................................................7
Section 2.3 Due Diligence..................................................9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase...................9
Section 3.2 Conditions to Seller's Obligations to Sell....................11
Section 3.3 Termination...................................................11
Section 3.4 Waiver by Buyer...............................................12
Section 3.5 [Intentionally Omitted}. ....................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller......................12
Section 4.2 Estoppels.....................................................14
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties....................................................14
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Section 4.4 Representations and Warranties of Buyer.......................16
Section 4.5 Buyer's Independent Investigation.............................17
Section 4.6 Entry and Indemnity; Limits on Government Contacts............20
Section 4.7 Release.......................................................21
ARTICLE V
TITLE
Section 5.1 Conveyance of Title...........................................22
Section 5.2 Evidence of Title.............................................23
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers.......................................................24
Section 6.2 Expenses......................................................24
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property.............................24
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent...26
Section 7.3 Seller's Maintenance of the Property..........................26
Section 7.4 Lease Enforcement.............................................26
Section 7.5 Lease Termination Prior to Closing............................27
Section 7.6 Tenant Notices................................................27
Section 7.7 Risk of Loss and Insurance Proceeds...........................27
Section 7.8 Notifications.................................................28
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions...........................................28
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Section 8.2 Closing.......................................................28
Section 8.3 Deposit of Documents..........................................28
Section 8.4 Estoppel Certificates.........................................31
Section 8.5 Prorations....................................................32
Section 8.6 Tax Certiorari Proceedings....................................34
Section 8.7 Tenant Obligations............................................35
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices.......................................................35
Section 9.2 Entire Agreement..............................................36
Section 9.3 Time..........................................................37
Section 9.4 Attorneys' Fees...............................................37
Section 9.5 No Merger.....................................................37
Section 9.6 Assignment....................................................37
Section 9.7 Counterparts..................................................37
Section 9.8 Governing Law; Jurisdiction and Venue.........................37
Section 9.9 Waiver of Trial by Jury.......................................38
Section 9.10 Confidentiality and Return of Documents......................38
Section 9.11 Interpretation of Agreement..................................41
Section 9.12 Amendments...................................................41
Section 9.13 No Recording.................................................41
Section 9.14 No Third Party Beneficiary...................................41
Section 9.15 Severability.................................................41
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract.41
Section 9.17 Further Assurances...........................................41
Section 9.18 Special Provisions...........................................42
Section 9.19 Exculpation..................................................42
Section 9.20 Counterparts.................................................42
EXHIBITS
EXHIBIT A REAL PROPERTY DEED
EXHIBIT B [INTENTIONALLY OMITTED]
EXHIBIT C INTENTIONALLY OMITTED
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EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
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<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between Trend Associates, a Pennsylvania limited partnership
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
<PAGE>
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its representatives on or
about November 21, 1997, and on-site materials made available to Buyer for
inspection.
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"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leases" shall mean all Existing Leases and New Leases, collectively.
"Leasing Costs" shall have the meaning set forth in Section 7.2.
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"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering the Real Property which are entered into after the
Effective Date in accordance with the terms of this Agreement, as the same
may be amended or modified from time to time in accordance with the terms
of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" shall have the meaning set forth in Section 2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" shall have the meaning set forth in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Related Purchase Agreements" shall mean those three Agreements of
Purchase and Sale, each of even date herewith, between Buyer, as buyer, and
one of the following persons, as sellers: (i) The Berkshire Group, a
Pennsylvania limited partnership, (ii) University Plaza, LP, a Delaware
limited partnership, and (iii) Park 80, L.L.C., a New Jersey limited
liability company.
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"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering the Real Property.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
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(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by any Tenant or third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, the "Real Property"); (b) [intentionally omitted]; (c) all
tangible personal property not owned or removable by any Tenant or third party,
if any, located on the Real Property and owned by Seller and used in the
operation or maintenance of the Real Property (the "Personal Property"); (d) (i)
Seller's interest, as landlord, owner or licensor, in each of the Existing
Leases, (ii) Seller's interest, as landlord, owner or licensor, in any New
Leases and (iii) to the extent assignable, any guarantees, letters of credit or
other instruments that secure or guarantee the performance of the obligations of
each Tenant; (e) to the extent assignable, all service contracts, maintenance
contracts, operating contracts, warranties, guarantees, listing agreements,
parking contracts and like contracts and agreements relating to the Real
Property, and commission agreements, equipment leases, contracts, subcontracts
and agreements relating to the construction of any unfinished tenant
improvements (collectively, the "Contracts"); (f) to the extent assignable, all
warranties and guaranties made by or received from any third party with respect
to any building, building component, structure, fixture, machinery, equipment or
material situated on the Real Property, or contained in any or comprising a part
of any Improvement or Leasehold Improvement (collectively, the "Warranties");
(g) to the extent Seller currently has such items in its possession and to the
extent assignable, all (i) preliminary, final and proposed building plans and
specifications (including "as-built" floor plans and drawings) and tenant
improvement plans and specifications for the Improvements and (ii) surveys,
grading plans, topographical maps, architectural and structural drawings and
engineering, soils, seismic, geologic and architectural reports, studies and
tests relating to the Real Property ((g)(i) and (g)(ii) collectively, the
"Records and Plans"); and (h) to the extent transferable, any intangible
personal
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property now or hereafter owned by Seller and used in the ownership, use or
operation of any one or more of the Real Property and/or the Personal Property,
excluding materials or information which in Seller's judgment is privileged or
confidential information, the name of the Seller and related names and
proprietary computer equipment, software and systems, but including all
(i) licenses, permits, building inspection approvals, certificates of occupancy,
approvals, subdivision maps and entitlements issued, approved or granted by
Governmental Authorities in connection with the Real Property, (ii) unrecorded
covenants, conditions and restrictions, reciprocal easement agreements, area
easement agreements and other common or planned development agreements or
documents affecting the Real Property and (iii) licenses, consents, easements,
rights of way and approvals obtained from private parties to make use of
utilities and to ensure vehicular and pedestrian ingress and egress for the Real
Property ((h)(i), (h)(ii) and (h)(iii) collectively, the "Licenses and Permits")
or other rights relating to the ownership, use or operation of any of the Real
Property or the Personal Property (collectively, the "Intangible Property").
The Real Property, together with the Personal Property, the Leases, the
Contracts, the Warranties, the Records and Plans and the Intangible Property
relating thereto are referred to herein as the "Property".
Section 2.2 Purchase Price.
(a) The purchase price of the Property is One Million Six Hundred
Fifty Thousand Dollars ($1,650,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 1700
Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Gordon Daniels
(the "Title Company"), a cash payment in the amount of $82,500 (the "Deposit").
The Deposit shall be held by the Title Company pursuant to an escrow agreement
among Buyer, Seller and the Title Company in the form of Exhibit N attached
hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Property as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Property contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in
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accordance with the wiring instructions set forth on Schedule 2.2.1 attached
hereto) of immediately available funds, with the Title Company and paid to
Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE
FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S INABILITY
TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE RETURNED TO
BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE RETURN OF THE
DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED BECAUSE
OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO UNDER THIS AGREEMENT, BUYER
MAY EITHER (A) TERMINATE THIS AGREEMENT BY WRITTEN NOTICE OF TERMINATION TO
SELLER ON THE CLOSING DATE, WHEREUPON THE DEPOSIT SHALL BE IMMEDIATELY RETURNED
TO BUYER AND SELLER SHALL BE OBLIGATED TO REIMBURSE BUYER FOR ITS OUT OF POCKET
EXPENSES (NOT TO EXCEED $25,000) OR (B) CONTINUE THIS AGREEMENT PENDING BUYER'S
ACTION FOR SPECIFIC PERFORMANCE, IN WHICH LATTER EVENT BUYER, AS A CONDITION TO
SUCH ACTION, SHALL NOT ACCEPT RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL
AMOUNT OF THE PURCHASE PRICE ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF
THE PROPERTY IS NOT CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER,
THEN, AS ITS SOLE AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS
LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN
THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE
PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE
OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE
DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW,
EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND
THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY OBLIGATIONS UNDER
SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S OBLIGATIONS UNDER SECTIONS 6.1
0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever
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in accordance with the terms of Section 2.2(b)(i), this Agreement shall
immediately and automatically terminate. Upon any termination of this Agreement
pursuant to this Section 2.2(d) or Section 2.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 4.6(a), 6.1, 9.4
and 9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and approved
(and all representations and warranties of Seller made herein shall be subject
to and qualified by) all of the Due Diligence Materials. Notwithstanding
anything to the contrary herein, Seller shall have no liability whatsoever to
Buyer with respect to any matter disclosed to or actually known by Buyer or its
agents prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Property is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filing required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Seller or the consummation by Seller
of the transactions contemplated hereby shall have been obtained or made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall be
used) with respect to the Real Property in the form of the title insurance
commitment (each, a "Title Commitment") obtained by Buyer from the Title Company
and delivered to Seller prior to the Effective Date showing title to the Real
Property vested in Buyer, subject only to the Permitted Exceptions. It shall
not be a condition to Closing that Buyer obtain any endorsements or coverages
not set forth in the applicable Title Commitment. Seller shall be entitled, by
notice to Buyer, to adjourn the Closing one or more times for an aggregate
period not to exceed thirty (30) days in order to remove any exceptions to title
that are not Permitted Exceptions. Nothing contained herein shall require
Seller to bring any action or proceeding or otherwise to incur any expense to
correct, discharge or otherwise remove
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title exceptions or defects with respect to the Property or to remove, remedy or
comply with any other grounds for Buyer's refusing to approve title, provided
that Seller shall be obligated to remove or discharge, or otherwise cause the
Title Company to omit as an exception to title or to insure against collection
thereof from or against the Property any mortgages or monetary liens created by
Seller, any mechanics' liens or judgment liens that are the obligation of Seller
(as opposed to any Tenant or other third party) and any liens and encumbrances
voluntarily created by Seller in violation of Section 7.1 (collectively, the
"Required Deletion Items"). If on the Closing Date there are any Required
Deletion Items, Seller may use any portion of the Purchase Price payable
pursuant to Section 2.2(b) to satisfy same, provided the Title Company shall
omit such lien or encumbrance as an exception to title.
(d) Buyer shall have received estoppel certificates for the Real
Property to the extent required by Section 8.4.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filings required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Buyer or the consummation by Buyer
of the transactions contemplated hereby shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
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(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
(f) Closing shall have occurred under each of the Related Purchase
Agreements in accordance with the respective terms thereof.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 [Intentionally Omitted}.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by
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Seller's creditors, (iii) suffered the appointment of a receiver to take
possession of the Property or all, or substantially all, of Seller's other
assets, (iv) suffered the attachment or other judicial seizure of the Property
or all, or substantially all, of Seller's other assets, (v) admitted in writing
its inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that are
to be delivered to Buyer at Closing (i) are, or at the time of Closing will be,
duly authorized, executed and delivered by Seller, (ii) do not, and at the time
of Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or they Property owned by Seller is
subject and (iii) constitute (or in the case of Closing documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, all material Contracts and all environmental and
structural reports in the possession of Seller. This representation shall not
be deemed breached by virtue of any Leases or Contracts entered into after the
Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, the Property (except for any New Leases entered into after the
Effective Date in accordance with Section 7.1) and (ii) as of the Effective
Date, Seller has not received written notice from any Significant Tenant that
Seller has not performed its material obligations under such Significant
Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty
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(60) days notice with respect to the Property (the "Non-Terminable Contracts")
are as set forth in Schedule 4.1.2 (the "Schedule of Contracts") or as entered
into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to any Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of the Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to the Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of any Property.
(m) Employees. Seller will have no employees at Closing, and any
employees of Seller existing on the date hereof shall have been terminated by
Seller prior to Closing in accordance with all applicable law, non-compliance
with which could result in a claim against Buyer. Buyer shall not be
responsible for, nor assume any liabilities of, Seller regarding any such
employees.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence Materials); (2) other than clauses (i) and (k)
above (which, in the case of clause (i) above, the parties acknowledge shall be
governed by Section 7.7 with respect to events occurring after the Effective
Date) shall be deemed remade by Seller, and shall be true in all material
respects, as of the Closing Date (except that any representations and warranties
which are made as of a specified date, shall have been true and correct as of
such specified date) subject to (A) the information disclosed in the Due
Diligence Materials, (B) litigation that is not reasonably likely to have a
material adverse effect on the Property, and (C) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Buyer; and (3) shall survive the Closing only as and to the extent expressly
provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4
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shall terminate to the extent specifically confirmed by a tenant estoppel
certificate delivered by a Tenant.
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to the Property, the amount of such
Claims exceeds Fifty Thousand Dollars ($50,000) ("Threshold Amount") and, in
such case, such Claims shall only be valid (and the Seller shall only be liable)
for the portion that exceeds the Threshold Amount; provided, however,
notwithstanding any provision to the contrary herein or in any Closing Document,
the (i) total liability of Seller for any or all Claims (inclusive of Claims
with respect to any estoppel certificates delivered by Seller pursuant to
Section 8.4(a)) with respect the Property shall not exceed two and three
quarters percent (2.75%) of the Purchase Price. Further notwithstanding any
provision to the contrary herein or in any Closing Document, Seller shall have
no liability with respect to any Claim under any of the representations and
warranties contained in this Agreement or in any Closing Document, which Claim
relates to or arises in connection with (1) any Hazardous Materials (except
solely to the extent that Seller has breached its representation in
Section 4.1(k)), (2) the physical condition of the Property (except solely to
the extent that Seller has breached its representation in Section 4.1(k)) or
(3) any other matter not expressly set forth in the Seller's representations and
warranties set forth in Section 4.1. Buyer shall not make any Claim or deliver
any Claim Notice unless it in good faith believes the Claims would exceed the
Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement, the
representations and warranties of Seller contained herein or in any Closing
Document shall survive only until July 6, 1998. Any Claim that Buyer may have
at any time against Seller for a breach of any such representation or warranty,
whether known or unknown, with respect to which a Claim Notice has not been
delivered to Seller on or prior to July 6, 1998 shall not be valid or effective.
For the avoidance of doubt, on July 6, 1998, Seller shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Buyer, any Permitted Assignee and/or their
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the
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Property, except solely for those matters that are then the subject of a pending
Claim Notice delivered by Buyer to Seller. Any Claim that Buyer may have at any
time against Seller for a breach of any such representation or warranty, whether
known or unknown, with respect to which a Claim Notice has been delivered to
Seller on or prior to July 6, 1998 may be the subject of subsequent litigation
brought by Buyer against Seller, provided that such litigation is commenced
against Seller on or prior to October 6, 1998. For the avoidance of doubt, on
October 6, 1998, Seller shall be fully discharged and released (without the need
for separate releases or other documentation) from any liability or obligation
to Buyer and/or its successors and assigns with respect to any Claims or any
other matter relating to this Agreement, any Closing Document or the Property,
except solely for those matters that are the subject of a litigation by Buyer
against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing Documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
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(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied with such independent investigation (but the foregoing will
not constitute a waiver of any breach of representation or warranty set forth in
Section 4.1 unless such breach is disclosed in the Due Diligence Materials or is
otherwise known by Buyer and/or any Permitted Assignee before the Closing Date
and Buyer and/or such Permitted Assignee(s) elect to proceed with the Closing).
Such independent investigation by Buyer may include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Real Property;
(iv) the physical condition of the Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of the Real
Property, including the presence or absence of Hazardous Materials;
(v) any easements and/or access rights affecting the Real
Property;
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(vi) the Leases with respect to the Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of the Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a
Survey of the Real Property;
(ii) a Rent Roll for the Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for the Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) to the extent in the possession of Seller or Seller's
property manager, reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under the
Real Property and the compliance of the Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys; and
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
the Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and
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similar matters, imposed by any Governmental Authority ("Real Estate Taxes") and
personal property taxes and (ii) all notices or documents for any assessments or
bonds relating to the Real Property.
(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Properties and the Due Diligence Materials and
has obtained, reviewed and approved a Title Commitment for each Property, (ii)
it is acquiring the Property based on such independent investigation and subject
to all information disclosed in the Due Diligence Materials (and also in
reliance on Seller's representations and warranties contained herein) and (iii)
Buyer shall have no right to terminate this Agreement based on any further
investigations of the Property or the Due Diligence Materials. Buyer has
approved of each and every aspect of the Property. The preceding sentence is
not intended to relieve, and shall not relieve, Seller from any of its
obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE THE PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING THE PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of the Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of the Real Property or the square footage of
the Improvements thereon or of any tenant space therein, (iii) the development
or income potential, or rights of or relating to, the Real Property, or the Real
Property's use, habitability, merchantability, or fitness, or the suitability,
value or adequacy of the Real Property for any particular purpose, (iv) the
zoning or other legal status of the Real Property or any other public or private
restrictions on the use of the Real Property, (v) the compliance of the Real
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any Governmental
Authority or of any other person or entity (including, without limitation, the
Americans with Disabilities Act), (vi) the ability of Buyer to obtain any
necessary governmental approvals, licenses or permits for Buyer's intended use
or development of the Real Property, (vii) the presence or absence of Hazardous
Materials on, in, under, above or about the Real Property or any adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
Improvements, (ix)
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the condition of title to the Real Property, (x) the Leases, Contracts or any
other agreements affecting the Real Property or the intentions of any party with
respect to the negotiation and/or execution of any lease or contract with
respect to the Real Property, (xi) Seller's ownership of the Property or any
portion thereof or (xii) the economics of, or the income and expenses, revenue
or expense projections or other financial matters, relating to, the operation of
the Real Property. Without limiting the generality of the foregoing, except as
otherwise set forth herein, Buyer expressly acknowledges and agrees that Buyer
is not relying on any representation or warranty of Seller, nor any partner,
officer, employee, attorney, agent or broker of Seller, whether implied,
presumed or expressly provided at law or otherwise, arising by virtue of any
statute, common law or other legally binding right or remedy in favor of Buyer.
Buyer further acknowledges and agrees that Seller is under no duty to make any
inquiry regarding any matter that may or may not be known to Seller or any
partner, officer, employee, attorney, agent or broker of Seller. This Section
4.5(d) shall survive the Closing, or, if the Closing does not occur, beyond the
termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF THE PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto the Real Property, Buyer shall give
Seller reasonable advance notice of such entry and shall conduct such entry and
any inspections in connection therewith so as to minimize, to the greatest
extent possible, interference with Seller's business and the business of the
Tenants and otherwise in a manner reasonably acceptable to Seller. Without
limiting the foregoing, prior to any entry to perform any necessary on-site
testing, Buyer shall give Seller written notice thereof, including the identity
of the company or persons who will perform such testing and the proposed scope
of the testing and the party performing the testing. Seller shall approve or
disapprove any proposed testing and the party performing the same within three
(3) Business Days after receipt of such notice. If a Buyer Party takes any
sample from the Real Property in connection with any such approved testing,
Buyer shall provide to Seller a portion of such sample being tested to allow
Seller, if it so chooses, to perform its own testing. Seller or its
representative may be present to observe any testing, or other inspection
performed on the Real
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Property. Buyer shall promptly deliver to Seller copies of any reports relating
to any testing or other inspection of the Real Property performed by or on
behalf of any Buyer Party. Buyer shall maintain, and shall ensure that its
contractors maintain, public liability and property damage insurance insuring
the Buyer Parties against any liability arising out of any entry or inspections
of the Real Property pursuant to the provisions hereof. Such insurance
maintained by Buyer shall be in the amount of Ten Million Dollars ($10,000,000)
combined single limit for injury to or death of one or more persons in an
occurrence, and for damage to tangible property (including loss of use) in an
occurrence. The policy maintained by Buyer shall insure the contractual
liability of Buyer covering the indemnities herein and shall (i) name Seller
(and their successors, assigns and Affiliates) as additional insureds,
(ii) contain a cross-liability provision, and (iii) contain a provision that
"the insurance provided by Buyer hereunder shall be primary and noncontributing
with any other insurance available to Seller." Buyer shall provide Seller with
evidence of such insurance coverage prior to any entry or inspection of the Real
Property. Buyer shall indemnify and hold the Seller Parties harmless from and
against any Claims arising out of or relating to any entry on the Real Property
by any Buyer Party, in the course of performing any inspections, testings or
inquiries. The foregoing indemnity shall survive the Closing, or, if the
Closing does not occur, beyond the termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of the Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, the Real Property discovered by Buyer's
environmental testing, Buyer shall first provide prior written notice to Seller
and shall not contact any Governmental Authority except in conjunction with
Seller. In addition, if Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to sue, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, LLC members, directors, officers, attorneys, employees and
agents of each of them, and their respective heirs, successors, personal
representatives and assigns (each a "Seller Party", and collectively, the
"Seller Parties") with respect to any and all Claims, whether direct or
indirect, known or unknown, foreseen or unforeseen, that may arise on account of
or in any way be connected with the Property including, without limitation, the
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physical, environmental and structural condition of the Real Property or any law
or regulation applicable thereto, including, without limitation, any Claim or
matter relating to the use, presence, discharge or release of Hazardous
Materials on, under, in, above or about the Real Property; provided, however,
Buyer does not waive its rights, if any, to recover from, and does not release
or discharge or covenant not to sue Seller for (i) any act that is found by a
court of competent jurisdiction to constitute fraud, (ii) any breach of Seller's
representations or warranties set forth in Section 4.1 or in Seller's estoppel
certificate delivered pursuant to Section 8.4, subject to the limitations and
conditions provided in this Agreement, or (iii) any breach of Seller's
obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for the Property. A copy of each Title Commitment delivered to Buyer
has been delivered to Seller and its counsel. At the Closing, as a condition
precedent to Buyer's obligation to close, Seller shall have delivered to Buyer a
deed for the Real Property in the form of Exhibit A (each, a "Deed"), subject to
no exceptions other than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for the Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of the Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Effective Date;
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(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling the
same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to the Property that have
been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, a 1992
ALTA Owner's Policy of Title Insurance (provided, that in jurisdictions where
local regulations require a form of policy other than a 1992 ALTA Owner's
Policy, such other required form shall be used) in the aggregate amount of the
Purchase Price for the Property showing title to the Property vested in Buyer or
its Permitted Assignee or designee, subject only to the Permitted Exceptions
(the "Title Policy").
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder was instrumentall in arranging or bringing about
this transaction and that there are no claims or rights for brokerage
commissions or finders' fees in connection with the transactions contemplated
hereby by any person or entity. If any person brings a claim for a commission
or finder's fee based upon any contact, dealings or communication with Buyer or
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Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Indemnified Party
in defending against the claim. The provisions of this Section 6.1 shall
survive the Closing or, if the Closing does not occur, any termination of this
Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real Property
in the ordinary course, on an arm's-length basis and consistent with Seller's
past practices and will not dispose of or encumber any Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring on or before December 30, 1997) and pay all costs and expenses
of the Property, including without limitation debt service and Real Estate
Taxes.
(b) Seller shall in good faith consult with Buyer regarding such
Lease at least three (3) Business Days prior to becoming legally bound with
respect thereto (but Seller shall nevertheless be free to enter such New Lease
without Buyer's approval). After the expiration of the Due Diligence Period,
Seller shall not, without Buyer's consent, enter into any New Leases or
materially modify any Existing Lease. Any consent to be given by Buyer pursuant
to this Section 7.1(b) shall not be unreasonably withheld or delayed and shall
be deemed granted if Buyer does not respond in writing to Seller's request for
consent within three (3) Business Days.
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(c) Seller shall not enter into or terminate any operating agreement
or any contract, agreement or other commitment of any sort (including any
contract for capital items or expenditures, but excluding any liens or other
encumbrances on title other than Permitted Exceptions), with respect to any one
or more of the Properties that (A) requires payments to or by Seller in excess
of $50,000 per annum, or the performance of services by Seller the value of
which is in excess of $50,000 per annum and (B) is not terminable without cause
and without penalty on thirty (30) days' notice or less; provided that Seller,
in its good faith but sole discretion, believes such contract is on market terms
and will benefit the Property. At least three (3) Business Days prior to
becoming legally bound with respect to any such matter, Seller shall consult
with and seek the consent of Buyer, and shall provide reasonable detail to Buyer
(including, at Buyer's request, copies of the relevant documentation), with
respect thereto. Any consent to be given by Buyer pursuant to this
Section 7.1(c) shall not be unreasonably withheld or delayed and shall be deemed
granted if Buyer does not respond in writing to Seller's request for consent
within three (3) Business Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell the Property or portion thereof without Buyer's
prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting the Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for
the costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at
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Closing equal to the amounts so paid. Free rent periods provided for in Leases
entered into by Seller prior to October 9, 1997 that occur, in whole or in part,
after the Closing Date shall be for the account of, and borne by, Buyer without
adjustment to the Purchase Price at closing. The provisions of this Section 7.2
shall survive the Closing.
Section 7.3 Seller's Maintenance of the Property. Between the
Effective Date and the Closing Date, Seller shall (a) maintain the Real Property
in substantially the same manner as prior hereto pursuant to Seller's normal
course of business, subject to reasonable wear and tear and further subject to
the occurrence of any damage or destruction to the Real Property by casualty or
other causes or events beyond the control of Seller; provided, however, that
Seller's maintenance obligations under this Section 7.3 shall not include any
obligation to make capital expenditures not incurred in Seller's normal course
of business or any other expenditures not incurred in Seller's normal course of
business; (b) continue to maintain its existing insurance coverage; and (c) not
grant any voluntary liens or encumbrances affecting such Property other than
Permitted Exceptions of the type described in clauses (i) and (ix) of
Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by any Tenant, provided, that
(i) with respect to delinquent rents, Seller may (to the extent permitted under
the Lease) apply Tenant security deposits held by Seller only to rents that are
thirty (30) days or more past due and (ii) with respect to any application by
Seller of Tenant security deposits held by Seller, Seller will deliver, in
connection with any such application, written notice to the affected Tenant(s)
indicating that their security deposits have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
Real Property or destruction of any
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improvements thereon or condemnation of any portion of the Property, provided
that upon the Closing, there shall be a credit against the Purchase Price due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by Seller as a result of any such damage or destruction or
condemnation, plus the amount of any insurance deductible or any uninsured
amount or retention, less any sums reasonably expended by Seller prior to the
Closing for the restoration or repair of the Property. Seller has provided
Buyer with a certificate of insurance for Seller's casualty insurance policy so
that Buyer can confirm its satisfaction with such policy. Seller agree that it
will maintain such policy in full force and effect until the Closing. If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums it reasonably expended prior to the Closing for the restoration
or repair of the Property. Notwithstanding the foregoing, (i) Seller shall not
settle, compromise or otherwise stipulate any award or recovery in connection
with any damage, destruction or condemnation, in each case if such damage,
destruction or condemnation impairs the value of a Property by at least
$250,000, without the prior written approval of Buyer, which approval shall not
be unreasonably withheld, (ii) Buyer shall have the right to participate in any
such settlement or other proceedings, and (iii) if the amount of the damage or
destruction as described in this Section 7.7 exceeds ten percent (10%) of the
Purchase Price, then Buyer may, at its option to be exercised within five (5)
Business Days of Seller's written notice of the occurrence of the damage or
destruction, either terminate this Agreement or consummate the purchase for the
full Purchase Price as required by the terms hereof. If Buyer elects to
terminate this Agreement, then the Deposit shall be immediately returned to
Buyer and neither party shall have any further rights or obligations hereunder
except to the extent set forth in Sections 4.6(a), 6.1, 9.4 and 9.10(a). If
Buyer elects to proceed with the purchase, then upon the Closing, Buyer shall be
entitled to a credit against the Purchase Price and shall receive an assignment
of any uncollected proceeds or awards, all as set forth in this Section 7.7
above. The provisions of this Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to the Property of
which Seller obtains actual knowledge by written notice, any notices of
violations of any legal requirements relating to the Property received by
Seller, any litigation of which Seller obtains actual knowledge by written
notice that arises out of the ownership of any of the Properties unless fully
covered by insurance (subject to customary deductibles), and any other matters
that would materially affect Seller's representations and warranties hereunder.
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ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"), in either case, with time being of the essence.
Except as otherwise permitted under this Agreement, such date and time may not
be extended without the prior written approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) On or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
(i) a duly executed and acknowledged Deed for the Real Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for the Real
Property in the form attached hereto as Exhibit E (each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for the Property in the form attached hereto as Exhibit F (each, an
"Assignment of Leases");
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(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for the
Real Property in the form attached hereto as Exhibit G (each, an "Assignment of
Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Property
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(b) On or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Property
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(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for the Real Property, (ii)
the Title Company shall deliver to Buyer all other documents and instruments
received by it which, in accordance with the terms of this Agreement, are to be
delivered by Seller to Buyer on the Closing Date, and (iii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement are to be delivered by Buyer to
Seller on the Closing Date. Buyer and Seller shall each deposit such other
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the purchase and sale of the
Property in accordance with the terms hereof; provided, that Seller shall not be
required to provide any indemnities or affidavits or to escrow any funds other
than the Seller's Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Property in Seller's possession, a set of keys to the Real Property
and originals (or copies, if originals are not available) of any other items in
Seller's possession relating to the use, ownership, operation, maintenance,
leasing, repair, alteration, management or development of the Real Property, on
the Closing Date (at such location as Buyer and Seller shall mutually agree).
Following the Closing, Buyer shall make all Leases, Contracts, other documents,
books, records and any other materials in its possession, to the extent the same
relate to the period of Seller's ownership of the Properties, available to
Seller or its representatives for inspection and/or copying at Buyer's offices
(at Seller's sole cost and expense) at reasonable times and upon reasonable
notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from each Tenant substantially in the
form attached hereto as Exhibit J; provided, however, that if a form of estoppel
certificate is attached to or otherwise prescribed in a particular lease
document, that form (the "Prescribed Form") shall be deemed to be acceptable to
Buyer in the event that any Tenant is unwilling to sign the form attached hereto
as Exhibit J. It shall be a condition to Buyer's obligation to close the sale
and purchase of a Property that on or before the Closing Seller delivers to
Buyer tenant estoppel certificates substantially in the form attached hereto as
Exhibit J (or in the Prescribed Form, if applicable) from (i) Tenants occupying
seventy five percent (75%) of the total leased square footage of the Property,
and (ii) Significant Tenants occupying seventy five percent (75%) of the total
leased square footage covered by such
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Significant Tenants' Leases (with respect to each of preceding clauses (i)-(ii),
the "Required Percentage"); provided, however, if Seller is unable to obtain the
aforesaid tenant estoppel certificates from Tenants or Significant Tenants (as
the case may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii) the
amount of the Tenants' or Significant Tenants' security deposits; (iii) the
dates through which rent has been paid; (iv) neither Seller nor, to Seller's
knowledge, any of those Tenants or Significant Tenants (as the case may be) is
in default thereunder; (v) a true, correct and complete copy of the Leases are
attached; (vi) the Leases expire on the dates specified and are not subject to
any renewal or extension options, except as specified, and (viii) there are no
options to purchase or rights of first refusal except as specified. Buyer shall
be obligated to accept Seller's certification in lieu of any missing estoppel
certificates. Seller's representations and warranties in the certificate shall
survive the Closing, provided that (i) Buyer must give Seller a Claim Notice
with respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any claim
that Buyer may have that is not so asserted, or litigation by Buyer that is not
so commenced, shall be barred and not be valid or effective and Seller shall
have no liability whatsoever with respect thereto) and (ii) any certificate
delivered by Seller pursuant to this Section 8.4 shall cease to survive the
Closing to the extent specifically confirmed by a tenant estoppel certificate
delivered by a Tenant or a Significant Tenant. In no event shall the minimum
thresholds to Buyer's recovery set forth in Section 4.3(a) apply to any
certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on the Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement; annual permits and/or inspection fees
(calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of the Property (other than
any Leasing Costs and free rent which shall be prorated as provided in Section
7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on the
Closing Date, on the basis of a 365-day year, with Buyer deemed the owner of the
Properties on the entire Closing
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Date. Rent which is due but uncollected as of the Closing Date shall not be
adjusted. On the Closing Date, Seller shall deliver to Buyer a schedule of all
such past due but uncollected rent owed by tenants. Buyer agrees to cause the
amount of such rental arrears to be included in the first bills thereafter
submitted by Buyer to such tenants after the Closing Date. Any rents collected
from a tenant after the Closing Date shall be applied first to the month in
which the Closing Date occurs, next to any rents payable by such tenant after
the Closing Date and thereafter to any arrearage owed by such tenant on the
Closing Date in the inverse order of maturity. Additional rent payments (and
estimated additional rent payments) actually paid by tenants prior to Closing
attributable to real estate taxes and operating costs shall be adjusted as of
the Closing Date. Additional rent payments (and estimated additional rent
payments) attributable to real estate taxes and operating costs to be paid by
tenants after the Closing shall be adjusted upon receipt by Buyer. The
adjustments of additional rent payments shall be based upon the number of days
in the period for which such payment relates that are before or after the
Closing Date. In no event will Buyer be entitled to receive any payments on or
under the promissory notes or other agreements referred to in Section 8.7.
Buyer shall use reasonable efforts until October 6, 1998 to collect any
delinquent rents that accrued prior to the Closing Date (but Seller shall have
the right to commence and pursue litigation against any Tenant to collect
delinquent rents and/or expense reimbursements, provided that Seller may not
seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
the Property has been assessed for property taxes purposes at such rates as
would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of the Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims and liability for
such taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other party
a sum of money based on proration(s) calculated after the Closing Date shall
promptly pay said sum to the other party, together with interest thereon at the
rate of two percent (2%) per annum over the Prime Rate from the Closing Date to
the date of payment, if payment is not made within ten (10) days after delivery
of a bill therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing occurs,
then the proration of such taxes shall be based upon
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the rate and assessments for the preceding calendar year, and such proration
shall be adjusted between Seller and Buyer as soon as reasonably practicable
after such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Properties to permit Seller to review
Buyer's proration statements. Seller shall have sixty (60) days after receipt
of Buyer's calculations to accept or contest such prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller and Buyer
shall each pay one-half of the realty transfer taxes payable with respect to the
deed. Seller and Buyer shall each be responsible for paying their respective
attorneys' fees and costs. Buyer and Seller agree that, given the de minimis
amount of Personal Property included within the Property, no portion of the
Purchase Price is allocable or attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Property in a
manner (or otherwise take a position) inconsistent with the Purchase Prices set
forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and retain
any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of the Property for any tax year which, in
accordance with the laws and regulations applicable to the Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to the Property, (i) Seller
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shall retain all rights (subject to any rights of Tenants under their Leases)
with respect to any tax year ending prior to the tax year (and all refunds
relating thereto) in which the Closing Date occurs, and shall have the sole
right to participate in and settle any proceeding relating thereto (provided,
that such settlement does not affect the assessed tax value for any subsequent
tax year), and (ii) Buyer shall have all rights (subject to any rights of
Tenants under their Leases) with respect to any tax year (and all refunds
relating thereto) which ends after the Closing Date; provided, however, that if
the proceeding is for a tax year in which the Closing Date occurs, such
settlement shall not be made without Buyer's prior consent, which consent shall
not be unreasonably withheld or delayed. With respect to any such proceeding
for a tax year in which the Closing Date occurs (whether commenced by Seller or
Buyer), any refund or credit of taxes for such tax year shall be applied first
to the unreimbursed out-of-pocket expenses, including reasonable counsel fees,
necessarily incurred in obtaining such refund or credit, and second, to any
Tenant entitled to same, and the balance shall be apportioned between Seller and
Buyer as of the Closing Date in accordance with the proportion of the applicable
tax year occurring before and after the Closing Date. In each case, the party
which prosecuted the proceeding shall deliver to the other copies of receipted
tax bills and any decision or settlement agreement evidencing the reduction in
taxes. If any refund shall be received by Seller which is for the account of
Buyer as provided in this Section 8.6, then Seller shall hold Buyer's share
thereof in trust for Buyer and, promptly upon receipt thereof, pay such share to
Buyer or any other party entitled to same as provided above. If any refund
shall be received by Buyer which is for the account of Seller as provided in
this Section 8.6, then Buyer shall hold Seller's share thereof in trust for
Seller and, promptly upon receipt thereof, pay such share to Seller or any other
party entitled to same as provided above. Each party shall execute any and all
consents or other documents as may be reasonably necessary to be executed by
such party so as to permit the other party to commence or continue any tax
certiorari proceeding which such other party is authorized to commence or
continue pursuant to the terms of this Section 8.6, or to collect any refund or
credit with respect to any such tax proceeding. The provisions of this Section
8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other agreements (other than the Leases) delivered to Seller
that evidence, deal with or otherwise relate solely to a Tenant's rental or
expense reimbursement obligations under its Lease that, as of the Closing Date,
are or were past due, shall not be conveyed to Buyer and shall be retained by
Seller. Seller agrees that in enforcing its rights against Tenants under any
such promissory notes or other agreements, Seller will not seek to exercise any
remedies that may be available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's audited
financial statements for the 1997 calendar year.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by a commercial
overnight courier that guarantees next day delivery and provides a receipt, or
(d) by legible facsimile (followed by hard copy delivered in accordance with
preceding subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: Trend Associates
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery). Notice may be given by
attorneys for the notifying partner.
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party, and are superseded and replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
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Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Property but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the case
may be, of one or more of the Properties and Seller shall convey at Closing the
Property or Properties (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Seller and the
other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES
RECOGNIZE THAT IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN
ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE THE PURCHASE AND SALE
OF THE PROPERTY PURSUANT HERETO. THE PARTIES AGREE TO COMPLY WITH SUCH OTHER
LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE AND SALE OF THE
PROPERTY. IT IS THE PARTIES' INTENT THAT
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THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO THE PROPERTY IN A MANNER THAT
RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving
this Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of
all federal and state courts sitting in the Commonwealth of Pennsylvania and
consent that any order, process, notice of motion or other application to or by
any such court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided that a
reasonable time for appearance is allowed, and Buyer and Seller agree that such
courts shall have the exclusive jurisdiction over any such suit, action or
proceeding commenced by any party. In furtherance of such agreement, Buyer and
Seller agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection
that it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the Commonwealth of Pennsylvania and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or
disclose Evaluation Material (as defined below) to Buyer, any Permitted
Assignee(s) and their Affiliates and representatives for review and inspection,
Buyer (on behalf of itself, any Permitted Assignee(s), and their respective
Affiliates and representatives) hereby agrees to be bound by the terms set forth
in this Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Property, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in
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whatever form of medium) that contain, or are derived from, such
information provided by Seller. Notwithstanding the foregoing, information
provided by Seller shall not constitute "Evaluation Material" if such
information (i) is or becomes generally available to the public other than
as a result of a disclosure by or through Buyer or its Representatives in
contravention of this Section 9.10(a) or (ii) is or becomes available to
Buyer from a source (other than Seller) not bound, to the knowledge of
Buyer, by any legal or contractual obligation prohibiting the disclosure of
Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Property as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Property and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer
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acknowledges and agrees that Seller shall be entitled to seek the remedies
of injunction, specific performance and other equitable relief for any
breach, threatened breach or anticipatory breach of the provisions of this
agreement by Buyer or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Property (the "Confidential Information"), provided that such disclosure may be
made (a) to any Person who is a member, partner, officer, director or employee
of Seller or counsel to or accountants of Seller solely for their use and on a
need-to-know basis, provided that such Persons are notified of Seller's
confidentiality obligations hereunder, (b) with the prior consent of Buyer, or
(c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request and
(iii) if disclosure is required or deemed advisable, reasonably cooperate with
Buyer (at no cost to Seller) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded such Confidential
Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the
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feminine and the neuter. The term "person" shall include any individual,
partnership, joint venture, corporation, trust, limited liability company,
unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Property. The parties shall be legally bound with respect to the
purchase and sale of the Property pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 Special Provisions. With respect to the Property
located in the Commonwealth of Pennsylvania, under the terms of the Pennsylvania
Sewage Facilities Act of January 24, 1966, No. 537, P.L. 12535 as amended,
Seller has received no written notice from a Governmental Authority that a
tie-in or tap to a community sewage system currently exists or is available or
that such system or any other utility systems or facilities are presently
adequate for Buyer's use of the Property, and Buyer agrees to assume full
responsibility for contacting any
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agencies or utility companies in order to obtain service to the Property and for
any fee incurred or payment required in connection therewith.
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
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The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: TREND ASSOCIATES
By: GH Trend, Ltd., its general partner
By: _________________________
Name:
Title
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EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $82,500 (the "Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and Trend Associates ("Seller"), the provisions of which
(including, without limitation, the defined terms) are hereby incorporated
herein by reference. The Deposit shall be paid to Seller by Escrowee at the
time of Closing under the Agreement, or if Closing does not take place,
distributed in accordance with the terms of the Agreement. Escrowee shall,
immediately upon receipt of the Deposit, deposit same in an interest bearing,
money market type escrow account with a federally insured bank or savings and
loan association located in Philadelphia, Pennsylvania. All interest which
shall accrue on the Deposit shall be in accordance with the Agreement. Escrowee
shall pay such interest to such party contemporaneously with Escrowee's payment
of the Deposit. Seller and Buyer agree that Escrowee is an escrow holder only
and is merely responsible for the safekeeping of the Deposit and interest and
shall not be required to determine questions of fact or law. If Escrowee shall
receive notice of a dispute as to the disposition of the Deposit or the
interest, then Escrowee shall not distribute the Deposit or interest except in
accordance with written instructions signed by both Buyer and Seller. Pending
resolution of any such dispute, Escrowee is authorized to pay the Deposit and
interest into court. If Escrowee pays the Deposit and interest into court, it
shall be discharged from all further obligations hereunder. This Escrow
Agreement shall be governed by the laws of the state of New York.
Seller's Federal Tax ID Number is 23-2386586.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable consideration,
each intending to be legally bound and to bind their respective successors and
assigns, have caused this Escrow Agreement to be executed and delivered as of
December 15, 1997.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: TREND ASSOCIATES
By: GH Trend, Ltd., its general partner
By: _________________________
Name:
Title
<PAGE>
Exhibit 10.11
AGREEMENT OF PURCHASE AND SALE
BETWEEN
UNIVERSITY PLAZA, L.P.
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.......................................................1
Section 1.2 Terms Generally...................................................6
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale..............................................................6
Section 2.2 Purchase Price....................................................7
Section 2.3 Due Diligence.....................................................9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase.....................10
Section 3.2 Conditions to Seller's Obligations to Sell.......................11
Section 3.3 Termination......................................................11
Section 3.4 Waiver by Buyer..................................................12
Section 3.5 [Intentionally Omitted]...........................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller.........................12
Section 4.2 Estoppels........................................................14
Section 4.3 Limitation on Claims; Survival of Representations and Warranties.15
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Section 4.4 Representations and Warranties of Buyer..........................16
Section 4.5 Buyer's Independent Investigation................................17
Section 4.6 Entry and Indemnity; Limits on Government Contacts...............20
Section 4.7 Release..........................................................22
ARTICLE V
TITLE
Section 5.1 Conveyance of Title..............................................22
Section 5.2 Evidence of Title................................................24
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers..........................................................24
Section 6.2 Expenses.........................................................24
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties..............................25
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent......26
Section 7.3 Seller's Maintenance of the Properties...........................26
Section 7.4 Lease Enforcement................................................27
Section 7.5 Lease Termination Prior to Closing...............................27
Section 7.6 Tenant Notices...................................................27
Section 7.7 Risk of Loss and Insurance Proceeds..............................27
Section 7.8 Notifications....................................................28
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions..............................................28
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Section 8.2 Closing..........................................................29
Section 8.3 Deposit of Documents.............................................29
Section 8.4 Estoppel Certificates............................................31
Section 8.5 Prorations.......................................................32
Section 8.6 Tax Certiorari Proceedings.......................................35
Section 8.7 Tenant Obligations...............................................36
Section 8.8 Seller Financial Statements.......................................36
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..........................................................36
Section 9.2 Entire Agreement.................................................38
Section 9.3 Time.............................................................38
Section 9.4 Attorneys' Fees..................................................38
Section 9.5 No Merger........................................................38
Section 9.6 Assignment.......................................................38
Section 9.7 Counterparts.....................................................39
Section 9.8 Governing Law; Jurisdiction and Venue............................39
Section 9.9 Waiver of Trial by Jury..........................................40
Section 9.10 Confidentiality and Return of Documents.........................40
Section 9.11 Interpretation of Agreement.....................................42
Section 9.12 Amendments......................................................42
Section 9.13 No Recording....................................................42
Section 9.14 No Third Party Beneficiary......................................43
Section 9.15 Severability....................................................43
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract....43
Section 9.17 Further Assurances..............................................43
Section 9.18 [Intentionally Omitted...........................................43
Section 9.19 Exculpation.....................................................43
Section 9.20 Counterparts....................................................43
EXHIBITS
EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B [INTENTIONALLY OMITTED ]
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EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
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<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between University Plaza, L.P., a Delaware limited partnership
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
<PAGE>
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed description
of the claimed breach or inaccuracy, including reasonably detailed
information as to the adverse effect on the value of the Property to which
such claimed breach relates, (iii) the specific provision of this Agreement
under which such breach is claimed and (iv) complete and detailed evidence
of the satisfaction of the conditions to Buyer's or a Permitted Assignee's
recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its
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representatives on or about November 21, 1997, and on-site materials made
available to Buyer for inspection.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leases" shall mean all Existing Leases and New Leases, collectively.
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"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering any Real Property which are entered into after the
Effective Date in accordance with the terms of this Agreement, as the same
may be amended or modified from time to time in accordance with the terms
of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" or "Properties" shall have the meaning set forth in Section
2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" or "Real Properties" shall have the meaning set forth
in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Related Purchase Agreement" shall mean those three Agreements of
Purchase and Sale, each of even date herewith, between Buyer, as buyer, and
one of the following persons, as seller: (i) The Berkshire Group, a
Pennsylvania limited partnership, (ii) Trend
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Associates, a Pennsylvania limited partnership, and (iii) Park 80, L.L.C.,
a New Jersey limited liability company.
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering any Real Property.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
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(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to
be obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise
of such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's
right, title and interest in and to the following: (a) each parcel of land
described in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified
as being owned by Seller on Schedule 2.1.1, together with any and all rights,
privileges and easements appurtenant thereto owned by Seller (including any
rights of Seller as declarant), together with all buildings, improvements and
fixtures (other than fixtures owned or removable by any Tenant or third
party) located thereon (collectively, the "Improvements"; each Fee Parcel,
together with the Improvements thereon, a "Real Property" and, collectively,
the "Real Properties"); (b) [intentionally omitted]; (c) all tangible
personal property not owned or removable by any Tenant or third party, if
any, located on the Real Properties and owned by Seller and used in the
operation or maintenance of any one or more of the Real Properties (the
"Personal Property"); (d) (i) Seller's interest, as landlord, owner or
licensor, in each of the Existing Leases, (ii) Seller's interest, as
landlord, owner or licensor, in any New Leases and (iii) to the extent
assignable, any guarantees, letters of credit or other instruments that
secure or guarantee the performance of the obligations of each Tenant; (e) to
the extent assignable, all service contracts, maintenance contracts,
operating contracts, warranties, guarantees, listing agreements, parking
contracts and like contracts and agreements relating to the Real Properties,
and commission agreements, equipment leases, contracts, subcontracts and
agreements relating to the construction of any unfinished tenant improvements
(collectively, the "Contracts"); (f) to the extent assignable, all warranties
and guaranties made by or received from any third party with respect to any
building, building component, structure, fixture, machinery, equipment or
material situated on any Real Property, or contained in any or comprising a
part of any Improvement or Leasehold Improvement (collectively, the
"Warranties"); (g) to the extent Seller currently has such items in its
possession and to the extent assignable, all (i) preliminary, final and
proposed
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building plans and specifications (including "as-built" floor plans and
drawings) and tenant improvement plans and specifications for the
Improvements and (ii) surveys, grading plans, topographical maps,
architectural and structural drawings and engineering, soils, seismic,
geologic and architectural reports, studies and tests relating to any Real
Property ((g)(i) and (g)(ii) collectively, the "Records and Plans"); and (h)
to the extent transferable, any intangible personal property now or hereafter
owned by Seller and used in the ownership, use or operation of any one or
more of the Real Properties and/or the Personal Property, excluding materials
or information which in Seller's judgment is privileged or confidential
information, the name of the Seller and related names and proprietary
computer equipment, software and systems, but including all (i) licenses,
permits, building inspection approvals, certificates of occupancy, approvals,
subdivision maps and entitlements issued, approved or granted by Governmental
Authorities in connection with a Real Property, (ii) unrecorded covenants,
conditions and restrictions, reciprocal easement agreements, area easement
agreements and other common or planned development agreements or documents
affecting any Real Property and (iii) licenses, consents, easements, rights
of way and approvals obtained from private parties to make use of utilities
and to ensure vehicular and pedestrian ingress and egress for any Real
Property ((h)(i), (h)(ii) and (h)(iii) collectively, the "Licenses and
Permits") or other rights relating to the ownership, use or operation of any
of the Real Properties or the Personal Property (collectively, the
"Intangible Property"). Each Real Property, together with the Personal
Property, the Leases, the Contracts, the Warranties, the Records and Plans
and the Intangible Property relating thereto are referred to herein as a
"Property" and, collectively, as the "Properties."
Section 2.2 Purchase Price.
(a) The purchase price of the Properties is Ten Million Five
Hundred Thousand Dollars ($10,500,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial
Deposit Date, Buyer shall deposit by wire transfer (made in accordance with
the wiring instructions set forth on Schedule 2.2.2 attached hereto) of
immediately available funds, in escrow with Commonwealth Land Title Insurance
Company, 1700 Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr.
Gordon Daniels (the "Title Company"), a cash payment in the amount of
$525,000 (the "Deposit"). The Deposit shall be held by the Title Company
pursuant to an escrow agreement among Buyer, Seller and the Title Company in
the form of Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a
part of the Deposit. If the sale of the Properties as contemplated hereunder
is consummated, then the Deposit (including the
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interest accrued on the Deposit) shall be paid to Seller at the consummation
of the purchase and sale of the Properties contemplated hereunder (the
"Closing") and credited against the Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the
Title Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO
THE FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO
UNDER THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE
DEPOSIT SHALL BE IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED
TO REIMBURSE BUYER FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR
(B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE,
IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT
RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE
ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN, AS ITS SOLE
AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY
OBLIGATIONS UNDER SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S
OBLIGATIONS UNDER SECTIONS 6.1 0R 9.4.
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INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time
being of the essence) the full amount of the Initial Deposit or the
Additional Deposit, as the case may be, for any or no reason whatsoever in
accordance with the terms of Section 2.2(b)(i), this Agreement shall
immediately and automatically terminate. Upon any termination of this
Agreement pursuant to this Section 2.2(d) or Section 2.3, no party shall have
any further rights or obligations hereunder, except as provided in Sections
4.6(a), 6.1, 9.4 and 9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and
approved (and all representations and warranties of Seller made herein shall
be subject to and qualified by) all of the Due Diligence Materials.
Notwithstanding anything to the contrary herein, Seller shall have no
liability whatsoever to Buyer with respect to any matter disclosed to or
actually known by Buyer or its agents prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction
(or Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the
transactions contemplated hereby with respect to any Property.
(b) All consents required to be obtained from, or filing required
to be made with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby shall have been obtained or
made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall
be used) with respect to each Real Property in the form of the title
insurance commitment (each, a "Title Commitment") obtained by Buyer from the
Title Company and delivered to Seller prior to the Effective Date, showing
title to such Real Property vested in Buyer, subject only to the Permitted
Exceptions. It shall not be a condition to Closing
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that Buyer obtain any endorsements or coverages not set forth in the
applicable Title Commitment. Seller shall be entitled, by notice to Buyer,
to adjourn the Closing one or more times for an aggregate period not to
exceed thirty (30) days in order to remove any exceptions to title that are
not Permitted Exceptions. Nothing contained herein shall require Seller to
bring any action or proceeding or otherwise to incur any expense to correct,
discharge or otherwise remove title exceptions or defects with respect to any
Property or to remove, remedy or comply with any other grounds for Buyer's
refusing to approve title, provided that Seller shall be obligated to remove
or discharge, or otherwise cause the Title Company to omit as an exception to
title or to insure against collection thereof from or against any Property
any mortgages or monetary liens created by Seller, any mechanics' liens or
judgment liens that are the obligation of Seller (as opposed to any Tenant or
other third party) and any liens and encumbrances voluntarily created by
Seller in violation of Section 7.1 (collectively, the "Required Deletion
Items"). If on the Closing Date there are any Required Deletion Items,
Seller may use any portion of the Purchase Price payable pursuant to Section
2.2(b) to satisfy same, provided the Title Company shall omit such lien or
encumbrance as an exception to title.
(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4.
(e) Each of the documents required to be delivered by Seller
pursuant to Section 8.3 shall have been delivered as provided therein and
Seller shall not otherwise be in material default of its material obligations
hereunder, and all of Seller's representations and warranties contained
herein shall be true and correct in all material respects as of the Closing
Date (except that any representations and warranties which are made as of a
specified date shall be true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the
transactions contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to be
obtained from, or filings required to be made with, any Governmental
Authority or third party in connection with the execution and delivery of
this Agreement by Buyer or the consummation by Buyer of the transactions
contemplated hereby shall have been obtained or made.
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(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
(e) Each of the documents required to be delivered by Buyer
pursuant to Section 8.3 shall have been delivered as provided therein, and
all of Buyer's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date.
(f) Closing shall have occurred under each of the Related Purchase
Agreements in accordance with the respective terms thereof.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing
Date, then the party to this Agreement whose obligations are conditioned upon
the satisfaction of such condition may in its sole and absolute discretion
terminate this Agreement, subject to Section 2.2(c), by written notice
delivered to the other party at or prior to the occurrence of the Closing.
Upon any termination of this Agreement pursuant to this Section 3.3, no party
shall have any further rights or obligations hereunder, except as provided in
Sections 2.2(c), 4.6(a), 6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement
and/or (ii) any breach of or inaccuracy in any representation or warranty of
Seller made in this Agreement, nonetheless elects to proceed to Closing,
then, upon the consummation of the Closing, Buyer and/or its Permitted
Assignees shall be deemed to have waived any such default and/or breach or
inaccuracy and shall have no claim against Seller with respect thereto.
Section 3.5 [Intentionally Omitted].
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
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(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Properties or all,
or substantially all, of Seller's other assets, (iv) suffered the attachment
or other judicial seizure of any of the Properties or all, or substantially
all, of Seller's other assets, (v) admitted in writing its inability to pay
its debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that
are to be delivered to Buyer at Closing (i) are, or at the time of Closing
will be, duly authorized, executed and delivered by Seller, (ii) do not, and
at the time of Closing will not, violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or any Property
owned by Seller is subject and (iii) constitute (or in the case of Closing
documents will constitute) a valid and legally binding obligation of Seller,
enforceable in accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to
be obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the
performance of Seller's obligations hereunder except as set forth on
Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, all material Contracts and all environmental
and structural reports in the possession of Seller. This representation
shall not be deemed breached by virtue of any Leases or Contracts entered
into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including
the rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent
Rolls")), (i) there are to Seller's knowledge no leases, license agreements
or occupying agreements (or any amendments or supplements thereto)
encumbering, or in force with respect to, any Property (except for any New
Leases entered into after the Effective Date in accordance with Section 7.1)
and (ii) as of the Effective Date, Seller has not received written notice
from any Significant Tenant that Seller has not performed its material
obligations under such Significant Tenant's Lease.
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(h) To Seller's knowledge, the only Contracts and amendments
thereto that will be in effect on the Closing Date that are not terminable
without cause or penalty on sixty (60) days notice with respect to any
Property (the "Non-Terminable Contracts") are as set forth in Schedule 4.1.2
(the "Schedule of Contracts") or as entered into in accordance with Section
7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that
is pending or threatened with respect to any Property, except (i) litigation
fully covered by insurance policies (subject to customary deductibles) or
(ii) litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule
4.1.4, Seller has not received any written notice from any Governmental
Authority that all or any portion of any Property is in material violation of
any applicable building codes or any applicable environmental law (relating
to clean-up or abatement), zoning law or land use law, or any other
applicable local, state or federal law or regulation relating to any
Property, which material violation has not been cured or remedied prior to
the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1
attached to this Agreement, Seller has not granted any option or right of
first refusal or first opportunity to any party to acquire any fee or ground
leasehold interest in any portion of any Property.
(m) Employees. Seller will have no employees at Closing, and any
employees of Seller existing on the date hereof shall have been terminated by
Seller prior to Closing in accordance with all applicable law, non-compliance
with which could result in a claim against Buyer. Buyer shall not be
responsible for, nor assume any liabilities of Seller regarding, any such
employees.
Each of the representations and warranties of Seller contained in
this Section 4.1: (1) is made as of the Effective Date (subject to the
information disclosed in the Due Diligence Materials); (2) other than clauses
(i) and (k) above (which, in the case of clause (i) above, the parties
acknowledge shall be governed by Section 7.7 with respect to events occurring
after the Effective Date) shall be deemed remade by Seller, and shall be true
in all material respects, as of the Closing Date (except that any
representations and warranties which are made as of a specified date, shall
have been true and correct as of such specified date) subject to (A) the
information disclosed in the Due Diligence Materials, (B) litigation that is
not reasonably likely to have a material adverse effect on any Property, and
(C) other matters expressly permitted in this Agreement or otherwise
specifically approved in writing by Buyer; and (3) shall survive the Closing
only as and to the extent expressly provided in Section 4.2 and Section 4.3.
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Section 4.2 Estoppels. The representations and warranties of
Seller regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel
delivered by Seller pursuant to Section 8.4 shall terminate to the extent
specifically confirmed by a tenant estoppel certificate delivered by a Tenant.
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or
assignments) executed by Seller and delivered to Buyer or any Permitted
Assignee at or in connection with the Closing (collectively, "Closing
Documents"), Seller shall have no liability whatsoever with respect to any
suits, actions, proceedings, investigations, demands, claims, liabilities,
fines, penalties, liens, judgments, losses, injuries, damages, expenses or
costs, including, without limitation, attorneys' and experts' fees and costs
and investigation, and remediation costs (collectively "Claims") under, and
Buyer shall be barred from bringing any Claims with respect to, any of the
representations and warranties contained in this Agreement or in any Closing
Document, except to the extent (and only to the extent) that (i) with respect
to Claims for breach of representations and warranties relating to a specific
Property, the amount of such Claims exceed One Hundred Thousand Dollars
($100,000) ("Threshold Amount") and, in such case, such Claims shall only be
valid (and the Seller shall only be liable) for the portion that exceeds the
Threshold Amount; provided, however, notwithstanding any provision to the
contrary herein or in any Closing Document, the (i) total liability of Seller
for any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Seller pursuant to Section 8.4(a)) with respect any
Property shall not exceed two and three quarters percent (2.75%) of the
Purchase Price. Further notwithstanding any provision to the contrary herein
or in any Closing Document, Seller shall have no liability with respect to
any Claim under any of the representations and warranties contained in this
Agreement or in any Closing Document, which Claim relates to or arises in
connection with (1) any Hazardous Materials (except solely to the extent that
Seller has breached its representation in Section 4.1(k)), (2) the physical
condition of any Property (except solely to the extent that Seller has
breached its representation in Section 4.1(k)) or (3) any other matter not
expressly set forth in the Seller's representations and warranties set forth
in Section 4.1. Buyer shall not make any Claim or deliver any Claim Notice
unless it in good faith believes the Claims would exceed the Threshold Amount
provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Seller contained herein or in any
Closing Document shall survive only until July 6, 1998. Any Claim that Buyer
may have at any time against Seller for a breach of any such representation
or warranty, whether known or unknown, with respect to which a Claim Notice
has not been delivered to Seller on or prior to July 6, 1998 shall not be
valid or effective. For the avoidance of doubt, on July 6, 1998, Seller shall
be fully discharged and released (without the need for separate releases or
other documentation) from any liability or
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obligation to Buyer, any Permitted Assignee and/or their successors and
assigns with respect to any Claims or any other matter relating to this
Agreement, any Closing Document or the Properties, except solely for those
matters that are then the subject of a pending Claim Notice delivered by
Buyer to Seller. Any Claim that Buyer may have at any time against Seller
for a breach of any such representation or warranty, whether known or
unknown, with respect to which a Claim Notice has been delivered to Seller on
or prior to July 6, 1998 may be the subject of subsequent litigation brought
by Buyer against Seller, provided that such litigation is commenced against
Seller on or prior to October 6, 1998. For the avoidance of doubt, on
October 6, 1998, Seller shall be fully discharged and released (without the
need for separate releases or other documentation) from any liability or
obligation to Buyer and/or its successors and assigns with respect to any
Claims or any other matter relating to this Agreement, any Closing Document
or the Properties, except solely for those matters that are the subject of a
litigation by Buyer against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all
documents executed by Buyer that are to be delivered to Seller at Closing (i)
are, or at the time of Closing will be, duly authorized, executed and
delivered by Buyer, (ii) do not, and at the time of Closing will not, violate
any provision of any agreement or judicial order to which Buyer is a party or
to which Buyer or any property owned by Buyer is subject and (iii)
constitutes (or in the case of Closing Documents will constitute) a valid and
legally binding obligation of Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of
all, or substantially all, of Buyer's assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally. As of the
Closing Date, Buyer will have sufficient funds to pay the Purchase Price and
consummate the transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
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(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings
are required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in
this Section (i) is made on the Effective Date; (ii) shall be deemed remade
by Buyer and/or its assignee(s), as applicable and appropriate, and shall be
true in all material respects, as of the Closing Date; and (iii) shall
survive the Closing until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of each
Property, either independently or through agents, representatives or experts
of Buyer's choosing, as Buyer considers necessary or appropriate, and that
Buyer is completely satisfied with such independent investigation (but the
foregoing will not constitute a waiver of any breach of representation or
warranty set forth in Section 4.1 unless such breach is disclosed in the Due
Diligence Materials or is otherwise known by Buyer and/or any Permitted
Assignee before the Closing Date and Buyer and/or such Permitted Assignee(s)
elect to proceed with the Closing). Such independent investigation by Buyer
may include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments,
zoning, use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of such
Real Property, including the presence or absence of Hazardous Materials;
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(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability
of the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site
assessment of such Real Property;
(ix) all matters relating to the income and operating or
capital expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a
Survey of each Real Property;
(ii) a Rent Roll for each Real Property, listing for any
Tenant the name, rent, amount of deposit and prepaid rent, if any, and lease
term and copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for each Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) to the extent in the possession of Seller or Seller's
property manager, reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under each
Real Property and the compliance of such Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys; and
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(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year
for each Real Property for all real estate taxes and assessments, water
rates, water meter charges, sewer rates, sewer charges, and similar matters,
imposed by any Governmental Authority ("Real Estate Taxes") and personal
property taxes and (ii) all notices or documents for any assessments or bonds
relating to each Real Property.
(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Properties and the Due Diligence Materials
and has obtained, reviewed and approved a Title Commitment for each Property,
(ii) it is acquiring the Properties based on such independent investigation
and subject to all information disclosed in the Due Diligence Materials (and
also in reliance on Seller's representations and warranties contained herein)
and (iii) Buyer shall have no right to terminate this Agreement based on any
further investigations of the Properties or the Due Diligence Materials.
Buyer has approved each and every aspect of such Properties. The preceding
sentence is not intended to relieve, and shall not relieve, Seller from any
of its obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER
SHALL SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH
ALL FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS
NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM
SELLER, NOR ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF
SELLER, AS TO ANY MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR
ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE
COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION: (i) the quality, nature,
habitability, merchantability, use, operation, value, marketability, adequacy
or physical condition of any Property or any aspect or portion thereof,
including, without limitation, structural elements, foundation, roof,
appurtenances, access, landscaping, parking facilities, electrical,
mechanical, HVAC, plumbing, sewage, and utility systems, facilities and
appliances, soils, geology and groundwater, (ii) the dimensions or lot size
of any Real Property or the square footage of the Improvements thereon or of
any tenant space therein, (iii) the development or income potential, or
rights of or relating to, any Real Property, or any Real Property's use,
habitability, merchantability, or fitness, or the suitability, value or
adequacy of such Real Property for any particular purpose, (iv) the zoning or
other legal status of any Real Property or any other public or private
restrictions on the use of such Real Property, (v) the compliance of any Real
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any
Governmental Authority or of any other person or entity (including, without
limitation, the Americans with Disabilities Act), (vi) the ability of Buyer
to obtain any necessary governmental approvals, licenses or permits for
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Buyer's intended use or development of any Real Property, (vii) the presence
or absence of Hazardous Materials on, in, under, above or about any Real
Property or any adjoining or neighboring property, (viii) the quality of any
labor and materials used in any Improvements, (ix) the condition of title to
any Real Property, (x) the Leases, Contracts or any other agreements
affecting any Real Property or the intentions of any party with respect to
the negotiation and/or execution of any lease or contract with respect to any
Real Property, (xi) Seller's ownership of any Property or any portion thereof
or (xii) the economics of, or the income and expenses, revenue or expense
projections or other financial matters, relating to, the operation of any
Real Property. Without limiting the generality of the foregoing, except as
otherwise set forth herein, Buyer expressly acknowledges and agrees that
Buyer is not relying on any representation or warranty of Seller, nor any
partner, officer, employee, attorney, agent or broker of Seller, whether
implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Buyer. Buyer further acknowledges and agrees that Seller is under
no duty to make any inquiry regarding any matter that may or may not be known
to Seller or any partner, officer, employee, attorney, agent or broker of
Seller. This Section 4.5(d) shall survive the Closing, or, if the Closing
does not occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR
TO CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY
INSURER. BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF
OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY
OF ANY PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE
SAME, ALL AT BUYER'S SOLE COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted
Assignee(s) or any of their agents, employees or contractors (collectively,
the "Buyer Parties" and each a "Buyer Party") onto a Real Property, Buyer
shall give Seller reasonable advance notice of such entry and shall conduct
such entry and any inspections in connection therewith so as to minimize, to
the greatest extent possible, interference with Seller's business and the
business of the Tenants and otherwise in a manner reasonably acceptable to
Seller. Without limiting the foregoing, prior to any entry to perform any
necessary on-site testing, Buyer shall give Seller written notice thereof,
including the identity of the company or persons who will perform such
testing and the proposed scope of the testing and the party performing the
testing. Seller shall approve or disapprove any proposed testing and the
party performing the same within three (3) Business Days after receipt of
such notice. If a Buyer Party takes any sample from a Real Property in
connection with any
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such approved testing, Buyer shall provide to Seller a portion of such sample
being tested to allow Seller, if it so chooses, to perform its own testing.
Seller or its representative may be present to observe any testing, or other
inspection performed on any Real Property. Buyer shall promptly deliver to
Seller copies of any reports relating to any testing or other inspection of
any Real Property performed by or on behalf of any Buyer Party. Buyer shall
maintain, and shall ensure that its contractors maintain, public liability
and property damage insurance insuring the Buyer Parties against any
liability arising out of any entry or inspections of any Real Property
pursuant to the provisions hereof. Such insurance maintained by Buyer shall
be in the amount of Ten Million Dollars ($10,000,000) combined single limit
for injury to or death of one or more persons in an occurrence, and for
damage to tangible property (including loss of use) in an occurrence. The
policy maintained by Buyer shall insure the contractual liability of Buyer
covering the indemnities herein and shall (i) name Seller (and their
successors, assigns and Affiliates) as additional insureds, (ii) contain a
cross-liability provision, and (iii) contain a provision that "the insurance
provided by Buyer hereunder shall be primary and noncontributing with any
other insurance available to Seller." Buyer shall provide Seller with
evidence of such insurance coverage prior to any entry or inspection of any
Real Property. Buyer shall indemnify and hold the Seller Parties harmless
from and against any Claims arising out of or relating to any entry on any
Real Property by any Buyer Party, in the course of performing any
inspections, testings or inquiries. The foregoing indemnity shall survive
the Closing, or, if the Closing does not occur, beyond the termination of
this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, neither Buyer nor any other Buyer Party shall contact any
Governmental Authority regarding any Hazardous Materials on or the
environmental condition of any Real Property without Seller's prior written
consent thereto; provided that if Buyer or Buyer's consultant is
unconditionally obligated by applicable law to notify a Governmental
Authority regarding any Hazardous Materials on, or the environmental
condition of, any Real Property discovered by Buyer's environmental testing,
Buyer shall first provide prior written notice to Seller and shall not
contact any Governmental Authority except in conjunction with Seller. In
addition, if Seller's consent is obtained by Buyer, Seller shall be entitled
to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for
itself and any successors and assigns of Buyer (including, without
limitation, any Permitted Assignee), waives its right to recover from, and
forever releases and discharges, and covenants not to sue, Seller, Seller's
Affiliates, Seller's asset manager, any lender to Seller, the partners,
trustees, shareholders, controlling persons, LLC members, directors,
officers, attorneys, employees and agents of each of them, and their
respective heirs, successors, personal representatives and
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assigns (each a "Seller Party", and collectively, the "Seller Parties") with
respect to any and all Claims, whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be
connected with any Property including, without limitation, the physical,
environmental and structural condition of the related Real Property or any
law or regulation applicable thereto, including, without limitation, any
Claim or matter relating to the use, presence, discharge or release of
Hazardous Materials on, under, in, above or about any Real Property;
provided, however, Buyer does not waive its rights, if any, to recover from,
and does not release or discharge or covenant not to sue Seller for (i) any
act that is found by a court of competent jurisdiction to constitute fraud,
(ii) any breach of Seller's representations or warranties set forth in
Section 4.1 or in Seller's estoppel certificate delivered pursuant to Section
8.4, subject to the limitations and conditions provided in this Agreement, or
(iii) any breach of Seller's obligations set forth in this Agreement that
expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for each Property. A copy of each Title Commitment delivered to
Buyer has been delivered to Seller and its counsel. At the Closing, as a
condition precedent to Buyer's obligation to close, Seller shall have
delivered to Buyer a deed for the Real Property in the form of Exhibit A
(each, a "Deed"), each subject to no exceptions other than the following (the
"Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under
Existing Leases and New Leases, including, without limitation, those Tenant
purchase rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special
improvement district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth
in or disclosed by the Title Commitment for such Real Property or other
documents made available to Buyer and any other exceptions to title that
would be disclosed by an inspection and/or survey of such Real Property,
including those disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land
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use), and all notes or notices of violation of any such laws, ordinances,
rules or regulations set forth in the Due Diligence Materials or in any title
reports, commitments or updates delivered to Buyer prior to the Effective
Date;
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling
the same;
(vi) Such other exceptions as the Title Company shall commit
to insure over in a manner reasonably satisfactory to Buyer, without any
additional cost to Buyer, whether such insurance is made available in
consideration of payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the applicable Property, other than those that
are specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance
with the foregoing shall be evidenced by the Title Company issuing, or to
committing to issue, at Closing, upon payment of the applicable premium
therefor, one or more 1992 ALTA Owner's Policies of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall
be used) in the aggregate amount of the Purchase Price for the Properties
showing title to each Property vested in Buyer or its Permitted Assignee or
designee, subject only to the Permitted Exceptions (the "Title Policy").
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ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to
each other that no broker or finder, other GMH Realty, Inc. ("GMH"), whose
fees will be the responsibility of Seller pursuant to a separate agreement
among between GMH and Seller, was instrumental in arranging or bringing about
this transaction and that there are no claims or rights for brokerage
commissions or finders' fees in connection with the transactions contemplated
hereby by any person or entity other than GMH. If any person brings a claim
for a commission or finder's fee based upon any contact, dealings or
communication with Buyer or Seller, then the party through whom such person
makes its claim shall defend the other party (the "Indemnified Party") from
such claim, and shall indemnify the Indemnified Party and hold the
Indemnified Party harmless from any and all costs, damages, claims,
liabilities or expenses (including without limitation, reasonable attorneys'
fees and disbursements) incurred by the Indemnified Party in defending
against the claim. The provisions of this Section 6.1 shall survive the
Closing or, if the Closing does not occur, any termination of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real
Property in the ordinary course, on an arm's-length basis and consistent with
Seller's past practices and will not dispose of or encumber any Property,
except for dispositions of personal property in the ordinary course of
business or as otherwise permitted by Section 7.1 or Section 7.3. Without
limiting the foregoing, Seller shall, in the ordinary course, negotiate with
prospective Tenants and enter into New Leases (on terms that Seller believes,
in its good faith business judgment, to be market terms), enforce Leases in
all material respects, perform in all material respects all of landlord's
obligations under the Leases (other than Leases that are or that are in the
process of being terminated due to Tenant's default thereunder, provided that
this provision shall not be deemed breached by virtue of Seller's failure to
perform under Leases expiring on or before December 30, 1997) and pay all
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costs and expenses of the Properties, including without limitation debt
service and Real Estate Taxes.
(b) Seller shall not, without Buyer's consent, enter into any New
Leases or materially modify any Existing Lease. Any consent to be given by
Buyer pursuant to this Section 7.1(b) shall not be unreasonably withheld or
delayed and shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating
agreement or any contract, agreement or other commitment of any sort
(including any contract for capital items or expenditures, but excluding any
liens or other encumbrances on title other than Permitted Exceptions), with
respect to any one or more of the Properties that (A) requires payments to or
by Seller in excess of $50,000 per annum, or the performance of services by
Seller the value of which is in excess of $50,000 per annum and (B) is not
terminable without cause and without penalty on thirty (30) days' notice or
less; provided that Seller, in its good faith but sole discretion, believes
such contract is on market terms and will benefit the applicable Property. At
least three (3) Business Days prior to becoming legally bound with respect to
any such matter, Seller shall consult with and seek the consent of Buyer, and
shall provide reasonable detail to Buyer (including, at Buyer's request,
copies of the relevant documentation), with respect thereto. Any consent to
be given by Buyer pursuant to this Section 7.1(c) shall not be unreasonably
withheld or delayed and shall be deemed granted if Buyer does not respond in
writing to Seller's request for consent within three (3) Business Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement
to create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in
writing to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell any Property or portion thereof without
Buyer's prior written consent.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting any Property (other than Contracts terminable on 30
days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
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Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for
the costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at Closing equal to the amounts so paid. Free rent periods provided for
in Leases entered into by Seller prior to October 9, 1997 that occur, in
whole or in part, after the Closing Date shall be for the account of, and
borne by, Buyer without adjustment to the Purchase Price at closing. The
provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Properties. Between the
Effective Date and the Closing Date, Seller shall (a) maintain each Real
Property in substantially the same manner as prior hereto pursuant to
Seller's normal course of business, subject to reasonable wear and tear and
further subject to the occurrence of any damage or destruction to such Real
Property by casualty or other causes or events beyond the control of Seller;
provided, however, that Seller's maintenance obligations under this Section
7.3 shall not include any obligation to make capital expenditures not
incurred in Seller's normal course of business or any other expenditures not
incurred in Seller's normal course of business; (b) continue to maintain its
existing insurance coverage; and (c) not grant any voluntary liens or
encumbrances affecting such Property other than Permitted Exceptions of the
type described in clauses (i) and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of
Section 7.1, prior to the Closing Date, Seller shall have the right, but not
the obligation, to enforce the rights and remedies of the landlord under any
Lease or New Lease, by summary proceedings or otherwise, and to apply all or
any portion of any security deposits then held by Seller toward any loss or
damage incurred by Seller by reason of any defaults by any Tenant, provided,
that (i) with respect to delinquent rents, Seller may (to the extent
permitted under the Lease) apply Tenant security deposits held by Seller only
to rents that are thirty (30) days or more past due and (ii) with respect to
any application by Seller of Tenant security deposits held by Seller, Seller
will deliver, in connection with any such application, written notice to the
affected Tenant(s) indicating that their security deposits have been or are
being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
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manner or entitle Buyer to a reduction in, or credit or allowance against,
the Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after
the Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by
the terms hereof, without regard to the occurrence or effect of any damage to
the related Real Properties or destruction of any improvements thereon or
condemnation of any portion of any Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller
as a result of any such damage or destruction or condemnation, plus the
amount of any insurance deductible or any uninsured amount or retention, less
any sums reasonably expended by Seller prior to the Closing for the
restoration or repair of any Property. Seller has provided Buyer with a
certificate of insurance for Seller's casualty insurance policy so that Buyer
can confirm its satisfaction with such policy. Seller agree that it will
maintain such policy in full force and effect until the Closing. If the
proceeds or awards have not been collected as of the Closing, then such
proceeds or awards shall be assigned to Buyer, except to the extent needed to
reimburse Seller for sums it reasonably expended prior to the Closing for the
restoration or repair of such Property. Notwithstanding the foregoing, (i)
Seller shall not settle, compromise or otherwise stipulate any award or
recovery in connection with any damage, destruction or condemnation, in each
case if such damage, destruction or condemnation impairs the value of a
Property by at least $250,000 without the prior written approval of Buyer,
which approval shall not be unreasonably withheld, (ii) Buyer shall have the
right to participate in any such settlement or other proceedings, and (iii)
if the amount of the damage or destruction as described in this Section 7.7
exceeds ten percent (10%) of the Purchase Price, then Buyer may, at its
option to be exercised within five (5) Business Days of Seller's written
notice of the occurrence of the damage or destruction, either terminate this
Agreement or consummate the purchase for the full Purchase Price as required
by the terms hereof. If Buyer elects to terminate this Agreement, then the
Deposit shall be immediately returned to Buyer and neither party shall have
any further rights or obligations hereunder except to the extent set forth in
Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the Closing, Buyer shall be entitled to a credit against
the Purchase Price and shall receive an assignment of any uncollected
proceeds or awards, all as set forth in this Section 7.7 above. The
provisions of this Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation,
environmental, zoning or other land-use regulation proceedings relating to
any of the Properties of which Seller obtains actual knowledge by written
notice, any notices of violations of any legal requirements relating to any
of the
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Properties received by Seller, any litigation of which Seller obtains actual
knowledge by written notice that arises out of the ownership of any of the
Properties unless fully covered by insurance (subject to customary
deductibles), and any other matters that would materially affect Seller's
representations and warranties hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement
with the Title Company, and this instrument shall serve as the instructions
to the Title Company as the escrow holder for consummation of the purchase
and sale contemplated hereby. Seller and Buyer agree to execute such
reasonable additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control, unless a contrary intent is expressly
indicated in such supplementary instructions.
Section 8.2 Closing. The Closing hereunder shall be held and
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the offices of Seller's counsel (or such other
location as the parties may agree) at 10:00 A.M. (Eastern Standard Time) on
January 5, 1998 or such earlier or later date and time as Buyer and Seller
may mutually agree upon in writing (the "Closing Date"), in either case, with
time being of the essence. Except as otherwise permitted under this
Agreement, such date and time may not be extended without the prior written
approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) On or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location
as the parties may agree) Seller shall deposit into escrow with the Title
Company the following items (pursuant to escrow instructions reasonably
acceptable to Seller and Buyer):
(i) a duly executed and acknowledged Deed for each Real
Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
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(iv) a duly executed counterpart of a Bill of Sale for each
Real Property in the form attached hereto as Exhibit E (each, a "Bill of
Sale");
(v) a duly executed counterpart of an Assignment and
Assumption of Leases for each Real Property in the form attached hereto as
Exhibit F (each, an "Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and
Assumption of Contracts, Warranties and Guaranties and Other Intangible
Property for each Real Property in the form attached hereto as Exhibit G
(each, an "Assignment of Contracts");
(vii) a duly executed counterpart of an agreement designating
the Title Company as the "Reporting Person" for the transaction contemplated
hereby pursuant to Section 6045(e) of the Federal Code and the regulations
promulgated thereunder, substantially in the form of Exhibit H attached
hereto (the "Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable
state and local law in connection with the conveyance of the Properties;
(ix) the Seller's affidavit to the Title Company, in the form
of Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code,
and on which Buyer is entitled to rely, that Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
(b) On or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
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(vi) a duly executed counterpart of Buyer's As-Is Certificate
and Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with
the conveyance of the Properties.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in
accordance with the wiring instructions set forth on Schedule 2.2.1) in an
amount equal to the sum of (i) the Purchase Price and (ii) the amount (if
any) of the costs, expenses and adjustments payable by Buyer under this
Agreement. The amount of the funds to be wired to the Title Company's escrow
account shall be reduced by the Deposit (including all interest thereon).
After Seller's confirmation of receipt of the Purchase Price (as reduced by
the costs, expenses, prorations and adjustments payable by Seller under this
Agreement) by wire transfer of federal funds by the Title Company to one or
more accounts designated by Seller: (i) the Title Company shall be authorized
to record the Deed for each Real Property, (ii) the Title Company shall
deliver to Buyer all other documents and instruments received by it which, in
accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with
the terms of this Agreement are to be delivered by Buyer to Seller on the
Closing Date. Buyer and Seller shall each deposit such other instruments as
are reasonably required by the Title Company or otherwise required to close
the escrow and consummate the purchase and sale of the Properties in
accordance with the terms hereof; provided, that Seller shall not be required
to provide any indemnities or affidavits or to escrow any funds other than
the Seller's Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence
files of the Real Properties in Seller's possession, a set of keys to each
Real Property and originals (or copies, if originals are not available) of
any other items in Seller's possession relating to the use, ownership,
operation, maintenance, leasing, repair, alteration, management or
development of the Real Properties, on the Closing Date (at such location as
Buyer and Seller shall mutually agree). Following the Closing, Buyer shall
make all Leases, Contracts, other documents, books, records and any other
materials in its possession, to the extent the same relate to the period of
Seller's ownership of the Properties, available to Seller or its
representatives for inspection and/or copying at Buyer's offices (at Seller's
sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from each Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the
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event that any Tenant is unwilling to sign the form attached hereto as
Exhibit J. It shall be a condition to Buyer's obligation to close the sale
and purchase of a Property that on or before the Closing Seller delivers to
Buyer tenant estoppel certificates substantially in the form attached hereto
as Exhibit J (or in the Prescribed Form, if applicable) from (i) Tenants
occupying seventy five percent (75%) of the total leased square footage of
the Properties; and (ii) Significant Tenants occupying seventy five percent
(75%) of the total leased square footage covered by such Significant Tenants'
Leases (with respect to each of preceding clauses (i)-(ii), the "Required
Percentage"); provided, however, if Seller is unable to obtain the aforesaid
tenant estoppel certificates from Tenants or Significant Tenants (as the case
may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii)
the amount of the Tenants' or Significant Tenants' security deposits; (iii)
the dates through which rent has been paid; (iv) neither Seller nor, to
Seller's knowledge, any of those Tenants or Significant Tenants (as the case
may be) is in default thereunder; (v) a true, correct and complete copy of
the Leases are attached; (vi) the Leases expire on the dates specified and
are not subject to any renewal or extension options, except as specified, and
(viii) there are no options to purchase or rights of first refusal except as
specified. Buyer shall be obligated to accept Seller's certification in lieu
of any missing estoppel certificates. Seller's representations and
warranties in the certificate shall survive the Closing, provided that (i)
Buyer must give Seller a Claim Notice with respect to any claim it may have
against Seller for a breach of any such representation and warranty by July
6, 1998, and must commence litigation (if any) relating to such Claim Notice
not later than October 6, 1998 (and any claim that Buyer may have that is not
so asserted, or litigation by Buyer that is not so commenced, shall be barred
and not be valid or effective and Seller shall have no liability whatsoever
with respect thereto) and (ii) any certificate delivered by Seller pursuant
to this Section 8.4 shall cease to survive the Closing to the extent
specifically confirmed by a tenant estoppel certificate delivered by a Tenant
or a Significant Tenant. In no event shall the minimum thresholds to Buyer's
recovery set forth in Section 4.3(a) apply to any certificates delivered by
Seller (but Buyer's recovery under any such certificates shall be limited by
the maximum limitations set forth in Section 4.3(a)).
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on any Property; water, sewer and utility charges; amounts
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payable under any existing Contract, Contract entered into after the
Effective Date and in accordance with this Agreement; annual permits and/or
inspection fees (calculated on the basis of the period covered); and any
other income or expenses relating to the operation and maintenance of each
Property (other than any Leasing Costs and free rent which shall be prorated
as provided in Section 7.2), shall all be prorated as of 12:01 a.m. Eastern
Standard Time on the Closing Date, on the basis of a 365-day year, with Buyer
deemed the owner of the Properties on the entire Closing Date. Rent which is
due but uncollected as of the Closing Date shall not be adjusted. On the
Closing Date, Seller shall deliver to Buyer a schedule of all such past due
but uncollected rent owed by tenants. Buyer agrees to cause the amount of
such rental arrears to be included in the first bills thereafter submitted by
Buyer to such tenants after the Closing Date. Any rents collected from a
tenant after the Closing Date shall be applied first to the month in which
the Closing Date occurs, next to any rents payable by such tenant after the
Closing Date and thereafter to any arrearage owed by such tenant on the
Closing Date in the inverse order of maturity. Additional rent payments (and
estimated additional rent payments) actually paid by tenants prior to Closing
attributable to real estate taxes and operating costs shall be adjusted as of
the Closing Date. Additional rent payments (and estimated additional rent
payments) attributable to real estate taxes and operating costs to be paid by
tenants after the Closing shall be adjusted upon receipt by Buyer. The
adjustments of additional rent payments shall be based upon the number of
days in the period for which such payment relates that are before or after
the Closing Date. In no event will Buyer be entitled to receive any payments
on or under the promissory notes or other agreements referred to in Section
8.7. Buyer shall use reasonable efforts until October 6, 1998 to collect any
delinquent rents that accrued prior to the Closing Date (but Seller shall
have the right to commence and pursue litigation against any Tenant to
collect delinquent rents and/or expense reimbursements, provided that Seller
may not seek as a remedy in any such litigation the termination of any Leases
or the dispossession of any Tenant). Seller agrees to forward any rents
received by it after the Closing Date to Buyer for application in accordance
with the provisions hereof. The amount of any security deposits that are
required to be returned to Tenants under Leases shall be credited against the
Purchase Price (and Seller shall be entitled to retain such security
deposits). In the event any Property has been assessed for property taxes
purposes at such rates as would result in reassessment (i.e., "escape
assessment" or "roll-back taxes") based upon the change in land usage or
ownership of such Property resulting from or after the consummation of the
transactions described in this Agreement, as between Buyer and Seller, Buyer
hereby agrees to pay all such taxes and to indemnify and save Seller harmless
from and against all claims and liability for such taxes. Such indemnity
shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such
Additional Rents are not finally adjusted between the landlord and tenant
under the applicable Lease until after the end of the 1997 calendar year,
then such prorations shall be calculated as soon as reasonably practicable
after such Additional Rents have been finally
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adjusted. Either party owing the other party a sum of money based on
proration(s) calculated after the Closing Date shall promptly pay said sum to
the other party, together with interest thereon at the rate of two percent
(2%) per annum over the Prime Rate from the Closing Date to the date of
payment, if payment is not made within ten (10) days after delivery of a bill
therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing
occurs, then the proration of such taxes shall be based upon the rate and
assessments for the preceding calendar year, and such proration shall be
adjusted between Seller and Buyer as soon as reasonably practicable after
such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer
shall permit Seller and its representatives and auditors during regular
business hours and upon reasonable prior written notice to have reasonable
access to the books and records in the possession of Buyer or any party to
whom Buyer has given custody of the same relating to the Properties to permit
Seller to review Buyer's proration statements. Seller shall have sixty (60)
days after receipt of Buyer's calculations to accept or contest such
prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all
endorsements thereto, and Surveys and Survey updates, and all costs of any
appraisal, engineering and environmental reports not delivered by Seller.
Seller and Buyer each shall pay one-half the realty transfer taxes payable
with respect to the deed. Seller and Buyer shall each be responsible for
paying their respective attorneys' fees and costs. Buyer and Seller agree
that, given the de minimis amount of Personal Property included within the
Properties, no portion of the Purchase Price is allocable or attributable to
such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in
a manner (or otherwise take a position) inconsistent with the relative
Purchase Price set forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and
retain any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5
shall survive the Closing until October 6, 1998 (except with respect to
prorations of taxes and municipal assessments).
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Section 8.6 Tax Certiorari Proceedings. Seller is hereby
authorized, but not obligated, to (a) commence (prior to the Closing Date) or
continue (after the Effective Date and after the Closing Date) any proceeding
for the reduction of the assessed valuation of any Property for any tax year
which, in accordance with the laws and regulations applicable to such
Property, requires that, to preserve the right to bring a tax certiorari
proceeding with respect to such tax year, such proceeding be commenced prior
to the Closing Date and (b) endeavor to settle any such proceeding in
Seller's discretion. After the Closing, with respect to any Property, (i)
Seller shall retain all rights (subject to any rights of Tenants under their
Leases) with respect to any tax year ending prior to the tax year (and all
refunds relating thereto) in which the Closing Date occurs, and shall have
the sole right to participate in and settle any proceeding relating thereto
(provided, that such settlement does not affect the assessed tax value for
any subsequent tax year), and (ii) Buyer shall have all rights (subject to
any rights of Tenants under their Leases) with respect to any tax year (and
all refunds relating thereto) which ends after the Closing Date; provided,
however, that if the proceeding is for a tax year in which the Closing Date
occurs, such settlement shall not be made without Buyer's prior consent,
which consent shall not be unreasonably withheld or delayed. With respect to
any such proceeding for a tax year in which the Closing Date occurs (whether
commenced by Seller or Buyer), any refund or credit of taxes for such tax
year shall be applied first to the unreimbursed out-of-pocket expenses,
including reasonable counsel fees, necessarily incurred in obtaining such
refund or credit, and second, to any Tenant entitled to same, and the balance
shall be apportioned between Seller and Buyer as of the Closing Date in
accordance with the proportion of the applicable tax year occurring before
and after the Closing Date. In each case, the party which prosecuted the
proceeding shall deliver to the other copies of receipted tax bills and any
decision or settlement agreement evidencing the reduction in taxes. If any
refund shall be received by Seller which is for the account of Buyer as
provided in this Section 8.6, then Seller shall hold Buyer's share thereof in
trust for Buyer and, promptly upon receipt thereof, pay such share to Buyer
or any other party entitled to same as provided above. If any refund shall
be received by Buyer which is for the account of Seller as provided in this
Section 8.6, then Buyer shall hold Seller's share thereof in trust for Seller
and, promptly upon receipt thereof, pay such share to Seller or any other
party entitled to same as provided above. Each party shall execute any and
all consents or other documents as may be reasonably necessary to be executed
by such party so as to permit the other party to commence or continue any tax
certiorari proceeding which such other party is authorized to commence or
continue pursuant to the terms of this Section 8.6, or to collect any refund
or credit with respect to any such tax proceeding. The provisions of this
Section 8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein
that may be construed to the contrary (including, without limitation, Section
8.5), promissory notes or other agreements (other than the Leases) delivered
to Seller that evidence, deal with or otherwise relate solely to a Tenant's
rental or expense reimbursement obligations under its Lease that, as of the
Closing Date, are or were past due, shall not be conveyed to Buyer and shall
be retained by Seller. Seller agrees that in enforcing its rights against
Tenants under any such promissory notes
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or other agreements, Seller will not seek to exercise any remedies that may
be available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's
audited financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b)
by certified mail, postage prepaid, return receipt requested, (c) by a
commercial overnight courier that guarantees next day delivery and provides a
receipt, or (d) by legible facsimile (followed by hard copy delivered in
accordance with preceding subsections (a)-(c)), and such notices shall be
addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: University Plaza, L.P.
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt
(or refusal by the intended recipient to accept delivery). Notices may be
given by attorneys for the notifying partner.
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Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains
all representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect
to the subject matter hereof. Any correspondence, memoranda or agreements
between the parties, including, without limitation, or any oral or written
statements made by Seller, its Affiliates, employees or agents, are not
binding on or enforceable against any party, and are superseded and replaced
in total by this Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of
each of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs
and expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without
limitation, court costs (including costs of any trial or appeal therefrom)
and reasonable attorneys' fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with
the transfer of title to the Properties but shall remain in effect until
fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate
any Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the
case may be, of one or more of the Properties and Seller shall convey at
Closing such Property or Properties (on behalf of Buyer) in accordance with
such written instructions. Nothing contained in the preceding sentence shall
be deemed to diminish or otherwise affect the obligations of Buyer hereunder,
including the obligations to pay the Purchase Price at Closing and to
indemnify Seller and the other Seller Parties in accordance with the terms
hereof. Subject to the limitations described herein, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
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Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES RECOGNIZE
THAT, WITH RESPECT TO SOME OF THE PROPERTIES, IT MAY BE NECESSARY FOR THE
PARTIES TO COMPLY WITH CERTAIN ASPECTS OF THE LAWS OF OTHER STATES IN ORDER
TO CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT HERETO. THE
PARTIES AGREE TO COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO
CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTIES. IT IS THE PARTIES'
INTENT THAT THE PROVISIONS OF THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A
MANNER THAT RESULTS IN THE GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving
this Agreement, Buyer and Seller hereby expressly submit to the jurisdiction
of all federal and state courts sitting in the Commonwealth of Pennsylvania
and consent that any order, process, notice of motion or other application to
or by any such court or a judge thereof may be served within or without such
court's jurisdiction by registered mail or by personal service, provided that
a reasonable time for appearance is allowed, and Buyer and Seller agree that
such courts shall have the exclusive jurisdiction over any such suit, action
or proceeding commenced by any party. In furtherance of such agreement,
Buyer and Seller agree upon the request of the other party to discontinue (or
agree to the discontinuance of) any such suit, action or proceeding pending
in any other jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection
that it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement brought in any
federal or state court sitting in the Commonwealth of Pennsylvania and hereby
further irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON,
UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS,
DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF
THE FOREGOING.
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Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s)
and their Affiliates and representatives for review and inspection, Buyer (on
behalf of itself, any Permitted Assignee(s), and their respective Affiliates
and representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Properties, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Properties as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Properties and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable
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assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing
it shall not issue any press release or public statement (a "Release") with
respect to the transactions contemplated by this Agreement without the prior
consent of all parties to this Agreement, except to the extent required by
law or the regulations of the Securities and Exchange Commission or the New
York Stock Exchange, and (ii) after the Closing, any Release issued by Seller
or Buyer shall be subject to the review and approval of all such parties
(which approval shall not be unreasonably withheld). If Seller or Buyer is
required by law to issue a Release, such party shall, at least two (2)
Business Days prior to the issuance of the same, deliver a copy of the
proposed Release to the other parties for their review. In response to
inquiries concerning a Release, Buyer cannot release any information
concerning Seller without Seller's prior written consent.
(c) Seller agrees for a period of one (1) year after the Closing
Date not to disclose capitalization rates and rates of return relating to the
Properties (the "Confidential Information"), provided that such disclosure
may be made (a) to any Person who is a member,
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partner, officer, director or employee of Seller or counsel to or accountants
of Seller solely for their use and on a need-to-know basis, provided that
such Persons are notified of Seller's confidentiality obligations hereunder,
(b) with the prior consent of Buyer, or (c) subject to the next sentence,
pursuant to legal, regulatory or administrative process. In the event that
Seller shall receive a request to disclose any Confidential Information under
clause (c) of the preceding sentence, Seller shall (i) promptly notify Buyer
thereof, (ii) consult with Buyer on the advisability of taking steps to
resist or narrow such request and (iii) if disclosure is required or deemed
advisable, reasonably cooperate with Buyer (at no cost to Seller) in any
attempt it may make to obtain an order or other assurance that confidential
treatment will be accorded such Confidential Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and
shall not be construed to affect the meaning of any provision contained
herein. Where the context so requires, the use of the singular shall include
the plural and vice versa and the use of the masculine shall include the
feminine and the neuter. The term "person" shall include any individual,
partnership, joint venture, corporation, trust, limited liability company,
unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any
memorandum or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held
by a court of competent jurisdiction to be invalid, unenforceable or void,
the remainder of this Agreement and such provisions as applied to other
persons, places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract with respect to the purchase
and sale of the Properties. The parties shall be legally bound with respect
to the purchase and sale of the Properties pursuant to the terms of this
Agreement only if and when the parties have been able to negotiate all of the
terms and provisions of this Agreement in a manner acceptable to each of the
parties in their respective sole discretion, including, without limitation,
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all of the Exhibits and Schedules hereto, and each of Seller and Buyer have
fully executed and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such other documents and do any and all other acts as may be
necessary to carry out the intent and purpose of this Agreement.
Section 9.18 [Intentionally Omitted].
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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 Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind
Buyer and Seller as if they had executed the same counterpart.
[Signatures on following page]
40
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The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: UNIVERSITY PLAZA, L.P., a
Delaware limited partnership
By: GH University Plaza, Inc.,
A Delaware corporation
By: _________________________
Name:
Title
41
<PAGE>
EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $525,000 ("Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and University Plaza, L.P. ("Seller"), the provisions of which
(including, without limitation, the defined terms) are hereby incorporated
herein by reference. The Deposit shall be paid to Seller by Escrowee at the
time of Closing under the Agreement, or if Closing does not take place,
distributed in accordance with the terms of the Agreement. Escrowee shall,
immediately upon receipt of the Deposit, deposit same in an interest bearing,
money market type escrow account with a federally insured bank or savings and
loan association located in Philadelphia, Pennsylvania. All interest which
shall accrue on the Deposit shall be in accordance with the Agreement.
Escrowee shall pay such interest to such party contemporaneously with
Escrowee's payment of the Deposit. Seller and Buyer agree that Escrowee is
an escrow holder only and is merely responsible for the safekeeping of the
Deposit and interest and shall not be required to determine questions of fact
or law. If Escrowee shall receive notice of a dispute as to the disposition
of the Deposit or the interest, then Escrowee shall not distribute the
Deposit or interest except in accordance with written instructions signed by
both Buyer and Seller. Pending resolution of any such dispute, Escrowee is
authorized to pay the Deposit and interest into court. If Escrowee pays the
Deposit and interest into court, it shall be discharged from all further
obligations hereunder. This Escrow Agreement shall be governed by the laws
of the state of New York.
Seller's Federal Tax ID Number is 51-0370917.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable
consideration, each intending to be legally bound and to bind their
respective successors and assigns, have caused this Escrow Agreement to be
executed and delivered as of December 15, 1997.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: UNIVERSITY PLAZA, L.P., a
Delaware limited partnership
By: GH University Plaza, Inc.,
A Delaware corporation
By: _________________________
Name:
Title
<PAGE>
Exhibit 10.12
AGREEMENT OF PURCHASE AND SALE
BETWEEN
VIRGINIA DRIVE ASSOCIATES, L.P.
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
December 15, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 2.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 2.3 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. . . . . . . . . . .9
Section 3.2 Conditions to Seller's Obligations to Sell. . . . . . . . . . . 11
Section 3.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.4 Waiver by Buyer . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller. . . . . . . . . . . . 12
Section 4.2 Estoppels . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-i-
<PAGE>
Section 4.4 Representations and Warranties of Buyer . . . . . . . . . . . . 16
Section 4.5 Buyer's Independent Investigation . . . . . . . . . . . . . . . 17
Section 4.6 Entry and Indemnity; Limits on Government Contacts. . . . . . . 20
Section 4.7 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V
TITLE
Section 5.1 Conveyance of Title . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.2 Evidence of Title . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property . . . . . . . . . . . . . . . 24
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent . . 25
Section 7.3 Seller's Maintenance of the Property. . . . . . . . . . . . . . 26
Section 7.4 Lease Enforcement . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.5 Lease Termination Prior to Closing. . . . . . . . . . . . . . . 26
Section 7.6 Tenant Notices. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.7 Risk of Loss and Insurance Proceeds . . . . . . . . . . . . . . 27
Section 7.8 Notifications . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions . . . . . . . . . . . . . . . . . . . . . . 28
-ii-
<PAGE>
Section 8.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.3 Deposit of Documents. . . . . . . . . . . . . . . . . . . . . . 28
Section 8.4 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . 31
Section 8.5 Prorations. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.6 Tax Certiorari Proceedings. . . . . . . . . . . . . . . . . . . 34
Section 8.7 Tenant Obligations. . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.2 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.3 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.5 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.6 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.8 Governing Law; Jurisdiction and Venue . . . . . . . . . . . . . 37
Section 9.9 Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . . 38
Section 9.10 Confidentiality and Return of Documents. . . . . . . . . . . . 38
Section 9.11 Interpretation of Agreement. . . . . . . . . . . . . . . . . . 40
Section 9.12 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.13 No Recording . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.14 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . 41
Section 9.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract . 41
Section 9.17 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.18 Special Provisions Regarding Property Located in the
Commonwealth of Pennsylvania. . . . . . . . . . . . . . . . . .41
Section 9.19 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.20 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBITS
EXHIBIT A REAL PROPERTY DEED
EXHIBIT B [INTENTIONALLY OMITTED ]
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EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M [INTENTIONALLY OMITTED]
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
SCHEDULE 1 SELLER
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
]SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
]SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
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AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of December 15, 1997 (this
"Agreement"), between Virginia Drive Associates, a Delaware limited partnership
("Seller"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
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"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall have the meaning set forth in Section 2.2(a).
"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials delivered to Buyer and its
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representatives entitled on or about November 21, 1997, and on-site
materials made available to Buyer for inspection.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or asbestos-
containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leases" shall mean all Existing Leases and New Leases, collectively.
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"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering the Real Property which are entered into after the
Effective Date in accordance with the terms of this Agreement, as the same
may be amended or modified from time to time in accordance with the terms
of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" shall have the meaning set forth in Section 2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" shall have the meaning set forth in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
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"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of the
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering the Real Property.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
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(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTY
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by any Tenant or third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, the "Real Property"); (b) [intentionally omitted]; (c) all
tangible personal property not owned or removable by any Tenant or third party,
if any, located on the Real Property and owned by Seller and used in the
operation or maintenance of any one or more of the Real Property (the "Personal
Property"); (d) (i) Seller's interest, as landlord, owner or licensor, in each
of the Existing Leases, (ii) Seller's interest, as landlord, owner or licensor,
in any New Leases and (iii) to the extent assignable, any guarantees, letters of
credit or other instruments that secure or guarantee the performance of the
obligations of each Tenant; (e) to the extent assignable, all service contracts,
maintenance contracts, operating contracts, warranties, guarantees, listing
agreements, parking contracts and like contracts and agreements relating to the
Real Property, and commission agreements, equipment leases, contracts,
subcontracts and agreements relating to the construction of any unfinished
tenant improvements (collectively, the "Contracts"); (f) to the extent
assignable, all warranties and guaranties made by or received from any third
party with respect to any building, building component, structure, fixture,
machinery, equipment or material situated on the Real Property, or contained in
any or comprising a part of any Improvement or Leasehold Improvement
(collectively, the "Warranties"); (g) to the extent Seller currently has such
items in its possession and to the extent assignable, all (i) preliminary, final
and proposed building plans and specifications (including "as-built" floor plans
and drawings) and tenant improvement plans and specifications for the
Improvements and (ii) surveys, grading plans, topographical maps, architectural
and structural drawings and engineering, soils, seismic, geologic and
architectural reports, studies and tests relating to the Real Property ((g)(i)
and (g)(ii) collectively, the "Records and Plans"); and (h) to the extent trans-
ferable, any intangible personal property now or hereafter owned by Seller and
used in the ownership, use or operation of any one or more of the Real Property
and/or the Personal Property, excluding materials or information which in
Seller's judgment is privileged or
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confidential information, the name of the Seller and related names and
proprietary computer equipment, software and systems, but including all
(i) licenses, permits, building inspection approvals, certificates of occupancy,
approvals, subdivision maps and entitlements issued, approved or granted by
Governmental Authorities in connection with the Real Property, (ii) unrecorded
covenants, conditions and restrictions, reciprocal easement agreements, area
easement agreements and other common or planned development agreements or
documents affecting the Real Property and (iii) licenses, consents, easements,
rights of way and approvals obtained from private parties to make use of
utilities and to ensure vehicular and pedestrian ingress and egress for the Real
Property ((h)(i), (h)(ii) and (h)(iii) collectively, the "Licenses and Permits")
or other rights relating to the ownership, use or operation of any of the Real
Property or the Personal Property (collectively, the "Intangible Property").
The Real Property, together with the Personal Property, the Leases, the
Contracts, the Warranties, the Records and Plans and the Intangible Property
relating thereto are referred to herein as the "Property".
Section 2.2 Purchase Price.
(a) The purchase price of the Property is Four Million Dollars
($4,000,000) (the "Purchase Price"), subject to prorations, credits and
adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 1700
Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Gordon Daniels
(the "Title Company"), a cash payment in the amount of $200,000. The Deposit
and shall be held by the Title Company pursuant to an escrow agreement among
Buyer, Seller and the Title Company in the form of Exhibit N attached hereto.
(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Property as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Property contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the
Deposit, as adjusted pursuant to Section 8.5, shall be deposited by Buyer, by
wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the Title
Company and paid to Seller at the Closing.
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(c) (i) IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE
FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S INABILITY
TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE RETURNED TO
BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE RETURN OF THE
DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED BECAUSE
OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO UNDER THIS AGREEMENT, BUYER
MAY EITHER (A) TERMINATE THIS AGREEMENT BY WRITTEN NOTICE OF TERMINATION TO
SELLER ON THE CLOSING DATE, WHEREUPON THE DEPOSIT SHALL BE IMMEDIATELY RETURNED
TO BUYER AND SELLER SHALL BE OBLIGATED TO REIMBURSE BUYER FOR ITS OUT OF POCKET
EXPENSES (NOT TO EXCEED $25,000) OR (B) CONTINUE THIS AGREEMENT PENDING BUYER'S
ACTION FOR SPECIFIC PERFORMANCE, IN WHICH LATTER EVENT BUYER, AS A CONDITION TO
SUCH ACTION, SHALL NOT ACCEPT RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL
AMOUNT OF THE PURCHASE PRICE ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF
THE PROPERTY IS NOT CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER,
THEN, AS ITS SOLE AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS
LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN
THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE
PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE
OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE
DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW,
EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND
THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY OBLIGATIONS UNDER
SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S OBLIGATIONS UNDER SECTIONS 6.1
0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever in accordance with
the terms of Section 2.2(b)(i), this Agreement shall immediately and
automatically terminate. Upon any termination of this Agreement pursuant to
this Section 2.2(d)
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or Section 2.3, no party shall have any further rights or obligations hereunder,
except as provided in Sections 4.6(a), 6.1, 9.4 and 9.10(a).
Section 2.3 Due Diligence. Buyer has reviewed, accepted and approved
(and all representations and warranties of Seller made herein shall be subject
to and qualified by) all of the Due Diligence Materials. Notwithstanding
anything to the contrary herein, Seller shall have no liability whatsoever to
Buyer with respect to any matter disclosed to or actually known by Buyer or its
agents prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Property is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to the Property.
(b) All consents required to be obtained from, or filing required to
be made with, any Governmental Authority or third party in connection with the
execution and delivery of this Agreement by Seller or the consummation by Seller
of the transactions contemplated hereby shall have been obtained or made.
(c) The Title Company has committed to issue, upon payment of the
applicable premium therefor, a 1992 ALTA Owner's Policy of Title Insurance
(provided, that in jurisdictions where local regulations require a form of
policy other than a 1992 ALTA Owner's Policy, such other required form shall be
used) with respect to the Real Property in the form of the title insurance
commitment (each, a "Title Commitment") obtained by Buyer from the Title Company
and delivered to Seller prior to the Effective Date, showing title to the Real
Property vested in Buyer, subject only to the Permitted Exceptions. It shall
not be a condition to Closing that Buyer obtain any endorsements or coverages
not set forth in the applicable Title Commitment. Seller shall be entitled, by
notice to Buyer, to adjourn the Closing one or more times for an aggregate
period not to exceed thirty (30) days in order to remove any exceptions to title
that are not Permitted Exceptions. Nothing contained herein shall require
Seller to bring any action or proceeding or otherwise to incur any expense to
correct, discharge or otherwise remove title exceptions or defects with respect
to the Property or to remove, remedy or comply with any other grounds for
Buyer's refusing to approve title, provided that Seller shall be obligated to
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remove or discharge, or otherwise cause the Title Company to omit as an
exception to title or to insure against collection thereof from or against the
Property any mortgages or monetary liens created by Seller, any mechanics' liens
or judgment liens that are the obligation of Seller (as opposed to any Tenant or
other third party) and any liens and encumbrances voluntarily created by Seller
in violation of Section 7.1 (collectively, the "Required Deletion Items"). If
on the Closing Date there are any Required Deletion Items, Seller may use any
portion of the Purchase Price payable pursuant to Section 2.2(b) to satisfy
same, provided the Title Company shall omit such lien or encumbrance as an
exception to title.
(d) Buyer shall have received estoppel certificates for the Real
Property to the extent required by Section 8.4.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Property is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to the Property.
(b) as set forth in Section 3.5, all] All consents required to be
obtained from, or filings required to be made with, any Governmental Authority
or third party in connection with the execution and delivery of this Agreement
by Buyer or the consummation by Buyer of the transactions contemplated hereby
shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
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(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 [Intentionally Omitted].
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTY
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of the Property or
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all, or substantially all, of Seller's other assets, (iv) suffered the
attachment or other judicial seizure of the Property or all, or substantially
all, of Seller's other assets, (v) admitted in writing its inability to pay its
debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
(c) Seller is duly organized and validly existing and in good
standing under the laws of its state of formation. Seller further represents
and warrants that this Agreement and all documents executed by Seller that are
to be delivered to Buyer at Closing (i) are, or at the time of Closing will be,
duly authorized, executed and delivered by Seller, (ii) do not, and at the time
of Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or the Property owned by Seller is
subject and (iii) constitute (or in the case of Closing Documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain (i) true, correct and
complete copies of all Existing Leases and all material Contracts in the
possession of Seller and (ii) all environmental and structural reports in the
possession of Seller. This representation shall not be deemed breached by
virtue of any Leases or Contracts entered into after the Effective Date in
accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, the Property (except for any New Leases entered into after the
Effective Date in accordance with Section 7.1) and (ii) as of the Effective
Date, Seller has not received written notice from any Significant Tenant that
Seller has not performed its material obligations under such Significant
Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty
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(60) days notice with respect to the Property (the "Non-Terminable Contracts")
are as set forth in Schedule 4.1.2 (the "Schedule of Contracts") or as entered
into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of the
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to the Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of the Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to the Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of the Property.
(m) Seller will have no employees at Closing, and any employees of
Seller existing on the date hereof shall have been terminated by Seller prior to
Closing in accordance with all applicable law, non-compliance with which could
result in a claim against Buyer. Buyer will not be responsible for, nor assume
any liabilities of Seller regarding, any such employees.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence Materials); (2) other than clauses (i) and (k)
above (which, in the case of clause (i) above, the parties acknowledge shall be
governed by Section 7.7 with respect to events occurring after the Effective
Date) shall be deemed remade by Seller, and shall be true in all material
respects, as of the Closing Date (except that any representations and warranties
which are made as of a specified date, shall have been true and correct as of
such specified date) subject to (A) the information disclosed in the Due
Diligence Materials, (B) litigation that is not reasonably likely to have a
material adverse effect on the Property, and (C) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Buyer; and (3) shall survive the Closing only as and to the extent expressly
provided in Section 4.2 and Section 4.3.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4
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shall terminate to the extent specifically confirmed by a tenant estoppel
certificate delivered by a Tenant.
Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to the Property, the amount of such
Claims exceeds Fifty Thousand Dollars ($50,000) ("Threshold Amount") and, in
such case, such Claims shall only be valid (and the Seller shall only be liable)
for the portion that exceeds the Threshold Amount; provided, however,
notwithstanding any provision to the contrary herein or in any Closing Document,
the (i) total liability of Seller for any or all Claims (inclusive of Claims
with respect to any estoppel certificates delivered by Seller pursuant to
Section 8.4(a)) with respect the Property shall not exceed two and three
quarters percent (2.75%) of the Purchase Price. Further notwithstanding any
provision to the contrary herein or in any Closing Document, Seller shall have
no liability with respect to any Claim under any of the representations and
warranties contained in this Agreement or in any Closing Document, which Claim
relates to or arises in connection with (1) any Hazardous Materials (except
solely to the extent that Seller has breached its representation in
Section 4.1(k)), (2) the physical condition of the Property (except solely to
the extent that Seller has breached its representation in Section 4.1(k)) or
(3) any other matter not expressly set forth in the Seller's representations and
warranties set forth in Section 4.1. Buyer shall not make any Claim or deliver
any Claim Notice unless it in good faith believes the Claims would exceed the
Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement, the
representations and warranties of Seller contained herein or in any Closing
Document shall survive only until July 6, 1998. Any Claim that Buyer may have
at any time against Seller for a breach of any such representation or warranty,
whether known or unknown, with respect to which a Claim Notice has not been
delivered to Seller on or prior to July 6, 1998 shall not be valid or effective.
For the avoidance of doubt, on July 6, 1998, Seller shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Buyer, any Permitted Assignee and/or their
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the
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Property, except solely for those matters that are then the subject of a pending
Claim Notice delivered by Buyer to Seller. Any Claim that Buyer may have at any
time against Seller for a breach of any such representation or warranty, whether
known or unknown, with respect to which a Claim Notice has been delivered to
Seller on or prior to July 6, 1998 may be the subject of subsequent litigation
brought by Buyer against Seller, provided that such litigation is commenced
against Seller on or prior to October 6, 1998. For the avoidance of doubt, on
October 6, 1998, Seller shall be fully discharged and released (without the need
for separate releases or other documentation) from any liability or obligation
to Buyer and/or its successors and assigns with respect to any Claims or any
other matter relating to this Agreement, any Closing Document or the Property,
except solely for those matters that are the subject of a litigation by Buyer
against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
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(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it has been given the full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents, representatives or experts of Buyer's
choosing, as Buyer considers necessary or appropriate, and that Buyer is
completely satisfied (but the foregoing will not constitute a waiver of any
breach of representation or warranty set forth in Section 4.1 unless such breach
is disclosed in the Due Diligence Materials or is otherwise known by Buyer
and/or any Permitted Assignee before the Closing Date and Buyer and/or such
Permitted Assignee(s) elect to proceed with the Closing). Such independent
investigation by Buyer may include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Real Property;
(iv) the physical condition of the Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements and of each tenant space therein, the structure, the roof, the
paving, the utilities, and all other physical and functional aspects of the Real
Property, including the presence or absence of Hazardous Materials;
(v) any easements and/or access rights affecting the Real
Property;
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(vi) the Leases with respect to the Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of the Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Property and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of the Real Property;
(ii) a Rent Roll for the Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for the Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) Phase I Environmental Site Assessment prepared by EMG,
dated January 17, 1997; and
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
the Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to the Real
Property.
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(c) Buyer acknowledges and agrees that (i) it has completed its
independent investigation of the Property and the Due Diligence Materials and
has obtained, reviewed and approved a Title Commitment for each Property, (ii)
it is acquiring the Property based on such independent investigation and subject
to all information disclosed in the Due Diligence Materials (and also in
reliance on Seller's representations and warranties contained herein) and (iii)
Buyer shall have no right to terminate this Agreement based on any further
investigations of the Property or the Due Diligence Materials. Buyer has
approved each and every aspect of such Property. The preceding sentence is not
intended to relieve, and shall not relieve, Seller from any of its obligations
under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of the Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of the Real Property or the square footage of
the Improvements thereon or of any tenant space therein, (iii) the development
or income potential, or rights of or relating to, the Real Property, or the Real
Property's use, habitability, merchantability, or fitness, or the suitability,
value or adequacy of the Real Property for any particular purpose, (iv) the
zoning or other legal status of the Real Property or any other public or private
restrictions on the use of the Real Property, (v) the compliance of the Real
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any Governmental
Authority or of any other person or entity (including, without limitation, the
Americans with Disabilities Act), (vi) the ability of Buyer to obtain any
necessary governmental approvals, licenses or permits for Buyer's intended use
or development of the Real Property, (vii) the presence or absence of Hazardous
Materials on, in, under, above or about the Real Property or any adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
Improvements, (ix) the condition of title to the Real Property, (x) the Leases,
Contracts or any other agreements affecting the Real Property or the intentions
of any party with respect to the negotiation and/or execution of any lease or
contract with respect to the Real Property, (xi) Seller's ownership of the
Property or any portion thereof or (xii) the economics of, or the income and
expenses, revenue or
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expense projections or other financial matters, relating to, the operation of
the Real Property. Without limiting the generality of the foregoing, except as
otherwise set forth herein, Buyer expressly acknowledges and agrees that Buyer
is not relying on any representation or warranty of Seller, nor any partner,
officer, employee, attorney, agent or broker of Seller, whether implied,
presumed or expressly provided at law or otherwise, arising by virtue of any
statute, common law or other legally binding right or remedy in favor of Buyer.
Buyer further acknowledges and agrees that Seller is under no duty to make any
inquiry regarding any matter that may or may not be known to Seller or any
partner, officer, employee, attorney, agent or broker of Seller. This Section
4.5(d) shall survive the Closing, or, if the Closing does not occur, beyond the
termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF THE PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto the Real Property, Buyer shall give
Seller reasonable advance notice of such entry and shall conduct such entry and
any inspections in connection therewith so as to minimize, to the greatest
extent possible, interference with Seller's business and the business of the
Tenants and otherwise in a manner reasonably acceptable to Seller. Without
limiting the foregoing, prior to any entry to perform any necessary on-site
testing, Buyer shall give Seller written notice thereof, including the identity
of the company or persons who will perform such testing and the proposed scope
of the testing and the party performing the testing. Seller shall approve or
disapprove any proposed testing and the party performing the same within three
(3) Business Days after receipt of such notice. If a Buyer Party takes any
sample from the Real Property in connection with any such approved testing,
Buyer shall provide to Seller a portion of such sample being tested to allow
Seller, if it so chooses, to perform its own testing. Seller or its
representative may be present to observe any testing, or other inspection
performed on the Real Property. Buyer shall promptly deliver to Seller copies
of any reports relating to any testing or other inspection of the Real Property
performed by or on behalf of any Buyer Party. Buyer shall maintain, and shall
ensure that its contractors maintain, public liability and property damage
insurance insuring the Buyer Parties against any liability arising out of any
entry or inspections of
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the Real Property pursuant to the provisions hereof. Such insurance maintained
by Buyer shall be in the amount of Ten Million Dollars ($10,000,000) combined
single limit for injury to or death of one or more persons in an occurrence, and
for damage to tangible property (including loss of use) in an occurrence. The
policy maintained by Buyer shall insure the contractual liability of Buyer
covering the indemnities herein and shall (i) name Seller (and their successors,
assigns and Affiliates) as additional insureds, (ii) contain a cross-liability
provision, and (iii) contain a provision that "the insurance provided by Buyer
hereunder shall be primary and noncontributing with any other insurance
available to Seller." Buyer shall provide Seller with evidence of such
insurance coverage prior to any entry or inspection of the Real Property. Buyer
shall indemnify and hold the Seller Parties harmless from and against any Claims
arising out of or relating to any entry on the Real Property by any Buyer Party,
in the course of performing any inspections, testings or inquiries. The
foregoing indemnity shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of the Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, the Real Property discovered by Buyer's
environmental testing, Buyer shall first provide prior written notice to Seller
and shall not contact any Governmental Authority except in conjunction with
Seller. In addition, if Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) Business Days prior written notice of the
intended contact and to have a representative present when Buyer has any such
contact with any governmental official or representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to sue, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, LLC members, directors, officers, attorneys, employees and
agents of each of them, and their respective heirs, successors, personal
representatives and assigns (each a "Seller Party", and collectively, the
"Seller Parties") with respect to any and all Claims, whether direct or
indirect, known or unknown, foreseen or unforeseen, that may arise on account of
or in any way be connected with any Property including, without limitation, the
physical, environmental and structural condition of the Real Property or any law
or regulation applicable thereto, including, without limitation, any Claim or
matter relating to the use, presence, discharge or release of Hazardous
Materials on, under, in, above or about the Real Property; provided, however,
Buyer does not waive its rights, if any, to recover from, and does
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not release or discharge or covenant not to sue Seller for (i) any act that is
found by a court of competent jurisdiction to constitute fraud, (ii) any breach
of Seller's representations or warranties set forth in Section 4.1 or in
Seller's estoppel certificate delivered pursuant to Section 8.4, subject to the
limitations and conditions provided in this Agreement, or (iii) any breach of
Seller's obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Buyer has obtained a Title
Commitment for the Property. A copy of each Title Commitment delivered to Buyer
has been delivered to Seller and its counsel. At the Closing, as a condition
precedent to Buyer's obligation to close, Seller shall have delivered to Buyer a
deed for the Real Property in the form of Exhibit A (each, a "Deed"), each
subject to no exceptions other than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for the Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of the Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Effective Date;
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments,
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in recordable form, canceling such lien or encumbrance, together with funds to
pay the cost of recording and canceling the same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds shall be deemed to be a full performance
and discharge of every obligation on the part of Seller to be performed under
this Agreement with respect to the applicable Property, other than those that
are specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, a 1992
ALTA Owner's Policy of Title Insurance in the amount of the Purchase Price
showing title to the Property vested in Buyer or its Permitted Assignee or
designee, subject only to the Permitted Exceptions (the "Title Policy").
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder, other GMH Realty, Inc. ("GMH"), whose fees will
be the responsibility of Seller pursuant to a separate agreement among between
GMH and Seller, was instrumental in arranging or bringing about this transaction
and that there are no claims or rights for brokerage commissions or finders'
fees in connection with the transactions contemplated hereby by any person or
entity other than GMH. If any person brings a claim for a commission or
finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless
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from any and all costs, damages, claims, liabilities or expenses (including
without limitation, reasonable attorneys' fees and disbursements) incurred by
the Indemnified Party in defending against the claim. The provisions of this
Section 6.1 shall survive the Closing or, if the Closing does not occur, any
termination of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTY
Section 7.1 Interim Operation of the Property.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real Property
in the ordinary course, on an arm's-length basis and consistent with Seller's
past practices and will not dispose of or encumber the Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring on or before December 30, 1997) and pay all costs and expenses
of the Property, including without limitation debt service and Real Estate
Taxes.
(b) Seller shall not, without Buyer's consent, enter into any New
Leases or materially modify any Existing Lease. Any consent to be given by
Buyer pursuant to this Section 7.1(b) shall not be unreasonably withheld or
delayed and shall be deemed granted if Buyer does not respond in writing to
Seller's request for consent within three (3) Business Days.
(c) Seller shall not enter into or terminate any operating agreement
or any contract, agreement or other commitment of any sort (including any
contract for capital items or expenditures, but excluding any liens or other
encumbrances on title other than Permitted Exceptions), with respect to the
Property that (A) requires payments to or by Seller in excess of $50,000 per
annum, or the performance of services by Seller the value of which is in excess
of
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$50,000 per annum and (B) is not terminable without cause and without penalty on
thirty (30) days' notice or less; provided that Seller, in its good faith but
sole discretion, believes such contract is on market terms and will benefit the
Property. At least three (3) Business Days prior to becoming legally bound with
respect to any such matter, Seller shall consult with and seek the consent of
Buyer, and shall provide reasonable detail to Buyer (including, at Buyer's
request, copies of the relevant documentation), with respect thereto. Any
consent to be given by Buyer pursuant to this Section 7.1(c) shall not be
unreasonably withheld or delayed and shall be deemed granted if Buyer does not
respond in writing to Seller's request for consent within three (3) Business
Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on the Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell the Property or portion thereof without Buyer's
prior written consent, except for dispositions of personal property in the
ordinary course of business or as otherwise permitted by Section 7.1 or Section
7.3.
(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting the Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent.
If the Closing occurs, Buyer shall be responsible and shall pay for the costs of
tenant improvement work or allowances, third-party leasing commissions and other
leasing costs (collectively, "Leasing Costs") relating to or arising from
(i) those Leases or modifications of Leases entered into on or after October 9,
1997 (ii) the exercise by a Tenant of a renewal, expansion or extension option
contained in any Lease, which renewal or extension period commences, or which
expansion space such Tenant first has the right to occupy, on or after October
9, 1997 (notwithstanding that such Tenant may have exercised such option prior
to October 9, 1997 and (iii) any items set forth on Schedule 7.2.1, and any
amounts paid by Seller in respect of such Leasing Costs shall result in an
upward adjustment to the Purchase Price at Closing equal to the amounts so paid.
Free rent periods provided for in Leases entered into by Seller prior to October
9, 1997 that occur, in whole or in part, after the Closing Date shall be for
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the account of, and borne by, Buyer without adjustment to the Purchase Price at
closing. The provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Property. Between the
Effective Date and the Closing Date, Seller shall (a) maintain the Real Property
in substantially the same manner as prior hereto pursuant to Seller's normal
course of business, subject to reasonable wear and tear and further subject to
the occurrence of any damage or destruction to the Real Property by casualty or
other causes or events beyond the control of Seller; provided, however, that
Seller's maintenance obligations under this Section 7.3 shall not include any
obligation to make capital expenditures not incurred in Seller's normal course
of business or any other expenditures not incurred in Seller's normal course of
business; (b) continue to maintain its existing insurance coverage; and (c) not
grant any voluntary liens or encumbrances affecting such Property other than
Permitted Exceptions of the type described in clauses (i) and (ix) of
Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by any Tenant, provided, that
(i) with respect to delinquent rents, Seller may (to the extent permitted under
the Lease) apply Tenant security deposits held by Seller only to rents that are
thirty (30) days or more past due and (ii) with respect to any application by
Seller of Tenant security deposits held by Seller, Seller will deliver, in
connection with any such application, written notice to the affected Tenant(s)
indicating that their security deposits have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the Property has been sold to Buyer and that, after the Closing,
all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Property for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
Real Property or destruction of any improvements thereon or condemnation of any
portion of the Property, provided that upon the Closing, there shall be a
credit against the Purchase Price due hereunder equal to the amount of
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any insurance proceeds or condemnation awards collected by Seller as a result of
any such damage or destruction or condemnation, plus the amount of any insurance
deductible or any uninsured amount or retention, less any sums reasonably
expended by Seller prior to the Closing for the restoration or repair of the
Property. Seller has provided Buyer with a certificate of insurance for
Seller's casualty insurance policy so that Buyer can confirm its satisfaction
with such policy. Seller agrees that it will maintain such policy in full force
and effect until the Closing. If the proceeds or awards have not been collected
as of the Closing, then such proceeds or awards shall be assigned to Buyer,
except to the extent needed to reimburse Seller for sums it reasonably expended
prior to the Closing for the restoration or repair of such Property.
Notwithstanding the foregoing, (i) Seller shall not settle, compromise or
otherwise stipulate any award or recovery in connection with any damage,
destruction or condemnation, in each case if such damage, destruction or
condemnation impairs the value of the Property by at least $250,000, without the
prior written approval of Buyer, which approval shall not be unreasonably
withheld, (ii) Buyer shall have the right to participate in any such settlement
or other proceedings, and (iii) if the amount of the damage or destruction as
described in this Section 7.7 exceeds ten percent (10%) of the Purchase Price,
then Buyer may, at its option to be exercised within five (5) Business Days of
Seller's written notice of the occurrence of the damage or destruction, either
terminate this Agreement or consummate the purchase for the full Purchase Price
as required by the terms hereof. If Buyer elects to terminate this Agreement,
then the Deposit shall be immediately returned to Buyer and neither party shall
have any further rights or obligations hereunder except to the extent set forth
in Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the Closing, Buyer shall be entitled to a credit against the
Purchase Price and shall receive an assignment of any uncollected proceeds or
awards, all as set forth in this Section 7.7 above. The provisions of this
Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to any of the Property
of which Seller obtains actual knowledge by written notice, any notices of
violations of any legal requirements relating to any of the Property received by
Seller, any litigation of which Seller obtains actual knowledge by written
notice that arises out of the ownership of the Property unless fully covered by
insurance (subject to customary deductibles), and any other matters that would
materially affect Seller's representations and warranties hereunder.
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ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"), in either case, with time being of the essence.
Except as otherwise permitted under this Agreement, such date and time may not
be extended without the prior written approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) At or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
(i) a duly executed and acknowledged Deed for the Real Property;
(ii) [intentionally omitted];
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for the
Property in the form attached hereto as Exhibit E (each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for the Property in the form attached hereto as Exhibit F (each, an
"Assignment of Leases");
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(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for the
Property in the form attached hereto as Exhibit G (each, an "Assignment of
Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Property;
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(b) At or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) [intentionally omitted];
(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Property.
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(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for the Real Property, (ii)
the Title Company shall deliver to Buyer all other documents and instruments
received by it which, in accordance with the terms of this Agreement, are to be
delivered by Seller to Buyer on the Closing Date, and (iii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement are to be delivered by Buyer to
Seller on the Closing Date. Buyer and Seller shall each deposit such other
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the purchase and sale of the
Property in accordance with the terms hereof; provided, that Seller shall not be
required to provide any indemnities or affidavits or to escrow any funds other
than the Seller's Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Property in Seller's possession, a set of keys to the Real Property
and originals (or copies, if originals are not available) of any other items in
Seller's possession relating to the use, ownership, operation, maintenance,
leasing, repair, alteration, management or development of the Real Property, on
the Closing Date (at such location as Buyer and Seller shall mutually agree).
Following the Closing, Buyer shall make all Leases, Contracts, other documents,
books, records and any other materials in its possession, to the extent the same
relate to the period of Seller's ownership of the Property, available to Seller
or its representatives for inspection and/or copying at Buyer's offices (at
Seller's sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. Seller shall use its reasonable
efforts (without incurring any additional expense) to obtain prior to the
Closing Date tenant estoppel certificates from each Tenant substantially in the
form attached hereto as Exhibit J; provided, however, that if a form of estoppel
certificate is attached to or otherwise prescribed in a particular lease
document, that form (the "Prescribed Form") shall be deemed to be acceptable to
Buyer in the event that any Tenant is unwilling to sign the form attached hereto
as Exhibit J. It shall be a condition to Buyer's obligation to close the sale
and purchase of a Property that on or before the Closing Seller delivers to
Buyer tenant estoppel certificates substantially in the form attached hereto as
Exhibit J (or in the Prescribed Form, if applicable) from (i) Tenants occupying
seventy five percent (75%) of the total leased square footage of the Property;
and (ii) Significant Tenants occupying seventy five percent (75%) of the total
leased square footage covered by such
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Significant Tenants' Leases (with respect to each of preceding clauses (i)-(ii),
the "Required Percentage"); provided, however, if Seller is unable to obtain the
aforesaid tenant estoppel certificates from Tenants or Significant Tenants (as
the case may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii) the
amount of the Tenants' or Significant Tenants' security deposits; (iii) the
dates through which rent has been paid; (iv) neither Seller nor, to Seller's
knowledge, any of those Tenants or Significant Tenants (as the case may be) is
in default thereunder; (v) a true, correct and complete copy of the Leases are
attached; (vi) the Leases expire on the dates specified and are not subject to
any renewal or extension options, except as specified, and (viii) there are no
options to purchase or rights of first refusal except as specified. Buyer shall
be obligated to accept Seller's certification in lieu of any missing estoppel
certificates. Seller's representations and warranties in the certificate shall
survive the Closing, provided that (i) Buyer must give Seller a Claim Notice
with respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any claim
that Buyer may have that is not so asserted, or litigation by Buyer that is not
so commenced, shall be barred and not be valid or effective and Seller shall
have no liability whatsoever with respect thereto) and (ii) any certificate
delivered by Seller pursuant to this Section 8.4 shall cease to survive the
Closing to the extent specifically confirmed by a tenant estoppel certificate
delivered by a Tenant or a Significant Tenant. In no event shall the minimum
thresholds to Buyer's recovery set forth in Section 4.3(a) apply to any
certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on the Property or that is pending and may become
a lien on any Property; water, sewer and utility charges; amounts payable
under any existing Contract, Contract entered into after the Effective Date
and in accordance with this Agreement; annual permits and/or inspection fees
(calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of the Property (other
than any Leasing Costs and free rent which shall be prorated as provided in
Section 7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on
the Closing Date, on the basis of a 365-day year, with Buyer deemed the owner
of the Property on the entire Closing
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Date. Rent which is due but uncollected as of the Closing Date shall not be
adjusted. On the Closing Date, Seller shall deliver to Buyer a schedule of all
such past due but uncollected rent owed by tenants. Buyer agrees to cause the
amount of such rental arrears to be included in the first bills thereafter
submitted by Buyer to such tenants after the Closing Date. Any rents collected
from a tenant after the Closing Date shall be applied first to the month in
which the Closing Date occurs, next to any rents payable by such tenant after
the Closing Date and thereafter to any arrearage owed by such tenant on the
Closing Date in the inverse order of maturity. Additional rent payments (and
estimated additional rent payments) actually paid by tenants prior to Closing
attributable to real estate taxes and operating costs shall be adjusted as of
the Closing Date. Additional rent payments (and estimated additional rent
payments) attributable to real estate taxes and operating costs to be paid by
tenants after the Closing shall be adjusted upon receipt by Buyer. The
adjustments of additional rent payments shall be based upon the number of days
in the period for which such payment relates that are before or after the
Closing Date. In no event will Buyer be entitled to receive any payments on or
under the promissory notes or other agreements referred to in Section 8.7.
Buyer shall use reasonable efforts until October 6, 1998 to collect any
delinquent rents that accrued prior to the Closing Date (but Seller shall have
the right to commence and pursue litigation against any Tenant to collect
delinquent rents and/or expense reimbursements, provided that Seller may not
seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
the Property has been assessed for property taxes purposes at such rates as
would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of such Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims and liability for
such taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other party
a sum of money based on proration(s) calculated after the Closing Date shall
promptly pay said sum to the other party, together with interest thereon at the
rate of two percent (2%) per annum over the Prime Rate from the Closing Date to
the date of payment, if payment is not made within ten (10) days after delivery
of a bill therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing occurs,
then the proration of such taxes shall be based upon
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the rate and assessments for the preceding calendar year, and such proration
shall be adjusted between Seller and Buyer as soon as reasonably practicable
after such tax rate or assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Property to permit Seller to review Buyer's
proration statements. Seller shall have sixty (60) days after receipt of
Buyer's calculations to accept or contest such prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller and Buyer
shall each pay one half of the realty transfer taxes payable with respect to the
deed. Seller and Buyer shall each be responsible for paying their respective
attorneys' fees and costs. Buyer and Seller agree that, given the de minimis
amount of Personal Property included within the Property, no portion of the
Purchase Price is allocable or attributable to such Personal Property.
(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Property in a
manner (or otherwise take a position) inconsistent with the Purchase Price set
forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and retain
any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of the Property for any tax year which, in
accordance with the laws and regulations applicable to such Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to the Property, (i) Seller
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shall retain all rights (subject to any rights of Tenants under their Leases)
with respect to any tax year ending prior to the tax year (and all refunds
relating thereto) in which the Closing Date occurs, and shall have the sole
right to participate in and settle any proceeding relating thereto (provided,
that such settlement does not affect the assessed tax value for any subsequent
tax year), and (ii) Buyer shall have all rights (subject to any rights of
Tenants under their Leases) with respect to any tax year (and all refunds
relating thereto) which ends after the Closing Date; provided, however, that if
the proceeding is for a tax year in which the Closing Date occurs, such
settlement shall not be made without Buyer's prior consent, which consent shall
not be unreasonably withheld or delayed. With respect to any such proceeding
for a tax year in which the Closing Date occurs (whether commenced by Seller or
Buyer), any refund or credit of taxes for such tax year shall be applied first
to the unreimbursed out-of-pocket expenses, including reasonable counsel fees,
necessarily incurred in obtaining such refund or credit, and second, to any
Tenant entitled to same, and the balance shall be apportioned between Seller and
Buyer as of the Closing Date in accordance with the proportion of the applicable
tax year occurring before and after the Closing Date. In each case, the party
which prosecuted the proceeding shall deliver to the other copies of receipted
tax bills and any decision or settlement agreement evidencing the reduction in
taxes. If any refund shall be received by Seller which is for the account of
Buyer as provided in this Section 8.6, then Seller shall hold Buyer's share
thereof in trust for Buyer and, promptly upon receipt thereof, pay such share to
Buyer or any other party entitled to same as provided above. If any refund
shall be received by Buyer which is for the account of Seller as provided in
this Section 8.6, then Buyer shall hold Seller's share thereof in trust for
Seller and, promptly upon receipt thereof, pay such share to Seller or any other
party entitled to same as provided above. Each party shall execute any and all
consents or other documents as may be reasonably necessary to be executed by
such party so as to permit the other party to commence or continue any tax
certiorari proceeding which such other party is authorized to commence or
continue pursuant to the terms of this Section 8.6, or to collect any refund or
credit with respect to any such tax proceeding. The provisions of this Section
8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other agreements (other than the Leases) delivered to Seller
that evidence, deal with or otherwise relate solely to a Tenant's rental or
expense reimbursement obligations under its Lease that, as of the Closing Date,
are or were past due, shall not be conveyed to Buyer and shall be retained by
Seller. Seller agrees that in enforcing its rights against Tenants under any
such promissory notes or other agreements, Seller will not seek to exercise any
remedies that may be available to it under the affected Leases.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by a commercial
overnight courier that guarantees next day delivery and provides a receipt, or
(d) by legible facsimile (followed by hard copy delivered in accordance with
preceding subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
To Seller: Virginia Drive Associates, L.P.
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
with a copy to: Crosstown Asset Corp. I
c/o Cargill Financial Services Corp.
6000 Clearwater Drive
Minnetonka, Minnesota 55343
Attention: Mr. Thomas S. Huettner
Fax No.: (612) 984-3905
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or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery). Notices may be given by
attorneys for the notifying partner.
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party, and are superseded and replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Property but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PARTIES RECOGNIZE THAT,
IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY WITH CERTAIN ASPECTS OF THE LAWS
OF OTHER STATES IN ORDER TO
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CONSUMMATE THE PURCHASE AND SALE OF SUCH PROPERTY PURSUANT HERETO. THE PARTIES
AGREE TO COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE
PURCHASE AND SALE OF PROPERTY. IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF
THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A MANNER THAT RESULTS IN THE
GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving this
Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of all
federal and state courts sitting in the Commonwealth of Pennsylvania and consent
that any order, process, notice of motion or other application to or by any such
court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided that a
reasonable time for appearance is allowed, and Buyer and Seller agree that such
courts shall have the exclusive jurisdiction over any such suit, action or
proceeding commenced by any party. In furtherance of such agreement, Buyer and
Seller agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the Commonwealth of Pennsylvania and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s) and
their Affiliates and representatives for review and inspection, Buyer (on behalf
of itself, any Permitted Assignee(s), and their respective Affiliates and
representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data,
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<PAGE>
furnished to Buyer, a Permitted Assignee, or their respective officers,
directors, employees, agents, advisors, Affiliates or representatives
(collectively "Representatives") by Seller or its Affiliates relating to
the Property, as well as written memoranda, notes, analyses, reports,
compilations, or studies prepared by Buyer or its Representatives (in
whatever form of medium) that contain, or are derived from, such
information provided by Seller. Notwithstanding the foregoing, information
provided by Seller shall not constitute "Evaluation Material" if such
information (i) is or becomes generally available to the public other than
as a result of a disclosure by or through Buyer or its Representatives in
contravention of this Section 9.10(a) or (ii) is or becomes available to
Buyer from a source (other than Seller) not bound, to the knowledge of
Buyer, by any legal or contractual obligation prohibiting the disclosure of
Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the Property as contemplated by this Agreement and
not for any other purpose whatsoever. Buyer (on behalf of itself and its
Representatives) further agrees that it will not disclose any Evaluation
Material or use it to the detriment of Seller or its Affiliates; provided,
however, that Buyer may without liability disclose Evaluation Material
(x) to any Representative of Buyer who needs to know such Evaluation
Material for the purpose of evaluating the transactions described in this
Agreement involving Seller and the Property and Buyer or its Permitted
Assignee(s) (it being understood and agreed that Buyer shall be fully
responsible for any disclosures by any such Person) and (y) pursuant to
administrative order or as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
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<PAGE>
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Property (the "Confidential Information"), provided that such disclosure may be
made (a) to any Person who is a member, partner, officer, director or employee
of Seller or counsel to or accountants of Seller solely for their use and on a
need-to-know basis, provided that such Persons are notified of Seller's
confidentiality obligations hereunder, (b) with the prior consent of Buyer, or
(c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request and
(iii) if disclosure is required or deemed advisable, reasonably cooperate with
Buyer (at no cost to Seller) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded such Confidential
Information.
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<PAGE>
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Property. The parties shall be legally bound with respect to the
purchase and sale of the Property pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 Special Provisions Regarding Property Located in the
Commonwealth of Pennsylvania. Under the terms of the Pennsylvania Sewage
Facilities Act of January 24, 1966, No. 537, P.L. 12535 as amended, Seller has
received no written notice from a
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<PAGE>
Governmental Authority that a tie-in or tap to a community sewage system
currently exists or is available or that such system or any other utility
systems or facilities are presently adequate for Buyer's use of the Property,
and Buyer agrees to assume full responsibility for contacting any agencies or
utility companies in order to obtain service to the Property and for any fee
incurred or payment required in connection therewith.
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
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<PAGE>
The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: VIRGINIA DRIVE ASSOCIATES, L.P.
By: GH Virginia Drive, Inc., its general partner
By: _________________________
Name:
Title
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EXHIBIT N
ESCROW AGREEMENT
Commonwealth Land Title Insurance Company ("Escrowee") agrees to hold in
escrow pursuant to this Agreement the sum of $200,000 ("Deposit") to be
deposited by Brandywine Operating Partnership, L.P. ("Buyer") pursuant to a
certain Agreement of Purchase and Sale dated December 15, 1997 ("Agreement"),
between Buyer and Virginia Drive Associates, L.P. ("Seller"), the provisions of
which (including, without limitation, the defined terms) are hereby incorporated
herein by reference. The Deposit shall be paid to Seller by Escrowee at the
time of Closing under the Agreement, or if Closing does not take place,
distributed in accordance with the terms of the Agreement. Escrowee shall,
immediately upon receipt of the Deposit, deposit same in an interest bearing,
money market type escrow account with a federally insured bank or savings and
loan association located in Philadelphia, Pennsylvania. All interest which
shall accrue on the Deposit shall be payable in accordance with the Agreement.
Escrowee shall pay such interest to such party contemporaneously with Escrowee's
payment of the Deposit. Seller and Buyer agree that Escrowee is an escrow
holder only and is merely responsible for the safekeeping of the Deposit and
interest and shall not be required to determine questions of fact or law. If
Escrowee shall receive notice of a dispute as to the disposition of the Deposit
or the interest, then Escrowee shall not distribute the Deposit or interest
except in accordance with written instructions signed by both Buyer and Seller.
Pending resolution of any such dispute, Escrowee is authorized to pay the
Deposit and interest into court. If Escrowee pays the Deposit and interest into
court, it shall be discharged from all further obligations hereunder. This
Escrow Agreement shall be governed by the laws of the state of New York.
Seller's Federal Tax ID Number is 23-2895748.
Buyer's Federal Tax ID Number is 23-2862640.
<PAGE>
IN WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable consideration,
each intending to be legally bound and to bind their respective successors and
assigns, have caused this Escrow Agreement to be executed and delivered as of
December 15, 1997.
Escrowee: COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: ___________________________
Gerard H. Sweeney
President
Seller: VIRGINIA DRIVE ASSOCIATES, L.P.
By: GH Virginia Drive, its general partner
By: _________________________
Name:
Title
<PAGE>
Exhibit 10.13
AGREEMENT OF PURCHASE AND SALE
BETWEEN
WHDWA REAL ESTATE LIMITED PARTNERSHIP
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
November 21, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................... 1
Section 1.2 Terms Generally............................................... 6
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale.......................................................... 7
Section 2.2 Purchase Price................................................ 8
Section 2.3 Due Diligence Period.......................................... 10
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase.................. 11
Section 3.2 Conditions to Seller's Obligations to Sell.................... 12
Section 3.3 Termination................................................... 13
Section 3.4 Waiver by Buyer............................................... 13
Section 3.5 Excluded Consent Properties................................... 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller...................... 14
Section 4.2 Estoppels..................................................... 16
Section 4.3 Limitation on Claims; Survival of Representations
and Warranties................................................ 16
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<PAGE>
Section 4.4 Representations and Warranties of Buyer....................... 18
Section 4.5 Buyer's Independent Investigation............................. 19
Section 4.6 Entry and Indemnity; Limits on Government Contacts............ 22
Section 4.7 Release....................................................... 24
ARTICLE V
TITLE
Section 5.1 Conveyance of Title........................................... 24
Section 5.2 Evidence of Title............................................. 26
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers....................................................... 26
Section 6.2 Expenses...................................................... 26
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties........................... 27
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent... 28
Section 7.3 Seller's Maintenance of the Properties........................ 29
Section 7.4 Lease Enforcement............................................. 29
Section 7.5 Lease Termination Prior to Closing............................ 29
Section 7.6 Tenant Notices................................................ 29
Section 7.7 Risk of Loss and Insurance Proceeds........................... 30
Section 7.8 Notifications................................................. 30
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions........................................... 31
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Section 8.2 Closing....................................................... 31
Section 8.3 Deposit of Documents.......................................... 31
Section 8.4 Estoppel Certificates......................................... 34
Section 8.5 Prorations.................................................... 35
Section 8.6 Tax Certiorari Proceedings.................................... 37
Section 8.7 Tenant Obligations............................................ 38
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices....................................................... 38
Section 9.2 Entire Agreement.............................................. 39
Section 9.3 Time.......................................................... 40
Section 9.4 Attorneys' Fees............................................... 40
Section 9.5 No Merger..................................................... 40
Section 9.6 Assignment.................................................... 40
Section 9.7 Counterparts.................................................. 40
Section 9.8 Governing Law; Jurisdiction and Venue......................... 40
Section 9.9 Waiver of Trial by Jury....................................... 41
Section 9.10 Confidentiality and Return of Documents...................... 41
Section 9.11 Interpretation of Agreement.................................. 44
Section 9.12 Amendments................................................... 44
Section 9.13 No Recording................................................. 44
Section 9.14 No Third Party Beneficiary................................... 44
Section 9.15 Severability................................................. 44
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract..................................................... 44
Section 9.17 Further Assurances........................................... 45
Section 9.18 Special Provisions Regarding Properties Located
in the Commonwealth of Pennsylvania.......................... 45
Section 9.19 Exculpation.................................................. 45
Section 9.20 Counterparts................................................. 45
EXHIBITS
- --------
EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B ASSIGNMENTS OF GROUND LEASES
EXHIBIT C INTENTIONALLY OMITTED
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EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M GROUND LEASE ESTOPPEL CERTIFICATE
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
- ---------
SCHEDULE 1 INTENTIONALLY OMITTED
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.2 LEASEHOLD ESTATES
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.1 ALLOCATED PURCHASE PRICE
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
SCHEDULE 8.1.1 TRANSFER TAXES
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<PAGE>
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of November 21, 1997 (this
"Agreement"), between WHDWA Real Estate Limited Partnership, a Delaware limited
partnership ("Seller"), and Brandywine Operating Partnership, L.P., a Delaware
limited partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Deposit" shall mean the earnest money deposit funded by
Buyer pursuant to the second sentence of Section 2.2(b)(i).
"Additional Deposit Date" shall have the meaning set forth in Section
2.2(b)(i)
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Allocated Purchase Price" shall have the meaning set forth in
Section 2.2(a).
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Ground Lease" shall have the meaning set forth in
Section 5.1(b).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
<PAGE>
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Consent Properties" shall mean the Property identified on Schedule
2.1.1 as "Freedom Business Center," King of Prussia, Pennsylvania.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall mean the Initial Deposit and the Additional Deposit.
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"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials referenced in the materials delivered to Buyer
and its representatives entitled "WHDWA Properties Due Diligence Index"
dated November 21, 1997) and on-site materials made available to Buyer for
inspection.
"Due Diligence Period" shall mean the period commencing on the
Effective Date and ending at 4:00 P.M. (Eastern Standard Time) on December
12,1997 (as such period may be extended by written notice from Seller to
Buyer), during which period Buyer shall conduct the due diligence
activities contemplated by Section 4.6 of this Agreement.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Excluded Consent Property" shall have the meaning set forth in
Section 3.5.
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Fee Property" or "Fee Properties" shall have the meaning set forth
in Section 2.1(a).
"Goldman" shall have the meaning set forth in Section 6.1.
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Ground Lease" shall have the meaning set forth in Section 4.5(b).
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
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"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit" shall mean the earnest money deposit funded by Buyer
pursuant to the first sentence of Section 2.2(b)(i).
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leasehold Estate" or "Leasehold Estates" shall have meaning set forth
in Section 2.1(b).
"Leasehold Improvements" shall have the meaning set forth in Section
2.1(b).
"Leasehold Improvements Deed" shall have the meaning set forth in
Section 5.1(c).
"Leasehold Property" or "Leasehold Properties" shall have the meaning
set forth in Section 2.1(b).
"Leases" shall mean all Existing Leases and New Leases, collectively.
"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering any Real Property which are entered into after the
Effective Date in accordance
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<PAGE>
with the terms of this Agreement, as the same may be amended or modified
from time to time in accordance with the terms of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" or "Properties" shall have the meaning set forth in Section
2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" or "Real Properties" shall have the meaning set forth
in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
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"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering any Real Property.
"Termination Notice" shall have the meaning set forth in Section 2.3.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
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ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by any Tenant or third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, a "Fee Property" and, collectively, the "Fee Properties");
(b) each leasehold estate described in Schedule 2.1.2 attached hereto identified
as being owned by Seller on Schedule 2.1.2, together with any and all rights
appurtenant thereto owned by Seller (each, a "Leasehold Estate" and,
collectively, the "Leasehold Estates"), together with all buildings,
improvements and fixtures (other than fixtures owned or removable by any Tenant
or third party) located thereon (collectively, the "Leasehold Improvements;"
each Leasehold Estate, together with the Leasehold Improvements thereon, a
"Leasehold Property" and, collectively, the "Leasehold Properties"); (c) all
tangible personal property not owned or removable by any Tenant or third party,
if any, located on the Real Properties and owned by Seller and used in the
operation or maintenance of any one or more of the Real Properties (the
"Personal Property"); (d) (i) Seller's interest, as landlord, owner or licensor,
in each of the Existing Leases, (ii) Seller's interest, as landlord, owner or
licensor, in any New Leases and (iii) to the extent assignable, any guarantees,
letters of credit or other instruments that secure or guarantee the performance
of the obligations of each Tenant; (e) to the extent assignable, all service
contracts, maintenance contracts, operating contracts, warranties, guarantees,
listing agreements, parking contracts and like contracts and agreements relating
to the Real Properties, and commission agreements, equipment leases, contracts,
subcontracts and agreements relating to the construction of any unfinished
tenant improvements (collectively, the "Contracts"); (f) to the extent
assignable, all warranties and guaranties made by or received from any third
party with respect to any building, building component, structure, fixture,
machinery, equipment or material situated on any Real Property, or contained in
any or comprising a part of any Improvement or Leasehold Improvement
(collectively, the "Warranties"); (g) to the extent Seller currently has such
items in its possession and to the extent assignable, all (i) preliminary, final
and proposed building plans and specifications (including "as-built" floor plans
and drawings) and tenant improvement plans and specifications for the
Improvements and the Leasehold Improvements and (ii) surveys, grading plans,
topographical maps, architectural and structural drawings and engineering,
soils, seismic, geologic and architectural reports, studies and tests relating
to any Real Property ((g)(i) and (g)(ii) collectively, the "Records and Plans");
and (h) to the extent transferable, any intangible personal property now or
hereafter owned by Seller and used in the ownership, use or operation of any one
or more of the Real Properties and/or the Personal Property, excluding materials
or information which in Seller's
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judgment is privileged or confidential information, the name WHDWA Real Estate
Limited Partnership and related names and proprietary computer equipment,
software and systems, but including all (i) licenses, permits, building
inspection approvals, certificates of occupancy, approvals, subdivision maps and
entitlements issued, approved or granted by Governmental Authorities in
connection with a Real Property, (ii) unrecorded covenants, conditions and
restrictions, reciprocal easement agreements, area easement agreements and other
common or planned development agreements or documents affecting any Real
Property and (iii) licenses, consents, easements, rights of way and approvals
obtained from private parties to make use of utilities and to ensure vehicular
and pedestrian ingress and egress for any Real Property ((h)(i), (h)(ii) and
(h)(iii) collectively, the "Licenses and Permits") or other rights relating to
the ownership, use or operation of any of the Real Properties or the Personal
Property (collectively, the "Intangible Property"). Each Fee Property or
Leasehold Property is referred to herein individually as a "Real Property" and
all of the foregoing are referred to herein collectively as the "Real
Properties." Each Fee Property and Leasehold Property, together with the
Personal Property, the Leases, the Contracts, the Warranties, the Records and
Plans and the Intangible Property relating thereto are referred to herein as a
"Property" and, collectively, as the "Properties."
Section 2.2 Purchase Price.
(a) The purchase price of the Properties is One Hundred Seven Million
One Hundred Thousand Dollars ($107,100,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein. The Purchase Price
shall be allocated among each Property (the "Allocated Purchase Price") in
accordance with Schedule 2.2.1 attached hereto.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 1700
Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Gordon Daniels
(the "Title Company"), a cash payment in the amount of Five Hundred Thousand
Dollars ($500,000). Unless Buyer has terminated this Agreement pursuant to
Section 2.3, by 3:00 P.M. (Eastern Standard Time) on the first Business Day
after the expiration of the Due Diligence Period (the "Additional Deposit
Date"), Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with the Title Company a cash payment in the amount
of Four Million Eight Hundred Fifty-Five Thousand Dollars ($4,855,000). The
Initial Deposit and the Additional Deposit shall be held by the Title Company
pursuant to an escrow agreement among Buyer, Seller and the Title Company in the
form of Exhibit N attached hereto.
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(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Properties as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Properties contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the Deposit
(each as may be adjusted in respect of any Excluded Consent Property pursuant to
Section 3.5), as adjusted pursuant to Section 8.5, shall be deposited by Buyer,
by wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the Title
Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO
THE FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO
UNDER THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE
DEPOSIT SHALL BE IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED
TO REIMBURSE BUYER FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR
(B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE,
IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT
RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE
ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN, AS ITS SOLE
AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY
OBLIGATIONS UNDER
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SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S OBLIGATIONS UNDER SECTIONS 6.1
0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever in accordance with
the terms of Section 2.2(b)(i), this Agreement shall immediately and
automatically terminate. Upon any termination of this Agreement pursuant to
this Section 2.2(d) or Section 2.3, no party shall have any further rights or
obligations hereunder, except as provided in Sections 4.6(a), 6.1, 9.4 and
9.10(a).
Section 2.3 Due Diligence Period. At any time prior to the
expiration of the Due Diligence Period, Buyer shall be free, in its sole and
absolute discretion, and for any or no reason whatsoever to terminate this
Agreement by written notice to Seller (the "Termination Notice") delivered on or
prior to the expiration of the Due Diligence Period. If the Termination Notice
is not delivered on or prior to the expiration of the Due Diligence Period,
Buyer shall be deemed to have reviewed, accepted and approved (and all
representations and warranties of Seller made herein shall be subject to and
qualified by) all of the Due Diligence Materials. Notwithstanding anything to
the contrary herein, Seller shall have no liability whatsoever to Buyer with
respect to any matter disclosed to or actually known by Buyer or its agents
prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to be
obtained from, or filing required to be made with, any Governmental Authority or
third party in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby
shall have been obtained or made.
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(c) The Title Company shall have issued or shall have committed to
issue, upon payment of the applicable premium therefor, a 1992 ALTA Owner's
Policy of Title Insurance (provided, that in jurisdictions where local
regulations require a form of policy other than a 1992 ALTA Owner's Policy, such
other required form shall be used) with respect to each Real Property in the
form of the title insurance commitment (each, a "Title Commitment") obtained by
Buyer during the Due Diligence Period from the Title Company showing title to
such Real Property vested in Buyer, subject only to the Permitted Exceptions.
It shall not be a condition to Closing that Buyer obtain any endorsements or
coverages not set forth in the applicable Title Commitment. Seller shall be
entitled, by notice to Buyer, to adjourn the Closing one or more times for an
aggregate period not to exceed thirty (30) days in order to remove any
exceptions to title that are not Permitted Exceptions. Nothing contained herein
shall require Seller to bring any action or proceeding or otherwise to incur any
expense to correct, discharge or otherwise remove title exceptions or defects
with respect to any Property or to remove, remedy or comply with any other
grounds for Buyer's refusing to approve title, provided that Seller shall be
obligated to remove or discharge, or otherwise cause the Title Company to omit
as an exception to title or to insure against collection thereof from or against
any Property any mortgages or monetary liens created by Seller, any mechanics'
liens or judgment liens that are the obligation of Seller (as opposed to any
Tenant or other third party) and any liens and encumbrances voluntarily created
by Seller in violation of Section 7.1 (collectively, the "Required Deletion
Items"). If on the Closing Date there are any Required Deletion Items, Seller
may use any portion of the Purchase Price payable pursuant to Section 2.2(b) to
satisfy same, provided the Title Company shall omit such lien or encumbrance as
an exception to title.
(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4 and the estoppel certificate from
the ground lessor with respect to each Ground Lease.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
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(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to be
obtained from, or filings required to be made with, any Governmental Authority
or third party in connection with the execution and delivery of this Agreement
by Buyer or the consummation by Buyer of the transactions contemplated hereby
shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 Excluded Consent Properties. In the event that on the
Closing Date, the conditions set forth in Section 3.1(b) shall not have been
satisfied by Seller or if a purchase option has been exercised with respect to
any Consent Property (such Consent Property, an "Excluded Consent Property"),
and but for such failure to satisfy Section 3.1(b) (or the exercise of such
purchase option) the conditions to Closing set forth in Section 3.1 otherwise
would be satisfied on the Closing Date, (i) Buyer shall be obligated to
purchase, and Seller shall be obligated to sell, the Properties other than such
Excluded Consent Property in accordance with the terms of this
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Agreement, and (ii) Buyer and Seller shall use their commercially reasonable
efforts (without incurring any additional expense) to satisfy such unsatisfied
conditions as soon as reasonably possible; provided that in such circumstances
"Properties" and the other defined terms used herein shall be construed to mean
the Properties excluding such Excluded Consent Property, Seller shall retain a
pro rata portion of the Deposit with respect to such Excluded Consent Property
(i.e., five percent (5%) of the Allocated Purchase Price attributable to such
Excluded Consent Property), and the Purchase Price shall be reduced by the
Allocated Purchase Price attributable to such Excluded Consent Property. If
within thirty (30) days after the Closing Date, the conditions to Closing set
forth in Section 3.1(b) with respect to such Excluded Consent Property shall
have been satisfied, Buyer shall be obligated to purchase, and Seller shall be
obligated to sell, such Excluded Consent Property in accordance with the terms
of this Agreement (but with prorations under Section 8.5 being calculated as of
the date such purchase and sale is closed, rather than the Closing Date) for a
Purchase Price equal to the Allocated Purchase Price attributable to such
Excluded Consent Property. The closing of such Excluded Consent Property shall
occur on the date which is ten (10) Business Days after the date either Buyer or
Seller notifies the other of the satisfaction of the conditions in Section
3.1(b).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Properties or all, or
substantially all, of Seller's other assets, (iv) suffered the attachment or
other judicial seizure of any of the Properties or all, or substantially all, of
Seller's other assets, (v) admitted in writing its inability to pay its debts as
they come due, or (vi) made an offer of settlement, extension or composition to
its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
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(c) Seller is duly organized and validly existing and in good standing
under the laws of its state of formation. Seller further represents and
warrants that this Agreement and all documents executed by Seller that are to be
delivered to Buyer at Closing (i) are, or at the time of Closing will be, duly
authorized, executed and delivered by Seller, (ii) do not, and at the time of
Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or any Property owned by Seller is
subject and (iii) constitute (or in the case of Closing documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, Ground Leases, all material Contracts and all
environmental and structural reports in the possession of Seller. This
representation shall not be deemed breached by virtue of any Leases or Contracts
entered into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, any Property (except for any New Leases entered into after the
Effective Date in accordance with Section 7.1) and (ii) as of the Effective
Date, Seller has not received written notice from any Significant Tenant that
Seller has not performed its material obligations under such Significant
Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty (60) days notice with respect to any Property (the
"Non-Terminable Contracts") are as set forth in Schedule 4.1.2 (the "Schedule of
Contracts") or as entered into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to any Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
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(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of any Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to any Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of any Property.
(m) Seller is not in material default under any Ground Lease, and, to
Seller's knowledge, each Ground Lease is in full force and effect.
(n) Seller has no employees employed in connection with the operation
of the Properties.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence Materials); (2) other than clauses (i) and (k)
above (which, in the case of clause (i) above, the parties acknowledge shall be
governed by Section 7.7 with respect to events occurring after the Effective
Date) shall be deemed remade by Seller, and shall be true in all material
respects, as of the Closing Date (except that any representations and warranties
which are made as of a specified date, shall have been true and correct as of
such specified date) subject to (A) the information disclosed in the Due
Diligence Materials, (B) litigation that is not reasonably likely to have a
material adverse effect on any Property, and (C) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Buyer; and (3) shall survive the Closing only as and to the extent expressly
provided in Section 4.2 and Section 4.3. If prior to the expiration of the Due
Diligence Period, Buyer discovers the existence of any option or right of first
refusal or first opportunity to acquire any fee or ground leasehold interest in
any portion of any Property other than those disclosed on Schedule 2.1.5 or
Schedule 4.1.1 to this Agreement, Buyer shall promptly provide Seller written
notice thereof so that the same may be disclosed to the Title Company in
Seller's Affidavit.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4 shall terminate to the extent specifically
confirmed by a tenant estoppel certificate delivered by a Tenant. The
representation in Section 4.1(m) shall terminate to the extent specifically
confirmed by an estoppel certificate by the ground lessor under the applicable
Ground Lease.
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Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to a specific Property, the amount of
such Claims exceed (each, a "Threshold Amount") (a) Four Hundred Thousand
Dollars ($400,000) with respect to the Property known as "Freedom Circle
Business Center," (b) Seventy Five Thousand Dollars ($75,000) with respect to
the Property known as "Devon West, and (c) One Hundred Thousand Dollars
($100,000) with respect to any other single Property and, in such case, such
Claims shall only be valid (and the Seller shall only be liable) for the portion
that exceeds the Threshold Amount; provided, however, notwithstanding any
provision to the contrary herein or in any Closing Document, the (i) total
liability of Seller for any or all Claims (inclusive of Claims with respect to
any estoppel certificates delivered by Seller pursuant to Section 8.4(a)) with
respect any Property shall not exceed two and three quarters percent (2.75%) of
the Allocated Purchase Price for such Property. Further notwithstanding any
provision to the contrary herein or in any Closing Document, Seller shall have
no liability with respect to any Claim under any of the representations and
warranties contained in this Agreement or in any Closing Document, which Claim
relates to or arises in connection with (1) any Hazardous Materials (except
solely to the extent that Seller has breached its representation in
Section 4.1(k)), (2) the physical condition of any Property (except solely to
the extent that Seller has breached its representation in Section 4.1(k)) or
(3) any other matter not expressly set forth in the Seller's representations and
warranties set forth in Section 4.1. Buyer shall not make any Claim or deliver
any Claim Notice unless it in good faith believes the Claims would exceed the
Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Seller contained herein or in any
Closing Document shall survive only until July 6, 1998. Any Claim that Buyer
may have at any time against Seller for a breach of any such representation
or warranty, whether known or unknown, with respect to which a Claim Notice
has not been delivered to Seller on or prior to July 6, 1998 shall not be
valid or effective. For the avoidance of doubt, on July 6, 1998, Seller
shall be fully discharged and released (without the need for separate
releases or other documentation) from any liability or obligation to Buyer,
any Permitted Assignee and/or their successors and assigns with respect to
any Claims or any other matter relating to this Agreement, any Closing
Document or the Properties, except solely for those matters that are then the
subject of a pending Claim Notice delivered by Buyer to Seller.
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Any Claim that Buyer may have at any time against Seller for a breach of any
such representation or warranty, whether known or unknown, with respect to
which a Claim Notice has been delivered to Seller on or prior to July 6, 1998
may be the subject of subsequent litigation brought by Buyer against Seller,
provided that such litigation is commenced against Seller on or prior to
October 6, 1998. For the avoidance of doubt, on October 6, 1998, Seller
shall be fully discharged and released (without the need for separate
releases or other documentation) from any liability or obligation to Buyer
and/or its successors and assigns with respect to any Claims or any other
matter relating to this Agreement, any Closing Document or the Properties,
except solely for those matters that are the subject of a litigation by Buyer
against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and
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delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it is being given the full
opportunity during the Due Diligence Period to inspect and investigate each and
every aspect of each Property, either independently or through agents,
representatives or experts of Buyer's choosing, as Buyer considers necessary or
appropriate, and the funding of the Additional Deposit will conclusively
evidence Buyer's complete satisfaction with such independent investigation (but
will not constitute a waiver of any breach of representation or warranty set
forth in Section 4.1 unless such breach is disclosed in the Due Diligence
Materials or is otherwise known by Buyer and/or any Permitted Assignee before
the Closing Date and Buyer and/or such Permitted Assignee(s) elect to proceed
with the Closing). Such independent investigation by Buyer may include, without
limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements or the Leasehold Improvements and of each tenant space therein, the
structure, the roof, the paving, the utilities, and all other physical and
functional aspects of such Real Property, including the presence or absence of
Hazardous Materials;
(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
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(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of such Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of each Real Property;
(ii) a Rent Roll for each Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for each Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under each
Real Property and the compliance of such Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys;
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
each Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to each Real
Property; and
(viii) the ground lease creating each Leasehold Estate (each, a
"Ground Lease").
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(c) Buyer acknowledges and agrees that (i) on or prior to the
expiration of the Due Diligence Period it will have completed its independent
investigation of the Properties and the Due Diligence Materials and shall have
obtained, reviewed and approved a Title Commitment for each Property, (ii) it is
acquiring the Properties based on such independent investigation and subject to
all information disclosed in the Due Diligence Materials (and also in reliance
on Seller's representations and warranties contained herein) and (iii) Buyer
shall have no right after the expiration of the Due Diligence Period to
terminate this Agreement based on any further investigations of the Properties
or the Due Diligence Materials. The failure of Buyer to send a Termination
Notice prior to the expiration of the Due Diligence Period shall conclusively
constitute Buyer's approval of each and every aspect of such Properties. The
preceding sentence is not intended to relieve, and shall not relieve, Seller
from any of its obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of any Real Property or the square footage of
the Improvements or Leasehold Improvements thereon or of any tenant space
therein, (iii) the development or income potential, or rights of or relating to,
any Real Property, or any Real Property's use, habitability, merchantability, or
fitness, or the suitability, value or adequacy of such Real Property for any
particular purpose, (iv) the zoning or other legal status of any Real Property
or any other public or private restrictions on the use of such Real Property,
(v) the compliance of any Real Property or its operation with any applicable
codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any Governmental Authority or of any other person or entity
(including, without limitation, the Americans with Disabilities Act), (vi) the
ability of Buyer to obtain any necessary governmental approvals, licenses or
permits for Buyer's intended use or development of any Real Property, (vii) the
presence or absence of Hazardous Materials on, in, under, above or about any
Real Property or any adjoining or neighboring property, (viii) the quality of
any labor and materials used in any Improvements or Leasehold Improvements, (ix)
the condition of title to any Real Property, (x) the Leases, Contracts or any
other agreements affecting any Real Property or the intentions of any party with
respect to the negotiation and/or execution of any lease
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or contract with respect to any Real Property, (xi) Seller's ownership of any
Property or any portion thereof or (xii) the economics of, or the income and
expenses, revenue or expense projections or other financial matters, relating
to, the operation of any Real Property. Without limiting the generality of the
foregoing, except as otherwise set forth herein, Buyer expressly acknowledges
and agrees that Buyer is not relying on any representation or warranty of
Seller, nor any partner, officer, employee, attorney, agent or broker of Seller,
whether implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Buyer. Buyer further acknowledges and agrees that Seller is under no
duty to make any inquiry regarding any matter that may or may not be known to
Seller or any partner, officer, employee, attorney, agent or broker of Seller.
This Section 4.5(d) shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto a Real Property, Buyer shall give Seller
reasonable advance notice of such entry and shall conduct such entry and any
inspections in connection therewith so as to minimize, to the greatest extent
possible, interference with Seller's business and the business of the Tenants
and otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any necessary on-site testing, Buyer
shall give Seller written notice thereof, including the identity of the company
or persons who will perform such testing and the proposed scope of the testing
and the party performing the testing. Seller shall approve or disapprove any
proposed testing and the party performing the same within three (3) Business
Days after receipt of such notice. If a Buyer Party takes any sample from a
Real Property in connection with any such approved testing, Buyer shall provide
to Seller a portion of such sample being tested to allow Seller, if it so
chooses, to perform its own testing. Seller or its representative may be
present to observe any testing, or other inspection performed on any Real
Property. Buyer shall promptly deliver to Seller copies of any reports relating
to any testing or other inspection of any Real Property performed by or on
behalf of any Buyer Party. Buyer shall maintain, and shall ensure that its
contractors maintain, public liability and property damage insurance insuring
the Buyer Parties against any liability arising out of any
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entry or inspections of any Real Property pursuant to the provisions hereof.
Such insurance maintained by Buyer shall be in the amount of Ten Million Dollars
($10,000,000) combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss of
use) in an occurrence. The policy maintained by Buyer shall insure the
contractual liability of Buyer covering the indemnities herein and shall (i)
name Seller (and their successors, assigns and Affiliates) as additional
insureds, (ii) contain a cross-liability provision, and (iii) contain a
provision that "the insurance provided by Buyer hereunder shall be primary and
noncontributing with any other insurance available to Seller." Buyer shall
provide Seller with evidence of such insurance coverage prior to any entry or
inspection of any Real Property. Buyer shall indemnify and hold the Seller
Parties harmless from and against any Claims arising out of or relating to any
entry on any Real Property by any Buyer Party, in the course of performing any
inspections, testings or inquiries. The foregoing indemnity shall survive the
Closing, or, if the Closing does not occur, beyond the termination of this
Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of any Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, any Real Property discovered by Buyer's
environmental testing during the Due Diligence Period, Buyer shall first provide
prior written notice to Seller and shall not contact any Governmental Authority
except in conjunction with Seller. In addition, if Seller's consent is obtained
by Buyer, Seller shall be entitled to receive at least five (5) Business Days
prior written notice of the intended contact and to have a representative
present when Buyer has any such contact with any governmental official or
representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to sue, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, directors, officers, attorneys, employees and agents of
each of them, and their respective heirs, successors, personal representatives
and assigns (each a "Seller Party", and collectively, the "Seller Parties") with
respect to any and all Claims, whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be connected
with any Property including, without limitation, the physical, environmental and
structural condition of the related Real Property or any law or regulation
applicable thereto, including, without limitation, any Claim or matter relating
to the use, presence, discharge or release of Hazardous Materials on, under, in,
above or about any Real Property; provided, however, Buyer does not waive its
rights, if any, to recover from, and does not release or discharge or covenant
not to sue Seller for (i) any act
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that is found by a court of competent jurisdiction to constitute fraud, (ii) any
breach of Seller's representations or warranties set forth in Section 4.1 or in
Seller's estoppel certificate delivered pursuant to Section 8.4, subject to the
limitations and conditions provided in this Agreement, or (iii) any breach of
Seller's obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Promptly after the Effective Date,
Buyer shall obtain a Title Commitment for each Property (and Buyer's failure to
obtain a Title Commitment prior to the expiration of the Due Diligence Period
for a Property shall constitute a waiver of Buyer's rights under Section 3.1(c)
and this Article V and Buyer shall be deemed to have accepted and approved all
matters affecting title to such Property). A copy of each Title Commitment
delivered to Buyer shall be simultaneously delivered to Seller and its counsel.
At the Closing, as a condition precedent to Buyer's obligation to close, Seller
shall have delivered to Buyer (a) a deed for each Fee Property in the form of
Exhibit A for the applicable jurisdiction (each, a "Deed"), (b) an assignment
and assumption for each Leasehold Estate in the form of Exhibit B (each, an
"Assignment of Ground Lease") and (c) a deed for each Leasehold Improvement in
the form of Exhibit C (each, a "Leasehold Improvements Deed"), each subject to
no exceptions other than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for such Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of such Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the
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Due Diligence Materials or in any title reports, commitments or updates
delivered to Buyer prior to the expiration of the Due Diligence Period;
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling the
same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds, the Assignments of Ground Leases, and the
Leasehold Improvements Deeds shall be deemed to be a full performance and
discharge of every obligation on the part of Seller to be performed under this
Agreement with respect to the applicable Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, one or
more 1992 ALTA Owner's Policies of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a 1992
ALTA Owner's Policy, such other required form shall be used) in the aggregate
amount of the Purchase Price for the Properties showing title to each Property
vested in Buyer or its Permitted Assignee or designee, subject only to the
Permitted Exceptions (the "Title Policy").
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ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder, other than Goldman, Sachs & Co. and certain of
its affiliates ("Goldman") and GMH Realty, Inc. ("GMH"), whose fees will be the
responsibility of Seller pursuant to a separate among between Goldman, GMH and
Seller, was instrumental in arranging or bringing about this transaction and
that there are no claims or rights for brokerage commissions or finders' fees in
connection with the transactions contemplated hereby by any person or entity
other than Goldman and GMH. If any person brings a claim for a commission or
finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Indemnified Party
in defending against the claim. The provisions of this Section 6.1 shall
survive the Closing or, if the Closing does not occur, any termination of this
Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real Property
in the ordinary course, on an arm's-length basis and consistent with Seller's
past practices and will not dispose of or encumber any Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring
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on or before December 30, 1997), and the ground lessee's obligations under the
Ground Leases and pay all costs and expenses of the Properties, including
without limitation debt service and Real Estate Taxes.
(b) During the period between the Effective Date and the expiration
of the Due Diligence Period, Seller shall provide Buyer with reasonably prompt
notice of (i) any New Lease, (ii) any modification of or amendment to any Lease
and (iii) any termination by Seller of any Lease prior to its expiration date.
With regard to any New Lease entered into before the expiration of the Due
Diligence Period, Seller shall in good faith consult with Buyer regarding such
Lease at least three (3) Business Days prior to becoming legally bound with
respect thereto (but Seller shall nevertheless be free to enter such New Lease
without Buyer's approval). After the expiration of the Due Diligence Period,
Seller shall not, without Buyer's consent, enter into any New Leases or
materially modify any Existing Lease. Any consent to be given by Buyer pursuant
to this Section 7.1(b) shall not be unreasonably withheld or delayed and shall
be deemed granted if Buyer does not respond in writing to Seller's request for
consent within three (3) Business Days.
(c) After the expiration of the Due Diligence Period, Seller shall
not enter into or terminate any operating agreement or any contract, agreement
or other commitment of any sort (including any contract for capital items or
expenditures, but excluding any liens or other encumbrances on title other than
Permitted Exceptions), with respect to any one or more of the Properties that
(A) requires payments to or by Seller in excess of $50,000 per annum, or the
performance of services by Seller the value of which is in excess of $50,000 per
annum and (B) is not terminable without cause and without penalty on thirty (30)
days' notice or less; provided that Seller, in its good faith but sole
discretion, believes such contract is on market terms and will benefit the
applicable Property. At least three (3) Business Days prior to becoming legally
bound with respect to any such matter, Seller shall consult with and seek the
consent of Buyer, and shall provide reasonable detail to Buyer (including, at
Buyer's request, copies of the relevant documentation), with respect thereto.
Any consent to be given by Buyer pursuant to this Section 7.1(c) shall not be
unreasonably withheld or delayed and shall be deemed granted if Buyer does not
respond in writing to Seller's request for consent within three (3) Business
Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell any Property or portion thereof without Buyer's
prior written consent.
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(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting any Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
(g) Prior to the Closing Date, Seller shall not enter into any
amendment, modification or termination of any Ground Lease.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for the
costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at Closing equal to the amounts so paid. Free rent periods provided for
in Leases entered into by Seller prior to October 9, 1997 that occur, in
whole or in part, after the Closing Date shall be for the account of, and
borne by, Buyer without adjustment to the Purchase Price at closing. The
provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Properties. Between the
Effective Date and the Closing Date, Seller shall (a) maintain each Real
Property in substantially the same manner as prior hereto pursuant to Seller's
normal course of business, subject to reasonable wear and tear and further
subject to the occurrence of any damage or destruction to such Real Property by
casualty or other causes or events beyond the control of Seller; provided,
however, that Seller's maintenance obligations under this Section 7.3 shall not
include any obligation to make capital expenditures not incurred in Seller's
normal course of business or any other expenditures not incurred in Seller's
normal course of business; (b) continue to maintain its existing insurance
coverage; and (c) not grant any voluntary liens or encumbrances affecting such
Property other than Permitted Exceptions of the type described in clauses (i)
and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by any Tenant, provided, that
(i) with respect to delinquent rents, Seller may (to the extent permitted under
the Lease) apply Tenant security deposits held by Seller only to rents that are
thirty (30) days or more past due and (ii) with respect to any application by
Seller of Tenant security deposits held by Seller, Seller will deliver, in
connection with any such
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application, written notice to the affected Tenant(s) indicating that their
security deposits have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
related Real Properties or destruction of any improvements thereon or
condemnation of any portion of any Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or repair
of any Property. Seller has provided Buyer with a certificate of insurance for
Seller's casualty insurance policy so that Buyer can confirm its satisfaction
with such policy. Seller agree that it will maintain such policy in full force
and effect until the Closing. If the proceeds or awards have not been collected
as of the Closing, then such proceeds or awards shall be assigned to Buyer,
except to the extent needed to reimburse Seller for sums it reasonably expended
prior to the Closing for the restoration or repair of such Property.
Notwithstanding the foregoing, (i) Seller shall not settle, compromise or
otherwise stipulate any award or recovery in connection with any damage,
destruction or condemnation, in each case if such damage, destruction or
condemnation impairs the value of a Property by at least $250,000 and occurs
after the expiration of the Due Diligence Period, without the prior written
approval of Buyer, which approval shall not be unreasonably withheld,
(ii) following the expiration of the Due Diligence Period, Buyer shall have the
right to participate in any such settlement or other proceedings, and (iii) if
the amount of the damage or destruction as described in this Section 7.7 exceeds
ten percent (10%) of the Allocated Purchase Price for a Property, then Buyer
may, at its option to be exercised within five (5) Business Days of Seller's
written notice of the occurrence of the damage or destruction, either terminate
this Agreement or consummate the purchase for the full Purchase Price as
required by the terms hereof. If Buyer elects to terminate this Agreement, then
the Deposit shall be immediately returned to Buyer and neither party shall have
any further rights or obligations hereunder except to the extent set forth in
Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the
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Closing, Buyer shall be entitled to a credit against the Purchase Price and
shall receive an assignment of any uncollected proceeds or awards, all as set
forth in this Section 7.7 above. The provisions of this Section 7.7 shall
survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to any of the
Properties of which Seller obtains knowledge, any notices of violations of any
legal requirements relating to any of the Properties received by Seller, any
litigation of which Seller obtains knowledge that arises out of the ownership of
any of the Properties unless fully covered by insurance (subject to customary
deductibles), and any other matters that would materially affect Seller's
representations and warranties hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"), in either case, with time being of the essence.
Except as otherwise permitted under this Agreement, such date and time may not
be extended without the prior written approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) At or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
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(i) a duly executed and acknowledged Deed for each Fee Property;
(ii) a duly executed and acknowledged Assignment of Ground Lease
for each Leasehold Estate (including the Leasehold Improvements on each
Leasehold Estate);
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a Bill of Sale for each Fee
Property and each Leasehold Property in the form attached hereto as Exhibit E
(each, a "Bill of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for each Fee Property and each Leasehold Property in the form attached
hereto as Exhibit F (each, an "Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for each
Fee Property and each Leasehold Property in the form attached hereto as Exhibit
G (each, an "Assignment of Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Properties;
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(b) At or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) a duly executed and acknowledged counterpart of an
Assignment of Ground Lease for each Leasehold Estate;
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(ii) a duly executed counterpart of each Bill of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Properties.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for each Fee Property and
the Assignment of Ground Lease for each Leasehold Estate, (ii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with the
terms of this Agreement are to be delivered by Buyer to Seller on the Closing
Date. Buyer and Seller shall each deposit such other instruments as are
reasonably required by the Title Company or otherwise required to close the
escrow and consummate the purchase and sale of the Properties in accordance with
the terms hereof; provided, that Seller shall not be required to provide any
indemnities or affidavits or to escrow any funds other than the Seller's
Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Properties in Seller's possession, a set of keys to each Real
Property and originals (or copies, if originals are not available) of any other
items in Seller's possession relating to the use, ownership, operation,
maintenance, leasing, repair, alteration, management or development of the Real
Properties, on the Closing Date (at such location as Buyer and Seller shall
mutually agree). Following the Closing, Buyer shall make all Leases, Contracts,
other documents, books, records and any other materials in its possession, to
the extent the same relate to the period of Seller's ownership of the
Properties, available to Seller
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or its representatives for inspection and/or copying at Buyer's offices (at
Seller's sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. (a) Seller shall use its
reasonable efforts (without incurring any additional expense) to obtain prior to
the Closing Date tenant estoppel certificates from each Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the event that any Tenant is unwilling to sign the form
attached hereto as Exhibit J. It shall be a condition to Buyer's obligation to
close the sale and purchase of a Property that on or before the Closing Seller
delivers to Buyer tenant estoppel certificates substantially in the form
attached hereto as Exhibit J (or in the Prescribed Form, if applicable) from
(i) Tenants occupying seventy five percent (75%) of the total leased square
footage of the Properties; and (ii) Significant Tenants occupying seventy five
percent (75%) of the total leased square footage covered by such Significant
Tenants' Leases (with respect to each of preceding clauses (i)-(ii), the
"Required Percentage"); provided, however, if Seller is unable to obtain the
aforesaid tenant estoppel certificates from Tenants or Significant Tenants (as
the case may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii) the
amount of the Tenants' or Significant Tenants' security deposits; (iii) the
dates through which rent has been paid; (iv) neither Seller nor, to Seller's
knowledge, any of those Tenants or Significant Tenants (as the case may be) is
in default thereunder; (v) a true, correct and complete copy of the Leases are
attached; (vi) the Leases expire on the dates specified and are not subject to
any renewal or extension options, except as specified, and (viii) there are no
options to purchase or rights of first refusal except as specified. Buyer shall
be obligated to accept Seller's certification in lieu of any missing estoppel
certificates. Seller's representations and warranties in the certificate shall
survive the Closing, provided that (i) Buyer must give Seller a Claim Notice
with respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any claim
that Buyer may have that is not so asserted, or litigation by Buyer that is not
so commenced, shall be barred and not be valid or effective and Seller shall
have no liability whatsoever with respect thereto) and (ii) any certificate
delivered by Seller pursuant to this Section 8.4 shall cease to survive the
Closing to the extent specifically confirmed by a tenant estoppel certificate
delivered by a Tenant or a Significant Tenant. In no event shall the minimum
thresholds to Buyer's recovery set forth in Section 4.3(a) apply to any
certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
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(b) Seller shall use reasonable efforts (without incurring any
additional expense) to obtain prior to the Closing Date an estoppel certificate
from the ground lessor of each Ground Lease, substantially in the form attached
hereto as Exhibit M.
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on any Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement or Ground Lease; annual permits and/or inspection
fees (calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of each Property (other than
any Leasing Costs and free rent which shall be prorated as provided in Section
7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on the
Closing Date, on the basis of a 365-day year, with Buyer deemed the owner of the
Properties on the entire Closing Date. Rent which is due but uncollected as of
the Closing Date shall not be adjusted. On the Closing Date, Seller shall
deliver to Buyer a schedule of all such past due but uncollected rent owed by
tenants. Buyer agrees to cause the amount of such rental arrears to be included
in the first bills thereafter submitted by Buyer to such tenants after the
Closing Date. Any rents collected from a tenant after the Closing Date shall be
applied first to the month in which the Closing Date occurs, next to any rents
payable by such tenant after the Closing Date and thereafter to any arrearage
owed by such tenant on the Closing Date in the inverse order of maturity.
Additional rent payments (and estimated additional rent payments) actually paid
by tenants prior to Closing attributable to real estate taxes and operating
costs shall be adjusted as of the Closing Date. Additional rent payments (and
estimated additional rent payments) attributable to real estate taxes and
operating costs to be paid by tenants after the Closing shall be adjusted upon
receipt by Buyer. The adjustments of additional rent payments shall be based
upon the number of days in the period for which such payment relates that are
before or after the Closing Date. In no event will Buyer be entitled to receive
any payments on or under the promissory notes or other agreements referred to in
Section 8.7. Buyer shall use reasonable efforts until October 6, 1998 to
collect any delinquent rents that accrued prior to the Closing Date (but Seller
shall have the right to commence and pursue litigation against any Tenant to
collect delinquent rents and/or expense reimbursements, provided that Seller may
not seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
any Property has been assessed for property taxes purposes at such rates as
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would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of such Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims and liability for
such taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other party
a sum of money based on proration(s) calculated after the Closing Date shall
promptly pay said sum to the other party, together with interest thereon at the
rate of two percent (2%) per annum over the Prime Rate from the Closing Date to
the date of payment, if payment is not made within ten (10) days after delivery
of a bill therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing occurs,
then the proration of such taxes shall be based upon the rate and assessments
for the preceding calendar year, and such proration shall be adjusted between
Seller and Buyer as soon as reasonably practicable after such tax rate or
assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Properties to permit Seller to review
Buyer's proration statements. Seller shall have sixty (60) days after receipt
of Buyer's calculations to accept or contest such prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller and Buyer
shall pay transfer, recordation, excise and deed taxes in accordance with local
custom (as set forth on Schedule 8.1.1 attached hereto). Seller and Buyer shall
each be responsible for paying their respective attorneys' fees and costs.
Buyer and Seller agree that, given the de minimis amount of Personal Property
included within the Properties, no portion of the Purchase Price is allocable or
attributable to such Personal Property.
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(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in a
manner (or otherwise take a position) inconsistent with the relative Allocated
Purchase Prices set forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and retain
any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of any Property for any tax year which, in
accordance with the laws and regulations applicable to such Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to any Property, (i) Seller shall retain all rights
(subject to any rights of Tenants under their Leases) with respect to any tax
year ending prior to the tax year (and all refunds relating thereto) in which
the Closing Date occurs, and shall have the sole right to participate in and
settle any proceeding relating thereto (provided, that such settlement does not
affect the assessed tax value for any subsequent tax year), and (ii) Buyer shall
have all rights (subject to any rights of Tenants under their Leases) with
respect to any tax year (and all refunds relating thereto) which ends after the
Closing Date; provided, however, that if the proceeding is for a tax year in
which the Closing Date occurs, such settlement shall not be made without Buyer's
prior consent, which consent shall not be unreasonably withheld or delayed.
With respect to any such proceeding for a tax year in which the Closing Date
occurs (whether commenced by Seller or Buyer), any refund or credit of taxes for
such tax year shall be applied first to the unreimbursed out-of-pocket expenses,
including reasonable counsel fees, necessarily incurred in obtaining such refund
or credit, and second, to any Tenant entitled to same, and the balance shall be
apportioned between Seller and Buyer as of the Closing Date in accordance with
the proportion of the applicable tax year occurring before and after the Closing
Date. In each case, the party which prosecuted the proceeding shall deliver to
the other copies of receipted tax bills and any decision or settlement agreement
evidencing the reduction in taxes. If any refund shall be received by Seller
which is for the account of Buyer as provided in this Section 8.6, then Seller
shall hold Buyer's share thereof in trust for Buyer and, promptly upon receipt
thereof, pay such share to Buyer or any other party entitled to same as provided
above. If any refund shall be received by Buyer which is for the account of
Seller as provided in this Section 8.6, then Buyer shall hold Seller's share
thereof in trust for Seller and, promptly upon receipt thereof, pay such share
to Seller or any other party entitled to same as provided above. Each party
shall execute any and all consents or other documents as may be reasonably
necessary to be executed by such party so as to permit the other party to
commence or
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continue any tax certiorari proceeding which such other party is authorized to
commence or continue pursuant to the terms of this Section 8.6, or to collect
any refund or credit with respect to any such tax proceeding. The provisions of
this Section 8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other agreements (other than the Leases) delivered to Seller
that evidence, deal with or otherwise relate solely to a Tenant's rental or
expense reimbursement obligations under its Lease that, as of the Closing Date,
are or were past due, shall not be conveyed to Buyer and shall be retained by
Seller. Seller agrees that in enforcing its rights against Tenants under any
such promissory notes or other agreements, Seller will not seek to exercise any
remedies that may be available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's audited
financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by a commercial
overnight courier that guarantees next day delivery and provides a receipt, or
(d) by legible facsimile (followed by hard copy delivered in accordance with
preceding subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President
Facsimile No.(610) 325-5622
with a copy to: Brad A. Molotsky, Esq., General Counsel
c/o Brandywine Realty Trust
16 Campus Blvd., Suite 150
Newtown Square, Pennsylvania 19073
Facsimile No.(610) 325-5622
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To Seller: WHDWA Real Estate Limited Partnership
c/o GMH Associates, Inc.
353 West Lancaster Avenue, Suite 210
Wayne, Pennsylvania 19087
Attn: Mr. Bruce Robinson
Facsimile No. (610) 687-6567
with a copy to: Ms. Angie Madison
c/o Goldman, Sachs & Co.
100 Crescent Court, Suite 1000
Dallas, Texas 75201
Facsimile No. (214) 855-6305
and to: Mark M. Katz, Esq.
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5339
Facsimile No. (202) 857-6395
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery).
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party, and are superseded and replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
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Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Properties but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the case
may be, of one or more of the Properties and Seller shall convey at Closing such
Property or Properties (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Seller and the
other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES RECOGNIZE THAT, WITH
RESPECT TO SOME OF THE PROPERTIES, IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY
WITH CERTAIN ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE THE
PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT HERETO. THE PARTIES AGREE TO
COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE
AND SALE OF SUCH PROPERTIES. IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF
THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A MANNER THAT RESULTS IN THE
GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving this
Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of all
federal and state courts sitting in the State of New York or the Commonwealth of
Pennsylvania and consent that any order, process, notice of motion or other
application to or by any such court or a judge thereof may be served within or
without such court's jurisdiction by registered mail or by personal service,
provided that a reasonable time for appearance is allowed, and Buyer and Seller
agree that such courts shall have the exclusive jurisdiction over any such suit,
action or proceeding commenced by any party. In
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furtherance of such agreement, Buyer and Seller agree upon the request of the
other party to discontinue (or agree to the discontinuance of) any such suit,
action or proceeding pending in any other jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the State of New York or the Commonwealth of
Pennsylvania and hereby further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s) and
their Affiliates and representatives for review and inspection, Buyer (on behalf
of itself, any Permitted Assignee(s), and their respective Affiliates and
representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Properties, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the
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Properties as contemplated by this Agreement and not for any other purpose
whatsoever. Buyer (on behalf of itself and its Representatives) further
agrees that it will not disclose any Evaluation Material or use it to the
detriment of Seller or its Affiliates; provided, however, that Buyer may
without liability disclose Evaluation Material (x) to any Representative of
Buyer who needs to know such Evaluation Material for the purpose of
evaluating the transactions described in this Agreement involving Seller
and the Properties and Buyer or its Permitted Assignee(s) (it being
understood and agreed that Buyer shall be fully responsible for any
disclosures by any such Person) and (y) pursuant to administrative order or
as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
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(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Properties (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member, partner, officer, director or
employee of Seller or counsel to or accountants of Seller solely for their use
and on a need-to-know basis, provided that such Persons are notified of Seller's
confidentiality obligations hereunder, (b) with the prior consent of Buyer, or
(c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request and
(iii) if disclosure is required or deemed advisable, reasonably cooperate with
Buyer (at no cost to Seller) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded such Confidential
Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
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Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 Special Provisions Regarding Properties Located in the
Commonwealth of Pennsylvania. With respect to the Properties located in the
Commonwealth of Pennsylvania, under the terms of the Pennsylvania Sewage
Facilities Act of January 24, 1966, No. 537, P.L. 12535 as amended, Seller has
received no written notice from a Governmental Authority that a tie-in or tap
to a community sewage system currently exists or is available or that such
system or any other utility systems or facilities are presently adequate for
Buyer's use of such Properties, and Buyer agrees to assume full responsibility
for contacting any agencies or utility companies in order to obtain service to
such Properties and for any fee incurred or payment required in connection
therewith.
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
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The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: /s/ GERARD H. SWEENEY
__________________________________________
Gerard H. Sweeney
President
Seller: WHDWA REAL ESTATE LIMITED PARTNERSHIP
By: WHDWA Gen-Par, Inc.,
General Partner
By: _________________________
Name:
Title
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<PAGE>
Exhibit 10.14
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), made and entered into as of
January 2, 1998 by and between Anthony A. Nichols, Sr. ("Employee") and
Brandywine Realty Trust, a Maryland real estate investment trust (the
"Company").
BACKGROUND
The Company desires to employ Employee, and Employee desires to enter
into the employ of the Company, on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee, and Employee
hereby accepts employment by the Company, for the period and upon the terms and
conditions contained in this Agreement.
2. Office and Duties.
(a) Employee shall be employed by the Company as its Chairman of
the Board and will serve as a member of the Board of Trustees of the Company
(the "Board") and member of the Executive Committee of the Board, and shall
perform such duties and shall have such authority as may from time to time be
specified by the Board. Employee shall report directly to the Board.
(b) Without further consideration, Employee shall, as directed
by the Board, serve as a director or officer of, or perform such other duties
and services as may be requested for and with respect to, any of the Company's
Subsidiaries, including, without limitation, Brandywine Realty Services
Corporation. As used in this Agreement, the terms "Subsidiary" and
"Subsidiaries" shall mean, with respect to any entity, any corporation,
partnership, limited liability company or other business entity in which the
subject entity has the power (whether by contract, through securities ownership,
or otherwise and whether directly or indirectly through control of one or more
intermediate Subsidiaries) to elect a majority of board of directors or other
governing body, including, in the case of a partnership, a majority of the board
of directors or other governing body of the general partner.
(c) Employee shall devote his full working time, energy, skill
and best efforts to the performance of his duties hereunder, in a manner which
will faithfully and diligently further the business interests of the Company and
its Subsidiaries.
3. Term. Unless sooner terminated as hereinafter provided, the term
of Employee's employment shall be for a period of five (5) years (the "Term")
commencing on the date hereof. The Term shall automatically renew for
additional one-year periods at the expiration
<PAGE>
of the then current Term unless either party shall give notice of his or its
election to terminate Employee's employment at least one year prior to the
end of the then-current Term, unless earlier terminated as hereinafter
provided.
4. Base Salary. For all of the services rendered by Employee to the
Company and its Subsidiaries, Employee shall receive an aggregate base salary of
$250,000 per annum during the term of his employment hereunder. Such salary may
be paid, at the election of the Company, either by the Company or by one or more
of its Subsidiaries, in such relative proportions as the Company may determine,
as earned in periodic installments in accordance with the Company's normal
payment policies for executive officers. In the event that the Employee is also
employed during any period by a Subsidiary of the Company, the amount of the
base salary payable by the Company during such period shall be reduced by the
amount of salary received by Employee during such period from such Subsidiary.
Employee's base salary shall be subject to review by the Board not less
frequently than annually, and Employee shall receive such salary increases as
the Board may from time to time approve.
5. Bonus. Employee shall receive, during the term of his employment
hereunder, such annual bonus as the Board, in its sole discretion, may determine
from time to time. Any such bonus may be based on Employee's annual performance
goals as established by the Board from time to time.
6. Participation in Incentive Plans. In addition to Employee's
eligibility to receive annual bonuses pursuant to Section 5, Employee shall be
entitled to participate in short-term and long-term incentive plans as shall be
maintained by the Company from time to time on such terms and conditions as
shall be established by the Board.
7. Prior Warrants. Nothing in this Agreement shall affect the terms
and conditions of warrants granted by the Company to Employee before the date of
this Agreement. Such warrants shall continue in force as in effect immediately
before the date of this Agreement.
8. Fringe Benefits. Throughout the term of his employment and as
long as they are kept in force by the Company, Employee shall be entitled to
participate in and receive the benefits of any profit sharing plan, retirement
plan, health or other employee benefit plan made available to other executive
officers of the Company, but in no event shall such benefits be less favorable
to Employee than the benefits listed on Schedule A hereto.
9. Automobile Allowance. Employee shall receive, during the term of
his employment hereunder, an automobile allowance of $833 per month.
10. Expenses. The Company shall reimburse Employee for all
reasonable, ordinary and necessary business expenses incurred by Employee in
connection with the performance of Employee's duties hereunder upon receipt of
vouchers therefor and in accordance with the Company's regular reimbursement
procedures and practices in effect from time to time.
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11. Vacation. Employee shall be entitled to a vacation of four (4)
weeks during each twelve (12) month period of his employment hereunder, during
which time Employee's compensation hereunder shall be paid in full. Employee
shall be permitted to carry over unused vacation during each twelve (12) month
period during the term and use such unused vacation in any subsequent twelve
(12) month period during the term.
12. Disability. If the Board determines in good faith by a vote of a
majority of its members (other than Employee) that Employee is unable to perform
his duties hereunder due to partial or total disability or incapacity resulting
from a mental or physical illness or injury or any similar cause for a period of
one hundred and twenty (120) consecutive days or for a cumulative period of one
hundred and eighty (180) days during any twelve (12) month period,
the Company shall have the right to terminate Employee's employment at any time
thereafter.
13. Death. Employee's employment shall terminate at the time of his
death.
14. Termination of Employment for Cause. The Company may discharge
Employee at any time for Cause. Cause shall mean: (i) habitual intoxication;
(ii) drug addiction; (iii) intentional and willful violation of any express
direction of the Board; (iv) theft, misappropriation or embezzlement of the
Company's funds; (v) conviction of a felony; or (vi) repeated and consistent
failure of Employee to be present at work during regular hours without valid
reason therefor.
15. Termination of Employment Without Cause. The Board, in its sole
discretion, may terminate Employee's employment hereunder without Cause upon 30
days' prior written notice to Employee at any time.
16. Resignation For Good Reason. Employee's resignation shall be
treated as a "Resignation for Good Reason" if Employee resigns within six (6)
months after any of the following circumstances, unless in the case of the
circumstances set forth in paragraphs (b), (c) or (d) below, such circumstances
are fully corrected within 30 days of Employee's delivery of notice to the
Company:
(a) A reduction in Employee's annual rate of base salary;
(b) A failure of the Company to make the payments required by
Section 4 hereof;
(c) A significant adverse alteration in the nature or status of
Employee's responsibilities;
(d) Any other material breach by the Company of this Agreement;
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(e) Relocation (without the written consent of Employee) of the
Company's executive offices to a location more than 30 miles from its current
location; or
(f) Upon a Change of Control (as defined in Section 17).
17. Change of Control. For purpose of this Agreement, a "Change of
Control" means:
(a) A "Change of Control" within the meaning of Section 1(d) of
the Brandywine Realty Trust 1997 Long-Term Incentive Plan, as currently in
effect; or
(b) The purchase of any common shares of beneficial interest of
the Company pursuant to a tender or exchange offer other than an offer by the
Company.
18. Payments Upon or After Termination of Employment.
(a) Voluntary Resignation Other than for Good Reason;
Termination for Cause; Non-Renewal of Employment Agreement. If Employee's
employment hereunder is terminated before the expiration of the Term because of
Employee's voluntary resignation (other than a Resignation for Good Reason) or
because of the Company's termination of Employee's employment for Cause, or if
Employee's employment is terminated at the expiration of the Term following an
election by either the Company or Employee not to renew the Term pursuant to
Section 3, the Company, or at its direction, its Subsidiaries shall pay to
Employee or, as appropriate, his legal representatives, heirs or estate all
amounts payable under Sections 4 and 8 accrued through the applicable date of
termination (the "Accrued Amount") within 30 days after such date of
termination. If Employee's employment is terminated by the Company for Cause or
by the Employee voluntarily (unless such termination of employment is a
Resignation for Good Reason), or if Employee's employment is terminated at the
expiration of the Term following an election by either the Company or Employee
not to renew the Term pursuant to Section 3, the Company shall have no
obligation or liability hereunder after the date of discharge or termination to
pay or provide base salary, bonus compensation, fringe benefits, or any other
form of compensation hereunder other than to pay the Accrued Amount.
(b) Termination of Employment Because of Death. If Employee's
employment is terminated as a result of the Employee's death before the
expiration of the Term, the Company shall pay Employee's legal representatives
the Accrued Amount as of the date of Employee's death, and, in addition, the
consideration provided for in Section 4 hereof, at the rate in effect at the
date of termination, for one year after such death, less the proceeds receivable
by Employee's heirs and legal representatives from any life insurance policy
provided by the Company. In addition, Employee shall be entitled to receive an
amount equal to the product that results from multiplying the amount of the
bonus paid to him pursuant to Section 5 hereof for the calendar year prior to
the year in which Employee dies multiplied by a fraction, the numerator of
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which is the number of days that Employee was alive during the year in which
the death occurs and the denominator of which is 365.
(c) Termination of Employment Because of Disability. If
Employee's employment is terminated by the Company for disability before the
expiration of the Term, the Company shall pay Employee the Accrued Amount as of
the such date of termination, and, in addition, the consideration described in
Sections 4 and 8 hereof, at the rate in effect at the date of termination, until
one year after Employee becomes eligible to receive benefits pursuant to the
disability insurance policy provided by the Company, at the rate in effect at
such date of termination, less the amount of disability insurance proceeds
receivable by Employee, provided that such period shall not exceed two years in
the aggregate. In addition, Employee shall be entitled to receive an amount
equal to the product that results from multiplying the amount of the bonus paid
to him pursuant to Section 5 hereof for the calendar year prior to the year in
which Employee's employement is terminated for disability multiplied by a
fraction, the numerator of which is the number of days that elapsed prior to the
termination during the year in which the termination occurs and the denominator
of which is 365.
(d) Termination of Employment by Company Without Cause;
Resignation for Good Reason. If Employee's employment is terminated by the
Company without Cause, or Employee Resigns for Good Reason, within 30 days
following the date of such termination of employment, the Company shall pay
Employee the Accrued Amount as of the date of such termination, and in addition:
(i) Subject to Section 18(d)(ii), the Company shall make a
cash lump sum payment to Employee equal to the greater of:
(A) the product of three (3) times the greater of
(1) the sum of the amounts paid or payable to Employee pursuant to Sections 4
and 5 hereunder (and the short-term portion of any bonus amounts paid or
payable pursuant to Section 6 hereunder) for the calendar year preceding the
calendar year in which such termination of employment occurs or (2) the sum
of the amounts paid or payable to Employee pursuant to Sections 4 and 5
hereunder (and the short-term portion of any bonus amounts paid or payable
pursuant to Section 6 hereunder) during the one-year period ending on the
date of such termination, provided that if such date of termination occurs
before the first anniversary of the date hereof, the cash lump sum payment
shall be equal to the product of three (3) times the sum of (x) Employee's
annualized base salary pay rate in effect as of such date of termination and
(y) the maximum bonus that would have been payable for the year that includes
such date of termination if all of the conditions for the payment of such
maximum bonus had been satisfied; or
(B) The amount payable pursuant to Section 4 hereunder
for the remainder of the Term at a rate equal to his base salary in effect at
the time of the date of such termination.
(ii) Employee may, in his sole discretion, elect in writing
to decline to receive part or all of the amount otherwise payable pursuant to
Section 18(d)(i). In
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addition, if, following payment of part or all of the amount payable pursuant
to Section 18(d)(i), Employee determines that Employee would be in a better
net after-tax position than he would be in if he retained such amount,
Employee may elect in writing to repay the Company the amount, plus interest
payable from the date of payment to the date of repayment at the "applicable
federal rate" as determined pursuant to section 1274 of the Code, and upon
such repayment and to the extent thereof, the original payment shall be
treated as a loan between the Company and Employee.
(e) In the event that Employee is employed by a Subsidiary of
the Company at the time of termination of employment, any amounts payable to the
Employee pursuant to this Section 18 shall be reduced by the amounts paid to
Employee by any such Subsidiary.
(f) Upon the payment of the amounts payable under this Section
18, neither the Company nor any of its Subsidiaries shall have any further
obligations hereunder to Employee (or to his estate, heirs, beneficiaries, or
legal representatives, as appropriate, or otherwise) to pay or provide any base
salary, bonus compensation, or fringe benefits, provided that if Employee
Resigns for Good Reason or the Company terminates Employee's employment without
Cause, Company shall, at its own expense, for a thirty-six (36) month period
after the date of termination of employment, arrange to provide Employee with
life, disability, accident and health insurance benefits substantially similar
to those which Employee was entitled to receive immediately prior to such date
of termination.
19. Prior Agreement. This Agreement is the successor to the
Employment Agreement between Employee and the Company dated as of July 31, 1996
(which Agreement was assigned to the Company as of October 31, 1996). Employee
represents to the Company that (a) there are no other agreements or
understandings with the Company to which Employee is a party relating to
employment, benefits or retirement, (b) there are no restrictions, agreements or
understandings whatsoever to which Employee is a party which would prevent or
make unlawful his execution of this Agreement or his employment hereunder, (c)
his execution of this Agreement and his employment hereunder shall not
constitute a breach of any contract, agreement or understanding, oral or
written, to which he is a party or by which he is bound, and (d) he is free and
able to execute this Agreement and to continue in the employment of the Company.
20. Key Man Insurance. The Company shall have the right at its
expense to purchase insurance on the life of Employee in such amounts as it
shall from time to time determine, of which the Company shall be the
beneficiary. Employee shall submit to such physical examinations as may be
required, and shall otherwise cooperate with the Company, in connection with the
Company obtaining such insurance.
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21. Miscellaneous.
(a) Controlling Law. This Agreement, and all questions relating
to its validity, interpretation, performance and enforcement, shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
(b) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received when delivered in
person against receipt, or when sent by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as set forth below:
(i) If to Employee:
Anthony A. Nichols, Sr.
1125 Cymry Drive
Newtown Square, PA 19073
(ii) If to the Company:
Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attention: General Counsel
In addition, notice by mail shall be by air mail if posted outside of
the continental United States.
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(c) Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
assigns and shall be binding upon Employee, his heirs and legal representatives.
(d) 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 who executes the same, and all of which shall 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.
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(e) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(f) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing.
(g) Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for convenience only; they form no part of this
Agreement and shall not affect its interpretation.
(h) Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
(i) Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday, then the final day shall be
deemed to be the next day which is not a Saturday, Sunday or holiday.
(j) Survival. The provisions of Sections 7, 12, 13, 14, 15, 16,
17, 18 and 19 shall survive the expiration or termination of the term of
Employee's employment hereunder.
(k) Assignability. This Agreement is not assignable by
Employee. It is assignable by the Company only (i) to any subsidiary of the
Company so long as the Company agrees to guarantee such subsidiary's obligations
hereunder, or (ii) subject to Sections 16 and 18 and only upon Employee's prior
written consent, to a person which is a successor in interest to the Company in
the business operated by it or which acquires all or substantially all of its
assets.
(l) Liability of Trustees, etc. No recourse shall be had for
any obligation of the Company hereunder, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of the Company, 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 each party
hereto.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above-written.
BRANDYWINE REALTY TRUST
By: ____________________________________
Title:___________________________________
EMPLOYEE
/s/ Anthony A. Nichols, Sr.
--------------------------------------
Anthony A. Nichols, Sr.
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GUARANTEE
In the event that the Company fails to perform its obligations under
the foregoing Employment Agreement, Brandywine Operating Partnership, L.P. shall
promptly perform the obligations of the Company arising thereunder which have
not been performed in strict accordance with the terms and conditions thereof.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: BRANDYWINE REALTY TRUST, its general partner
By: /s/ Gerard H. Sweeney
----------------------------------------
Gerard H. Sweeney, President and Chief
Executive Officer
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Exhibit 10.15
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), made and entered into as of
January 2, 1998 by and between Gerard H. Sweeney ("Employee") and Brandywine
Realty Trust, a Maryland real estate investment trust (the "Company").
BACKGROUND
The Company desires to employ Employee, and Employee desires to enter
into the employ of the Company, on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee, and Employee
hereby accepts employment by the Company, for the period and upon the terms and
conditions contained in this Agreement.
2. Office and Duties.
(a) Employee shall be employed by the Company as its President and
Chief Executive Officer and will serve as a member of the Board of Trustees of
the Company (the "Board") and member of the Executive Committee of the Board,
and shall perform such duties and shall have such authority as may from time to
time be specified by the Board. Employee shall report directly to the Board.
(b) Without further consideration, Employee shall, as directed by the
Board, serve as a director or officer of, or perform such other duties and
services as may be requested for and with respect to, any of the Company's
Subsidiaries, including, without limitation, Brandywine Realty Services
Corporation. As used in this Agreement, the terms "Subsidiary" and
"Subsidiaries" shall mean, with respect to any entity, any corporation,
partnership, limited liability company or other business entity in which the
subject entity has the power (whether by contract, through securities ownership,
or otherwise and whether directly or indirectly through control of one or more
intermediate Subsidiaries) to elect a majority of board of directors or other
governing body, including, in the case of a partnership, a majority of the board
of directors or other governing body of the general partner.
(c) Employee shall devote his full working time, energy, skill and
best efforts to the performance of his duties hereunder, in a manner which will
faithfully and diligently further the business interests of the Company and its
Subsidiaries.
3. Term. Unless sooner terminated as hereinafter provided, the term of
Employee's employment shall be for a period of five (5) years (the "Term")
commencing on the date hereof. The Term shall automatically renew for
additional one-year periods at the expiration
<PAGE>
of the then current Term unless either party shall give notice of his or its
election to terminate Employee's employment at least one year prior to the end
of the then-current Term, unless earlier terminated as hereinafter provided.
4. Base Salary. For all of the services rendered by Employee to the
Company and its Subsidiaries, Employee shall receive an aggregate base salary of
$300,000 per annum during the term of his employment hereunder. Such salary may
be paid, at the election of the Company, either by the Company or by one or more
of its Subsidiaries, in such relative proportions as the Company may determine,
as earned in periodic installments in accordance with the Company's normal
payment policies for executive officers. In the event that the Employee is also
employed during any period by a Subsidiary of the Company, the amount of the
base salary payable by the Company during such period shall be reduced by the
amount of salary received by Employee during such period from such Subsidiary.
Employee's base salary shall be subject to review by the Board not less
frequently than annually, and Employee shall receive such salary increases as
the Board may from time to time approve.
5. Bonus. Employee shall receive, during the term of his employment
hereunder, such annual bonus as the Board, in its sole discretion, may determine
from time to time. Any such bonus may be based on Employee's annual performance
goals as established by the Board from time to time.
6. Participation in Incentive Plans. In addition to Employee's
eligibility to receive annual bonuses pursuant to Section 5, Employee shall be
entitled to participate in short-term and long-term incentive plans as shall be
maintained by the Company from time to time on such terms and conditions as
shall be established by the Board.
7. Prior Option and Warrants. Nothing in this Agreement shall affect
the terms and conditions of options and warrants granted by the Company to
Employee before the date of this Agreement. Such options and warrants shall
continue in force as in effect immediately before the date of this Agreement.
Without limiting the generality of the foregoing, the options granted to
Employee under his employment agreement executed on August 8, 1994 (the "1994
Agreement") shall remain in effect, and those provisions of the 1994
Agreement which govern Employee's entitlement to exercise such options shall
continue in effect as if such 1994 Agreement had not been terminated. In
furtherance of the foregoing, references in Section 4.1(b)(v) of the 1994
Agreement to "the Company" shall hereafter be construed as references to the
Company and its Subsidiaries.
8. Fringe Benefits. Throughout the term of his employment and as long as
they are kept in force by the Company, Employee shall be entitled to participate
in and receive the benefits of any profit sharing plan, retirement plan, health
or other employee benefit plan made available to other executive officers of the
Company, but in no event shall such benefits be less favorable to Employee than
the benefits listed on Schedule A hereto.
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<PAGE>
9. Automobile Allowance. Employee shall receive, during the term of his
employment hereunder, an automobile allowance of $833 per month.
10. Expenses. The Company shall reimburse Employee for all reasonable,
ordinary and necessary business expenses incurred by Employee in connection with
the performance of Employee's duties hereunder upon receipt of vouchers therefor
and in accordance with the Company's regular reimbursement procedures and
practices in effect from time to time.
11. Vacation. Employee shall be entitled to a vacation of four (4) weeks
during each twelve (12) month period of his employment hereunder, during which
time Employee's compensation hereunder shall be paid in full. Employee shall be
permitted to carry over unused vacation during each twelve (12) month period
during the term and use such unused vacation in any subsequent twelve (12) month
period during the term.
12. Disability. If the Board determines in good faith by a vote of a
majority of its members (other than Employee) that Employee is unable to perform
his duties hereunder due to partial or total disability or incapacity resulting
from a mental or physical illness or injury or any similar cause for a period of
one hundred and twenty (120) consecutive days or for a cumulative period of one
hundred and eighty (180) days during any twelve (12) month period,
the Company shall have the right to terminate Employee's employment at any time
thereafter.
13. Death. Employee's employment shall terminate at the time of his
death.
14. Termination of Employment for Cause. The Company may discharge
Employee at any time for Cause. Cause shall mean: (i) habitual intoxication;
(ii) drug addiction; (iii) intentional and willful violation of any express
direction of the Board; (iv) theft, misappropriation or embezzlement of the
Company's funds; (v) conviction of a felony; or (vi) repeated and consistent
failure of Employee to be present at work during regular hours without valid
reason therefor.
15. Termination of Employment Without Cause. The Board, in its sole
discretion, may terminate Employee's employment hereunder without Cause upon 30
days' prior written notice to Employee at any time.
16. Resignation For Good Reason. Employee's resignation shall be treated
as a "Resignation for Good Reason" if Employee resigns within six (6) months
after any of the following circumstances, unless in the case of the
circumstances set forth in paragraphs (b), (c) or (d) below, such circumstances
are fully corrected within 30 days of Employee's delivery of notice to the
Company:
(a) A reduction in Employee's annual rate of base salary;
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<PAGE>
(b) A failure of the Company to make the payments required by Section
4 hereof;
(c) A significant adverse alteration in the nature or status of
Employee's responsibilities;
(d) Any other material breach by the Company of this Agreement;
(e) Relocation (without the written consent of Employee) of the
Company's executive offices to a location more than 30 miles from its current
location; or
(f) Upon a Change of Control (as defined in Section 17).
17. Change of Control. For purpose of this Agreement, a "Change of
Control" means:
(a) A "Change of Control" within the meaning of Section 1(d) of the
Brandywine Realty Trust 1997 Long-Term Incentive Plan, as currently in effect;
or
(b) The purchase of any common shares of beneficial interest of the
Company pursuant to a tender or exchange offer other than an offer by the
Company.
18. Payments Upon or After Termination of Employment.
(a) Voluntary Resignation Other than for Good Reason; Termination for
Cause; Non-Renewal of Employment Agreement. If Employee's employment hereunder
is terminated before the expiration of the Term because of Employee's voluntary
resignation (other than a Resignation for Good Reason) or because of the
Company's termination of Employee's employment for Cause, or if Employee's
employment is terminated at the expiration of the Term following an election by
either the Company or Employee not to renew the Term pursuant to Section 3, the
Company, or at its direction, its Subsidiaries shall pay to Employee or, as
appropriate, his legal representatives, heirs or estate all amounts payable
under Sections 4 and 8 accrued through the applicable date of termination (the
"Accrued Amount") within 30 days after such date of termination. If Employee's
employment is terminated by the Company for Cause or by the Employee voluntarily
(unless such termination of employment is a Resignation for Good Reason), or if
Employee's employment is terminated at the expiration of the Term following an
election by either the Company or Employee not to renew the Term pursuant to
Section 3, the Company shall have no obligation or liability hereunder after the
date of discharge or termination to pay or provide base salary, bonus
compensation, fringe benefits, or any other form of compensation hereunder other
than to pay the Accrued Amount.
(b) Termination of Employment Because of Death. If Employee's
employment is terminated as a result of the Employee's death before the
expiration of the Term,
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<PAGE>
the Company shall pay Employee's legal representatives the Accrued Amount as of
the date of Employee's death, and, in addition, the consideration provided for
in Section 4 hereof, at the rate in effect at the date of termination, for one
year after such death, less the proceeds receivable by Employee's heirs and
legal representatives from any life insurance policy provided by the Company.
In addition, Employee shall be entitled to receive an amount equal to the
product that results from multiplying the amount of the bonus paid to him
pursuant to Section 5 hereof for the calendar year prior to the year in which
Employee dies multiplied by a fraction, the numerator of which is the number of
days that Employee was alive during the year in which the death occurs and the
denominator of which is 365.
(c) Termination of Employment Because of Disability. If Employee's
employment is terminated by the Company for disability before the expiration of
the Term, the Company shall pay Employee the Accrued Amount as of the such date
of termination, and, in addition, the consideration described in Sections 4 and
8 hereof, at the rate in effect at the date of termination, until one year after
Employee becomes eligible to receive benefits pursuant to the disability
insurance policy provided by the Company, at the rate in effect at such date of
termination, less the amount of disability insurance proceeds receivable by
Employee, provided that such period shall not exceed two years in the aggregate.
In addition, Employee shall be entitled to receive an amount equal to the
product that results from multiplying the amount of the bonus paid to him
pursuant to Section 5 hereof for the calendar year prior to the year in which
Employee's employement is terminated for disability multiplied by a fraction,
the numerator of which is the number of days that elapsed prior to the
termination during the year in which the termination occurs and the denominator
of which is 365.
(d) Termination of Employment by Company Without Cause; Resignation
for Good Reason. If Employee's employment is terminated by the Company without
Cause, or Employee Resigns for Good Reason, within 30 days following the date of
such termination of employment, the Company shall pay Employee the Accrued
Amount as of the date of such termination, and in addition:
(i) Subject to Section 18(d)(ii), the Company shall make a cash
lump sum payment to Employee equal to the greater of:
(A) the product of three (3) times the greater of (1)
the sum of the amounts paid or payable to Employee pursuant to Sections 4 and
5 hereunder (and the short-term portion of any bonus amounts paid or payable
pursuant to Section 6 hereunder) for the calendar year preceding the calendar
year in which such termination of employment occurs or (2) the sum of the
amounts paid or payable to Employee pursuant to Sections 4 and 5 hereunder
(and the short-term portion of any bonus amounts paid or payable pursuant to
Section 6 hereunder) during the one-year period ending on the date of such
termination, provided that if such date of termination occurs before the
first anniversary of the date hereof, the cash lump sum payment shall be
equal to the product of three (3) times the sum of (x) Employee's annualized
base salary pay rate in effect as of such date of termination and (y) the
maximum bonus that would have been payable for the year that includes such
date of termination if all of the conditions for the payment of such maximum
bonus had been satisfied; or
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<PAGE>
(B) The amount payable pursuant to Section 4 hereunder for
the remainder of the Term at a rate equal to his base salary in effect at the
time of the date of such termination.
(ii) Employee may, in his sole discretion, elect in writing to
decline to receive part or all of the amount otherwise payable pursuant to
Section 18(d)(i). In addition, if, following payment of part or all of the
amount payable pursuant to Section 18(d)(i), Employee determines that Employee
would be in a better net after-tax position than he would be in if he retained
such amount, Employee may elect in writing to repay the Company the amount, plus
interest payable from the date of payment to the date of repayment at the
"applicable federal rate" as determined pursuant to section 1274 of the Code,
and upon such repayment and to the extent thereof, the original payment shall be
treated as a loan between the Company and Employee.
(e) In the event that Employee is employed by a Subsidiary of the
Company at the time of termination of employment, any amounts payable to the
Employee pursuant to this Section 18 shall be reduced by the amounts paid to
Employee by any such Subsidiary.
(f) Upon the payment of the amounts payable under this Section 18,
neither the Company nor any of its Subsidiaries shall have any further
obligations hereunder to Employee (or to his estate, heirs, beneficiaries, or
legal representatives, as appropriate, or otherwise) to pay or provide any base
salary, bonus compensation, or fringe benefits, provided that if Employee
Resigns for Good Reason or the Company terminates Employee's employment without
Cause, Company shall, at its own expense, for a thirty-six (36) month period
after the date of termination of employment, arrange to provide Employee with
life, disability, accident and health insurance benefits substantially similar
to those which Employee was entitled to receive immediately prior to such date
of termination.
19. Prior Agreement. This Agreement is the successor to the Employment
Agreement between Employee and the Company dated as of July 31, 1996 (which
Agreement was assigned to the Company as of October 31, 1996). Employee
represents to the Company that (a) there are no other agreements or
understandings with the Company to which Employee is a party relating to
employment, benefits or retirement, (b) there are no restrictions, agreements or
understandings whatsoever to which Employee is a party which would prevent or
make unlawful his execution of this Agreement or his employment hereunder, (c)
his execution of this Agreement and his employment hereunder shall not
constitute a breach of any contract, agreement or understanding, oral or
written, to which he is a party or by which he is bound, and (d) he is free and
able to execute this Agreement and to continue in the employment of the Company.
20. Key Man Insurance. The Company shall have the right at its expense to
purchase insurance on the life of Employee in such amounts as it shall from time
to time
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<PAGE>
determine, of which the Company shall be the beneficiary. Employee shall submit
to such physical examinations as may be required, and shall otherwise cooperate
with the Company, in connection with the Company obtaining such insurance.
21. Miscellaneous.
(a) Controlling Law. This Agreement, and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.
(b) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered in person
against receipt, or when sent by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth below:
(i) If to Employee:
Gerard H. Sweeney
2 Craig Lane
Haverford, PA 19041
(ii) If to the Company:
Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attention: General Counsel
In addition, notice by mail shall be by air mail if posted outside of
the continental United States.
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(c) Binding Nature of Agreement. This Agreement shall be binding
upon and inure to the benefit of the Company and its successors and assigns and
shall be binding upon Employee, his heirs and legal representatives.
(d) 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
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who executes the same, and all of which shall 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.
(e) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(f) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing.
(g) Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for convenience only; they form no part of this
Agreement and shall not affect its interpretation.
(h) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
(i) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or holiday, then the final day shall be deemed to be the next
day which is not a Saturday, Sunday or holiday.
(j) Survival. The provisions of Sections 7, 12, 13, 14, 15, 16, 17,
18 and 19 shall survive the expiration or termination of the term of Employee's
employment hereunder.
(k) Assignability. This Agreement is not assignable by Employee. It
is assignable by the Company only (i) to any subsidiary of the Company so long
as the Company agrees to guarantee such subsidiary's obligations hereunder, or
(ii) subject to Sections 16 and 18 and only upon Employee's prior written
consent, to a person which is a successor in interest to the Company in the
business operated by it or which acquires all or substantially all of its
assets.
(l) Liability of Trustees, etc. No recourse shall be had for any
obligation of the Company hereunder, or for any claim based thereon or otherwise
in respect thereof, against any past, present or future trustee, shareholder,
officer or employee of the Company, whether by virtue of any statute or rule of
law, or by the enforcement of any
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assessment or penalty or otherwise, all such liability being expressly waived
and released by each party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above-written.
BRANDYWINE REALTY TRUST
By: ____________________________________
Title:__________________________________
EMPLOYEE
/s/ Gerard H. Sweeney
-----------------
Gerard H. Sweeney
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<PAGE>
GUARANTEE
In the event that the Company fails to perform its obligations under
the foregoing Employment Agreement, Brandywine Operating Partnership, L.P. shall
promptly perform the obligations of the Company arising thereunder which have
not been performed in strict accordance with the terms and conditions thereof.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: BRANDYWINE REALTY TRUST, its
general partner
By: /s/ Gerard H. Sweeney
---------------------
Gerard H. Sweeney, President and Chief
Executive Officer
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Prospectus Supplement dated January 8, 1998 to the Prospectus
dated November 13, 1997 (the "Prospectus") of Brandywine Realty Trust (the
"Company") of: our report dated February 22, 1997, on the consolidated financial
statements of the Company, included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1996; our reports dated October 31, 1996 on the
combined statements of revenue and certain expenses of Equivest Management Inc.
Acquisition Properties, the Commonwealth of Pennsylvania State Employees'
Retirement System Acquisition Properties, and of Delaware Corporate Center for
the year ended December 31, 1995, included in the Company's Prospectus filed on
November 27, 1996 relating to the Company's Registration Statement on Form S-11
(No. 333-13969) declared effective November 25, 1996; our report dated February
11, 1997 on the combined financial statements of revenue and certain expenses of
Columbia Acquisition Properties for the year ended December 31, 1996, included
in the Company's Form 8-K/A (No.1) dated February 13, 1997 and Form 8-K/A (No.
2) dated February 24, 1997; our report dated January 29, 1997 on the combined
financial statements of revenue and certain expenses of Main Street Properties
for the year ended December 31, 1996, included in the Company's Form 8-K/A (No.
1) dated April 29, 1997; our report dated May 29, 1997 on the combined financial
statements of revenue and certain expenses of TA Properties for the year ended
December 31, 1996, included in the Company's Form 8-K dated June 9, 1997; our
report dated June 3, 1997 on the combined financial statements of revenue and
certain expenses of Emmes Properties for the year ended December 31, 1996,
included in the Company's Form 8-K dated June 9, 1997; our report dated June 23,
1997 on the combined financial statements of revenue and certain expenses of 748
& 855 Springdale Drive for the year ended December 31, 1996 included in the
Company's Form 8-K dated June 26, 1997; our report dated July 21, 1997 on the
combined financial statements of revenue and certain expenses of the Green Hills
Properties for the year ended December 31, 1996 included in the Company's Form
10-Q for the quarter ended June 30, 1997; our report dated July 21, 1997 on the
combined financial statements of revenue and certain expenses of the Berwyn Park
Properties for the year ended December 31, 1996, included in the Company's Form
10-Q for the quarter ended June 30, 1997; our report dated August 21, 1997 on
the combined financial statements of revenue and certain expenses of 500 & 501
Office Center Drive for the year ended December 31, 1996 included in the
Company's Form 8-K dated September 10, 1997; our report dated October 15, 1997
on the combined financial statements of revenue and certain expenses of
Metropolitan Industrial Center for the year ended December 31, 1996, included in
the Company's Form 8-K dated October 30, 1997; our report dated October 27, 1997
on the combined financial statements of revenue and certain expenses of Atrium I
for the year ended December 31, 1996, included in the Company's Form 8-K dated
October 30, 1997; our report dated November 14, 1997 on the combined financial
statements of revenue and certain expenses of Scarborough Properties for the
year ended December 31, 1996, included in the Company's Form 8-K dated December
16, 1997; our report dated December 3, 1997 on the financial statement of
revenue and certain expenses of Bala Pointe Office Centre for the year ended
December 15, 1996, included in the Company's Form 8-K dated December 16, 1997;
and our report dated December 13, 1997 on the combined financial statement of
revenue and certain expenses of GMH Properties for the year ended December 31,
1996, included in the Company's Form 8-K dated December 16, 1997; and to all
references to our Firm included in the Prospectus or Prospectus Supplement.
Philadelphia, Pa., ARTHUR ANDERSEN LLP
January 8, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the reference to our firm and our report dated June 19,
1997 with respect to the financial statements of the Greentree Executive
Campus Acquisition Properties under the "Experts" heading of a Prospectus
Supplement to the Prospectus dated November 13, 1997 of Brandywine Realty
Trust to be filed with the Securities and Exchange Commission and consent to
the filing of this Consent as an Exhibit to a Current Report on Form 8-K of
Brandywine Realty Trust.
/s/ Zelenkofske, Axelrod & Company, Ltd.
Zelenkofske, Axelrod & Company, Ltd.
Jenkintown, Pennsylvania
January 8, 1998
<PAGE>
EXHIBIT 23.3
CONSENT
We hereby consent to the references to us in the Prospectus Supplement
to the Prospectus dated November 13, 1997 (collectively, the "Prospectus") of
Brandywine Realty Trust (which Prospectus is part of a Registration Statement on
Form S-3, Registration No. 333-39155), and we further consent to the reference
to us under the heading "Experts" in the Prospectus Supplement.
This consent may be filed as an exhibit to the Registration Statement
or to a Form 8-K files by Brandywine Realty Trust.
CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC.
By: /s/ Gerald B. McNamara
----------------------
Name: Gerald B. McNamara, MAI
Title: Associate Director and Manager
Date: January 7, 1998
