<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) January 20, 1998
BRANDYWINE REALTY TRUST
-----------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MARYLAND (1-9106) (23-2413352)
- -------- ------ ----------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) file number) Identification Number)
</TABLE>
16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
Page 1 of 8 pages
<PAGE>
Item 5. Other Events
I. RREEF Portfolio
As of the date of this filing, the Company has determined that it is
probable that it will acquire, through Brandywine Operating Partnership, L.P.
(the "Operating Partnership"), a portfolio of 14 properties containing
approximately 941,471 net rentable square feet (collectively, the "RREEF
Properties"). Thirteen of these properties are located in King of Prussia, PA
and one is located in Middletown, PA. As part of this acquisition, the
Company will also acquire through the Operating Partnership approximately 19
acres of undeveloped land in King of Prussia, PA.
As of January 23, 1998, the RREEF Properties were fully leased to 20
tenants. Telespectrum Worldwide, Inc. and Lockheed Martin Corporation each
individually occupies more than 10% of the total net rentable area of the
portfolio under leases covering 178,635 and 158,000 net rentable square feet,
respectively.
The Company anticipates closing the purchase of the RREEF Properties on
or about February 6, 1998. The purchase price for the RREEF Properties
(including the undeveloped land) is anticipated to total approximately $55.5
million. The Operating Partnership expects to pay the purchase price and
closing expenses using borrowings under its existing revolving credit
facility.
The sellers of the RREEF Properties, RREEF MidAmerica/East Fund, RREEF
USA Fund-I and RREEF MidAmerica East-V Six, Inc., each are parties
unaffiliated with the Company and the Operating Partnership. The Company
based its determination of the purchase price of the RREEF Properties on the
expected cash flow, physical condition, location, competitive advantages,
existing tenancies and opportunities to retain and attract additional
tenants. The purchase price was determined by arm's-length negotiation
between the Company and the sellers.
The table set forth below shows certain information regarding rental
rates and lease expirations for the RREEF Properties.
2
<PAGE>
SCHEDULED LEASE EXPIRATIONS
(RREEF Portfolio)
<TABLE>
<CAPTION>
YEAR OF NUMBER OF LEASES RENTABLE SQUARE FINAL ANNUALIZED PERCENTAGE OF TOTAL
LEASE EXPIRING WITHIN FOOTAGE SUBJECT BASE RENT UNDER FINAL ANNUALIZED BASE RENT
EXPIRATION THE YEAR AT (1) TO EXPIRING LEASES EXPIRING LEASES (2) UNDER EXPIRING LEASES
- ----------------------- ----------------------- --------------------- ------------------ -------------------------
<S> <C> <C> <C> <C>
1998 8 107,439 $ 916,533 17.4%
1999 1 25,000 75,000 1.4%
2000 7 256,141 1,262,667 23.9%
2001 3 72,072 367,839 7.0%
2002 4 353,635 1,767,771 33.5%
2003 -- -- -- --
2004 -- -- -- --
2005 1 77,184 540,288 10.2%
2006 -- -- -- --
2007 and
Thereafter 1 50,000 350,000 6.6%
------ ------- ------------- -----
Total 25 941,471 $ 5,280,098 100.0%
------ ------- ------------- -----
------ ------- ------------- -----
</TABLE>
(1) A lease is considered to expire if, and at any time, it is terminable by the
tenant without payment of penalty or premium.
(2) "Final Annualized Base Rent" for each lease scheduled to expire represents
the cash rental rate in the final month prior to expiration multiplied by
twelve.
3
<PAGE>
II. Financial Statements
Financial statements for the RREEF Properties are included in this
Current Report under Item 7. After reasonable inquiry, the Company is not
aware of any material factors relating to the above mentioned properties that
would cause the reported financial information relating to such properties
not to be necessarily indicative of future operating results.
4
<PAGE>
III. Four Tower Bridge Partnership
On January 20, 1998, Four Tower Bridge Associates ("Four Tower Bridge
Partnership"), a limited partnership in which a wholly-owned subsidiary of
the Operating Partnership is a general partner, obtained a $16.75 million
construction loan (the "Construction Loan") from PNC Bank, National
Association (the "Bank") to finance construction of an approximately 85,000
square foot office building (the "Four Tower Bridge Building") in West
Conshohocken, Montgomery County, Pennsylvania. Additional information
relating to this development project is contained in Item 5 of a Current
Report on Form 8-K filed with the Securities and Exchange Commission on
November 17, 1997.
In connection with the Construction Loan, the Operating Partnership
agreed to provide an equity contribution of $6.75 million to the Four Tower
Bridge Partnership upon the earlier of: (i) one year from the Construction
Loan closing; (ii) receipt of a certificate of occupancy for the Four Tower
Bridge Building; and (iii) a default under the Construction Loan. In
addition, the Operating Partnership agreed to provide a $10.0 million forward
commitment for the benefit of the Bank pursuant to which it would loan $10.0
million to Four Tower Bridge Partnership under certain circumstances to
provide Four Tower Bridge Partnership funds that would (together with the
$6.75 million equity contribution) enable it to repay the entire principal
amount of the Construction Loan. Four Tower Bridge Partnership expects,
however, that an unaffiliated third party, such as an insurance company or
pension fund, will provide the permanent loan to refinance the Construction
Loan upon completion of the Four Tower Bridge Building. The Operating
Partnership's equity contribution will be entitled to a 10% preferential
return, and advances, if any, made by the Operating Partnership under its
forward commitment would accrue interest at LIBOR plus 250 basis points,
would be repayable over ten years and would be secured by a first priority
mortgage on the Four Tower Bridge Building. A copy of the forward commitment
is attached as an exhibit under Item 7.
IV. Other
In a Current Report on Form 8-K filed by the Company with the Securities
and Exchange Commission on January 9, 1998, the Company reported under Item 2
its January 5, 1998 consummation of the acquisition of a portfolio of
properties. Management of the Company
5
<PAGE>
expects that the Company will make approximately $2.0 million in capital
expenditures during 1998 with respect to the Park 80 West facility in Saddle
Brook, New Jersey acquired as part of this transaction. These expenditures
will be primarily to replace and upgrade the electrical and HVAC systems and
to make structural repairs to the parking garage and certain common areas.
6
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements.
The audited statement of revenue and certain operating expenses of
the RREEF Properties for the year ended December 31, 1996 and the
unaudited statement of revenue and certain operating expenses for the
nine months ended September 30, 1997 are included on pages F-17 to
F-20.
(b) Pro Forma Financial Information.
Pro forma financial information which reflects the Company's
acquisition of the RREEF Properties as of and for the nine months
ended September 30, 1997 and for the year ended December 31, 1996
are included on pages F-1 to F-16.
(c) Exhibits.
10.1--Forward Commitment.
10.2--Agreement of Purchase and Sale between Brandywine Operating
Partnership, L.P. and RREEF MidAmerica/East Fund-IV.
10.3--Agreement of Purchase and Sale between Brandywine Operating
Partnership, L.P. and RREEF MidAmerica East-V Six, Inc.
10.4--Agreement of Purchase and Sale between Brandywine Operating
Partnership, L.P. and RREEF USA Fund-I.
23.1--Consent of Arthur Andersen LLP
7
<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 thereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: January 27, 1998 By: /s/ Gerard H. Sweeney
------------------------
Gerard H. Sweeney, President and
Chief Executive Officer
(Principal Executive Officer)
Date: January 27, 1998 By: /s/ Mark S. Kripke
------------------------
Mark S. Kripke, Chief
Financial Officer (Principal
Financial and Accounting
Officer)
8
<PAGE>
BRANDYWINE REALTY TRUST
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C>
I. UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION
- - Pro Forma Condensed Consolidating Balance Sheet as of September 30, 1997...... F-4
- - Pro Forma Condensed Consolidating Statement of Operations for the Year Ended
December 31, 1996............................................................. F-5
- - Pro Forma Condensed Consolidating Statement of Operations for the Nine Months
Ended September 30, 1997...................................................... F-6
- - Notes and Management's Assumptions to Unaudited Pro Forma Condensed
Consolidating Financial Information........................................... F-7
II. RREEF PROPERTIES
- - Report of Independent Public Accountants...................................... F-17
- - Combined Statements of Revenue and Certain Expenses for the Year Ended
December 31, 1996 (audited) and for the Nine Month Period Ended
September 30, 1997 (unaudited)................................................ F-18
- - Notes to Statements of Revenue and Certain Expenses........................... F-19
</TABLE>
F-1
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The following sets forth the pro forma condensed consolidating balance
sheet of Brandywine Realty Trust ("the Company") as of September 30, 1997 and
the pro forma condensed consolidating statements of operations for the nine
months ended September 30, 1997 and for the year ended December 31, 1996.
The pro forma condensed consolidating financial information should be
read in conjunction with the historical financial statements of the Company
and those acquisitions deemed significant pursuant to the rules and
regulations of the Securities and Exchange Commission.
The unaudited pro forma condensed consolidating financial information is
presented as if the following events occurred on September 30, 1997 for
balance sheet purposes, and at the beginning of the period presented for
purposes of the statements of operations:
- - The Company acquired the properties described in Note 1 to these pro forma
financial statements.
- - The Company acquired its partnership interests in Brandywine Operating
Partnership, L.P. (the "Operating Partnership").
- - The Company issued 4,600,000 Common Shares at $16.50 per share, of which
600,000 shares related to the underwriter's exercise of the over-allotment
option (the "1996 Offering").
- - The Company issued 636,363 Common Shares at $16.50 per share to a voting
trust established for the benefit of the Pennsylvania State Employees
Retirement System ("SERS"), in exchange for $10.5 million (the "SERS
Offering") and contributed such proceeds to the Operating Partnership in
exchange for 636,363 units of general partnership interest ("GP Units") in
the Operating Partnership.
- - The Company issued 709,090 Common Shares at $16.50 per share to two
investment funds managed by Morgan Stanley Asset Management Inc. (the "Morgan
Stanley Offering") and contributed the proceeds to the Operating Partnership
in exchange for 709,090 GP Units.
- - The Operating Partnership repaid $49,805,000 of mortgage indebtedness and
$764,000 of loans made by Safeguard Scientifics, Inc. and paid a $500,000
prepayment penalty with a portion of the proceeds of the 1996 Offering, the
SERS Offering and the Morgan Stanley Offering.
- - The Company issued 2,375,500 Common Shares at $20.625 per share, of which
175,500 shares related to the underwriter's exercise of the over-allotment
option (the "March 1997 Offering").
- - The Company issued 11,500,000 Common Shares at $20.75 per share, of which
1,500,000 shares related to the underwriter's exercise of the over-allotment
option (the "July 1997 Offering"). The net proceeds from the July 1997
Offering were contributed to the Operating Partnership in exchange for
11,500,000 GP Units.
- - The Operating Partnership repaid $160,775,000 of indebtedness under the
Company's revolving credit facility using proceeds from the July 1997
Offering.
- - The Company issued 786,840 Common Shares at $22.31 per share (the
"September 1997 Offering"). The net proceeds from the September 1997 Offering
were contributed to the Operating Partnership in exchange for 786,840 GP
Units.
- - The Company issued 751,269 Common Shares at $24.63 per share (the "December
1997 Offering"). The net proceeds from the December 1997 Offering were
contributed to the Operating Partnership in exchange for 751,269 GP Units.
F-2
<PAGE>
The pro forma condensed consolidating financial information does not give
effect to the Company's pending underwritten equity offering of Common
Shares, as more fully described in a Prospectus Supplement and Prospectus
filed with the Securities and Exchange Commission on January 9, 1998.
The pro forma condensed consolidating financial information is unaudited
and is not necessarily indicative of what the actual financial position would
have been at September 30, 1997, nor does it purport to represent the future
financial position and the results of operations of the Company.
F-3
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 1997 (NOTES 1 AND 2)
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
BRANDYWINE
REALTY TRUST
HISTORICAL OTHER RECENT
CONSOLIDATED DECEMBER 1997 ACQUISITIONS RREEF PRO FORMA
(A) OFFERING (B) (C) PROPERTIES (D) CONSOLIDATED
------------ ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Real estate investments, net... $ 462,772 $ -- $ 330,356 $ 56,680 $ 849,808
Cash and cash equivalents...... 19,965 -- -- -- 19,965
Escrowed cash.................. 348 -- -- -- 348
Accounts receivable............ 2,465 -- -- -- 2,465
Due from affiliates............ -- -- -- -- --
Investment in management
company...................... 318 -- -- -- 318
Deferred costs and other
assets....................... 8,470 -- -- -- 8,470
------------ ------------- ----------- -------------- ------------
Total assets................. 494,338 -- 330,356 56,680 881,374
------------ ------------- ----------- -------------- ------------
------------ ------------- ----------- -------------- ------------
LIABILITIES:
Mortgage notes payable......... 47,984 -- -- -- 47,984
Notes payable, Credit Facility. 14,000 (17,593) 320,848 56,680 373,935
Accrued interest............... 303 -- -- -- 303
Accounts payable and accrued
expenses..................... 4,128 -- -- -- 4,128
Distributions payable.......... 8,338 -- -- -- 8,338
Tenant security deposits
and deferred rents........... 3,960 -- -- -- 3,960
Tenant security deposits
and deferred rents........... 387 -- -- -- 387
------------ ------------- ----------- -------------- ------------
Total liabilities............ 79,100 (17,593) 320,848 56,680 439,035
------------ ------------- ----------- -------------- ------------
MINORITY INTEREST................ 4,894 -- 9,508 -- 14,402
------------ ------------- ----------- -------------- ------------
BENEFICIARIES' EQUITY:
Common shares of
beneficial interest.......... 234 8 -- -- 242
Additional paid-in capital..... 428,787 17,585 -- -- 446,372
Share warrants................. 962 -- -- -- 962
Cumulative earnings............ 5,209 -- -- -- 5,209
Cumulative distributions....... (24,848) -- -- -- (24,848)
------------ ------------- ----------- -------------- ------------
Total beneficiaries' equity.. 410,344 17,593 -- -- 427,937
------------ ------------- ----------- -------------- ------------
Total liabilities and
beneficiaries' equity...... $ 494,338 $ -- $ 330,356 $ 56,680 $ 881,374
------------ ------------- ----------- -------------- ------------
------------ ------------- ----------- -------------- ------------
</TABLE>
F-4
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (NOTES 1 AND 3)
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
BRANDYWINE 1997 EVENTS
REALTY -----------------------------
TRUST 1997 TOTAL
HISTORICAL 1996 OTHER RREEF PRO FORMA
CONSOLIDATED (A) EVENTS (B) SUBTOTAL EVENTS (C) PROPERTIES (E) CONSOLIDATED
---------------- ---------- -------- ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE:
Base rents............................ $ 8,462 $12,646 $21,108 $75,395 $4,051 $ 100,554
Tenant reimbursements................. 1,372 2,838 4,210 9,754 643 14,607
Other................................. 196 100 296 683 -- 979
---------------- ---------- -------- ---------- ------ ------------
Total Revenue....................... 10,030 15,584 25,614 85,832 4,694 116,140
---------------- ---------- -------- ---------- ------ ------------
OPERATING EXPENSES:
Interest.............................. 2,751 513 3,264 25,478 4,251 32,993
Depreciation and amortization......... 2,836 4,687 7,523 20,447 1,814 29,784
Property expenses..................... 3,709 6,830 10,539 36,189 1,288 48,016
General and administrative............ 825 148 973 -- -- 973
---------------- ---------- -------- ---------- ------ ------------
Total operating expenses............ 10,121 12,178 22,299 82,114 7,353 111,766
---------------- ---------- -------- ---------- ------ ------------
Income (loss) before minority interest
and equity in income (loss) of
management company.................. (91) 3,406 3,315 3,718 (2,659) 4,374
Equity in income (loss) of management
company............................... (26) 66 40 1,194 97 1,331
---------------- ---------- -------- ---------- ------ ------------
Income (loss) before minority
interest.............................. (117) 3,472 3,355 4,912 (2,562) 5,705
Minority interest in (income) loss...... (45) (429) (474) 361 75 (38)
---------------- ---------- -------- ---------- ------ ------------
Net income (loss)....................... (162) 3,043 2,881 5,273 (2,487) 5,667
(Income) loss allocated to Preferred
Shares................................ (401) (1,847) (2,248) -- -- (2,248)
---------------- ---------- -------- ---------- ------ ------------
Income (loss) allocated to Common
Shares................................ $ (563) $ 1,196 $ 633 $ 5,273 $(2,487) $ 3,419
---------------- ---------- -------- ---------- ------ ------------
---------------- ---------- -------- ---------- ------ ------------
Earnings (loss) per Common Share........ $ (0.43) $ 0.15
---------------- ------------
---------------- ------------
Weighted average number of shares
outstanding including share
equivalents........................... 1,302,648 22,329,515
---------------- ------------
</TABLE>
F-5
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (NOTES 1 AND 3)
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1997 EVENTS
-----------------------------
<S> <C> <C> <C> <C>
BRANDYWINE
REALTY
TRUST 1997 RREEF TOTAL
HISTORICAL OTHER PROPERTIES PRO FORMA
CONSOLIDATED (A) EVENTS (D) (E) CONSOLIDATED
-------------------- ------------ --------------- ----------------
REVENUE:
Base rents............................. $ 32,290 $ 46,128 $ 3,120 $ 81,538
Tenant reimbursements.................. 5,731 5,272 529 11,532
Other.................................. 818 402 -- 1,220
---------- ------------ ------ ----------------
Total Revenue........................ 38,839 51,802 3,649 94,290
---------- ------------ ------ ----------------
OPERATING EXPENSES:
Interest............................... 4,899 16,531 3,180 24,610
Depreciation and amortization.......... 10,051 12,119 1,357 23,527
Property operating expenses............ 14,805 20,385 939 36,129
Other expenses......................... 705 -- -- 705
---------- ------------ ------ ----------------
Total operating expenses............. 30,460 49,035 5,476 84,971
---------- ------------ ------ ----------------
---------- ------------ ------ ----------------
Income (loss) before equity income of
management company and minority
interest............................... 8,379 2,767 (1,827) 9,319
Equity in income (loss) of management
company................................ 332 798 73 1,203
---------- ------------ ------ ----------------
Income (loss) before minority interest... 8,711 3,565 (1,754) 10,522
Minority interest in (income) loss....... (256) (105) 52 (309)
---------- ------------ ------ ----------------
Net income (loss)........................ 8,455 3,460 (1,702) 10,213
(Income) loss allocated to Preferred
Shares................................. (499) -- -- (499)
---------- ------------ ------ ----------------
Income (loss) allocated to Common
Shares................................. $ 7,956 $ 3,460 $ (1,702) $ 9,714
---------- ------------ ------ ----------------
---------- ------------ ------ ----------------
Earnings (loss) per Common Share......... $ 0.90 $ 0.40
---------- ----------------
---------- ----------------
Weighted average number of shares
outstanding including share
equivalents............................ 8,809,379 24,134,025
---------- ----------------
</TABLE>
F-6
<PAGE>
BRANDYWINE REALTY TRUST
NOTES AND MANAGEMENT'S ASSUMPTIONS TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
BRANDYWINE REALTY TRUST
1. BASIS OF PRESENTATION:
Brandywine Realty Trust (the "Company") is a Maryland real estate investment
trust. As of January 27, 1998, the Company owned 139 properties. The Company's
interest in all of the Properties is held through Brandywine Operating
Partnership, L.P. (the "Operating Partnership"). The Company is the sole general
partner of the Operating Partnership and as of January 27, 1998, the Company
held a 98.2% interest in the Operating Partnership.
These pro forma financial statements should be read in conjunction with
the historical financial statements and notes thereto of the Company, the
SSI/TNC Properties, the LibertyView Building, the nine properties (the "SERS
Properties") acquired in November 1996 from SERS and its subsidiaries,
Delaware Corporate Center I, 700/800 Business Center Drive, the Columbia
Acquisition Properties, the Main Street Acquisition Properties, the TA
Properties, the Emmes Properties, the Greentree Executive Campus Acquisition
Properties, 748 & 855 Springdale Drive, the Green Hills Properties, the
Berwyn Park Properties, 500 & 501 Office Center Drive, Metropolitan
Industrial Center, Atrium 1, Bala Pointe Office Centre, the Scarborough
Properties, the GMH Properties and the RREEF Properties. In management's
opinion, all adjustments necessary to reflect the effects of the 1996
Offering, the SERS Offering, the Morgan Stanley Offering, the March 1997
Offering, the July 1997 Offering, the September 1997 Offering, the December
1997 Offering, the acquisitions of the SSI/TNC Properties, the LibertyView
Building, the 1996 Additional Acquisition Properties (consisting of the SERS
Properties, Delaware Corporate Center I, 700/800 Business Center Drive and
8000 Lincoln Drive), the Columbia Acquisition Properties, the Main Street
Acquisition Properties, 1336 Enterprise Drive, the Greentree Executive
Campus, Five Eves Drive, Kings Manor, the TA Properties, the Emmes
Properties, 748 & 855 Springdale Drive, 1974 Sproul Road, the Green Hills
Properties, the Berwyn Park Properties, 500 & 501 Office Center Drive,
Metropolitan Industrial Center, Atrium 1, 5 & 6 Cherry Hill Executive Campus,
220 Commerce Drive, Provident Place, the PECO Building, Bala Pointe Office
Centre, the Scarborough Properties, the GMH Properties and the RREEF
Properties by the Company have been made.
2. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET:
(A) Reflects the Company's historical consolidated balance sheet as of
September 30, 1997.
(B) Reflects the December 1997 Offering and the use of the net proceeds to
repay $17.6 million of indebtedness under the Credit Facility.
F-7
<PAGE>
(C) Reflects the Company's acquisiton of several property acquisitions as
follows:
<TABLE>
<CAPTION>
Property Purchase Price Closing Costs Total
- ----------------------------------------------------------------------- -------------- ------------- ----------
<S> <C> <C> <C>
Atrium I............................................................... $ 10,250 $ 45 $ 10,295
5 & 6 Cherry Hill Executive Campus..................................... 3,484 20 3,504
220 Commerce Drive..................................................... 5,300 129 5,429
Provident Place........................................................ 6,300 152 6,452
PECO Building.......................................................... 9,500 146 9,646
Bala Pointe Office Center.............................................. 26,750 403 27,153
Scarborough Properties................................................. 37,075 122 37,197
GMH Properties......................................................... 229,015 1,665 230,680
-------------- ------ ----------
Total................................................................ $ 327,674 $ 2,682 $ 330,356
-------------- ------ ----------
-------------- ------ ----------
</TABLE>
(D) Reflects the Company's acquisition of the RREEF Properties as follows:
<TABLE>
<S> <C>
Purchase Price..................................................................... $ 55,500
Closing Costs...................................................................... 1,180
---------
$ 56,680
---------
---------
</TABLE>
3. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING STATEMENTS OF
OPERATIONS:
(A) Reflects the historical consolidated operations of the Company.
(B) Reflects the historical operations of the SSI/TNC Properties,
LibertyView Building and the 1996 Additional Acquisition Properties from January
1, 1996 through the respective dates of acquisition, plus the pro forma 1996
Offering adjustments. The table below reflects the adjustments:
F-8
<PAGE>
<TABLE>
<CAPTION>
SSI/TNC
Properties and Delaware 700/800
LibertyView SERS Corporate Business Center
Building Properties Center Drive
-------------- ---------- --------- ---------------
<S> <C> <C> <C> <C>
Revenue:
Base rents................... $ 5,714 $4,008 $2,036 $651
Tenant reimbursements........ 2,511 249 -- 76
Other........................ 100 -- -- --
------- ---------- --------- -----
Total revenue.............. 8,325 4,257 2,036 727
Operating Expenses:
Interest..................... 3,783 194 -- --
Depreciation and
amortization............... 2,819 818 374 212
Property expenses............ 2,831 2,217 552 270
General and administrative... 715 -- -- --
------- ---------- --------- -----
Total operating expenses... 10,148 3,229 926 482
Income (loss) before management
company and minority
interest..................... (1,823) 1,028 1,110 245
Equity in income (loss) of
management company........... 75 -- -- --
------- ---------- --------- -----
Income (loss) before minority
interest..................... (1,748) 1,028 1,110 245
Minority interest in (income)
loss......................... 513 -- -- --
------- ---------- --------- -----
Net income (loss).............. (1,235) 1,028 1,110 245
Income allocated to Preferred
Shares....................... -- -- -- --
------- ---------- --------- -----
Income (loss) allocated to
Common Shares................ $(1,235) $1,028 $1,110 $245
------- ---------- --------- -----
<CAPTION>
1996 Pro
Forma Total Pro
& Other Forma
8000 Lincoln Offering 1996
Drive Adjustments Events
------------ ----------- ---------
<S> <C> <C> <C>
Revenue:
Base rents................... $237 $-- $12,646
Tenant reimbursements........ 2 -- 2,838
Other........................ -- -- 100
----- ----------- ---------
Total revenue.............. 239 -- 15,584
Operating Expenses:
Interest..................... -- (3,464) 513
Depreciation and
amortization................. 89 375 4,687
Property expenses............ 231 729 6,830
General and administrative... -- (567) 148
----- ----------- ---------
Total operating expenses... 320 (2,927) 12,178
Income (loss) before management
company and minority
interest..................... (81) 2,927 3,406
Equity in income (loss) of
management company........... -- (9) 66
----- ----------- ---------
Income (loss) before minority
interest..................... (81) 2,918 3,472
Minority interest in (income)
loss......................... -- (942) (429)
----- ----------- ---------
Net income (loss).............. (81) 1,976 3,043
Income allocated to Preferred
Shares....................... -- (1,847) (1,847)
----- ----------- ---------
Income (loss) allocated to
Common Shares................ $(81) $ 129 $ 1,196
----- ----------- ---------
</TABLE>
F-9
<PAGE>
(C) Reflects the pro forma statements of operations of the Columbia
Acquisition Properties, the Main Street Acquisition Properties, 1336
Enterprise Drive, Kings Manor, Greentree Executive Campus, Five Eves Drive,
the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974
Sproul Road, the Berwyn Park Properties, the Green Hills Properties, 500/501
Office Center Drive, Christiana Corporate Center, Metropolitan Industrial
Center, Atrium 1, 5 & 6 Cherry Hill Executive Campus, 220 Commerce Drive,
Provident Place, the PECO Building, Bala Pointe Office Centre, the
Scarborough Properties and the GMH Properties for the year ended December 31,
1996 and other pro forma adjustments to reflect the March 1997 Offering, the
July 1997 Offering, the September 1997 Offering and the December 1997
Offering for the year ended December 31, 1996. The operating results
reflected below include the historical results and related pro forma
adjustments to reflect the period January 1, 1996 through the earlier of the
respective acquisition dates or December 31, 1996. Operating results from
those dates forward are included in the historical results of the Company.
<TABLE>
<CAPTION>
Columbia Main Street 1336 Greentree
Acquisition Acquisition Enterprise Executive Five Eves
Properties Properties Drive Kings Manor Campus Drive
----------- ----------- ------------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Base rents................................... $ 5,146 $ 3,141 $ 437 $ 411 $ 1,862 $ 348
Tenant reimbursements........................ 359 347 75 107 175 39
Other........................................ 376 -- -- -- -- 1
----------- ----------- ----- ----- ----------- -----
Total revenue.............................. 5,881 3,488 512 518 2,037 388
----------- ----------- ----- ----- ----------- -----
Operating Expenses:
Interest (i)................................. 1,680 -- -- -- 841 254
Depreciation and amortization (ii)........... 1,007 629 117 114 359 108
Property expenses............................ 1,979 2,194 107 170 1,018 151
General and administrative................... -- -- -- -- -- --
----------- ----------- ----- ----- ----------- -----
Total operating expenses................... 4,666 2,823 224 284 2,218 513
----------- ----------- ----- ----- ----------- -----
Income (loss) before equity in income of
management company and minority interest..... 1,215 665 288 234 (181) (125)
Equity in income (loss) of management company
(iii)........................................ -- -- -- -- -- --
----------- ----------- ----- ----- ----------- -----
Income (loss) before minority interest......... 1,215 665 288 234 (181) (125)
Minority interest in (income) loss............. (36) (20) (8) (7) 5 4
Net income..................................... $ 1,179 $ 645 $ 280 $ 227 $ (176) $ (121)
----------- ----------- ----- ----- ----------- -----
----------- ----------- ----- ----- ----------- -----
</TABLE>
<TABLE>
<CAPTION>
748 & 855
Emmes Springdale 1974 Sproul MARCH 1997 JULY 1997
Ta Properties Properties Drive Road Offering Offering
------------- ----------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Base rents.................................. $ 5,102 $ 6,214 $ 940 $ 774 $ -- $ --
Tenant reimbursements....................... 735 2,681 -- 118 -- --
Other....................................... 9 10 -- -- -- --
------ ----------- ----- ----------- --- -----------
Total revenue............................. 5,846 8,905 940 892 -- --
------ ----------- ----- ----------- --- -----------
Operating Expenses:
Interest (i)................................ 3,168 4,987 400 -- (525) (12,058)
Depreciation and amortization (ii).......... 1,352 2,128 171 134 -- --
Property expenses........................... 1,962 3,482 250 492 -- --
General and administrative.................. -- -- -- -- -- --
------ ----------- ----- ----------- --- -----------
Total operating expenses.................. 6,482 10,597 821 626 (525) (12,058)
------ ----------- ----- ----------- --- -----------
Income (loss) before equity in income of
management company and minority interest.... (636) (1,692) 119 266 525 12,058
Equity in income (loss) of management company
(iii)....................................... 105 65 23 22 -- --
------ ----------- ----- ----------- --- -----------
Income (loss) before minority interest........ (531) (1,627) 142 288 525 12,058
Minority interest in (income) loss............ 16 48 (4) (8) 342 (293)
------ ----------- ----- ----------- --- -----------
Net income.................................... $ (515) $ (1,579) $ 138 $ 280 $ 867 $ 11,765
------ ----------- ----- ----------- --- -----------
------ ----------- ----- ----------- --- -----------
</TABLE>
F-10
<PAGE>
<TABLE>
<CAPTION>
Green Hills 500/501 Christiana Metropolitan
Berwyn Park Properties Office Corporate Industrial
Properties (IV) Center Drive Center Center Atrium 1
------------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Base rents............................. $ 3,815 $ 7,700 $ 1,754 $ 768 $ 1,811 $ 1,226
Tenant reimbursements.................. 720 -- 1,358 61 406 33
Other.................................. 108 -- 43 2 9 26
------ ------ ------ ----- ------ -----------
Total revenue........................ 4,643 7,700 3,155 831 2,226 1,285
------ ------ ------ ----- ------ -----------
Operating Expenses:
Interest (i)........................... -- 1,200 1,125 430 1,238 772
Depreciation and amortization (ii)..... 1,205 1,294 547 183 528 329
Property expenses...................... 1,991 3,419 1,561 337 678 755
General and administrative............. -- -- -- -- -- --
------ ------ ------ ----- ------ -----------
Total operating expenses............. 3,196 5,913 3,233 950 2,444 1,856
------ ------ ------ ----- ------ -----------
Income (loss) before equity in income of
management company and minority
interest............................... 1,447 1,787 (78) (119) (218) (571)
Equity in income (loss) of management
company (iii).......................... 166 (115) 76 5 53 31
------ ------ ------ ----- ------ -----------
Income (loss) before minority interest... 1,613 1,672 (2) (114) (165) (540)
Minority interest in (income) loss....... (47) (49) -- 3 5 16
------ ------ ------ ----- ------ -----------
Net income............................... $ 1,566 $ 1,623 $ (2) $ (111) $ (160) $ (524)
------ ------ ------ ----- ------ -----------
------ ------ ------ ----- ------ -----------
</TABLE>
<TABLE>
<CAPTION>
5 & 6 Cherry Peco
September Hill Executive 220 Commerce Provident Building
1997 Offering Campus Drive Place (V)
----------------- --------------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents............................... $ -- $ 152 $ 572 $ 756 $ 1,017
Tenant reimbursements.................... -- -- -- 105 --
Other.................................... -- -- -- 8 --
------- ------- ------- ----- -----------
Total revenue.......................... -- 152 572 869 1,017
------- ------- ------- ----- -----------
Operating Expenses:
Interest (i)............................. -- 263 407 484 723
Depreciation and amortization (ii)....... -- 112 174 206 309
Property expenses........................ -- 169 194 333 --
General and administrative............... -- -- -- -- --
------- ------- ------- ----- -----------
Total operating expenses............... -- 544 775 1,023 1,032
------- ------- ------- ----- -----------
Income (loss) before equity in income
of management company and minority
interest................................. -- (392) (203) (154) (15)
Equity in income (loss) of management
company (iii)............................ -- -- 12 18 --
------- ------- ------- ----- -----------
Income (loss) before minority interest..... -- (392) (191) (136) (15)
Minority interest in (income) loss......... 33 12 6 4 --
------- ------- ------- ----- -----------
Net income................................. $ 33 $ (380) $ (185) $ (132) $ (15)
------- ------- ------- ----- -----------
------- ------- ------- ----- -----------
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
December Bala Pointe Scarborough GMH Total Other
1997 Offering Office Centre Properties Properties 1997 Events
------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents................................. $ -- $ 3,572 $ 4,971 $ 22,906 $ 75,395
Tenant reimbursements...................... -- 21 239 2,175 9,754
Other...................................... -- 35 -- 56 683
------ ------ ------ ----------- -----------
Total revenue............................ -- 3,628 5,210 25,137 85,832
------ ------ ------ ----------- -----------
Operating Expenses:
Interest (i)............................... (1,319) 2,036 2,071 17,301 25,478
Depreciation and amortization (ii)......... -- 869 1,190 7,382 20,447
Property expenses.......................... -- 1,559 2,424 10,964 36,189
General and administrative................. -- -- -- -- --
------ ------ ------ ----------- -----------
Total operating expenses................. (1,319) 4,464 5,685 35,647 82,114
------ ------ ------ ----------- -----------
Income (loss) before equity in income of
management company and minority interest... 1,319 (836) (475) (10,510) 3,718
Equity in income (loss) of management company
(iii)...................................... -- 64 119 550 1,194
------ ------ ------ ----------- -----------
Income (loss) before minority interest....... 1,319 (772) (356) (9,960) 4,912
Minority interest in (income) loss........... (39) 23 10 293 361
------ ------ ------ ----------- -----------
Net income................................... $ 1,280 $ (749) $ (346) $ (9,667) $ 5,273
------ ------ ------ ----------- -----------
------ ------ ------ ----------- -----------
</TABLE>
- ------------------------
(i) Pro forma interest expense is presented assuming an effective rate of
7.5% on borrowings under the Company's revolving credit facility. The
adjustment for the Columbia Acquisition Properties also reflects an
effective interest rate of 9.5% on assumed debt. The adjustments for
the March 1997 Offering, the July 1997 Offering and the December 1997
Offering represent interest savings related to the payoff of $7 million
and $160.8 million, respectively, of credit facility borrowings at an
effective rate of 7.5%.
(ii) Pro forma depreciation expense is presented assuming an 80% building
and 20% land allocation of the purchase price and capitalized closing
costs and assumes a useful life of 25 years.
(iii) Pro forma equity in income of management company is presented based on
management fees less incremental costs estimated to be incurred.
(iv) Pro forma property expenses of the Green Hill Properties exclude $666,000
from historical amounts. Such amount represents expected salary savings.
(v) Pro forma base rents for the Peco Building are based on the lease in
place as of November 25, 1997 as historically the property was owner
occupied and was not an operating property. All property expenses are
paid directly by the tenant.
(D) Reflects the pro forma adjustments relating to the Columbia
Acquisition Properties, the Main Street Acquisition Properties, 1336
Enterprise Drive, Kings Manor, Greentree Executive Campus, Five Eves Drive,
the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974
Sproul Road, the Berwyn Park Properties, the Green Hills Properties, 500/501
Office Center Drive, Christiana Corporate Center, Metropolitan Industrial
Center, Atrium 1, 5 & 6 Cherry Hill Executive Campus, 220 Commerce Drive,
Provident Place, the PECO Building, Bala Pointe Office Centre, the
Scarborough Properties and the GMH Properties for the nine months ended
September 30, 1997 and other pro forma adjustments to reflect the March 1997
Offering, the July 1997 Offering, the September 1997 Offering and the
December 1997 Offering for the nine months ended September 30, 1997. The
operating results reflected below include the historical results and related
pro forma adjustments to reflect the period January 1, 1997 through the
earlier of the respective acquisition date or September 30, 1997.
F-12
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA MAIN STREET 1336 GREENTREE
ACQUISITION ACQUISITION ENTERPRISE EXECUTIVE
PROPERTIES PROPERTIES DRIVE KINGS MANOR CAMPUS
----------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents............................................. $338 $542 $78 $105 $602
Tenant reimbursements.................................. 24 60 13 27 17
Other.................................................. 25 -- -- -- --
----- ----- --- ----- ---------
Total revenue...................................... 387 602 91 132 619
----- ----- --- ----- ---------
Operating Expenses:
Interest (i)........................................... 110 -- -- -- 249
Depreciation and amortization (ii)..................... 66 109 21 29 106
Property expenses...................................... 130 379 19 43 272
General and administrative............................. -- -- -- -- --
----- ----- --- ----- ---------
Total operating expenses........................... 306 488 40 72 627
----- ----- --- ----- ---------
Income (loss) before equity in income of management company
and minority interest.................................... 81 114 51 60 (8)
Equity in income (loss) of management company (iii)........ -- -- -- -- --
----- ----- --- ----- ---------
Income (loss) before minority interest..................... 81 114 51 60 (8)
Minority interest in (income) loss......................... (2) (3) (1) (2) --
----- ----- --- ----- ---------
Net income................................................. $ 79 $111 $50 $ 58 $ (8)
----- ----- --- ----- ---------
----- ----- --- ----- ---------
<CAPTION>
FIVE EVES
DRIVE
---------
<S> <C>
Revenue:
Base rents............................................. $103
Tenant reimbursements.................................. 12
Other.................................................. --
---------
Total revenue...................................... 115
---------
Operating Expenses:
Interest (i)........................................... 75
Depreciation and amortization (ii)..................... 32
Property expenses...................................... 45
General and administrative............................. --
---------
Total operating expenses........................... 152
---------
Income (loss) before equity in income of management company
and minority interest.................................... (37)
Equity in income (loss) of management company (iii)........ --
---------
Income (loss) before minority interest..................... (37)
Minority interest in (income) loss......................... 1
---------
Net income................................................. $(36)
---------
---------
</TABLE>
<TABLE>
<CAPTION>
748 & 855
TA EMMES SPRINGDALE 1974 SPROUL MARCH 1997
PROPERTIES PROPERTIES DRIVE ROAD OFFERING
--------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents............................................ $2,053 $2,570 $414 $ 354 $--
Tenant reimbursements................................. 299 1,130 -- 54 --
Other................................................. 6 2 -- -- --
--------- ---------- ----- ----------- ---
Total revenue..................................... 2,358 3,702 414 408 --
--------- ---------- ----- ----------- ---
Operating Expenses:
Interest (i).......................................... 1,241 2,049 171 -- (91)
Depreciation and amortization (ii).................... 530 875 73 61 --
Property expenses..................................... 698 1,332 99 225 --
General and administrative............................ -- -- -- -- --
--------- ---------- ----- ----------- ---
Total operating expenses.......................... 2,469 4,256 343 286 (91)
--------- ---------- ----- ----------- ---
Income (loss) before equity in income of management
company and minority interest........................... (111) (554) 71 122 91
Equity in income (loss) of management company (iii)....... 41 27 10 10 --
--------- ---------- ----- ----------- ---
Income (loss) before minority interest.................... (70) (527) 81 132 91
Minority interest in (income) loss........................ 2 15 (2) (4) (52)
--------- ---------- ----- ----------- ---
Net income................................................ $(68) $ (512) $ 79 $ 128 $39
--------- ---------- ----- ----------- ---
--------- ---------- ----- ----------- ---
<CAPTION>
JULY 1997
OFFERING
---------
<S> <C>
Revenue:
Base rents............................................ $ --
Tenant reimbursements................................. --
Other................................................. --
---------
Total revenue..................................... --
---------
Operating Expenses:
Interest (i).......................................... (6,904)
Depreciation and amortization (ii).................... --
Property expenses..................................... --
General and administrative............................ --
---------
Total operating expenses.......................... (6,904)
---------
Income (loss) before equity in income of management
company and minority interest........................... 6,904
Equity in income (loss) of management company (iii)....... --
---------
Income (loss) before minority interest.................... 6,904
Minority interest in (income) loss........................ (42)
---------
Net income................................................ $6,862
---------
---------
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
CHRISTIANA METROPOLITAN
BERWYN PARK GREEN HILLS 500/501 OFFICE CORPORATE INDUSTRIAL
PROPERTIES PROPERTIES (IV) CENTER DRIVE CENTER CENTER
----------- --------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents....................................... $2,492 $4,567 $1,106 $615 $1,395
Tenant reimbursements............................ 376 -- 919 22 306
Other............................................ 36 -- 48 45 33
----------- ------ ------ ----- ------
Total revenue................................ 2,904 4,567 2,073 682 1,734
----------- ------ ------ ----- ------
Operating Expenses:
Interest (i)..................................... -- 690 700 309 926
Depreciation and amortization (ii)............... 700 745 340 131 395
Property expenses................................ 1,073 2,059 971 218 472
General and administrative....................... -- -- -- -- --
----------- ------ ------ ----- ------
Total operating expenses..................... 1,773 3,494 2,011 658 1,793
----------- ------ ------ ----- ------
Income (loss) before equity in income of management
company and minority interest...................... 1,131 1,073 62 24 (59)
Equity in income (loss) of management company
(iii).............................................. 95 (66) 44 4 40
----------- ------ ------ ----- ------
Income (loss) before minority interest............... 1,226 1,007 106 28 (19)
Minority interest in (income) loss................... (36) (30) (3) (1) 1
----------- ------ ------ ----- ------
Net income........................................... $1,190 $ 977 $ 103 $ 27 $ (18)
----------- ------ ------ ----- ------
----------- ------ ------ ----- ------
<CAPTION>
ATRIUM 1
--------
<S> <C>
Revenue:
Base rents....................................... $ 962
Tenant reimbursements............................ 33
Other............................................ 26
--------
Total revenue................................ 1,021
--------
Operating Expenses:
Interest (i)..................................... 577
Depreciation and amortization (ii)............... 246
Property expenses................................ 555
General and administrative....................... --
--------
Total operating expenses..................... 1,378
--------
Income (loss) before equity in income of management
company and minority interest...................... (357)
Equity in income (loss) of management company
(iii).............................................. 23
--------
Income (loss) before minority interest............... (334)
Minority interest in (income) loss................... 10
--------
Net income........................................... $(324)
--------
--------
</TABLE>
<TABLE>
<CAPTION>
5 & 6
CHERRY
HILL 220
SEPTEMBER EXECUTIVE COMMERCE PROVIDENT PECO
1997 OFFERING CAMPUS DRIVE PLACE BUILDING (V)
------------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents..................................... $-- $114 52$5 $567 $762
Tenant reimbursements.......................... -- -- -- 79 --
Other.......................................... -- -- -- 6 --
--- ---------- -------- --------- -----
Total revenue.............................. -- 114 525 652 762
--- ---------- -------- --------- -----
Operating Expenses:
Interest (i)................................... -- 197 304 362 541
Depreciation and amortization (ii)............. -- 84 130 154 231
Property expenses.............................. -- 126 164 249 --
General and administrative..................... -- -- -- -- --
--- ---------- -------- --------- -----
Total operating expenses................... -- 407 598 765 772
--- ---------- -------- --------- -----
Income (loss) before equity in income of management
company and minority interest.................... -- (293 ) (73 ) (113) (10)
Equity in income (loss) of management company
(iii)............................................ -- -- 9 13 --
--- ---------- -------- --------- -----
Income (loss) before minority interest............. -- (293 ) (64 ) (100) (10)
Minority interest in (income) loss................. 26 9 2 3 --
--- ---------- -------- --------- -----
Net income......................................... $26 $(284 ) (6$2 ) $(97) $(10)
--- ---------- -------- --------- -----
--- ---------- -------- --------- -----
</TABLE>
F-14
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 1997 BALA POINTE SCARBOROUGH GMH TOTAL OTHER
OFFERING OFFICE CENTRE PROPERTIES PROPERTIES 1997 EVENTS
------------- ------------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Base rents.......................................... $ -- $2,837 $4,292 $18,735 $46,128
Tenant reimbursements............................... -- 27 425 1,449 5,272
Other............................................... -- 28 17 130 402
--- ------ ----------- ---------- -----------
Total revenue................................... -- 2,892 4,734 20,314 51,802
--- ------ ----------- ---------- -----------
Operating Expenses:
Interest (i)........................................ (987) 1,523 1,549 12,940 16,531
Depreciation and amortization (ii).................. -- 650 890 5,521 12,119
Property expenses................................... -- 1,243 1,834 8,179 20,385
General and administrative.......................... -- -- -- -- --
--- ------ ----------- ---------- -----------
Total operating expenses........................ (987) 3,416 4,273 26,640 49,035
--- ------ ----------- ---------- -----------
Income (loss) before equity in income of management
company and minority interest......................... 987 (524) 461 (6,326) 2,767
Equity in income (loss) of management company (iii)..... -- 48 89 411 798
--- ------ ----------- ---------- -----------
Income (loss) before minority interest.................. 987 (476) 550 (5,915) 3,565
Minority interest in (income) loss...................... (29) 14 (155) 174 (105)
--- ------ ----------- ---------- -----------
Net income.............................................. $958 $ (462) $ 395 $(5,741) $ 3,460
--- ------ ----------- ---------- -----------
--- ------ ----------- ---------- -----------
</TABLE>
- ------------------------
(i) Pro forma interest expense is presented assuming an effective rate of 7.5%
on borrowings under the Company's revolving credit facility. The adjustment
for the Columbia Acquisition Properties also reflects an effective interest
rate of 9.5% on assumed debt. The adjustments for the March 1997 Offering,
the July 1997 Offering and the December 1997 Offering represent interest
savings related to the payoff of $7 million and $160.8 million,
respectively, of credit facility borrowings at an effective rate of 7.5%.
(ii) Pro forma depreciation expense is presented assuming an 80% building and
20% land allocation of the purchase price and capitalized closing costs and
assumes a useful life of 25 years.
(iii) Pro forma equity in income of management company is presented based on
management fees less incremental costs estimated to be incurred.
(iv) Pro forma property expenses for the Green Hill Properties exclude $333,000
from historical amounts. Such amount represents expected salary savings.
(v) Pro forma base rents for the Peco Building are based on the lease in place
as of November 25, 1997 as historically the property was owner occupied and
was not an operating property. All property expenses are paid directly by
the tenant.
F-15
<PAGE>
(E) Reflects the pro forma statements of operations of the RREEF
Properties for the nine months ended September 30, 1997 and for the year
ended December 31, 1996. All amounts represent historical operations except
for the pro forma adjustments noted:
- For the nine months ended September 30, 1997:
<TABLE>
<CAPTION>
RREEF
Properties
-----------
<S> <C>
Revenue:
Base rents............................................................ $ 3,120
Tenant reimbursements................................................. 529
Other................................................................. --
-----------
Total revenue....................................................... 3,649
-----------
Operating Expenses:
Interest (i).......................................................... 3,180
Depreciation and amortization (ii).................................... 1,357
Property expenses..................................................... 939
General and administrative............................................ --
-----------
Total operating expenses............................................ 5,476
-----------
Income (loss) before equity in income of management company and minority
interest.............................................................. (1,827)
Equity in income (loss) of management company (iii)..................... 73
-----------
Income (loss) before minority interest.................................. (1,754)
Minority interest in (income) loss...................................... 52
-----------
Net income $ (1,702)
-----------
-----------
</TABLE>
-For the year ended December 31, 1996:
<TABLE>
<CAPTION>
RREEF
PROPERTIES
-----------
<S> <C>
Revenue:
Base rents............................................................ $ 4,051
Tenant reimbursements................................................. 643
Other................................................................. --
-----------
Total revenue....................................................... 4,694
-----------
Operating Expenses:
Interest (i).......................................................... 4,251
Depreciation and amortization (ii).................................... 1,814
Property expenses..................................................... 1,288
General and administrative............................................ --
-----------
Total operating expenses............................................ 7,353
-----------
Income (loss) before equity in income of management company and minority
interest.............................................................. (2,659)
Equity in income (loss) of management company (iii)..................... 97
-----------
Income (loss) before minority interest.................................. (2,562)
Minority interest in (income) loss...................................... 75
-----------
Net income $ (2,487)
-----------
-----------
</TABLE>
- ------------------------
(i) Pro forma a interest expense is presented assuming an effective rate of
7.5% on borrowings under the Company's revolving credit facility.
(ii) Pro forma depreciation expense is presented assuming an 80% building and
20% land allocation of the purchase price and capitalized closing costs
and assumes a useful life of 25 years.
(iii) Pro forma equity in income of management company is presented based on
management fees less incremental costs estimated to be incurred.
F-16
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Brandywine Realty Trust:
We have audited the combined statement of revenue and certain expenses of
The RREEF Properties described in Note 1, for the year ended December 31, 1996.
This financial statement is the responsibility of the Properties' management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The combined statement of revenue and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in a current report on Form 8-K of Brandywine
Realty Trust, as described in Note 1, and is not intended to be a complete
presentation of the The RREEF Properties' revenue and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenue and certain expenses of The RREEF
Properties for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
January 22, 1998
F-17
<PAGE>
THE RREEF PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES (NOTE 1)
<TABLE>
<CAPTION>
For the For the Nine
Year Ended Months Ended
December 31, September 30,
1996 1997
------------ -------------
(Unaudited)
<S> <C> <C>
REVENUE:
Minimum rent (Note 2)............................................................. $ 4,051,000 $ 3,120,000
Tenant reimbursements............................................................. 643,000 529,000
------------ -------------
Total revenue................................................................... 4,694,000 3,649,000
------------ -------------
CERTAIN EXPENSES:
Maintenance and other operating expenses.......................................... 625,000 403,000
Utilities......................................................................... 182,000 161,000
Real estate taxes................................................................. 481,000 375,000
------------ -------------
Total certain expenses.......................................................... 1,288,000 939,000
------------ -------------
REVENUE IN EXCESS OF CERTAIN EXPENSES............................................... $ 3,406,000 $ 2,710,000
------------ -------------
------------ -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-18
<PAGE>
THE RREEF PROPERTIES
NOTES TO THE COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
DECEMBER 31, 1996
1. BASIS OF PRESENTATION:
The combined statement of revenue and certain expenses reflects the
combined operations of The RREEF Properties (the "Properties"). The
Properties are expected to be acquired in February 1998 by Brandywine Realty
Trust (the "Company") under related sales agreement with RREEF USA Fund--I,
RREEF MidAmerica East-IV, and RREEF MidAmerica East-V (collectively the
"RREEF Funds"). The properties consist of the King of Prussia Industrial Park
(12 buildings and one plot of land behind 600 Allendale Road), King of
Prussia, PA, 741 First Avenue, King of Prussia, PA, and 180 Wheeler Court,
Middletown, PA. The Properties have an aggregate net rentable area of
approximately 940,213 square feet (90% leased as of December 31, 1996). The
expected purchase price is approximately $55.5 million. This combined
statement of revenue and certain expenses is to be included in the Company's
current report on Form 8-K, as the above described transaction has been
deemed significant pursuant to the rules and regulations of the Securities
and Exchange Commission.
The accounting records of the Property are maintained on an accrual
basis. Adjusting entries have been made to present the accompanying financial
statements in accordance with generally accepted accounting principles. The
accompanying financial statements exclude certain expenses such as interest,
depreciation and amortization, and other costs not directly related to the
future operations of the Properties.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. The ultimate results could differ from those estimates.
The statement of revenue and certain expenses for the nine months ended
September 30, 1997 is unaudited; however, in the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) necessary for
the fair presentation of the statement of revenue and certain expenses for
the interim period have been included. The results of the interim periods are
not necessarily indicative of the results for the full year.
F-19
<PAGE>
2. OPERATING LEASES:
Base rents presented for the year ended December 31, 1996, include
straight-line adjustments for rental revenue increases in accordance with
generally accepted accounting principles. The aggregate rental revenue
decreases resulting from the straight-line adjustment for the year ended
December 31, 1996 and the nine months ended September 30, 1997 were $(52,000)
and $(95,000) (unaudited), respectively.
The following tenants had minimum rental payments greater than 10% of the
total minimum rent in 1996:
<TABLE>
<S> <C>
Smithkline Beecham Corporation............... $ 470,000
Tozour-Trane, Inc............................ $ 540,000
</TABLE>
The Properties are leased to tenants under operating leases with
expiration dates extending to the year 2005. Future minimum rentals under
noncancelable operating leases, excluding tenant reimbursements of operating
expenses as of December 31, 1996, are as follows:
<TABLE>
<S> <C>
1997................................... $4,088,000
1998................................... 3,308,000
1999................................... 3,141,000
2000................................... 3,016,000
2001................................... 2,665,000
Thereafter............................. 3,026,000
-----------
$19,244,000
-----------
-----------
</TABLE>
Certain leases also include provisions requiring tenants to reimburse the
Property for management costs and other operating expenses up to stipulated
amounts.
3. RELATED PARTY TRANSACTIONS:
The Properties paid management fees of $205,000 to RREEF Management
Company, a related party, based on percentages as defined in the management
agreement. These management fees are included within maintenance and other
operating expenses in the statement of revenue and certain expenses.
RREEF Management Company leases 3,344 square feet at a minimal annual
base rental of $24,000 and receives 1,530 square feet of free rental space at
one of the Properties. Per the lease agreement, the lease terminates on the
earlier of (1) one year after RREEF USA Fund-I sells its interest in the
building or (2) 30 days after RREEF Management Company notifies the landlord
of its election to terminate.
F-20
<PAGE>
January 20, 1998
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
One Tower Bridge
100 West Front Street
West Conshohocken, Pennsylvania 19428
Attention: Donald W. Pulver
Dear Mr. Pulver:
Brandywine Operating Partnership, L.P., a Delaware limited partnership, or
its affiliate ("Lender"), hereby offers to make a loan ("Loan") to Four Tower
Bridge Associates, a Pennsylvania limited partnership ("Borrower"), for term
financing for Four Tower Bridge, West Conshohocken Borough, Montgomery County,
Pennsylvania (the "Real Property"), inclusive of the 82,000+- square foot
mid-rise office building to be constructed thereon (the building, parking and
related improvements being collectively referred to as "Improvements"), all on
the terms and conditions set forth herein:
1. Amount; Purpose.
(a) The Loan shall be in the principal amount of up to $10,000,000,
or such lesser amount as shall actually be necessary to fund costs for
development of the Improvements in excess of funds to be advanced under Section
3.07 of that certain Agreement of Limited Partnership of Borrower, and shall be
evidenced by a promissory note in such aggregate principal amount executed by
Borrower and made payable to the order of Lender ("Note").
(b) The Loan shall be used by Borrower solely to partially refinance
the cost of acquisition of the Real Property and construction of the
Improvements.
2. Interest Rate. The Loan shall provide for interest to be paid on the
unpaid principal balance outstanding from time to time, at a per annum rate
equal to a 30, 60 or 90 day (as determined by Lender) LIBOR + 250 basis points.
The Loan shall mature ten (10) years from its funding. Interest only shall be
paid in advance for the month in which the loan closing ("Closing") shall occur,
followed by 35 payments of interest only, payable in arrears, commencing on the
fifteenth (15th) day of the second month following the date of the Closing and
each succeeding month thereafter, followed by 84 payments of interest and
principal, also payable in arrears, with all unpaid interest and principal due
on the maturity date. Amortization of the Loan is based upon a thirty (30) year
schedule.
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 2
3. Payment Terms.
(a) Borrower shall have the right, prior to the Maturity Date, to
prepay the unpaid principal balance of the Note without premium or penalty,
subject to and upon the terms and conditions governing the prepayment of
indebtedness to be set forth in definitive loan documents.
(b) Any prepayment, whether voluntary or involuntary, shall be
applied first to any accrued and unpaid interest under the Note up to the date
of such prepayment, and then to any other sums which may be payable to Lender
under the Loan Documents up to the date of such prepayment, and then to the
outstanding principal balance of the Note, any such prepayment applied to
principal shall be applied to the principal portions of installments due under
the Note in the inverse order of their maturity, and the acceptance of any such
prepayment when there is an event of default in existence under any of the Loan
Documents shall not constitute a waiver, release or accord and satisfaction
thereof or of any rights with respect thereto by Lender.
(c) The Note shall provide for a late payment charge of four (4%)
percent of any principal, interest or other amount not paid when due, and a rate
of interest after the occurrence of an event of default under the Loan Documents
("Default Rate") of four (4%) percent in excess of the interest rate then
payable under the Note pursuant to paragraph 2 above.
(d) Borrower shall reimburse Lender for any and all fees, costs and
expenses Lender may incur in connection with making, disbursing, administering
and enforcing the Loan contemplated hereby. Without limitation of any
provisions set forth herein or in the Loan Documents, Borrower shall indemnify,
defend and save and hold harmless Lender of, from and against any and all loss,
cost, expense, damage and liability which Lender or Lender's affiliates may
suffer, sustain or incur by reason of, or arising out of Borrower's breach,
violation or default under, or other failure to timely and fully pay and perform
its obligations under the Loan.
4. Loan Documents; Security. The Loan evidenced by the Note shall be
governed and secured, inter alia, as follows:
(a) a first, insured Open-End Mortgage and Security Agreement
covering the Real Property and Improvements from Borrower to Lender
("Mortgage");
(b) a first Assignment of Leases and Rents from Borrower to Lender
relating to all leases affecting all or any portion of the Real Property
("Assignment of Leases and Rents");
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 3
(c) a first Assignment of Borrower's interests under contracts,
licenses and permits, documents and rights relating to the property as specified
by Lender ("Assignments of Contracts");
(d) Uniform Commercial Code financing statements executed by Borrower
in favor of Lender, perfecting Lender's first security interests granted by
Borrower pursuant to the Mortgage in all tangible and intangible personal
property which at the time of the Loan Closing or thereafter is located on or
used in connection with the Real Property ("UCC's");
(e) an Environmental Indemnification Agreement furnished by
Borrower with which Borrower shall indemnify and hold Lender harmless of and
from any and all loss, cost, expense, damage or liability relating to the
environmental condition of the Real Property or the presence of hazardous wastes
thereon.
5. Loan Closing Date. Lender's obligation to fund under this Commitment
shall terminate on the earlier of (i) the date which is eighteen (18) months
after the date hereof and (ii) the date on which any alternate financing
contemplated by Section 18 below is funded and the Construction Loan from PNC
Bank, National Association made to Borrower on the date hereof is repaid from
the proceeds thereof.
6. Composition of Borrower. During the term of the Loan, Borrower shall
be and remain a Pennsylvania limited partnership, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania, in which Four
Oliver Tower Associates and Brandywine TB I, L.P., or its affiliate, shall be
and remain its sole partners.
7. General and Special Conditions. The General Conditions attached
hereto are an integral part of this Commitment and are incorporated herein by
this reference. The General Conditions shall not in any way diminish any of the
terms, conditions or requirements set forth herein, and such General Conditions
shall be interpreted to augment, supplement and complement such terms,
conditions and requirements. In addition to the General Conditions and any
other conditions that may be set forth in the Loan Documents, Lender's
obligation to make the Loan shall be specifically subject to the following
conditions:
(a) Intentionally Omitted.
(b) Intentionally Omitted.
(c) Intentionally Omitted.
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 4
(d) Certificate of Occupancy: Borrower shall deliver to Lender a
current, final certificate of occupancy for the building issued by the
Commonwealth of Pennsylvania Department of Labor and Industry and by Montgomery
County (or by other appropriate governmental authorities) and evidence
satisfactory to Lender demonstrating compliance with all zoning, building,
health, fire, traffic, safety, environmental, wetlands and such other rules,
regulations, ordinances, statutes and requirements applicable to the property
and the improvements relating thereto.
8. Fees and Costs. Acceptance of this Commitment shall constitute
Borrower's unconditional agreement, if and when the Loan Closing occurs, to pay
all fees, including a closing fee equal to one (1%) percent of the Loan,
expenses, taxes, costs and charges in respect to the Loan, or in any way
connected therewith, including but not limited to Lender's reasonable counsel
fees and costs, title insurance premiums and search fees, survey costs,
environmental audit costs, appraisal costs, recording and filing fees and site
inspection fees of Lender.
9. Tax and Insurance Escrows. Real estate taxes and insurance premiums
shall be paid or caused to be paid by Borrower timely, and Borrower shall be
required to furnish Lender with paid receipts therefor. The Mortgage shall
reserve to Lender upon an event of default the option to collect monthly from
Borrower and hold in escrow amounts sufficient to pay real estate taxes, water
and sewer charges and assessments, other lienable assessments and insurance
premiums, irrespective of whether such items are paid by the tenants under any
executed leases relating to space on the Real Property. Lender shall release
such amounts to Borrower from time to time upon proof of the payment of such
items by Borrower.
10. Accuracy of Information. Borrower represents to Lender that all
documents and/or information provided to Lender by Borrower in connection with
the issuance of this Commitment are true and correct in all material respects
and Borrower further acknowledges that the issuance of this Commitment by Lender
is in reliance upon the accuracy and truth of such documents and/or information.
11. Waiver of Trial by Jury. Borrower hereby knowingly, voluntarily and
intentionally waives the right it may have to a trial by jury in respect of any
litigation based hereon, arising out of, under or in connection with this
Commitment or the Loan and any document contemplated to be executed in
conjunction herewith or therewith, or any course of conduct, course of dealing,
statements (whether verbal or written) or actions of Borrower or Lender. This
provision is a material inducement for Lender entering into this Commitment.
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 5
12. Brokerage and Other Fees. Borrower agrees to indemnify and hold
Lender harmless against the claims of any and all brokers or agents and from
claims for any commissions, fees or other amounts owned or claimed to be owed
regarding the Loan and/or the Real Property and Improvements.
13. Non-Recourse. The Loan shall be non-recourse to the Borrower, subject
to specific "carve-outs" to be set forth in the definitive loan documents,
including, without limitation, (a) fraud or intentional misrepresentation, (b)
environmental liabilities and (c) misapplication of loan proceeds, rental or
other income, security deposits, insurance proceeds or condemnation awards.
14. Lender's Review. Lender and its agents may inspect the plans and
specifications, the Project Budget, the course of construction and other matters
pertaining to construction of the Building and Improvements. Lender will accept
Valcon as its inspector. Borrower acknowledges and agrees that such inspections
are made solely for the protection of the Lender in its capacity as Lender, and
Borrower confirms that the Lender is not making and will not be deemed to be
making any representations or warranties as to any matters pertaining to the
Building or Improvements by reason of such inspections or by reason of advances
made by the Lender under the Loan Documents. Without limitation of any of the
foregoing, Borrower has selected the general contractor, all major
subcontractors, the project architect and engineer, and all other consultants
providing professional services with respect to the Project, and Lender, in its
capacity as such, has not and shall not have any responsibility for their
selection nor for the quality of their materials, their services, or
workmanship. Neither the Borrower nor any other person shall have any right to
rely on any procedures required by the Lender herein, such procedures being
solely for the protection of the Lender, in its capacity as lender.
Following acceptance of this Commitment and prior to the Closing, Borrower
shall provide to Lender a copy of all periodic architect's reports by the
architect of record and by the construction lender's architect/engineer within
thirty (30) days of submission during the entire period of construction. In
addition to the foregoing, Borrower shall provide to Lender a lease schedule
provided during each calendar quarter of the initial lease-up period of the
property containing not less than the following information: tenant name, lease
term, lease commencement, date of occupancy, monthly rent, concessions, unit
size and unit leased.
15. No Off-set. Anything herein contained to the contrary
notwithstanding, the Borrower and Lender specifically acknowledge and agree
that Lender shall not have the right to offset its commitment to lend
hereunder against distributions or other sums paid or to be paid to
Brandywine TB I, L.P., in its capacity as a partner of Borrower, and Borrower
shall not have the
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 6
right to offset distributions or other sums due Brandywine TB I, L.P. as a
partner of Borrower, against Lender's commitment to lend hereunder.
16. Borrower and Lender. Lender and Borrower acknowledge and agree that
their respective obligations to one another hereunder and under the Loan
Documents are in addition to, and shall be independent of, any obligations of
Borrower to its partners, and the obligations of Borrower's partners, each to
the other. Borrower, Four Oliver Tower Corporation and Four Oliver Tower
Associates expressly acknowledge and agree that Lender has no fiduciary duty or
fiduciary obligation of any kind to them by reason of this Commitment or the
Loan, or any of them, and Lender is and shall be free to exercise any and all
rights and remedies reserved to Lender hereunder and under the Loan Documents,
notwithstanding that Brandywine TB I, L.P., an affiliate of Brandywine Operating
Partnership, is a partner in Borrower.
17. Exculpation. No recourse shall be had for any obligation of
Brandywine Realty Trust under this Commitment or under any document executed in
connection herewith or pursuant hereto, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of Brandywine Realty Trust, whether by virtue
of any statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released by
the Borrower and all parties claiming by, through or under Borrower.
18. Alternate Financing. Lender acknowledges and agrees that nothing
herein prevents Borrower from obtaining alternate financing in lieu of the Loan,
and that by executing the acceptance attached hereto Borrower is not obligated
to accept the Loan from Lender, but only to accept the terms set forth herein if
Borrower elects to accept the Loan. Lender's commitment to make the Loan
hereunder will remain in effect and available to Borrower until such time as any
such alternate financing is funded.
[remainder of this page left intentionally blank]
<PAGE>
Four Tower Bridge Associates
c/o Four Oliver Tower Associates,
Managing General Partner
Attention: Donald W. Pulver
January 20, 1998
Page 7
19. Acceptance; Termination. The acceptance of this Commitment shall be
evidenced by the return of the enclosed copy hereof executed by Borrower, within
three (3) days from the date hereof. Unless this Commitment is so accepted, it
shall become null and void.
Very truly yours,
Brandywine Operating Partnership, L. P. , a
Delaware limited partnership
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its General Partner
By: /s/ Anthony A. Nichols, Sr.
---------------------------
Name: Anthony A. Nichols, Sr.
Title: Chairman of the Board
<PAGE>
ACCEPTANCE
Intending to be legally bound, the undersigned hereby accept the foregoing
Commitment and agree to the terms and conditions thereof.
FOUR TOWER BRIDGE ASSOCIATES, a Pennsylvania
limited partnership
By: FOUR OLIVER TOWER ASSOCIATES, a
Pennsylvania limited partnership
By: FOUR OLIVER TOWER CORPORATION, a
Pennsylvania corporation, its duly
authorized general partner
By: /s/ Donald W. Pulver
--------------------
Donald W. Pulver, President
By: BRANDYWINE TB I, L.P., a Pennsylvania
limited partnership
By: BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability
company
By:/s/ Anthony A. Nichols, Sr.
---------------------------
Name: Anthony A. Nichols, Sr.
Title: Chairman
<PAGE>
GENERAL CONDITIONS
The following General Conditions are an integral part of this
commitment:
1. Documents and Information to be Furnished to Lender Before Loan
Closing. At least ten (10) business days prior to the scheduled date of the
Loan Closing, Borrower must obtain at its expense and submit to Lender the
documents and information set forth below. Such documentation and information
shall be subject to Lender's review and approval, both as to form and substance,
and shall be updated and effective at the time of Loan Closing. None of the
materials provided by Borrower shall vary in any material respect from the
information and materials previously provided to Lender in order to induce
Lender to underwrite and approve the Loan.
(a) A currently dated title report, in form and substance
satisfactory to Lender, issued by Lawyers Title Insurance Corporation, covering
the Real Property, which contains copies of all identified documents referred to
therein. The title report shall stipulate that title insurance, in a form
approved by Lender, shall be issued to Lender at time of the Loan Closing which
shall insure Lender as the holder of a valid first mortgage lien for the full
amount of the Mortgage, free and clear of all liens (including mechanic's liens
filed or unfiled), encumbrances and exceptions other than those which may be
approved by Lender.
(b) A current ALTA/ASCM as-built survey of the Real Property,
certified to and acceptable to Lender and to Lawyers Title Insurance
Corporation, issuing the title insurance, showing such items as Lender shall
specify, together with a metes and bounds description of the Real Property
corresponding to such survey.
(c) Any and all lease agreements relating to any portion of the Real
Property, and any form of proposed lease agreement to be used by Borrower in
connection with the Real Property during the term of the Loan.
(d) Borrower's Agreement of Limited Partnership, Certificate of
Limited Partnership, pertinent incumbency and signature certificates, and
resolutions authorizing the transaction.
(e) A written opinion of Borrower's 's counsel, who shall be
acceptable to Lender, stating that, inter alia: (i) Borrower is duly organized,
validly existing and in good standing in the Commonwealth of Pennsylvania,
authorized to do business in the Commonwealth of Pennsylvania, (ii) Borrower has
full authority and legal right to carry out the terms of this Commitment and any
other documentation required hereunder or in connection with the Loan, (iii)
Borrower has taken all necessary and appropriate action to authorize the
execution and delivery of this Commitment and all other documents required to be
executed by it in connection with the Loan, (iv) this Commitment and all other
documents required to be executed by Borrower in connection with the Loan have
been duly executed and acknowledged or witnessed, as appropriate, by Borrower,
(v) none of the aforesaid actions, undertakings and agreements contravene or
shall contravene Borrower's Partnership Agreement or Certificate of Limited
<PAGE>
Partnership, the provisions of this Commitment, or the provisions of any
contract or agreement to which Borrower is a party or by which Borrower is bound
or any applicable law, (vi) the Note, Mortgage and all other loan documents are
valid and binding and enforceable according to their respective terms in the
state where the Real Property is located, and (vii) the Loan is not civilly
usurious.
(f) Fully paid fire and casualty insurance policies with extended
coverage, covering risk of loss or damage to the Real Property due to fire and
such other casualties as Lender may require, with limits equal to one hundred
percent of the full replacement cost with such company or companies approved by
Lender (but such company must have an A or better rating by Best's Rating
Service) and containing mortgagee clauses in favor of Lender in form and content
satisfactory to Lender; fully paid flood insurance policy, if determined to be
necessary by Lender; and fully paid liability insurance and workmen's
compensation insurance in such amounts as may be required by Lender or, as to
workmen's compensation, mandated by statute.
(g) The final as-built plans and specifications for the Building and
Improvements, which shall have been approved in writing by all necessary and
appropriate governmental authorities, the general contractor, the primary
subcontractors, and the architect, engineer and bonding company, as appropriate.
(h) Appraisals of the Real Property in accordance with the
requirements of Title 11 of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") based upon its fair market value currently
and upon its projected fair market value following completion of the
construction of the Building as shown in the plans and specifications, which
appraisals shall be paid for by Borrower, performed by an MAI appraiser selected
by or acceptable to Lender and acceptable in form and substance to Lender having
a value of at least Sixteen Million Seven Hundred Fifty Thousand Dollars
($16,750,000.00).
(i) A Phase I Environmental Report (and the report of such further
investigations, if any, as shall be deemed appropriate by Lender), prepared by
an independent environmental engineering firm acceptable to Lender, which may be
McLarer Hart, indicating that there are no hazardous substances or wastes in, on
or around the Real Property, that the Real Property does not contain any
wetlands, that the Real Property is not located in a flood hazard area or
100-year flood plain, and otherwise in form and substance satisfactory to
Lender.
(j) Intentionally Omitted.
2. Lender's Approval of Documents and Title. The need for and the
adequacy as to form and substance of each and every document relating to the
Loan and all questions relating to the validity, status and priority of the
security for the Loan shall be determined by and must be satisfactory to Lender.
3. Condemnation. Lender shall have the right to terminate this
Commitment in the event there occurs, between the date of this Commitment and
the date of the Loan Closing, any loss or damage to the Real Property due to any
taking of all or any portion of the Real Property
-2-
<PAGE>
by exercise of the power of condemnation or eminent domain, which precludes or
substantially delays completion of the Project.
4. Maximum Rate of Interest on Loan. Notwithstanding anything to the
contrary contained herein or in any other document executed in connection with
the Loan, the effective rate of interest on the Loan shall not exceed the
maximum effective rate of interest permitted by applicable law or regulation.
Borrower hereby agrees to give Lender prior written notice in the event any
interest payment made to Lender with respect to this Loan will cause the total
interest payments collected in any one year to be usurious under applicable law,
and Lender hereby agrees not to collect knowingly any interest from Borrower in
the form of fees or otherwise which will render this Loan usurious. In the
event that such interest would be usurious in Lender's opinion, Lender reserves
the right to reduce the interest payable by Borrower or, if the Loan Closing has
not yet occurred and at its option, to terminate this Commitment. This
provision shall survive the Loan Closing and the repayment of the Loan.
5. No Other Liens on Real Property. Borrower hereby agrees that during
the term of the Loan and any extension thereof, there shall be no other
financing secured by the Real Property and no lien or encumbrance other than
those contemplated by this Commitment shall be created or permitted to exist
against the Real Property without the written consent of Lender. In the event
such consent is given, any and all such financing and liens shall be absolutely
and unconditionally subordinated to the lien of the Mortgage contemplated by
this Commitment.
6. No Transfer of Real Property. Borrower hereby agrees that during the
term of the Loan and any extension thereof, there shall be no transfer of legal
or equitable ownership of the Real Property.
7. No Waiver of Rights. Neither the failure of Lender nor the delay of
Lender to exercise any right, power or privilege under this Commitment shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other or further exercise of any other
right, power or privilege.
8. Assignment.
(a) Neither this Commitment nor the Loan proceeds shall be assignable
by Borrower without the prior written consent of Lender, and any attempt at such
assignment without such consent shall be void.
(b) This Commitment, the Loan and any and all documents pertaining
thereto may be placed, assigned, serviced or participated (either in whole or in
part) by Lender, its successors and assigns.
9. Modification; Entire Commitment; No Reliance by Third Parties. No
change or modification of this Commitment shall be valid unless the same is in
writing and signed by the parties hereto. This Commitment contains the entire
agreement between the parties hereto and there are no promises, agreements,
conditions, undertakings, warranties and representations, either written or
oral, expressed or implied between the parties hereto other than as herein set
-3-
<PAGE>
forth. It is expressly understood and agreed that this Commitment represents an
integration of any and all prior and contemporaneous promises, agreements,
conditions, undertakings, warranties and representation between the parties
hereto. This Commitment is directed solely and exclusively to Borrower and
shall not inure to the benefit of or be relied upon by any third party.
10. Commitment to Survive Closing. This Commitment shall survive the Loan
Closing and each and every one of the obligations and undertakings of Borrower
named herein shall be continuing obligations and undertakings and shall not
cease and determine until the entire Loan, together with all interest and fees
due hereon and any other amounts which may accrue pursuant hereto or to the
Loan, shall have been paid in full, and until all obligations and undertakings
of Borrower shall have been fully completed and discharged. To the extent the
Loan Documents conflict with this Commitment, the Loan Documents shall prevail.
* * * *
-4-
<PAGE>
AGREEMENT OF PURCHASE AND SALE
between
Brandywine Operating Partnership, L.P., Purchaser,
and
RREEF MidAmerica/East Fund-IV, Seller
741 First Avenue
King of Prussia, Upper Merion Township, Montgomery County, Pennsylvania
<PAGE>
Table of Contents
1. Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Review of the Property.. . . . . . . . . . . . . . . . . . . . . . 2
4. Title and Survey.. . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Representations and Warranties.. . . . . . . . . . . . . . . . . . 4
5.1 Representations and Warranties of Seller.. . . . . . . . 4
5.2 Representations and Warranties of Purchaser. . . . . . . 7
5.3 Limitations. . . . . . . . . . . . . . . . . . . . . . 7
5.4 Condition of Property. . . . . . . . . . . . . . . . . . 8
6. Closing Conditions.. . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Title Insurance. . . . . . . . . . . . . . . . . . . . . 8
6.2 Estoppel Letters . . . . . . . . . . . . . . . . . . . . 8
6.3 Representations and Warranties . . . . . . . . . . . . . 9
6.4 Seller Performance . . . . . . . . . . . . . . . . . . . 9
7. Other Agreements.. . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Closing of Sale. . . . . . . . . . . . . . . . . . . . . 10
8.2 Prorations; Adjustments. . . . . . . . . . . . . . . . . 10
8.3 Proration of Service Charges.. . . . . . . . . . . . . . 11
8.4 Closing Costs. . . . . . . . . . . . . . . . . . . . . . 12
8.5 Possession.. . . . . . . . . . . . . . . . . . . . . . . 12
8.6 Seller's Closing Documents.. . . . . . . . . . . . . . . 12
8.7 Purchaser's Closing Documents. . . . . . . . . . . . . . 13
8.8 Joint Deliveries.. . . . . . . . . . . . . . . . . . . . 14
9. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.1 Modifications. . . . . . . . . . . . . . . . . . . . . . 14
9.2 Casualty and Condemnation. . . . . . . . . . . . . . . . 14
9.3 Time of Essence. . . . . . . . . . . . . . . . . . . . . 14
9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 14
9.5 Parties Bound. . . . . . . . . . . . . . . . . . . . . . 16
9.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . 16
i
<PAGE>
9.7 Continuation Until Closing; Leasing. . . . . . . . . . . 16
9.8 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 16
9.9 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . 17
9.10 Remedies for Non-Performance.. . . . . . . . . . . . . . 17
9.11 Brokers Commission.. . . . . . . . . . . . . . . . . . . 17
9.12 Survival of Covenants. . . . . . . . . . . . . . . . . . 17
9.13 Seller's Investment Committee Approval.. . . . . . . . . 17
9.14 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.15 Entry and Indemnity. . . . . . . . . . . . . . . . . . . 18
9.16 Release. . . . . . . . . . . . . . . . . . . . . . . . . 18
9.17 Confidential Information. . . . . . . . . . . . . . . . 19
9.18 Calculation of Time Periods. . . . . . . . . . . . . . . 19
9.19 Entire Agreement.. . . . . . . . . . . . . . . . . . . . 19
9.20 Severability.. . . . . . . . . . . . . . . . . . . . . . 20
9.21 Facsimile Signatures.. . . . . . . . . . . . . . . . . . 20
9.22 Further Assurances.. . . . . . . . . . . . . . . . . . . 20
9.23 Offer. . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.24 Seller Exculpation Clause. . . . . . . . . . . . . . . . 20
9.25 Purchaser Exculpation Clause.. . . . . . . . . . . . . . 21
9.26 SEC Reporting (8-K) Requirements.. . . . . . . . . . . . 21
List of Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . 23
ii
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AGREEMENT OF PURCHASE AND SALE
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
("Purchaser") agrees to purchase, and RREEF MIDAMERICA/EAST FUND-IV, a
California group trust ("Seller") agrees to sell, that certain improved real
property, hereinafter referred to as the "Property", situated in the City of
King of Prussia, Upper Merion Township, Montgomery County, Commonwealth of
Pennsylvania, legally described on Exhibit A attached hereto and made a part
hereof, consisting of a single parcel of real estate improved with a building
commonly known as 741 First Avenue, King of Prussia, Pennsylvania, together
with all rights, privileges, easements and appurtenances thereto, including
any and all mineral rights, development rights, air rights, and the like; all
personal property owned by the Seller and located on or used in conjunction
with the Property (specifically excluding furniture, fixtures and equipment
owned by RREEF Management Company and located in the RREEF Management Company
office); any and all intangible personal property owned by Seller and used in
the operation of the Property, including the right to use the name of the
property (but not the name "RREEF"), to the extent assignable, but excluding
computer software and related licenses; contract rights, "Leases" of all or
any part of the Property, all licenses, permits and other written
authorizations necessary for the use, operation and ownership of the
Property, records, security deposits and prepaid rent, if any, and the
benefit of any guaranties of the Leases.
1. Purchase Price. The purchase price for the Property ("Purchase
Price") is Six Million Three Hundred Forty Thousand Dollars ($6,340,000.00),
payable by wire transfer of immediately available funds at Closing as defined
in Paragraph 8.1.
2. Deposit.
2.1 Purchaser has previously deposited, pursuant to this Agreement
and pursuant to the Other Agreements (defined in Paragraph 7 below), the
amount of Five Hundred Fifty Thousand Dollars ($550,000.00) (the "Deposit")
with Commonwealth Land Title Insurance Company ("Escrow Holder") as earnest
money to secure Purchaser's performance hereunder and under the Other
Agreements. The Deposit may be invested at the direction of Purchaser with
the approval of Seller. All investment income earned from the investment of
the Deposit, less investment fees, if any, will be added to and become a part
of the Deposit and will be applied toward the Purchase Price under the KOP
Agreement (defined in Paragraph 7) if Closing is completed in accordance with
this Agreement; otherwise all interest will be paid to the party entitled to
the Deposit. The escrow instructions to Escrow Holder will be in the form of
Schedule 2.1 attached hereto (the "Escrow Instructions"). If Purchaser does
not elect to terminate this Agreement pursuant to Section 3 below, prior to
the end of the Review Period (defined in Section 3.4), on or before one
business day after last day of the Review Period Purchaser shall deposit an
additional $500,000 with Escrow Holder, which shall be added to and become a
part of the Deposit for all purposes hereunder.
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2.2 Of the total Deposit, the sum of $150,000 is agreed to be
non-refundable, and shall be refunded to Purchaser only (i) if Purchaser
terminates this Agreement under Section 3.4, under the circumstances set
forth in Section 3.4.1, or (ii) if the Agreement is terminated or if the
Closing fails to occur by reason of Seller's default. Under all other
circumstances, wherever under this Agreement and the Other Agreements the
Deposit is to be returned to Purchaser, $150,000 out of the Deposit shall be
paid to Seller, to be retained by Seller as fully earned.
3. Review of the Property.
3.1 From and after the "Effective Date" (as defined in Paragraph
9.23), Seller agrees to provide Purchaser and its agents or consultants with
access to the Property to inspect each and every part thereof to determine
its present condition and to conduct such physical and environmental studies
(including a mechanical and roof study and Phase I environmental assessment)
as it deems appropriate.
3.2 Within three (3) business days after the Effective Date Seller
will make available to Purchaser for inspection and copying, all to the
extent in the possession of Seller or its managing agent, a copy of each
existing Lease and equipment lease, service contract and maintenance or other
contract pertaining to the operations of the Property that will survive
Closing, a copy of each real estate tax bills for 1994-1996, both inclusive,
and unaudited financial statements for the Property for the years 1994-1996,
both inclusive.
3.3 Within three (3) business days after the Effective Date Seller
will make available to Purchaser for inspection and copying at the office of
Seller's managing agent, all to the extent in the possession of Seller or its
managing agent:
3.3.1 a copy of each environmental reports relating to the
Property prepared by third party consultants since January 1, 1995.
3.3.2 a copy of each current franchises, business or other
licenses, bonds, permits, certificates, authorizations and other evidences of
consent, approval, authorization or permission relating to or affecting the
Project of or from any person, including any governmental authority, held by
Seller, including any pending applications.
3.3.3 a copy of each material third party warranties and
guaranties, if any, which are in effect with respect to the Property.
3.4 Purchaser has until 5:00 p.m. CST on February 2, 1998 (the
"Review Period"), to determine in its sole discretion whether all matters
relating to the Property (except title and survey, which are governed by
Paragraph 4), are acceptable, and to obtain the approval of the transaction
contemplated herein by Seller's Board of Directors. If Purchaser concludes
that any matter relating to the Property is not acceptable or that its Board
has disapproved the
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transaction, Purchaser will so notify Seller (the "Termination Notice") prior
to the expiration of the Review Period (which notice shall contain a copy of
Purchaser's roof/structural report and other reports or studies, other than
environmental reports, obtained in connection with Purchaser's due
diligence). Upon timely delivery of the Termination Notice, this Agreement
will terminate without liability on the part of Seller or Purchaser, other
than Purchaser's indemnity contained in Paragraph 9.15 hereof and the
obligation to deliver to Seller a copy of any environmental report obtained
by Purchaser if requested by Seller within ten (10) days after receipt of the
Termination Notice. In the event that Purchaser does not timely so notify
Seller, Purchaser will be deemed to have concluded that all matters relating
to the Property are acceptable and to have elected to proceed with the
transaction upon the terms and conditions contained in this Agreement
(including the obligation to increase the amount of the Deposit by an
additional $500,000) without regard to this Paragraph 3.4.
3.4.1 If this Agreement is terminated pursuant to
Paragraph 3.4, the Deposit, less $150,000, will be returned to Purchaser as
provided in the Escrow Instructions. This $150,000 shall be paid to Seller,
unless Purchaser's termination resulted from (i) Seller's default, (ii) a
material deviation from the economics of the Property as presented in
Seller's offering memorandum (it being understood and agreed that Seller
makes no warranty or representation as to said offering memorandum), or (iii)
any material structural or environmental defect in the Property not known or
disclosed to Purchaser before December 22, 1997.
3.5 Purchaser agrees that any information obtained by Purchaser or
its authorized agents in the conduct of its due diligence will be treated as
confidential pursuant to Paragraph 9.17.
4. Title and Survey. Purchaser has ordered, at its expense (and upon
receipt, Purchaser shall promptly deliver copies to Seller): (i) a commitment
for a 1992 form ALTA Owner's title insurance policy with respect to the
Property from Commonwealth Land Title Insurance Company (the "Title Insurer")
in the amount of the Purchase Price, and (ii) copies of all documents
relating to title exceptions referred to therein. Seller has already
ordered, and Purchaser has received, at Purchaser's sole expense, a plat of
survey of the Property made in accordance with Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys (1992) pursuant to the accuracy
standards of an Urban Survey. On or before January 30, 1998, Purchaser
agrees to notify Seller of any objection Purchaser may have to any exceptions
reported in the commitment or any matter shown on the plat of survey (the
"Unacceptable Exceptions"). Seller will be responsible for satisfaction of
the Title Insurer's Schedule B-1 seller requirements. All other exceptions
and survey matters will be deemed acceptable to Purchaser. If Purchaser
fails to give such notice to Seller, the survey and all of the exceptions in
the title commitment will be deemed acceptable to Purchaser. Seller will
have ten (10) days after receipt of Purchaser's notice within which to notify
Purchaser whether Seller elects to either (a) eliminate or induce the Title
Insurer to insure over (subject to Purchaser's consent, not to be
unreasonably withheld) the Unacceptable Exceptions or (b) terminate this
Agreement. If Seller agrees to eliminate or induce to the Title Insurer to
insure over (with Purchaser's consent) the
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<PAGE>
Unacceptable Exceptions, Seller will be obligated to do so at its cost on or
prior to Closing. If Seller elects to terminate this Agreement, neither
party will have any further rights or obligations hereunder, except as
provided in Paragraph 9.15. If Seller fails to give any timely notice,
Seller will be deemed to have elected to terminate this Agreement. If any
other recorded exception to title is discovered after the commitment is
delivered to Purchaser, and Purchaser does not elect to waive such exception
upon the first to occur of (a) the Closing or (b) seven (7) days after being
notified of such exception and to proceed with the consummation of the
Closing, Seller will have fifteen (15) days after the expiration of said
seven (7) day period (and Closing will be delayed if necessary, so that it
occurs not earlier than twenty-two (22) days after Purchaser is notified of
such exception) after notifying Purchaser of such discovery in which to use
commercially reasonable efforts to eliminate or to induce the Title Insurer
to insure over (subject to Purchaser's approval, not to be unreasonably
withheld) such exception, and if such exception is not eliminated or insured
over as aforesaid within said 15-day period, Purchaser may terminate this
Agreement, in which event the Deposit will be returned to Purchaser and
neither party will have any further rights or obligations hereunder except as
provided in Paragraph 9.15, or close the sale subject to such exception.
Seller agrees that it will pay off at Closing (and not induce the Title
Insurer to insure over) title exceptions representing monetary liens of a
definite or ascertainable amount voluntarily granted by Seller. In using
commercially reasonable efforts to eliminate or to induce the Title Insurer
to insure over Unacceptable Exceptions, Seller will not be required to
litigate or to expend more than $10,000 in the aggregate. Ad valorem real
estate taxes not yet due and payable and all title and survey matters which
are not Unacceptable Exceptions are hereinafter referred to as Acceptable
Exceptions.
5. Representations and Warranties.
5.1 Representations and Warranties of Seller. As used in this
Paragraph 5.1 and elsewhere in this Agreement, the phrase "to the knowledge
of Seller" or phrases of similar import mean and are limited to the actual
current knowledge, without duty to investigate or inquire, of Seller's
portfolio manager (Pamela Boneham) and Seller's local manager having ongoing
management responsibility with respect to the Property (Barbara Gillentine),
and not to any constructive knowledge of any of the foregoing individuals or
of Seller or any investment advisor to Seller, any entity that is a partner
in such investment advisor, or any affiliates of any thereof, or to any
officer, agent, representative, or employee of Seller or such investment
advisor, any such constituent partner, or any such affiliate. Seller hereby
warrants and represents to Purchaser (with such representations and
warranties to be re-made as of Closing pursuant to Paragraph 8.6.10) as
follows:
5.1.1 Pending Proceedings. With the exception of the
items set forth in Schedule 5.1 (the "Disclosure Schedule") to the knowledge
of Seller, Seller has received no written notice of special assessments,
condemnation, environmental, zoning or other land use regulation proceedings,
either pending or planned to be instituted, with respect to the Property or
any part thereof.
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<PAGE>
5.1.2 Status of Seller and Closing Documents. Subject to
Paragraph 9.13, this Agreement has been, and all the closing documents to be
delivered by Seller to Purchaser at Closing are or will be, duly authorized,
executed, and delivered by Seller, will be sufficient to convey insurable
title, are legal, valid, and binding obligations of Seller, are enforceable
in accordance with their respective terms, and do not violate any provisions
of any agreement to which Seller or the Property is subject or bound. Seller
is duly organized and validly existing and, if required, duly qualified to
transact business in the State in which the Property is located.
5.1.3 Non-Foreign Status. Seller is not a foreign person
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended.
5.1.4 Compliance with Laws. With the exception of the
items set forth in the Disclosure Schedule, Seller has received no
governmental notice, not heretofore corrected, alleging that the Property or
its current uses are in violation of any zoning, building, health, traffic,
environmental, flood control or all other applicable rules, regulations,
codes, ordinances, or statutes of any local, state and federal authorities or
any other governmental authority (collectively, the "Laws") asserting
jurisdiction over the Property.
5.1.5 Service Contracts. With the exception of the items
set forth in the Disclosure Schedule, to Seller's knowledge, there are no
agreements or contracts affecting the Property (including, without
limitation, any management, leasing, services or maintenance agreements)
which are not terminable at will by Seller without further liability, upon
not more than 30 days' prior written notice. The contracts and agreements to
be assigned to Purchaser pursuant to Paragraph 8.6.5 are listed on Schedule
5.1.5 attached hereto. Seller agrees to terminate the existing management
agreement covering the Property on or before Closing.
5.1.6 No Default. The execution and delivery of this
Agreement, and consummation of the transaction described in this Agreement,
does not and will not constitute a default under any contract, lease, or
agreement to which Seller is a party or by which Seller is bound.
5.1.7 No Suits. Except as set forth in the Disclosure
Schedule and except for personal injury or property damage actions for which
there is adequate insurance coverage and where the insurance carrier has
accepted the tender of the defense without reservation, to Seller's
knowledge, there is no action, suit or proceeding pending or threatened
against or affecting the Property or any portion thereof, or relating to or
arising out of the ownership, management or operation of the Property, in any
court or before or by any federal, state, or municipal department,
commission, board, bureau or agency or other governmental instrumentality.
5.1.8 Environmental Condition. Each of the following
representations contained in this Paragraph 5.1.8 is wholly qualified and
limited by (a) any matters disclosed in
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<PAGE>
any materials made available or delivered to Purchaser by Seller pursuant to
Paragraph 3 above or otherwise, (b) any matters disclosed in any
environmental reports or studies obtained by Purchaser, and (c) any other
matters of which Purchaser has actual knowledge. Subject to the foregoing,
Seller represents:
5.1.8.1 With the exception of items listed in the
Disclosure Schedule, and except (i) in amounts customarily found in office
uses and in the other uses for which the Property is suited and used and (ii)
in compliance with applicable law, to Seller's knowledge, Seller has not
released, generated or handled Hazardous Materials on the Property, and
Seller has no knowledge of any release, generation or handling of Hazardous
Materials on the Property by any tenants or the incorporation of Hazardous
Materials by the tenants in any improvements on the Property during the time
Seller owned the Property. For the purposes hereof, "Hazardous Material"
means any substance, chemical, waste or other material which is listed,
defined or otherwise identified as "hazardous" or "toxic" under any federal,
state, local or administrative agency ordinance or law, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601 et seq. and the Resource Conservation
and Recovery Act, 42 U.S.C. Sections 6901 et seq., or any regulation, order,
rule or requirement adopted hereunder, as well as any formaldehyde, urea,
polychlorinated biphenyls, petroleum, petroleum product or by-product, crude
oil, natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel or mixture thereof, radon, asbestos, and "source,"
"special nuclear" and "by-product" material as defined in the Atomic Energy
Act of 1985, 42 U.S.C. Sections 3011 et seq.
5.1.8.2 With the exception of items listed in the
Disclosure Schedule, to Seller's knowledge, Seller has not received any
summons, citation, directive, letter or other communication, written or oral,
from the United States Environmental Protection Agency or the State
environmental protection agency having jurisdiction over the Property.
5.1.9 Options. Seller has granted no options or rights of
first refusal to acquire any interest in the Property not set forth in the
Leases delivered to Purchaser or in documents of record disclosed in the
title commitment.
5.1.10 Rent Roll. To Seller's knowledge, the information
set forth on the rent roll attached hereto as Schedule 5.1.10 is true and
accurate in all material respects.
5.1.11 Tenant Rights. There are no termination, extension,
cancellation, or expansion rights under any occupancy arrangements with
respect to the Property except as contained in the Leases.
5.1.12 Leasing Commissions. All leasing commissions, free
rent and tenant improvement allowances due and payable as of the date hereof
by Seller have been paid or will have been paid on or before Closing. To
Seller's knowledge, the only current leases as to
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which commissions, free rent and tenant improvement allowances may become due
in the future are listed on Schedule 5.1.12, which future obligations shall
be expressly assumed by Purchaser.
5.1.13 There are no employees of the Property or Seller who
will become employees of Purchaser or for which Purchaser shall be
responsible in any way.
5.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that this Agreement has been, and all the
documents to be delivered by Purchaser to Seller will be, duly authorized,
executed, and are or will be legal, valid, and binding obligations of
Purchaser, are or will be enforceable in accordance with their respective
terms, and do not and will not at Closing violate any provisions of any
agreement to which Purchaser is subject.
5.3 Limitations. Each of the representations and warranties of
Seller contained in Paragraph 5.1: (i) is made as of the date of this
Agreement; (ii) will be deemed to be remade by Seller, and to be true in all
material respects, as of Closing, subject to other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Purchaser; and (iii) will survive for a period of one (1) year after the
Closing Date, as defined in Paragraph 8.1. Any claim that Purchaser may have
at any time against Seller for a breach of any such representation or
warranty, whether known or unknown, which is not asserted by notice from
Purchaser to Seller within such six (6) month period will not be valid or
effective, and Seller will have no liability with respect thereto. Nor will
Seller have any liability to Purchaser for a breach of any representation or
warranty unless the valid claims for all such breaches collectively aggregate
more than One Hundred Thousand Dollars ($100,000.00), in which event the full
amount of such valid claims shall be actionable, subject to the limitation in
Section 9.10. The continued accuracy in all material respects of the
aforesaid representations and warranties is a condition precedent to
Purchaser's obligation to close. If any of said representations and
warranties is not correct in all material respects at the time the same is
made or as of Closing, and Seller had no knowledge of such inaccuracy when
the representation or warranty was made, or when remade at Closing, or if
such warranty or representation becomes inaccurate on or prior to Closing
other than by reason of Seller's default hereunder, Purchaser may, upon being
notified of such occurrence on or prior to Closing either (a) terminate this
Agreement without liability on the part of Seller or Purchaser, other than
Purchaser's indemnity contained in Paragraph 9.15 and the Deposit will be
returned to Purchaser, or (b) waive such matter and proceed to Closing, by
notice to Seller given within ten (10) days after Purchaser is notified of
such occurrence, but in no event later than Closing. If Purchaser fails to
give any notice within the required time period, Purchaser will be deemed to
have elected to waive such matter and to proceed to Closing. If any of said
representations and warranties are not correct in all material respects at
the time the same is made or as of Closing, and Seller had knowledge of such
inaccuracy when the representation or warranty was made, or, by its default
hereunder caused the representation or warranty to be inaccurate when remade
at Closing, Purchaser may either (x) terminate this Agreement subject to its
obligations under Paragraph 9.15, receive a return of the Deposit and recover
from Seller all of Purchaser's actual, reasonable out-of-pocket costs
incurred in connection with its review of
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the Property or (y) waive the breach and its rights under clause (x) and
proceed to Closing, by notice to Seller given within ten (10) days after
Purchaser is notified of such occurrence, but in no event later than Closing.
If Purchaser fails to give any notice within the required time period,
Purchaser will be deemed to have elected to waive such matter and to proceed
to Closing.
5.4 Condition of Property. Except as expressly set forth in this
Agreement, Seller has not made and does not hereby make any representations,
warranties or other statements as to the condition of the Property and
Purchaser acknowledges that at Closing it is purchasing the Property on an
"AS IS, WHERE IS" basis and without relying on any representations and
warranties of any kind whatsoever, express or implied, from Seller, its
agents or brokers as to any matters concerning the Property. Except as
expressly set forth in this Agreement, no representations or warranties have
been made or are made and no responsibility has been or is assumed by Seller
or by any partner, officer, person, firm, agent or representative acting or
purporting to act on behalf of Seller as to the condition or repair of the
Property or the value, expense of operation, or income potential thereof or
as to any other fact or condition which has or might affect the Property or
the condition, repair, value, expense of operation or income potential of the
Property or any portion thereof. The parties agree that all understandings
and agreements heretofore made between them or their respective agents or
representatives are merged in this Agreement and the Schedules and Exhibits
hereto annexed, which alone fully and completely express their agreement, and
that this Agreement has been entered into after full investigation, or with
the parties satisfied with the opportunity afforded for investigation,
neither party relying upon any statement or representation by the other
unless such statement or representation is specifically embodied in this
Agreement or the Exhibits annexed hereto. Purchaser acknowledges that Seller
has requested Purchaser to inspect fully the Property and investigate all
matters relevant thereto and, with respect to the condition of the Property,
to rely solely upon the results of Purchaser's own inspections or other
information obtained or otherwise available to Purchaser, rather than any
information that may have been provided by Seller to Purchaser.
6. Closing Conditions. Purchaser's obligation to proceed to Closing
is conditioned upon Seller's performance of the following obligations and
satisfaction of the following conditions, in addition to all of its other
obligations and conditions contained in this Agreement, provided that
Purchaser may in its sole discretion elect to waive failure by Seller to
perform any particular obligation.
6.1 Title Insurance. The Title Insurer is prepared to issue a
policy of title insurance insuring Purchaser's interest in the Property being
conveyed, subject only to Acceptable Exceptions.
6.2 Estoppel Letters. Seller has delivered to Purchaser not later
than the date of Closing, estoppel letters substantially in the form of
Schedule 6.2 ("Required Estoppel Form") or in form otherwise reasonably
acceptable to Purchaser, prepared by Seller and
8
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addressed to Purchaser, from tenants occupying in the aggregate at least 75%
of the Property, measured by square footage. All estoppel letters must be
dated not more than forty-five (45) days prior to the date of Closing. An
estoppel letter form, even though not in the Required Estoppel Form, will be
deemed reasonably acceptable to Purchaser if said letter contains the
following information: confirming rent, security deposit, square footage and
termination date; that no rent has been paid more than one month in advance;
that the lease is in full force and effect and that a true and correct copy
of the lease with all amendments and modifications is attached; and that all
work to be performed by Landlord has been performed and that the tenant has
no knowledge of any Landlord default.
6.2.1 If Seller is unable to obtain the requisite estoppel
letters as described above, Seller may (but is not required to) substitute
for any unsigned estoppel letter from a tenant other than a Major Tenant an
estoppel letter in the Required Estoppel Form, which may be completed,
executed and delivered by Seller and warranted and represented by Seller,
provided that such substituted estoppel letters will not collectively
represent in excess of 10% of all of the tenants, measured by square footage.
Seller's representations and warranties in the certificates will survive the
Closing subject to the limitations of Paragraph 5.3. In the event that,
following the Closing Date, Seller or Purchaser obtains an estoppel letter
complying with the requirements of Paragraph 6.2 with respect to any lease
for which Seller delivered a substituted estoppel letter, Seller will deliver
such estoppel letter to Purchaser and, upon such delivery, Seller will be
automatically released from any liability or obligation under the substituted
estoppel letter previously delivered by Seller with respect to such lease.
Purchaser may (but shall not be required to) accept a substituted estoppel
letter as to a Major Tenant as well.
6.2.2 If Seller is unable to obtain and deliver sufficient
tenant estoppel certificates as required under Paragraph 6.2, or if the
letters received under Paragraph 6.2 or substituted estoppels permitted under
Paragraph 6.2.1 contain information or omissions unacceptable to Purchaser in
its reasonable discretion, then Seller will not be in default by reason
thereof, but Purchaser may, by notice given to Seller before the Closing,
elect (i) to waive said conditions and proceed with the Closing or (ii) to
terminate this Agreement, and receive a refund of the Deposit. If Purchaser
elects to terminate this Agreement, neither party will have any further
rights or obligations hereunder except as provided in Paragraph 9.15.
6.3 Representations and Warranties. All of Seller's
representations and warranties made pursuant to Paragraph 5.1 remain true and
correct in all material respects.
6.4 Seller Performance. Seller has delivered all of the documents
and other items required pursuant to Paragraph 8.6 and has performed all
other covenants, undertakings and obligations required by this Agreement, to
be performed or complied with by Seller at or prior to Closing.
7. Other Agreements. The obligations of Purchaser and Seller to close
hereunder shall also be conditioned upon the simultaneous closing of (a) the
purchase by Purchaser or an
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affiliate of Purchaser, of twelve industrial and office buildings and a
parcel of vacant land in King of Prussia Business Park, King of Prussia,
Pennsylvania, pursuant to that certain Agreement of Purchase and Sale of even
date herewith ("KOP Agreement") between Purchaser, as purchaser, and RREEF
USA Fund-I ("KOP Owner"), as seller, and (b) the purchase by Purchaser or an
affiliate of Purchaser, of the industrial building commonly known as 180
Wheeler Court, Bucks County, Pennsylvania, pursuant to that certain Agreement
of Purchase and Sale of even date herewith (the "Wheeler Court Agreement";
the KOP Agreement and the Wheeler Court Agreement collectively the "Other
Agreements") between Purchaser, as purchaser, and RREEF MidAmerica East-V
Six, Inc. ("Wheeler Court Owner"; the KOP Owner and the Wheeler Court Owner
are collectively referred to as the "Other Owners"), as seller. This
condition may be waived by the parties. Without limiting the generality of
the foregoing, if Purchaser terminates this Agreement pursuant to Section 3
or Section 4, the Other Owners shall have the right to terminate the Other
Agreements as well; or, if Purchaser terminates one or more of the Other
Agreements pursuant to Section 3 or Section 4 of the Other Agreements, Seller
shall have the right to terminate this Agreement as well. A default by
Purchaser under one or more of the Other Agreements shall be deemed a
Purchaser default hereunder, and a default by an Other Owner under one or
more of the Other Agreements shall be deemed a Seller default hereunder.
8. Closing.
8.1 Closing of Sale. The purchase and sale contemplated herein
shall close (herein referred to as the "Closing") at the office of the Title
Insurer, or as otherwise mutually agreed, on a date selected by Seller, which
date (the "Closing Date") shall not be earlier than the date which is fifteen
(15) days after the expiration of the Review Period nor more than thirty (30)
days after expiration of the Review Period, time being of the essence. At
Closing, Seller will deliver to Purchaser a Special Warranty Deed ("Deed") in
the form of Schedule 8.6.1 and other closing documents required hereunder and
Purchaser will cause payment of the Purchase Price to be made to Seller by
wire transfer. The sale (payment of the Purchase Price and delivery of the
Deed) may, at Purchaser's option to be exercised by notice to Seller at least
five (5) days prior to the Closing Date, be closed through escrow with the
Title Insurer in accordance with the general provisions of the usual form of
escrow agreement used in similar transactions by such Title Insurer with
special provisions inserted (i) as may be required to conform with this
Agreement and (ii) to close on a so-called "New York Style" basis.
8.2 Prorations; Adjustments. The parties will prorate taxes,
rental, and other income, and operating or other expenses of the Property as
of 12:01 a.m. on the date after Closing (i.e., Seller is entitled to the
income and responsible for the expenses of the day of Closing). All income
will be prorated on the basis of income actually received by Seller, as
opposed to income which is due or for which Seller has rendered invoices but
which has not been paid (i.e., Seller will not be entitled to any credit for
receivables, and there will be no proration as to such receivables). Any
taxes or other expenses of the Property for any period prior to Closing which
are payable by tenants of the Property subsequent to Closing (e.g., real
estate taxes paid in arrears and not yet billed to tenants), will reduce the
credit to Purchaser for such items (i.e., no
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credit from Seller for pass-through items for which Purchaser will later
collect from the tenants). To the extent that the taxes to be prorated are
not known with certainty, such proration will be based upon the most recent
tax bill or county estimate, to be re-prorated upon issuance of final bills.
Seller also agrees to give Purchaser a credit against the Purchase Price for
all cash security deposits required to be held pursuant to the Leases (less
portions thereof applied by Seller to tenant defaults and not subsequently
restored by the tenant in question) and all interest due thereon and shall
assign to Purchaser any other tenant deposits held by Seller. Purchaser will
pay amounts subsequently received by it from tenants constituting base rent,
capital reimbursements or other income due from tenants and attributable to
Seller's period of ownership, but not collected as of the date of Closing, to
Seller promptly upon receipt; provided that amounts received from tenants by
Purchaser will be first applied to current charges, and the balance will be
applied to payments due to Seller. Notwithstanding the foregoing, Seller
shall expressly reserve the right to seek to collect, directly from the
tenants after Closing and with Purchaser's cooperation, any delinquencies and
other amounts attributable to Seller's period of ownership, but not collected
as of the date of Closing. To the extent Seller has received amounts from
tenants for real estate taxes and 1997 and 1998 operating expenses in excess
of amounts paid by Seller with respect to such expenses, Seller will credit
such excess to Purchaser at Closing, and Seller will provide adequate backup
information in connection with such credit. On or after the Closing, Seller
will have no further obligations with respect to any Leases or other
agreements affecting the Property, including, without limitation, tenant
improvement work, leasing commissions and free rent.
8.2.1 Seller and Purchaser hereby agree to use their
reasonable efforts to calculate prorations (including real estate tax
prorations) so as to permit settlement thereof on the Closing Date, provided,
however, that if any of such prorations cannot be calculated accurately on
the Closing Date, then the same will be calculated as soon as reasonably
practicable after the Closing Date, but in no event later than the later to
occur of (i) thirty (30) days after Seller receives its final cost
certification for the year in which Closing occurs, or (ii) March 31 of the
year following the year in which Closing occurs, and either party owing the
other party a sum of money based on such subsequent proration(s) 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" (as announced
from time to time in the Wall Street Journal) from the Closing Date to the
date of payment if payment is not made within thirty (30) days after delivery
of a bill therefor together with reasonable back-up documentation. This
obligation of the parties will survive Closing.
8.3 Proration of Service Charges. To the extent Seller, as
opposed to tenants, is responsible for payment of utility charges, Seller
will attempt to have utility meters read as of the Closing Date. To the
extent that this is not possible and to the extent that any other obligation
for continuing services is incurred, and statements are rendered for such
services covering periods both before and after the Closing Date, the amount
will be adjusted between the parties as of the Closing Date on a per-diem
basis. Seller will forward any such statements which it receives to
Purchaser and Purchaser will pay the same. Seller will remit to Purchaser its
proportionate share immediately upon demand.
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8.4 Closing Costs. Purchaser agrees to pay (i) the Title
Insurer's escrow and/or closing fees (including any payment to the closing
officer of the Title Insurer as may be the local custom at the Closing), (ii)
the cost of the title commitment and basic policy and endorsements, if any,
required to meet Seller's obligations hereunder and the cost of any
endorsements to the title policy required by Purchaser, including extended
coverage, (iii) all recording fees and taxes with respect to the Deed, (iv)
all costs of Purchaser's physical inspections of the Property (environmental,
engineering) and other due diligence activities; (v) all costs of survey,
including fees and charges of Gannett Fleming Associates (originally engaged
by Seller); (vi) cancellation charges, if applicable, to Coventry Abstract
(originally engaged by Seller); and (vii) one-half (1/2) of applicable
transfer taxes. Seller agrees to pay (i) all recording fees with respect to
clearing Seller's title, and (ii) one-half (1/2) of applicable transfer
taxes. Except as otherwise provided in Paragraph 9.9, each party is
responsible for its own attorneys' and other professional fees. All other
closing costs shall be allocated in accordance with the prevailing local
custom.
8.5 Possession. Subject to the rights of tenants pursuant to
Leases delivered to Purchaser, Seller will deliver possession of the Property
and of any conveyed personal property to the Purchaser on the date of Closing
and Seller will thereupon deliver to Purchaser the originals of all Leases,
all correspondence with tenants, tenant/lease files, operating statements,
plans and specifications, supplies and advertising materials, booklets, keys,
and other items used in connection with operation of the Property.
8.6 Seller's Closing Documents. As part of the Closing, Seller
will deliver to Purchaser:
8.6.1 the Deed, in the form of Schedule 8.6.1
8.6.2 an affidavit in customary form that Seller is not a
foreign person within the meaning of Section 1445(e) of the Internal Revenue
Code of 1986, in the form of Schedule 8.6.2;
8.6.3 such affidavits as are customarily required by Title
Insurer in connection with issuance of the owner's basic title insurance
policy, including a mechanics' lien and judgment affidavit;
8.6.4 an assignment of the Leases in the form of Schedule
8.6.4 ("Lease Assignment");
8.6.5 an assignment of contracts and warranties in the
form of Schedule 8.6.5 ("Contracts Assignment"), assigning to Purchaser all
contracts listed on Schedule 5.1.5, other than those designated by Purchaser
for termination by notice to Seller not less than thirty (30) days prior to
Closing;
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8.6.6 an assignment of intangibles in the form of Schedule
8.6.6 ("Intangibles Assignment");
8.6.7 letters, in form to be supplied by Purchaser, to the
tenants at the Property, instructing the tenants to pay rent to Purchaser
and to recognize Purchaser as landlord under their Leases;
8.6.8 a bill of sale conveying all personal property of
Seller, if any, located at the Property and used in connection with the
maintenance or operation thereof (specifically excluding furniture, fixtures
and equipment owned by RREEF Management Company and located in the RREEF
Management Company office), in the form of Schedule 8.6.8;
8.6.9 a rent roll, certified by Seller as being true and
correct, to Seller's knowledge, as of the Closing Date, in the form
previously delivered to Purchaser;
8.6.10 a "bring down certificate" stating that Seller's
representations and warranties are true and correct as of the Closing Date,
in the form of Schedule 8.6.10;
8.6.11 estoppel certificates as required by Paragraph 6.2
herein; and
8.6.12 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
8.7 Purchaser's Closing Documents. As part of the Closing,
Purchaser will deliver to Seller:
8.7.1 good federal funds in an amount equal to the
Purchase Price, less the Deposit and interest thereon and plus or minus
prorations as provided herein and plus funds sufficient to pay Purchaser's
closing costs hereunder;
8.7.2 such affidavits as are customarily required by Title
Insurer in connection with issuance of the owner's title insurance policy;
8.7.3 executed counterpart of the Lease Assignment;
8.7.4 executed counterpart of the Contracts Assignment;
8.7.5 executed counterpart of the Intangibles Assignment;
8.7.6 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
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8.8 Joint Deliveries. At the Closing, Seller and Purchaser will
execute and deliver to each other the following documents in proper form:
8.8.1 Closing Statement;
8.8.2 City, county and state transfer tax declarations or
similar instruments; and
8.8.3 All other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
9. Miscellaneous.
9.1 Modifications. This Agreement can be amended only in writing
signed by both of the parties.
9.2 Casualty and Condemnation. Seller agrees to keep its
customary replacement cost insurance covering the Property in effect until
the Closing. If between the Effective Date and the Closing the improvements
on the Property are destroyed or damaged to the extent that repairs cost in
excess of $250,000 in the estimate of an architect or contractor selected by
Seller and reasonably acceptable to Purchaser, or if condemnation proceedings
are commenced against the Property, Purchaser may (i) terminate this
Agreement or (ii) elect to accept the Property in its then condition, in
which event Seller will pay or assign to Purchase at Closing all proceeds of
insurance (plus the applicable deductible) or condemnation awards payable to
Seller by reason of such damage or condemnation. In the event Purchaser
makes neither election by the earlier of (a) Closing or (b) ten (10) days
after being advised of such casualty or condemnation, Purchaser will be
deemed to have elected to accept the Property in its then condition. In the
event of any other damage to the Property, Seller may either repair the
damage or give Purchaser a reduction in the Purchase Price equal to the cost
of repairing such damage, as certified by an architect or contractor selected
by Seller and reasonably acceptable to Purchaser. In the event of any damage
where Purchaser does not have the right to terminate and Seller elects to
repair such damage, the Closing Date shall be delayed for the number of days
required to repair the damage, which Seller agrees to do in accordance with
all Laws and in a good and workmanlike manner.
9.3 Time of Essence. Time (including, without limitation, the
date specified as the Closing Date) is of the essence of this Agreement.
9.4 Notices. All notices required or permitted hereunder must be
in writing and shall be served on the parties at the following address:
If to Purchaser: Brandywine Realty Trust
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Newtown Square Corporate Campus
16 Campus Blvd.
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney, President & CEO
Brad A. Molotsky, General Counsel
Facsimile: (610-325-5622)
If to Seller: RREEF MidAmerica/East Fund-IV
c/o The RREEF Funds
875 N. Michigan Avenue
Suite 4100
Chicago, IL 60611
Attn: Mr. John Turney & Ms. Pamela Boneham
Facsimile: (312) 266-9346
with a copy to: RREEF MidAmerica/East Fund-IV
c/o The RREEF Funds
650 Park Avenue
Suite 210
King of Prussia, PA 19406
Attn: Ms. Barbara Gillentine
Facsimile: (610) 337-2308
and a copy to: D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attn: Lawrence J. Moss
Facsimile: (312) 580-0923
Any such notices may be sent by (a) certified mail, return receipt requested, in
which case notice will be deemed delivered three (3) business days after
deposit, postage prepaid in the U.S. mail or (b) a nationally recognized
overnight courier, in which case notice will be deemed delivered one business
day after deposit with such courier or (c) facsimile transmission, in which case
notice will be deemed delivered upon electronic verification that transmission
to recipient was completed, provided that notices sent by facsimile transmission
on a day other than a business day, or before 9:00 a.m. or after 5:00 p.m.
recipient's time on a business day, shall be deemed given on the first business
day following the date of transmission or (d) personal delivery. The above
addresses and facsimile numbers may be changed by notice to the other party;
provided that no notice of a change of address or facsimile number will be
effective until actual receipt of such notice.
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9.5 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited
assignment shall be void; provided that Purchaser may assign this Agreement
without Seller's consent to an Affiliate; provided that the assignee is not a
party-in-interest as described in Paragraph 9.14. Subject to the foregoing,
this Agreement is binding upon and inure to the benefit of the respective
legal representatives, successors, assigns, heirs, and devisees of the
parties. For the purposes of this Paragraph, the term "Affiliate" means (a)
an entity that directly or indirectly controls, is controlled by or is under
common control with the Purchaser or (b) an entity at least a majority of
whose economic interest is owned by Purchaser; and the term "control" means
the power to direct the management of such entity through voting rights,
ownership or contractual obligations.
9.6 Governing Law. The performance and interpretation of this
Agreement is controlled by the law of the Commonwealth of Pennsylvania.
9.7 Continuation Until Closing; Leasing.
9.7.1 Between the Effective Date and the Closing, Seller
agrees to keep and perform all of the obligations to be performed by landlord
under any Leases and Laws. Seller agrees to operate the Property in the same
manner as before the making of this Agreement, the same as though Seller were
retaining the Property. Seller agrees not to convey the Property, nor to
grant any liens or easements with respect thereto.
9.7.2 Seller shall not permit or consent to any new
leases, amendments, extensions, renewals (other than pursuant to tenant
renewal options, if any) or subleases without first submitting them to
Purchaser for Purchaser's approval on an approval form in the form attached
hereto as Schedule 9.7.2, which approval shall not be unreasonably withheld.
Purchaser shall have three (3) business days to notify Seller of its approval
of such leases, amendments, extensions, renewals or subleases, and in the
event that Purchaser does not so notify Seller, the leases, amendments,
extensions, renewals or subleases, as the case may be, shall be deemed
approved.
9.7.3 With respect to any new lease or lease modification
entered into by Seller after December 18, 1997 and approved by Purchaser, by
the terms of which Seller obligates itself to perform or performs or pays or
contracts for any tenant improvement work or additional landlord work
required pursuant to such lease, or pays or contracts for any leasing
commissions or grants any free rent period or other financial concessions,
then such expenses and/or free rent or other concessions, and all other
third-party costs incurred (including attorneys' fees) in connection with
such lease, will be a credit to Seller at Closing to the extent Seller paid
such amounts prior to Closing; otherwise Purchaser agrees to assume liability
for the payment and performance of such obligations in accordance with the
terms thereof.
9.8 Brokers. Seller and Purchaser each (i) represents and
warrants to the other that it has not dealt with any broker or finder in
connection with the transaction contemplated by
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this Agreement other than the parties, if any, to be paid a commission as
specified in Paragraph 9.11, and (ii) agrees to defend, indemnify and hold
the other harmless from and against any losses, damages, costs, or expenses
(including attorneys' fees) incurred by such other party due to a breach of
the foregoing warranty by the indemnifying party.
9.9 Attorneys' Fees. Notwithstanding any limitation on remedies
or amounts recoverable set forth elsewhere herein, if any action is brought
by either party against the other party, the party in whose favor final
judgment is entered will be entitled to recover court costs incurred and
reasonable attorneys' fees at trial, upon appeal and on any petition for
review.
9.10 Remedies for Non-Performance. Purchaser's remedies regarding
breach of warranty or representation by Seller are governed by Paragraph 5.3.
In the event of any other default by Seller hereunder, Purchaser may, as its
sole and exclusive remedy, either (i) terminate this Agreement and seek
damages, subject to performance of Purchaser's indemnities set forth in
Paragraph 9.15, and receive back the Deposit or (ii) seek specific
performance. If said sale is not consummated because of a default under this
Agreement on the part of Purchaser, the Deposit will be paid to and retained
by Seller as Seller's sole and exclusive remedy. Seller and Purchaser
acknowledge that the Deposit is a reasonable forecast of just compensation
for the harm that could be caused by Purchaser's default and that the harm
suffered by Seller is difficult or impossible to accurately ascertain or
predict. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY, SELLER'S TOTAL LIABILITY FOR DAMAGES FOR BREACH OF THE COVENANTS,
AGREEMENTS, WARRANTIES AND REPRESENTATIONS UNDER THIS AGREEMENT AND THE OTHER
AGREEMENTS, COLLECTIVELY, SHALL NEVER EXCEED TWO MILLION DOLLARS
($2,000,000.00), AND IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES.
9.11 Brokers Commission. Seller agrees to pay the brokerage
commission due The Flynn Company pursuant to a separate agreement.
9.12 Survival of Covenants. All covenants hereunder which, by
their terms, are intended to survive Closing will survive Closing hereunder.
9.13 Seller's Investment Committee Approval. This condition has
been satisfied.
9.14 ERISA. Purchaser represents and warrants to Seller that none
of Purchaser's assets are "plan assets," (as that term is defined by 29 CFR
Section 2510.3-101) because all plans that are subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended, and which
have invested in Purchaser hold only "equity interests," (as that term is
defined by 29 CFR Section 2510.3-101(b)(1)) that are "publicly-offered
securities," (as that term is defined by 29 CFR Section 2510.3-101(b)(2)).
Purchaser further represents and warrants to Seller that
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it is not any one of the types of entities listed in 29 CFR Section
2510.3-101(h), the character of which would identify its assets as "plan
assets."
9.15 Entry and Indemnity. In connection with any entry by
Purchaser, or its agents, employees or contractors onto the Property,
Purchaser 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 Seller's tenants and otherwise in a manner
reasonably acceptable to Seller. Without limiting the foregoing, prior to any
entry to perform any on-site testing, Purchaser shall give Seller notice
thereof, including the identity of the company or persons who will perform
such testing and the proposed scope of the testing. Seller shall approve or
disapprove the scope and methodology of such proposed testing within three
(3) business days after receipt of such notice, such approval to be within
the sole and unfettered discretion of Seller; Seller's failure to notify
Purchaser of its approval or disapproval shall be deemed to be Seller's
disapproval thereof. If Purchaser or its agents, employees or contractors
take any sample from the Property in connection with any such approved
testing, upon Seller's request, Purchaser 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 Property. Upon Seller's
request, Purchaser shall promptly deliver to Seller copies of any reports
relating to any testing or other inspection of the Property performed by
Purchaser or its agents, employees or contractors. Purchaser shall maintain,
and shall assure that its contractors maintain, public liability and property
damage insurance in amounts and in form and substance adequate to insure
against all liability of Purchaser, its agents, employees or contractors,
arising out of any entry or inspections of the Property pursuant to the
provisions hereof, and Purchaser shall provide Seller with evidence of such
insurance coverage upon request by Seller. Purchaser shall indemnify, defend
and hold Seller harmless from and against any costs, damages, liabilities,
losses, expenses, liens or claims (including, without limitation, reasonable
attorney's fees) arising out of or relating to any entry on the Property by
Purchaser, its agents, employees or contractors in the course of performing
the inspections, testings or inquiries provided for in this Agreement,
including without limitation damage to the Property or release of hazardous
substances or materials onto the Property, excluding, however, any costs
incurred by Seller in supervising Purchaser's testing. The foregoing
indemnity shall survive beyond the Closing, or if the sale is not
consummated, beyond the termination of this Agreement.
9.16 Release. Except to the extent of the representations and
warranties of Seller expressly set forth in this Agreement, and except to the
extent of a breach by Seller of applicable laws, but otherwise
notwithstanding any other provision of this Agreement to the contrary,
Purchaser, on behalf of itself and its successors and assigns, waives its
right to recover from, and forever releases and discharges, Seller, Seller's
affiliates, Seller's investment manager, the partners, trustees,
shareholders, directors, officers, employees and agents of each of them, and
their respective heirs, successors, personal representatives and assigns
(collectively, the "Seller Related Parties"), from any and all demands,
claims, legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
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without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, which may arise on account of or in
any way be connected with the physical condition of the Property or any law
or regulation applicable thereto, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Sections 9601 et seq.), the Resources Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act
(33 U.S.C. Section 466 et seq.), the Safe Drinking Water Act (14 U.S.C.
Sections 1401-1450), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), and the Toxic Substance Control Act (15 U.S.C.
Sections 2601-2629)
9.17 Confidential Information. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to consultants, investors, advisors, and affiliates, or as
required by law. No party will make any public disclosure of the specific
terms of this Agreement, except as required by law. Without limiting the
generality of the foregoing, any press release or other public disclosure
regarding this Agreement or the transactions contemplated herein, and the
wording of same, must be approved in advance by both parties. In connection
with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, each party acknowledges
that it will have access to confidential information relating to the other
party. Each party shall treat such information as confidential, preserve the
confidentiality thereof, and not duplicate or use such information, except to
advisors, consultants, investors and affiliates in connection with the
transactions contemplated hereby. In the event of the termination of this
Agreement for any reason whatsoever, Purchaser will return to Seller, at
Seller's request, all documents, work papers, and other material (including
all copies thereof) obtained from Seller in connection with the transactions
contemplated hereby, and each party shall use its best efforts, including
instructing its employees and others who have had access to such information,
to keep confidential and not to use any such information. The provisions of
this Paragraph 9.17 will survive the Closing or, if the purchase and sale is
not consummated, any termination of this Agreement.
9.18 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event,
after which the designated period of time begins to run, is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday, in which event the
period shall run until the end of the next day which is neither a Saturday,
Sunday, or legal holiday (i.e., a day on which federally chartered banks are
not open for business in Chicago, Illinois). The last day of any period of
time described herein shall be deemed to end at 5 p.m. Chicago, Illinois time
on the last day of such period of time. All days other than Saturdays,
Sundays and legal holidays in which national banks are closed in Chicago,
Illinois are business days hereunder.
9.19 Entire Agreement. This Agreement and any other document to be
furnished pursuant to the provisions hereof embody the entire agreement and
understanding of the parties hereto as to the subject matter contained
herein. There are no restrictions, promises,
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representations, warranties, covenants, or undertakings other than those
expressly set forth or referred to in such documents. This Agreement and
such documents supersede all prior agreements and understandings among the
parties with respect to the subject matter hereof
9.20 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement.
9.21 Facsimile Signatures. Executed facsimile copies of this
Agreement or any amendments hereto shall be binding upon the parties, and
facsimile signatures appearing hereon or on any amendments hereto shall be
deemed to be original signatures.
9.22 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by Seller
to Purchaser at Closing, Seller agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or
after the Closing any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the conveyance, transfer and assignment of the Property to Purchaser.
9.23 Offer. Execution and delivery of this Agreement by Purchaser
constitutes an offer to purchase the Property on the terms contained herein.
Delivery by Seller of a copy of the fully executed Agreement by facsimile
transmission on or before the Expiration Date, followed by a manually signed
copy thereof delivered the next business day after transmission of such copy,
shall constitute acceptance by Seller as of the date of the facsimile
transmission. The date on which Seller delivers a fully executed copy of this
Agreement to Purchaser, or delivers a copy by facsimile transmission followed
by a manually signed copy as provided in the preceding sentence is referred
to herein as the "Effective Date."
9.24 Seller Exculpation Clause. The obligations of Seller
contained herein are intended to be binding only on the property of the trust
party to this Agreement of Purchase and Sale and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the trustees, investment managers, any general partners thereof, or any
employees or agents of the trustees or investment managers. All documents to
be executed by Seller shall also contain the foregoing exculpation.
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9.25 Purchaser Exculpation Clause. No recourse shall be had for
any obligation of Brandywine Operating Partnership, L.P. and Brandywine
Realty Trust under this Agreement or under any document executed in
connection herewith or pursuant hereto, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of Brandywine Operating Partnership, L.P. or
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 the Seller and all parties
claiming by, through or under Seller.
9.26 SEC Reporting (8-K) Requirements. For the period of time
commencing on the date hereof and continuing through the first anniversary of
the Closing Date, and without limitation of other document production
otherwise required of Seller hereunder, Seller shall, from time to time, upon
reasonable advance written notice from Purchaser, provide Purchaser and its
representatives, with (a) access to all financial information pertaining to
the period of Seller's ownership and operation of the Property, which
information is relevant and reasonably necessary, in the opinion of
Purchaser's outside, third party accountants (the "Accountants"), to enable
Purchaser and its Accountants to prepare financial statements in compliance
with any or all of (i) Rule 3-05 or 3-15 of Regulation S-X of the Securities
and Exchange Commission (the "Commission"), as applicable; (ii) any other
rule issued by the Commission and applicable to Purchaser; and (iii) any
registration statement, report or disclosure statement filed with the
Commission, by, or on behalf of Purchaser; and (b) a representation letter,
signed by the
21
<PAGE>
individual(s) responsible for Seller's financial reporting, substantially in
the form of Schedule 9.26 attached hereto, which representation letter may be
required by the Accountants in order to render an opinion concerning Seller's
financial statements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER: PURCHASER:
RREEF MIDAMERICA/EAST FUND-IV BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: RREEF America L.L.C., its By: Brandywine Realty Trust,
investment advisor its authorized general
partner
By:________________________________ By:____________________________
Authorized Representative Gerard H. Sweeney
President and Chief
Dated: ____________________________ Executive Officer
Dated:_________________________
22
<PAGE>
List of Schedules and Exhibits
Schedules
2.1 Escrow Instructions
5.1 Disclosure Schedule
5.1.5 Service Contracts
5.1.10 Rent Roll
5.1.12 Future Leasing Commissions, Tenant Improvements and
Free Rent
6.2 Form of Estoppel Letter
8.6.1 Form of Deed
8.6.2 FIRPTA Certificate
8.6.4 Assignment and Assumption of Leases
8.6.5 Assignment and Assumption of Contracts and Warranties
8.6.6 Assignment of Intangibles
8.6.8 Bill of Sale
8.6.10 Bring-Down Certificate
9.26 SEC Compliance Representation Letter
Exhibits
A Legal Description of Property
A-1 Descriptive List of the Property
23
<PAGE>
Schedule 2.1
EARNEST MONEY ESCROW INSTRUCTIONS
(earnest money escrow instructions previously executed)
<PAGE>
Schedule 5.1
DISCLOSURE SCHEDULE
A 1996 Environmental Audits was prepared by ATC Environmental, Inc.
for the Property. This Audit has been made available to Purchaser for
inspection and copying, and, each of the Seller warranties of Section 5.1.8
and its subparagraphs are qualified and limited by any matters disclosed in
such Audit.
<PAGE>
Schedule 5.1.5
Service Contracts
A.T. BUILDERS
BFI
BERWYN GLASS
BOYLE ELECTRICAL CONTRACTORS
BURHANS GLASS COMPANY, INC.
CONTROLLED ENVIRONMENTS
CROWN CONTRACTORS, INC.
JOSEPH W. DAVIS, INC.
DIROCCO BROTHERS COMPANY
DURASEAL, INC.
ELDREDGE
FIDELITY ALARM COMPANY
GALLAGHER EXCAVATING, INC. (GEI)
GUARDIAN ALARM SYSTEMS
HONEYWELL
MOON LANDSCAPING
OLIVER SPRINKLER
PENNTEX CONSTRUCTION COMPANY
PHOENIX MECHANICAL, INC.
RHETT HAMILTON JONES ASSOCIATES
SANTANGELO HAULING CO.
SECURITY ELEVATOR COMPANY
SYSTEMATIC ROOFING ANALYSIS
TELEPHONE DIAGNOSTIC SERVICES, INC.
TERMINIX INTERNATIONAL CO.
VECTORDYNE
DAVID WHITE PLUMBING
<PAGE>
Schedule 5.1.10
Rent Roll
<PAGE>
Schedule 5.1.12
Future Leasing Commissions, Tenant Improvements and Free Rent
1. If Tozour Trane, the tenant of 741 First Avenue, does not exercise certain
termination options, commissions may become due to The Flynn Company in the
amounts of $20,260.50 and $16,109.00 on May 1, 2000 and May 1, 2003,
respectively.
<PAGE>
Schedule 6.2
TENANT ESTOPPEL LETTER
__________ __, 1998
Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Newtown Square, PA 19073
Attention: Gerard H. Sweeney,
President and Chief Executive Officer
NationsBank, N.A.,
Real Estate Banking
8300 Greensboro Drive, Suite 300
McLean, VA 22102
Attention: Gary P.F. Carr
Re: Lease from ________, for Suite ____, located
at [BUILDING ADDRESS]
[CITY/TOWNSHIP], Pennsylvania (the
"Property")
To Whom it May Concern:
The undersigned is the holder of the tenant's interest under the lease
described on Exhibit A attached hereto (the "Lease") demising a portion of
the Property (the "Leased Premises"). We understand that Brandywine Realty
Trust, its assignee or nominee ("Brandywine") intends to acquire the
Property, and that NationsBank, N.A., as Agent for the parties listed on
Schedule 1 attached hereto ("Lender") may be the holder of a first mortgage
on the Property, and that Brandywine and Lender require this certification
from us.
Accordingly, we hereby certify to Brandywine and Lender as follows:
1. The Lease is in full force and effect and has not been modified,
amended or supplemented in any way, except as follows (Insert dates of all
modifications, amendments, or supplements; if none, write "None"):____________
______________________________________________________________________________.
<PAGE>
2. There are no other representations, warranties, agreements,
concessions, commitments, or other understandings between the undersigned and
the Landlord regarding the Property other than as set forth in the Lease or
paragraph 1 above.
3. The landlord under the Lease has completed and delivered, and the
undersigned has accepted, the Leased Premises in the condition required by the
Lease and the term of the Lease commenced on _________. The Leased Premises
consists of approximately ___________ square feet. The undersigned has taken
possession of and is occupying the Leased Premises on a rent-paying basis and
the monthly base rent payable thereunder is $_________, payable in advance. All
improvements and work required under the Lease to be made by the landlord
thereunder and all facilities required under the Lease to be furnished to the
Leased Premises have been completed to the satisfaction of the undersigned,
except as follows (Insert description of any improvements and work to be
completed by the landlord under the Lease; if none, write "None"):
_____________________________.
4. The fixed expiration date set forth in the Lease, excluding renewals
and extensions, is ________________. The undersigned neither has any option or
right to purchase the Property or any portion thereof nor does the undersigned
have any right or option to terminate the Lease or any of its obligations
thereunder in advance of the scheduled termination date of the Lease as noted
above, except as follows (Insert description of any purchase rights or options,
and/or any early termination rights; if none, write "None"):
_______________________________.
5. All rents, additional rents and other sums due and payable under the
Lease have been paid in full and no rents, additional rents or other sums
payable under the Lease have been paid for more than one (1) month in advance
of the due dates thereof.
6. The landlord under the Lease is not in default under any of the
requirements, provisions, terms, conditions or covenants of the Lease to be
performed or complied with by the landlord under the Lease, and no event has
occurred or situation exists which would, with the passage of time and/or the
giving of notice, constitute a default or an event of default by the landlord
under the Lease.
7. The undersigned is not in default under any of the requirements,
provisions, terms, conditions, or covenants of the Lease to be performed or
complied with by the undersigned, and no event has occurred or situation
exists which would, with the passage of time and/or the giving of notice,
constitute a default or an event of default by the undersigned under the
Lease.
2
<PAGE>
8. The undersigned has received no notice from any governmental
authority or other person or party claiming a violation of, or requiring
compliance with, any Federal, State or local statute, ordinance, rule,
regulation or other requirement of law, for environmental contamination at
the Leased Premises, to the best knowledge of the undersigned no hazardous,
toxic or polluting substances or wastes have been generated, treated,
manufactured, stored, refined, used, handled, transported, released, spilled,
disposed of or deposited by Tenant on, in or under the Leased Premises.
9. Neither the undersigned nor the landlord under the Lease has commenced
any action or given or received any notice for the purpose of terminating the
Lease.
10. There are no existing defenses, offsets, claims, or credits against
the payment of rent or the performance of the undersigned's obligations under
the Lease.
11. The undersigned has paid to the landlord under the Lease a security
deposit of $____________.
Very truly yours,
By:
---------------------------------
Name:
Title:
3
<PAGE>
Exhibit A
(Description of Lease)
4
<PAGE>
Schedule 8.6.1
Form of Deed
SPECIAL WARRANTY DEED:
THIS INDENTURE made this ____ day of ____________, 1998,
BETWEEN RREEF MIDAMERICA/EAST FUND-IV, A CALIFORNIA GROUP TRUST
(hereinafter called the Grantor/s), of the one part and
_____________________
(hereinafter called the Grantee/s), of the second part,
WITNESSETH That in consideration of Ten and No/100 Dollars ($10.00) in hand
paid, the receipt whereof is hereby acknowledged, the said Grantor/s do/does
hereby grant, bargain, sell and convey unto the said Grantee/s, his/her/their
successors and /or assigns,
ALL THAT CERTAIN real estate, situated in the County of Montgomery and
Commonwealth of Pennsylvania known and described on the attached Exhibit A
"Legal Description," attached hereto an hereby made a part hereof.
TOGETHER with all and singular the buildings, improvements, ways, streets,
alleys, driveways, passages, waters, water-courses, rights, liberties,
privileges, hereditaments and appurtenances whatsoever unto the hereby granted
premises belonging, or in anywise appertaining, and the reversions and
remainders, rents, issues and profits thereof; and all the estate, right, title,
interest, use, trust, property, possession, claim and demand whatsoever of
Grantor as well at law as in equity, of, in, and to the same.
TO HAVE AND TO HOLD the said lot or piece of ground described with the buildings
and improvements thereon erected, hereditaments and premises hereby granted, or
mentioned and intended so to be, with the appurtenances unto the said Grantee,
and its successors and assigns to and for the only proper use and behoof of the
said Grantee, and its successors and assigns, forever.
AND the said Grantor/s do/does hereby covenant to and with the said Grantee/s
that he/she/they, the said Grantor/s, his/her/their successors and/or assigns,
SHALL AND WILL warrant specially and forever defend the herein above described
premises, with the hereditaments and appurtenances, unto the said Grantor/s and
against every other person lawfully claiming or who shall hereafter claim the
same or any part thereof, by, from and under his/her/their successors and/or
assigns or any of them, subject to validly and legally existing encumbrances of
record.
IN WITNESS WHEREOF, the said Grantor/s has/have caused these presents to be duly
executed, the day and year first above written.
<PAGE>
ATTEST: RREEF MIDAMERICA/EAST FUND-IV,
a California group trust
By:___________________________ By: RREEF America L.L.C., a
Delaware limited liability company,
its investment advisor
By:_______________________
Authorized Representative
[Add Pennsylvania address certification]
2
<PAGE>
STATE OF _____________________)
) SS.
COUNTY OF ____________________)
I,_______________________________________________, a notary public in and
for said County, in the State aforesaid, DO HEREBY CERTIFY that ______________
__________________ and ___________________________, personally known to me to be
the ______________________ and ______________ of RREEF MIDAMERICA/EAST FUND-IV,
a California group trust, and personally known to me to be the same persons
whose names are subscribed to the foregoing instrument, appeared before me this
day in person and acknowledged that as such __________________________ and
_________________, they signed and delivered the said instrument as their free
and voluntary act, and as the free and voluntary act and deed of said trust,
for the uses and purposes therein set forth.
GIVEN under my hand and official seal this ____ day of _________________,
1998.
----------------------------------
Notary Public
Commission expires
------------------------------------------------------------
3
<PAGE>
EXHIBIT A
Legal Description
<PAGE>
Schedule 8.6.2
FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee that withholding of tax is not required upon
the disposition of a U.S. real property interest by __________________________
__________________________________________, a _______________________ ("Seller")
hereby certifies the following:
1. Seller is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);
2. Seller's U.S. employer identification number is 94-6566801; and
3. Seller's principal place of business is 101 California Street, 26th
floor, San Francisco, CA 94111-5853
Seller understands that this certification may be disclosed to the
Internal Revenue Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Seller.
________________________________________
________________________________________
By: ____________________________________
Authorized Representative
Subscribed and sworn to
before me this ____ day of
______, 1998.
______________________________
Notary Public
<PAGE>
Schedule 8.6.4
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (the "Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined), is between _________________________________________,
a Delaware corporation, ("Assignor") and ________________, a _______________
("Assignee").
A. Assignor is the lessor under certain leases executed with respect
to that certain real property and improvements thereon known as
____________________, _______________________, and more particularly
described in Exhibit "A" attached hereto (the "Property"), which leases are
described in Exhibit B attached hereto (the "Leases").
B. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase the Property from Assignor and
Assignor agreed to sell the Property to Assignee, on the terms and conditions
contained therein.
C. Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof, on the terms
and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee pursuant
to the Agreement (the "Conveyance Date") [SHOULD BE THE DAY FOLLOWING CLOSING],
Assignor hereby assigns to Assignee all of its right, title, and interest in and
to the Leases except rents and other sums due Assignor first accruing on or
prior to the Conveyance Date, and, effective as of the day following the
Conveyance Date, Assignee hereby accepts such assignment.
2. Assignor hereby assumes full responsibility for all obligations and
defaults of landlord under the Leases accruing prior to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable attorneys'
fees) arising from Assignor's failure to perform said obligations, provided that
Assignee makes a claim hereunder on or before one (1) year following the
Conveyance Date.
3. Assignee hereby assumes full responsibility for all obligations of
landlord under the Leases accruing after the Conveyance Date and Assignee hereby
agrees to defend, indemnify and hold Assignor harmless from any claims,
liabilities or costs (including reasonable attorneys' fees) arising from
Assignee's failure to perform said obligations. Without limiting the generality
<PAGE>
of the foregoing, Assignee assumes full responsibility for the free rent, unpaid
tenant improvement allowances and leasing commissions under the Leases as listed
on Exhibit C.
4. This Assignment shall be governed by the laws of the Commonwealth of
Pennsylvania.
5. This Assignment may be executed in counterparts.
6. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally binding
upon, nor shall any resort be had to the private properties of, any of the
investment managers of Assignor, or any general partners thereof, or any
employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and
Assumption of Leases.
ASSIGNOR: ASSIGNEE:
_______________________________ _______________________________
_______________________________ _______________________________
By:____________________________ By:____________________________
Authorized Representative
Title:_________________________
Dated:_________________________ Dated:_________________________
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Existing Leases
(rent roll to be attached)
4
<PAGE>
EXHIBIT C
Free Rent, Tenant Improvement Allowances and Leasing Commissions
5
<PAGE>
Schedule 8.6.5
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES (the
"Assignment") dated as the dates of execution set forth below, but effective as
of the Conveyance Date (as herein defined), is between
_____________________________ ___________________________________, ("Assignor")
and ________________, a ___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a condition
precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee pursuant
to the Agreement (the "Conveyance Date")[SHOULD BE THE DAY FOLLOWING CLOSING],
Assignor hereby assigns to Assignee all of its right, title, and interest in and
to the following:
2. Assignor hereby grants, transfers and assigns to Assignee all the
right, title and interest of Assignor in and to the following:
(a) All contracts listed on Exhibit B attached hereto.
(b) All presently effective and assignable warranties, guaranties,
representations or covenants given to or made in favor of Assignor or Assignor's
affiliates in connection with the acquisition, development, construction,
maintenance, repair, renovation or inspection of the Property.
The foregoing are collectively referred to herein as the "Contracts."
3. Assignor hereby assumes full responsibility for all obligations and
defaults of Assignor under the Contracts accruing to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable attorneys'
fees) arising from Assignor's failure to perform said obligations, provided that
Assignee makes a claim hereunder on or before one (1) year following the
Conveyance Date.
<PAGE>
4. Assignee hereby assumes full responsibility for all obligations of
owner of the Property under the Contracts accruing after the Conveyance Date
and Assignee hereby agrees to defend, indemnify and hold Assignor harmless
from any claims, liabilities or costs (including reasonable attorneys' fees)
arising from Assignee's failure to perform said obligations.
5. This Assignment shall be governed by the laws of the Commonwealth of
Pennsylvania.
6. This Assignment may be executed in counterparts.
7. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally binding
upon, nor shall any resort be had to the private properties of, any of the
investment managers of Assignor, or any general partners thereof, or any
employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Contracts and Warranties.
ASSIGNOR: ASSIGNEE:
_______________________________ _______________________________
_______________________________ _______________________________
By:____________________________ By:____________________________
Authorized Representative
Title:_________________________
Dated:_________________________ Dated:_________________________
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Contracts
A.T. BUILDERS
BFI
BERWYN GLASS
BOYLE ELECTRICAL CONTRACTORS
BURHANS GLASS COMPANY, INC.
CONTROLLED ENVIRONMENTS
CROWN CONTRACTORS, INC.
JOSEPH W. DAVIS, INC.
DIROCCO BROTHERS COMPANY
DURASEAL, INC.
ELDREDGE
FIDELITY ALARM COMPANY
GALLAGHER EXCAVATING, INC. (GEI)
GUARDIAN ALARM SYSTEMS
HONEYWELL
MOON LANDSCAPING
OLIVER SPRINKLER
PENNTEX CONSTRUCTION COMPANY
PHOENIX MECHANICAL, INC.
RHETT HAMILTON JONES ASSOCIATES
SANTANGELO HAULING CO.
SECURITY ELEVATOR COMPANY
SYSTEMATIC ROOFING ANALYSIS
TELEPHONE DIAGNOSTIC SERVICES, INC.
TERMINIX INTERNATIONAL CO.
VECTORDYNE
DAVID WHITE PLUMBING
4
<PAGE>
Schedule 8.6.6
ASSIGNMENT OF INTANGIBLES
THIS ASSIGNMENT AND ASSUMPTION OF INTANGIBLES ("Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined), is between ______________________________________,
("Assignor") and ________________, a ___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a condition
precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee pursuant
to the Agreement (the "Conveyance Date")[SHOULD BE THE DAY FOLLOWING CLOSING],
Assignor hereby assigns to Assignee all of its right, title, and interest in and
to the following:
(i) All licenses, permits, certificates of occupancy, approvals,
dedications, subdivision maps or plats and entitlements issued, approved or
granted by federal, state or municipal authorities or otherwise in
connection with the Property and its renovation, construction, use,
maintenance, repair, leasing and operation; and all licenses, consents,
easements, rights of way and approvals required from private parties to
make use of utilities, to insure pedestrian ingress and egress to the
Property and to insure continued use of any vaults under public rights-of-
way presently used in the operation of the Property.
(ii) any trade style or trade name used in connection with the
Property; and,
(iii) all correspondence with the tenants under tenant leases, all
booklets and manuals relating to the maintenance and operation of the
Property.
The foregoing are collectively referred to herein as the "Intangibles".
2. Assignor agrees to assume full responsibility for its obligations
under the Intangibles accruing on or prior to the Conveyance Date and Assignor
agrees to defend, indemnify and hold Assignee harmless from any claims,
liabilities or costs arising from
<PAGE>
Assignor's failure to perform said obligations, provided that Assignee makes
a claim hereunder on or before one (1) year following the Conveyance Date.
3. Assignee assumes full responsibility for all obligations of the owner
of the property accruing under the Intangibles from the day after the Conveyance
Date and Assignee agrees to defend, indemnify and hold Assignor and its
predecessors in title harmless from all claims, liabilities or costs arising
from Assignee's failure to perform said obligations.
4. This instrument may be executed in counterparts.
5. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally binding
upon, nor shall any resort be had to the private properties of, any of the
investment managers of Assignor, or any general partners thereof, or any
employees or agents of the investment managers
IN WITNESS WHEREOF, the parties have executed this Assignment of
Intangibles.
ASSIGNOR: ASSIGNEE:
_______________________ ______________________________
_____________________________, ______________________________
By: By:
Authorized Representative
Title:
Dated: Dated:
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
Schedule 8.6.8
BILL OF SALE
________________________________________________________________________
("Seller"), in consideration of Ten and No/100 Dollars and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby sells, transfers, assigns and sets over unto
__________________ ("Purchaser"), all of its right, title and interest in and
to any and all personal property, which personal property is owned by Seller
and located on the real estate legally described on Exhibit A attached hereto
(the "Personal Property"), including, but not limited to, the Personal
Property listed on Exhibit B.
Seller hereby represents and warrants to Purchaser that Seller is the
absolute owner of the Personal Property free and clear of all liens, charges and
encumbrances, and that Seller has full right, power and authority to sell the
Personal Property and to make this Bill of Sale. All warranties of quality,
fitness and merchantability are hereby excluded.
The obligations of Seller contained herein are intended to be binding only
on the property of the Seller and shall not be personally binding upon, nor
shall any resort be had to the private properties of, any of the investment
managers of Seller, or any general partners thereof, or any employees or agents
of the investment managers
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the ___ day
of _______, 1998, but effective on the date on which the Property is conveyed by
Seller to Purchaser.
______________________________
______________________________
By:___________________________
Authorized Representative
<PAGE>
STATE OF _________ )
) SS
COUNTY OF ________ )
The undersigned, a Notary Public in and for said County in the State
aforesaid, DOES HEREBY CERTIFY that ________________, authorized representative
of _________________________________________________________________, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such authorized representative, appeared before me this
day in person and acknowledged that __he, being duly authorized, signed, sealed
and delivered the said instrument as h___ free and voluntary act, and as the
free and voluntary acts of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and Notarial Seal this _____ day of
______________, 1998.
_______________________
Notary Public
My Commission Expires:
____________________, 19___
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Personal Property
(none)
<PAGE>
Schedule 8.6.10
SELLER'S CLOSING CERTIFICATE
THIS CLOSING CERTIFICATE is made as of the ___ day of ________________,
1998, by and between ______________________________________________________
("Seller"), to and in favor of ____________________________________________,
a __________ ("Purchaser"), under and pursuant to that certain Agreement of
Purchase and Sale by and between Seller and __________, with an Effective
Date as defined therein (the "Agreement"), for the purchase and sale of that
certain Property situated in the _________, _______ County, ____________ (as
defined in the Agreement).
Pursuant to Paragraphs 5.3 and 8.6.10 of the Agreement and except as
disclosed on Exhibit A attached hereto and made a part hereof, Seller hereby
reconfirms, remakes and rewarrants to Purchaser as of the date hereof each of
the representations, warranties and covenants given by Seller contained in
Paragraph 5.1 of the Agreement in the same manner as such representations,
warranties and covenants were given in the Agreement, each of which is
incorporated herein and made a part hereof by this reference. Except as
modified hereby, Seller hereby confirms that each of said representations,
warranties and covenants are true and accurate in all material respect as of the
date hereof. Seller's reconfirming, remaking and rewarranting of its
representations, warranties and covenants is subject to the limitations set
forth in Paragraph 5.3 of the Agreement.
The obligations of Seller contained herein are intended to be binding only
on the property of the Seller and shall not be personally binding upon, nor
shall any resort be had to the private properties of, any of the investment
managers of Seller, or any general partners thereof, or any employees or agents
of the investment managers
IN WITNESS WHEREOF, Seller has executed this Closing Certificate on the day
and year first above written, but effective upon the date on which the Property
is conveyed by Seller to Purchaser.
SELLER:
_____________________________
_____________________________
By: _____________________________
Authorized Signatory
<PAGE>
EXHIBIT A
Disclosure
<PAGE>
Schedule 9.7.2
New Lease Approval Form
Property: ___________________________________________________________________
Tenant: _____________________________________________________________________
Square Feet: ________________________________________________________________
Location: ___________________________
Anticipated Lease Commencement: _____________________________________________
Anticipated Rent Commencement: ______________________________________________
Term: _______________________________________________________________________
FREE RENT: __________________________________________________________________
Rental Rate: Period PSF Rate Annual Income
________________ ________________ ________________
________________ ________________ ________________
________________ ________________ ________________
Note: Above rental rates do not include Tenant Electric
Tenant Improvement Allowance: PSF ______________ Amount ___________________ T.I.
Mechanism: ___________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
OPTIONS: ________________ ________________ ________________
________________ ________________ ________________
________________ ________________ ________________
Initial Commission:
BROKER % Amount
__________________ _______________ _________________________________________
__________________ _______________ _________________________________________
Broker Future Entitlements: __________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Other Comments: ______________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Approved By: ________________
<PAGE>
Schedule 9.26
SEC COMPLIANCE REPRESENTATION LETTER
(Accountant Name & Address)
Dear Sirs:
In connection with your audit of the statement of revenues and certain
expenses of the Property situated in the City of King of Prussia, Montgomery
County, Pennsylvania, commonly known as 741 First Avenue (the "Property") for
the year ended December 31, 199__ (the "Operating Statement"), prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission, the undersigned ("Seller") makes the following limited,
qualified and specific representations, which are true to Seller's knowledge (as
such phrase is hereinafter defined):
1. Seller has made available or caused its property manager to make
available to Brandywine Operating Partnership, L.P. ("Buyer"), or its
representatives, Seller's financial records and files in Seller's
actual possession pertaining to the operation of the Property (such
records and files being collectively referred to herein as the
"Files").
2. Except as disclosed in the Files, Seller is not aware of any events or
transactions which have occurred since December 31, 199_ and prior to
the date hereof that would have a material effect on the Operating
Statement for the period then ended.
3. We recognize that, as the Owner of the Property, we are responsible
for directing the fair presentation of the Operating Statement. We
believe the Operating Statement is fairly presented in conformity with
generally accepted accounting principals.
As used in this letter, the words "Seller's knowledge" shall be deemed to
mean, and shall be limited to, the actual (as distinguished from implied,
imputed or constructive) knowledge of Joseph S. Cappelletti and Barbara
Gillentine without such person having any obligation to make an independent
inquiry or investigation.
Notwithstanding any provision in this letter to the contrary, Seller is
executing this letter solely as an accommodation to and at the request of Buyer
and, except to the extent Seller is liable to Buyer for representations and
warranties expressly set forth in that certain Agreement of Purchase and Sale,
dated _________ 1998, by and between Seller and Buyer (the "Sale Agreement"),
this letter is subject to the condition that Seller shall not be liable or
responsible to Buyer, any parent, subsidiary or other affiliate of Buyer, or any
officer, director, employee, agent, representative, shareholder, partner or
principal of Buyer or any such parent, subsidiary or other affiliate thereof or
any accountant or other professionals engaged by or on behalf of any of the
foregoing, including, without limitation, [accountant] (all of the foregoing
being collectively referred to herein as the "Buyer Parties"), as a result of
the fact that any of the statements made herein are in any way inaccurate,
untrue or incorrect. By the acceptance of this letter, except for rights and
remedies that Buyer may have under the Sale Agreement with respect to
representations and warranties expressly set forth in the Sale Agreement, each
of the Buyer Parties shall be deemed to have waived any and all rights and
remedies that any of them may have against Seller, whether at law or in equity,
as a result of the fact that any of the statements made herein are in any way
inaccurate, untrue or incorrect.
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<PAGE>
Seller has executed this letter for the limited purposes set forth herein,
and for the use of [accountant] only. No other parties may rely on the
statements set forth herein.
Very truly yours,
RREEF MIDAMERICA/EAST FUND-IV,
a California group trust
By: RREEF America L.L.C.,
a Delaware limited liability company
By:_______________________________
Name: Joseph S. Cappelletti
Title: Its Authorized Representative
By: __________________________________
Name: Barbara J. Gillentine
Title: Its Authorized Representative
5
<PAGE>
EXHIBIT A
Legal Description of Property
<PAGE>
Exhibit 10.3
AGREEMENT OF PURCHASE AND SALE
between
Brandywine Operating Partnership, L.P., Purchaser,
and
RREEF MidAmerica East-V Six, Inc., Seller
180 Wheeler Court, Bucks County, Pennsylvania
<PAGE>
Table of Contents
1. Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. Review of the Property.. . . . . . . . . . . . . . . . . . . . . . .2
4. Title and Survey.. . . . . . . . . . . . . . . . . . . . . . . . . .3
5. Representations and Warranties.. . . . . . . . . . . . . . . . . . .4
5.1 Representations and Warranties of Seller.. . . . . . . . .4
5.2 Representations and Warranties of Purchaser. . . . . . . .7
5.3 Limitations. . . . . . . . . . . . . . . . . . . . . . .7
5.4 Condition of Property. . . . . . . . . . . . . . . . . . .8
6. Closing Conditions.. . . . . . . . . . . . . . . . . . . . . . . . .8
6.1 Title Insurance. . . . . . . . . . . . . . . . . . . . . .8
6.2 Estoppel Letters . . . . . . . . . . . . . . . . . . . . .8
6.3 Representations and Warranties . . . . . . . . . . . . . .9
6.4 Seller Performance . . . . . . . . . . . . . . . . . . . .9
7. Other Agreements.. . . . . . . . . . . . . . . . . . . . . . . . . .9
8. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Closing of Sale. . . . . . . . . . . . . . . . . . . . . 10
8.2 Prorations; Adjustments. . . . . . . . . . . . . . . . . 10
8.3 Proration of Service Charges.. . . . . . . . . . . . . . 11
8.4 Closing Costs. . . . . . . . . . . . . . . . . . . . . . 12
8.5 Possession.. . . . . . . . . . . . . . . . . . . . . . . 12
8.6 Seller's Closing Documents.. . . . . . . . . . . . . . . 12
8.7 Purchaser's Closing Documents. . . . . . . . . . . . . . 13
8.8 Joint Deliveries.. . . . . . . . . . . . . . . . . . . . 14
9. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.1 Modifications. . . . . . . . . . . . . . . . . . . . . . 14
9.2 Casualty and Condemnation. . . . . . . . . . . . . . . . 14
9.3 Time of Essence. . . . . . . . . . . . . . . . . . . . . 14
9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 14
9.5 Parties Bound. . . . . . . . . . . . . . . . . . . . . . 16
9.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . 16
i
<PAGE>
9.7 Continuation Until Closing; Leasing. . . . . . . . . . . 16
9.8 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 16
9.9 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . 17
9.10 Remedies for Non-Performance.. . . . . . . . . . . . . . 17
9.11 Brokers Commission.. . . . . . . . . . . . . . . . . . . 17
9.12 Survival of Covenants. . . . . . . . . . . . . . . . . . 17
9.13 Seller's Investment Committee Approval.. . . . . . . . . 17
9.14 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.15 Entry and Indemnity. . . . . . . . . . . . . . . . . . . 18
9.16 Release. . . . . . . . . . . . . . . . . . . . . . . . . 18
9.17 Confidential Information. . . . . . . . . . . . . . . . 19
9.18 Calculation of Time Periods. . . . . . . . . . . . . . . 19
9.19 Entire Agreement.. . . . . . . . . . . . . . . . . . . . 19
9.20 Severability.. . . . . . . . . . . . . . . . . . . . . . 20
9.21 Facsimile Signatures.. . . . . . . . . . . . . . . . . . 20
9.22 Further Assurances.. . . . . . . . . . . . . . . . . . . 20
9.23 Offer. . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.24 Seller Exculpation Clause. . . . . . . . . . . . . . . . 20
9.25 Purchaser Exculpation Clause.. . . . . . . . . . . . . . 21
9.26 SEC Reporting (8-K) Requirements.. . . . . . . . . . . . 21
List of Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . 23
ii
<PAGE>
AGREEMENT OF PURCHASE AND SALE
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
("Purchaser") agrees to purchase, and RREEF MIDAMERICA EAST-V SIX, INC., a
Delaware Corporation ("Seller") agrees to sell, that certain improved real
property, hereinafter referred to as the "Property", situated in Bucks
County, Commonwealth of Pennsylvania, legally described on Exhibit A attached
hereto and made a part hereof, consisting of a single parcel of real estate
improved with a building commonly known as 180 Wheeler Court, Bucks County,
Pennsylvania, together with all rights, privileges, easements and
appurtenances thereto, including any and all mineral rights, development
rights, air rights, and the like; all personal property owned by the Seller
and located on or used in conjunction with the Property (specifically
excluding furniture, fixtures and equipment owned by RREEF Management Company
and located in the RREEF Management Company office); any and all intangible
personal property owned by Seller and used in the operation of the Property,
including the right to use the name of the property (but not the name
"RREEF"), to the extent assignable, but excluding computer software and
related licenses; contract rights, "Leases" of all or any part of the
Property, all licenses, permits and other written authorizations necessary
for the use, operation and ownership of the Property, records, security
deposits and prepaid rent, if any, and the benefit of any guaranties of the
Leases.
1. Purchase Price. The purchase price for the Property ("Purchase
Price") is Two Million Eight Hundred Thousand Dollars ($2,800,000.00), payable
by wire transfer of immediately available funds at Closing as defined in
Paragraph 8.1.
2. Deposit.
2.1 Purchaser has previously deposited, pursuant to this Agreement
and pursuant to the Other Agreements (defined in Paragraph 7 below) the
amount of Five Hundred Fifty Thousand Dollars ($550,000.00) (the "Deposit")
with Commonwealth Land Title Insurance Company ("Escrow Holder") as earnest
money to secure Purchaser's performance hereunder and under the Other
Agreements. The Deposit may be invested at the direction of Purchaser with
the approval of Seller. All investment income earned from the investment of
the Deposit, less investment fees, if any, will be added to and become a part
of the Deposit and will be applied toward the Purchase Price under the KOP
Agreement (defined in Paragraph 7) if Closing is completed in accordance with
this Agreement; otherwise all interest will be paid to the party entitled to
the Deposit. The escrow instructions to Escrow Holder will be in the form of
Schedule 2.1 attached hereto (the "Escrow Instructions"). If Purchaser does
not elect to terminate this Agreement pursuant to Section 3 below, prior to
the end of the Review Period (defined in Section 3.4), on or before one
business day after last day of the Review Period Purchaser shall deposit an
additional $500,000 with Escrow Holder, which shall be added to and become a
part of the Deposit for all purposes hereunder.
<PAGE>
2.2 Of the total Deposit, the sum of $150,000 is agreed to be
non-refundable, and shall be refunded to Purchaser only (i) if Purchaser
terminates this Agreement under Section 3.4, under the circumstances set forth
in Section 3.4.1, or (ii) if the Agreement is terminated or if the Closing fails
to occur by reason of Seller's default. Under all other circumstances, wherever
under this Agreement and the Other Agreements the Deposit is to be returned to
Purchaser, $150,000 out of the Deposit shall be paid to Seller, to be retained
by Seller as fully earned.
3. Review of the Property.
3.1 From and after the "Effective Date" (as defined in Paragraph
9.23), Seller agrees to provide Purchaser and its agents or consultants with
access to the Property to inspect each and every part thereof to determine its
present condition and to conduct such physical and environmental studies
(including a mechanical and roof study and Phase I environmental assessment) as
it deems appropriate.
3.2 Within three (3) business days after the Effective Date Seller
will make available to Purchaser for inspection and copying, all to the
extent in the possession of Seller or its managing agent, a copy of each
existing Lease and equipment lease, service contract and maintenance or other
contract pertaining to the operations of the Property that will survive
Closing, a copy of each real estate tax bills for 1994-1996, both inclusive,
and unaudited financial statements for the Property for the years 1994-1996,
both inclusive.
3.3 Within three (3) business days after the Effective Date Seller
will make available to Purchaser for inspection and copying at the office of
Seller's managing agent, all to the extent in the possession of Seller or its
managing agent:
3.3.1 a copy of each environmental reports relating to the
Property prepared by third party consultants since January 1, 1995.
3.3.2 a copy of each current franchises, business or other
licenses, bonds, permits, certificates, authorizations and other evidences of
consent, approval, authorization or permission relating to or affecting the
Project of or from any person, including any governmental authority, held by
Seller, including any pending applications.
3.3.3 a copy of each material third party warranties and
guaranties, if any, which are in effect with respect to the Property.
3.4 Purchaser has until 5:00 p.m. CST on February 2, 1998 (the
"Review Period"), to determine in its sole discretion whether all matters
relating to the Property (except title and survey, which are governed by
Paragraph 4), are acceptable, and to obtain the approval of the transaction
contemplated herein by Seller's Board of Directors. If Purchaser concludes that
any matter relating to the Property is not acceptable or that its Board has
disapproved the
2
<PAGE>
transaction, Purchaser will so notify Seller (the "Termination Notice") prior to
the expiration of the Review Period (which notice shall contain a copy of
Purchaser's roof/structural report and other reports or studies, other than
environmental reports, obtained in connection with Purchaser's due diligence).
Upon timely delivery of the Termination Notice, this Agreement will terminate
without liability on the part of Seller or Purchaser, other than Purchaser's
indemnity contained in Paragraph 9.15 hereof and the obligation to deliver to
Seller a copy of any environmental report obtained by Purchaser if requested by
Seller within ten (10) days after receipt of the Termination Notice. In the
event that Purchaser does not timely so notify Seller, Purchaser will be deemed
to have concluded that all matters relating to the Property are acceptable and
to have elected to proceed with the transaction upon the terms and conditions
contained in this Agreement (including the obligation to increase the amount of
the Deposit by an additional $500,000) without regard to this Paragraph 3.4.
3.4.1 If this Agreement is terminated pursuant to Paragraph
3.4, the Deposit, less $150,000, will be returned to Purchaser as provided in
the Escrow Instructions. This $150,000 shall be paid to Seller, unless
Purchaser's termination resulted from (i) Seller's default, (ii) a material
deviation from the economics of the Property as presented in Seller's offering
memorandum (it being understood and agreed that Seller makes no warranty or
representation as to said offering memorandum), or (iii) any material structural
or environmental defect in the Property not known or disclosed to Purchaser
before December 22, 1997.
3.5 Purchaser agrees that any information obtained by Purchaser or
its authorized agents in the conduct of its due diligence will be treated as
confidential pursuant to Paragraph 9.17.
4. Title and Survey. Purchaser has ordered, at its expense (and upon
receipt, Purchaser shall promptly deliver copies to Seller): (i) a commitment
for a 1992 form ALTA Owner's title insurance policy with respect to the Property
from Commonwealth Land Title Insurance Company (the "Title Insurer") in the
amount of the Purchase Price, and (ii) copies of all documents relating to title
exceptions referred to therein. Seller has already ordered, and Purchaser has
received, at Purchaser's sole expense, a plat of survey of the Property made in
accordance with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys (1992) pursuant to the accuracy standards of an Urban Survey. On or
before January 30, 1998, Purchaser agrees to notify Seller of any objection
Purchaser may have to any exceptions reported in the commitment or any matter
shown on the plat of survey (the "Unacceptable Exceptions"). Seller will be
responsible for satisfaction of the Title Insurer's Schedule B-1 seller
requirements. All other exceptions and survey matters will be deemed acceptable
to Purchaser. If Purchaser fails to give such notice to Seller, the survey and
all of the exceptions in the title commitment will be deemed acceptable to
Purchaser. Seller will have ten (10) days after receipt of Purchaser's notice
within which to notify Purchaser whether Seller elects to either (a) eliminate
or induce the Title Insurer to insure over (subject to Purchaser's consent, not
to be unreasonably withheld) the Unacceptable Exceptions or (b) terminate this
Agreement. If Seller agrees to eliminate or induce to the Title Insurer to
insure over (with Purchaser's consent) the
3
<PAGE>
Unacceptable Exceptions, Seller will be obligated to do so at its cost on or
prior to Closing. If Seller elects to terminate this Agreement, neither party
will have any further rights or obligations hereunder, except as provided in
Paragraph 9.15. If Seller fails to give any timely notice, Seller will be
deemed to have elected to terminate this Agreement. If any other recorded
exception to title is discovered after the commitment is delivered to Purchaser,
and Purchaser does not elect to waive such exception upon the first to occur of
(a) the Closing or (b) seven (7) days after being notified of such exception and
to proceed with the consummation of the Closing, Seller will have fifteen (15)
days after the expiration of said seven (7) day period (and Closing will be
delayed if necessary, so that it occurs not earlier than twenty-two (22) days
after Purchaser is notified of such exception) after notifying Purchaser of such
discovery in which to use commercially reasonable efforts to eliminate or to
induce the Title Insurer to insure over (subject to Purchaser's approval, not to
be unreasonably withheld) such exception, and if such exception is not
eliminated or insured over as aforesaid within said 15-day period, Purchaser may
terminate this Agreement, in which event the Deposit will be returned to
Purchaser and neither party will have any further rights or obligations
hereunder except as provided in Paragraph 9.15, or close the sale subject to
such exception. Seller agrees that it will pay off at Closing (and not induce
the Title Insurer to insure over) title exceptions representing monetary liens
of a definite or ascertainable amount voluntarily granted by Seller. In using
commercially reasonable efforts to eliminate or to induce the Title Insurer to
insure over Unacceptable Exceptions, Seller will not be required to litigate or
to expend more than $10,000 in the aggregate. Ad valorem real estate taxes not
yet due and payable and all title and survey matters which are not Unacceptable
Exceptions are hereinafter referred to as Acceptable Exceptions.
5. Representations and Warranties.
5.1 Representations and Warranties of Seller. As used in this
Paragraph 5.1 and elsewhere in this Agreement, the phrase "to the knowledge of
Seller" or phrases of similar import mean and are limited to the actual current
knowledge, without duty to investigate or inquire, of Seller's portfolio manager
(Pamela Boneham) and Seller's local manager having ongoing management
responsibility with respect to the Property (Barbara Gillentine), and not to any
constructive knowledge of any of the foregoing individuals or of Seller or any
investment advisor to Seller, any entity that is a partner in such investment
advisor, or any affiliates of any thereof, or to any officer, agent,
representative, or employee of Seller or such investment advisor, any such
constituent partner, or any such affiliate. Seller hereby warrants and
represents to Purchaser (with such representations and warranties to be re-made
as of Closing pursuant to Paragraph 8.6.10) as follows:
5.1.1 Pending Proceedings. With the exception of the items
set forth in Schedule 5.1 (the "Disclosure Schedule") to the knowledge of
Seller, Seller has received no written notice of special assessments,
condemnation, environmental, zoning or other land use regulation proceedings,
either pending or planned to be instituted, with respect to the Property or any
part thereof.
4
<PAGE>
5.1.2 Status of Seller and Closing Documents. Subject to
Paragraph 9.13, this Agreement has been, and all the closing documents to be
delivered by Seller to Purchaser at Closing are or will be, duly authorized,
executed, and delivered by Seller, will be sufficient to convey insurable title,
are legal, valid, and binding obligations of Seller, are enforceable in
accordance with their respective terms, and do not violate any provisions of any
agreement to which Seller or the Property is subject or bound. Seller is duly
organized and validly existing and, if required, duly qualified to transact
business in the State in which the Property is located.
5.1.3 Non-Foreign Status. Seller is not a foreign person
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended.
5.1.4 Compliance with Laws. With the exception of the items
set forth in the Disclosure Schedule, Seller has received no governmental
notice, not heretofore corrected, alleging that the Property or its current uses
are in violation of any zoning, building, health, traffic, environmental, flood
control or all other applicable rules, regulations, codes, ordinances, or
statutes of any local, state and federal authorities or any other governmental
authority (collectively, the "Laws") asserting jurisdiction over the Property.
5.1.5 Service Contracts. With the exception of the items set
forth in the Disclosure Schedule, to Seller's knowledge, there are no agreements
or contracts affecting the Property (including, without limitation, any
management, leasing, services or maintenance agreements) which are not
terminable at will by Seller without further liability, upon not more than 30
days' prior written notice. The contracts and agreements to be assigned to
Purchaser pursuant to Paragraph 8.6.5 are listed on Schedule 5.1.5 attached
hereto. Seller agrees to terminate the existing management agreement covering
the Property on or before Closing.
5.1.6 No Default. The execution and delivery of this
Agreement, and consummation of the transaction described in this Agreement, does
not and will not constitute a default under any contract, lease, or agreement to
which Seller is a party or by which Seller is bound.
5.1.7 No Suits. Except as set forth in the Disclosure
Schedule and except for personal injury or property damage actions for which
there is adequate insurance coverage and where the insurance carrier has
accepted the tender of the defense without reservation, to Seller's knowledge,
there is no action, suit or proceeding pending or threatened against or
affecting the Property or any portion thereof, or relating to or arising out of
the ownership, management or operation of the Property, in any court or before
or by any federal, state, or municipal department, commission, board, bureau or
agency or other governmental instrumentality.
5.1.8 Environmental Condition. Each of the following
representations contained in this Paragraph 5.1.8 is wholly qualified and
limited by (a) any matters disclosed in
5
<PAGE>
any materials made available or delivered to Purchaser by Seller pursuant to
Paragraph 3 above or otherwise, (b) any matters disclosed in any environmental
reports or studies obtained by Purchaser, and (c) any other matters of which
Purchaser has actual knowledge. Subject to the foregoing, Seller represents:
5.1.8.1 With the exception of items listed in the
Disclosure Schedule, and except (i) in amounts customarily found in office uses
and in the other uses for which the Property is suited and used and (ii) in
compliance with applicable law, to Seller's knowledge, Seller has not released,
generated or handled Hazardous Materials on the Property, and Seller has no
knowledge of any release, generation or handling of Hazardous Materials on the
Property by any tenants or the incorporation of Hazardous Materials by the
tenants in any improvements on the Property during the time Seller owned the
Property. For the purposes hereof, "Hazardous Material" means any substance,
chemical, waste or other material which is listed, defined or otherwise
identified as "hazardous" or "toxic" under any federal, state, local or
administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq. and the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq., or any regulation, order, rule or requirement adopted
hereunder, as well as any formaldehyde, urea, polychlorinated biphenyls,
petroleum, petroleum product or by-product, crude oil, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture
thereof, radon, asbestos, and "source," "special nuclear" and "by-product"
material as defined in the Atomic Energy Act of 1985, 42 U.S.C. Sections 3011 et
seq.
5.1.8.2 With the exception of items listed in the
Disclosure Schedule, to Seller's knowledge, Seller has not received any summons,
citation, directive, letter or other communication, written or oral, from the
United States Environmental Protection Agency or the State environmental
protection agency having jurisdiction over the Property.
5.1.9 Options. Seller has granted no options or rights of
first refusal to acquire any interest in the Property not set forth in the
Leases delivered to Purchaser or in documents of record disclosed in the title
commitment.
5.1.10 Rent Roll. To Seller's knowledge, the information set
forth on the rent roll attached hereto as Schedule 5.1.10 is true and accurate
in all material respects.
5.1.11 Tenant Rights. There are no termination, extension,
cancellation, or expansion rights under any occupancy arrangements with respect
to the Property except as contained in the Leases.
5.1.12 Leasing Commissions. All leasing commissions, free
rent and tenant improvement allowances due and payable as of the date hereof by
Seller have been paid or will have been paid on or before Closing. To Seller's
knowledge, the only current leases as to
6
<PAGE>
which commissions, free rent and tenant improvement allowances may become due in
the future are listed on Schedule 5.1.12, which future obligations shall be
expressly assumed by Purchaser.
5.1.13 There are no employees of the Property or Seller who
will become employees of Purchaser or for which Purchaser shall be responsible
in any way.
5.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that this Agreement has been, and all the
documents to be delivered by Purchaser to Seller will be, duly authorized,
executed, and are or will be legal, valid, and binding obligations of Purchaser,
are or will be enforceable in accordance with their respective terms, and do not
and will not at Closing violate any provisions of any agreement to which
Purchaser is subject.
5.3 Limitations. Each of the representations and warranties of
Seller contained in Paragraph 5.1: (i) is made as of the date of this Agreement;
(ii) will be deemed to be remade by Seller, and to be true in all material
respects, as of Closing, subject to other matters expressly permitted in this
Agreement or otherwise specifically approved in writing by Purchaser; and (iii)
will survive for a period of one (1) year after the Closing Date, as defined in
Paragraph 8.1. Any claim that Purchaser may have at any time against Seller for
a breach of any such representation or warranty, whether known or unknown, which
is not asserted by notice from Purchaser to Seller within such six (6) month
period will not be valid or effective, and Seller will have no liability with
respect thereto. Nor will Seller have any liability to Purchaser for a breach
of any representation or warranty unless the valid claims for all such breaches
collectively aggregate more than One Hundred Thousand Dollars ($100,000.00), in
which event the full amount of such valid claims shall be actionable, subject to
the limitation in Section 9.10. The continued accuracy in all material respects
of the aforesaid representations and warranties is a condition precedent to
Purchaser's obligation to close. If any of said representations and warranties
is not correct in all material respects at the time the same is made or as of
Closing, and Seller had no knowledge of such inaccuracy when the representation
or warranty was made, or when remade at Closing, or if such warranty or
representation becomes inaccurate on or prior to Closing other than by reason of
Seller's default hereunder, Purchaser may, upon being notified of such
occurrence on or prior to Closing either (a) terminate this Agreement without
liability on the part of Seller or Purchaser, other than Purchaser's indemnity
contained in Paragraph 9.15 and the Deposit will be returned to Purchaser, or
(b) waive such matter and proceed to Closing, by notice to Seller given within
ten (10) days after Purchaser is notified of such occurrence, but in no event
later than Closing. If Purchaser fails to give any notice within the required
time period, Purchaser will be deemed to have elected to waive such matter and
to proceed to Closing. If any of said representations and warranties are not
correct in all material respects at the time the same is made or as of Closing,
and Seller had knowledge of such inaccuracy when the representation or warranty
was made, or, by its default hereunder caused the representation or warranty to
be inaccurate when remade at Closing, Purchaser may either (x) terminate this
Agreement subject to its obligations under Paragraph 9.15, receive a return of
the Deposit and recover from Seller all of Purchaser's actual, reasonable
out-of-pocket costs incurred in connection with its review of
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the Property or (y) waive the breach and its rights under clause (x) and proceed
to Closing, by notice to Seller given within ten (10) days after Purchaser is
notified of such occurrence, but in no event later than Closing. If Purchaser
fails to give any notice within the required time period, Purchaser will be
deemed to have elected to waive such matter and to proceed to Closing.
5.4 Condition of Property. Except as expressly set forth in this
Agreement, Seller has not made and does not hereby make any representations,
warranties or other statements as to the condition of the Property and Purchaser
acknowledges that at Closing it is purchasing the Property on an "AS IS, WHERE
IS" basis and without relying on any representations and warranties of any kind
whatsoever, express or implied, from Seller, its agents or brokers as to any
matters concerning the Property. Except as expressly set forth in this
Agreement, no representations or warranties have been made or are made and no
responsibility has been or is assumed by Seller or by any partner, officer,
person, firm, agent or representative acting or purporting to act on behalf of
Seller as to the condition or repair of the Property or the value, expense of
operation, or income potential thereof or as to any other fact or condition
which has or might affect the Property or the condition, repair, value, expense
of operation or income potential of the Property or any portion thereof. The
parties agree that all understandings and agreements heretofore made between
them or their respective agents or representatives are merged in this Agreement
and the Schedules and Exhibits hereto annexed, which alone fully and completely
express their agreement, and that this Agreement has been entered into after
full investigation, or with the parties satisfied with the opportunity afforded
for investigation, neither party relying upon any statement or representation by
the other unless such statement or representation is specifically embodied in
this Agreement or the Exhibits annexed hereto. Purchaser acknowledges that
Seller has requested Purchaser to inspect fully the Property and investigate all
matters relevant thereto and, with respect to the condition of the Property, to
rely solely upon the results of Purchaser's own inspections or other information
obtained or otherwise available to Purchaser, rather than any information that
may have been provided by Seller to Purchaser.
6. Closing Conditions. Purchaser's obligation to proceed to Closing is
conditioned upon Seller's performance of the following obligations and
satisfaction of the following conditions, in addition to all of its other
obligations and conditions contained in this Agreement, provided that Purchaser
may in its sole discretion elect to waive failure by Seller to perform any
particular obligation.
6.1 Title Insurance. The Title Insurer is prepared to issue a policy
of title insurance insuring Purchaser's interest in the Property being conveyed,
subject only to Acceptable Exceptions.
6.2 Estoppel Letters. Seller has delivered to Purchaser not later
than the date of Closing, estoppel letters substantially in the form of Schedule
6.2 ("Required Estoppel Form") or in form otherwise reasonably acceptable to
Purchaser, prepared by Seller and
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addressed to Purchaser, from tenants occupying in the aggregate at least 75% of
the Property, measured by square footage. All estoppel letters must be dated
not more than forty-five (45) days prior to the date of Closing. An estoppel
letter form, even though not in the Required Estoppel Form, will be deemed
reasonably acceptable to Purchaser if said letter contains the following
information: confirming rent, security deposit, square footage and termination
date; that no rent has been paid more than one month in advance; that the lease
is in full force and effect and that a true and correct copy of the lease with
all amendments and modifications is attached; and that all work to be performed
by Landlord has been performed and that the tenant has no knowledge of any
Landlord default.
6.2.1 If Seller is unable to obtain the requisite estoppel
letters as described above, Seller may (but is not required to) substitute for
any unsigned estoppel letter from a tenant other than a Major Tenant an estoppel
letter in the Required Estoppel Form, which may be completed, executed and
delivered by Seller and warranted and represented by Seller, provided that such
substituted estoppel letters will not collectively represent in excess of 10% of
all of the tenants, measured by square footage. Seller's representations and
warranties in the certificates will survive the Closing subject to the
limitations of Paragraph 5.3. In the event that, following the Closing Date,
Seller or Purchaser obtains an estoppel letter complying with the requirements
of Paragraph 6.2 with respect to any lease for which Seller delivered a
substituted estoppel letter, Seller will deliver such estoppel letter to
Purchaser and, upon such delivery, Seller will be automatically released from
any liability or obligation under the substituted estoppel letter previously
delivered by Seller with respect to such lease. Purchaser may (but shall not be
required to) accept a substituted estoppel letter as to a Major Tenant as well.
6.2.2 If Seller is unable to obtain and deliver sufficient
tenant estoppel certificates as required under Paragraph 6.2, or if the letters
received under Paragraph 6.2 or substituted estoppels permitted under Paragraph
6.2.1 contain information or omissions unacceptable to Purchaser in its
reasonable discretion, then Seller will not be in default by reason thereof, but
Purchaser may, by notice given to Seller before the Closing, elect (i) to waive
said conditions and proceed with the Closing or (ii) to terminate this
Agreement, and receive a refund of the Deposit. If Purchaser elects to
terminate this Agreement, neither party will have any further rights or
obligations hereunder except as provided in Paragraph 9.15.
6.3 Representations and Warranties. All of Seller's representations
and warranties made pursuant to Paragraph 5.1 remain true and correct in all
material respects.
6.4 Seller Performance. Seller has delivered all of the documents
and other items required pursuant to Paragraph 8.6 and has performed all other
covenants, undertakings and obligations required by this Agreement, to be
performed or complied with by Seller at or prior to Closing.
7. Other Agreements. The obligations of Purchaser and Seller to close
hereunder shall also be conditioned upon the simultaneous closing of (a) the
purchase by Purchaser or an
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affiliate of Purchaser, of twelve industrial and office buildings and a parcel
of vacant land in King of Prussia Business Park, King of Prussia, Pennsylvania,
pursuant to that certain Agreement of Purchase and Sale of even date herewith
("KOP Agreement") between Purchaser, as purchaser, and RREEF USA Fund-I ("KOP
Owner"), as seller, and (b) the purchase by Purchaser or an affiliate of
Purchaser, of the industrial building commonly known as 741 First Avenue, King
of Prussia, Pennsylvania, pursuant to that certain Agreement of Purchase and
Sale of even date herewith (the "741 Agreement"; the KOP Agreement and the
741Agreement collectively the "Other Agreements") between Purchaser, as
purchaser, and RREEF MidAmerica/East Fund-IV ("741 Owner"; the KOP Owner and the
741 Owner are collectively referred to as the "Other Owners"), as seller. This
condition may be waived by the parties. Without limiting the generality of the
foregoing, if Purchaser terminates this Agreement pursuant to Section 3 or
Section 4, the Other Owners shall have the right to terminate the Other
Agreements as well; or, if Purchaser terminates one or more of the Other
Agreements pursuant to Section 3 or Section 4 of the Other Agreements, Seller
shall have the right to terminate this Agreement as well. A default by
Purchaser under one or more of the Other Agreements shall be deemed a Purchaser
default hereunder, and a default by an Other Owner under one or more of the
Other Agreements shall be deemed a Seller default hereunder.
8. Closing.
8.1 Closing of Sale. The purchase and sale contemplated herein shall
close (herein referred to as the "Closing") at the office of the Title Insurer,
or as otherwise mutually agreed, on a date selected by Seller, which date (the
"Closing Date") shall not be earlier than the date which is fifteen (15) days
after the expiration of the Review Period nor more than thirty (30) days after
expiration of the Review Period, time being of the essence. At Closing, Seller
will deliver to Purchaser a Special Warranty Deed ("Deed") in the form of
Schedule 8.6.1 and other closing documents required hereunder and Purchaser will
cause payment of the Purchase Price to be made to Seller by wire transfer. The
sale (payment of the Purchase Price and delivery of the Deed) may, at
Purchaser's option to be exercised by notice to Seller at least five (5) days
prior to the Closing Date, be closed through escrow with the Title Insurer in
accordance with the general provisions of the usual form of escrow agreement
used in similar transactions by such Title Insurer with special provisions
inserted (i) as may be required to conform with this Agreement and (ii) to close
on a so-called "New York Style" basis.
8.2 Prorations; Adjustments. The parties will prorate taxes,
rental, and other income, and operating or other expenses of the Property as of
12:01 a.m. on the date after Closing (i.e., Seller is entitled to the income and
responsible for the expenses of the day of Closing). All income will be
prorated on the basis of income actually received by Seller, as opposed to
income which is due or for which Seller has rendered invoices but which has not
been paid (i.e., Seller will not be entitled to any credit for receivables, and
there will be no proration as to such receivables). Any taxes or other expenses
of the Property for any period prior to Closing which are payable by tenants of
the Property subsequent to Closing (e.g., real estate taxes paid in arrears and
not yet billed to tenants), will reduce the credit to Purchaser for such items
(i.e., no
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credit from Seller for pass-through items for which Purchaser will later collect
from the tenants). To the extent that the taxes to be prorated are not known
with certainty, such proration will be based upon the most recent tax bill or
county estimate, to be re-prorated upon issuance of final bills. Seller also
agrees to give Purchaser a credit against the Purchase Price for all cash
security deposits required to be held pursuant to the Leases (less portions
thereof applied by Seller to tenant defaults and not subsequently restored by
the tenant in question) and all interest due thereon and shall assign to
Purchaser any other tenant deposits held by Seller. Purchaser will pay amounts
subsequently received by it from tenants constituting base rent, capital
reimbursements or other income due from tenants and attributable to Seller's
period of ownership, but not collected as of the date of Closing, to Seller
promptly upon receipt; provided that amounts received from tenants by Purchaser
will be first applied to current charges, and the balance will be applied to
payments due to Seller. Notwithstanding the foregoing, Seller shall expressly
reserve the right to seek to collect, directly from the tenants after Closing
and with Purchaser's cooperation, any delinquencies and other amounts
attributable to Seller's period of ownership, but not collected as of the date
of Closing. To the extent Seller has received amounts from tenants for real
estate taxes and 1997 and 1998 operating expenses in excess of amounts paid by
Seller with respect to such expenses, Seller will credit such excess to
Purchaser at Closing, and Seller will provide adequate backup information in
connection with such credit. On or after the Closing, Seller will have no
further obligations with respect to any Leases or other agreements affecting the
Property, including, without limitation, tenant improvement work, leasing
commissions and free rent.
8.2.1 Seller and Purchaser hereby agree to use their
reasonable efforts to calculate prorations (including real estate tax
prorations) so as to permit settlement thereof on the Closing Date, provided,
however, that if any of such prorations cannot be calculated accurately on the
Closing Date, then the same will be calculated as soon as reasonably practicable
after the Closing Date, but in no event later than the later to occur of (i)
thirty (30) days after Seller receives its final cost certification for the year
in which Closing occurs, or (ii) March 31 of the year following the year in
which Closing occurs, and either party owing the other party a sum of money
based on such subsequent proration(s) 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" (as announced from time to time in the Wall Street
Journal) from the Closing Date to the date of payment if payment is not made
within thirty (30) days after delivery of a bill therefor together with
reasonable back-up documentation. This obligation of the parties will survive
Closing.
8.3 Proration of Service Charges. To the extent Seller, as opposed
to tenants, is responsible for payment of utility charges, Seller will attempt
to have utility meters read as of the Closing Date. To the extent that this is
not possible and to the extent that any other obligation for continuing services
is incurred, and statements are rendered for such services covering periods both
before and after the Closing Date, the amount will be adjusted between the
parties as of the Closing Date on a per-diem basis. Seller will forward any
such statements which it receives to Purchaser and Purchaser will pay the same.
Seller will remit to Purchaser its proportionate share immediately upon demand.
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8.4 Closing Costs. Purchaser agrees to pay (i) the Title Insurer's
escrow and/or closing fees (including any payment to the closing officer of the
Title Insurer as may be the local custom at the Closing), (ii) the cost of the
title commitment and basic policy and endorsements, if any, required to meet
Seller's obligations hereunder and the cost of any endorsements to the title
policy required by Purchaser, including extended coverage, (iii) all recording
fees and taxes with respect to the Deed, (iv) all costs of Purchaser's physical
inspections of the Property (environmental, engineering) and other due diligence
activities; (v) all costs of survey, including fees and charges of Gannett
Fleming Associates (originally engaged by Seller); (vi) cancellation charges, if
applicable, to Coventry Abstract (originally engaged by Seller); and (vii)
one-half (1/2) of applicable transfer taxes. Seller agrees to pay (i) all
recording fees with respect to clearing Seller's title, and (ii) one-half (1/2)
of applicable transfer taxes. Except as otherwise provided in Paragraph 9.9,
each party is responsible for its own attorneys' and other professional fees.
All other closing costs shall be allocated in accordance with the prevailing
local custom.
8.5 Possession. Subject to the rights of tenants pursuant to Leases
delivered to Purchaser, Seller will deliver possession of the Property and of
any conveyed personal property to the Purchaser on the date of Closing and
Seller will thereupon deliver to Purchaser the originals of all Leases, all
correspondence with tenants, tenant/lease files, operating statements, plans and
specifications, supplies and advertising materials, booklets, keys, and other
items used in connection with operation of the Property.
8.6 Seller's Closing Documents. As part of the Closing, Seller will
deliver to Purchaser:
8.6.1 the Deed, in the form of Schedule 8.6.1
8.6.2 an affidavit in customary form that Seller is not a
foreign person within the meaning of Section 1445(e) of the Internal Revenue
Code of 1986, in the form of Schedule 8.6.2;
8.6.3 such affidavits as are customarily required by Title
Insurer in connection with issuance of the owner's basic title insurance policy,
including a mechanics' lien and judgment affidavit;
8.6.4 an assignment of the Leases in the form of Schedule
8.6.4 ("Lease Assignment");
8.6.5 an assignment of contracts and warranties in the form
of Schedule 8.6.5 ("Contracts Assignment"), assigning to Purchaser all contracts
listed on Schedule 5.1.5, other than those designated by Purchaser for
termination by notice to Seller not less than thirty (30) days prior to Closing;
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8.6.6 an assignment of intangibles in the form of Schedule
8.6.6 ("Intangibles Assignment");
8.6.7 letters, in form to be supplied by Purchaser, to the
tenants at the Property, instructing the tenants to pay rent to Purchaser and
to recognize Purchaser as landlord under their Leases;
8.6.8 a bill of sale conveying all personal property of
Seller, if any, located at the Property and used in connection with the
maintenance or operation thereof (specifically excluding furniture, fixtures and
equipment owned by RREEF Management Company and located in the RREEF Management
Company office), in the form of Schedule 8.6.8;
8.6.9 a rent roll, certified by Seller as being true and
correct, to Seller's knowledge, as of the Closing Date, in the form previously
delivered to Purchaser;
8.6.10 a "bring down certificate" stating that Seller's
representations and warranties are true and correct as of the Closing Date, in
the form of Schedule 8.6.10;
8.6.11 estoppel certificates as required by Paragraph 6.2
herein; and
8.6.12 all other documents, instruments or writings which may
be reasonably required to consummate the transactions contemplated herein.
8.7 Purchaser's Closing Documents. As part of the Closing, Purchaser
will deliver to Seller:
8.7.1 good federal funds in an amount equal to the Purchase
Price, less the Deposit and interest thereon and plus or minus prorations as
provided herein and plus funds sufficient to pay Purchaser's closing costs
hereunder;
8.7.2 such affidavits as are customarily required by Title
Insurer in connection with issuance of the owner's title insurance policy;
8.7.3 executed counterpart of the Lease Assignment;
8.7.4 executed counterpart of the Contracts Assignment;
8.7.5 executed counterpart of the Intangibles Assignment;
8.7.6 all other documents, instruments or writings which may
be reasonably required to consummate the transactions contemplated herein.
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8.8 Joint Deliveries. At the Closing, Seller and Purchaser will
execute and deliver to each other the following documents in proper form:
8.8.1 Closing Statement;
8.8.2 City, county and state transfer tax declarations or
similar instruments; and
8.8.3 All other documents, instruments or writings which may
be reasonably required to consummate the transactions contemplated herein.
9. Miscellaneous.
9.1 Modifications. This Agreement can be amended only in writing
signed by both of the parties.
9.2 Casualty and Condemnation. Seller agrees to keep its customary
replacement cost insurance covering the Property in effect until the Closing.
If between the Effective Date and the Closing the improvements on the Property
are destroyed or damaged to the extent that repairs cost in excess of $250,000
in the estimate of an architect or contractor selected by Seller and reasonably
acceptable to Purchaser, or if condemnation proceedings are commenced against
the Property, Purchaser may (i) terminate this Agreement or (ii) elect to accept
the Property in its then condition, in which event Seller will pay or assign to
Purchase at Closing all proceeds of insurance (plus the applicable deductible)
or condemnation awards payable to Seller by reason of such damage or
condemnation. In the event Purchaser makes neither election by the earlier of
(a) Closing or (b) ten (10) days after being advised of such casualty or
condemnation, Purchaser will be deemed to have elected to accept the Property in
its then condition. In the event of any other damage to the Property, Seller
may either repair the damage or give Purchaser a reduction in the Purchase Price
equal to the cost of repairing such damage, as certified by an architect or
contractor selected by Seller and reasonably acceptable to Purchaser. In the
event of any damage where Purchaser does not have the right to terminate and
Seller elects to repair such damage, the Closing Date shall be delayed for the
number of days required to repair the damage, which Seller agrees to do in
accordance with all Laws and in a good and workmanlike manner.
9.3 Time of Essence. Time (including, without limitation, the date
specified as the Closing Date) is of the essence of this Agreement.
9.4 Notices. All notices required or permitted hereunder must be in
writing and shall be served on the parties at the following address:
If to Purchaser: Brandywine Realty Trust
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Newtown Square Corporate Campus
16 Campus Blvd.
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney, President & CEO
Brad A. Molotsky, General Counsel
Facsimile: (610-325-5622)
If to Seller: RREEF MidAmerica East-V Six, Inc.
c/o The RREEF Funds
875 N. Michigan Avenue
Suite 4100
Chicago, IL 60611
Attn: Mr. John Turney & Ms. Pamela Boneham
Facsimile: (312) 266-9346
with a copy to: RREEF MidAmerica East-V Six, Inc.
c/o The RREEF Funds
650 Park Avenue
Suite 210
King of Prussia, PA 19406
Attn: Ms. Barbara Gillentine
Facsimile: (610) 337-2308
and a copy to: D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attn: Lawrence J. Moss
Facsimile: (312) 580-0923
Any such notices may be sent by (a) certified mail, return receipt requested, in
which case notice will be deemed delivered three (3) business days after
deposit, postage prepaid in the U.S. mail or (b) a nationally recognized
overnight courier, in which case notice will be deemed delivered one business
day after deposit with such courier or (c) facsimile transmission, in which case
notice will be deemed delivered upon electronic verification that transmission
to recipient was completed, provided that notices sent by facsimile transmission
on a day other than a business day, or before 9:00 a.m. or after 5:00 p.m.
recipient's time on a business day, shall be deemed given on the first business
day following the date of transmission or (d) personal delivery. The above
addresses and facsimile numbers may be changed by notice to the other party;
provided that no notice of a change of address or facsimile number will be
effective until actual receipt of such notice.
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9.5 Parties Bound. Neither party may assign this Agreement without
the prior written consent of the other, and any such prohibited assignment shall
be void; provided that Purchaser may assign this Agreement without Seller's
consent to an Affiliate; provided that the assignee is not a party-in-interest
as described in Paragraph 9.14. Subject to the foregoing, this Agreement is
binding upon and inure to the benefit of the respective legal representatives,
successors, assigns, heirs, and devisees of the parties. For the purposes of
this Paragraph, the term "Affiliate" means (a) an entity that directly or
indirectly controls, is controlled by or is under common control with the
Purchaser or (b) an entity at least a majority of whose economic interest is
owned by Purchaser; and the term "control" means the power to direct the
management of such entity through voting rights, ownership or contractual
obligations.
9.6 Governing Law. The performance and interpretation of this
Agreement is controlled by the law of the Commonwealth of Pennsylvania.
9.7 Continuation Until Closing; Leasing.
9.7.1 Between the Effective Date and the Closing, Seller
agrees to keep and perform all of the obligations to be performed by landlord
under any Leases and Laws. Seller agrees to operate the Property in the same
manner as before the making of this Agreement, the same as though Seller were
retaining the Property. Seller agrees not to convey the Property, nor to grant
any liens or easements with respect thereto.
9.7.2 Seller shall not permit or consent to any new leases,
amendments, extensions, renewals (other than pursuant to tenant renewal options,
if any) or subleases without first submitting them to Purchaser for Purchaser's
approval on an approval form in the form attached hereto as Schedule 9.7.2,
which approval shall not be unreasonably withheld. Purchaser shall have three
(3) business days to notify Seller of its approval of such leases, amendments,
extensions, renewals or subleases, and in the event that Purchaser does not so
notify Seller, the leases, amendments, extensions, renewals or subleases, as
the case may be, shall be deemed approved.
9.7.3 With respect to any new lease or lease modification
entered into by Seller after December 18, 1997 and approved by Purchaser, by the
terms of which Seller obligates itself to perform or performs or pays or
contracts for any tenant improvement work or additional landlord work required
pursuant to such lease, or pays or contracts for any leasing commissions or
grants any free rent period or other financial concessions, then such expenses
and/or free rent or other concessions, and all other third-party costs incurred
(including attorneys' fees) in connection with such lease, will be a credit to
Seller at Closing to the extent Seller paid such amounts prior to Closing;
otherwise Purchaser agrees to assume liability for the payment and performance
of such obligations in accordance with the terms thereof.
9.8 Brokers. Seller and Purchaser each (i) represents and warrants
to the other that it has not dealt with any broker or finder in connection with
the transaction contemplated by
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this Agreement other than the parties, if any, to be paid a commission as
specified in Paragraph 9.11, and (ii) agrees to defend, indemnify and hold the
other harmless from and against any losses, damages, costs, or expenses
(including attorneys' fees) incurred by such other party due to a breach of the
foregoing warranty by the indemnifying party.
9.9 Attorneys' Fees. Notwithstanding any limitation on remedies or
amounts recoverable set forth elsewhere herein, if any action is brought by
either party against the other party, the party in whose favor final judgment is
entered will be entitled to recover court costs incurred and reasonable
attorneys' fees at trial, upon appeal and on any petition for review.
9.10 Remedies for Non-Performance. Purchaser's remedies regarding
breach of warranty or representation by Seller are governed by Paragraph 5.3.
In the event of any other default by Seller hereunder, Purchaser may, as its
sole and exclusive remedy, either (i) terminate this Agreement and seek damages,
subject to performance of Purchaser's indemnities set forth in Paragraph 9.15,
and receive back the Deposit or (ii) seek specific performance. If said sale is
not consummated because of a default under this Agreement on the part of
Purchaser, the Deposit will be paid to and retained by Seller as Seller's sole
and exclusive remedy. Seller and Purchaser acknowledge that the Deposit is a
reasonable forecast of just compensation for the harm that could be caused by
Purchaser's default and that the harm suffered by Seller is difficult or
impossible to accurately ascertain or predict. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT TO THE CONTRARY, SELLER'S TOTAL LIABILITY FOR
DAMAGES FOR BREACH OF THE COVENANTS, AGREEMENTS, WARRANTIES AND REPRESENTATIONS
UNDER THIS AGREEMENT AND THE OTHER AGREEMENTS, COLLECTIVELY, SHALL NEVER EXCEED
TWO MILLION DOLLARS ($2,000,000.00), AND IN NO EVENT SHALL SELLER BE LIABLE FOR
SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES.
9.11 Brokers Commission. Seller agrees to pay the brokerage
commission due The Flynn Company pursuant to a separate agreement.
9.12 Survival of Covenants. All covenants hereunder which, by their
terms, are intended to survive Closing will survive Closing hereunder.
9.13 Seller's Investment Committee Approval. This condition has been
satisfied.
9.14 ERISA. Purchaser represents and warrants to Seller that none of
Purchaser's assets are "plan assets," (as that term is defined by 29 CFR Section
2510.3-101) because all plans that are subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended, and which have invested in
Purchaser hold only "equity interests," (as that term is defined by 29 CFR
Section 2510.3-101(b)(1)) that are "publicly-offered securities," (as that term
is defined by 29 CFR Section 2510.3-101(b)(2)). Purchaser further represents
and warrants to Seller that
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it is not any one of the types of entities listed in 29 CFR Section
2510.3-101(h), the character of which would identify its assets as "plan
assets."
9.15 Entry and Indemnity. In connection with any entry by Purchaser,
or its agents, employees or contractors onto the Property, Purchaser 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
Seller's tenants and otherwise in a manner reasonably acceptable to Seller.
Without limiting the foregoing, prior to any entry to perform any on-site
testing, Purchaser shall give Seller notice thereof, including the identity of
the company or persons who will perform such testing and the proposed scope of
the testing. Seller shall approve or disapprove the scope and methodology of
such proposed testing within three (3) business days after receipt of such
notice, such approval to be within the sole and unfettered discretion of Seller;
Seller's failure to notify Purchaser of its approval or disapproval shall be
deemed to be Seller's disapproval thereof. If Purchaser or its agents,
employees or contractors take any sample from the Property in connection with
any such approved testing, upon Seller's request, Purchaser 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 Property. Upon
Seller's request, Purchaser shall promptly deliver to Seller copies of any
reports relating to any testing or other inspection of the Property performed by
Purchaser or its agents, employees or contractors. Purchaser shall maintain,
and shall assure that its contractors maintain, public liability and property
damage insurance in amounts and in form and substance adequate to insure against
all liability of Purchaser, its agents, employees or contractors, arising out of
any entry or inspections of the Property pursuant to the provisions hereof, and
Purchaser shall provide Seller with evidence of such insurance coverage upon
request by Seller. Purchaser shall indemnify, defend and hold Seller harmless
from and against any costs, damages, liabilities, losses, expenses, liens or
claims (including, without limitation, reasonable attorney's fees) arising out
of or relating to any entry on the Property by Purchaser, its agents, employees
or contractors in the course of performing the inspections, testings or
inquiries provided for in this Agreement, including without limitation damage to
the Property or release of hazardous substances or materials onto the Property,
excluding, however, any costs incurred by Seller in supervising Purchaser's
testing. The foregoing indemnity shall survive beyond the Closing, or if the
sale is not consummated, beyond the termination of this Agreement.
9.16 Release. Except to the extent of the representations and
warranties of Seller expressly set forth in this Agreement, and except to the
extent of a breach by Seller of applicable laws, but otherwise notwithstanding
any other provision of this Agreement to the contrary, Purchaser, on behalf of
itself and its successors and assigns, waives its right to recover from, and
forever releases and discharges, Seller, Seller's affiliates, Seller's
investment manager, the partners, trustees, shareholders, directors, officers,
employees and agents of each of them, and their respective heirs, successors,
personal representatives and assigns (collectively, the "Seller Related
Parties"), from any and all demands, claims, legal or administrative
proceedings, losses, liabilities, damages, penalties, fines, liens, judgments,
costs or expenses whatsoever (including,
18
<PAGE>
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, which may arise on account of or in
any way be connected with the physical condition of the Property or any law or
regulation applicable thereto, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 9601 et seq.), the Resources Conservation and Recovery Act of
1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section
466 et seq.), the Safe Drinking Water Act (14 U.S.C. Sections 1401-1450), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), and the
Toxic Substance Control Act (15 U.S.C. Sections 2601-2629)
9.17 Confidential Information. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to consultants, investors, advisors, and affiliates, or as
required by law. No party will make any public disclosure of the specific terms
of this Agreement, except as required by law. Without limiting the generality
of the foregoing, any press release or other public disclosure regarding this
Agreement or the transactions contemplated herein, and the wording of same, must
be approved in advance by both parties. In connection with the negotiation of
this Agreement and the preparation for the consummation of the transactions
contemplated hereby, each party acknowledges that it will have access to
confidential information relating to the other party. Each party shall treat
such information as confidential, preserve the confidentiality thereof, and not
duplicate or use such information, except to advisors, consultants, investors
and affiliates in connection with the transactions contemplated hereby. In the
event of the termination of this Agreement for any reason whatsoever, Purchaser
will return to Seller, at Seller's request, all documents, work papers, and
other material (including all copies thereof) obtained from Seller in connection
with the transactions contemplated hereby, and each party shall use its best
efforts, including instructing its employees and others who have had access to
such information, to keep confidential and not to use any such information. The
provisions of this Paragraph 9.17 will survive the Closing or, if the purchase
and sale is not consummated, any termination of this Agreement.
9.18 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event,
after which the designated period of time begins to run, is not to be included
and the last day of the period so computed is to be included, unless such last
day is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday (i.e., a day on which federally chartered banks are not open for
business in Chicago, Illinois). The last day of any period of time described
herein shall be deemed to end at 5 p.m. Chicago, Illinois time on the last day
of such period of time. All days other than Saturdays, Sundays and legal
holidays in which national banks are closed in Chicago, Illinois are business
days hereunder.
9.19 Entire Agreement. This Agreement and any other document to be
furnished pursuant to the provisions hereof embody the entire agreement and
understanding of the parties hereto as to the subject matter contained herein.
There are no restrictions, promises,
19
<PAGE>
representations, warranties, covenants, or undertakings other than those
expressly set forth or referred to in such documents. This Agreement and such
documents supersede all prior agreements and understandings among the parties
with respect to the subject matter hereof
9.20 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement.
9.21 Facsimile Signatures. Executed facsimile copies of this
Agreement or any amendments hereto shall be binding upon the parties, and
facsimile signatures appearing hereon or on any amendments hereto shall be
deemed to be original signatures.
9.22 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by Seller to
Purchaser at Closing, Seller agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
9.23 Offer. Execution and delivery of this Agreement by Purchaser
constitutes an offer to purchase the Property on the terms contained herein.
Delivery by Seller of a copy of the fully executed Agreement by facsimile
transmission on or before the Expiration Date, followed by a manually signed
copy thereof delivered the next business day after transmission of such copy,
shall constitute acceptance by Seller as of the date of the facsimile
transmission. The date on which Seller delivers a fully executed copy of this
Agreement to Purchaser, or delivers a copy by facsimile transmission followed by
a manually signed copy as provided in the preceding sentence is referred to
herein as the "Effective Date."
9.24 Seller Exculpation Clause. The obligations of Seller contained
herein are intended to be binding only on the property of the trust party to
this Agreement of Purchase and Sale and shall not be personally binding upon,
nor shall any resort be had to the private properties of, any of the trustees,
investment managers, any general partners thereof, or any employees or agents of
the trustees or investment managers. All documents to be executed by Seller
shall also contain the foregoing exculpation.
20
<PAGE>
9.25 Purchaser Exculpation Clause. No recourse shall be had for any
obligation of Brandywine Operating Partnership, L.P. and Brandywine Realty Trust
under this Agreement or under any document executed in connection herewith or
pursuant hereto, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
Brandywine Operating Partnership, L.P. or 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
the Seller and all parties claiming by, through or under Seller.
9.26 SEC Reporting (8-K) Requirements. For the period of time
commencing on the date hereof and continuing through the first anniversary of
the Closing Date, and without limitation of other document production otherwise
required of Seller hereunder, Seller shall, from time to time, upon reasonable
advance written notice from Purchaser, provide Purchaser and its
representatives, with (a) access to all financial information pertaining to the
period of Seller's ownership and operation of the Property, which information is
relevant and reasonably necessary, in the opinion of Purchaser's outside, third
party accountants (the "Accountants"), to enable Purchaser and its Accountants
to prepare financial statements in compliance with any or all of (i) Rule 3-05
or 3-15 of Regulation S-X of the Securities and Exchange Commission (the
"Commission"), as applicable; (ii) any other rule issued by the Commission and
applicable to Purchaser; and (iii) any registration statement, report or
disclosure statement filed with the Commission, by, or on behalf of Purchaser;
and (b) a representation letter, signed by the
21
<PAGE>
individual(s) responsible for Seller's financial reporting, substantially in the
form of Schedule 9.26 attached hereto, which representation letter may be
required by the Accountants in order to render an opinion concerning Seller's
financial statements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates set forth below.
SELLER: PURCHASER:
RREEF MIDAMERICA EAST-V SIX, INC. BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: RREEF America L.L.C., its
investment advisor By: Brandywine Realty Trust, its
authorized general partner
By: --------------------------- By: ---------------------------
Authorized Representative Gerard H. Sweeney
President and Chief Executive
Officer
Dated:-------------------------- Dated:---------------------------
22
<PAGE>
List of Schedules and Exhibits
Schedules
2.1 Escrow Instructions
5.1 Disclosure Schedule
5.1.5 Service Contracts
5.1.10 Rent Roll
5.1.12 Future Leasing Commissions, Tenant Improvements and
Free Rent
6.2 Form of Estoppel Letter
8.6.1 Form of Deed
8.6.2 FIRPTA Certificate
8.6.4 Assignment and Assumption of Leases
8.6.5 Assignment and Assumption of Contracts and Warranties
8.6.6 Assignment of Intangibles
8.6.8 Bill of Sale
8.6.10 Bring-Down Certificate
9.26 SEC Compliance Representation Letter
Exhibits
A Legal Description of Property
A-1 Descriptive List of the Property
23
<PAGE>
Schedule 2.1
EARNEST MONEY ESCROW INSTRUCTIONS
(earnest money escrow instructions previously executed)
<PAGE>
Schedule 5.1
DISCLOSURE SCHEDULE
1. A 1996 Environmental Audits was prepared by ATC Environmental,
Inc. for the Property. This Audit has been made available to Purchaser for
inspection and copying, and, each of the Seller warranties of Section 5.1.8
and its subparagraphs are qualified and limited by any matters disclosed in
such Audit.
2. Possible building code violations disclosed by Seller to Purchaser
by letter dated January 21, 1997 from Lawrence J. Moss to Brad A. Molotsky.
3. Bell Atlantic has requested an easement for laying underground
telephone lines, as disclosed by Seller to Purchaser by letter dated January
21, 1997 from Lawrence J. Moss to Brad A. Molotsky.
<PAGE>
Schedule 5.1.5
Service Contracts
A.T. BUILDERS
CROWN CONTRACTORS, INC
ELDREDGE, INC.
OLIVER SPRINKLER CO.
DOUGLAS SCOTT LANDSCAPING
PHOENIX MECHANICAL INC.
WAYMAN FIRE PROTECTION
<PAGE>
Schedule 5.1.10
Rent Roll
<PAGE>
Schedule 5.1.12
Future Leasing Commissions, Tenant Improvements and Free Rent
(none)
<PAGE>
Schedule 6.2
TENANT ESTOPPEL LETTER
________ __, 1998
Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Newtown Square, PA 19073
Attention: Gerard H. Sweeney,
President and Chief Executive Officer
NationsBank, N.A.,
Real Estate Banking
8300 Greensboro Drive, Suite 300
McLean, VA 22102
Attention: Gary P.F. Carr
Re: Lease from ________, for Suite ____, located at
[BUILDING ADDRESS]
[CITY/TOWNSHIP], Pennsylvania (the "Property")
To Whom it May Concern:
The undersigned is the holder of the tenant's interest under the lease
described on Exhibit A attached hereto (the "Lease") demising a portion of
the Property (the "Leased Premises"). We understand that Brandywine Realty
Trust, its assignee or nominee ("Brandywine") intends to acquire the
Property, and that NationsBank, N.A., as Agent for the parties listed on
Schedule 1 attached hereto ("Lender") may be the holder of a first mortgage
on the Property, and that Brandywine and Lender require this certification
from us.
Accordingly, we hereby certify to Brandywine and Lender as follows:
1. The Lease is in full force and effect and has not been modified,
amended or supplemented in any way, except as follows (Insert dates of all
modifications, amendments, or supplements; if none, write "None"):
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
2. There are no other representations, warranties, agreements,
concessions, commitments, or other understandings between the undersigned and
the Landlord regarding the Property other than as set forth in the Lease or
paragraph 1 above.
3. The landlord under the Lease has completed and delivered, and the
undersigned has accepted, the Leased Premises in the condition required by
the Lease and the term of the Lease commenced on _________. The Leased
Premises consists of approximately ___________ square feet. The undersigned
has taken possession of and is occupying the Leased Premises on a rent-paying
basis and the monthly base rent payable thereunder is $_________, payable in
advance. All improvements and work required under the Lease to be made by
the landlord thereunder and all facilities required under the Lease to be
furnished to the Leased Premises have been completed to the satisfaction of
the undersigned, except as follows (Insert description of any improvements
and work to be completed by the landlord under the Lease; if none, write
"None"):
---------------------------------------------------------------------
4. The fixed expiration date set forth in the Lease, excluding
renewals and extensions, is ________________. The undersigned neither has
any option or right to purchase the Property or any portion thereof nor does
the undersigned have any right or option to terminate the Lease or any of its
obligations thereunder in advance of the scheduled termination date of the
Lease as noted above, except as follows (Insert description of any purchase
rights or options, and/or any early termination rights; if none, write
"None"):
---------------------------------------------------------------------
5. All rents, additional rents and other sums due and payable under
the Lease have been paid in full and no rents, additional rents or other sums
payable under the Lease have been paid for more than one (1) month in advance
of the due dates thereof.
6. The landlord under the Lease is not in default under any of the
requirements, provisions, terms, conditions or covenants of the Lease to be
performed or complied with by the landlord under the Lease, and no event has
occurred or situation exists which would, with the passage of time and/or the
giving of notice, constitute a default or an event of default by the landlord
under the Lease.
7. The undersigned is not in default under any of the requirements,
provisions, terms, conditions, or covenants of the Lease to be performed or
complied with by the undersigned, and no event has occurred or situation
exists which would, with the passage of time and/or the giving of notice,
constitute a default or an event of default by the undersigned under the
Lease.
2
<PAGE>
8. The undersigned has received no notice from any governmental
authority or other person or party claiming a violation of, or requiring
compliance with, any Federal, State or local statute, ordinance, rule,
regulation or other requirement of law, for environmental contamination at
the Leased Premises, to the best knowledge of the undersigned no hazardous,
toxic or polluting substances or wastes have been generated, treated,
manufactured, stored, refined, used, handled, transported, released, spilled,
disposed of or deposited by Tenant on, in or under the Leased Premises.
9. Neither the undersigned nor the landlord under the Lease has
commenced any action or given or received any notice for the purpose of
terminating the Lease.
10. There are no existing defenses, offsets, claims, or credits against
the payment of rent or the performance of the undersigned's obligations under
the Lease.
11. The undersigned has paid to the landlord under the Lease a security
deposit of $____________.
Very truly yours,
By:
--------------------------------
Name:
Title:
3
<PAGE>
Exhibit A
(Description of Lease)
4
<PAGE>
Schedule 8.6.1
Form of Deed
SPECIAL WARRANTY DEED:
THIS INDENTURE made this ____ day of ___________, 1998,
BETWEEN RREEF MIDAMERICA EAST-V SIX, INC., A Delaware corporation
(hereinafter called the Grantor/s), of the one part and
---------------------
(hereinafter called the Grantee/s), of the second part,
WITNESSETH That in consideration of Ten and No/100 Dollars ($10.00) in hand
paid, the receipt whereof is hereby acknowledged, the said Grantor/s do/does
hereby grant, bargain, sell and convey unto the said Grantee/s, his/her/their
successors and /or assigns,
ALL THAT CERTAIN real estate, situated in the County of Montgomery and
Commonwealth of Pennsylvania known and described on the attached Exhibit A
"Legal Description," attached hereto an hereby made a part hereof.
TOGETHER with all and singular the buildings, improvements, ways, streets,
alleys, driveways, passages, waters, water-courses, rights, liberties,
privileges, hereditaments and appurtenances whatsoever unto the hereby
granted premises belonging, or in anywise appertaining, and the reversions
and remainders, rents, issues and profits thereof; and all the estate, right,
title, interest, use, trust, property, possession, claim and demand
whatsoever of Grantor as well at law as in equity, of, in, and to the same.
TO HAVE AND TO HOLD the said lot or piece of ground described with the
buildings and improvements thereon erected, hereditaments and premises hereby
granted, or mentioned and intended so to be, with the appurtenances unto the
said Grantee, and its successors and assigns to and for the only proper use
and behoof of the said Grantee, and its successors and assigns, forever.
AND the said Grantor/s do/does hereby covenant to and with the said Grantee/s
that he/she/they, the said Grantor/s, his/her/their successors and/or
assigns, SHALL AND WILL warrant specially and forever defend the herein above
described premises, with the hereditaments and appurtenances, unto the said
Grantor/s and against every other person lawfully claiming or who shall
hereafter claim the same or any part thereof, by, from and under
his/her/their successors and/or assigns or any of them, subject to validly
and legally existing encumbrances of record.
IN WITNESS WHEREOF, the said Grantor/s has/have caused these presents to be
duly executed, the day and year first above written.
<PAGE>
ATTEST: RREEF MIDAMERICA EAST-V SIX,
INC., a Delaware corporation
By: By: RREEF America L.L.C., a Delaware
-------------------------------- limited liability company, its investment
advisor
By:
--------------------------
Authorized Representative
[Add Pennsylvania address certification]
2
<PAGE>
STATE OF----------------------)
) SS.
COUNTY OF---------------------)
I, _________________________________________, a notary public in and for
said County, in the State aforesaid, DO HEREBY CERTIFY that _________________
and _________________, personally known to me to be the _________________ and
_________________ of RREEF MidAmerica East-V Six, Inc., a Delaware
corporation, and personally known to me to be the same persons whose names
are subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that as such _________________ and _________________,
they signed and delivered the said instrument as their free and voluntary
act, and as the free and voluntary act and deed of said trust, for the uses
and purposes therein set forth.
GIVEN under my hand and official seal this ____ day of _________, 1998.
-----------------------------------
Notary Public
Commission expires
--------------------------------------------------------
3
<PAGE>
EXHIBIT A
Legal Description
<PAGE>
Schedule 8.6.2
FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not
required upon the disposition of a U.S. real property interest by
__________________________________________, a _______________________
("Seller") hereby certifies the following:
1. Seller is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);
2. Seller's U.S. employer identification number is 94-3082895; and
3. Seller's principal place of business is 101 California Street, 26th floor,
San Francisco, CA 94111-5853
Seller understands that this certification may be disclosed to the
Internal Revenue Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Seller.
------------------------------------
------------------------------------
By:
---------------------------------
Authorized Representative
Subscribed and sworn to
before me this ____ day of
__________, 1998.
- ------------------------------------
Notary Public
<PAGE>
Schedule 8.6.4
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (the "Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined), is between ___________________________, a Delaware
corporation, ("Assignor") and ________________, a ______________ ("Assignee").
A. Assignor is the lessor under certain leases executed with respect
to that certain real property and improvements thereon known as
______________________, _______________________, and more particularly
described in Exhibit "A" attached hereto (the "Property"), which leases are
described in Exhibit B attached hereto (the "Leases").
B. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase the Property from Assignor and
Assignor agreed to sell the Property to Assignee, on the terms and conditions
contained therein.
C. Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof, on the terms
and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance Date") [SHOULD BE THE DAY FOLLOWING
CLOSING], Assignor hereby assigns to Assignee all of its right, title, and
interest in and to the Leases except rents and other sums due Assignor first
accruing on or prior to the Conveyance Date, and, effective as of the day
following the Conveyance Date, Assignee hereby accepts such assignment.
2. Assignor hereby assumes full responsibility for all obligations and
defaults of landlord under the Leases accruing prior to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable
attorneys' fees) arising from Assignor's failure to perform said obligations,
provided that Assignee makes a claim hereunder on or before one (1) year
following the Conveyance Date.
3. Assignee hereby assumes full responsibility for all obligations of
landlord under the Leases accruing after the Conveyance Date and Assignee
hereby agrees to defend, indemnify and hold Assignor harmless from any
claims, liabilities or costs (including reasonable attorneys' fees) arising
from Assignee's failure to perform said obligations. Without limiting the
generality
<PAGE>
of the foregoing, Assignee assumes full responsibility for the free rent,
unpaid tenant improvement allowances and leasing commissions under the Leases
as listed on Exhibit C.
4. This Assignment shall be governed by the laws of the Commonwealth
of Pennsylvania.
5. This Assignment may be executed in counterparts.
6. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Leases.
ASSIGNOR: ASSIGNEE:
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
By: By:
---------------------------- ----------------------------
Authorized Representative
Title:
-------------------------
Dated: Dated:
------------------------- -------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Existing Leases
(rent roll to be attached)
4
<PAGE>
EXHIBIT C
Free Rent, Tenant Improvement Allowances and Leasing Commissions
5
<PAGE>
Schedule 8.6.5
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES (the
"Assignment") dated as the dates of execution set forth below, but effective
as of the Conveyance Date (as herein defined), is between ____________________
_____________________, ("Assignor") and ________________, a
___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a
condition precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance Date")[SHOULD BE THE DAY FOLLOWING
CLOSING] , Assignor hereby assigns to Assignee all of its right, title, and
interest in and to the following:
2. Assignor hereby grants, transfers and assigns to Assignee all the
right, title and interest of Assignor in and to the following:
(a) All contracts listed on Exhibit B attached hereto.
(b) All presently effective and assignable warranties, guaranties,
representations or covenants given to or made in favor of Assignor or
Assignor's affiliates in connection with the acquisition, development,
construction, maintenance, repair, renovation or inspection of the Property.
The foregoing are collectively referred to herein as the "Contracts."
3. Assignor hereby assumes full responsibility for all obligations and
defaults of Assignor under the Contracts accruing to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable
attorneys' fees) arising from Assignor's failure to perform said obligations,
provided that Assignee makes a claim hereunder on or before one (1) year
following the Conveyance Date.
<PAGE>
4. Assignee hereby assumes full responsibility for all obligations of
owner of the Property under the Contracts accruing after the Conveyance Date
and Assignee hereby agrees to defend, indemnify and hold Assignor harmless
from any claims, liabilities or costs (including reasonable attorneys' fees)
arising from Assignee's failure to perform said obligations.
5. This Assignment shall be governed by the laws of the Commonwealth
of Pennsylvania.
6. This Assignment may be executed in counterparts.
7. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Contracts and Warranties.
ASSIGNOR: ASSIGNEE:
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
By: By:
---------------------------- ----------------------------
Authorized Representative
Title:
-------------------------
Dated: Dated:
------------------------- -------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Contracts
A.T. BUILDERS
CROWN CONTRACTORS, INC
ELDREDGE, INC.
OLIVER SPRINKLER CO.
DOUGLAS SCOTT LANDSCAPING
PHOENIX MECHANICAL INC.
WAYMAN FIRE PROTECTION
4
<PAGE>
Schedule 8.6.6
ASSIGNMENT OF INTANGIBLES
THIS ASSIGNMENT AND ASSUMPTION OF INTANGIBLES ("Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined),
is between ____________________________________________________________________
("Assignor") and ________________, a ___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a
condition precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance
Date")[SHOULD BE THE DAY FOLLOWING CLOSING], Assignor hereby assigns to
Assignee all of its right, title, and interest in and to the following:
(i) All licenses, permits, certificates of occupancy, approvals,
dedications, subdivision maps or plats and entitlements issued, approved or
granted by federal, state or municipal authorities or otherwise in
connection with the Property and its renovation, construction, use,
maintenance, repair, leasing and operation; and all licenses, consents,
easements, rights of way and approvals required from private parties to
make use of utilities, to insure pedestrian ingress and egress to the
Property and to insure continued use of any vaults under public
rights-of-way presently used in the operation of the Property.
(ii) any trade style or trade name used in connection with the
Property; and,
(iii) all correspondence with the tenants under tenant leases, all
booklets and manuals relating to the maintenance and operation of the
Property.
The foregoing are collectively referred to herein as the "Intangibles".
2. Assignor agrees to assume full responsibility for its obligations
under the Intangibles accruing on or prior to the Conveyance Date and
Assignor agrees to defend, indemnify and hold Assignee harmless from any
claims, liabilities or costs arising from
<PAGE>
Assignor's failure to perform said obligations, provided that Assignee makes
a claim hereunder on or before one (1) year following the Conveyance Date.
3. Assignee assumes full responsibility for all obligations of the
owner of the property accruing under the Intangibles from the day after the
Conveyance Date and Assignee agrees to defend, indemnify and hold Assignor
and its predecessors in title harmless from all claims, liabilities or costs
arising from Assignee's failure to perform said obligations.
4. This instrument may be executed in counterparts.
5. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers
IN WITNESS WHEREOF, the parties have executed this Assignment of
Intangibles.
ASSIGNOR: ASSIGNEE:
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
By: By:
---------------------------- ----------------------------
Authorized Representative
Title:
-------------------------
Dated: Dated:
------------------------- -------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
Schedule 8.6.8
BILL OF SALE
__________________________________________________________ ("Seller"), in
consideration of Ten and No/100 Dollars and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
hereby sells, transfers, assigns and sets over unto __________________
("Purchaser"), all of its right, title and interest in and to any and all
personal property, which personal property is owned by Seller and located on
the real estate legally described on Exhibit A attached hereto (the "Personal
Property"), including, but not limited to, the Personal Property listed on
Exhibit B.
Seller hereby represents and warrants to Purchaser that Seller is the
absolute owner of the Personal Property free and clear of all liens, charges
and encumbrances, and that Seller has full right, power and authority to sell
the Personal Property and to make this Bill of Sale. ALL WARRANTIES OF
QUALITY, FITNESS AND MERCHANTABILITY ARE HEREBY EXCLUDED.
The obligations of Seller contained herein are intended to be binding
only on the property of the Seller and shall not be personally binding upon,
nor shall any resort be had to the private properties of, any of the
investment managers of Seller, or any general partners thereof, or any
employees or agents of the investment managers
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the ___
day of _______, 1998, but effective on the date on which the Property is
conveyed by Seller to Purchaser.
-------------------------------
-------------------------------
By:
----------------------------
Authorized Representative
<PAGE>
STATE OF _________ )
) SS
COUNTY OF _______ )
The undersigned, a Notary Public in and for said County in the
State aforesaid, DOES HEREBY CERTIFY that ________________, authorized
representative of ____________________________________________________________,
who is personally known to me to be the same person whose name is subscribed
to the foregoing instrument as such authorized representative, appeared
before me this day in person and acknowledged that __he, being duly
authorized, signed, sealed and delivered the said instrument as h___ free and
voluntary act, and as the free and voluntary acts of said corporation, for
the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this ___ day of _________, 1998.
-------------------------------
Notary Public
My Commission Expires:
__________________, 19___
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Personal Property
(none)
4
<PAGE>
Schedule 8.6.10
SELLER'S CLOSING CERTIFICATE
THIS CLOSING CERTIFICATE is made as of the ________ day of _______________,
1998, by and between ___________________________ ("Seller"), to and in favor of
______________________, a _________________ ("Purchaser"), under and pursuant to
that certain Agreement of Purchase and Sale by and between Seller and
_________________, with an Effective Date as defined therein (the
"Agreement"), for the purchase and sale of that certain Property situated in
the _________________, _________________ County,_________________ (as defined
in the Agreement).
Pursuant to Paragraphs 5.3 and 8.6.10 of the Agreement and except as
disclosed on Exhibit A attached hereto and made a part hereof, Seller hereby
reconfirms, remakes and rewarrants to Purchaser as of the date hereof each of
the representations, warranties and covenants given by Seller contained in
Paragraph 5.1 of the Agreement in the same manner as such representations,
warranties and covenants were given in the Agreement, each of which is
incorporated herein and made a part hereof by this reference. Except as
modified hereby, Seller hereby confirms that each of said representations,
warranties and covenants are true and accurate in all material respect as of
the date hereof. Seller's reconfirming, remaking and rewarranting of its
representations, warranties and covenants is subject to the limitations set
forth in Paragraph 5.3 of the Agreement.
The obligations of Seller contained herein are intended to be binding
only on the property of the Seller and shall not be personally binding upon,
nor shall any resort be had to the private properties of, any of the
investment managers of Seller, or any general partners thereof, or any
employees or agents of the investment managers
IN WITNESS WHEREOF, Seller has executed this Closing Certificate on the
day and year first above written, but effective upon the date on which the
Property is conveyed by Seller to Purchaser.
SELLER:
- -----------------------------
- -----------------------------
By:
--------------------------
Authorized Signatory
<PAGE>
EXHIBIT A
Disclosure
<PAGE>
Schedule 9.7.2
New Lease Approval Form
Property:
---------------------------------------------------------------------
Tenant:
-----------------------------------------------------------------------
Square Feet:
------------------------------------------------------------------
Location:
---------------------------------------------------------------------
Anticipated Lease Commencement:
-----------------------------------------------
Anticipated Rent Commencement:
-----------------------------------------------
Term:
-------------------------------------------------------------------------
FREE RENT:
--------------------------------------------------------------------
Rental Rate: Period PSF Rate Annual Income
------------------- --------------- ------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
Note: Above rental rates do not include Tenant Electric
Tenant Improvement Allowance: PSF Amount
--------------------- ----------------
T.I. Mechanism:
---------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
OPTIONS: --------------------------------------------------------------------
---------------------------------------------------------------------
- -----------------------------------------------------------------------------
Initial Commission:
BROKER % Amount
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Broker Future Entitlements:
---------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Other Comments:
---------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Approved By:
-----------------
<PAGE>
Schedule 9.26
SEC COMPLIANCE REPRESENTATION LETTER
(Accountant Name & Address)
Dear Sirs:
In connection with your audit of the statement of revenues and certain
expenses of the Property situated in the Bucks County, Pennsylvania, commonly
known as 180 Wheeler Court (the "Property") for the year ended December 31,
199__ (the "Operating Statement"), prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission, the
undersigned ("Seller") makes the following limited, qualified and specific
representations, which are true to Seller's knowledge (as such phrase is
hereinafter defined):
1. Seller has made available or caused its property manager to make
available to Brandywine Operating Partnership, L.P. ("Buyer"), or its
representatives, Seller's financial records and files in Seller's
actual possession pertaining to the operation of the Property (such
records and files being collectively referred to herein as the
"Files").
2. Except as disclosed in the Files, Seller is not aware of any events or
transactions which have occurred since December 31, 199_ and prior to
the date hereof that would have a material effect on the Operating
Statement for the period then ended.
3. We recognize that, as the Owner of the Property, we are responsible
for directing the fair presentation of the Operating Statement. We
believe the Operating Statement is fairly presented in conformity with
generally accepted accounting principals.
As used in this letter, the words "Seller's knowledge" shall be deemed
to mean, and shall be limited to, the actual (as distinguished from implied,
imputed or constructive) knowledge of Joseph S. Cappelletti and Barbara
Gillentine without such person having any obligation to make an independent
inquiry or investigation.
Notwithstanding any provision in this letter to the contrary, Seller is
executing this letter solely as an accommodation to and at the request of
Buyer and, except to the extent Seller is liable to Buyer for representations
and warranties expressly set forth in that certain Agreement of Purchase and
Sale, dated _________ 1998, by and between Seller and Buyer (the "Sale
Agreement'), this letter is subject to the condition that Seller shall not be
liable or responsible to Buyer, any parent, subsidiary or other affiliate of
Buyer, or any officer, director, employee, agent, representative,
shareholder, partner or principal of Buyer or any such parent, subsidiary or
other affiliate thereof or any accountant or other professionals engaged by
or on behalf of any of the foregoing, including, without limitation,
[accountant] (all of the foregoing being collectively referred to herein as
the "Buyer Parties"), as a result of the fact that any of the statements made
herein are in any way inaccurate, untrue or incorrect. By the acceptance of
this letter, except for rights and remedies that Buyer may have under the
Sale Agreement with respect to representations and warranties expressly set
forth in the Sale Agreement, each of the Buyer Parties shall be deemed to
have waived any and all rights and remedies that any of them may have against
Seller, whether at law or in equity, as a result of the fact that any of the
statements made herein are in any way inaccurate, untrue or incorrect.
4
<PAGE>
Seller has executed this letter for the limited purposes set forth
herein, and for the use of [accountant] only. No other parties may rely on
the statements set forth herein.
Very truly yours,
RREEF MIDAMERICA EAST-V SIX, INC.,
a Delaware corporation
By: RREEF America L.L.C.,
a Delaware limited liability company
By:
--------------------------------
Name: Joseph S. Cappelletti
Title: Its Authorized Representative
By:
--------------------------------
Name: Barbara J. Gillentine
Title: Its Authorized Representative
5
<PAGE>
EXHIBIT A
Legal Description of Property
<PAGE>
AGREEMENT OF PURCHASE AND SALE
between
Brandywine Operating Partnership, L.P., Purchaser,
and
RREEF USA Fund-I, Seller
King of Prussia Business Park
King of Prussia, Upper Merion Township, Montgomery County, Pennsylvania
<PAGE>
Table of Contents
1. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Deposit.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Review of the Property. . . . . . . . . . . . . . . . . . . . . . . . 2
4. Title and Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Representations and Warranties. . . . . . . . . . . . . . . . . . . . 4
5.1 Representations and Warranties of Seller.. . . . . . . . . 4
5.2 Representations and Warranties of Purchaser. . . . . . . . 7
5.3 Limitations. . . . . . . . . . . . . . . . . . . . . . . 7
5.4 Condition of Property. . . . . . . . . . . . . . . . . . . 8
6. Closing Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Title Insurance. . . . . . . . . . . . . . . . . . . . . . 9
6.2 Estoppel Letters . . . . . . . . . . . . . . . . . . . . . 9
6.3 Representations and Warranties . . . . . . . . . . . . . . 10
6.4 Seller Performance . . . . . . . . . . . . . . . . . . . . 10
7. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Closing of Sale. . . . . . . . . . . . . . . . . . . . . . 10
8.2 Prorations; Adjustments. . . . . . . . . . . . . . . . . . 11
8.3 Proration of Service Charges.. . . . . . . . . . . . . . . 12
8.4 Closing Costs. . . . . . . . . . . . . . . . . . . . . . . 12
8.5 Possession.. . . . . . . . . . . . . . . . . . . . . . . . 12
8.6 Seller's Closing Documents.. . . . . . . . . . . . . . . . 12
8.7 Purchaser's Closing Documents. . . . . . . . . . . . . . . 13
8.8 Joint Deliveries.. . . . . . . . . . . . . . . . . . . . . 14
9. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.1 Modifications. . . . . . . . . . . . . . . . . . . . . . . 14
9.2 Casualty and Condemnation. . . . . . . . . . . . . . . . . 14
9.3 Time of Essence. . . . . . . . . . . . . . . . . . . . . . 15
9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.5 Parties Bound. . . . . . . . . . . . . . . . . . . . . . . 16
i
<PAGE>
9.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 16
9.7 Continuation Until Closing; Leasing. . . . . . . . . . . . 16
9.8 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.9 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . 17
9.10 Remedies for Non-Performance.. . . . . . . . . . . . . . . 17
9.11 Brokers Commission.. . . . . . . . . . . . . . . . . . . . 17
9.12 Survival of Covenants. . . . . . . . . . . . . . . . . . . 18
9.13 Seller's Investment Committee Approval.. . . . . . . . . . 18
9.14 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.15 Entry and Indemnity. . . . . . . . . . . . . . . . . . . . 18
9.16 Release. . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.17 Confidential Information. . . . . . . . . . . . . . . . . 19
9.18 Calculation of Time Periods. . . . . . . . . . . . . . . . 20
9.19 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . 20
9.20 Severability.. . . . . . . . . . . . . . . . . . . . . . . 20
9.21 Facsimile Signatures.. . . . . . . . . . . . . . . . . . . 20
9.22 Further Assurances.. . . . . . . . . . . . . . . . . . . . 20
9.23 Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.24 Seller Exculpation Clause. . . . . . . . . . . . . . . . . 21
9.25 Purchaser Exculpation Clause.. . . . . . . . . . . . . . . 21
9.26 SEC Reporting (8-K) Requirements.. . . . . . . . . . . . . 21
List of Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . 23
ii
<PAGE>
AGREEMENT OF PURCHASE AND SALE
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
("Purchaser") agrees to purchase, and RREEF USA FUND-I, a California group
trust ("Seller") agrees to sell, that certain improved real property,
hereinafter referred to as the "Property", situated in the City of King of
Prussia, Upper Merion Township, Montgomery County, Commonwealth of
Pennsylvania, legally described on Exhibit A attached hereto and made a part
hereof, consisting of twelve (12) buildings and one vacant parcel, all as
listed on Exhibit A-1 attached hereto and hereby made a part hereof, together
with all rights, privileges, easements and appurtenances thereto, including
any and all mineral rights, development rights, air rights, and the like; all
personal property owned by the Seller and located on or used in conjunction
with the Property (specifically excluding furniture, fixtures and equipment
owned by RREEF Management Company and located in the RREEF Management Company
office, as well as the 650 Park Avenue canopy and canopy structure); any and
all intangible personal property owned by Seller and used in the operation of
the Property, including the right to use the name of the property (but not
the name "RREEF"), to the extent assignable, but excluding computer software
and related licenses; contract rights, "Leases" of all or any part of the
Property, all licenses, permits and other written authorizations necessary
for the use, operation and ownership of the Property, records, security
deposits and prepaid rent, if any, and the benefit of any guaranties of the
Leases.
1. Purchase Price. The purchase price for the Property ("Purchase
Price") is Forty-Six Million Three Hundred Sixty Thousand Dollars
($46,360,000.00), payable by wire transfer of immediately available funds at
Closing as defined in Paragraph 8.1.
2. Deposit.
2.1 Purchaser has previously deposited, pursuant to this
Agreement and pursuant to the Other Agreements (defined in Paragraph 7
below), the amount of Five Hundred Fifty Thousand Dollars ($550,000.00) (the
"Deposit") with Commonwealth Land Title Insurance Company ("Escrow Holder")
as earnest money to secure Purchaser's performance hereunder and under the
Other Agreements. The Deposit may be invested at the direction of Purchaser
with the approval of Seller. All investment income earned from the
investment of the Deposit, less investment fees, if any, will be added to and
become a part of the Deposit and will be applied toward the Purchase Price if
Closing is completed in accordance with this Agreement; otherwise all
interest will be paid to the party entitled to the Deposit. The escrow
instructions to Escrow Holder will be in the form of Schedule 2.1 attached
hereto (the "Escrow Instructions"). If Purchaser does not elect to
terminate this Agreement pursuant to Section 3 below, prior to the end of the
Review Period (defined in Section 3.4), on or before one business day after
last day of the Review Period Purchaser shall deposit an additional $500,000
with Escrow Holder, which shall be added to and become a part of the Deposit
for all purposes hereunder.
<PAGE>
2.2 Of the total Deposit, the sum of $150,000 is agreed to be
non-refundable, and shall be refunded to Purchaser only (i) if Purchaser
terminates this Agreement under Section 3.4, under the circumstances set
forth in Section 3.4.1, or (ii) if the Agreement is terminated or if the
Closing fails to occur by reason of Seller's default. Under all other
circumstances, wherever under this Agreement and the Other Agreements the
Deposit is to be returned to Purchaser, $150,000 out of the Deposit shall be
paid to Seller, to be retained by Seller as fully earned.
3. Review of the Property.
3.1 From and after the "Effective Date" (as defined in Paragraph
9.23), Seller agrees to provide Purchaser and its agents or consultants with
access to the Property to inspect each and every part thereof to determine
its present condition and to conduct such physical and environmental studies
(including a mechanical and roof study and Phase I environmental assessment)
as it deems appropriate.
3.2 Within three (3) business days after the Effective Date
Seller will make available to Purchaser for inspection and copying, all to
the extent in the possession of Seller or its managing agent, a copy of each
existing Lease and equipment lease, service contract and maintenance or
other contract pertaining to the operations of the Property that will survive
Closing, a copy of each real estate tax bills for 1994-1996, both inclusive,
and unaudited financial statements for the Property for the years 1994-1996,
both inclusive.
3.3 Within three (3) business days after the Effective Date
Seller will make available to Purchaser for inspection and copying at the
office of Seller's managing agent, all to the extent in the possession of
Seller or its managing agent:
3.3.1 a copy of each environmental reports relating to
the Property prepared by third party consultants since January 1, 1995.
3.3.2 a copy of each current franchises, business or
other licenses, bonds, permits, certificates, authorizations and other
evidences of consent, approval, authorization or permission relating to or
affecting the Project of or from any person, including any governmental
authority, held by Seller, including any pending applications.
3.3.3 a copy of each material third party warranties and
guaranties, if any, which are in effect with respect to the Property.
3.4 Purchaser has until 5:00 p.m. CST on February 2, 1998 (the
"Review Period"), to determine in its sole discretion whether all matters
relating to the Property (except title and survey, which are governed by
Paragraph 4), are acceptable, and to obtain the approval of the transaction
contemplated herein by Seller's Board of Directors. If Purchaser concludes
that any matter relating to the Property is not acceptable or that its Board
has disapproved the
2
<PAGE>
transaction, Purchaser will so notify Seller (the "Termination Notice") prior
to the expiration of the Review Period (which notice shall contain a copy of
Purchaser's roof/structural report and other reports or studies, other than
environmental reports, obtained in connection with Purchaser's due
diligence). Upon timely delivery of the Termination Notice, this Agreement
will terminate without liability on the part of Seller or Purchaser, other
than Purchaser's indemnity contained in Paragraph 9.15 hereof and the
obligation to deliver to Seller a copy of any environmental report obtained
by Purchaser if requested by Seller within ten (10) days after receipt of the
Termination Notice. In the event that Purchaser does not timely so notify
Seller, Purchaser will be deemed to have concluded that all matters relating
to the Property are acceptable and to have elected to proceed with the
transaction upon the terms and conditions contained in this Agreement
(including the obligation to increase the amount of the Deposit by an
additional $500,000) without regard to this Paragraph 3.4.
3.4.1 If this Agreement is terminated pursuant to
Paragraph 3.4, the Deposit, less $150,000, will be returned to Purchaser as
provided in the Escrow Instructions. This $150,000 shall be paid to Seller,
unless Purchaser's termination resulted from (i) Seller's default, (ii) a
material deviation from the economics of the Property as presented in
Seller's offering memorandum (it being understood and agreed that Seller
makes no warranty or representation as to said offering memorandum), or (iii)
any material structural or environmental defect in the Property not known or
disclosed to Purchaser before December 22, 1997.
3.5 Purchaser agrees that any information obtained by Purchaser
or its authorized agents in the conduct of its due diligence will be treated
as confidential pursuant to Paragraph 9.17.
4. Title and Survey. Purchaser has ordered, at its expense (and upon
receipt, Purchaser shall promptly deliver copies to Seller): (i) a commitment
for a 1992 form ALTA Owner's title insurance policy with respect to the
Property from Commonwealth Land Title Insurance Company (the "Title Insurer")
in the amount of the Purchase Price, and (ii) copies of all documents
relating to title exceptions referred to therein. Seller has already
ordered, and Purchaser has received, at Purchaser's sole expense, a plat of
survey of the Property made in accordance with Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys (1992) pursuant to the accuracy
standards of an Urban Survey. On or before January 30, 1998, Purchaser
agrees to notify Seller of any objection Purchaser may have to any exceptions
reported in the commitment or any matter shown on the plat of survey (the
"Unacceptable Exceptions"). Seller will be responsible for satisfaction of
the Title Insurer's Schedule B-1 seller requirements. All other exceptions
and survey matters will be deemed acceptable to Purchaser. If Purchaser
fails to give such notice to Seller, the survey and all of the exceptions in
the title commitment will be deemed acceptable to Purchaser. Seller will
have ten (10) days after receipt of Purchaser's notice within which to notify
Purchaser whether Seller elects to either (a) eliminate or induce the Title
Insurer to insure over (subject to Purchaser's consent, not to be
unreasonably withheld) the Unacceptable Exceptions or (b) terminate this
Agreement. If Seller agrees to eliminate or induce to the Title Insurer to
insure over (with Purchaser's consent) the
3
<PAGE>
Unacceptable Exceptions, Seller will be obligated to do so at its cost on or
prior to Closing. If Seller elects to terminate this Agreement, neither
party will have any further rights or obligations hereunder, except as
provided in Paragraph 9.15. If Seller fails to give any timely notice,
Seller will be deemed to have elected to terminate this Agreement. If any
other recorded exception to title is discovered after the commitment is
delivered to Purchaser, and Purchaser does not elect to waive such exception
upon the first to occur of (a) the Closing or (b) seven (7) days after being
notified of such exception and to proceed with the consummation of the
Closing, Seller will have fifteen (15) days after the expiration of said
seven (7) day period (and Closing will be delayed if necessary, so that it
occurs not earlier than twenty-two (22) days after Purchaser is notified of
such exception) after notifying Purchaser of such discovery in which to use
commercially reasonable efforts to eliminate or to induce the Title Insurer
to insure over (subject to Purchaser's approval, not to be unreasonably
withheld) such exception, and if such exception is not eliminated or insured
over as aforesaid within said 15-day period, Purchaser may terminate this
Agreement, in which event the Deposit will be returned to Purchaser and
neither party will have any further rights or obligations hereunder except as
provided in Paragraph 9.15, or close the sale subject to such exception.
Seller agrees that it will pay off at Closing (and not induce the Title
Insurer to insure over) title exceptions representing monetary liens of a
definite or ascertainable amount voluntarily granted by Seller. In using
commercially reasonable efforts to eliminate or to induce the Title Insurer
to insure over Unacceptable Exceptions, Seller will not be required to
litigate or to expend more than $10,000 in the aggregate. Ad valorem real
estate taxes not yet due and payable and all title and survey matters which
are not Unacceptable Exceptions are hereinafter referred to as Acceptable
Exceptions.
5. Representations and Warranties.
5.1 Representations and Warranties of Seller. As used in this
Paragraph 5.1 and elsewhere in this Agreement, the phrase "to the knowledge
of Seller" or phrases of similar import mean and are limited to the actual
current knowledge, without duty to investigate or inquire, of Seller's
portfolio manager (Pamela Boneham) and Seller's local manager having ongoing
management responsibility with respect to the Property (Barbara Gillentine),
and not to any constructive knowledge of any of the foregoing individuals or
of Seller or any investment advisor to Seller, any entity that is a partner
in such investment advisor, or any affiliates of any thereof, or to any
officer, agent, representative, or employee of Seller or such investment
advisor, any such constituent partner, or any such affiliate. Seller hereby
warrants and represents to Purchaser (with such representations and
warranties to be re-made as of Closing pursuant to Paragraph 8.6.10) as
follows:
5.1.1 Pending Proceedings. With the exception of the
items set forth in Schedule 5.1 (the "Disclosure Schedule") to the knowledge
of Seller, Seller has received no written notice of special assessments,
condemnation, environmental, zoning or other land use regulation proceedings,
either pending or planned to be instituted, with respect to the Property or
any part thereof.
4
<PAGE>
5.1.2 Status of Seller and Closing Documents. Subject to
Paragraph 9.13, this Agreement has been, and all the closing documents to be
delivered by Seller to Purchaser at Closing are or will be, duly authorized,
executed, and delivered by Seller, will be sufficient to convey insurable
title, are legal, valid, and binding obligations of Seller, are enforceable
in accordance with their respective terms, and do not violate any provisions
of any agreement to which Seller or the Property is subject or bound. Seller
is duly organized and validly existing and, if required, duly qualified to
transact business in the State in which the Property is located.
5.1.3 Non-Foreign Status. Seller is not a foreign person
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended.
5.1.4 Compliance with Laws. With the exception of the
items set forth in the Disclosure Schedule, Seller has received no
governmental notice, not heretofore corrected, alleging that the Property or
its current uses are in violation of any zoning, building, health, traffic,
environmental, flood control or all other applicable rules, regulations,
codes, ordinances, or statutes of any local, state and federal authorities or
any other governmental authority (collectively, the "Laws") asserting
jurisdiction over the Property.
5.1.5 Service Contracts. With the exception of the items
set forth in the Disclosure Schedule, to Seller's knowledge, there are no
agreements or contracts affecting the Property (including, without
limitation, any management, leasing, services or maintenance agreements)
which are not terminable at will by Seller without further liability, upon
not more than 30 days' prior written notice. The contracts and agreements to
be assigned to Purchaser pursuant to Paragraph 8.6.5 are listed on Schedule
5.1.5 attached hereto. Seller agrees to terminate the existing management
agreement covering the Property on or before Closing.
5.1.6 No Default. The execution and delivery of this
Agreement, and consummation of the transaction described in this Agreement,
does not and will not constitute a default under any contract, lease, or
agreement to which Seller is a party or by which Seller is bound.
5.1.7 No Suits. Except as set forth in the Disclosure
Schedule and except for personal injury or property damage actions for which
there is adequate insurance coverage and where the insurance carrier has
accepted the tender of the defense without reservation, to Seller's
knowledge, there is no action, suit or proceeding pending or threatened
against or affecting the Property or any portion thereof, or relating to or
arising out of the ownership, management or operation of the Property, in any
court or before or by any federal, state, or municipal department,
commission, board, bureau or agency or other governmental instrumentality.
5.1.8 Environmental Condition. Each of the following
representations contained in this Paragraph 5.1.8 is wholly qualified and
limited by (a) any matters disclosed in
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any materials made available or delivered to Purchaser by Seller pursuant to
Paragraph 3 above or otherwise, (b) any matters disclosed in any
environmental reports or studies obtained by Purchaser, and (c) any other
matters of which Purchaser has actual knowledge. Subject to the foregoing,
Seller represents:
5.1.8.1 With the exception of items listed in the
Disclosure Schedule, and except (i) in amounts customarily found in office
uses and in the other uses for which the Property is suited and used and (ii)
in compliance with applicable law, to Seller's knowledge, Seller has not
released, generated or handled Hazardous Materials on the Property, and
Seller has no knowledge of any release, generation or handling of Hazardous
Materials on the Property by any tenants or the incorporation of Hazardous
Materials by the tenants in any improvements on the Property during the time
Seller owned the Property. For the purposes hereof, "Hazardous Material"
means any substance, chemical, waste or other material which is listed,
defined or otherwise identified as "hazardous" or "toxic" under any federal,
state, local or administrative agency ordinance or law, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601 et seq. and the Resource Conservation
and Recovery Act, 42 U.S.C. Sections 6901 et seq., or any regulation, order,
rule or requirement adopted hereunder, as well as any formaldehyde, urea,
polychlorinated biphenyls, petroleum, petroleum product or by-product, crude
oil, natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel or mixture thereof, radon, asbestos, and "source,"
"special nuclear" and "by-product" material as defined in the Atomic Energy
Act of 1985, 42 U.S.C. Sections 3011 et seq.
5.1.8.2 With the exception of items listed in the
Disclosure Schedule, to Seller's knowledge, Seller has not received any
summons, citation, directive, letter or other communication, written or oral,
from the United States Environmental Protection Agency or the State
environmental protection agency having jurisdiction over the Property.
5.1.9 Options. Seller has granted no options or rights
of first refusal to acquire any interest in the Property not set forth in the
Leases delivered to Purchaser or in documents of record disclosed in the
title commitment. The purchase rights of the U.S. Postal Service under its
lease have expired without exercise.
5.1.10 Rent Roll. To Seller's knowledge, the information
set forth on the rent roll attached hereto as Schedule 5.1.10 is true and
accurate in all material respects.
5.1.11 Tenant Rights. There are no termination,
extension, cancellation, or expansion rights under any occupancy arrangements
with respect to the Property except as contained in the Leases.
5.1.12 Leasing Commissions. All leasing commissions, free
rent and tenant improvement allowances due and payable as of the date hereof
by Seller have been paid or will have been paid on or before Closing. To
Seller's knowledge, the only current leases as to
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which commissions, free rent and tenant improvement allowances may become due
in the future are listed on Schedule 5.1.12, which future obligations shall
be expressly assumed by Purchaser.
5.1.13 There are no employees of the Property or Seller
who will become employees of Purchaser or for which Purchaser shall be
responsible in any way.
5.2 Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to Seller that this Agreement has been, and
all the documents to be delivered by Purchaser to Seller will be, duly
authorized, executed, and are or will be legal, valid, and binding
obligations of Purchaser, are or will be enforceable in accordance with their
respective terms, and do not and will not at Closing violate any provisions
of any agreement to which Purchaser is subject.
5.3 Limitations. Each of the representations and warranties of
Seller contained in Paragraph 5.1: (i) is made as of the date of this
Agreement; (ii) will be deemed to be remade by Seller, and to be true in all
material respects, as of Closing, subject to other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Purchaser; and (iii) will survive for a period of one (1) year after the
Closing Date, as defined in Paragraph 8.1. Any claim that Purchaser may have
at any time against Seller for a breach of any such representation or
warranty, whether known or unknown, which is not asserted by notice from
Purchaser to Seller within such six (6) month period will not be valid or
effective, and Seller will have no liability with respect thereto. Nor will
Seller have any liability to Purchaser for a breach of any representation or
warranty unless the valid claims for all such breaches collectively aggregate
more than One Hundred Thousand Dollars ($100,000.00), in which event the full
amount of such valid claims shall be actionable, subject to the limitation in
Section 9.10. The continued accuracy in all material respects of the
aforesaid representations and warranties is a condition precedent to
Purchaser's obligation to close. If any of said representations and
warranties is not correct in all material respects at the time the same is
made or as of Closing, and Seller had no knowledge of such inaccuracy when
the representation or warranty was made, or when remade at Closing, or if
such warranty or representation becomes inaccurate on or prior to Closing
other than by reason of Seller's default hereunder, Purchaser may, upon being
notified of such occurrence on or prior to Closing either (a) terminate this
Agreement without liability on the part of Seller or Purchaser, other than
Purchaser's indemnity contained in Paragraph 9.15 and the Deposit will be
returned to Purchaser, or (b) waive such matter and proceed to Closing, by
notice to Seller given within ten (10) days after Purchaser is notified of
such occurrence, but in no event later than Closing. If Purchaser fails to
give any notice within the required time period, Purchaser will be deemed to
have elected to waive such matter and to proceed to Closing. If any of said
representations and warranties are not correct in all material respects at
the time the same is made or as of Closing, and Seller had knowledge of such
inaccuracy when the representation or warranty was made, or, by its default
hereunder caused the representation or warranty to be inaccurate when remade
at Closing, Purchaser may either (x) terminate this Agreement subject to its
obligations under Paragraph 9.15, receive a return of the Deposit and recover
from Seller all of Purchaser's actual, reasonable out-of-pocket costs
incurred in connection with its review of
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the Property or (y) waive the breach and its rights under clause (x) and
proceed to Closing, by notice to Seller given within ten (10) days after
Purchaser is notified of such occurrence, but in no event later than Closing.
If Purchaser fails to give any notice within the required time period,
Purchaser will be deemed to have elected to waive such matter and to proceed
to Closing.
5.4 Condition of Property. Except as expressly set forth in
this Agreement, Seller has not made and does not hereby make any
representations, warranties or other statements as to the condition of the
Property and Purchaser acknowledges that at Closing it is purchasing the
Property on an "AS IS, WHERE IS" basis and without relying on any
representations and warranties of any kind whatsoever, express or implied,
from Seller, its agents or brokers as to any matters concerning the Property.
Except as expressly set forth in this Agreement, no representations or
warranties have been made or are made and no responsibility has been or is
assumed by Seller or by any partner, officer, person, firm, agent or
representative acting or purporting to act on behalf of Seller as to the
condition or repair of the Property or the value, expense of operation, or
income potential thereof or as to any other fact or condition which has or
might affect the Property or the condition, repair, value, expense of
operation or income potential of the Property or any portion thereof. The
parties agree that all understandings and agreements heretofore made between
them or their respective agents or representatives are merged in this
Agreement and the Schedules and Exhibits hereto annexed, which alone fully
and completely express their agreement, and that this Agreement has been
entered into after full investigation, or with the parties satisfied with the
opportunity afforded for investigation, neither party relying upon any
statement or representation by the other unless such statement or
representation is specifically embodied in this Agreement or the Exhibits
annexed hereto. Purchaser acknowledges that Seller has requested Purchaser
to inspect fully the Property and investigate all matters relevant thereto
and, with respect to the condition of the Property, to rely solely upon the
results of Purchaser's own inspections or other information obtained or
otherwise available to Purchaser, rather than any information that may have
been provided by Seller to Purchaser.
6. Closing Conditions. Purchaser's obligation to proceed to Closing
is conditioned upon Seller's performance of the following obligations and
satisfaction of the following conditions, in addition to all of its other
obligations and conditions contained in this Agreement, provided that
Purchaser may in its sole discretion elect to waive failure by Seller to
perform any particular obligation.
6.1 Title Insurance. The Title Insurer is prepared to issue a
policy of title insurance insuring Purchaser's interest in the Property being
conveyed, subject only to Acceptable Exceptions.
6.2 Estoppel Letters. Seller has delivered to Purchaser not
later than the date of Closing, estoppel letters substantially in the form of
Schedule 6.2 ("Required Estoppel Form") or in form otherwise reasonably
acceptable to Purchaser, prepared by Seller and
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addressed to Purchaser, from tenants occupying in the aggregate at least 75%
of the Property, measured by square footage. All estoppel letters must be
dated not more than forty-five (45) days prior to the date of Closing. An
estoppel letter form, even though not in the Required Estoppel Form, will be
deemed reasonably acceptable to Purchaser if said letter contains the
following information: confirming rent, security deposit, square footage and
termination date; that no rent has been paid more than one month in advance;
that the lease is in full force and effect and that a true and correct copy
of the lease with all amendments and modifications is attached; and that all
work to be performed by Landlord has been performed and that the tenant has
no knowledge of any Landlord default.
6.2.1 If Seller is unable to obtain the requisite
estoppel letters as described above, Seller may (but is not required to)
substitute for any unsigned estoppel letter from a tenant other than a Major
Tenant an estoppel letter in the Required Estoppel Form, which may be
completed, executed and delivered by Seller and warranted and represented by
Seller, provided that such substituted estoppel letters will not collectively
represent in excess of 10% of all of the tenants, measured by square footage.
Seller's representations and warranties in the certificates will survive the
Closing subject to the limitations of Paragraph 5.3. In the event that,
following the Closing Date, Seller or Purchaser obtains an estoppel letter
complying with the requirements of Paragraph 6.2 with respect to any lease
for which Seller delivered a substituted estoppel letter, Seller will deliver
such estoppel letter to Purchaser and, upon such delivery, Seller will be
automatically released from any liability or obligation under the substituted
estoppel letter previously delivered by Seller with respect to such lease.
Purchaser may (but shall not be required to) accept a substituted estoppel
letter as to a Major Tenant as well.
6.2.2 If Seller is unable to obtain and deliver
sufficient tenant estoppel certificates as required under Paragraph 6.2, or
if the letters received under Paragraph 6.2 or substituted estoppels
permitted under Paragraph 6.2.1 contain information or omissions unacceptable
to Purchaser in its reasonable discretion, then Seller will not be in default
by reason thereof, but Purchaser may, by notice given to Seller before the
Closing, elect (i) to waive said conditions and proceed with the Closing or
(ii) to terminate this Agreement, and receive a refund of the Deposit. If
Purchaser elects to terminate this Agreement. neither party will have any
further rights or obligations hereunder except as provided in Paragraph 9.15.
6.3 Representations and Warranties. All of Seller's
representations and warranties made pursuant to Paragraph 5.1 remain true and
correct in all material respects.
6.4 Seller Performance. Seller has delivered all of the
documents and other items required pursuant to Paragraph 8.6 and has
performed all other covenants, undertakings and obligations required by this
Agreement, to be performed or complied with by Seller at or prior to Closing.
7. Other Agreements. The obligations of Purchaser and Seller to close
hereunder shall also be conditioned upon the simultaneous closing of (a) the
purchase by Purchaser or an
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affiliate of Purchaser, of the industrial building commonly known as 741
First Avenue, King of Prussia, Pennsylvania, pursuant to that certain
Agreement of Purchase and Sale of even date herewith (the "741 First Avenue
Agreement") between Purchaser, as purchaser, and RREEF MidAmerica/East
Fund-IV ("741 First Avenue Owner"), as seller, and (b) the purchase by
Purchaser or an affiliate of Purchaser, of the industrial building commonly
known as 180 Wheeler Court, Bucks County, Pennsylvania, pursuant to that
certain Agreement of Purchase and Sale of even date herewith (the "Wheeler
Court Agreement"; the 741 First Avenue Agreement and the Wheeler Court
Agreement collectively the "Other Agreements") between Purchaser, as
purchaser, and RREEF MidAmerica East-V Six, Inc. ("Wheeler Court Owner"; the
741 First Avenue Owner and the Wheeler Court Owner are collectively referred
to as the "Other Owners"), as seller. This condition may be waived by the
parties. Without limiting the generality of the foregoing, if Purchaser
terminates this Agreement pursuant to Section 3 or Section 4, the Other
Owners shall have the right to terminate the Other Agreements as well; or, if
Purchaser terminates one or more of the Other Agreements pursuant to Section
3 or Section 4 of the Other Agreements, Seller shall have the right to
terminate this Agreement as well. A default by Purchaser under one or more
of the Other Agreements shall be deemed a Purchaser default hereunder, and a
default by an Other Owner under one or more of the Other Agreements shall be
deemed a Seller default hereunder.
8. Closing.
8.1 Closing of Sale. The purchase and sale contemplated herein
shall close (herein referred to as the "Closing") at the office of the Title
Insurer, or as otherwise mutually agreed, on a date selected by Seller, which
date (the "Closing Date") shall not be earlier than the date which is fifteen
(15) days after the expiration of the Review Period nor more than thirty (30)
days after expiration of the Review Period, time being of the essence. At
Closing, Seller will deliver to Purchaser a Special Warranty Deed ("Deed") in
the form of Schedule 8.6.1 and other closing documents required hereunder and
Purchaser will cause payment of the Purchase Price to be made to Seller by
wire transfer. The sale (payment of the Purchase Price and delivery of the
Deed) may, at Purchaser's option to be exercised by notice to Seller at least
five (5) days prior to the Closing Date, be closed through escrow with the
Title Insurer in accordance with the general provisions of the usual form of
escrow agreement used in similar transactions by such Title Insurer with
special provisions inserted (i) as may be required to conform with this
Agreement and (ii) to close on a so-called "New York Style" basis.
8.2 Prorations; Adjustments. The parties will prorate taxes,
rental, and other income, and operating or other expenses of the Property as
of 12:01 a.m. on the date after Closing (i.e., Seller is entitled to the
income and responsible for the expenses of the day of Closing). All income
will be prorated on the basis of income actually received by Seller, as
opposed to income which is due or for which Seller has rendered invoices but
which has not been paid (i.e., Seller will not be entitled to any credit for
receivables, and there will be no proration as to such receivables). Any
taxes or other expenses of the Property for any period prior to Closing which
are payable by tenants of the Property subsequent to Closing (e.g., real
estate taxes paid in
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arrears and not yet billed to tenants), will reduce the credit to Purchaser
for such items (i.e., no credit from Seller for pass-through items for which
Purchaser will later collect from the tenants). To the extent that the taxes
to be prorated are not known with certainty, such proration will be based
upon the most recent tax bill or county estimate, to be re-prorated upon
issuance of final bills. Seller also agrees to give Purchaser a credit
against the Purchase Price for all cash security deposits required to be held
pursuant to the Leases (less portions thereof applied by Seller to tenant
defaults and not subsequently restored by the tenant in question) and all
interest due thereon and shall assign to Purchaser any other tenant deposits
held by Seller. Purchaser will pay amounts subsequently received by it from
tenants constituting base rent, capital reimbursements or other income due
from tenants and attributable to Seller's period of ownership, but not
collected as of the date of Closing, to Seller promptly upon receipt;
provided that amounts received from tenants by Purchaser will be first
applied to current charges, and the balance will be applied to payments due
to Seller. Notwithstanding the foregoing, Seller shall expressly reserve the
right to seek to collect, directly from the tenants after Closing and with
Purchaser's cooperation, any delinquencies and other amounts attributable to
Seller's period of ownership, but not collected as of the date of Closing.
To the extent Seller has received amounts from tenants for real estate taxes
and 1997 and 1998 operating expenses in excess of amounts paid by Seller with
respect to such expenses, Seller will credit such excess to Purchaser at
Closing, and Seller will provide adequate backup information in connection
with such credit. On or after the Closing, Seller will have no further
obligations with respect to any Leases or other agreements affecting the
Property, including, without limitation, tenant improvement work, leasing
commissions and free rent.
8.2.1 Seller and Purchaser hereby agree to use their
reasonable efforts to calculate prorations (including real estate tax
prorations) so as to permit settlement thereof on the Closing Date, provided,
however, that if any of such prorations cannot be calculated accurately on
the Closing Date, then the same will be calculated as soon as reasonably
practicable after the Closing Date, but in no event later than the later to
occur of (i) thirty (30) days after Seller receives its final cost
certification for the year in which Closing occurs, or (ii) March 31 of the
year following the year in which Closing occurs, and either party owing the
other party a sum of money based on such subsequent proration(s) 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" (as announced
from time to time in the Wall Street Journal) from the Closing Date to the
date of payment if payment is not made within thirty (30) days after delivery
of a bill therefor together with reasonable back-up documentation. This
obligation of the parties will survive Closing.
8.3 Proration of Service Charges. To the extent Seller, as
opposed to tenants, is responsible for payment of utility charges, Seller
will attempt to have utility meters read as of the Closing Date. To the
extent that this is not possible and to the extent that any other obligation
for continuing services is incurred, and statements are rendered for such
services covering periods both before and after the Closing Date, the amount
will be adjusted between the parties as of the Closing Date on a per-diem
basis. Seller will forward any such statements
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which it receives to Purchaser and Purchaser will pay the same. Seller will
remit to Purchaser its proportionate share immediately upon demand.
8.4 Closing Costs. Purchaser agrees to pay (i) the Title
Insurer's escrow and/or closing fees (including any payment to the closing
officer of the Title Insurer as may be the local custom at the Closing), (ii)
the cost of the title commitment and basic policy and endorsements, if any,
required to meet Seller's obligations hereunder and the cost of any
endorsements to the title policy required by Purchaser, including extended
coverage, (iii) all recording fees and taxes with respect to the Deed, (iv)
all costs of Purchaser's physical inspections of the Property (environmental,
engineering) and other due diligence activities; (v) all costs of survey,
including fees and charges of Gannett Fleming Associates (originally engaged
by Seller); (vi) cancellation charges, if applicable, to Coventry Abstract
(originally engaged by Seller); and (vii) one-half (1/2) of applicable
transfer taxes. Seller agrees to pay (i) all recording fees with respect to
clearing Seller's title, and (ii) one-half (1/2) of applicable transfer
taxes. Except as otherwise provided in Paragraph 9.9, each party is
responsible for its own attorneys' and other professional fees. All other
closing costs shall be allocated in accordance with the prevailing local
custom.
8.5 Possession. Subject to the rights of tenants pursuant to
Leases delivered to Purchaser, Seller will deliver possession of the Property
and of any conveyed personal property to the Purchaser on the date of Closing
and Seller will thereupon deliver to Purchaser the originals of all Leases,
all correspondence with tenants, tenant/lease files, operating statements,
plans and specifications, supplies and advertising materials, booklets, keys,
and other items used in connection with operation of the Property.
8.6 Seller's Closing Documents. As part of the Closing, Seller
will deliver to Purchaser:
8.6.1 the Deed, in the form of Schedule 8.6.1
8.6.2 an affidavit in customary form that Seller is not a
foreign person within the meaning of Section 1445(e) of the Internal Revenue
Code of 1986, in the form of Schedule 8.6.2;
8.6.3 such affidavits as are customarily required by
Title Insurer in connection with issuance of the owner's basic title
insurance policy, including a mechanics' lien and judgment affidavit;
8.6.4 an assignment of the Leases in the form of Schedule
8.6.4 ("Lease Assignment");
8.6.5 an assignment of contracts and warranties in the
form of Schedule 8.6.5 ("Contracts Assignment"), assigning to Purchaser all
contracts listed on Schedule 5.1.5,
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other than those designated by Purchaser for termination by notice to Seller
not less than thirty (30) days prior to Closing;
8.6.6 an assignment of intangibles in the form of
Schedule 8.6.6 ("Intangibles Assignment");
8.6.7 letters, in form to be supplied by Purchaser, to
the tenants at the Property, instructing the tenants to pay rent to
Purchaser and to recognize Purchaser as landlord under their Leases;
8.6.8 a bill of sale conveying all personal property of
Seller, if any, located at the Property and used in connection with the
maintenance or operation thereof (specifically excluding furniture, fixtures
and equipment owned by RREEF Management Company and located in the RREEF
Management Company office), in the form of Schedule 8.6.8;
8.6.9 a rent roll, certified by Seller as being true and
correct, to Seller's knowledge, as of the Closing Date, in the form
previously delivered to Purchaser;
8.6.10 a "bring down certificate" stating that Seller's
representations and warranties are true and correct as of the Closing Date,
in the form of Schedule 8.6.10;
8.6.11 estoppel certificates as required by Paragraph 6.2
herein; and
8.6.12 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
8.7 Purchaser's Closing Documents. As part of the Closing,
Purchaser will deliver to Seller:
8.7.1 good federal funds in an amount equal to the
Purchase Price, less the Deposit and interest thereon and plus or minus
prorations as provided herein and plus funds sufficient to pay Purchaser's
closing costs hereunder;
8.7.2 such affidavits as are customarily required by
Title Insurer in connection with issuance of the owner's title insurance
policy;
8.7.3 executed counterpart of the Lease Assignment;
8.7.4 executed counterpart of the Contracts Assignment;
8.7.5 executed counterpart of the Intangibles Assignment;
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8.7.6 all other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
8.8 Joint Deliveries. At the Closing, Seller and Purchaser will
execute and deliver to each other the following documents in proper form:
8.8.1 Closing Statement;
8.8.2 City, county and state transfer tax declarations or
similar instruments; and
8.8.3 All other documents, instruments or writings which
may be reasonably required to consummate the transactions contemplated herein.
9. Miscellaneous.
9.1 Modifications. This Agreement can be amended only in
writing signed by both of the parties.
9.2 Casualty and Condemnation. Seller agrees to keep its
customary replacement cost insurance covering the Property in effect until
the Closing. If between the Effective Date and the Closing the improvements
on the Property are destroyed or damaged to the extent that repairs cost in
excess of $1,000,000 in the estimate of an architect or contractor selected
by Seller and reasonably acceptable to Purchaser, or if condemnation
proceedings are commenced against the Property, Purchaser may (i) terminate
this Agreement or (ii) elect to accept the Property in its then condition, in
which event Seller will pay or assign to Purchase at Closing all proceeds of
insurance (plus the applicable deductible) or condemnation awards payable to
Seller by reason of such damage or condemnation. In the event Purchaser
makes neither election by the earlier of (a) Closing or (b) ten (10) days
after being advised of such casualty or condemnation, Purchaser will be
deemed to have elected to accept the Property in its then condition. In the
event of any other damage to the Property, Seller may either repair the
damage or give Purchaser a reduction in the Purchase Price equal to the cost
of repairing such damage, as certified by an architect or contractor selected
by Seller and reasonably acceptable to Purchaser. In the event of any damage
where Purchaser does not have the right to terminate and Seller elects to
repair such damage, the Closing Date shall be delayed for the number of days
required to repair the damage, which Seller agrees to do in accordance with
all Laws and in a good and workmanlike manner.
9.3 Time of Essence. Time (including, without limitation, the
date specified as the Closing Date) is of the essence of this Agreement.
9.4 Notices. All notices required or permitted hereunder must
be in writing and shall be served on the parties at the following address:
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If to Purchaser: Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Blvd.
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney, President & CEO
Brad A. Molotsky, General Counsel
Facsimile: (610-325-5622)
If to Seller: RREEF USA FUND-I
c/o The RREEF Funds
875 N. Michigan Avenue
Suite 4100
Chicago, IL 60611
Attn: Mr. John Turney & Ms. Pamela Boneham
Facsimile: (312) 266-9346
with a copy to: RREEF USA FUND-I
c/o The RREEF Funds
650 Park Avenue
Suite 210
King of Prussia, PA 19406
Attn: Ms. Barbara Gillentine
Facsimile: (610) 337-2308
and a copy to: D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attn: Lawrence J. Moss
Facsimile: (312) 580-0923
Any such notices may be sent by (a) certified mail, return receipt requested,
in which case notice will be deemed delivered three (3) business days after
deposit, postage prepaid in the U.S. mail or (b) a nationally recognized
overnight courier, in which case notice will be deemed delivered one business
day after deposit with such courier or (c) facsimile transmission, in which
case notice will be deemed delivered upon electronic verification that
transmission to recipient was completed, provided that notices sent by
facsimile transmission on a day other than a business day, or before 9:00
a.m. or after 5:00 p.m. recipient's time on a business day, shall be deemed
given on the first business day following the date of transmission or (d)
personal delivery. The above addresses and facsimile numbers may be changed
by notice to the other party; provided
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that no notice of a change of address or facsimile number will be effective
until actual receipt of such notice.
9.5 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited
assignment shall be void; provided that Purchaser may assign this Agreement
without Seller's consent to an Affiliate; provided that the assignee is not a
party-in-interest as described in Paragraph 9.14. Subject to the foregoing,
this Agreement is binding upon and inure to the benefit of the respective
legal representatives, successors, assigns, heirs, and devisees of the
parties. For the purposes of this Paragraph, the term "Affiliate" means (a)
an entity that directly or indirectly controls, is controlled by or is under
common control with the Purchaser or (b) an entity at least a majority of
whose economic interest is owned by Purchaser; and the term "control" means
the power to direct the management of such entity through voting rights,
ownership or contractual obligations.
9.6 Governing Law. The performance and interpretation of this
Agreement is controlled by the law of the Commonwealth of Pennsylvania.
9.7 Continuation Until Closing; Leasing.
9.7.1 Between the Effective Date and the Closing, Seller
agrees to keep and perform all of the obligations to be performed by landlord
under any Leases and Laws. Seller agrees to operate the Property in the same
manner as before the making of this Agreement, the same as though Seller were
retaining the Property. Seller agrees not to convey the Property, nor to
grant any liens or easements with respect thereto.
9.7.2 Seller shall not permit or consent to any new
leases, amendments, extensions, renewals (other than pursuant to tenant
renewal options, if any) or subleases without first submitting them to
Purchaser for Purchaser's approval on an approval form in the form attached
hereto as Schedule 9.7.2, which approval shall not be unreasonably withheld.
Purchaser shall have three (3) business days to notify Seller of its approval
of such leases, amendments, extensions, renewals or subleases, and in the
event that Purchaser does not so notify Seller, the leases, amendments,
extensions, renewals or subleases, as the case may be, shall be deemed
approved.
9.7.3 With respect to any new lease or lease modification
entered into by Seller after December 18, 1997 and approved by Purchaser, by
the terms of which Seller obligates itself to perform or performs or pays or
contracts for any tenant improvement work or additional landlord work
required pursuant to such lease, or pays or contracts for any leasing
commissions or grants any free rent period or other financial concessions,
then such expenses and/or free rent or other concessions, and all other
third-party costs incurred (including attorneys' fees) in connection with
such lease, will be a credit to Seller at Closing to the extent Seller paid
such amounts prior to Closing; otherwise Purchaser agrees to assume liability
for the payment and performance of such obligations in accordance with the
terms thereof.
16
<PAGE>
9.8 Brokers. Seller and Purchaser each (i) represents and
warrants to the other that it has not dealt with any broker or finder in
connection with the transaction contemplated by this Agreement other than the
parties, if any, to be paid a commission as specified in Paragraph 9.11, and
(ii) agrees to defend, indemnify and hold the other harmless from and against
any losses, damages, costs, or expenses (including attorneys' fees) incurred
by such other party due to a breach of the foregoing warranty by the
indemnifying party.
9.9 Attorneys' Fees. Notwithstanding any limitation on remedies
or amounts recoverable set forth elsewhere herein, if any action is brought
by either party against the other party, the party in whose favor final
judgment is entered will be entitled to recover court costs incurred and
reasonable attorneys' fees at trial, upon appeal and on any petition for
review.
9.10 Remedies for Non-Performance. Purchaser's remedies
regarding breach of warranty or representation by Seller are governed by
Paragraph 5.3. In the event of any other default by Seller hereunder,
Purchaser may, as its sole and exclusive remedy, either (i) terminate this
Agreement and seek damages, subject to performance of Purchaser's indemnities
set forth in Paragraph 9.15, and receive back the Deposit or (ii) seek
specific performance. If said sale is not consummated because of a default
under this Agreement on the part of Purchaser, the Deposit will be paid to
and retained by Seller as Seller's sole and exclusive remedy. Seller and
Purchaser acknowledge that the Deposit is a reasonable forecast of just
compensation for the harm that could be caused by Purchaser's default and
that the harm suffered by Seller is difficult or impossible to accurately
ascertain or predict. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
TO THE CONTRARY, SELLER'S TOTAL LIABILITY FOR DAMAGES FOR BREACH OF THE
COVENANTS, AGREEMENTS, WARRANTIES AND REPRESENTATIONS UNDER THIS AGREEMENT
AND THE OTHER AGREEMENTS, COLLECTIVELY, SHALL NEVER EXCEED TWO MILLION
DOLLARS ($2,000,000.00), AND IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES.
9.11 Brokers Commission. Seller agrees to pay the brokerage
commission due The Flynn Company pursuant to a separate agreement.
9.12 Survival of Covenants. All covenants hereunder which, by
their terms, are intended to survive Closing will survive Closing hereunder.
9.13 Seller's Investment Committee Approval. This condition has
been satisfied.
9.14 ERISA. Purchaser represents and warrants to Seller that
none of Purchaser's assets are "plan assets," (as that term is defined by 29
CFR Section 2510.3-101) because all plans that are subject to the provisions
of the Employee Retirement Income Security Act of 1974,
17
<PAGE>
as amended, and which have invested in Purchaser hold only "equity
interests," (as that term is defined by 29 CFR Section 2510.3-101(b)(1)) that
are "publicly-offered securities," (as that term is defined by 29 CFR Section
2510.3-101(b)(2)). Purchaser further represents and warrants to Seller that
it is not any one of the types of entities listed in 29 CFR Section
2510.3-101(h), the character of which would identify its assets as "plan
assets."
9.15 Entry and Indemnity. In connection with any entry by
Purchaser, or its agents, employees or contractors onto the Property,
Purchaser 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 Seller's tenants and otherwise in a manner
reasonably acceptable to Seller. Without limiting the foregoing, prior to
any entry to perform any on-site testing, Purchaser shall give Seller notice
thereof, including the identity of the company or persons who will perform
such testing and the proposed scope of the testing. Seller shall approve or
disapprove the scope and methodology of such proposed testing within three
(3) business days after receipt of such notice, such approval to be within
the sole and unfettered discretion of Seller; Seller's failure to notify
Purchaser of its approval or disapproval shall be deemed to be Seller's
disapproval thereof. If Purchaser or its agents, employees or contractors
take any sample from the Property in connection with any such approved
testing, upon Seller's request, Purchaser 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 Property. Upon Seller's
request, Purchaser shall promptly deliver to Seller copies of any reports
relating to any testing or other inspection of the Property performed by
Purchaser or its agents, employees or contractors. Purchaser shall maintain,
and shall assure that its contractors maintain, public liability and property
damage insurance in amounts and in form and substance adequate to insure
against all liability of Purchaser, its agents, employees or contractors,
arising out of any entry or inspections of the Property pursuant to the
provisions hereof, and Purchaser shall provide Seller with evidence of such
insurance coverage upon request by Seller. Purchaser shall indemnify, defend
and hold Seller harmless from and against any costs, damages, liabilities,
losses, expenses, liens or claims (including, without limitation, reasonable
attorney's fees) arising out of or relating to any entry on the Property by
Purchaser, its agents, employees or contractors in the course of performing
the inspections, testings or inquiries provided for in this Agreement,
including without limitation damage to the Property or release of hazardous
substances or materials onto the Property, excluding, however, any costs
incurred by Seller in supervising Purchaser's testing. The foregoing
indemnity shall survive beyond the Closing, or if the sale is not
consummated, beyond the termination of this Agreement.
9.16 Release. Except to the extent of the representations and
warranties of Seller expressly set forth in this Agreement, and except to the
extent of a breach by Seller of applicable laws, but otherwise
notwithstanding any other provision of this Agreement to the contrary,
Purchaser, on behalf of itself and its successors and assigns, waives its
right to recover from, and forever releases and discharges, Seller, Seller's
affiliates, Seller's investment manager, the partners, trustees,
shareholders, directors, officers, employees and agents of each of them,
18
<PAGE>
and their respective heirs, successors, personal representatives and assigns
(collectively, the "Seller Related Parties"), from any and all demands,
claims, legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, which may arise on account of or in
any way be connected with the physical condition of the Property or any law
or regulation applicable thereto, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Sections 9601 et seq.), the Resources Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act
(33 U.S.C. Section 466 et seq.), the Safe Drinking Water Act (14 U.S.C.
Sections 1401-1450), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), and the Toxic Substance Control Act (15 U.S.C.
Sections 2601-2629)
9.17 Confidential Information. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to consultants, investors, advisors, and affiliates, or as
required by law. No party will make any public disclosure of the specific
terms of this Agreement, except as required by law. Without limiting the
generality of the foregoing, any press release or other public disclosure
regarding this Agreement or the transactions contemplated herein, and the
wording of same, must be approved in advance by both parties. In connection
with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, each party acknowledges
that it will have access to confidential information relating to the other
party. Each party shall treat such information as confidential, preserve the
confidentiality thereof, and not duplicate or use such information, except to
advisors, consultants, investors and affiliates in connection with the
transactions contemplated hereby. In the event of the termination of this
Agreement for any reason whatsoever, Purchaser will return to Seller, at
Seller's request, all documents, work papers, and other material (including
all copies thereof) obtained from Seller in connection with the transactions
contemplated hereby, and each party shall use its best efforts, including
instructing its employees and others who have had access to such information,
to keep confidential and not to use any such information. The provisions of
this Paragraph 9.17 will survive the Closing or, if the purchase and sale is
not consummated, any termination of this Agreement.
9.18 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event,
after which the designated period of time begins to run, is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday, in which event the
period shall run until the end of the next day which is neither a Saturday,
Sunday, or legal holiday (i.e., a day on which federally chartered banks are
not open for business in Chicago, Illinois). The last day of any period of
time described herein shall be deemed to end at 5 p.m. Chicago, Illinois time
on the last day of such period of time. All days other than Saturdays,
Sundays and legal holidays in which national banks are closed in Chicago,
Illinois are business days hereunder.
19
<PAGE>
9.19 Entire Agreement. This Agreement and any other document to
be furnished pursuant to the provisions hereof embody the entire agreement
and understanding of the parties hereto as to the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings other than those expressly set forth or referred
to in such documents. This Agreement and such documents supersede all prior
agreements and understandings among the parties with respect to the subject
matter hereof
9.20 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement, or affecting the validity or
enforceability of any of the terms or provisions of this Agreement.
9.21 Facsimile Signatures. Executed facsimile copies of this
Agreement or any amendments hereto shall be binding upon the parties, and
facsimile signatures appearing hereon or on any amendments hereto shall be
deemed to be original signatures.
9.22 Further Assurances. In addition to the acts and deeds
recited herein and contemplated to be performed, executed and/or delivered by
Seller to Purchaser at Closing, Seller agrees to perform, execute and
deliver, but without any obligation to incur any additional liability or
expense, on or after the Closing any further deliveries and assurances as may
be reasonably necessary to consummate the transactions contemplated hereby or
to further perfect the conveyance, transfer and assignment of the Property to
Purchaser.
9.23 Offer. Execution and delivery of this Agreement by
Purchaser constitutes an offer to purchase the Property on the terms
contained herein. Delivery by Seller of a copy of the fully executed
Agreement by facsimile transmission on or before the Expiration Date,
followed by a manually signed copy thereof delivered the next business day
after transmission of such copy, shall constitute acceptance by Seller as of
the date of the facsimile transmission. The date on which Seller delivers a
fully executed copy of this Agreement to Purchaser, or delivers a copy by
facsimile transmission followed by a manually signed copy as provided in the
preceding sentence is referred to herein as the "Effective Date."
9.24 Seller Exculpation Clause. The obligations of Seller
contained herein are intended to be binding only on the property of the trust
party to this Agreement of Purchase and Sale and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the trustees, investment managers, any general partners thereof, or any
employees or agents of the trustees or investment managers. All documents to
be executed by Seller shall also contain the foregoing exculpation.
20
<PAGE>
9.25 Purchaser Exculpation Clause. No recourse shall be had for
any obligation of Brandywine Operating Partnership, L.P. and Brandywine
Realty Trust under this Agreement or under any document executed in
connection herewith or pursuant hereto, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of Brandywine Operating Partnership, L.P. or
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 the Seller and all parties
claiming by, through or under Seller.
9.26 SEC Reporting (8-K) Requirements. For the period of time
commencing on the date hereof and continuing through the first anniversary of
the Closing Date, and without limitation of other document production
otherwise required of Seller hereunder, Seller shall, from time to time, upon
reasonable advance written notice from Purchaser, provide Purchaser and its
representatives, with (a) access to all financial information pertaining to
the period of Seller's ownership and operation of the Property, which
information is relevant and reasonably necessary, in the opinion of
Purchaser's outside, third party accountants (the "Accountants"), to enable
Purchaser and its Accountants to prepare financial statements in compliance
with any or all of (i) Rule 3-05 or 3-15 of Regulation S-X of the Securities
and Exchange Commission (the "Commission"), as applicable; (ii) any other
rule issued by the Commission and applicable to Purchaser; and (iii) any
registration statement, report or disclosure statement filed with the
Commission, by, or on behalf of Purchaser; and (b) a representation letter,
signed by the
21
<PAGE>
individual(s) responsible for Seller's financial reporting, substantially in
the form of Schedule 9.26 attached hereto, which representation letter may be
required by the Accountants in order to render an opinion concerning Seller's
financial statements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER: PURCHASER:
RREEF USA FUND-I BRANDYWINE OPERATING PARTNERSHIP,
L.P.
By: RREEF America L.L.C., its By: Brandywine Realty Trust, its
investment advisor authorized general partner
By: By:
---------------------------- -------------------------------
Authorized Representative Gerard H. Sweeney
President and Chief Executive
Dated: Officer
------------------------- Dated:
----------------------------
22
<PAGE>
List of Schedules and Exhibits
Schedules
- ------------
2.1 Escrow Instructions
5.1 Disclosure Schedule
5.1.5 Service Contracts
5.1.10 Rent Roll
5.1.12 Future Leasing Commissions, Tenant Improvements
and Free Rent
6.2 Form of Estoppel Letter
8.6.1 Form of Deed
8.6.2 FIRPTA Certificate
8.6.4 Assignment and Assumption of Leases
8.6.5 Assignment and Assumption of Contracts and
Warranties
8.6.6 Assignment of Intangibles
8.6.8 Bill of Sale
8.6.10 Bring-Down Certificate
9.26 SEC Compliance Representation Letter
Exhibits
- --------------
A Legal Description of Property
A-1 Descriptive List of the Property
23
<PAGE>
Schedule 2.1
EARNEST MONEY ESCROW INSTRUCTIONS
(earnest money escrow instructions previously executed)
<PAGE>
Schedule 5.1
DISCLOSURE SCHEDULE
1. The Upper Merion Area school district has filed real estate tax
assessment appeals, seeking to increase the assessments against the
660 Allendale Road and 680 Allendale Road properties for tax years
beginning on and after January 1, 1996. Counsel for Seller has
negotiated a tentative settlement, whereby the School District
would dismiss its appeals, and the 1998 reassessment for 660
Allendale would be increased from $3,566,070 to $4,200,000.
Purchaser hereby concurs with this settlement, and authorizes
Seller to authorize its counsel to proceed to attempt to put this
proposed settlement into effect.
2. 1996 Environmental Audits were prepared by ATC Environmental, Inc.
for the following properties:
1. 600 Park Avenue
2. 650 Park Avenue
3. 875 First Avenue
4. 630 Clark Avenue
5. 650 Clark Avenue
6. 620 Allendale Road
7. 640-660 Allendale Road
8. 680 Allendale Road
9. 741 Third Avenue
10. 820 Third Avenue
11. 780 Third Avenue
12. 751-761 Fifth Avenue
These Audits have been made available to Purchaser for inspection
and copying, and, each of the Seller warranties of Section 5.1.8
and its subparagraphs are qualified and limited by any matters
disclosed in such Audits.
<PAGE>
Schedule 5.1.5
Service Contracts
A.T. BUILDERS
BFI
BERWYN GLASS
BOYLE ELECTRICAL CONTRACTORS
BURHANS GLASS COMPANY, INC.
CONTROLLED ENVIRONMENTS
CROWN CONTRACTORS, INC.
JOSEPH W. DAVIS, INC.
DIROCCO BROTHERS COMPANY
DURASEAL, INC.
ELDREDGE
FIDELITY ALARM COMPANY
GALLAGHER EXCAVATING, INC. (GEI)
GUARDIAN ALARM SYSTEMS
HONEYWELL
MOON LANDSCAPING
OLIVER SPRINKLER
PENNTEX CONSTRUCTION COMPANY
PHOENIX MECHANICAL, INC.
RHETT HAMILTON JONES ASSOCIATES
SANTANGELO HAULING CO.
SECURITY ELEVATOR COMPANY
SYSTEMATIC ROOFING ANALYSIS
TELEPHONE DIAGNOSTIC SERVICES, INC.
TERMINIX INTERNATIONAL CO.
VECTORDYNE
DAVID WHITE PLUMBING
<PAGE>
Schedule 5.1.10
Rent Roll
<PAGE>
Schedule 5.1.12
Future Leasing Commissions, Tenant Improvements and Free Rent
1. If Lockheed Martin, the tenant of 751-761 Fifth Avenue, does not
exercise its termination option, a commission may become due to The
Flynn Company and GMH in the aggregate amount of $44,388.00 on October
1, 2000.
2. Seller and Gannett Fleming (650 Park Avenue) have signed a letter of
intent to extend its lease for seven years and expand to approximately
35,000 square feet. The extended lease would commence July 1, 1998 or
sooner. Base rent is $16.00 gross plus electric, with escalation over
1997 base year and 3% annual increases in base rent. Tenant will be
entitled to a tenant improvement allowance of $15.00 per square foot,
and a leasing commission in the amount of $____________ will be payable
to _____________.
3. Wacker Siltronic Corp. (650 Park Avenue, 1,072 square feet) is extending
its lease. A commission in the amount of $1,326 will be payable to The
Flynn Company.
4. The landlord has agreed to pay Metropolitan Fiber Systems of
Philadelphia, Inc. (MFS) (630 Clark Avenue) up to $450,000 for tenant
improvements and roof repairs/replacements. The work has been performed
but the landlord has not yet been billed. This remains a Seller
obligation, and Seller agrees to hold Purchaser from and against any
liability for these amounts, such obligation to survive Closing.
<PAGE>
Schedule 6.2
TENANT ESTOPPEL LETTER
__________ __, 1998
Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Newtown Square, PA 19073
Attention: Gerard H. Sweeney,
President and Chief Executive Officer
NationsBank, N.A.,
Real Estate Banking
8300 Greensboro Drive, Suite 300
McLean, VA 22102
Attention: Gary P.F. Carr
Re: Lease from ________, for Suite ____, located at
[BUILDING ADDRESS]
[CITY/TOWNSHIP], Pennsylvania (the "Property")
To Whom it May Concern:
The undersigned is the holder of the tenant's interest under the lease
described on Exhibit A attached hereto (the "Lease") demising a portion of
the Property (the "Leased Premises"). We understand that Brandywine Realty
Trust, its assignee or nominee ("Brandywine") intends to acquire the
Property, and that NationsBank, N.A., as Agent for the parties listed on
Schedule 1 attached hereto ("Lender") may be the holder of a first mortgage
on the Property, and that Brandywine and Lender require this certification
from us.
Accordingly, we hereby certify to Brandywine and Lender as follows:
1. The Lease is in full force and effect and has not been modified,
amended or supplemented in any way, except as follows (Insert dates of all
modifications, amendments, or supplements; if none, write "None"):
___________________________________________________________________________
__________________________________.
<PAGE>
2. There are no other representations, warranties, agreements,
concessions, commitments, or other understandings between the undersigned and
the Landlord regarding the Property other than as set forth in the Lease or
paragraph 1 above.
3. The landlord under the Lease has completed and delivered, and the
undersigned has accepted, the Leased Premises in the condition required by
the Lease and the term of the Lease commenced on _________. The Leased
Premises consists of approximately ___________ square feet. The undersigned
has taken possession of and is occupying the Leased Premises on a rent-paying
basis and the monthly base rent payable thereunder is $_________, payable in
advance. All improvements and work required under the Lease to be made by the
landlord thereunder and all facilities required under the Lease to be
furnished to the Leased Premises have been completed to the satisfaction of
the undersigned, except as follows (Insert description of any improvements
and work to be completed by the landlord under the Lease; if none, write
"None"): _____________________________.
4. The fixed expiration date set forth in the Lease, excluding
renewals and extensions, is ________________. The undersigned neither has
any option or right to purchase the Property or any portion thereof nor does
the undersigned have any right or option to terminate the Lease or any of its
obligations thereunder in advance of the scheduled termination date of the
Lease as noted above, except as follows (Insert description of any purchase
rights or options, and/or any early termination rights; if none, write
"None"): _______________________________.
5. All rents, additional rents and other sums due and payable under the
Lease have been paid in full and no rents, additional rents or other sums
payable under the Lease have been paid for more than one (1) month in advance
of the due dates thereof.
6. The landlord under the Lease is not in default under any of the
requirements, provisions, terms, conditions or covenants of the Lease to be
performed or complied with by the landlord under the Lease, and no event has
occurred or situation exists which would, with the passage of time and/or the
giving of notice, constitute a default or an event of default by the landlord
under the Lease.
7. The undersigned is not in default under any of the requirements,
provisions, terms, conditions, or covenants of the Lease to be performed or
complied with by the undersigned, and no event has occurred or situation
exists which would, with the passage of time and/or the giving of notice,
constitute a default or an event of default by the undersigned under the
Lease.
2
<PAGE>
8. The undersigned has received no notice from any governmental
authority or other person or party claiming a violation of, or requiring
compliance with, any Federal, State or local statute, ordinance, rule,
regulation or other requirement of law, for environmental contamination at
the Leased Premises, to the best knowledge of the undersigned no hazardous,
toxic or polluting substances or wastes have been generated, treated,
manufactured, stored, refined, used, handled, transported, released, spilled,
disposed of or deposited by Tenant on, in or under the Leased Premises.
9. Neither the undersigned nor the landlord under the Lease has
commenced any action or given or received any notice for the purpose of
terminating the Lease.
10. There are no existing defenses, offsets, claims, or credits against
the payment of rent or the performance of the undersigned's obligations under
the Lease.
11. The undersigned has paid to the landlord under the Lease a security
deposit of $____________.
Very truly yours,
By:
--------------------------------------
Name:
Title:
3
<PAGE>
Exhibit A
(Description of Lease)
4
<PAGE>
Schedule 8.6.1
Form of Deed
SPECIAL WARRANTY DEED:
THIS INDENTURE made this ____ day of ____________ , 1998,
BETWEEN RREEF USA FUND-I, A CALIFORNIA GROUP TRUST
(hereinafter called the Grantor/s), of the one part and
_____________________
(hereinafter called the Grantee/s), of the second part,
WITNESSETH That in consideration of Ten and No/100 Dollars ($10.00) in hand
paid, the receipt whereof is hereby acknowledged, the said Grantor/s do/does
hereby grant, bargain, sell and convey unto the said Grantee/s, his/her/their
successors and /or assigns,
ALL THAT CERTAIN real estate, situated in the County of Montgomery and
Commonwealth of Pennsylvania known and described on the attached Exhibit A
"Legal Description," attached hereto an hereby made a part hereof.
TOGETHER with all and singular the buildings, improvements, ways, streets,
alleys, driveways, passages, waters, water-courses, rights, liberties,
privileges, hereditaments and appurtenances whatsoever unto the hereby
granted premises belonging, or in anywise appertaining, and the reversions
and remainders, rents, issues and profits thereof; and all the estate, right,
title, interest, use, trust, property, possession, claim and demand
whatsoever of Grantor as well at law as in equity, of, in, and to the same.
TO HAVE AND TO HOLD the said lot or piece of ground described with the
buildings and improvements thereon erected, hereditaments and premises hereby
granted, or mentioned and intended so to be, with the appurtenances unto the
said Grantee, and its successors and assigns to and for the only proper use
and behoof of the said Grantee, and its successors and assigns, forever.
AND the said Grantor/s do/does hereby covenant to and with the said Grantee/s
that he/she/they, the said Grantor/s, his/her/their successors and/or
assigns, SHALL AND WILL warrant specially and forever defend the herein above
described premises, with the hereditaments and appurtenances, unto the said
Grantor/s and against every other person lawfully claiming or who shall
hereafter claim the same or any part thereof, by, from and under
his/her/their successors and/or assigns or any of them, subject to validly
and legally existing encumbrances of record.
IN WITNESS WHEREOF, the said Grantor/s has/have caused these presents to be
duly executed, the day and year first above written.
<PAGE>
ATTEST:
RREEF USA FUND-I, a California
group trust
By:
------------------------------- By: RREEF America L.L.C., a
Delaware limited
liability company, its
investment advisor
By:
-------------------------
Authorized Representative
[Add Pennsylvania address certification]
2
<PAGE>
STATE OF )
----------------
) SS.
COUNTY OF )
----------------
I, ____________________________________________________________, a
notary public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY that _______________________ and _______________________________,
personally known to me to be the __________________________ and __________ of
RREEF USA FUND-I, a California group trust, and personally known to me to be
the same persons whose names are subscribed to the foregoing instrument,
appeared before me this day in person and acknowledged that as such
_____________________________ and __________, they signed and delivered the
said instrument as their free and voluntary act, and as the free and
voluntary act and deed of said trust, for the uses and purposes therein set
forth.
GIVEN under my hand and official seal this ____ day of ___________, 1998.
-------------------------------------------
Notary Public
Commission expires
------------------------------------------------------------
3
<PAGE>
EXHIBIT A
Legal Description
<PAGE>
Schedule 8.6.2
FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not
required upon the disposition of a U.S. real property interest by
__________________________________________, a _______________________
("Seller") hereby certifies the following:
1. Seller is not a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. Seller's U.S. employer identification number is 94-2624868; and
3. Seller's principal place of business is 101 California Street, 26th
floor, San Francisco, CA 94111-5853
Seller understands that this certification may be disclosed to the
Internal Revenue Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Seller.
_______________________________________
_______________________________________
By:
------------------------------------
Authorized Representative
Subscribed and sworn to
before me this ____ day of
______, 1998.
- ------------------------------
Notary Public
<PAGE>
Schedule 8.6.4
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (the "Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined), is between
_________________________________________, a Delaware corporation,
("Assignor") and ________________, a ___________________ ("Assignee").
A. Assignor is the lessor under certain leases executed with respect
to that certain real property and improvements thereon known
as_________________________________, _______________________, and more
particularly described in Exhibit "A" attached hereto (the "Property"), which
leases are described in Exhibit B attached hereto (the "Leases").
B. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase the Property from Assignor and
Assignor agreed to sell the Property to Assignee, on the terms and conditions
contained therein.
C. Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof, on the terms
and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance Date")
[SHOULD BE THE DAY FOLLOWING CLOSING], Assignor hereby assigns to Assignee
all of its right, title, and interest in and to the Leases except rents and
other sums due Assignor first accruing on or prior to the Conveyance Date,
and, effective as of the day following the Conveyance Date, Assignee hereby
accepts such assignment.
2. Assignor hereby assumes full responsibility for all obligations and
defaults of landlord under the Leases accruing prior to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable
attorneys' fees) arising from Assignor's failure to perform said obligations,
provided that Assignee makes a claim hereunder on or before one (1) year
following the Conveyance Date.
3. Assignee hereby assumes full responsibility for all obligations of
landlord under the Leases accruing after the Conveyance Date and Assignee
hereby agrees to defend, indemnify and hold Assignor harmless from any
claims, liabilities or costs (including reasonable attorneys' fees) arising
from Assignee's failure to perform said obligations. Without limiting the
generality
<PAGE>
of the foregoing, Assignee assumes full responsibility for the free rent,
unpaid tenant improvement allowances and leasing commissions under the Leases
as listed on Exhibit C.
4. This Assignment shall be governed by the laws of the Commonwealth
of Pennsylvania.
5. This Assignment may be executed in counterparts.
6. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Leases.
ASSIGNOR: ASSIGNEE:
__________________________________ __________________________________
__________________________________ __________________________________
By: By:
------------------------------- -------------------------------
Authorized Representative
Title:
----------------------------
Dated: Dated:
---------------------------- ----------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
Existing Leases
(rent roll to be attached)
4
<PAGE>
EXHIBIT C
Free Rent, Tenant Improvement Allowances and Leasing Commissions
5
<PAGE>
Schedule 8.6.5
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND WARRANTIES (the
"Assignment") dated as the dates of execution set forth below, but effective
as of the Conveyance Date (as herein defined), is between
____________________ ___________________________________, ("Assignor") and
________________, a ___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a
condition precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance
Date")[SHOULD BE THE DAY FOLLOWING CLOSING] , Assignor hereby assigns to
Assignee all of its right, title, and interest in and to the following:
2. Assignor hereby grants, transfers and assigns to Assignee all the
right, title and interest of Assignor in and to the following:
(a) All contracts listed on Exhibit B attached hereto.
(b) All presently effective and assignable warranties, guaranties,
representations or covenants given to or made in favor of Assignor or
Assignor's affiliates in connection with the acquisition, development,
construction, maintenance, repair, renovation or inspection of the Property.
The foregoing are collectively referred to herein as the "Contracts."
3. Assignor hereby assumes full responsibility for all obligations and
defaults of Assignor under the Contracts accruing to and including the
Conveyance Date. Assignor also agrees to defend, indemnify and hold Assignee
harmless from any claims, liabilities or costs (including reasonable
attorneys' fees) arising from Assignor's failure to perform said obligations,
provided that Assignee makes a claim hereunder on or before one (1) year
following the Conveyance Date.
<PAGE>
4. Assignee hereby assumes full responsibility for all obligations of
owner of the Property under the Contracts accruing after the Conveyance Date
and Assignee hereby agrees to defend, indemnify and hold Assignor harmless
from any claims, liabilities or costs (including reasonable attorneys' fees)
arising from Assignee's failure to perform said obligations.
5. This Assignment shall be governed by the laws of the Commonwealth
of Pennsylvania.
6. This Assignment may be executed in counterparts.
7. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Contracts and Warranties.
ASSIGNOR: ASSIGNEE:
_____________________________ ______________________________
_____________________________ ______________________________
By: By:
--------------------------------- --------------------------------
Authorized Representative Title:
--------------------------------
Dated: Dated:
------------------------------ --------------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
-----------
Contracts
A.T. BUILDERS
BFI
BERWYN GLASS
BOYLE ELECTRICAL CONTRACTORS
BURHANS GLASS COMPANY, INC.
CONTROLLED ENVIRONMENTS
CROWN CONTRACTORS, INC.
JOSEPH W. DAVIS, INC.
DIROCCO BROTHERS COMPANY
DURASEAL, INC.
ELDREDGE
FIDELITY ALARM COMPANY
GALLAGHER EXCAVATING, INC. (GEI)
GUARDIAN ALARM SYSTEMS
HONEYWELL
MOON LANDSCAPING
OLIVER SPRINKLER
PENNTEX CONSTRUCTION COMPANY
PHOENIX MECHANICAL, INC.
RHETT HAMILTON JONES ASSOCIATES
SANTANGELO HAULING CO.
SECURITY ELEVATOR COMPANY
SYSTEMATIC ROOFING ANALYSIS
TELEPHONE DIAGNOSTIC SERVICES, INC.
TERMINIX INTERNATIONAL CO.
VECTORDYNE
DAVID WHITE PLUMBING
4
<PAGE>
Schedule 8.6.6
ASSIGNMENT OF INTANGIBLES
THIS ASSIGNMENT AND ASSUMPTION OF INTANGIBLES ("Assignment") dated
as the dates of execution set forth below, but effective as of the Conveyance
Date (as herein defined), is
between____________________________________________________________,
("Assignor") and ________________, a ___________________ ("Assignee").
A. Assignor and Assignee have entered into an Agreement of Purchase
and Sale with an Effective Date of ______________, 1998 (the "Agreement"),
pursuant to which Assignee agreed to purchase Assignor's interest in the real
property legally described on Exhibit A attached hereto (the "Property"), on
the terms and conditions contained therein.
B. Whereas the execution and delivery of this Assignment is a
condition precedent to the purchase of the Property by the Assignee.
ACCORDINGLY, the parties hereby agree as follows:
1. As of the date on which the Property is conveyed to Assignee
pursuant to the Agreement (the "Conveyance
Date")[SHOULD BE THE DAY FOLLOWING CLOSING], Assignor hereby assigns to
Assignee all of its right, title, and interest in and to the following:
(i) All licenses, permits, certificates of occupancy, approvals,
dedications, subdivision maps or plats and entitlements issued, approved
or granted by federal, state or municipal authorities or otherwise in
connection with the Property and its renovation, construction, use,
maintenance, repair, leasing and operation; and all licenses, consents,
easements, rights of way and approvals required from private parties to
make use of utilities, to insure pedestrian ingress and egress to the
Property and to insure continued use of any vaults under public
rights-of-way presently used in the operation of the Property.
(ii) any trade style or trade name used in connection with the
Property; and,
(iii) all correspondence with the tenants under tenant leases, all
booklets and manuals relating to the maintenance and operation of the
Property.
The foregoing are collectively referred to herein as the "Intangibles".
2. Assignor agrees to assume full responsibility for its obligations
under the Intangibles accruing on or prior to the Conveyance Date and
Assignor agrees to defend, indemnify and hold Assignee harmless from any
claims, liabilities or costs arising from
<PAGE>
Assignor's failure to perform said obligations, provided that Assignee makes
a claim hereunder on or before one (1) year following the Conveyance Date.
3. Assignee assumes full responsibility for all obligations of the
owner of the property accruing under the Intangibles from the day after the
Conveyance Date and Assignee agrees to defend, indemnify and hold Assignor
and its predecessors in title harmless from all claims, liabilities or costs
arising from Assignee's failure to perform said obligations.
4. This instrument may be executed in counterparts.
5. The obligations of Assignor contained herein are intended to be
binding only on the property of the Assignor and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Assignor, or any general partners thereof, or
any employees or agents of the investment managers
IN WITNESS WHEREOF, the parties have executed this Assignment of
Intangibles.
ASSIGNOR: ASSIGNEE:
_____________________________ ________________________________
_________________________________, ________________________________
By: By:
-------------------------------- --------------------------------
Authorized Representative
Title:
--------------------------------
Dated: Dated:
-------------------------------- --------------------------------
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
Schedule 8.6.8
BILL OF SALE
_________________________________________________________________
("Seller"), in consideration of Ten and No/100 Dollars and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby sells, transfers, assigns and sets over unto
__________________ ("Purchaser"), all of its right, title and interest in and
to any and all personal property, which personal property is owned by Seller
and located on the real estate legally described on Exhibit A attached hereto
(the "Personal Property"), including, but not limited to, the Personal
Property listed on Exhibit B.
Seller hereby represents and warrants to Purchaser that Seller is the
absolute owner of the Personal Property free and clear of all liens, charges
and encumbrances, and that Seller has full right, power and authority to sell
the Personal Property and to make this Bill of Sale. All warranties of
quality, fitness and merchantability are hereby excluded.
The obligations of Seller contained herein are intended to be binding
only on the property of the Seller and shall not be personally binding upon,
nor shall any resort be had to the private properties of, any of the
investment managers of Seller, or any general partners thereof, or any
employees or agents of the investment managers
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the ___
day of _______, 1998, but effective on the date on which the Property is
conveyed by Seller to Purchaser.
_______________________________
_______________________________
By:___________________________
Authorized Representative
<PAGE>
STATE OF _________ )
) SS
COUNTY OF _______ )
The undersigned, a Notary Public in and for said County in the
State aforesaid, DOES HEREBY CERTIFY that ________________, authorized
representative of
_________________________________________________________________, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such authorized representative, appeared before me
this day in person and acknowledged that __he, being duly authorized, signed,
sealed and delivered the said instrument as h___ free and voluntary act, and
as the free and voluntary acts of said corporation, for the uses and purposes
therein set forth.
GIVEN under my hand and Notarial Seal this _____ day of
______________, 1998.
_______________________
Notary Public
My Commission Expires:
____________________, 19___
2
<PAGE>
EXHIBIT A
Legal Description
3
<PAGE>
EXHIBIT B
-------------
Personal Property
NUMBER ITEM DESCRIPTION
- ------ -------------------------- ----------------------------------
2 METAL CABINETS ASSORTED PAINT & SUPPLIES, DROP
CLOTHES
1 METAL FILE CABINET ELECTRICAL SUPPLIES
1 LARGE METAL SHELF ASSORTED PLUMBING SUPPLIES
2 SMALL METAL SHELVES ASSORTED DOOR CLOSURES & BALLAST
ASSORTED DROP CLOTHES & COVE BASE
1 WOODEN SHELF AT WORK BENCH ASSORTED NUTS & BOLTS, WASHERS, COFFEE
CANS & SUPPLIES
2 4 FT. STEP LADDERS WOOD & ALUMINUM
2 PUSH BROOMS
1 WORK BENCH & VISE UNDER WORK BENCH-ASSORTED EMPTY PAINT
BUCKETS & DOOR KNOBS & OTHER SUPPLIES.
HAND SOAP DISPENSER PARTS.
2 WET MOPS & BUCKETS
2 CASES F40CW LIGHT BULBS - 4 FT.
1 CASES 8 FT. LIGHT BULBS
1 24 FT. EXTENSION LADDER FIBERGLASS
1 6 FT. STEP LADDER WOOD
2 10 FT. STEP LADDER 1-WOOD, 1-FIBERGLASS
1 8 FT. STEP LADDER
2 SECTIONS OF RUBBER HOSE
ASSORTED BELTS FOR AIR
HANDLERS
1 CASE FILTERS FOR WALL FAN UNITS
1 PAINT SPRAYER
2 RAKES
1 POST HOLE DIGGER
4
<PAGE>
NUMBER ITEM DESCRIPTION
- ------ -------------------------- ----------------------------------
1 ICE CHOPPER
ASSORTED P.V.C. PIPE
1 SET OF WOODEN TRUSSES
6 5 GALLON CANS ASSORTED PAINTS
6 ELECTRIC MOTORS
(UNDER AIR HANDLER #3)
1 WEED WACKER
1 SCAFFOLD
RUBBER CONES
PAINT THINNERS
1 KEYSCAN LOCK SYSTEM COMPUTERIZED SYSTEM TO MONITOR LOCKING
AND UNLOCKING OF DOORS. KEYS ISSUED TO
SELECTED TENANTS
5
<PAGE>
Schedule 8.6.10
SELLER'S CLOSING CERTIFICATE
THIS CLOSING CERTIFICATE is made as of the ___________ day of
_______________________, 1998, by and between
________________________________ ______________________ ("Seller"), to and
in favor _____________________________________________________________, a
__________ ("Purchaser"), under and pursuant to that certain Agreement of
Purchase and Sale by and between Seller and __________, with an Effective
Date as defined therein (the "Agreement"), for the purchase and sale of that
certain Property situated in the _________, _______ County, ____________ (as
defined in the Agreement).
Pursuant to Paragraphs 5.3 and 8.6.10 of the Agreement and except
as disclosed on Exhibit A attached hereto and made a part hereof, Seller
hereby reconfirms, remakes and rewarrants to Purchaser as of the date hereof
each of the representations, warranties and covenants given by Seller
contained in Paragraph 5.1 of the Agreement in the same manner as such
representations, warranties and covenants were given in the Agreement, each
of which is incorporated herein and made a part hereof by this reference.
Except as modified hereby, Seller hereby confirms that each of said
representations, warranties and covenants are true and accurate in all
material respect as of the date hereof. Seller's reconfirming, remaking and
rewarranting of its representations, warranties and covenants is subject to
the limitations set forth in Paragraph 5.3 of the Agreement.
The obligations of Seller contained herein are intended to be
binding only on the property of the Seller and shall not be personally
binding upon, nor shall any resort be had to the private properties of, any
of the investment managers of Seller, or any general partners thereof, or any
employees or agents of the investment managers
IN WITNESS WHEREOF, Seller has executed this Closing Certificate on
the day and year first above written, but effective upon the date on which
the Property is conveyed by Seller to Purchaser.
SELLER:
_____________________________
_____________________________
By:
-----------------------------
Authorized Signatory
<PAGE>
EXHIBIT A
Disclosure
<PAGE>
Schedule 9.7.2
NEW LEASE APPROVAL FORM
Property: ________________________________________________________________
Tenant: ________________________________________________________________
Square Feet:______________________________________________________________
Location: _________________________________
Anticipated Lease Commencement: __________________________________________
Anticipated Rent Commencement: __________________________________________
Term: ___________________________________________________________________
FREE RENT: _______________________________________________________________
Rental Rate: ___________Period _____________ PSF Rate __________Annual Income
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Note: Above rental rates do not include Tenant Electric
Tenant Improvement Allowance: PSF _________ Amount ___________T.I.
Mechanism: ______________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
OPTIONS: _______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Initial Commission:
________ BROKER___________________% ______________________Amount
______________________________________________________________________
______________________________________________________________________
Broker Future Entitlements:___________________________________________
______________________________________________________________________
______________________________________________________________________
Other Comments:_______________________________________________________
______________________________________________________________________
______________________________________________________________________
Approved By: ____________________________
<PAGE>
Schedule 9.26
SEC COMPLIANCE REPRESENTATION LETTER
(Accountant Name & Address)
Dear Sirs:
In connection with your audit of the statement of revenues and certain
expenses of the Properties situated in the City of King of Prussia,
Montgomery County, Pennsylvania, commonly known as a portion of the King of
Prussia Business Center (the "Property") for the year ended December 31,
199__ (the "Operating Statement"), prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission, the
undersigned ("Seller") makes the following limited, qualified and specific
representations, which are true to Seller's knowledge (as such phrase is
hereinafter defined):
1. Seller has made available or caused its property manager to make
available to Brandywine Operating Partnership, L.P. ("Buyer"), or
its representatives, Seller's financial records and files in
Seller's actual possession pertaining to the operation of the
Property (such records and files being collectively referred to
herein as the "Files").
2. Except as disclosed in the Files, Seller is not aware of any events
or transactions which have occurred since December 31, 199_ and
prior to the date hereof that would have a material effect on the
Operating Statement for the period then ended.
3. We recognize that, as the Owner of the Property, we are responsible
for directing the fair presentation of the Operating Statement. We
believe the Operating Statement is fairly presented in conformity
with generally accepted accounting principals.
As used in this letter, the words "Seller's knowledge" shall be deemed
to mean, and shall be limited to, the actual (as distinguished from implied,
imputed or constructive) knowledge of Joseph S. Cappelletti and Barbara
Gillentine without such person having any obligation to make an independent
inquiry or investigation.
Notwithstanding any provision in this letter to the contrary, Seller is
executing this letter solely as an accommodation to and at the request of
Buyer and, except to the extent Seller is liable to Buyer for representations
and warranties expressly set forth in that certain Agreement of Purchase and
Sale, dated _________ 1998, by and between Seller and Buyer (the "Sale
Agreement'), this letter is subject to the condition that Seller shall not be
liable or responsible to Buyer, any parent, subsidiary or other affiliate of
Buyer, or any officer, director, employee, agent, representative,
shareholder, partner or principal of Buyer or any such parent, subsidiary or
other affiliate thereof or any accountant or other professionals engaged by
or on behalf of any of the foregoing, including, without limitation,
[accountant](all of the foregoing being collectively referred to herein as
the "Buyer Parties"), as a result of the fact that any of the statements made
herein are in any way inaccurate, untrue or incorrect. By the acceptance of
this letter, except for rights and remedies that Buyer may have under the
Sale Agreement with respect to representations and warranties expressly set
forth in the Sale Agreement, each of the Buyer Parties shall be deemed to
have waived any and all rights and remedies that any of them may have against
Seller, whether at law or in equity, as a
4
<PAGE>
result of the fact that any of the statements made herein are in any way
inaccurate, untrue or incorrect.
Seller has executed this letter for the limited purposes set forth
herein, and for the use of [accountant] only. No other parties may rely on
the statements set forth herein.
Very truly yours,
RREEF USA FUND-I,
a California group trust
By: RREEF America L.L.C.,
a Delaware limited liability company
By:_______________________________
Name: Joseph S. Cappelletti
Title: Its Authorized Representative
By: __________________________________
Name: Barbara J. Gillentine
Title: Its Authorized Representative
5
<PAGE>
EXHIBIT A
Legal Description of Property
<PAGE>
EXHIBIT A-1
Descriptive List of the Property
King of Prussia Industrial Park, King of Prussia, Pennsylvania
1. 600 Park Avenue
2. 650 Park Avenue
3. 875 First Avenue
4. 630 Clark Avenue
5. 650 Clark Avenue
6. 620 Allendale Road
7. 640-660 Allendale Road
8. 680 Allendale Road
9. 741 Third Avenue
10. 820 Third Avenue
11. 780 Third Avenue
12. 751-761 Fifth Avenue
13. Allendale Road Development Site
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated January 22, 1998 in this Form 8-K on the combined statement
of revenue and certain expenses of the RREEF Properties into the Company's
previously filed Registration Statements on Forms S-3 (File No. 333-20999 and
333-39155) and Forms S-8 (File No. 333-14243 and File No. 333-28427).
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
January 27, 1998
