UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-13274
Cali Realty Corporation
(Exact name of registrant as specified in its charter)
Maryland 22-3305147
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
11 Commerce Drive, Cranford, New Jersey 07016-3501
(Address of principal executive office)
(Zip Code)
(908) 272-8000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or such shorter period that the
Registrant was required to file such report) YES [ X ] NO [ ]
and (2) has been subject to such filing requirements for the past ninety (90)
days YES [ X ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
There were 15,202,482 shares of $.01 par value common stock outstanding
at May 10, 1996.
<PAGE>
CALI REALTY CORPORATION
Form 10-Q
INDEX
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995
Consolidated Statements of Operations for the three months
ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows for the three months
ended March 31, 1996 and 1995
Consolidated Statement of Stockholders' Equity for the
three months ended March 31, 1996
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II - Other Information and Signatures
Item 1. Exhibits
Signatures
<PAGE>
CALI REALTY CORPORATION
Part I - Financial Information
Item 1 Financial Statements
The information furnished in the accompanying consolidated balance
sheets, statements of operations, of cash flows, and of stockholders'
equity reflect all adjustments which are, in the opinion of
management, necessary for a fair presentation of the aforementioned
financial statements for the interim periods.
The aforementioned financial statements should be read in conjunction
with the notes to the aforementioned financial statements and
Management's Discussion and Analysis of Financial Condition and
Results of Operations and the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
The results of operations for the three months ended March 31, 1996
are not necessarily indicative of the results to be expected for the
entire fiscal year or any other period.
<PAGE>
<TABLE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)
================================================================================
March 31, December 31,
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Rental property
Land ........................................... $ 40,758 $ 38,962
Buildings and improvements ..................... 321,520 319,028
Tenant improvements ............................ 28,989 28,588
Furniture, fixtures and equipment .............. 1,085 1,097
--------- ---------
392,352 387,675
Less - accumulated depreciation and amortization ... (58,431) (59,095)
--------- ---------
Total rental property .......................... 333,921 328,580
Cash and cash equivalents .......................... 1,494 967
Unbilled rents receivable .......................... 18,795 18,855
Deferred charges and other assets,
net of accumulated amortization .................. 11,024 10,873
Restricted cash .................................... 4,453 3,229
Accounts receivable, net of allowance for
doubtful accounts of $176 and $134 .............. 1,806 1,341
Other receivables .................................. 238 104
--------- ---------
Total assets ................................... $ 371,731 $ 363,949
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages and loans payable ........................ $ 137,741 $ 135,464
Dividends and distributions payable ................ 7,608 7,606
Accounts payable and accrued expenses .............. 3,509 3,245
Rents received in advance and security deposits .... 4,775 3,114
Accrued interest payable ........................... 484 629
--------- ---------
Total liabilities .............................. 154,117 150,058
--------- ---------
Minority interest of unitholders in
Operating Partnership ........................... 27,683 28,083
--------- ---------
(Continued)
<PAGE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - Continued (in thousands, except per share amounts)
================================================================================
March 31, December 31,
1996 1995
--------- ---------
<S> <C> <C>
Commitments and contingencies
Stockholders' equity:
Preferred stock, authorized 5,000,000 shares,
none issued
Common stock, $.01 par value, 25,000,000 shares
authorized, 15,202,482 shares and 15,104,725
shares outstanding ............................. 152 151
Additional paid-in capital ......................... 186,741 185,657
Retained earnings .................................. 3,038 --
--------- ---------
Total stockholders' equity ..................... 189,931 185,808
--------- ---------
Total liabilities and stockholders' equity ..... $ 371,731 $ 363,949
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
====================================================================================
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
REVENUES
Base rents .............................................. $ 16,012 $ 11,240
Escalations and recoveries .............................. 3,081 2,121
Parking and other ....................................... 404 401
Interest income ......................................... 74 110
-------- --------
Total revenues ...................................... 19,571 13,872
-------- --------
EXPENSES
Real estate taxes ....................................... 1,959 1,314
Utilities ............................................... 1,882 1,365
Operating services ...................................... 2,803 1,862
General and administrative .............................. 936 933
Depreciation and amortization ........................... 3,294 2,832
Interest expense ........................................ 2,569 1,641
-------- --------
Total expenses ...................................... 13,443 9,947
-------- --------
Income before gain on sale of rental property,
minority interest and extraordinary item ............ 6,128 3,925
Gain on sale of rental property ......................... 5,658 --
-------- --------
Income before minority interest
and extraordinary item ............................ 11,786 3,925
Minority interest ....................................... 1,812 836
-------- --------
Income before extraordinary item ........................ 9,974 3,089
Extraordinary item-loss on early retirement of debt (net
of minority interest's share of $86) ............... 475 --
-------- --------
Net income .............................................. $ 9,499 $ 3,089
======== ========
(Continued)
<PAGE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - Continued (in thousands, except per share amounts)
==========================================================================================
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
Net income per common share:
Income before extraordinary item-
loss on early retirement of debt .................... $ .66 $ .29
Extraordinary item-loss on early retirement of debt ..... (.03) --
-------- --------
Net income .............................................. $ .63 $ .29
======== ========
Dividends declared per common share ..................... $ .43 $ .40
======== ========
Weighted average shares outstanding ..................... 15,146 10,473
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
====================================================================================
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................. $ 9,499 $ 3,089
Adjustments to reconcile net income to net cash
flows provided by operating activities
Depreciation and amortization ...................... 3,294 2,832
Gain on sale of rental property .................... (5,658) --
Minority interest .................................. 1,812 836
Extraordinary item-loss on early retirement of debt 475 --
Changes in operating assets and liabilities
Increase in unbilled rents receivable .............. (69) (35)
Increase in deferred charges and other assets, net . (993) (553)
Increase in accounts receivable, net ............... (465) (68)
(Increase) decrease in other receivables ........... (134) 158
Decrease (increase) in accounts payable and
accrued expenses ................................ 264 (440)
Increase in rents received in advance and
security deposits ............................... 1,661 405
(Decrease) increase in accrued interest payable .... (145) 162
-------- --------
Net cash provided by operating activities ............ 9,541 6,386
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental property ........................... (12,400) (2,700)
Proceeds from sale of rental property .................. 10,147 --
Increase in restricted cash ............................ (1,224) (537)
-------- --------
Net cash used in investing activities ................ (3,477) (3,237)
-------- --------
(Continued)
<PAGE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (in thousands)
====================================================================================
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgages and loans payable .............. 36,300 --
Repayments of mortgages and loans payable .............. (34,023) --
Debt prepayment premiums and other costs ............... (312) --
Purchase of treasury stock ............................. -- (1,595)
Proceeds from stock options exercised .................. 106 --
Payment of dividends and distributions ................. (7,608) (5,371)
-------- --------
Net cash used in financing activities ................ (5,537) (6,966)
-------- --------
Net increase (decrease) in cash and cash equivalents ... 527 (3,817)
Cash and cash equivalents, beginning of period ......... 967 6,394
-------- --------
Cash and cash equivalents, end of period ............... $ 1,494 $ 2,577
======== ========
Supplemental Cash Flow Information:
Cash paid for interest ................................. $ 2,796 $ 1,479
======== ========
Interest capitalized ................................... $ 82 $ --
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (in thousands)
=====================================================================================================
Additional Total
Common Stock Paid-In Retained Stockholders'
Shares Par Value Capital Earnings Equity
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1996 .......... 15,105 $ 151 $ 185,657 -- $ 185,808
Conversions of 92 Units to shares ... 92 1 978 -- 979
Net income .......................... -- -- -- 9,499 9,499
Dividends ........................... -- -- -- (6,461) (6,461)
Stock options exercised ............. 6 -- 106 -- 106
--------- --------- --------- --------- ---------
Balance at March 31, 1996 ........... 15,203 $ 152 $ 186,741 $ 3,038 $ 189,931
========= ========= ========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
CALI REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
================================================================================
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization Cali Realty Corporation (the "Company"), a Maryland
corporation, is a fully integrated, self-
administered, self-managed real estate investment
trust (REIT) providing leasing, management,
acquisition, development, construction and tenant-
related services for its properties. As of March 31,
1996, the Company owned and operated 40 Class A
office and office/flex buildings totaling
approximately 3.9 million square feet and a 327 unit
residential complex. The properties are located in
New Jersey and New York.
The Company was incorporated on May 24, 1994 and
commenced operations on August 31, 1994. On August
31, 1994, the Company completed an initial public
offering and effected a business combination with the
Cali Group (not a legal entity.) The Company raised
(net of offering costs) approximately $165,518 of
capital through an initial public offering (the
"Offering") of 10,500,000 shares of common stock, and
used the proceeds to acquire a 78.94 percent interest
in Cali Realty, L.P. (the "Operating Partnership")
and related entities, which were formed just prior to
consummation of the Offering and are the successors
to the operations of the Cali Group. Prior to the
completion of the business combination with the
Company, the Cali Group consisted principally of the
property partnerships set forth below, which were
engaged in development, ownership and operation of a
portfolio of twelve office buildings and one
multi-family residential property located in New
Jersey (the "Initial Properties"), and the real
estate leasing, management, acquisition, development
and construction business of Cali Associates.
<PAGE>
<TABLE>
<CAPTION>
PROPERTY PARTNERSHIPS PROPERTY LOCATION
--------------------- -----------------
<S> <C>
Grove Street Associates of Jersey City Limited Partnership Jersey City, NJ
-----------------------------------------------------------------------------------------
Office Associates, Ltd. Roseland, NJ
-----------------------------------------------------------------------------------------
500 Columbia Turnpike Associates Florham Park, NJ
-----------------------------------------------------------------------------------------
C.W. Associates Clark, NJ
-----------------------------------------------------------------------------------------
Chestnut Ridge Associates Woodcliff Lake, NJ
-----------------------------------------------------------------------------------------
Roseland II Limited Partnership Roseland, NJ
-----------------------------------------------------------------------------------------
20 Commerce Drive Associates Cranford, NJ
-----------------------------------------------------------------------------------------
Century Plaza Associates Paramus, NJ
-----------------------------------------------------------------------------------------
D.B.C. Associates Clifton, NJ
-----------------------------------------------------------------------------------------
11 Commerce Drive Associates Cranford, NJ
-----------------------------------------------------------------------------------------
Cali Building V Associates Cranford, NJ
-----------------------------------------------------------------------------------------
6 Commerce Drive Associates Cranford, NJ
-----------------------------------------------------------------------------------------
Tenby Chase Apartments Delran, NJ
-----------------------------------------------------------------------------------------
</TABLE>
Prior to and simultaneous with the consummation of the Offering, the
Company, the Operating Partnership and related entities and the Cali Group
engaged in certain formation transactions summarized as follows:
(i) The Cali Group contributed all their interests in the Initial
Properties to the Operating Partnership in exchange for units in the
Operating Partnership ("Units.") Certain non-continuing partners in
certain of the Initial Properties received cash in exchange for
their interests therein;
(ii) Concurrently with the Offering, the Cali Group transferred from the
property partnerships an aggregate of $5,175 in exchange for 300,000
Units (the "Concurrent Placement");
(iii) The Company contributed the net proceeds from the Offering to the
Operating Partnership in exchange for the Units. The Operating
Partnership used substantially all of such net proceeds, together
with the net proceeds from the Mortgage Financing (Note 5), and the
cash proceeds of the Concurrent Placement, described above, to repay
certain indebtedness on the Initial Properties, to purchase certain
land previously leased and to acquire the interests of certain
non-continuing partners;
(iv) The Operating Partnership acquired all of the non-voting preferred
stock of, and a 99 percent economic interest in, Cali Services, Inc.
("CSI"), an entity formed to engage in third party property
management services.
<PAGE>
In 1994 and 1995, following the Company's initial public offering, the
Company acquired 28 office and office/flex properties totaling 1,723,000
square feet for approximately $157,000. The acquisition properties are all
located in New Jersey and New York.
On March 20, 1996, the Company sold its office building located at 15
Essex Road in Paramus, New Jersey ("Essex Road") and concurrently acquired
a 95,000 square foot office building at 103 Carnegie Center in Princeton,
New Jersey. The concurrent transactions qualified as a tax free exchange,
as the Company used substantially all of the proceeds from the sale of
Essex Road to acquire the Princeton property. The financial statements for
the three months ended March 31, 1996 include a gain of $5,658 relating to
this transaction.
In advance of the sale of Essex Road, on March 12, 1996, the Company
prepaid $5,492 of the Mortgage Financing (Note 5) and obtained a release
of the mortgage liens on the property. On account of prepayment penalties,
loan origination fees, legal fees and other costs incurred in the
retirement of the debt, an extraordinary loss of $475, net of minority
interest's share of the loss ($86), was recorded for the three months
ended March 31, 1996.
On May 2, 1996, the Company acquired Rose Tree Corporate Center, a
two-building suburban office complex totaling approximately 260,000 square
feet located in Media, Pennsylvania. The complex was acquired for
approximately $28 million, which was drawn on one of the Company's credit
facilities.
Basis of
Presentation The accompanying consolidated financial statements
include all accounts of the Company and its majority
owned subsidiaries which consist principally of the
Operating Partnership. The Company's investment in
CSI is accounted for under the equity method.
All significant intercompany accounts and
transactions have been eliminated.
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 revenues and expenses
during the reporting period. Actual results could
differ from those estimates.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES
Rental Property Rental properties are stated at cost less accumulated
depreciation. Costs include interest, property taxes,
insurance and other project costs incurred during the
period of construction. Ordinary repairs and
maintenance are expensed as incurred; major
replacements and betterments are capitalized and
depreciated over their estimated useful lives. Fully
depreciated assets are removed from the accounts.
Depreciation is computed on a straight-line basis
over the estimated useful lives of the assets as
follows:
-----------------------------------------------------
Buildings and improvements 40 years
-----------------------------------------------------
Tenant improvements The shorter of the term
of the related lease or
useful lives
-----------------------------------------------------
Furniture, fixtures and equipment 5 to 10 years
-----------------------------------------------------
On a periodic basis, management assesses whether
there are any indicators that the value of the real
estate properties may be impaired. A property's value
is impaired only if management's estimate of the
aggregate future cash flows (undiscounted and without
interest charges) to be generated by the property are
less than the carrying value of the property.
Management does not believe that the value of any of
its real estate properties are impaired.
Deferred
Financing Costs Costs incurred in obtaining financing are capitalized
and amortized on a straight-line basis, which
approximates the effective interest method, over the
term of the related indebtedness. Amortization of
such costs were $261 and $441 for the three months
ended March 31, 1996 and 1995, respectively.
Deferred
Leasing Costs Costs incurred in connection with leases are
capitalized and amortized on a straight-line basis
over the terms of the related leases. Unamortized
deferred leasing costs are charged to amortization
expense upon early termination of the lease.
Revenue
Recognition The Company recognizes base rental revenue on a
straight-line basis over the terms of the respective
leases. Unbilled rents receivable represents the
amount by which straight-line rental revenue exceeds
rents currently billed in accordance with the lease
agreements. Parking revenue includes income from
parking spaces leased to tenants.
<PAGE>
Rental income on residential property under operating
leases having terms generally of one year or less is
recognized when earned.
Cash and Cash
Equivalents All highly liquid investments with a maturity of
three months or less when purchased are considered to
be cash equivalents.
Income and
Other Taxes The Company has elected to be taxed as a REIT under
Sections 856 through 860 of the Code. As a REIT, the
Company will not be subject to federal income tax to
the extent it distributes at least 95 percent of its
REIT taxable income to its shareholders. REITs are
subject to a number of organizational and operational
requirements. If the Company fails to qualify as a
REIT in any taxable year, the Company will be subject
to federal income tax (including any applicable
alternative minimum tax) on its taxable income at
regular corporate tax rates. The Company may be
subject to certain state and local taxes.
Net Income
Per Share Net income per share is computed using the weighted
average common shares outstanding during the period.
The weighted average shares outstanding during the
three months ended March 31, 1996 and 1995 were
15,146,089 and 10,473,333, respectively. The assumed
exercise of outstanding stock options using the
Treasury Stock method is not considered dilutive.
Dividends and
Distributions
Payable The dividends and distributions payable at March 31,
1996 represents dividends payable to shareholders of
record on April 3, 1996 (15,202,482 shares) and
distributions payable to minority interest
unitholders (2,699,002 Units) on that same date. The
first quarter dividends and distributions of $.425
per share and per Unit were approved by the Board of
Directors on March 20, 1996 and were paid on April
19, 1996.
<PAGE>
3. RESTRICTED CASH
Restricted cash includes security deposits for the residential property, and
escrow and reserve funds for debt service, real estate taxes, property
insurance, capital improvements, tenant improvements, and leasing costs
established pursuant to certain mortgage financing arrangements and is
comprised of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------ ------
<S> <C> <C>
Escrow and other reserve funds ............... $4,130 $2,901
Residential security deposits ................ 323 328
------ ------
Total restricted cash ..................... $4,453 $3,229
====== ======
</TABLE>
4. DEFERRED CHARGES AND OTHER ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
-------- --------
<S> <C> <C>
Deferred leasing costs ......................... $ 12,704 $ 13,498
Deferred financing costs ....................... 5,300 5,778
-------- --------
18,004 19,276
Accumulated amortization ....................... (7,628) (9,035)
-------- --------
Deferred charges, net .......................... 10,376 10,241
Prepaid expenses and other assets .............. 648 632
-------- --------
Total deferred charges and other assets ..... $ 11,024 $ 10,873
======== ========
</TABLE>
5. MORTGAGES AND LOANS PAYABLE
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
-------- --------
<S> <C> <C>
Mortgage Financing [a] ................... $ 64,508 $ 70,000
Fair Lawn Property Loan [b] .............. 18,733 18,764
Initial Credit Facility [c] .............. 28,500 46,700
Additional Credit Facility [d] ........... 26,000 --
-------- --------
$137,741 $135,464
======== ========
</TABLE>
<PAGE>
[a] Concurrent with the Company's initial public
offering, the Company's initial operating
subsidiaries, which own the Initial Properties,
issued five-year mortgage notes with an aggregate
principal balance of $144,500 secured and cross-
collateralized by the Initial Properties to an
affiliate ("PSI") of Prudential Securities Inc. PSI
then issued commercial mortgage pay-through bonds
("Bonds") collateralized by the mortgage notes. Bonds
with an aggregate principal balance of $70,000 were
purchased by unrelated third parties. Bonds with an
aggregate principal balance of $74,500 were purchased
by the Company. As a result, the Company's initial
mortgage financing was $70,000, (the "Mortgage
Financing"). Approximately $38,000 of the $70,000 is
guaranteed under certain conditions by certain
partners of the partnerships which owned the Initial
Properties. The Mortgage Financing requires monthly
payments of interest only, with all principal and any
accrued but unpaid interest due in August 1999.
$46,000 of the $70,000 Mortgage Financing bears
interest at a net cost to the Company equal to a
fixed rate of 8.02 percent per annum and the
remaining $24,000 bears interest at a net cost to the
Company equal to a floating rate of 100 basis points
over 30-day London Inter Bank Offered Rate (LIBOR)
with a lifetime interest rate cap of 11.6 percent.
In advance of the sale of Essex Road, on March 12,
1996, the Company prepaid $5,492 ($1,687-fixed rate,
$3,805-floating rate debt) of the Mortgage Financing,
resulting in outstanding balances at March 31, 1996
of $44,313 for the 8.02 percent fixed rate debt and
$20,195 for the floating rate debt.
[b] In connection with the acquisition of an office
building in Fair Lawn, New Jersey on March 3, 1995,
the Company assumed an $18,764 non-recourse mortgage
loan bearing interest at a fixed rate of 8.25 percent
per annum. The loan requires payment of interest only
through March 15, 1996 and payment of principal and
interest thereafter, on a 20 year amortization
schedule, with the remaining principal balance due
October 1, 2003.
[c] The Company has a $70,000 revolving credit facility
("Initial Credit Facility"), which may be used to
fund acquisitions and new development projects and
for general working capital purposes, including
capital expenditures and tenant improvements. In
connection with the Initial Mortgage Financing, the
Company obtained a $6,005 letter of credit, secured
by the Initial Credit Facility, to meet certain
tenant improvement and capital expenditure reserve
requirements. The Initial Credit Facility currently
bears interest at a floating rate equal to 150 basis
points over LIBOR. The Initial Credit Facility is a
recourse liability of the Operating Partnership and
is secured by a pledge of the $74,500 Bonds held by
<PAGE>
the Company. The Initial Credit Facility requires
monthly payments of interest only, with outstanding
advances and any accrued but unpaid interest due
February 28, 1997 and is subject to renewal at the
lender's sole discretion. The Initial Credit Facility
also requires a fee equal to one quarter of one
percent of the unused balance payable quarterly in
arrears. Since March 31, 1996, the Company has repaid
$23,200 and drawn $30,700 on the Initial Credit
Facility.
[d] On February 1, 1996, the Company obtained an
additional credit facility (the "Additional Credit
Facility") secured by certain of its properties in
the amount of $75,000 from two participating banks.
The Additional Credit Facility has a three- year term
and bears interest at 150 basis points over 30-day
LIBOR. The terms of the Additional Credit Facility
include certain restrictions and covenants which
limit, among other things, dividend payments and
additional indebtedness and which require compliance
with specified financial ratios and other financial
measurements. The Additional Credit Facility also
requires a fee equal to one quarter of one percent of
the unused balance payable quarterly in arrears.
Since March 31, 1996, the Company has drawn $24,000
on the Additional Credit Facility.
Interest Rate Swap Agreements:
On May 24, 1995, the Company entered into an interest rate swap agreement
with a commercial bank. The swap agreement fixes the Company's one-month
LIBOR base to a fixed 6.285 percent per annum on a notional amount of
$24,000 through August 1999.
On January 23, 1996, the Company entered into an interest rate swap
agreement with one of the participating banks in its Additional Credit
Facility. The swap agreement has a three-year term and a notional amount
of $26,000 which fixes the Company's one-month LIBOR base to 5.265 percent
(with a 150 basis point spread, an interest rate of 6.765 percent) on its
floating rate credit facilities.
The Company is exposed to credit loss in the event of non-performance by
the other parties to the interest rate swap agreements. However, the
Company does not anticipate non-performance by either counterparty.
6. MINORITY INTEREST
In conjunction with the Company's initial public offering, individuals
contributing interests to the Operating Partnership had the right to elect
either to receive common stock of the Company or Units. A Unit and a share
of common stock of the Company have substantially the same economic
characteristics in as much as they effectively share equally in the net
income or loss of the Operating Partnership. Minority interest in the
accompanying consolidated financial statements relates to Units held by
parties other than the Company.
<PAGE>
Beginning one year after the closing of the Company's initial public stock
offering (which occurred on August 31, 1994), certain Units are able to be
redeemed by the unitholders on the basis of one Unit for either one share
of common stock or cash equal to the fair market value of a share at the
time of the redemption. When a Unit is redeemed for common stock, minority
interest is reduced and the Company's investment in the Operating
Partnership is increased. During the three months ended March 31, 1996,
91,614 Units were redeemed for common stock of the Company.
7. RELATED PARTY TRANSACTIONS
Certain employees of the Operating Partnership provide leasing services to
the Properties and receive fees as compensation ranging from .667 percent
to 2.667 percent of adjusted rents. For the three months ended March 31,
1996 and 1995, such fees, which are capitalized and amortized,
approximated $80 and $132, respectively.
8. SIGNIFICANT TENANT
At March 31, 1996, Donaldson, Lufkin and Jenrette Securities Corporation
("DLJ") leased approximately 55 percent of the space in the 95 Christopher
Columbus Drive, Jersey City property. Total rental income from DLJ,
including escalations and recoveries, was $2,424 and $2,431 for the three
months ended March 31, 1996 and 1995, respectively. At March 31, 1996 and
December 31, 1995, respectively, unbilled rents receivable included
$12,351 and $12,164 from DLJ.
On April 9, 1996, the Company signed a lease with DLJ for an additional
73,200 square feet of space at its Jersey City property. The 13-year lease
is scheduled to commence on June 1, 1996, and will increase the tenant's
occupancy in the building to approximately 66 percent.
9. STOCK OPTION PLAN
In 1994, the Company established the Cali Employee Stock Option Plan
("Employee Plan") and the Cali Director Stock Option Plan ("Directors
Plan") under which a total of 1,330,188 (subject to adjustment) of the
Company's shares of common stock have been reserved for issuance. Options
granted under the Employee Plan generally become exercisable over a three
to five year period, while options under the Directors Plan become
exercisable in one year. All options were granted at not less than fair
market value at dates of grant and have a term of ten years.
<PAGE>
Information regarding the Company's stock option plans is summarized
below:
<TABLE>
<CAPTION>
Cali Employee Cali Director
Stock Option Stock Option
Shares under option: Plan Plan
-------------------- ------------- -------------
<S> <C> <C>
Granted on August 31, 1994 at $17.25 per share 600,000 25,000
----------------------------------------------------------------------------------------------
Outstanding at December 31, 1994 600,000 25,000
Granted at $17.25-$19.875 per share 220,200 10,000
Less--
Lapsed or canceled (3,588) --
----------------------------------------------------------------------------------------------
Outstanding at December 31, 1995 816,612 35,000
Granted at $21.50 per share 361,750 --
Less--
Lapsed or canceled (4,447) --
Exercised at $17.25 per share (1,143) (5,000)
----------------------------------------------------------------------------------------------
Outstanding at March 31, 1996 1,172,772 30,000
$17.25-$21.50 per share
----------------------------------------------------------------------------------------------
Exercisable at March 31, 1996 271,124 30,000
----------------------------------------------------------------------------------------------
Available for grant at December 31, 1995 463,576 15,000
----------------------------------------------------------------------------------------------
Available for grant at March 31, 1996 106,273 15,000
----------------------------------------------------------------------------------------------
</TABLE>
10. EMPLOYEE BENEFIT PLAN
All employees of the Company who meet certain minimum age and period of
service requirements are eligible to participate in a Section 401(k) plan
(the "Plan") as defined by the Internal Revenue Code. The Plan allows
eligible employees to defer up to 15 percent of their annual compensation.
The amounts contributed by employees are immediately vested and
non-forfeitable. The Company, at management's discretion, may match
employee contributions. No employer contributions have been made to date.
11. COMMITMENTS AND CONTINGENCIES
Pursuant to the terms of the Mortgage Financing, the Company is required
to escrow $143 per month for tenant improvements and leasing commissions
and $53 per month for capital improvements.
Pursuant to an agreement with the City of Jersey City, New Jersey expiring
in 2009, the Company is required to make payments in lieu of property
taxes ("PILOT") on its property in Jersey City. Such PILOT is determined
based on the greater of 2 percent of the property cost, as defined, or
$1,131 per annum, through 1999 and 2.5 percent, or $1,414 per annum,
through 2004.
<PAGE>
12. TENANT LEASES
The Properties are leased to tenants under operating leases with various
expiration dates through 2009. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the
tenant's proportionate share of and/or increases in real estate taxes and
certain operating costs as defined and the pass through of charges for
electrical usage.
13. STOCKHOLDERS' EQUITY
To maintain its qualification as a REIT, not more than 50 percent in value
of the outstanding shares of the Company may be owned, directly or
indirectly, by five or fewer individuals (defined to include certain
entities), applying certain constructive ownership rules. To help ensure
that the Company will not fail this test, the Company's Articles of
Incorporation provides for, among other things, certain restrictions on
the transfer of the common stock to prevent further concentration of stock
ownership. Moreover, to evidence compliance with these requirements, the
Company must maintain records that disclose the actual ownership of its
outstanding common stock and will demand written statements each year from
the holders of record of designated percentages of its common stock
requesting the disclosure of the beneficial owners of such common stock.
On March 7, 1995, the Board of Directors authorized the Company to
purchase up to 100,000 shares of its outstanding common stock so that the
total number of shares and Units may be reduced to approximately
13,300,000. On March 8, 1995, the Company purchased, for constructive
retirement, 100,000 shares of its outstanding common stock for $1,595. The
excess of the purchase price over par value was recorded as a reduction to
additional paid-in capital. Concurrent with this purchase, the Company
sold to the Operating Partnership 100,000 Units for $1,595.
On November 6, 1995, the Company completed a second public offering of
4,000,000 shares of its common stock at $19.50 per share (the "Second
Offering"). Net proceeds to the Company after the underwriting discounts
and other offering costs were approximately $72,512 which was used along
with funds drawn on the Initial Credit Facility to acquire certain
properties.
On November 17, 1995, pursuant to an over-allotment option granted to the
underwriters of the Second Offering, the Company issued an additional
600,000 shares of its common stock at $19.50 per share. Net proceeds to
the Company after underwriting discounts totaled approximately $11,082,
which was used to repay an equal amount of indebtedness on the Initial
Credit Facility.
* * * *
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Consolidated Financial Statements of Cali Realty Corporation and the notes
thereto.
The following comparisons are for the three months ended March 31, 1996
("1996,") as compared to the three months ended March 31, 1995 ("1995.")
References are made to the "Pre-Acquisition Properties," which is
comprised of all properties owned by the Company at December 31, 1994, as
well as "Acquired Properties," which refers to all properties acquired by
the Company since January 1, 1995.
Three Months Ended March 31, 1996 Compared to Three Months Ended
March 31, 1995
Total revenues increased $5.7 million, or 41.1 percent, for the three
months ended March 31, 1996 over 1995. Base rents increased $4.8 million,
or 42.5 percent, of which $5.2 million, or 46 percent, was attributable to
the Acquired Properties, offset by a decrease of $0.4 million, or 3.6
percent, primarily as a result of occupancy changes at the Pre-Acquisition
Properties. Escalations and recoveries increased $1.0 million, or 45.3
percent, substantially all of which was attributable to the Acquired
Properties.
Total expenses for the three months ended March 31, 1996 increased $3.5
million, or 35.1 percent, as compared to the same period in 1995. Interest
expense increased by $0.9 million, or 56.5 percent, primarily due to an
increase in indebtedness resulting from drawings on the Company's credit
facilities in connection with property acquisitions. Real estate taxes
increased $0.6 million, or 49.1 percent, for 1996 over 1995 due to the
Acquired Properties. Additionally, operating services increased $0.9
million, or 50.6 percent, and utilities increased $0.5 million, or 38
percent. The aggregate increase in operating services and utilities of
$1.4 million, or 45.3 percent, consists of $1.2 million, or 38.8 percent,
attributable to the Acquired Properties, and $0.2 million, or 6.5 percent,
for the Pre-Acquisition Properties due primarily to a harsher winter in
1996. Depreciation and amortization increased $0.5 million, or 16.3
percent, for 1996 over 1995, of which $0.8 million relates to depreciation
on the Acquired Properties, offset by decreases of $0.1 million for
depreciation on the Pre-Acquisition Properties and $0.2 million for
amortization of deferred financing costs.
Income before minority interest and extraordinary item increased to $11.8
million in 1996 from $3.9 million in 1995. The increase of $7.9 million
was due to the gain on sale of a rental property of $5.7 million in 1996,
as well as to the factors discussed above.
Net income increased $6.4 million for the three months ended March 31,
1996 from $3.1 million (net of minority interest of $0.8 million) in 1995
to $9.5 million (net of minority interest of $1.8 million) in 1996, as a
result of an increase in income before minority interest and extraordinary
item of $7.9 million partially offset by recognition in 1996 of a $0.5
million (net of minority interest's share of $0.1 million) extraordinary
item - loss on early retirement of debt.
<PAGE>
Liquidity and Capital Resources
Statement of Cash Flows
During the three months ended March 31, 1996, the Company generated $9.5
million in cash flow from operating activities, and, along with $10.1
million of proceeds from the sale of a rental property, $7.8 million in
net borrowings on its credit facilities and $0.1 million of proceeds from
stock options exercised, used an aggregate $27.5 million to (i) purchase a
rental property for $10.4 million, (ii) acquire tenant improvements and
building improvements for $2.0 million, (iii) pay quarterly dividends and
distributions of $7.6 million, (iv) prepay a portion of its mortgage notes
in the amount of $5.5 million, (v) increase the escrow cash balances
relating to the Mortgage Financing by $1.2 million, (vi) pay debt
prepayment penalties and other related costs of $0.3 million, and (vii)
increase its cash and cash equivalents balance by $0.5 million.
Capitalization
On November 6, 1995, the Company completed its Second Offering of
4,000,000 shares of common stock, $.01 par value, at $19.50 per share. The
proceeds of the Second Offering, net of offering costs, were approximately
$72.5 million. The Company used these funds along with funds drawn on the
Initial Credit Facility to acquire certain properties, as fully described
in the Company's Form 10-K for the year ended December 31, 1995.
On November 17, 1995, pursuant to an over-allotment option granted to the
underwriters of the Second Offering, the Company issued an additional
600,000 shares of its common stock, $.01 par value, at $19.50 per share.
Net proceeds to the Company after underwriting discounts were
approximately $11.1 million which were used to repay an equal amount of
indebtedness under the Initial Credit Facility.
On February 1, 1996, the Company obtained from two participating banks the
$75 million Additional Credit Facility. The Additional Credit Facility
bears interest at a floating rate equal to 150 basis points over LIBOR.
The Additional Credit Facility is also subject to certain financial
covenants, including the ratio of earnings before interest, taxes,
depreciation and amortization to debt service, minimum net worth and
debt-to-market capitalization. In addition, the Additional Credit Facility
restricts distributions by the Company in excess of 100 percent of Funds
from Operations for three successive quarters, provided that the Company
retains the right to make distributions necessary to maintain its status
as a REIT. The Additional Credit Facility is secured by a first lien
mortgage on certain of the Company's properties. Additional Credit
Facility borrowings are recourse to the Operating Partnership and
guaranteed by the Company.
On May 24, 1995, the Company entered into an interest rate swap agreement
with a commercial bank. The swap agreement fixes the Company's one-month
LIBOR base to a fixed 6.285 percent per annum on a notional amount of
$24,000 through August 1999.
In addition, on January 23, 1996, the Company entered into a second
interest rate swap agreement with one of the participating banks in its
Additional Credit Facility. This swap agreement has a three-year term and
a notional amount of $26,000 which fixes the Company's one-month LIBOR
base at 5.265 percent on its floating rate credit facilities.
<PAGE>
On March 20, 1996, the Company sold its office building located at 15
Essex Road in Paramus, New Jersey ("Essex Road") and concurrently acquired
a 95,000 square foot office building at 103 Carnegie Center in Princeton,
New Jersey. The concurrent transactions qualified as a tax free exchange,
as the Company used substantially all of the proceeds from the sale of
Essex Road to acquire the Princeton property. The financial statements for
the three months ended March 31, 1996 include a gain of $5,658 relating to
this transaction.
On May 2, 1996, the Company acquired Rose Tree Corporate Center, a
two-building suburban office complex totaling approximately 260,000 square
feet, located in Media, Pennsylvania. The complex was acquired for
approximately $28 million which was drawn on the Initial Credit Facility.
Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. Management believes that the Company
will have access to the capital resources necessary to expand and develop
its business. To the extent that the Company's cash flow from operating
activities is insufficient to finance its non-recurring capital
expenditures such as property acquisition costs and other capital
expenditures, the Company expects to finance such activities through the
credit facilities and other debt and equity financing.
The Company presently has no plans for major capital improvements to the
existing properties, other than normal recurring expenditures. The Company
expects to meet its short-term liquidity requirements generally through
its working capital and net cash provided by operating activities along
with the Initial Credit Facility and Additional Credit Facility. The
Company expects to meet certain of its financing requirements through
long-term borrowings and the issuance of debt securities or additional
equity securities. In addition, the Company anticipates utilizing the
Initial Credit Facility and Additional Credit Facility primarily to fund
property acquisition activities.
The Company does not intend to reserve funds to retire the existing
Mortgage Financing, indebtedness under the credit facilities or other
mortgages and loans payable upon maturity. Instead, the Company will seek
to refinance such debt at maturity or retire such debt through the
issuance of additional equity securities. The Company anticipates that its
available cash and cash equivalents and cash flows from operating
activities, together with cash available from borrowings and other
sources, will be adequate to meet the Company's capital and liquidity
needs both in the short and long-term. However, if these sources of funds
are insufficient or unavailable, the Company's ability to make the
expected distributions discussed below may be adversely affected.
To maintain its qualification as a real estate investment trust, the
Company must make annual distributions to its stockholders of at least 95
percent of its REIT taxable income, excluding the dividends paid deduction
and net capital gains. Moreover, the Company intends to make regular
quarterly distributions to its stockholders which, based upon current
policy, in the aggregate would equal approximately $25.8 million on an
annual basis. However, any such distribution, whether for federal income
tax purposes or otherwise, would only be paid out of available cash after
meeting both operating requirements and scheduled debt service on
mortgages and loans payable and required annual capital expenditure
reserves pursuant to its mortgage indenture.
<PAGE>
Funds From Operations
The Company considers Funds from Operations after adjustment for the
straight-lining of rents one measure of REIT performance. Funds from
Operations is defined as net income (loss) before minority interest of
unitholders, computed in accordance with Generally Accepted Accounting
Principles, excluding gains (or losses) from debt restructuring and sales
of property, plus real estate-related depreciation and amortization. Funds
from Operations should not be considered as an alternative to net income
as an indication of the Company's performance or to cash flows as a
measure of liquidity.
Funds from Operations for the three months ended March 31, 1996 and 1995,
as calculated in accordance with the National Association of Real Estate
Investment Trusts definition published in March 1995, are summarized in
the following table (in thousands):
<TABLE>
<CAPTION>
Three Months Ended:
--------------------
March 31, March 31,
1996 1995
-------- --------
<S> <C> <C>
Income before minority interest, gain on sale of property $ 6,128 $ 3,925
and extraordinary item
Add: Real estate-related depreciation and amortization 3,020 2,370
-------- --------
Funds from Operations .................................... 9,148 6,295
Deduct: Rental income adjustment for straight-lining
of rents ........................................... (69) (34)
-------- --------
Funds from Operations after adjustments for
straight-lining of rents ............................... $ 9,079 $ 6,261
======== ========
Weighted average shares outstanding (1) .................. 17,897 13,307
======== ========
</TABLE>
(1) Assumes redemption of all Units, calculated on a weighted average basis,
for shares of common stock in the Company.
Inflation
The Company's leases with the majority of its tenants provide for
recoveries and escalation charges based upon the tenant's proportionate
share of and/or increases in real estate taxes and certain operating
costs, which reduce the Company's exposure to increases in operating costs
resulting from inflation.
<PAGE>
CALI REALTY CORPORATION
Part II -- Other Information and Signatures
Item 6. Exhibits
The following exhibits are filed herewith:
10.35 Agreement of Sale and Purchase, dated February 28, 1996,
between Adwin Realty Company and LBA Associates, collectively
as Seller, and J. Brian O'Neill, or his Nominees or Assignees,
as Buyer.
10.36 Purchase Agreement, dated March 11, 1996 between Keller
Carnegie Associates, as Seller, and Century Plaza Associates,
as Purchaser.
10.37 Agreement of Assignment of Real Estate Sale Agreement, dated
April 26, 1996, between J. Brian O'Neill, as Contract Vendee,
and Cal-Tree Realty Associates L.P., as Assignee.
10.38 Agreement of Assignment, dated May 1, 1996, between J. Brian
O'Neill, as Assignor, and Bryemere L.P., as Assignee.
10.39 Amendment to Agreement of Assignment of Real Estate Agreement,
dated May 2, 1996, between Bryemere L.P., as Assignor, and
Cal-Tree Realty Associates L.P., as Assignee.
<PAGE>
Signatures
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.
Cali Realty Corporation
-----------------------
(Registrant)
/s/ Barry Lefkowitz
-------------------------------------
Date: May 14, 1996 Barry Lefkowitz
Chief Financial Officer
(signing on behalf of the Registrant)
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE (the "Agreement") is made as of
this 28th day of February, 1996, by and between ADWIN REALTY COMPANY, a
Pennsylvania corporation and LBA ASSOCIATES, a Pennsylvania general partnership,
having an address at 300 Stevens Drive, Lester, PA 19113-1521 (collectively
referred to herein as "Seller") and J. BRIAN O'NEILL, OR HIS NOMINEE(S) OR
ASSIGNEE(S), having a business address c/o 443 South Gulph Road, King of
Prussia, PA 19406 ("Buyer").
W I T N E S S E T H:
In consideration of the covenants and provisions contained herein, the
parties agree as follows:
1. Agreement to Sell and Purchase. Seller agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, subject to all of the terms and conditions
of this Agreement, certain property located at 1400 Providence Road, Media,
Delaware County, Pennsylvania, consisting of the following:
(a) Real Property. That certain tract of land more fully
described by metes and bounds on Exhibit "A" to this Agreement containing
approximately thirteen (13) acres in area, identified on the Delaware County Tax
Map as Folio Nos. 35-00-01465-00 and 35-00-00806- 00, together with all
improvements thereon including, without limitation, the two (2) office buildings
containing approximately 259,746 net leasable square feet in the aggregate, and
all appurtenances thereto (including, without limitation, all easements,
rights-of-way, water rights, mineral and timber rights, development rights,
privileges, licenses, and other rights and benefits belonging to, running with
the owner of, or in any way relating to the aforesaid tract of land and all
trees, shrubbery and plants, and rights to growing crops); together with all
rights, title and interest of Seller in and to any land lying in the bed of any
street, opened or proposed, in front of or abutting or adjoining the aforesaid
tract of land, and all right, title and interest of Seller in and to any unpaid
award for the taking by eminent domain of any part of the aforesaid tract of
land or for damage to such tract of land by reason of a change of grade of any
street (collectively, the "Real Property").
(b) Personal Property. All fixtures, furniture, equipment,
supplies, stock for completion of tenant improvements and other personal
property attached or appurtenant to, or located in or on, or used in connection
with the Real Property which are not owned by tenants of the Real Property,
together with all intangible personal property used in the ownership, operation
or maintenance of the Real Property including, without limitation, the items set
forth on Exhibit "B" to this Agreement (collectively, the "Personal Property"),
but excluding the items set forth on Exhibit "C" of this Agreement
(collectively, the "Excluded Items of Personal Property").
(c) Property. The Real Property and the Personal Property are
sometime collectively referred to as the "Property".
2. Purchase Price.
(a) Amount and Method of Payment. The purchase price for the
Property (the "Purchase Price"), subject to adjustments as provided in this
Agreement, shall be Twenty-Two Million Five Hundred Thousand Dollars
($22,500,000.00), and shall be paid as follows:
(i) One Hundred Fifty Thousand Dollars ($150,000.00)
(the "Deposit") is being paid upon execution of this Agreement by Buyer's plain
check drawn to the order of the Title Company selected by Buyer (the "Escrow
Agent" ). Seller acknowledges the delivery by Buyer to the Escrow Agent of
Buyer's check for the Deposit. As used in this Agreement, the term "Deposit"
shall refer to any sums then paid by Buyer to Escrow Agent on account of the
Purchase Price. The Deposit shall be held by the Escrow Agent in one (1) or more
federally-insured interest bearing accounts acceptable to both Seller and Buyer,
or in short-term United States Government obligations having a maturity date
which is not later than the Closing Date (as hereinafter defined). The taxpayer
identification number for Adwin Realty Company is 23-1706179 and the taxpayer
identification number for LBA Associates is 23-2534044; Buyer's social security
number is ###-##-####.
(ii) The balance of the Purchase Price shall be paid
at the Closing (as hereinafter defined) by wire transfer of immediately
available funds as directed by Seller.
3. Disposition of Deposit; Defaults.
(a) Held in Escrow. The Deposit shall be held in escrow and
disbursed by the Escrow Agent strictly in accordance with the terms of this
Agreement.
(b) Upon Default.
(i) If Buyer, without the right to do so and in
default of its obligations under this Agreement, fails to complete the Closing,
Seller shall have the right to be paid the Deposit and all interest earned on
the Deposit as liquidated damages. The right of Seller to be paid the Deposit
plus interest thereon shall be Seller's exclusive and sole remedy, and Seller
hereby waives any right to recover the balance of the Purchase Price, or any
part thereof, and the right to pursue any other remedy permitted by law or in
equity against Buyer. Notwithstanding anything to the contrary contained in this
Paragraph 3(b), the Escrow Agent shall not pay the Deposit to Seller under this
Paragraph 3(b) until the earlier to occur of (A) receipt by the Escrow Agent of
written joint instructions from Seller and Buyer, or (b) entry of a final and
unappealable adjudication determining which party is entitled to receive all or
part of the Deposit.
(ii) If Seller, without the right to do so and in
default of its obligations under this Agreement, fails to complete the Closing
or otherwise defaults under or breaches this Agreement, Buyer, as its sole
remedies, shall have the right to be paid the Deposit and all interest earned on
the Deposit together with the amount of all charges incurred by Buyer for
searching title, the cost of any plans, surveys and environmental studies
ordered by Buyer and all other reasonable fees costs and expenses incurred by
Buyer in connection with the Property and Buyer's intended acquisition thereof
in the maximum amount of Fifty Thousand Dollars ($50,000.00) (the "Reimburseable
Costs"), together with the right to specific performance and injunctive relief.
Upon payment to Buyer of the Reimburseable Costs, Buyer shall provide a copy of
such plans, surveys and reports to Seller (and to the extent assignable, provide
an assignment of same).
(c) Upon Closing or Termination by Buyer. If the Closing is
completed hereunder, the Escrow Agent shall pay the Deposit to Seller and all
interest earned on the Deposit to Buyer. If Buyer terminates this Agreement as a
result of Seller's default or pursuant to the exercise of any right of
termination permitted by this Agreement, upon the earlier to occur of: (i)
receipt by Escrow Agent of written joint instructions from Seller and Buyer or
(ii) entry of a final and unappealable adjudication determining which party is
entitled to receive the Deposit and interest thereto, as applicable, the Deposit
and all interest thereon shall be distributed in accordance with such written
instructions or adjudication.
(d) Dispute. In the event of a dispute between the parties
with respect to the Deposit, the Escrow Agent may deposit the Deposit with a
court of competent jurisdiction and commence an interpleader action. Upon
notifying Seller and Buyer of the commencement of such action, the Escrow Agent
shall be released of all liability with respect to the Deposit, except to the
extent of accounting for any monies previously delivered by the Escrow Agent out
of escrow. Escrow Agent shall not be liable to either Seller or Buyer other than
for the performance of its duties under this Agreement, its negligence or
intentional wrongdoing. The Escrow Agent may rely upon the genuineness or
authenticity of any document tendered to it by either of the parties, and shall
be under no duty of independent inquiry with respect to any acts or
circumstances recited in such documents. Seller and Buyer shall indemnify,
defend and hold harmless the Escrow Agent from and against all costs, claims or
liabilities arising from the performance by the Escrow Agent of its obligations
under this Agreement, other than for its failure to comply herewith, negligence
or intentional wrongdoing.
(e) Counsel as Escrow Agent. If the Escrow Agent is counsel
for Seller or Buyer, such counsel shall not be disqualified or prohibited from
representing its client in connection with any matter arising out of this
Agreement by reason of its capacity as the Escrow Agent.
4. Closing.
(a) Place of Closing. The closing and settlement of this
transaction (the "Closing") shall take place at the offices of Adelman Lavine
Gold and Levin, a Professional Corporation, 1900 Two Penn Center Plaza,
Philadelphia, PA 19102-1799.
(b) Closing Date. The Closing shall commence on or before the
date which is sixty (60) days after the expiration of the Inspection Period (as
defined herein) (the "Closing Date"). On or before the initial Closing Date,
Buyer shall have the right to extend the initial Closing Date for an additional
forty-five (45) days by written notice to Seller, provided such notice is
accompanied by Buyer's plain check drawn to the order of the Escrow Agent in the
amount of Fifty-Thousand Dollars ($50,000.00), which amount shall be held by the
Escrow Agent on account of the Purchase Price and included in the total Deposit
tendered by Buyer under this Agreement.
5. Condition of Title.
(a) Title to Real Property. Title to the Real Property shall
be good and marketable and free and clear of all liens, restrictions, easements,
encumbrances, leases, tenancies and other title objections, except for the
Permitted Encumbrances (as hereinafter defined), and shall be insurable as such
and as provided in this Agreement at ordinary rates by any reputable title
insurance company selected by Buyer (the "Title Company") pursuant to an ALTA
Owner's Policy of Title Insurance, 1992 Form B, amended October 17, 1992 (the
"Owner's Policy of Title Insurance"). The term "Permitted Encumbrances" shall
mean the Tenant Leases (as hereinafter defined) and the items set forth on
Exhibit "D" to this Agreement. The Owner's Policy of Title Insurance shall also
contain endorsements insuring that (i) the covenants, conditions and
restrictions included in the Permitted Encumbrances have not been violated and
that a future violation thereof will not cause a forfeiture or reversion of
title; (ii) Buyer's contemplated use of the Real Property as office building(s)
will not violate the covenants, conditions and restrictions included in the
Permitted Encumbrances; (iii) if the Real Property consists of multiple parcels,
all such parcels constitute a single, contiguous tract; (iv) the Real Property
has direct access to Providence Road, and Kirk Lane, publicly dedicated roads;
and (v) the existing use of the Real Property complies with all applicable
zoning ordinances and regulations as may affect the Real Property. The premium
for the Owner's Policy of Title Insurance and such endorsements will be paid by
Buyer.
(b) Title to Personal Property. Title to the Personal Property
shall be good and marketable and free and clear of all liens, security interests
and other encumbrances. Seller shall pay at or before the Closing all sums
required to free the Personal Property of any interest of any party not
otherwise permitted under this Agreement and shall cause to be filed at or
before the Closing any termination statement, release, discharge or other
document required to remove of record any encumbrance upon the Personal Property
held by any party.
(c) Commitment to Insure. Buyer hereby acknowledges and agrees
that Buyer will order a commitment to insure with respect to the Real Property
from the Title Company, such commitment to certify that fee simple title to the
Real Property is vested in Seller, and to commit to insure title to the Real
Property as required by Paragraph 5(a) hereof. If the commitment to insure
discloses that title to the Real Property is subject to any defect, encumbrance
or other title objection other than the Permitted Encumbrances, or if Buyer is
unable to obtain such commitment to insure, Buyer shall have the right to give
to Seller written notice specifying such defect, encumbrance or other title
objection, or inability to obtain such commitment to insure, and Seller shall
use reasonable efforts to correct such defect, encumbrance or other title
objection (including the payment and satisfaction of monetary liens) and obtain
the commitment to insure from a reputable title insurance company acceptable to
Buyer, all by the date which is the later of (i) the Closing Date, or (ii)
thirty (30) days following Buyer's notice specifying the defect.
(d) Inability to Convey. If Seller is unable to convey title
to the Real Property to Buyer at Closing in accordance with the requirements of
this Agreement, or if a commitment to insure in accordance with the requirements
of this Agreement cannot be obtained from the Title Company or other reputable
title insurance company acceptable to Buyer, Buyer shall have the options (i) of
taking such title as Seller is able to convey with abatement of the Purchase
Price in the amount (fixed or ascertainable) of any liens on the Real Property,
(ii) of terminating Buyer's obligations under this Agreement and being repaid
the Deposit and all interest earned thereon, this Agreement shall be null and
void and neither party shall have any obligations hereunder.
6. Possession.
(a) Delivery of Possession. Actual, sole and exclusive
physical possession of the Property shall be given to Buyer at Closing
unoccupied and free of any leases, claims to or rights of possession, other than
the rights of tenants under the Tenant Leases, by delivery of the keys to the
Property and Seller's special warranty deed, duly executed and acknowledged by
Seller and in proper form for recording (the "Deed"), and Seller's bill of sale
in the form of Exhibit "E" to this Agreement duly executed and acknowledged by
Seller and in proper form for recording (the "Bill of Sale"). If Buyer causes a
survey of the Real Property to be made, then at Buyer's option the description
of the Real Property contained in the Deed shall be based upon that survey. It
is intended by the parties that the Real Property includes all of the land and
real property interest owned by Seller in the vicinity of the lot or tract of
ground described on Exhibit "A" to this Agreement. If it is determined that
Seller owns land or other real property interest adjacent to and in addition to,
that described on Exhibit "A" to this Agreement, then the Deed shall include
such additional land or interests. The proposed Deed shall be prepared by Seller
at Seller's expense and shall be submitted to Buyer for the Buyer's approval not
less than ten (10) days before the Closing Date.
(b) Delivery of Separate Deeds. If the Real Property consists
of multiple parcels at the Closing, or if Buyer desires to create separate
parcels or air rights estates in and to the Real Property, Seller shall so
convey by the delivery of separate deeds for each parcel, and in such event the
term "Deed" as used in this Agreement shall mean all of the deeds delivered by
Seller to Buyer with respect to the Real Property, collectively.
7. Apportionments.
(a) (i) Taxes, Rents, etc. Real estate taxes (on the basis of
the actual fiscal years for which such taxes are assessed) on the Real Property,
personal property taxes on the Personal Property, minimum water and sewer
rentals, rents including, without limitation, expense pass through, percentage
rents and other sums paid by tenants, licensees and concessionaires and
collected by Seller under the Tenant Leases prior to the Closing, payments due
under the Service Agreements (as hereinafter defined) which are to be assigned
to Buyer hereunder, prepaid liens fees and other charges for licenses and
permits for the Real Property which will remain in effect for Buyer's benefit
after the Closing and which are listed on Exhibit "F" to this Agreement
including, municipal rubbish removal charges, (if any), shall be apportioned pro
rata between Seller and Buyer on a per diem basis as of the Closing Date.
(ii) The Purchase Price has not been increased by
reason of any accounts receivable held by Seller at Closing. Therefore, any
payment received by Buyer after the Closing Date from a tenant under any of the
Tenant Leases on account of minimum fixed rent which is applicable to periods of
time prior to the Closing Date and any other payments received by Buyer after
the Closing Date from a tenant under any of the Tenant Leases on account of
charges to such tenant for utilities or services consumed by or rendered to such
tenant prior to the Closing Date shall be apportioned by Buyer upon receipt, and
the portion thereof attributable to minimum fixed rent or expenses applicable to
periods of time prior to the Closing Date shall promptly be paid by Buyer to
Seller as an adjustment to the Purchase Price and shall be accompanied by an
accounting of such payment in reasonable detail. Any payment received by Seller
after the Closing Date from a tenant under any of the Tenant Leases on account
of fixed minimum rent which is applicable to periods of time subsequent to the
Closing Date and any other payments received by Seller after the Closing Date
and any other payments received by Seller after the Closing Date and any other
payments received by Seller after the Closing Date from a tenant under any of
the Tenant for utilities or services consumed by or rendered to such tenant
after the Closing Date shall be apportioned by Seller upon receipt, and the
portion thereof attributable to fixed minimum rent or expenses applicable to
periods of time subsequent to the Closing Date shall promptly be paid by Seller
to Buyer. If, at Closing, any tenants are in arrears in the payment of minimum
fixed rent or utility charges which were payable prior to the Closing Date, all
payments by such tenants after Closing received by Buyer shall be deemed as
being applicable, first as against current amounts then due to Buyer, if any,
and then as against such arrearages. In the event that any of the tenants under
the Tenant Leases are in monetary default of their obligations to Seller under
their respective Tenant Lease as of the Closing Date, and if requested by Seller
to do so Buyer shall promptly and diligently endeavor to collect any such
amounts after the Closing for the benefit of Seller, and shall remit any amounts
so collected to Seller promptly upon receipt thereof. Seller agrees to give
Buyer ten (10) days prior written notice before seeking collection or
instituting legal proceedings against any tenant for the collection of rent or
charges due Seller. This Paragraph 7(a)(ii) shall survive Closing.
(iii) If the apportionment of any "escalation"
payment relating to operating expenses, or other payments received by Seller
prior to the Closing Date from a tenant under any of the Tenant Leases on
account of periods prior to the Closing Date or on account of sums which are
attributable to expenses incurred by the landlord for periods of time prior to
the Closing Date, cannot be precisely determined at the Closing, Seller and
Buyer shall reasonably estimate the apportionment of such sums pro rata between
Buyer and Seller on a per diem basis as of the Closing Date. A post-closing
adjustment shall be made, if necessary, between Buyer and Seller for such
apportioned items within thirty (30) days after the sums can be precisely
determined. This Paragraph 7(a)(iii) shall survive Closing.
(iv) If bills for real estate taxes on the Real
Property have not been issued as of the Closing Date, and if the amount of real
estate taxes of the then current tax fiscal year is not then known, the
apportionment of real estate taxes shall be made at the Closing on the basis of
the prior year's real estate taxes.
(v) If, at the Closing, the Real Property or any part
thereof is affected by an assessment which is payable in installments of which
the first installment is then a charge or lien, or has been paid prior to
February 2, 1996, then all unpaid installments of such assessments, including
those which are to become due and payable after the Closing, shall be deemed to
be due and payable and to be a lien upon the Real Property and shall be paid and
discharged by Seller at the Closing.
(vi) Any credit due to Buyer pursuant to this
Paragraph 7(a) shall be applied as a credit against that portion of the Purchase
Price payable at the Closing; and any credit due to Seller pursuant to this
Paragraph 7(a) shall be paid by Buyer to Seller at the Closing as an addition to
the Purchase Price.
(b) Security Deposits. The total sum of all tenant security
deposits listed on Exhibit "G", as updated at the Closing pursuant to Paragraph
15(a)(xi), together with all interest earned thereon, if any, as of the Closing
Date which Seller is obligated to pay to tenants, shall be given to Buyer at the
Closing as a credit against that portion of the Purchase Price payable at the
Closing.
(c) Utility Meter Readings. Seller shall obtain readings of
the water, electric, gas and other utility meters servicing the Real Property
(other than meters measuring exclusively utility consumption which is to be paid
in full by tenants under Tenant Leases) to a date no sooner than the Closing
Date. If Seller is unable to obtain readings of any meters prior to the Closing
Date, the Closing shall be completed without such readings and, upon obtaining
said readings, Seller shall pay the charges incurred prior to the Closing Date
as reasonably determined by Buyer based upon such readingsy
(d) Transfer and Sales Taxes. Seller and Buyer shall each pay
at the Closing one-half (1/2) of all realty transfer, recordation and
documentary fees, stamps and taxes imposed on the Deed, conveyance of the Real
Property or the transactions contemplated by this Agreement.
(e) Adjustments to Purchase Price for Certain Expenditures. At
Closing, Buyer shall reimburse Seller for commissions paid by Seller to any
party (a "Lease Broker") and costs for tenant improvements with respect to or on
account of any new Leases entered into by Seller on or before February 2, 1996
or renewals or extensions of Tenant Leases, the terms of which Buyer has
approved pursuant to the provisions of Paragraph 10 hereof.
8. Representations and Warranties of Seller. Seller, to induce Buyer to
enter into this Agreement and to complete the Closing, makes the following
representations and warranties to Buyer, which representations and warranties
are true and correct as of the date of this Agreement, and shall be true and
correct at and as of the Closing Date in all respects as though such
representations and warranties were made both at and as of the date of this
Agreement, and at and as of the Closing Date.
AS TO THE TENANT LEASES:
(a) Exhibit "G" to this Agreement is a complete and correct
list of all of the leases, tenancies, licenses and other agreements for the use
or occupancy of any portion of the Property in effect on the date of this
Agreement (the "Tenant Leases")
(b) Each of the Tenant Leases is valid and subsisting and in
full force and effect and, except as otherwise set forth on Exhibit "G", the
tenant thereunder is in actual possession of that portion of the Property Leased
pursuant to such Tenant Lease and occupied in accordance with a properly issued
certificate of occupancy and, except as otherwise set forth on Exhibit "G",
neither the tenant nor the landlord is in default under the Tenant Lease.
(c) The copies of the Tenant Leases previously delivered by
Seller to Buyer are true and complete copies of such Tenant Lease and the same
have not been further amended, modified or supplemented; and no tenant
thereunder has any right to extend or renew the term thereof except as expressly
set forth in its Tenant Lease.
(d) Except as set forth on Exhibit "G", no tenant has asserted
any claim of which Seller has notice which could adversely affect the right of
the landlord to collect rent from such tenant and no notice of default or breach
on the part of the landlord under any of the Tenant Leases has been received by
Seller from any tenant which has not been cured.
(e) To the best of Seller's knowledge, All painting, repairs,
alterations, improvements and other work required to be performed by the
landlord under the terms of each of the Tenant Leases and all of the other
obligations of the landlord required to be performed thereunder through and
including February 2, 1996 have been fully performed and paid for in full by
Seller.
(f) The rents and other payments set forth on Exhibit "G" are
the actual rents, income and charges presently being collected by Seller under
the Tenant Leases, all minimum rent is payable monthly in advance.
(g) Except as set forth on Exhibit "G", no tenant under any of
the Tenant Leases is entitled to any concession, allowance, rebate or refund.
(h) No tenant under any of the Tenant Leases has prepaid any
rent or other charges for more than the current month.
(i) To the extent any of the Tenant Leases and any of the
rents or other amounts payable under the Tenant Leases has been assigned,
pledged or encumbered as collateral security, such assignment will be terminated
at the Closing, whereupon the Tenant Leases may be assigned by Seller free and
clear of all liens, claims and encumbrances.
(j) No security deposits have been paid by tenants under the
Tenant Leases which have not previously been returned to the tenants, except as
listed on Exhibit "G".
(k) No brokerage or leasing commissions or other compensation
is or will be due or payable to any Lease Broker with respect to or on account
of any of the Tenant Leases or any extensions or renewals thereof which occurred
on or before February 2, 1996, except as expressly set forth on Exhibit "G"; and
Seller will pay in full, at or before the Closing, all sums now or hereafter due
to any Lease Broker on account of any of the Tenant Leases or any extensions or
renewals thereof or any other actions by the tenants thereunder and shall
deliver to Buyer at the Closing written releases in form satisfactory to Buyer
of all claims and other rights by all such Lease Brokers. Buyer agrees to pay
all commissions for renewals due and payable on or after February 2, 1996.
(1) No tenant under any of the Tenant Leases has any right or
option to acquire the Property or any portion thereof, except as listed on
Exhibit "G", and there are no outstanding agreements with any other party
granting any right or creating any obligation to acquire the Property or any
portion thereof or any interest therein.
(m) Except as set forth in Tenant Leases approved by Buyer in
accordance with Paragraph 10 hereof, Seller has no obligation to pay rent or
satisfy any other obligation of any tenant under any Tenant Lease for space in
any other building, or to purchase any tenant's leasehold estate in any other
building or to contribute to any tenant for unfinished tenant leasehold
improvements other than those listed on Exhibit "G"; and, to the extent such
obligations may exist, Seller will discharge and pay in full, at or prior to the
Closing, all such obligations and deliver to Buyer at the Closing a written
release in form satisfactory to Buyer of all claims and other rights by the
party to whom Seller is so obligated in connection with such obligations.
AS TO THE PROPERTY:
(n) Seller has not received any notice (a "Defect Notice")
from the holder of any mortgage presently encumbering the Property (the
"Existing Mortgage"), any insurance company which has issued a policy with
respect to the Property or from any board of fire underwriters (or other body
exercising similar functions) claiming any defects or deficiencies in the
Property or suggesting or requesting the performance of any repairs, alterations
or other work to the Property, or any portion thereof.
(o) There are no management, service, equipment, supply,
security, maintenance, construction, concession or other agreements with respect
to or affecting the Property, or any portion thereof, except for the agreements
listed on Exhibit "H" to this Agreement (collectively, the "Service
Agreements"); neither Seller nor the other party to any of the Service
Agreements is in default thereunder and no event or omission has occurred which
with the giving of notice or lapse of time, or both, would constitute a default
or breach under any of the Service Agreements; each of the Service Agreements
designated on Exhibit "H" to be assigned to Buyer at the Closing is assignable
by Seller and will not be invalidated, violated or otherwise adversely affected
by the assignment thereof or by the transfer of the Property to Buyer; the
copies of the Service Agreements previously delivered by Seller to Buyer are
true and complete copies of the Service Agreements and same have not been
further amended, modified or supplemented; and each of the Service Agreements
designated on Exhibit "H" to be terminated shall be terminated by Seller at or
prior to the Closing and all sums due thereunder paid in full by Seller.
(p) To the best of Seller's knowledge, all buildings and
improvements (including all roads, parking areas, curbs, sidewalks, sewers and
other utilities) included within the Property have been completed and installed
in accordance with the plans and specifications therefor approved by the
governmental authorities having jurisdiction of the Property;
(q) To the best of Seller's knowledge, all permanent
certificates of occupancy and all other licenses, permits, authorizations,
consents, certificates and approvals required by all governmental authorities
having jurisdiction of the Property and the requisite certificates of the local
board of fire underwriters (or other body exercising similar functions) have
been issued for the Property (and all individual items constituting the
Property), have been paid for, are in full force and effect, are assignable by
Seller, and will not be invalidated, violated or otherwise adversely affected by
the assignment thereof or by the transfer of the Property to Buyer.
(r) The current zoning classification of the Real Property
under the applicable zoning code is "SU-3, Office District", and Seller has
received no notice of any violations of any zoning, subdivision, building or
similar law, ordinance, order, regulation or recorded plat or any certificate of
occupancy issued for the Property.
(s) Seller has received no notice of any violation (a
"Violation") of any applicable law, ordnance, code, rule, order, regulation
requirements of any governmental authority (except for compliance with , the
Americans With Disabilities Act, Pub. L. 101-336, July 26, 1990, 104 Stat. 327
and Pub. L. 102-166, Title I, Section lO9 (a), (b)(2), Title III, Section 315,
November 21, 1991, 105 Stat. 1077, 1095 (the "ADA" which non-compliance Seller
has disclosed to Buyer), the requirements of any local board of fire
underwriters (or other body exercising similar functions), or the provisions of
the Tenant Leases or Service Agreements; and there are not presently outstanding
and uncured notices of any Violations.
(t) Exhibit "I" to this Agreement sets forth the only fire and
extended coverage insurance policies maintained by Seller with respect to the
Property ("Policy"); the Policy is in full force and effect and all premiums due
thereunder have been paid; and Seller has not received any notice from the
insurance companies which issued the Policy, indicating that the Policy will not
be renewed or will be renewed at a higher premium than is presently payable
therefor.
(u) There is no action, suit or proceeding pending or, to the
knowledge of Seller, threatened against or affecting Seller or the Property or
any portion thereof or any of the Tenant Leases or Service Agreements 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, county or municipal
department, commission, board, bureau or agency or other governmental
instrumentality.
(v) All taxes currently due and payable with respect to the
Real Property have been paid; the Real Property constitutes separate tax parcels
and are separately assessed for real estate tax purposes; there is no proceeding
pending for the adjustment of the assessed valuation of all or any portion of
the Real Property; the Real Property has been assessed and real estate taxes
have been paid on the basis of the value of all improvements as completed; there
is no abatement in effect with respect to all or any portion of the real estate
taxes, the real estate tax bills previously delivered by Seller to Buyer are
true and complete copies of all bills for taxes levied against or on account of
the Property of any rent or income from the Property since January 1, 1993.
(w) To the best of Seller's knowledge, no portion of the Real
Property is located within an area designated as a flood hazard area or an area
which will require the purchase of flood insurance for the obtaining of any
federally insured or federally related loan; no portion of the Real Property is
located in any area constituting a "wetland" or "other water of the United
States" or "waters of the United States" or "waters of the Commonwealth of
Pennsylvania" (as defined in Paragraph ll(a)(v) hereof), or in a "coastal zone"
as defined under federal, state or local law; and no portion of the Real
Property is located in any conservation or historic district.
(x) Seller has not received any notice of any condemnation
proceeding or other proceedings in the nature of eminent domain in connection
with the Property (a "Taking"), and, to Seller's knowledge, no Taking has been
threatened.
(y) All contractors, subcontractors and other persons or
entities furnishing work, labor, materials or supplies for the development and
construction of the Property have been paid in full and there are no claims
against the Seller or the Property in connection therewith.
(z) All of the books, records, information, data and other
items supplied by Seller to Buyer, and upon which Seller prepared financial
statements for the past three (3) years for the operation of the Property, are
all true, complete and correct in all material respects, have been prepared in
accordance with generally accepted accounting practices and principles, and
fairly and accurately present the results of operations of the Property for the
past three (3) years.
(aa) The statement of income and expense attached as Exhibit
"J" to this Agreement is true, complete and correct, fairly and accurately
reflects the income and expenses of the operation of the Property for the
periods reflected thereby, and has been audited and certified to by an
independent certified public accountant or was prepared in accordance with
generally accepted accounting practices and principles.
(bb) To the best of Seller's knowledge, the copies of the
documents constituting the easements, rights-of-way, restrictions and agreements
of record specified on Exhibit "D" to this Agreement previously exhibited by
Seller to Buyer (the "Recorded Agreements") are true and complete copies
thereof, and same have not been further amended, modified or supplemented; and
no default or breach exists under the Recorded Agreements, and no event or
omission has occurred which, with the giving of notice or lapse of time or both,
would constitute a default or breach under the Recorded Agreements.
(cc) No portion of the Real Property is the subject of any
abatement, reduction, deferral or "rollback" with regard to real estate taxes
nor any agreement or arrangement whereby the Real Property may be subject to the
imposition of real property taxes after the Closing Date on account of periods
of time prior to the Closing Date; the Real Property has not, prior to the date
of this Agreement, and will not, prior to the Closing Date, be subject to a
covenant with the County of Delaware or any other governmental agency pursuant
to the Act of January 13, 1965 P.L. 1292, as amended, 16 P.S. Section 11941 et
seq. ("Act 515") or the Pennsylvania Farmland and Forest Land Assessment Act of
1974, as amended, 72, P.S. Section 5490.1 et seq. ("Act 319"), or any similar
law; and in the event of a breach by Seller of the representation and warranty
set forth in this Paragraph 8(ee), then, in addition to all other rights and
remedies provided to Buyer at law or pursuant to the terms of this Agreement,
and notwithstanding any other provision set forth in this Agreement, Seller
shall be solely responsible for any and all accrued taxes, interest and penalty
imposed upon the Real Property from the commencement of any covenant under Act
515 or Act 319 or other agreement or arrangement up to and including the Closing
Date, which taxes, interest and penalties shall be satisfied at the Closing.
(dd) To the best of Seller's knowledge, all fire safety
systems at or serving the Property are identified as "K" to this Agreement and
are in good condition, repair and working order.
(ee) The execution and delivery of this Agreement and the
performance by Seller of its obligations hereunder have been duly authorized by
all requisite corporate action, and will not conflict with or result in a breach
of any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of Seller, and will not conflict with or result in a
breach of any law, regulation or order, or any agreement or instrument to which
Seller is a party or by which Seller is bound or the Property is subject; and
this Agreement and the documents to be delivered by Seller pursuant to this
Agreement will each constitute the legal, valid and binding obligations of
Seller, enforceable in accordance with their respective terms, covenants and
conditions; and there are no claims, defenses (personal or otherwise) or offsets
to the validity of or enforceability against Seller of this Agreement and the
documents to be delivered pursuant hereto.
9. Survival of Representations, Warranties and Obligations.
(a) Surviving Representations and Warranties. The
representations and warranties of Seller set forth in Paragraph 8 of this
Agreement shall remain in effect for a period of one (1) year following the
Closing Date and thereafter if Buyer shall have given to Seller notice of a
breach thereof within one (1) year period. For the purposes of the
representations and warranties contained in this Agreement, the receipt by,
notice to or knowledge of Seller's managing agent at the Property, if any, shall
be attributed to Seller.
10. Operations Prior to Closing. Between the date of the execution of
this Agreement and Closing:
(a) Repairs; Alterations. Seller shall, at its expense, make
all repairs and replacements, structural and nonstructural, which are required
with respect to any portion of the Property to maintain it in its present
condition, which in all instances shall be in accordance with all applicable
federal, state and local laws, and in accordance with sound business practices,
except only damage by a Casualty (which term is defined in, and shall be
governed by, the provisions of Paragraph 12 below) and reasonable wear and tear.
Seller will not in any manner alter the condition of the Property, including,
without limitation, the removal therefrom of soil or other ground conditions or
the making of any changes or alterations to the buildings and improvements
thereon.
(b) Operations and Management. Seller shall operate and manage
the Property in the same manner as it has been operated and managed prior to the
date of this Agreement and in accordance with applicable law. Seller shall
submit to Buyer monthly reports of rental collections, occupancy and vacancies.
(c) Compliance with Obligations. Seller shall comply with all
of the obligations of Seller under the Tenant Leases, the Service Agreements and
all other agreements and contractual arrangements by which Seller and/or the
Property are bound or affected. Seller shall maintain the Policy in full force
and effect and shall pay all required premiums and other charges. If Seller
fails to make any payments required under the provisions of this Paragraph
10(c), Buyer may, at or prior to the Closing Date, in addition to all of its
other rights and remedies available at law, in equity or under this Agreement,
make such payment on behalf of Seller and set off and deduct the amount of such
payment against the Purchase Price.
(d) New Contracts; New Leases.
(i) Seller shall not enter into any contract for or
on behalf of or affecting the Property, unless such contract can be terminated
upon at least thirty (30) days prior notice or without charge, cost, penalty or
premium, and shall not renew, fail to give a notice which, in the absence of
which, will result in an automatic renewal of, modify, cancel or terminate any
Service Agreement, and shall not renew, fail to give a notice which, in the
absence of which, will result in an automatic renewal of, modify, cancel, accept
surrender of, terminate, or accept any advance rental under any of the Tenant
Leases. Seller shall not execute any new service agreement or new lease for any
portion of the Property without the prior written consent of Buyer which consent
shall not be unreasonably withheld or delayed.
(ii) (A) Notwithstanding the provisions of Paragraph
10(d)(i) above, Seller may enter into new leases prior to the Closing Date for
portions of the Real Property which are or may become vacant or may renew any of
the Tenant Leases which expire prior to the Closing Date, subject to the prior
approval of Buyer to the terms thereof, which approval shall not be unreasonably
withheld or delayed.
(B) Seller shall use reasonable efforts to
obtain tenant leases with respect to any portion of the Real Property which are
or may become vacant prior to the Closing Date, and to obtain renewals of any of
the Tenant Leases which expire prior to the Closing Date.
(C) All unrented spare units in the Property
which have been vacated by tenants and not reoccupied prior to the Closing or
which have never been occupied shall be delivered at the Closing free of all
personal property not conveyed to Buyer under this Agreement.
(D) Seller will not apply any security
deposit paid under any of the Tenant Leases to the payment of rent or on account
of any default by the tenant unless shown on rent roll and occurring prior to
February 2, 1996
(e) Buyer's Access.
(i) Buyer, its attorneys, accountants, architects,
engineers and other representatives shall be afforded access to the Property and
to all books, records and files relating to the operation thereof, including,
without limitation, any and all studies and/or reports conducted by or for
Seller with respect to the condition of any and all mechanical systems located
on or within the Property (including those relating to the heating, ventilation
and air conditioning system(s)),from time to time prior to the Closing for the
purposes of inspections, preparation of plans, taking of measurements, making of
surveys, making of appraisals and generally for the ascertainment of the
condition of the Property; and there shall be furnished to Buyer all
documentation concerning the Property in the possession of Seller and/or
Seller's management agent for the Property which Buyer, its attorneys,
accountants, architects, engineers and other representatives shall reasonably
request. All of the foregoing information and materials shall be maintained in
the strictest of confidence by Buyer and Buyer's attorneys, accountants,
architects, engineers and other representatives and shall be promptly returned
to Seller upon any terimation of this Agreement. Buyer shall cause all of
Buyer's representatives as aforesaid to comply with all of the foregoing
requirements.
(ii) Any entry upon the Real Property by Buyer or its
representatives shall be at their sole risk and shall occur at reasonable times
and in a manner which does not unreasonably interfere with the use and occupancy
of the Real Property by any of the tenants. In the event that Buyer or any of
its representatives conduct any tests upon any Real Property, upon completion of
such tests Buyer shall promptly and fully restore the Real Property
substantially to the condition which it was in prior to commencement of such
tests. The results of all tests shall be supplied to Seller promptly upon
Buyer's receipt thereof.
Any entry on the Property by Buyer or its agents or
representatives pursuant to which Paragraph 10 shall be subject to Buyer's full
compliance with the following terms and conditions:
(A) Buyer agrees to indemnify, defend and
hold harmless Seller from and against any and all claims, suits, actions,
liabilities, losses, damages and expenses (including, without limitation,
reasonable attorneys' fees) of every kind and nature arising in whole or in part
from any act or omission of Buyer or any of its employees, architects,
engineers, contactors, subcontractors, agents or invitees while in, on or about
the Property. This Paragraph 10(e)(ii)(A) shall survive the Closing or any
sooner termination of this Agreement for a period equal to any applicable period
for the limitation of actions under applicable law following the Closing or such
sooner termination, and thereafter if Seller shall have given notice to Buyer of
a claim hereunder within such period until such claim is finally resolved.
(f) Notices. Promptly after receipt thereof by Seller, Seller
shall deliver to Buyer the following:
(i) a copy of any notice of default given or received
under any of the Tenant Leases or the Service Agreements;
(ii) a copy of any additional Tenant Lease executed
by Seller as permitted by the terms of Paragraph 10(d)(ii) hereof, as fully
executed;
(iii) a copy of any tax bill, notice or statement of
value, or notice of change in a tax rate affecting or relating to the Real
Property;
(iv) a copy of any notice of an actual or alleged
Violation; and
(v) a copy of any notice of a Taking.
(g) Employees. At the Closing, Seller shall terminate the
employment of all persons and/or entities then employed by Seller in connection
with the management, operation and maintenance of the Property, if any, and
Seller shall pay all accrued and unpaid vacation, salary, wages, benefits and
other compensation owed to same as of the Closing Date or required to be paid
under applicable law. Buyer shall assume no liability for any such payments or
for any other such obligations of Seller, and Seller shall indemnify, defend and
hold Buyer harmless from and against all claims in connection with such
vacation, salary, wages, benefits and other compensation which have accrued and
are payable as of the Closing Date.
(h) Tenant Estoppel Certificates. Seller shall complete and
deliver for execution by each tenant under the Tenant Leases which are
designated on Exhibit "G" as requiring a Tenant Estoppel Certificate a written
certification in the form of Exhibit "L" to this Agreement ("Tenant Estoppel
Certificate"), and shall use its best efforts to obtain an executed Tenant
Estoppel Certificate from each tenant. Seller shall deliver to Buyer a copy of
each executed Tenant Estoppel Certificate delivered to Seller promptly after
receiving same.
11. Environmental Matters.
(a) Representations and Warranties. Seller represents and
warrants to Buyer that, to the best of Seller's knowledge,:
(i) The Property and all activities and conditions at
the Property including, without limitation, those involving the use and
operation of the Personal Property, are in compliance with the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
et seq. ("CERCLA"), as amended by the Superfund Amendments and Reauthorization
Act of 1986 ("SARA"), the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq., as amended from time to time ("RCRA"), and the Clean
Water Act, 33 U.S.C. Sections 1251 et seq., as amended from time to time, the
Clean Air Act, 42 U.S.C. Sections 7401 et seq, as amended from time to time, the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., as amended from
time to time, the Hazardous Materials Transportation Act, 49 U.S.C. Section 6901
et seq., as amended from time to time, the Federal Water Pollution Control Act,
33 U.S.C. Sections 1251 et seq., as amended from time to time, the Safe Drinking
Water Act, 42 U.S.C. Sections 300f-300j, as amended from time to time, the
Pennsylvania Hazardous Sites Cleanup Act, 35 P.S. Sections 6020.101 et seq., as
amended from time to time ("HSCA"), and the Dam Safety and Encroachments Act, 32
P.S. Sections 693.1 et seq., as amended from time to time, and with all other
federal, state and local environmental laws, statutes, ordinances, regulations,
rules, orders and requirements of common law including, without limitation,
those relating to the construction, operation, maintenance or repair of any
improvements or equipment or other Personal Property; the discharge, emission or
release of any Contaminant (as hereinafter defined) to the air, soil, surface
water or ground water; the discharge of any dredge or fill material to a wetland
or other water of the United States (as hereinafter defined); the storage,
treatment, disposal or handling of any Contaminant; or the construction,
operation, maintenance or repair of aboveground or underground storage tanks
(collectively, "Environmental Laws").
(ii) No Contaminant is present on, over or under or
is migrating from the Property or is present on any of the Personal Property or
on, over or under any premises adjacent to the Property. As used in this
Agreement, the term "Contaminant" shall mean any "hazardous substance" or
"pollutant or contaminant" as defined pursuant to CERCLA or HSCA, "petroleum" as
defined pursuant to RCRA, or any material containing petroleum, any
polychlorinated biphenyls ("PCBs") or substances containing PCBs, any urea
formaldehyde foam, or any asbestos or materials containing asbestos.
(iii) Neither radon nor any radon progeny is present
at any area of the Property in excess of 4 picocuries/liter.
(iv) Seller has not, and except as disclosed to Buyer
in that certain Limited Subsurface Investigation Report by Enviro Business, Inc.
dated January 3, 1996 and that certain Environmental Site Assessment and Soil
Removal Report of Harpstead Enviromental, Inc. dated August 17, 1992, nor to the
best of its knowledge has anyone else, generated, stored, treated, disposed of,
discharged, released, emitted or otherwise handled any Contaminant on, over,
under, from or in any manner affecting the Property or any premises adjacent to
the Property or in connection with the Personal Property. For the purposes of
this subparagraph (iv) only, "Contaminant" shall not include construction
materials (other than asbestos, polychlorinated biphenyls or urea formaldehyde
foam), office equipment, fuel and other similar products contained in vehicles
and cleaning solutions and other maintenance materials that are customarily used
or stored incidental to and are reasonably necessary for the operation or
maintenance of the Property.
(v) Seller has not, nor to the best of its knowledge
has anyone else, discharged any dredge or fill material to any "wetland" or
"waters of the United States" or "waters of the Commonwealth of Pennsylvania" on
the Property, as those terms are defined in the rules and regulations
promulgated pursuant to the Clean Water Act or the Dam Safety and Encroachments
Act or other applicable federal, state or local law.
(vi) Neither the Property nor, to the best of
Seller's knowledge, any adjacent premises, is listed or proposed for listing on
the National Priorities List established pursuant to Section 105(8)(B) of
CERCLA, 42 U.S.C. Section 9605(8)(B), or on any other hazardous site test
promulgated by any federal, state or local government or governmental agency.
(vii) No underground or aboveground storage tanks are
present at the Property.
(viii) Seller has provided Buyer with copies of all:
(A) permits, licenses, certificates, registrations, approvals, and any
amendments thereto required for the Property and for the conduct of Seller's
activities at the Property pursuant to or necessary for compliance with
Environmental Laws; (B) applications, reports or other materials submitted to
any governmental agency in connection with any Environmental Law; (C) records or
manifests required to be maintained pursuant to Environmental Laws or which are
relevant to the issue of compliance with Environmental Laws; (D) correspondence,
notices of violation, summonses, orders, administrative, civil or criminal
complaints, requests for information or other documents received by Seller or
its agents pertaining to compliance with Environmental Laws or the generation,
storage, treatment, handling, discharge, emission, release or migration of any
Contaminant on, over, under, from or affecting the Property; and (E) records and
analyses of any environmental tests pertaining to the Property including,
without limitation, the results of any air, water or soil analyses or tank
integrity testing which are in the possession of Seller or any managing agent
for the Property or the existence of which is known to Seller.
(ix) No civil, criminal or administrative proceeding
is pending or threatened relating to Environmental Laws or Contaminants on,
over, under, from or affecting the Property; neither Seller nor any of its
agents has received any notice of violation or potential liability regarding the
Property or activities thereon relating to Environmental Laws or Contaminants
on, over, under from or affecting the Property and Seller has no reason to know
of circumstances that would give rise to such notices or proceedings in the
future; Seller has not entered into any consent order, consent decree,
administrative order, judicial order or settlement relating to Environmental
Laws or Contaminants on, over, under, migrating from or affecting the Property.
(b) Cooperation. Seller will assist Buyer in giving notice to
applicable government agencies and in transferring or reissuing to Buyer any
permit, license, certificate, registration or other approval necessary to
continue operations at the Property, or in obtaining for Buyer any new permit,
license, certificate, registration or approval required of Buyer under any
Environmental Law.
(c) Liens. Seller represents and warrants that it does not
know or have reason to know of any lien imposed, or any circumstance which might
lead to imposition of a lien, upon its revenues or personal or real property
pursuant to any Environmental Law.
(d) Buyer's Environmental Investigation.
(i) Upon execution of this Agreement by Seller, Buyer
may contract for the preparation of a Phase I environmental report with respect
to the Property (the "Phase I"), at Buyer's sole cost and expense, with a
consultant selected by Buyer, which shall include an investigation of, inter
alia, compliance with Environmental Laws, the presence of Contaminants on, over,
under, migrating from or affecting the Property including, without limitation,
in connection with the use and operation of any personal property, and the
presence of conditions that may affect Buyer's intended use of the Property.
(ii) Seller will give reasonable cooperation to Buyer
and Buyer's agents in the preparation of the Phase I including, without
limitation, (A) complying with requests for information and records; (B)
assisting Buyer in obtaining governmental agency or other records and, upon
Buyer's request, communicating directly with any governmental agencies; and (C)
granting Buyer access to the entire Property including, without limitation,
access for collecting surface or subsurface samples of soil, vegetation or
water, or samples from buildings and other improvements and Personal Property
located on the Property, including samples from walls, floors, ceilings,
plenums, paved areas and other areas the taking of which samples may necessitate
some damage to the buildings, other improvements or the Personal Property, and
installing groundwater monitoring wells if necessary in Buyer's opinion.
(iii) If, in Buyer's sole opinion, Buyer's
environmental investigation is not completed by at least ten (10) business days
prior to the Closing Date, then at Buyer's election Closing shall automatically
be extended to the tenth (10th) business day following completion of Buyer's
investigation, but in no event shall the Closing be extended pursuant to this
subparagraph beyond thirty (30) days after the Closing Date established pursuant
to Paragraph 4(b) hereof.
(iv) If, in Buyer's sole opinion, the environmental
investigation indicates any non-compliance with Environmental Law at or in
connection with the Property or the Personal Property or the use or operation
thereof, or the presence of Contaminants on, under, over, migrating from or
affecting the Property or the presence of any condition that may affect Buyer's
intended use of the Property, then, at Buyer's election, Buyer may terminate
this Agreement together with reimbursement to Buyer of Reimburseable Costs in an
amount not to exceed Fifty Thousand Dollars ($50,000.00).
(v) Buyer's environmental investigation shall in no
way limit or otherwise affect Seller's representations and warranties under this
Paragraph 11 hereof in any other provision of this Agreement.
(e) Indemnification. Provided Seller is notified of such claim
within one (1) year after the Closing Date, Seller agrees to indemnify, hold
harmless, defend and reimburse Buyer for, and release Buyer from, all costs,
expenses (including, without limitation, reasonable attorneys' fees, consultant
and expert fees and court costs), losses (including, without limitation, loss of
income and loss of value of the Property), and liabilities (including, without
limitation, common law and statutory liability) suffered by Buyer from or in
connection with any of the following: (i) Seller's breach of any of the
provisions in this Paragraph 11; (ii) compliance with any present Environmental
Laws incurred on account of the status of or conditions existing at the Property
before the Closing; (iii) studying or remedying contamination or suspected
contamination of the Property by any Contaminant, which contamination existed
before the Closing; (iv) costs incurred due to any investigation of the Property
or any cleanup, removal, remediation or any restoration required by a federal,
state or local governmental agency or political subdivision or court arising out
of the condition of the Property before Closing; and (v) claims, sums paid for
settlement of claims, damages, fines, penalties, judgments or other sanctions
incurred, arising out of, relating to or on account of any Environmental Laws or
the presence of any Contaminants (including, without limitation, any personal
injury or property damage relating thereto) arising out of the condition of the
Property before the Closing, except as may have been disclosed to Buyer prior to
the Closing Date.
(f) Choice of Remedies. None of the remedies described herein
shall exclude or limit Buyer's common law rights of recovery, contribution or
other legal redress, or Buyer's right to obtain statutory relief including, but
not limited to, a cost recovery action under CERCLA or other federal, state or
local statutes providing for similar remedies and the right to specific
performance.
(g) Survival. The representations, warranties and
indemnifications of this Paragraph 11 shall survive the Closing for a period of
one (1) year after the Closing Date.
12. Casualty.
(a) Seller's Insurance. Seller shall maintain the Policy in
effect until the time of the Closing, and shall deliver to Buyer, within ten
(10) days after the date of this Agreement, an endorsement to the Policy issued
by the insurance company issuing the Policy evidencing that the Policy is in
effect, that the same will not be cancelled or materially modified without at
least thirty (30) days prior written notice to Buyer, and that Buyer has been
named as an additional insured party thereunder, as its interest may appear. At
the Closing, Seller may cancel the Policy and the full short rate rebate of the
prepaid premium shall be paid to Seller.
(b) Destruction. If at any time prior to the Closing Date any
portion of the Property is destroyed or damaged as a result of fire or any other
casualty ("Casualty"), Seller shall promptly give written notice ("Casualty
Notice") thereof to Buyer. If the Property is the subject of a Casualty, Buyer
shall have the right, at its sole option, of terminating this Agreement (by
written notice to Seller and the Escrow Agent given within ten (10) days after
receipt of the Casualty Notice from Seller) unless, if insubstantial and not
material, the Casualty damage or destruction is fully repaired or restored by
Seller prior to the Closing Date. If Buyer does not terminate this Agreement,
the proceeds of any insurance with respect to the Property paid between the date
of this Agreement and the Closing Date and not retained by the holder of the
Existing Mortgage, less an amount to be retained by Seller equal to Seller's
deductible under the Policy, shall be paid to Buyer at the time of the Closing,
and all unpaid claims and rights in connection with losses to the Property shall
be assigned to Buyer at Closing without in any manner affecting the Purchase
Price.
(c) Repairs. If the Property is the subject of a Casualty, but
Buyer does not terminate this Agreement pursuant to the provisions of Paragraph
12(b) hereof, then Seller shall cause all temporary repairs to be made to the
Property as shall be required to prevent further deterioration and damage to the
Property prior to the Closing Date; provided, however, that any such repairs
shall first be approved by Buyer. Seller shall have the right to be reimbursed
from the proceeds of any insurance with respect to the Property paid between the
date of this Agreement and the Closing Date and not retained by the holder of
the Existing Mortgage for the cost of all such repairs made pursuant to this
Paragraph 12(c). Except for the obligation of Seller to repair the Property set
forth in this Paragraph 12(c), Seller shall have no other obligation to repair
any Casualty, damage or destruction in the event Buyer does not elect to
terminate this Agreement pursuant to the provisions of Paragraph 12(b), and in
such event, Buyer shall accept the Property at the Closing as damaged or
destroyed by the Casualty and Buyer shall have the right to enter the Real
Property prior to the Closing for the purpose of performing such repairs thereto
(at Buyer's sole cost and expense) as are reasonably necessary to protect the
Property against further damage prior to the Closing Date.
13. Eminent Domain. If a Taking affects all or any part of the Property
prior to the Closing, or if any proceeding for a Taking is commenced prior to
the Closing, or if notice of the contemplated commencement of a Taking is given
prior to the Closing, Buyer shall have the right, at its sole option, of
terminating this Agreement (by written notice to Seller within ten (10) days
after receipt by Buyer of written notice from Seller of the Taking). If Buyer
does not terminate this Agreement pursuant to the provisions of this Paragraph
13, Seller shall, at the Closing, be deemed to have assigned to Buyer all of
Seller's right, title and interest in and to any awards or damages to which
Seller may have become entitled or may thereafter be entitled by reason of any
exercise of the power of eminent domain or condemnation with respect to or for
the Taking of the Property or any portion thereof.
14. Conditions of Buyer's Obligations.
(a) Conditions. The obligations of Buyer under this Agreement
are subject to the satisfaction at the time of the Closing of each of the
following conditions (any one of which may be waived in whole or in part in
writing by Buyer at or prior to the Closing):
(i) all of the representations and warranties by
Seller set forth in this Agreement shall be true and correct at and as of the
Closing Date in all respects as though such representations and warranties were
made both at and as of the date of this Agreement and at and as of the Closing
Date;
(ii) no representation or warranty by Seller
contained in this Agreement shall contain any untrue statement or shall omit a
material fact necessary to make the statement of fact therein recited not
misleading;
(iii) Seller shall have performed all covenants,
agreements and conditions required by this Agreement to be performed by Seller
prior to or as of the Closing Date;
(iv) there shall have been no material adverse change
in the financial condition of the Property during the period from the date of
this Agreement to the Closing Date;
(v) that portion of the Property subject to Tenant
Leases is leased in accordance with the Rent Roll attached hereto as Exhibit
"G", is fully occupied under properly issued certificates of occupancy pursuant
to valid and fully enforceable Tenant Leases and all rent payable thereunder is
paid to date;
(vi) executed Tenant Estoppel Certificates shall have
been received within thirty (30) days after the date of this Agreement from each
of the tenants under the Tenant Leases which are designated on Exhibit "G" as
requiring a Tenant Estoppel Certificate;
(vii) Buyer shall have reviewed and approved the
Tenant Leases and operating costs of the Property within thirty (30) days after
the date of this Agreement.;
(viii) Seller shall have delivered, or caused to be
delivered, all of the documents required to be delivered at Closing under this
Agreement;
(ix) Buyer shall have received an updated and
recertified as-built survey of the Property certified to Buyer and disclosing no
conditions objectionable to Buyer.
(b) Failure of Condition. In the event any of the conditions
set forth in Paragraph 14(a) hereof are not satisfied as of the Closing Date,
Buyer shall have the right (in addition to all other rights and remedies
available to Buyer under this Agreement, at law or equity), at Buyer's sole
option (by written notice to Seller) to (i) terminate Buyer's obligations under
this Agreement; or (ii) complete the Closing notwithstanding the unsatisfied
condition; or (iii) adjourn the Closing to a date not later than sixty (60)
days, during which period Seller shall satisfy any unsatisfied conditions within
Seller's power to satisfy;
(c) Inspection Contingency. Buyer shall, during the period
from the date Buyer receives from Seller a fully executed counterpart of this
Agreement to the date occurring thirty (30) days thereafter (the "Inspection
Period"), examine the Property, the Rent Roll, the Tenant Leases, the Service
Agreements, the Policy, the Permitted Encumbrances and the other items to be
delivered by Seller to Buyer, cause any survey to be prepared and commence any
environmental study including, without limitation, causing test bores to be
drilled. Buyer may, for any or no reason whatsoever, terminate this Agreement by
written notice given to Seller on or before the expiration of the Inspection
Period (a "Termination Notice"). Upon delivery of a Termination Notice as
aforesaid, Buyer shall be entitled to the return of the Deposit and all interest
accrued thereon; and upon such payment, except as otherwise expressly provided
herein, this Agreement shall be and become null and void, neither party hereto
shall have any further rights or obligations hereunder and all original executed
counterparts of this Agreement shall be returned to Seller for cancellation. In
the event Buyer terminates this Agreement in accordance with this Paragraph
14(c), Buyer shall not be entitled to be reimbursed from Seller for any of the
Reimbursable Costs.
15. Items to be Delivered at the Closing.
(a) By Seller. At the Closing, Seller shall deliver to Buyer
the following:
(i) Deed . The Deed.
(ii) Bill of Sale. The Bill of Sale.
(iii) Assignment of Leases and Service Agreements.
Assignments in the form of Exhibits "L" and "M", respectively, of the Tenant
Leases and the Service Agreements designated on Exhibit "H" to be assigned to
Buyer, duly executed and acknowledged by Seller and in proper form for
recording, assigning to Buyer or Buyer's assignee all of the lessor's and
Seller's right, title and interest in and to the Tenant Leases and such Service
Agreements, together with an original executed copy of each of the Tenant Leases
and all guarantees and to the extent in Seller's possession, tenant financial
information, insurance certificates, correspondence and all other information
and files relating thereto, and each such Service Agreements and a letter, duly
executed by Seller, in form satisfactory to Buyer addressed to each of the
tenants under the Tenant Leases and other parties under the Service Agreements
informing each of the assignments.
(iv) Certificates, Etc. An assignment, duly executed
and acknowledged by Seller, of (and delivery to Buyer of originals or copies
of): all permanent certificates of occupancy and all other licenses, permits,
authorizations, consents, certificates and approvals required by all
governmental authorities having jurisdiction over the Property; all fees, escrow
and/or security funds, deposits and other sums heretofore paid to any
governmental authority in connection with the Property; all certificates issued
by the local board of fire underwriters (or other body exercising similar
functions); all plans, specifications and project manuals for the Property; all
guarantees, bonds and warranties with respect to the Property (together with
original counterparts of such instruments); and all keys to the Property.
(v) Assignment of Escrow Deposits. An assignment,
duly executed by Seller, assigning to Buyer or Buyer's assignee all sums, if
any, then on deposit with the holder of the Existing Mortgage for the payment of
real estate taxes, insurance premiums, and any other amounts then held by the
holder of the Existing Mortgage.
(vi) Assignment of Name. An assignment, duly executed
by Seller, assigning to Buyer or Buyer's assignee, Seller's rights to use all
names or designations pertaining to the Property.
(vii) Tenant Estoppel Certificates. Original
counterparts of the Tenant Estoppel Certificates.
(viii) Releases. The releases from the Lease Brokers
specified in Paragraph 8(k) hereof duly executed and acknowledged by each Lease
Broker and addressed to Buyer or Buyer's assignee, and the releases from the
parties specified in Paragraph 8(m) hereof duly executed and acknowledged by
each such party and addressed to Buyer or Buyer's assignee.
(ix) Resolutions; Title Company Affidavits, Etc. Such
resolutions and certificates as Buyer or the Title Company shall require to
evidence the due authorization of the execution and performance of this
Agreement and the documents to be delivered pursuant hereto; if Seller is a
corporation, Seller's Articles or Certificate of Incorporation and by-laws, as
amended, certified by the secretary of Seller; if Seller is a partnership,
Seller's partnership agreement, as amended, certified by a partner of Seller,
and the items required in the preceding clause with respect to any corporate
general partner of Seller and all affidavits, indemnities and other agreements
required by the Title Company to permit it to issue to Buyer the Owner's Policy
of Title Insurance required pursuant to Paragraph 5(a) hereof.
(x) Statements of Operating Expenses. A statement of
all operating expenses and real estate taxes for all "base years" under the
Tenant Leases, certified by Seller and a certified public accountant as being
true and correct, with all other information necessary or required to permit
Buyer to calculate and collect after the Closing all payments of additional rent
and other charges under the Tenant Leases.
(xi) Up-Dated Rent Roll. A schedule in the form of
Exhibit "G" of the rents and other charges and payments due from tenants under
the Tenant Leases including, without limitation, any which are in arrears, all
dated as of the Closing Date and certified by Seller as true and correct.
(xii) Conveyance of Awards. All proper instruments
for the conveyance of the awards referred to in Paragraphs l(a) and 13 hereof.
(xiii) Additional Permits and Certificates.
(A) To the extent in Seller's possession or
control, a certificate issued by the appropriate officer of the municipality
wherein the Real Property lies, certifying to the same type of information as if
provided in the Statement of Occupancy issued pursuant to the Philadelphia
Building Code; provided, however, that the foregoing requirement shall be deemed
waived by Buyer if the Real Property is situated in a municipality, the laws or
ordinances of which do not provide for the issuance of such a certificate.
(B) To the extent in Seller's possession or
control, if the Real Property is not situated in a city of the first class,
second class, or second Class A, a permit issued by the Pennsylvania Department
of Labor and Industry pursuant to Act of Assembly of April 27, 1927, P.L. 465
(35 P.S. Sections 1221-1235), as amended, which permit shall authorize the
occupancy or use of the building and all other structures on the Real Property
and shall be dated after the date of completion of the most recent erection,
adaptation, remodeling or alteration of any of such building or structures.
(ix) Plans and Specifications. To the extent in
Seller's possession or control, a set of plans and specifications for the
improvements which constitute a part of the Property and all alterations and
additions thereto, and a set of project manuals for the Property.
(x) Books and Records. Duplicate copies of all books,
records and operating reports in Seller's possession which are necessary to
insure continuity of operation of the Property.
(xi) MSDS Sheets. To the extent in Seller's
possession or control, copies of all material safety data sheets posted at any
time by Seller at the Property.
(xii) Letters of Credit. All letters of credit held
by Seller as security for the performance by any tenant of its obligations under
its Tenant Lease, together with an endorsement to each such letter of credit
issued by the issuer of such letter of credit naming Buyer or Buyer's assignee
as beneficiary under such letter of credit.
(xiii) Warranties. All warranties applicable to the
Property including, without limitation, those relating to the roof and the
heating, ventilating and air conditioning systems, together with an assignment
thereof to Buyer.
(xix) Other Documents. Any other documents required
to be delivered by Seller pursuant to any other provisions of this Agreement.
(b) Buyer. At the Closing, Buyer shall deliver to Seller the
following:
(i) Purchase Price. The portion of the Purchase Price
payable pursuant to Paragraph 2(a)(ii).
(ii) Assumption Agreements. Assumption agreements, in
the form of Exhibits "L" and "M" respectively, of the Tenant Leases and of the
Service Agreements designated on Exhibit "H" to be assigned to Buyer, duly
executed and acknowledged by Buyer and in proper form for recording.
(iii) Other Documents. Any other document required to
be delivered by Buyer pursuant to any other provision of this Agreement.
16. Indemnity of Seller. Seller agrees to indemnify, defend and hold
harmless Buyer from and against, and to reimburse Buyer with respect to, any and
all claims, demands, causes of action, losses, damages, liabilities, costs and
expenses (including, without limitation, reasonable attorney's fees and court
costs) asserted against or incurred by Buyer by reason of or arising out of (a)
a breach of any representation or warranty of Seller as set forth in this
Agreement, and (b) the failure of Seller to perform any obligation required by
this Agreement to be performed by it. The rights of Buyer to indemnification
under this Agreement shall not be affected by the fact that Buyer knew or should
have known the true state of facts giving rise to such indemnification, and the
furnishing of any information to Buyer or its affiliates or representatives or
the investigation by Buyer or its affiliates or representatives shall not affect
Buyer's right to rely on any representations or warranties made in this
Agreement.
17. Brokerage. Buyer and Seller represent and warrant to each other
that neither has dealt with any broker, finder or other intermediary in
connection with this sale other than Cushman & Wakefield of Pennsylvania, Inc.
(the "Broker"). Buyer agrees to pay all brokerage commission due to the Broker
up to the sum of Two Hundred Fifty Thousand Dollars ($250,000.00). Buyer and
Seller otherwise agree to indemnify, defend and hold each other harmless from
and against all claims, demands, causes of action, loss, damages, liabilities
costs and expenses (including, without limitation, attorneys' fees and court
costs) arising from any claims for commissions made by any broker, finder or
other intermediary, other than the Broker, with which either may have dealt in
connection with this sale, and the other party shall have no liability, or
obligation in connection therewith.
18. No Other Representations. Buyer acknowledges that neither Seller
nor anyone acting, or purporting to act, on behalf of Seller, has, except as
expressly set forth in this Agreement, made any representation or warranty with
respect to the Property.
19. Assignability. Buyer shall have the right to assign this Agreement
at any time before Closing and its rights hereunder with Seller's prior written
consent which shall not be unreasonably withheld; and any assignee of Buyer
shall be entitled to all of the rights and powers of Buyer hereunder. Buyer may
assign this Agreement at Closing with or without Buyer's consent.
20. FIRPTA.
(a) Parties Who Are Not Foreign - Entity Transferor. Section
1145 of the Internal Revenue Code of 1986, as amended (the "Code") provides that
a transferee of a United States real property interest must withhold tax if the
transferor is a foreign person. To inform Buyer that withholding of tax is not
required upon the disposition by Seller of a United States real property
interest, the undersigned parties executing this Agreement on behalf of Seller
hereby certify the following on behalf of Seller:
(i) Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and Income Tax Regulations).
(ii) The U.S. employer identification number for Awin
Realty Company is 23-1706179 and the taxpayer identification number for LBA
Associates is 23- 2534044; and
(iii) Seller's office address is 300 Stevens Drive,
Lester, Pennsylvania 19113-1521.
Seller, and the parties executing this Agreement on behalf of Seller, understand
that this certification may be disclosed to the Internal Revenue Service by
Buyer and that any false statement made here could be punished by fine,
imprisonment or both. Under penalties of perjury, the undersigned parties
executing this Agreement on behalf of Seller declare that they have examined
this certification and to the best of their knowledge and belief, it is true,
correct and complete; and they further declare that they have authority to sign
this document on behalf of Seller.
(b) Re-certification at Closing. The Seller, and the parties
executing this Agreement on behalf of Seller, shall deliver to Buyer at Closing,
a restatement of the above certifications of Seller and of the parties executing
this Agreement on behalf of Seller in the form attached to this Agreement as
Exhibit "N".
21. Notices.
(a) All notices, demands, requests or other communications
required or permitted under the term of this Agreement shall be in writing and,
unless and until otherwise specified in a written notice by the party to whom
notice is intended to be given, shall be sent to the parties at the following
respective addresses:
(i) if intended for Seller:
300 Stevens Drive
Lester, PA 19113-1521
Attention:Annamarie Donley, Vice President
(ii) if intended for Buyer:
443 South Gulph Road
King of Prussia, PA
with a copy to:
Adelman Lavine Gold and Levin,
a Professional Corporation
1900 Two Penn Center Plaza
Philadelphia, PA 19102-1799
Attention: Kevin W. Walsh, Esquire
(iii) if intended for Escrow Agent:
Certified Abstract Co., Inc.
5 Sentry Parkway East, Suite 107
Blue Bell, PA 19422
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other communication
shall be deemed to have been properly given for all purposes if (i) delivered
against a written receipt of delivery; (ii) mailed by registered or certified
mail of the United States Postal Service, return receipt requested, postage
prepaid; or (iii) delivered to a nationally recognized overnight courier service
for next business day delivery, to its addressee at such party's address as set
forth above.
(c) Each such notice, demand or request shall be deemed to
have been given upon the earlier of (i) actual receipt or refusal by the
addressee or (ii) deposit thereof at any main or branch United States post
office if sent in accordance with Paragraph 21(b)(ii) hereof, and deposit
thereof with the courier if sent pursuant to Paragraph 21(b)(iii).
22. Miscellaneous.
(a) Captions and Headings. The captions and headings
incorporated in this Agreement are inserted for convenience of reference only
and shall not form any part of this Agreement or affect its interpretation.
(b) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.
(c) Entire Agreement; Governing Law. This agreement contains
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all prior or other negotiations, representations,
understandings and agreements of, by or among the parties, express or implied,
oral or written, which are fully merged herein. The express terms of this
Agreement control and supersede any course of performance and/or customary
practice inconsistent with any such terms. Any agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this
Agreement unless such agreement is in writing and signed by the party against
whom enforcement of such change, modification, discharge or abandonment is
sought. This Agreement shall be governed by and construed under the laws of the
Commonwealth of Pennsylvania.
(d) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other provision may be invalid or unenforceable in whole or in part.
(e) Waiver of Tender of Deed and Purchase Monies. The tender
of an executed Deed by Seller and the tender by Buyer of the portion of the
Purchase Price payable at the Closing are mutually waived, but nothing in this
Agreement shall be construed as a waiver of Seller's obligation to deliver the
Deed and the Bill of Sale and/or of the concurrent obligation of Buyer to pay
the portion of the Purchase Price payable at the Closing.
(f) Gender, etc. Words used in this Agreement, regardless of
the number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
(g) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one (1) and the same instrument. This Agreement shall be binding when
one (1) or more counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected on this Agreement as the
signatories.
(h) Exhibits. All exhibits attached to this Agreement are
incorporated by reference into and made a part of this Agreement.
(i) No Waiver. Neither the failure nor any delay on the part
of either party to this Agreement to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver or any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of any such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
(j) Interpretation. No provision of this Agreement is to be
interpreted for or against either part because that part or that party's legal
representative or counsel drafted such provision.
(k) Time. Time is of the essence of this Agreement. In
computing the number of days for purposes of this Agreement, all days shall be
counted, including Saturdays, Sundays and holidays; provided, however, that if
the final day of any time period provided in this Agreement shall end on a
Saturday, Sunday or legal holiday, then the final day shall extend to 5:00 p.m.
of the next full business day. For the purposes of this Paragraph 22(k), the
term "holiday" shall mean a day other than a Saturday or Sunday on which banks
in the state in which the Real Property is located are or may elect to be
closed.
(l) Buyer's Exercise of Right to Terminate. If Buyer desires
to terminate its obligations under this Agreement pursuant to any of the
provisions hereof, Buyer shall do so by delivering written notice of termination
to Seller, with a copy to the Escrow Agent, whereupon, after delivery of such
notice by Seller to Escrow Agent, the Deposit and all interest earned thereon
shall be paid to Buyer, and except as otherwise expressly provided herein, this
Agreement shall be and become null and void and neither party shall have any
further rights or obligations under this Agreement and all original executed
counterparts of this Agreement shall be returned to Seller for cancellation. Any
dispute(s) with respect to the disposition of the Deposit following Buyer's
exercise of any right hereunder to terminate this Agreement shall be resolved in
accordance with the terms of Paragraph 3(b) hereof.
(m) Post-Closing Instructions. Seller agrees to instruct, or
cause its agents, servants, or employees to instruct, Buyer or its designee in
all phases and aspects of the operation of the Real Property, to disclose to
Buyer all information concerning the Property reasonably necessary, convenient
or useful to Buyer, which information and instructions are specifically made a
part of the Property to be purchased hereunder, and to hold itself and its
agents, servants, representatives, and employees available until the Closing
Date and from time to time thereafter in order to supply any additional
information reasonably requested by Buyer regarding the operation, maintenance,
or management of the Property.
23. Index to Definitions. The definition of each of the following def
ined terms is contained in the Paragraph of this Agreement set forth below:
Defined Term Paragraph
------------ ---------
Act 319 8(dd)
Act 515 8(dd)
ADA 8(s)
Bill of Sale 6(a)
Broker 17
Buyer Preamble
Casualty 12(b)
Casualty Notice 12(b)
Closing 4(a)
Closing Date 4(b)
Code 20(a)
Contaminant 11(a)(ii)
Deed 6(a)
Defect Notice 8(n)
Deposit 2(a)(i)
Environmental Laws ll(a)(i)
Escrow Agent 2(a)(i)
Excluded Items of Personal l(b)
Property
Existing Mortgage 8(n)
Holiday 22(k)
Inspection Period 14(c)
Lease Broker 8(k)
Owner's Policy of Title 5(a)
Insurance
PCBs 11 (a) ( ii)
Permitted Encumbrances 5(a)
Personal Property l(b)
Policy 8(t)
Property l(c)
Purchase Price 2(a)
Real Property l(a)
Recorded Agreements 8(cc)
Reimburseable Costs 3(a)(ii)
Seller Preamble
Service Agreements 8(o)
Taking 8(x)
Tenant Leases 8(a)
Tenant Estoppel Certificate 10(h)
Title Company 5(a)
Violation 8(s)
Waters of the Commonwealth ll(a)(v)
of Pennsylvania
Waters of the United States ll(a)(v)
Wetland ll(a) (v)
In addition, certain defined terms in the form of acronyms or shortened
statutory names for statutes or governmental agencies which are referred to in
Paragraph 11 are defined in that Paragraph.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement as a sealed instrument as of the day and year first
above written.
SELLER:
Attest: ADWIN REALTY COMPANY,
a Pennsylvania corporation
_____________________ By:_________________________
[corporate seal] Name:
Title:
LBA ASSOCIATES
By: ADWIN REALTY COMPANY
By:_________________________
A General Partner
ADWIN INVESTMENT CO.
By:___________________________
A General Partner
BUYER:
Witness:____________________ ____/s/____________________
J. BRIAN O'NEILL
<PAGE>
JOINDER OF BROKER
The undersigned, the broker referred to in Paragraph 17 of the
foregoing Agreement of Sale and Purchase, acknowledges and agrees that Seller
shall have no liability to the undersigned for payment of any commission or
other compensation in connection with the Agreement of Sale and Purchase, the
sale of the Property, or in connection with any financing obtained by Buyer to
complete its acquisition of the Property, except as specifically provided in the
foregoing Agreement and Sale of Purchase. The undersigned consents to the
provisions of Paragraph 17 of the foregoing Agreement of Sale and Purchase.
Intending to be legally bound, the undersigned has caused this
Joinder of Broker to be executed the ______ day of February, 1996.
CUSHMAN & WAKEFIELD OF
PENNSYLVANIA, INC.,
a Pennsylvania corporation
By: ____________________________
WILLIAM LUFF, Branch Manager
<PAGE>
EXHIBITS
Exhibit "A" Legal Description of Real Property
Exhibit "B" List of Personal Property
Exhibit "C" Excluded Items of Personal Property
Exhibit "D" Permitted Title Encumbrances
Exhibit "E" Bill of Sale
Exhibit "F" Fees to be Apportioned at Closing
Exhibit "G" Rent Roll
Exhibit "H" Service Agreements
Exhibit "I" Policy
Exhibit "J" Statement of Income and Expense by Seller
Exhibit "K" Tenant Estoppel Certificate
Exhibit "L" Assignment and Assumption of Tenant Leases
Exhibit "M" Assignment and Assumption of Service Agreements
Exhibit "N" FIRPTA Affidavit1
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF REAL PROPERTY
See attached.
<PAGE>
EXHIBIT "B"
LIST OF PERSONAL PROPERTY
See attached.
<PAGE>
EXHIBIT "C"
EXCLUDED ITEMS OF PERSONAL PROPERTY
See attached.
<PAGE>
EXHIBIT "D"
PERMITTED TITLE ENCUMRANCES
See attached.
<PAGE>
EXHIBIT "E"
BILL OF SALE
<PAGE>
SCHEDULE "A" TO BILL OF SALE
LEGAL DESCRIPTION OF REAL PROPERTY
See attached.
<PAGE>
SCHEDULE "B" TO BILL OF SALE
PERSONAL PROPERTY
See attached.
<PAGE>
SCHEDULE "F"
LICENSE FEES TO BE APPORTIONED AT CLOSING
<PAGE>
EXHIBIT "G"
RENT ROLL
See attached.
<PAGE>
EXHIBIT "H"
SERVICE AGREEMENTS
See attached.
<PAGE>
EXHIBIT "I"
POLICY
See attached.
<PAGE>
EXHIBIT "J"
STATEMENT OF INCOME AND EXPENSE
See attached.
<PAGE>
EXHIBIT "K"
TENANT ESTOPPEL CERTIFICATE
See attached.
<PAGE>
EXHIBIT "L"
ASSIGNMENT AND ASSUMPTION OF TENANT LEASES
<PAGE>
SCHEDULE "A" TO ASSIGNMENT AND
ASSUMPTION OF TENANT LEASES
LEASES
<PAGE>
EXHIBIT "M"
ASSIGNMENT AND ASSUMPTION AGREEMENT
<PAGE>
SCHEDULE "A" TO ASSIGNMENT AND ASSUMPTION AGREEMENT
SERVICE AGREEMENTS
<PAGE>
SCHEDULE "N"
FIRPTA AFFIDAVIT
AGREEMENT
THIS AGREEMENT made this 11TH day of March, 1996 between KELLER
CARNEGIE ASSOCIATES, a New Jersey limited partnership having an office at 103
Carnegie Center, Princeton, New Jersey 08540 ("Seller") and CENTURY PLAZA
ASSOCIATES, a New Jersey general partnership, having an office at 11 Commercial
Drive, Cranford, New Jersey 07016 ("Purchaser").
RECITALS
A. Seller is the owner of the Premises (as hereinafter defined) located
in the County of Mercer, Township of Princeton, State of New Jersey, commonly
known as 103 Carnegie Center, Princeton, New Jersey.
B. Seller has agreed to sell to Purchaser, and Purchaser has agreed to
purchase from Seller, the Premises (as hereinafter defined), subject to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
Seller hereby agrees to sell and convey, and Purchaser hereby
agrees to purchase, subject to all terms and conditions set forth in this
Agreement:
(i) those certain plots, pieces or parcels of land
situate, lying and being in the County of Mercer, Township of Princeton and
State of New Jersey comprised of approximately 9.892 acres in the aggregate of
developed land, as described in Exhibit A annexed hereto (the "Land"); and
(ii) the buildings, open parking areas and
improvements, including without limitation, all mechanical, electrical, heating,
ventilation, air conditioning and plumbing fixtures, systems and equipment as
well as all compressors, engines, elevators and escalators, if any, erected on
the Land and commonly known as Carnegie Center, Princeton, New Jersey (the
"Buildings"); and
(iii) All leases and other agreements with respect to
the occupancy of the Land and Buildings, together with all amendments and
modifications thereto, and rents, additional rents, reimbursements, profits,
income, receipts and Security Deposits thereunder ("Leases") and all of Seller's
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Land and Buildings ("Service
Contracts") to the extent Purchaser elects to assume same as provided in Section
9 herein; and
(iv) all right, title and interest, if any, of the
Seller in and to those certain fixtures, equipment, furniture and other personal
property affixed to or appurtenant to the Land and Buildings including, without
limitation, all carpets, drapes and other furnishings; maintenance equipment and
tools; keys to locks on or in the Buildings; and all other machinery, equipment,
meters, boilers, repair parts, fixtures and tangible personal property of every
kind and character and all accessions and additions thereto owned by and in the
possession of Seller and attached to or located upon and used in connection with
the ownership, maintenance, or operation of the Land or Buildings which are not
the property of tenants of the Buildings or of other persons (the "Personal
Property"); and
(v) all right, title and interest, if any, of the
Seller in and to any land lying in the bed of any public street, road, alley,
easements, rights of way, water, water courses, hereditaments or avenue opened
or proposed, in front of or adjoining said Land and Buildings, including all
strips and gores between the Land and abutting property, to the center line
thereof; and
(vi) all right, title and interest of Seller, if any,
in and to all site plans, surveys, soil and substrata studies, architectural
drawings, plans and specifications, engineering plans and studies, floor plans,
landscape plans, operating or maintenance manuals and other plans and studies of
any kind owned by Seller, if any, with respect to the Land, the Buildings, or
the Personal Property ("Plans"); and
(vii) all books, records, promotional material,
tenant data, leasing material and forms, past and current rent rolls, paid bill
files, bank statements, tax returns, market studies, keys, and other materials
of any kind owned by Seller, if any, which are or may be used in Seller's
ownership or use of the Land, the Buildings or the Personal Property ("Books and
Records"); and
(viii) all right, title and interest of Seller, if
any, in and to the use of the name "Carnegie Center" and any other name by which
the property is commonly known, and all goodwill, if any, related to the name by
which the property is commonly known; and
(ix) all right, title and interest of Seller, if any,
in and to any and all licenses and permits owned or held by Seller (including
any certificates of occupancy) to the extent such are assignable and in any way
related to or arising out of or used in connection with the ownership or
operation of the Land, the Buildings or the Personal Property (collectively,
"Licenses and Permits"); and
(x) all other rights, privileges and appurtenances
owned by Seller, if any, and in any way related to the rights and interests
described above in this Section.
(The foregoing properties, rights and interests set forth or described in
sub-sections (i) - (x) of this Section 1 are hereinafter collectively referred
to as the "Premises".)
2. DEFINITIONS OF CERTAIN TERMS.
For purposes of this Agreement, unless the context otherwise
requires:
"Additional Rent" shall mean any component of
additional rent, however characterized, under a Lease, including without
limitation, real estate taxes, electrical charges, utility costs and operating
expenses.
"Additional Rent Credit" shall mean the aggregate
amount due to all Tenants on account of the overpayment during calendar year
1995 or any other prior year of any Additional Rent.
"Appurtenances" shall mean all right, title and
interest, if any, of Seller in and to any award or payment made, or to be made,
(x) for any taking in condemnation, eminent domain or agreement in lieu thereof
of land adjoining all or any part of the Land or Buildings, (y) for damage to
the Land or Buildings or any part thereof by reason of change of grade or
closing of any such street, road, highway or avenue, and (z) for any taking in
condemnation or eminent domain of any part of the Land or Buildings other than
provided for in Section 19.
"Broker" is as defined in Section 16.
"Brokerage Fund" is as defined in Section 15.
"Cash Payment" is Ten Million ($10,000,000) Dollars,
subject to adjustments as provided herein.
"Closing" is on or about March 20, 1996, but subject
to the provisions of Section 22.
"Closing Date" shall mean the date on which the deed
to the Premises shall be delivered and title thereto conveyed to Purchaser.
"Deed" shall mean a bargain and sale deed with
covenants in proper statutory form for recording so as to convey to Purchaser
good and marketable title to the fee simple of the Premises, free and clear of
all liens and encumbrances, except the Permitted Encumbrances.
"Deposit" is Two Hundred Fifty Thousand ($250,000)
Dollars.
"DOT" is as defined in Section 19.
"Element" is as defined in Section 26.
"Environmental Documents" is as defined in Section
26.
"Escrow Agent" is First American Title Insurance
Company.
"Escrow" is as defined in Section 15.
"Escrow Agreement" is as defined in Section 15.
"Estoppel Certificate" is as defined in Section 7.
"Execution Date" is the date that a fully executed
copy of this Agreement is in the possession of counsel to Purchaser and Seller.
"Expenses Fund" is as defined in Section 15.
"Governmental Authorities" shall mean any agency,
board, bureau, commission, department or body of any municipal, county, state or
federal governmental unit, or any subdivision thereof, having, asserting or
acquiring jurisdiction over all or any part of the Premises or the management,
operation, use or improvement thereof.
"Hazardous Materials" shall include, without
limitation, gasoline, petroleum products, explosives, radioactive materials,
polychlorinated biphenyls, asbestos or any materials containing asbestos, or
related or similar materials, or any other substance or material defined as a
hazardous or toxic substance or waste or toxic pollutant by any federal, state
or local law, ordinance, rule, or regulation.
"Inspection Period" is the period commencing on the
Execution Date and ending March 20, 1996.
"ISRA" is the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et seq., the regulations promulgated thereunder and any amending or
successor legislation and regulations.
"ISRA Compliance Date" is as defined in Section 26.
"Lease Extensions" is as defined in Section 8.
"Major Facility" is as defined in the Spill Act.
"Master Lease" is as defined in Section 15.
"NJDEP" is the New Jersey Department of Environmental
Protection.
"Permitted Encumbrances" is as defined in Section 5.
"Premises" is as defined in Section 1.
"Purchase Price" is as defined in Section 4.
"Rent Roll" is the rent roll for the Premises set
forth in Exhibit G in the form required under Section 9(b).
"Security Deposits" are those deposits posted under
the Leases and all other deposits, if any, in the nature of security for a
Tenant's performance under its Lease.
"Seller's Equity" is as defined in Section 9.
"Service Contracts" shall mean those contracts set
forth in Exhibit H.
"Spill Act" shall mean the Spill Compensation and
Control Act, N.J.S.A. 58:10-23.11 et seq., together with any amendments or
revisions thereof and any regulations promulgated thereunder and any amending or
successor legislation and regulations.
"Tenant Improvement Fund" is as defined in Section
15.
"Tenants" shall mean any and all occupants of the
Premises as of the date hereof.
"Tests and Studies" is as defined in Section 3.
"Title Company" is First American Title Insurance
Company.
"Title Policy" is as defined in Section 17.
3. INSPECTION PERIOD; PURCHASER'S RIGHT OF
INSPECTION PRIOR TO CLOSING
During the Inspection Period, Purchaser, at its sole expense,
may perform Tests and Studies and may inspect the physical (including
environmental) and financial condition of the Premises, including but not
limited to the Leases, contracts, engineering and environmental reports,
development approval agreements, permits and approvals and Service Contracts,
which inspection shall be satisfactory to Purchaser in its sole discretion.
Purchaser may terminate this Agreement for any reason, by written notice to
Seller given within the Inspection Period. In the event Purchaser terminates
this Agreement, Purchaser shall be entitled to the return of the Deposit with
interest earned thereon, and this Agreement shall be null and void and the
parties hereto shall be relieved of all further obligations hereunder except as
otherwise provided herein.
During the Inspection Period, Purchaser, its agents and
contractors, shall have the right to enter upon the Premises and perform (or
cause to be performed) tests, investigations and studies of or related to the
Premises including, but not limited to, soil borings, ground water
investigation, percolator tests, surveys, architectural, engineering,
subdivision, environmental, access, financial, market analysis, development and
economic feasibility studies and other tests, investigations or studies as
Purchaser, in its sole discretion, determines is necessary or desirable to
satisfy Purchaser of the feasibility of owning and using the Premises
(collectively the "Tests and Studies"), provided that it shall give Seller
notification of its intention to conduct any such inspection and that such
inspection shall not unreasonably impede the normal day-to-day business
operation of the Premises. Such right of inspection and the exercise of such
right shall not constitute a waiver by Purchaser of the breach of any
representation or warranty of Seller which might have been disclosed by such
inspection.
Seller agrees to permit Purchaser access to the Premises upon
prior notice to Seller for the purpose of performing the Tests and Studies. To
assist Purchaser in the performance of its Tests and Studies, Seller has
previously delivered to Purchaser true and complete copies of all test borings,
environmental reports (including, without limitation, all Environmental
Documents), surveys, title materials and engineering and architectural data and
the like relating to the Premises that are in Seller's possession or under its
control and, in the event any additional materials or information come within
Seller's possession or control after the date of this Agreement, Seller shall
promptly submit true and complete copies of the same to Purchaser. Seller shall
cooperate with Purchaser in facilitating the Tests and Studies and shall obtain,
at no cost or expense to Seller, any consents that may be necessary in order for
Purchaser to perform the same. Purchaser shall repair and restore any portion of
the surface of the Premises disturbed by Purchaser, its agents or contractors
during the conduct of any of the Tests and Studies to substantially the same
condition as existed prior to such disturbance.
4. PURCHASE PRICE AND TERMS OF PAYMENT.
The purchase price for the Premises is Ten Million Two Hundred
Fifty Thousand and xx/100 Dollars ($10,250,000.00) (the "Purchase Price"),
payable as follows:
(a) Delivery of the Deposit to the Escrow Agent, within three
(3) days of the Execution Date, which shall be held pursuant to the terms of
Section 24; and
(b) The Cash Payment, by a bank, certified or cashier's check
on the Closing Date or by the wiring of federal funds to Seller or the Escrow
Agent, subject to adjustment as provided herein.
5. MATTERS TO WHICH THIS SALE IS SUBJECT
The Premises are sold and are to be conveyed subject to the
following (collectively the "Permitted Encumbrances"):
(a) The liens of real estate taxes, personal property taxes,
water charges, and sewer charges provided same are not due and payable;
(b) The rights of Tenants, as tenants only;
(c) Those restrictions, covenants, agreements, easements,
matters and things affecting title to the Premises and more particularly
described in Exhibit "D" annexed hereto and by this reference made a part
hereof;
(d) Any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates as the same may be amended
subsequent to the date hereof affecting the Premises adopted by the United
States, the State of New
Jersey, the Township of Princeton and any and every other Governmental Authority
having jurisdiction thereof;
(e) The state of facts shown on that certain survey prepared
by Thomas Tyler Moore Associates Inc. and dated June 8, 1987 and revised June
18, 1987 and any update of said survey and any other state of facts which a
recent and accurate survey of the Premises would actually show, provided same do
not impair the use of the Premises as an office building and do not render title
uninsurable at standard rates; and
(f) Those Service Contracts (as hereinafter defined) and, to
the extent permitted herein, replacements and renewals thereof (subject to
apportionment as provided in this Agreement) if and to the extent the same are
assumed by Purchaser, at its option, at Closing.
6. ADJUSTMENTS
(a) The following items with respect to the Premises are to be
apportioned as of midnight on the date preceding the Closing and shall be paid
to the appropriate parties outside of the Purchase Price:
(i) Rents, escalation charges and percentage rents
payable by Tenants as and when collected. Purchaser shall use reasonable efforts
to collect delinquent additional rents. All monies received from Tenants from
and after the Closing shall belong to Purchaser and shall be applied by
Purchaser to current rents and other charges under the Leases and to any
delinquencies then due Purchaser. After application of such monies to any rents
and charges due to Purchaser (whether current or delinquent), Purchaser agrees
to remit to Seller any excess amounts paid by a Tenant to the extent paid prior
to Closing. Delinquent additional rents received after Closing shall be applied
first to any delinquent additional rents owed to Purchaser, and thereafter paid
to Seller. The provisions of this subsection 6(a) shall survive the Closing
Date.
(ii) The Additional Rent Credit. At least ten (10)
days prior to Closing, Seller shall deliver to Purchaser a schedule showing the
portion of the Additional Rent Credit allowable to each Tenant and a description
of the nature of such overpayment. Purchaser agrees to remit said amount to each
Tenant on the schedule. Seller acknowledges its obligation to each Tenant with
respect to any claims for overpayment of Additional Rent for any period prior to
the Closing Date other than as set forth on said schedule, and that such
obligation shall survive the Closing. In the event that any Tenant shall assert
a claim against Purchaser for any Additional Rent Credit, Seller shall
indemnify, defend and hold harmless Purchaser for any loss, cost or expense
arising therefrom, including without limitation the amount of the claim and
reasonable counsel fees and disbursements (whether or not in-house or outside
counsel).
(iii) Utility charges payable by Seller, including,
without limitation, electricity, water charges and sewer charges. If there are
meters on the Premises, Seller will cause readings of all said meters to be
performed not more than five (5) days prior to the Closing Date.
(iv) Amounts payable under the Service Contracts, to
the extent Purchaser assumes such Service Contracts at Closing.
(v) Real estate taxes due and payable over the
calendar year. If the Closing Date (as hereinafter defined) shall occur before
the tax rate is fixed, the apportionment of real estate taxes shall be upon the
basis of the tax rate for the preceding year applied to the latest assessed
valuation. If subsequent to the Closing Date, real estate taxes (by reason of
change in either assessment or rate or for any other reason) for the Premises
should be determined to be higher or lower than those that are apportioned, a
new computation shall be made, and Seller agrees to pay Purchaser any increase
shown by such recomputation and vice versa. The provisions of this Subsection
6(a)(v) will survive the Closing Date.
(vi) Income from vending machines, if any, and all
other income, if any, other than rents.
(vii) All charges levied for the maintenance charges,
membership fees, dues or other charges as provided in the Declaration of
Covenants, Conditions and Restrictions, as amended (as defined in the Title
Policy).
(b) At the Closing, Seller shall deliver to Purchaser a list
of the Additional Rents billed to Tenants for the calendar year 1996 (both on a
monthly basis and in the aggregate), the basis for which the monthly amounts are
being billed and the amounts incurred by Seller on account of the components of
Additional Rent for calendar year 1996. Upon the reconciliation by Purchaser of
the Additional Rents billed to Tenants, and the amounts actually incurred for
calendar year 1996, Seller and Purchaser shall be liable for overpayments of
Additional Rents, and shall be entitled to payments from Tenants, as the case
may be, on a pro rata basis based upon each party's period of ownership during
calendar year 1996.
(c) Except as otherwise provided in this Agreement, the
adjustments shall be made in accordance with the customs in respect to title
closings in the State of New Jersey.
(d) Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
7. ESTOPPEL CERTIFICATES
(a) Seller represents to Purchaser that Seller has delivered
to each Tenant an estoppel certificate in the form annexed hereto as Exhibit "E"
for Tenant's execution, completed to reflect the Tenant's particular Lease
status.
(b) Seller agrees to use its best reasonable efforts to obtain
from all Tenants and deliver same to Purchaser (i) the estoppel certificates
referred to in subsection 7(a), or at a minimum and in satisfaction of the
remainder of this Section 7, (ii) estoppel certificates in the form in which
each Tenant is obligated to deliver same as provided in its Lease. All
certificates referred to in (i) and (ii) above shall be collectively referred to
as "Estoppel Certificates".
(c) As a condition to Closing, Seller shall deliver (i) an
Estoppel Certificate from each Tenant which is leasing demised space in the
Premises of 10,000 square feet or more and (ii) Estoppel Certificates from the
remaining Tenants leasing seventy-five (75%) percent of the aggregate remaining
square footage of the Premises.
(d) For an Estoppel Certificate to be deemed delivered for
purposes of this Agreement, it must certify that the Tenant's most recent rental
payment under its Lease was made not more than one (1) month prior to the month
in which the Closing occurs.
(e) Seller shall deliver its own Estoppel Certificate on
behalf of each Tenant which has failed to deliver such certificate on its own
behalf.
8. ITEMS TO BE DELIVERED BY SELLER ON THE CLOSING DATE
On the Closing Date, Seller, at its sole cost and expense,
will deliver or cause to be delivered to Purchaser the following documents in
connection with the Premises in form and substance reasonably satisfactory to
Purchaser:
(a) The Deed duly executed and acknowledged. The delivery of
the Deed shall also be deemed to transfer all of Seller's right, title and
interest in and to the Personal Property.
(b) All original Leases and all other documents pertaining
thereto, and certified copies of such Leases or other documents where Seller,
using its best efforts, is unable to deliver originals of same.
(c) All other original documents or instruments initialed by
or on behalf of the parties to this Agreement or referred to herein, and
certified copies of same where Seller, using its best efforts, is unable to
deliver originals.
(d) A letter to Tenants advising the Tenants of the sale
hereunder and directing that rent and other payments thereafter be sent to
Purchaser or its designee, as Purchaser shall so direct.
(e) Duly executed and acknowledged assignment of all Leases,
Security Deposits and Intangible Property in the form of Exhibit "F" annexed
hereto.
(f) A cashier's check to the order of Purchaser in the amount
of the Security Deposits and any prepaid rents, together with interest required
to be paid thereon.
(g) An affidavit, or such other documents as required by the
Title Company, executed by Seller certifying (i) against any work done or
supplies delivered to the Premises which might be grounds for a materialman's or
mechanic's lien under or pursuant to New Jersey law, in form sufficient to
enable the Title Company affirmatively to insure Purchaser against any such
lien, (ii) that the signatures on the Deed are sufficient to bind Seller and
convey the Premises to Purchaser, (iii) the conveyance is not prohibited or
restricted in any way under the laws of the State of New Jersey and (iv) the
Rent Roll. Seller shall also deliver a survey affidavit in the form and
substance required by the Title Company.
(h) Any and all affidavits and other instruments (including
but not limited to all organizational documents of the Seller and Seller's
general partner including limited partnership agreements, certificates of
partnership, by laws, articles of incorporation, and good standing certificates)
and documents which the Title Company shall reasonably require in order to
insure title to Purchaser, subject to no exceptions other than the Permitted
Encumbrances.
(i) The Estoppel Certificates required in Section 7.
(j) Plans, Books and Records.
(k) Intentionally deleted.
(l) A Rent Roll, current as of the Closing Date, certified by
Seller as being true and correct in all respects.
(m) All proper instruments as shall be reasonably required for
(i) the conveyance of title to the Appurtenances, and (ii) subject to the
provisions of Section 19, the assignment of and/or collection rights to any
condemnation or eminent domain claims, awards or payments, as well as the right
to claim or collect damages resulting from damage to the Premises or any part
thereof by reason of the changing of grade or closing of any street, road,
highway or avenue.
(n) Duly executed and acknowledged assignment of those Service
Contracts which Purchaser has elected to assume in the form of Exhibit "H"
annexed hereto.
(o) A certificate signed by an officer of Seller to the effect
that Seller is not a "foreign person" as that term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended.
(p) All such transfer and other tax declarations and returns
and information returns, duly executed and sworn to by Seller as may be required
of Seller by law in connection with the conveyance of the Premises to Purchaser,
including but not limited to, Internal Revenue Service forms 1099-S and 1096.
(q) A statement setting forth the Purchase Price with all
adjustments and prorations shown thereon.
(r) The Seller's closing certificate with respect to the
representations and warranties described in Section 9 hereof.
(s) The Additional Rent list and Additional Rent Credit
schedule described in Section 6 hereof.
(t) The Escrow Agreement described in Section 15 hereof.
(u) Lease extension and modification agreements executed by
Kurt Salmon Associates ("Salmon") and Ronin Development Corporation ("Ronin") on
terms previously approved by Purchaser and otherwise in form and substance
reasonably acceptable to Purchaser (collectively, the "Lease Extensions"). If
Seller shall be unable to obtain the Lease Extensions after having used
reasonable efforts to obtain same, then Seller perform as described in Section
15.
(v) A certification from the Association (as defined in the
Title Policy) that all charges, including monthly common charges and
assessments, have been paid through the Closing Date with respect to the
Premises.
(w) Evidence sufficient to Purchaser and the Title Company
that Scottish & York Realty, Inc. has no rights or options now or in the future
with respect to the Premises.
9. SELLER'S REPRESENTATIONS AND WARRANTIES
In order to induce Purchaser to purchase the Premises, Seller
hereby warrants, represents and agrees that the following are true as of the
date hereof and will be true on the Closing Date:
(a) Annexed hereto as Exhibit "C" is a true, complete and
correct schedule of all Leases, which Leases are valid and bona fide and are now
in full force and effect. No defaults exist thereunder and no condition exists
which, with the passage of time or the giving of notice or both, will become a
default; the Leases constitute all of the leases, tenancies or occupancies
affecting the Premises on the date hereof; all Tenants have commenced occupancy;
other than as set forth in the Leases, there are no agreements which confer upon
any Tenant or any other person or entity any rights with respect to the
Premises, nor is any Tenant entitled now or in the future to any concession,
rebate, offset, allowance or free rent for any period, nor has any such claim
been asserted by any Tenant.
(b) Annexed hereto as Exhibit "G" (the "Rent Roll") is a true,
complete and correct listing of all Leases, which sets forth: (i) the total
number of Tenants at the Premises; (ii) the name of each Tenant; (iii) fixed
rent actually being collected; (iv) expiration date or status of the Leases
(including all rights or options to renew); (v) Security Deposits; (vi)
arrangements under which any Tenant is occupying space on the date hereof or
will in the future, occupy such space; (vii) any notices given by any Tenant of
an intention to vacate space in the future; and (viii) the base year(s) and base
year amounts for all items of rent or additional rent billed to each Tenant on
that basis. Seller has performed all of the obligations and observed all of the
covenants required of the landlord under the terms of the Leases.
(c) All work, alterations, improvements or installations
required to be made for or on behalf of all Tenants under the Leases have in all
respects been carried out, performed and complied with, and there is no
agreement with any Tenant for the performance of any work to be done in the
future. No work has been performed at the Premises which would require an
amendment to the certificate of occupancy, and any and all work performed at the
Premises to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Premises will be paid in full on the Closing Date.
(d) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Premises or the
operation thereof, except the Service Contracts. True, accurate and complete
copies of the Service Contracts have been initialed by the parties. All of the
Service Contracts are and will on the Closing Date be unmodified and in full
force and effect without any default or claim of default by any of the parties
thereto. All sums presently due and payable by Seller under the Service
Contracts have been fully paid and all sums which become due and payable between
the date hereof and the Closing Date shall be fully paid on the Closing Date.
(e) There are no actions, suits, labor disputes, litigation or
proceedings currently pending or, to the knowledge of Seller, threatened against
or related to Seller or to all or any part of the Premises or the operation
thereof, nor does Seller know of any basis for any such action.
(f) There are no outstanding requirements or recommendations
by (i) the insurance company(s) which issued the insurance policies insuring the
Premises; (ii) any board of fire underwriters or other body exercising similar
functions, or (iii) the holder of any mortgage, which require or recommend any
repairs or work to be done on the Premises.
(g) No Tenants are in arrears for the payment of rent for any
month preceding the month of the date of this Agreement, nor has Seller received
notice of an intention to vacate from any Tenant, except as noted on the Rent
Roll.
(h) Subject to the terms of this Agreement, Seller has
received no written notice and has no knowledge of (i) any pending or
contemplated annexation or condemnation proceedings, or private purchase in lieu
thereof, affecting or which may affect the Premises, or any part thereof, (ii)
any proposed or pending proceeding to change or redefine the zoning
classification of all or any part of the Premises, (iii) any proposed or pending
special assessments affecting the Premises or any portion thereof, (iv) any
penalties or interest due with respect to real estate taxes assessed against the
Premises and (v) any proposed change(s) in any road or grades with respect to
the roads providing a means of ingress and egress to the Premises. Seller agrees
to furnish Purchaser with a copy of any such notice received within two (2) days
after receipt.
(i) Seller has provided Purchaser with all reports in Seller's
possession or under its control related to the physical condition of the
Premises and all Books and Records necessary for Purchaser to conduct its due
diligence and Tests and Studies.
(j) Seller has no knowledge of any notices, suits, or
judgments relating to any violations (including environmental) of any laws,
ordinances or regulations affecting the Premises, or any violations or
conditions that may give rise thereto and has no reason to believe that any
Governmental Authorities contemplates the issuance thereof.
(k) There are no employees working at or in connection with
the Premises. There is currently no union agreement affecting the Premises and
none will be in effect on the Closing Date.
(l) Annexed hereto as Exhibit " L" is a schedule of all
leasing commission obligations affecting the Premises. The respective
obligations of Seller and Purchaser with respect to said commissions are set
forth in Section 15.
(m) Seller (A) is a duly organized and validly existing
limited partnership (corporation) under the laws of the State of New Jersey, and
is duly authorized to transact business in the State of New Jersey; (B) has all
requisite power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it hereunder,
and to perform its obligations hereunder and under such other documents and
instruments in order to sell the Premises in accordance with the terms and
conditions hereof and all necessary actions of the general and limited partners
(stockholders and board of directors) of Seller to confer such power and
authority upon the persons executing this Agreement and all documents which are
contemplated by this Agreement on its behalf have been taken.
(n) This Agreement, when duly executed and delivered, will be
the legal, valid and binding obligation of Seller, enforceable in accordance
with the terms of this Agreement. Seller's performance of its duties and
obligations under this Agreement and the transfer documents contemplated hereby
will not conflict with, or result in a breach of or default under, any provision
of any of Seller's organizational documents, any agreements, instruments,
decrees, judgments, injunctions, orders, writs, laws, rules or regulations, or
any determination or award of any court or arbitrator, to which Seller is a
party or by which its assets are or may be bound.
(o) No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under Federal or State bankruptcy laws is pending or
threatened against, or contemplated by Seller.
(p) No person, firm, or entity has any rights in, or rights to
acquire all or any part of the Premises.
(q) The Personal Property is now owned and will on the Closing
Date be owned by Seller free and clear of any conditional bills of sale, chattel
mortgages, security agreements or financing statements or other security
interests of any kind.
All representations and warranties provided by Seller in this Agreement shall
survive the Closing Date for a period of one (1) year and shall not be merged in
the delivery of the Deed. Seller agrees to indemnify and hold Purchaser harmless
against all claims, liabilities, losses, deficiencies and damages as well as
reasonable expenses (including attorney's fees), and interest and penalties
related thereto, asserted by any third party against or incurred by Purchaser,
by reason of or resulting from any breach, inaccuracy, incompleteness or
nonfulfillment of the covenants, representations and warranties of Seller
contained in this Agreement. Any recovery by Purchaser from Seller under this
Section shall be limited to Seller's Equity in the Premises (as hereafter
defined) unless Seller has made a willful misrepresentation under this Section 9
whereupon recovery by Purchaser shall not be limited in any manner whatsoever.
"Seller's Equity" in the Premises shall mean the net amount of the Purchase
Price actually received by Seller after deducting from the Purchase Price all
charges and costs of Seller including, but not limited to, the payoff of the
Mutual Benefit Life mortgage, the Tenant Improvement Fund, the Brokerage Fund,
the Expenses Fund, the consulting/brokerage payment to Salvatore Frassetto and
Seller's expenses in connection with this transaction.
10. SELLER'S COVENANTS
Seller covenants and agrees that between the date hereof and
the Closing Date it shall perform or observe the following with respect to the
Premises:
(a) Seller, as landlord, will not enter into any new leases
with respect to the Premises, or renew or modify any Lease, without Purchaser's
prior written consent.
(b) If prior to the Closing Date Seller shall have received
from (i) any insurance company which issued a policy with respect to the
Premises, (ii) any board of fire underwriters or other body exercising similar
functions, or (iii) the holder of any mortgage, any notice requiring or
recommending any repair work to be done on the Premises, Seller will do the same
expeditiously and diligently at its own cost and expense prior to the Closing
Date.
(c) Seller will operate and maintain the Premises in the
ordinary course of business and use reasonable efforts to reasonably preserve
for Purchaser the relationships of Seller and Seller's Tenants, suppliers,
managers, employees and others having on-going relationships with the Premises.
Seller will complete any capital expenditure program currently in process or
anticipated to be completed. Seller will not defer taking any actions or
spending any of its funds, or otherwise manage the Premises differently, due to
the pending sale of the Premises.
(d) Seller shall not:
(i) Enter into any agreement requiring Seller to do
work for any Tenant after the Closing Date without first obtaining the written
consent of Purchaser; or
(ii) Accept the surrender of any Service Contract or
Lease, or grant any concession, rebate, allowance or free rent.
(e) Seller shall not, between the date hereof and the Closing
Date, apply any of such Security Deposits with respect to any Tenant in
occupancy on the Closing Date.
(f) Subject to the provisions of this Agreement, between the
date hereof and the Closing Date, Seller will not renew, extend or modify any of
the Service Contracts without the prior written consent of the Purchaser in each
instance first had and obtained. At the Closing, Seller will cancel or will have
previously cancelled (effective on the Closing Date) all Service Contracts
except those which Purchaser has agreed in writing to assume, with all
cancellations at Seller's sole cost and expense.
(g) Seller shall not remove any Personal Property, fixtures or
equipment located in or on the Premises, except as may be required for repair
and replacement. All replacements shall be free and clear of liens and
encumbrances and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to Purchaser.
(h) Seller shall, upon request of Purchaser at any time after
the date hereof, assist Purchaser in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
Purchaser may reasonably request, covering the period of Seller's ownership of
the Premises.
(i) Between the date hereof and the Closing Date, Seller will
make all required payments under any mortgage affecting the Premises within any
applicable grace period, but without reimbursement by Purchaser therefor and
Seller shall also pay all of its interest and related obligations under any such
mortgage through and including the Closing Date. Seller shall also comply with
all other terms covenants, and conditions of any mortgage on the Premises.
(j) Seller shall not cause or permit the Premises, or any
interest therein, to be alienated, mortgaged, liened, encumbered (other than by
mechanic's or materialman's liens or claims which are removed or bonded against
prior to Closing) or otherwise be transferred.
(k) Up to and including the Closing Date, Seller agrees to
maintain and keep such hazard, liability and casualty insurance policies in full
force and effect in such amounts and covering such risks sufficiently to protect
the Premises and to protect, to a reasonable and prudent extent, the owner of
the Premises, in such amounts as are required so as not to be deemed a
co-insurer, and for actual replacement cost, against any loss, damage, claim or
liability.
(l) Seller shall permit Purchaser and its authorized
representatives to inspect the Books and Records of its operations at all
reasonable times for a period of one (1) year subsequent to the Closing Date.
All Books and Records not conveyed to Purchaser hereunder shall be maintained
for Purchaser's inspection at Seller's address as set forth above.
(m) All violations of laws, statutes, ordinances, regulations,
orders or requirements affecting the Premises of which Seller has knowledge,
whether or not such violations are now noted in the records of or have been
issued by any Governmental Authorities, will be complied with by Seller and the
Premises will be conveyed free of any such violations.
(n) Seller shall retain the books and records used in
determining additional rent amounts under the Leases for a period of two (2)
years after notification of said amounts are given to Tenants.
11. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS.
The obligations of Purchaser to purchase the Premises and to
perform the other covenants and obligations to be performed by Purchaser on the
Closing Date shall be subject to the following conditions (all or any of which
may be waived, in whole or in part, by Purchaser):
(i) The representations and warranties made by Seller
herein shall be true and correct in all respects with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date.
(ii) Seller shall have performed all covenants and
obligations undertaken by Seller in Section 10 hereof in all respects and
complied with all conditions required by this Agreement to be performed or
complied with by it on or before the Closing Date.
(iii) The Title Company is unconditionally prepared
to issue to Purchaser a Title Policy meeting the requirements set forth in
Section 17 hereof for an "insurable title".
(iv) Seller shall have delivered to Purchaser all of
the documents enumerated in Section 8 hereof.
12. SELLER'S CREDIT
(a) For a period of three (3) months following the Closing
Date, Seller shall have the nonexclusive right to present to Purchaser leases
for up to 2,500 square feet of space at the Premises vacant as of the date
hereof provided the following conditions are met:
(i) the minimum rent shall be at least $19.00 per
square foot gross (including fixed and additional rent) for each year of the
lease;
(ii) the lease term shall be for no less than five
(5) years and no more than ten (10) years;
(iii) there are no tenant rent concessions of any
kind whatsoever contained in the lease;
(iv) the lease is on the same form as the Leases;
(v) the creditworthiness of the proposed tenant and,
to the extent not otherwise provided herein, the terms and conditions of the
proposed lease (and any brokerage agreement executed therewith) shall be
satisfactory to Purchaser, in its reasonable discretion;
(vi) the tenant is a bona fide third party;
(vii) the lease shall have been executed by the
tenant thereunder and shall be a valid, binding and enforceable obligation of
said party upon the execution thereof by Purchaser as a landlord thereunder; and
(viii) the procuring broker, if any, shall be any
broker other than Cali Realty Corporation or an affiliate thereof.
If Seller procures any leases in accordance with conditions (i) through (viii),
then within thirty (30) days following the tenant thereunder taking occupancy
and commencing the payment of regular installments of rent, Purchaser shall pay
to Seller an amount derived by multiplying 7.692 times the difference between
(a) the gross rent to be paid over the first year of the lease and (b) the
projected operating expenses during the first full year of the lease and
thereafter subtracting the aggregate of the tenant improvement costs and
brokerage commissions associated with the lease. Following such payment,
Purchaser shall be responsible for any tenant improvement costs and brokerage
commission incurred with respect to said lease; to the extent previously paid by
Seller, Purchaser shall reimburse Seller against actual receipts marked "paid."
(b) Purchaser shall have no obligation to accept any lease or
leases from Seller which lease in the aggregate is in excess of 2,500 square
feet of said vacant space at the Premises. In the event Purchaser shall accept a
lease or leases in the aggregate in excess of 2,500 square feet, Seller's credit
shall only be applicable to a pro rata amount based upon 2,500 square feet.
(c) Seller's rights as set forth in this Section 12 are
nonexclusive. As a result, Seller shall only have the rights so provided herein
during said three (3) month period only so long as any of said vacant space is
available and only for so much of said vacant space as is available. Seller
shall have no right or claim to any credit if said vacant space is leased by any
other party.
If any payments are made to Seller pursuant to this Section 12 and it is
determined by a Governmental Authority that transfer taxes are due with respect
to said payments, Purchaser shall withhold the applicable amount for transfer
tax purposes and pay said amount over to the appropriate Governmental Authority.
13. EXPENSES
(a) Seller shall pay the fees, costs and expenses of Seller's
counsel, and any and all sales taxes, transfer taxes, documentary stamps,
customary recording fees and other taxes and charges imposed in connection with
the delivery and recording of the Deed, all customary prorations and
appointments and one-half of all reasonable escrow fees.
(b) Purchaser shall pay the fees, costs and expenses of
Purchaser's counsel, all title insurance premiums and charges, all recording
fees, all survey or surveyor charges, and any fees, costs or expenses incurred
by Purchaser in connection with its inspection of the Property, including, but
not limited to, any architects', engineers', accountants', appraisers' or
contractors' fees or costs, all customary prorations and appointments and
one-half of all reasonable escrow fees.
(c) The obligations of Seller and Purchaser set forth in this
Section 13 shall survive the Closing or the earlier termination of this
Agreement.
14. TAX REDUCTION AND APPEALS
Seller is hereby authorized to continue the proceeding or
proceedings now pending for the reduction of the assessed valuation of the
Premises as set forth on Exhibit "J" and to litigate or settle the same in
Seller's discretion. Purchaser is hereby authorized by Seller, in Purchaser's
sole discretion, to file any applicable proceeding for the 1996 fiscal year for
the reduction of the assessed valuation of the Premises.
The net refund of taxes, if any, for any tax year for which Seller or Purchaser
shall be entitled to share in the refund shall be divided between Seller and
Purchaser in accordance with the apportionment of taxes pursuant to the
provisions hereof. The provisions of this Section shall survive the Closing
Date.
15. LEASING COMMISSIONS AND
TENANT IMPROVEMENT OBLIGATIONS
(a) All leasing commissions due on account of the original
term of all Leases made before the date of this Agreement and extensions and
renewals which are presently effective (but not renewals or extensions of such
leases which are exercised after the Closing Date) shall be paid by Seller. All
leasing commissions on account of extensions or renewals of Leases made after
the Closing Date shall be paid by Purchaser with the exception of those
pertaining to the Lease Extensions as further set forth in Sections 15(b) and
(c). All tenant improvements obligations shall be satisfied prior to the Closing
Date with the exception of those pertaining to the Lease Extensions as further
set forth in Sections 15(b) and (c). The provisions of this Section shall
survive the Closing.
(b) (i) In the event that the Lease Extensions are delivered
at Closing, Seller shall direct that a portion of the Purchase Price in the
aggregate amount of (a) 110% of the tenant improvement allowances granted to
Salmon and Ronin for tenant improvements to be performed by a contractor
acceptable to Purchaser (the "Tenant Improvement Fund"), (b) 100% of the amount
of brokerage commissions relating to the Salmon and Ronin lease extensions (the
"Brokerage Fund") and (c) 100% of certain other identifiable costs and expenses
set forth in Exhibit "K" (the "Expenses Fund") be remitted directly to Escrow
Agent pursuant to the terms of the escrow agreement (the "Escrow Agreement") in
form and substance to be agreed upon between the parties hereto and to be
disbursed to Purchaser in accordance with the terms of the Escrow Agreement. The
Escrow Agent shall disburse at Closing amounts escrowed under the Brokerage Fund
and the Expenses Fund upon (i) receipt of invoices received from certain brokers
and/or vendors and (ii) approval of such invoices from Purchaser.
(ii) In the event that only one of the Lease
Extensions is executed and delivered at Closing, then (X) the aforedescribed
Funds described in Section 15(b)(i) shall be funded at Closing only to the
extent necessary to cover the tenant improvements and brokerage commissions for
said Lease Extension plus the Expenses Fund, (Y) the Master Lease (as hereafter
defined) shall be entered into for the space not leased and (Z) the Escrow shall
be reduced by $200,000.00, which amount shall be used to pay the
brokerage/consulting fee to Salvatore Frassetto. If Seller does not deliver both
Lease Extensions fully executed at Closing, then neither of the aforedescribed
Funds shall be funded and the provisions of the following paragraph (c) shall
govern.
(c) If Seller does not deliver fully executed Lease Extensions
by the Closing Date, Seller and Purchaser hereby agree to proceed as follows:
(a) a portion of the Purchase Price up to Eight Million Five Hundred Thousand
($8,500,000.00) Dollars shall be used to satisfy that certain mortgage made by
Seller to The Mutual Benefit Life Insurance Company in the original principal
amount of $10,000,000.00 (b) to remit the remainder of the Purchase Price (the
"Escrow") to the Escrow Agent pursuant to the terms of the Escrow Agreement, (c)
to perform their respective obligations under this Agreement, and (d) to enter
into a master lease between Seller, as tenant, and Purchaser, as landlord, (the
"Master Lease") for the space which was to have been occupied by Ronin, Salmon,
or both, as applicable, following the Lease Extensions had such Lease Extensions
been entered into. The payments by Seller under the Master Lease are obligations
secured and guaranteed by the Escrow; provided, however, that Seller's maximum
obligation under the Master Lease shall be limited to the amount of the Escrow.
The Master Lease shall be on Purchaser's standard form of lease under the terms
and conditions previously agreed upon between the parties. The rent obligations
of Seller, as tenant, under the Master Lease shall be paid directly out of the
Escrow in accordance with the terms and conditions of the Escrow Agreement.
(d) When and if both Lease Extensions are signed under the terms and
conditions of this Agreement, or replacement leases acceptable to Purchaser
covering all of the space demised under the Master Lease are signed, then the
balance of the Escrow less an amount equal to the greater of (i) the amounts to
be escrowed as the Tenant Improvement Fund, the Brokerage Fund and Expenses Fund
as provided in paragraph (b) above or (ii) 110% of the tenant improvement
allowances granted under the replacement leases for tenant improvements to be
performed by a contractor acceptable to Purchaser plus 100% of the amount of the
actual brokerage commissions relating to the replacement leases plus any of the
then unpaid identifiable costs and expenses described in paragraph (b) above
shall be released to Seller.
16. BROKER
Purchaser and Seller represent that they have not dealt with
any brokers, finders or salesmen except Keller, Dodd and Woodworth, Inc. (the
"Broker"), in connection with this transaction, and agree to indemnify, defend
and hold each other harmless from and against any and all loss, cost, damage,
liability or expense, including reasonable attorneys' fees, which they may
sustain, incur or be exposed to by reason of any claim for fees or commissions.
The commission payable to Broker shall be paid by Seller. The provisions of this
Section shall survive the Closing Date or other termination of this Agreement.
17. TITLE REPORT
(a) Purchaser agrees promptly after execution of this
Agreement to order a report of title or title commitment from the Title Company
and to direct the Title Company to provide Seller with a copy thereof. It shall
be a condition to Closing that Seller transfer, and that the Title Company agree
to insure, title to the Premises in the amount of the purchase price (at a
standard rate for such insurance) in the name of Purchaser, after delivery of
the Deed, by a standard 1992 ALTA Owners Policy, with ALTA endorsements Form
8.1, Form 9 and any other endorsements as required by Purchaser attached, free
and clear of all liens, encumbrances and other matters, other than the Permitted
Encumbrances (the "Title Policy"). The Title Company shall provide affirmative
insurance that any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title
and the exception for taxes shall apply only to the current taxes not yet due
and payable. Seller shall provide such affidavits and undertakings as the Title
Company insuring title to the Premises may require and shall cure all other
defects and exceptions. The words "insurable title" and "insurable" as used in
this Agreement are hereby defined to mean title which is insurable at standard
rates (without special premium) by the Title Company without exception other
than the Permitted Encumbrances, and standard printed policy and survey
exceptions. Seller shall be obligated to expend up to the Purchase Price to
cause title to the Premises to be conveyed to Purchaser in the manner required
under this Agreement.
(b) If, at the Closing, Seller is unable to convey to
Purchaser insurable title to the Premises subject to and in accordance with the
provisions of this Agreement, Seller shall be entitled, upon written notice
delivered to Purchaser at or prior to the Closing, to reasonable adjournments of
the Closing Date one or more times, for a period or periods not to exceed, in
the aggregate, thirty (30) days, to enable Seller to convey such title or to
fulfill such obligations. If Seller does not so elect to adjourn the Closing, or
if at the adjourned date Seller is still unable to convey insurable title
subject to, and in accordance with the provisions of, this Agreement, then
Purchaser may, at its option, (a) terminate this Agreement by written notice
delivered as provided in Section 23 hereof, in which event the sole liability of
Seller shall be to direct Title Company to refund the Deposit with interest
thereon to Purchaser, and to refund to Purchaser all charges made for (i)
examining the title, (ii) any appropriate additional municipal searches made in
accordance with this Agreement, and (iii) survey and survey inspection charges;
or (b) accept title to the Premises subject to such defect(s), in which event
such defect(s) shall become Permitted Encumbrance(s). Upon such refund being
made to Purchaser in accordance with clause (a) of the immediately preceding
sentence, then this Agreement shall automatically become void and of no further
force or effect, and neither party shall have any obligations of any nature to
the other hereunder or by reason hereof, except obligations which, pursuant to
the provisions of this Agreement, are expressly stated to survive the
termination of this Agreement. If Seller elects to adjourn the Closing as
provided above, this Agreement shall remain in effect for the period or periods
of adjournments, in accordance with its terms.
(c) Upon notice to Seller, Purchaser shall have the right to
cause one or more title insurance companies, whether or not through abstract
agencies, to insure Purchaser's title to the Premises on a co-insurance basis or
to change title companies, so long as in each instance, said company and agency,
to the extent applicable, is a duly licensed title insurance company authorized
to conduct business in the State of New Jersey.
18. CASUALTY LOSS
(a) If prior to the Closing Date any part of the Premises is
damaged as the result of fire or other casualty and the estimated cost of repair
of the damage exceeds $100,000.00, Purchaser shall have the option to either (i)
accept title to the Premises without any abatement of the purchase price
whatsoever, in which event on the Closing Date all of the insurance proceeds
shall be assigned by Seller to Purchaser and any moneys theretofore received by
Seller in connection with such fire or other casualty shall be paid over to
Purchaser, or (ii) cancel this Agreement and the Deposit together with all
interest earned thereon shall be returned to Purchaser by the Escrow Agent, and
upon such return neither party shall have any further liability or obligation to
the other. In the event that the damages shall not exceed $100,000.00, this
Agreement shall remain in full force and effect, the insurance proceeds shall be
assigned by Seller to Purchaser and all sums received by Seller in connection
therewith shall be paid over to Purchaser. Seller shall maintain adequate
insurance on the Premises to cover the full replacement value of the Buildings
without reduction for depreciation, including adequate rental value insurance,
so as not to be deemed a co-insurer and for actual replacement costs, with no
more than a $5,000.00 deductible and Seller shall give Purchaser a credit
therefor on the Closing Date in case of fire or other casualty occurring before
the Closing Date.
(b) Seller shall not settle any fire or casualty loss claims
in connection with the Premises without obtaining Purchaser's prior written
consent.
(c) Seller hereby agrees to furnish Purchaser with written
notification of any such fire or casualty within twenty-four (24) hours of such
event.
19. CONDEMNATION
(a) Notwithstanding anything to the contrary contained in
Section 19(b) below, in the event of the institution of any proceedings,
judicial, administrative or otherwise, which shall relate to the proposed
material taking of any portion of the Premises by eminent domain prior to the
Closing Date, or in the event of the material taking of any portion of the
Premises by eminent domain prior to the Closing Date, Purchaser shall have the
right and option to terminate this Agreement by giving the Seller written notice
to such effect at any time after its receipt of written notification of any such
occurrence. Any damage to or destruction of the Premises as a result of a taking
by eminent domain shall be deemed "material" for purposes of this Section 19 if
the estimate of the damage, which estimate shall be performed by an insurance
adjustor and Purchaser's architect, shall exceed $100,000.00. Should Purchaser
so terminate this Agreement in accordance with this Section 19, the Deposit
together with interest earned thereon shall immediately be returned to Purchaser
by the Escrow Agent and upon such return, neither party shall have any further
liability or obligations to the other. In the event Purchaser shall not elect to
cancel this Agreement, Seller shall assign all proceeds of such taking to
Purchaser, and same shall be Purchaser's sole property, and Purchaser shall have
the sole right to settle any claim in connection with the Premises.
(b) The parties hereby agree that Seller shall retain the
condemnation awards, payments or compensation attributable to and resulting from
that certain condemnation proceeding by the New Jersey Department of
Transportation (the "DOT") for the property more particularly described in
Exhibit "I" annexed hereto. In the event that the outcome of such proceeding
shall result in the taking by the DOT of more property than contemplated by the
parties in Exhibit "I", Purchaser shall receive any awards, payments or
compensation attributable to such excess taking.
20. REMEDIES
(a) In the event Purchaser fails to perform on the Closing
Date, Purchaser's sole liability and Seller's sole recourse shall be limited to
the amount of the Deposit. Seller agrees that retention of the Deposit
constitutes fixed and liquidated damages resulting from Purchaser's default, and
Seller waives any other claim, at law or in equity, either against Purchaser or
against any person, known or unknown, disclosed or undisclosed.
(b) (i) If, after complying with the terms of this Agreement,
Seller shall be unable to convey the Premises in accordance with the terms of
this Agreement, the sole obligation and liability of Seller shall be to direct
the Escrow Agent to refund to Purchaser the Deposit, and to pay Purchaser's net
cost of examining title, which cost is not to exceed the charges fixed by the
local board of title underwriters and actually to be paid by Purchaser, and
survey charges actually to be paid by Purchaser, which charges are not to exceed
$5,000, whereupon this Agreement shall be deemed cancelled and the parties
hereto shall be released of all obligations and liabilities under this
Agreement, except those that are expressly stated to survive the cancellation or
termination of this Agreement.
(ii) In the event of any default on the part of
Seller or Seller's failure to comply with any representation, warranty or
agreement in any material respect, Purchaser shall be entitled to (a) terminate
this Agreement upon notice to Seller, in which event the Deposit shall be
returned by Escrow Agent to Purchaser and neither party shall thereafter have
any further obligations under this Agreement (b) commence an action against
Seller seeking specific performance of Seller's obligations under this Agreement
or (c) in the event of a willful default by Seller, Purchaser may pursue any and
all of its remedies at law or in equity or any combination thereof.
(c) The acceptance of the Deed by Purchaser shall be deemed a
full performance and discharge of every agreement and obligation of Seller to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing.
21. ASSESSMENT
If, on the Closing Date, the Premises or any part thereof
shall be or shall have been affected by an assessment or assessments which are
or may become payable in annual installments, of which the first installment is
either then a charge or lien or has been paid, then for the purposes of this
Agreement all the unpaid installments of any such assessment, including those
which are to become due and payable after the Closing Date, shall be deemed to
be due and payable and to be liens upon the Premises and shall be paid and
discharged by Seller on the Closing Date.
22. CLOSING
The closing and delivery of the Deed (the "Closing") shall
take place at the offices of Pryor, Cashman, Sherman & Flynn, 410 Park Avenue,
New York, New York 10022 on or about the Closing Date. Upon notice to Seller,
Purchaser may elect to accelerate the Closing Date to a date not less than five
(5) days after the date of Purchaser's notice.
23. NOTICE
All notices, demands, requests, or other writings in this
Agreement provided to be given or made or sent, or which may be given or made or
sent, by either party hereto to the other or by Escrow Agent, shall be in
writing and shall be delivered by depositing the same with any nationally
recognized overnight delivery service, or by telecopy or fax machine, in either
event with all transmittal fees prepaid, properly addressed, and sent to the
following addresses:
If to Purchaser: Century Plaza Associates
c/o Cali Realty Acquisition Corporation
11 Commercial Drive
Cranford, New Jersey 07016
Attn: John J. Cali and Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Andrew S. Levine, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
(212) 326-0414 (tele.)
(212) 326-0806 (fax)
If to Seller: Mr. C. Lawrence Keller
Keller Carnegie Associates
103 Carnegie Ceter
Princeton, New Jersey 08540
(609) 452-8880 (tele.)
(609) 520-1730 (fax)
with a copy to: George C. Witte, Jr., Esq.
McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07101
(201) 622-4444 (tele.)
(201) 624-7070 (fax)
If to Escrow Agent: First American Title Insurance Company
228 East 45th Street
New York, New York 10017
(212) 922-9700
(212) 922-0881
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided same is sent prior to 4:00 p.m. on a business day (if sent later, then
notice shall be deemed given on the next business day) and if the sending party
receives a written send verification on its machines and forwards a copy thereof
by regular mail accompanied by such notice or communication. Notices may be
given by counsel for the parties described above, and such Notices shall be
deemed given by Purchaser or Seller, as the case may be, for all purposes
hereunder.
24. ESCROW AGREEMENT
Upon the signing of this Agreement by the parties, Purchaser
shall deliver the Deposit to Escrow Agent. The parties agree that the Deposit
shall be held by the Escrow Agent in escrow and disposed of only in accordance
with the provisions of this Section 24. The parties agree that if the Deposit is
cash, such cash shall be invested in an assignable interest-bearing certificate
of deposit, money market fund, treasury bill or other similar security approved
by Seller and Purchaser, and all interest accruing thereon shall be paid to
Purchaser, except as otherwise provided herein.
(a) The Escrow Agent will deliver the Deposit to Seller or to
Purchaser, as the case may be, under the following conditions:
(i) To Seller on the Closing Date;
(ii) To Seller upon receipt of written demand
therefor, such demand stating that Purchaser has defaulted in the performance of
this Agreement and specifically setting forth the facts and circumstances
underlying such default. The Escrow Agent shall not honor such demand until more
than five (5) days have elapsed after the Escrow Agent has mailed a copy of such
demand to Seller or Purchaser, as the case may be, nor thereafter if the Escrow
Agent shall have received written notice of objection from Purchaser in
accordance with the provisions of clause (b) of this Section 24; or
(iii) To Purchaser upon receipt of written demand
therefor, such demand stating that this Agreement has been terminated in
accordance with the provisions hereof, or Seller has defaulted in the
performance of this Agreement, and specifically setting forth the facts and
circumstances underlying the same. The Escrow Agent shall not honor such demand
until more than five (5) days have elapsed after the Escrow Agent has mailed a
copy of such demand to Seller or Purchaser, as the case may be, nor thereafter,
if the Escrow Agent shall have received written notice of objection from the
other party in accordance with the provisions of clause (b) of this Section 24.
(b) Upon the filing of a written demand for the Deposit by
Purchaser or Seller, pursuant to subclause (ii) or (iii) of clause (a) of this
Section 24, the Escrow Agent shall promptly mail a copy thereof to the other
party. The other party shall have the right to object to the delivery of the
Deposit by filing written notice of such objection with the Escrow Agent at any
time within five (5) days after the mailing of such copy to it, but not
thereafter. Such notice shall set forth the basis for objecting to the delivery
of the Deposit. Upon receipt of such notice, the Escrow Agent shall promptly
mail a copy thereof to the party who filed the written demand.
(c) In the event the Escrow Agent shall have received the
notice of objection provided for in clause (b) above and within the time therein
prescribed, the Escrow Agent shall continue to hold the Deposit until (i) the
Escrow Agent receives written notice from Seller and Purchaser directing the
disbursement of said Deposit, in which case, the Escrow Agent shall then
disburse said Deposit in accordance with said direction, or (ii) in the event of
litigation between Seller and Purchaser, the Escrow Agent shall deliver the
Deposit to the Clerk of the Court in which said litigation is pending, or (iii)
the Escrow Agent takes such affirmative steps as the Escrow Agent may, in the
Escrow Agent's reasonable opinion, elect in order to terminate the Escrow
Agent's duties including, but not limited to, depositing the Deposit with the
Court and bringing an action for interpleader, the costs thereof to be borne by
whichever of Seller or Purchaser is the losing party.
(d) The Escrow Agent may act upon any instrument or other
writing believed by it in good faith to be genuine and to be signed and
presented by the proper person and it shall not be liable in connection with the
performance of any duties imposed upon the Escrow Agent by the provisions of
this Agreement, except for damage caused by the Escrow Agent's own negligence or
willful default. The Escrow Agent shall have no duties or responsibilities
except those set forth herein. The Escrow Agent shall not be bound by any
modification of this Agreement, unless the same is in writing and signed by
Purchaser and Seller, and, if the Escrow Agent's duties hereunder are affected,
unless Escrow Agent shall have given prior written consent thereto. In the event
that the Escrow Agent shall be uncertain as to the Escrow Agent's duties or
rights hereunder, or shall receive instructions from Purchaser or Seller which,
in the Escrow Agent's opinion, are in conflict with any of the provisions
hereof, the Escrow Agent shall be entitled to hold and apply the Deposit
pursuant to clause (c) above and may decline to take any other action. The
Escrow Agent shall not charge a fee for its services as escrow agent.
25. ASSIGNMENT.
Purchaser shall have the right, at its sole option, to assign
its rights hereunder to First American Exchange Corporation or to an affiliate
of Purchaser upon written notice to Seller. Seller shall, within five (5) days
after receiving such notice, consent to such assignment. No such assignment
shall relieve Purchaser of its obligations hereunder.
26. ENVIRONMENTAL REPRESENTATIONS
(a) Seller represents and warrants that (a) there are no
Hazardous Materials on or at the Premises, except those in compliance with all
applicable federal, state and local laws, ordinances, rules and regulations; (b)
no owner or occupant nor any prior owner or occupant of the Premises has
received any notice or advice from any Governmental Authority or any source
whatsoever with respect to Hazardous Materials on, from or affecting the
Premises; (c) no portion of the Premises has ever been used by Seller or any
former owner, occupant or operator to generate, manufacture, refine, produce,
treat, store, handle, dispose of, transfer, process or transport Hazardous
Materials, whether or not any of those parties has received notice or advice
from any Governmental Authority or other source with respect thereto; (d) no
portion of the Premises is now, or has ever been used as a "Major Facility," and
Seller has not used, and does not intend to use, any portion of the Premises for
that purpose; and (e) Hazardous Materials have not been transported from the
Premises to another location which is not in compliance with all applicable
federal, state or local environmental laws, regulations or permit requirements.
Seller covenants that the Premises has been kept free of Hazardous Materials,
and neither Seller nor any occupant of the Premises has used, transported,
stored, disposed of or in any manner dealt with Hazardous Materials on the
Premises, except in compliance with all applicable federal, state and local
laws, ordinances, rules and regulations. Seller has complied with, and ensures
compliance by all occupants of the Premises with, all applicable federal, state
and local laws, ordinances, rules and regulations, and has kept the Premises
free and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Seller receives any notice or advice from any
governmental agency or any source whatsoever with respect to Hazardous Materials
on, from or affecting the Premises, Seller shall immediately notify Purchaser.
(b) Seller represents and warrants that no lien has been
attached to the Premises as a result of any action by the Commission of the
NJDEP or its successor or its designee pursuant to the New Jersey Spill
Compensation Fund as such term is defined in the Spill Act expending monies from
said fund to pay for "cleanup and removal costs" or "natural resources" damages
as a result of any "discharge" of any "hazardous substances" on or at the
Premises, as such terms are defined in the Spill Act. Seller further represents,
covenants and agrees that Seller has not in the past, and does not now own,
operate or control any Major Facility or any hazardous or solid waste disposal
facility.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of the Purchaser to pay the Cash Payment and otherwise
close title to the Premises on the Closing Date shall be subject to the
condition that Seller obtain a Letter of Non-Applicability pursuant to ISRA from
the Industrial Site Evaluation Element or its successor (hereinafter called the
"Element") of the NJDEP, on or before the Closing Date (hereinafter called the
"ISRA Compliance Date"). If this condition is not satisfied on or before the
ISRA Compliance Date, Purchaser shall have the right to extend the ISRA
Compliance Date or to terminate this Agreement, in which event this Agreement
shall be rendered null and void and of no further force or effect, Seller shall
promptly reimburse Purchaser for the costs of obtaining its title search,
appraisal and any survey of the Premises obtained by Purchaser, the Deposit
shall promptly be paid to Purchaser, and neither party shall have any further
liability or obligation to the other under or by virtue of this Agreement.
(d) Seller shall provide Purchaser with all information,
reports, studies and analysis which Seller delivered to the NJDEP for the
application and issuance of the Letter of Non-Applicability.
(e) For purposes of this Agreement, the term "Environmental
Documents" shall mean all environmental documentation in the possession or under
the control of Seller concerning the Premises or its environs including, without
limitation, all sampling plans, cleanup plans, preliminary assessment plans and
reports, site investigation plans and reports, remedial investigation and
reports, remedial action plans and reports or the equivalent, sampling results,
sampling result quality assurance/quality control documentation, correspondence
to or from the Element or any other municipal, county, state or federal
Governmental Authority, submissions to the Element or any other municipal,
county, state or federal Governmental Authority and directives, orders,
approvals and disapprovals issued by the Element or any other Governmental
Authority. Within five (5) days from the date of this Agreement, and
subsequently promptly upon receipt by Seller or Seller's representatives, Seller
shall deliver to Purchaser: (i) all Environmental Documents concerning or
generated by or on behalf of predecessors in title or former occupants of the
Premises; (ii) all Environmental Documents concerning or generated by or on
behalf of Seller, whether currently or hereafter existing; (iii) all
Environmental Documents concerning or generated by or on behalf of current or
future occupants of the Premises, whether currently or hereafter existing; and
(iv) a description of all known operations, past and present, undertaken at the
Premises, and existing maps, diagrams and other Environmental Documents
designating the location of past and present operations at the Premises and past
and present storage of hazardous or toxic substances, pollutants or wastes, or
fill materials, above or below ground, in, on, under or about the Premises or
its environs.
(f) Seller shall notify Purchaser in advance of all meetings
scheduled between Seller or Seller's representatives and NJDEP and Purchaser,
and Purchaser's representatives shall have the right, without obligation, to
attend and participate in all such meetings.
(g) Seller shall indemnify, defend and hold harmless Purchaser
from and against all claims, liabilities, losses, damages, penalties and costs,
foreseen or unforeseen including, without limitation, counsel, engineering,
attorney and other professional or expert fees, which Purchaser may incur,
resulting directly or indirectly, wholly or partly, from any misrepresentation
or breach of warranty by Seller or by reason of Seller's action or non-action
with regard to Seller's obligation under this Section 26. Any recovery by
Purchaser from Seller under this Section 26(g) shall be limited to Seller's
Equity in the Premises.
(h) This Section 26 shall survive Closing for a period of one
(1) year unless Seller has made a willful misrepresentation under this Section
26 whereupon the indemnification provisions of this Section 26 shall survive
indefinitely and recovery by Purchaser shall not be limited in any manner
whatsoever.
27. SECTION 1031 EXCHANGE.
Purchaser and First American Exchange Corporation have entered
into that certain Exchange Agreement whereby First American Exchange corporation
has agreed to act as a qualified intermediary for Section 1031 tax deferred
exchanges. Purchaser and Purchaser's designee reserves the right to include this
transaction as part of an Internal Revenue Code, Section 1031 tax deferred
exchange for the benefit of Purchaser or Purchaser's designee. Seller agrees to
cooperate with Purchaser, Purchaser's designee and any outside parties and use
reasonable efforts to assist Purchaser and Purchaser's designee in achieving a
Section 1031 exchange, including but not limited to, the assignment by Purchaser
of all of its rights and obligations hereunder. Seller further agrees to execute
any and all documents (subject to the reasonable approval of Seller's counsel)
as are reasonably necessary in connection therewith, provided that the close of
escrow for the conveyance of the Premises shall not be contingent upon or
subject to the completion of such exchange. Purchaser agrees to indemnify and
hold Seller harmless from any extraordinary costs, expenses or liabilities,
including attorney's fees, incurred by Seller which are a direct result of
Seller's participation in such exchange.
28. MISCELLANEOUS
(a) If any instrument or deposit is necessary in order to
obviate a defect in or objection or exception to title, the following shall
apply: (i) any such instrument shall be in such form and shall contain such
terms and conditions as may be required by the Title Company to omit any defect,
objection or exception to title, (ii) any such deposit shall be made with the
Title Company, and (iii) Seller agrees to execute, acknowledge and deliver any
such instrument and to make any such deposit.
(b) This Agreement constitutes the entire agreement between
the parties and incorporates and supersedes all prior negotiations and
discussions between the parties.
(c) This Agreement cannot be amended, waived or terminated
orally, but only by an agreement in writing signed by the party to be charged.
(d) This Agreement shall be interpreted and governed by the
laws of the State of New Jersey and shall be binding upon the parties hereto and
their respective successors and assigns.
(e) Whenever in this Agreement there is a provision for the
return of the Deposit, the provision shall be deemed to include all interest
earned thereon and paid to Purchaser.
(f) The caption headings in this Agreement are for convenience
only and are not intended to be part of this Agreement and shall not be
construed to modify, explain or alter any of the terms, covenants or conditions
herein contained.
(g) If any term, covenant or condition of this Agreement is
held to be invalid, illegal or unenforceable in any respect, this Agreement
shall be construed without such provision.
(h) Each party shall, from time to time, execute, acknowledge
and deliver such further instruments, and perform such additional acts, as the
other party may reasonably request in order to effectuate the intent of this
Agreement. Nothing contained in this Agreement shall be deemed to create any
rights or obligations of partnership, joint venture or similar association
between Seller and Purchaser. This Agreement shall be given a fair and
reasonable construction in accordance with the intentions of the parties hereto,
and without regard to or aid of canons requiring construction against Seller,
Purchaser or the party whose counsel drafted this Agreement.
(i) This Agreement shall not be effective or binding until
such time as it has been executed and delivered by all parties hereto. This
Agreement may be executed by the parties hereto in counterparts, all of which
together shall constitute a single Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PURCHASER
CENTURY PLAZA ASSOCIATES
By: Cali Sub IV, Inc., its managing
general partner
By: /s/
Name: Roger W. Thomas
Title: Vice President - General Counsel
SELLER
KELLER CARNEGIE ASSOCIATES, a New Jersey
Limited Partnership
By: 103 Carnegie Associates, L.P., a New Jersey
limited partnership
By: /s/
Name: C. Lawrence Keller
Title: General Partner
By: /s/
Name: Stuart R. Alpert
Title: General Partner
The undersigned joins in the execution of the Agreement solely for the
purpose of acknowledging the receipt of the Deposit and its agreement to hold
the Deposit in escrow in accordance with the terms hereof.
ESCROW AGENT
FIRST AMERICAN EXCHANGE CORPORATION
By:__/s/____________________________
Name: Diane Schappo
Title: Assistant Vice President
<PAGE>
Exhibit A
(Land)
<PAGE>
Exhibit B
(List of Personal Property)
<PAGE>
Exhibit C
(Tenant Lease Dates)
<PAGE>
Exhibit D
(Permitted Exceptions)
<PAGE>
Exhibit E
(Estoppel Certificates)
<PAGE>
Exhibit F
(Assignment of Leases)
<PAGE>
SCHEDULE A
Leases
<PAGE>
SCHEDULE B
Security Deposits
<PAGE>
Exhibit G
(Rent Roll)
<PAGE>
<PAGE>
Exhibit H
(Service Contracts)
<PAGE>
Exhibit I
(Map Setting Forth Property Under Condemnation
Proceeding with the New Jersey Department of Transportation)
<PAGE>
Exhibit J
(Tax Reduction Proceeding)
None.
<PAGE>
Exhibit K
(Certain Identifiable Costs and Expenses)
<PAGE>
Exhibit L
(Schedule of Leasing Commissions)
AGREEMENT OF ASSIGNMENT OF REAL ESTATE SALE AGREEMENT (the
"Assignment Agreement") entered into this 26th day of April, 1996, between
BRYMER, L.P., a Pennsylvania limited partnership ("Contract Vendee"), having an
office c/o 443 South Gulph Road, King of Prussia, Pennsylvania 19406 and
CAL-TREE REALTY ASSOCIATES L.P. ("Assignee"), a Pennsylvania limited partnership
having an office c/o Cali Realty Corporation, 11 Commerce Drive, Cranford, New
Jersey 07016.
W I T N E S S E T H:
WHEREAS, as of the 2nd day of February, 1996, an Agreement of
Sale and Purchase was entered into between Adwin Realty Company and LBA
Associates, as seller (collectively, "Seller") and Contract Vendee covering the
purchase and sale of premises known as 1400 Providence Road, Media, Delaware
County, Pennsylvania and more particularly described in Exhibit "A" annexed
hereto ("Premises"), which Agreement of Sale and Purchase was amended by a
certain Amendment to Agreement of Sale and Purchase between Seller and Contract
Vendee dated May 2, 1996 (collectively, the "Sales Agreement"); and
WHEREAS, Contract Vendee is desirous of assigning to Assignee
all of the right, title and interest of Contract Vendee in and to the Sales
Agreement; and
WHEREAS, the parties agree that any capitalized terms not
otherwise defined herein shall have the meaning attributed to them in the Sales
Agreement.
NOW, THEREFORE, in consideration of the Premises and the mutual
covenants expressed herein, the parties hereto hereby agree as follows:
1. ASSIGNMENT OF SALES AGREEMENT; ASSIGNMENT PRICE.
(a) Contract Vendee agrees to assign to Assignee the Sales
Agreement, which assignment shall be effective as of the Closing (as defined
below), on the terms and conditions set forth below, pursuant to the Assignment
of Sales Agreement (the "Assignment") annexed hereto as Exhibit "B".
(b) The assignment price payable to Contract Vendee on account
of this Assignment Agreement is of Six Million ($6,000,000.00) Dollars (the
"Assignment Price"), payable as follows:
(i) Two Hundred Fifty Thousand and XX/100 Dollars
($250,000.00) (the "Deposit") to be paid to First American Title Insurance
Company (the "Escrow Agent") by wire transfer of immediately available funds
received by Escrow Agent on or before April 29, 1996, which Deposit shall be
held in escrow in accordance with the provisions hereinafter set forth; and
(ii) Five Million Five Hundred Seventy Thousand
($5,750,000.00) Dollars at Closing (as defined below), by wire transfer of
immediately available funds to Contract Vendee subject to adjustment as provided
herein.
(iii) At Closing, Assignee shall unconditionally be
entitled to a credit in the amount of $400,000.00 (the "Credit") against the
Assignment Price.
(c) At and only upon the Closing, Assignee shall also pay to
Seller the amount due Seller under the Sales Agreement on account of the
Purchase Price but not to exceed Twenty Two Million Three Hundred Thousand
($22,300,000.00) Dollars and subject to adjustment as provided in the Sales
Agreement, which Contract Vendee represents and warrants to Assignee is the
Purchase Price.
2. INTENTIONALLY DELETED.
3. MATTERS TO WHICH THIS TRANSACTION IS SUBJECT
Title to the Real Property and to the Personal Property shall be
as set forth in Section 5 of the Sales Agreement. Contract Vendee represents and
warrants to Assignee that it has not issued any notice of any defect,
encumbrance or other title objection, and covenants that (a) it shall not issue
any such notice without Assignee's prior consent, (b) will issue any such notice
which Assignee so requests and (c) will exercise the options set forth in
Section 5(d) of the Sales Agreement as directed by Assignee.
4. REPRESENTATIONS AND WARRANTIES.
(a) Contract Vendee for himself only, to induce Assignee to
enter into this Assignment Agreement and to complete the Closing, makes the
following representations and warranties to Assignee, which representations and
warranties are true and correct as of the date of this Assignment Agreement, and
shall be true and correct at and as of the Closing in all respects as though
such representations and warranties were made both at and as of the date of this
Assignment Agreement, and at and as of the Closing:
(i) annexed hereto as Exhibit "C" is a true, complete and
correct copy of the Sales Agreement, which Sales Agreement has not been
modified, changed or amended and which Sales Agreement represents the entire
agreement between Contract Vendee and Seller with respect to the Premises;
(ii) to the best of Contract Vendee's actual knowledge,
the Sales Agreement is in full force and effect, is a valid contract and is
legally enforceable in accordance with its terms;
(iii) Contract Vendee has, to the best of his actual
knowledge, heretofore timely performed and observed all of the duties,
obligations, terms, covenants and conditions of the Sales Agreement on the its
part to be performed or observed thereunder;
(iv) all representations contained in the Sales Agreement
made by Contract Vendee, and to the best knowledge of Contract Vendee, made by
Seller, are and continue to be true and correct;
(v) neither Seller nor Contract Vendee has declared a
default under the Sales Agreement, and to the best of Contract Vendee's actual
knowledge, no event has occurred or failed to occur which, but for the giving of
notice or passage of time, or both, would constitute a default thereunder by
either Seller or Contract Vendee;
(vi) Contract Vendee has not assigned, conveyed,
encumbered, mortgaged, pledged or transferred all or any part of its interest in
the Sales Agreement other than a certain prior Agreement to Form Partnership, as
amended, entered into by Contract Vendee and Berwind Property Group, Inc.
("BPG") relating to the Premises and the Sales Agreement. BPG has consented to
the execution, delivery and performance of this Assignment Agreement by Contact
Vendee and that no further authorization from BPG is required to so perform. BPG
agrees, represents and warrants, by its execution and delivery of this
Assignment Agreement for the limited purpose of joining in this and the
following paragraph, that it has not entered into any assignment or other
agreement which, by its terms or in the performance thereof, would conflict with
or result in a breach of this Assignment Agreement. Assignee agrees that based
upon the foregoing, it will look solely to Contract Vendee for the performance
of Contract Vendee's obligations, representations and warranties hereunder, and
that BPG will have no obligations or liabilities with respect thereto. Nothing
herein contained shall be deemed to modify or alter the respective rights and
obligations of BPG and Contract Vendee under the terms of the BPG Agreement;
(vii) No person, firm, corporation or other entity has
any right or option to acquire the Premises or any part thereof other than
Assignee and BPG as set forth in the preceding paragraph;
(viii) Contract Vendee has delivered to Assignee true,
correct and complete copies any and all material documents, instruments,
agreements and other items in its possession with respect to the Premises,
including without limitation the Tenant Leases, the Service Agreements, the
Recorded Agreements, the Tenant Estoppel Certificates, any schedules, summaries
and projections of tenant improvement costs and leasing commission obligations,
tenant profiles and summaries and structural, engineering and environmental
assessment reports in Contract Vendee's possession with respect to the Premises;
(ix) Contract Vendee has not received from Seller or any
other party any notice of any litigation, insurance claim, personal injury,
proceeding (zoning or otherwise) or governmental investigation pending or
threatened against or relating to the Premises or the transaction contemplated
by the Sales Agreement other than as set forth on Exhibit "D" annexed hereto; to
the extent any matter is set forth on Exhibit "D";
(x) To the best of Contract Vendee's knowledge, the only
leases, tenancies, licenses and other agreements for the use and occupancy of
any portion of the Premises other than the Tenant Leases are those leases,
tenancies, licenses and other agreements listed on Exhibit "E" (the "Additional
Leases"), which Exhibit is a true, correct and complete list of Additional
Leases; the representations and warranties of Seller with respect to the Tenant
Leases set forth in Sections 8(b) through (m) of the Sales Agreement are hereby
deemed repeated in their entirety in this Assignment Agreement by Contract
Vendee with respect to the Additional Leases and Exhibit "E", and therefore all
references in said Sections to Seller, Tenant Leases and Exhibit "G" are hereby
deemed references to Contract Vendee, Additional Leases and Exhibit "E"
respectively;
(xi) Annexed hereto as Exhibit "H" is a true, complete
and correct schedule of the economic terms of the leases currently under
negotiation by Seller or Contract Vendee with Principal Mutual Life Insurance
Company ("Principal"), Barnett International ("Barnett") and Anixeter
("Anixeter");
(xii) Annexed hereto as Exhibit "F" is a true, complete
and correct schedule of the leasing commission agreements for the Additional
Leases;
(xiii) To the best of Contract Vendee's knowledge, there
has been no material adverse change in the status of the Premises or any
contracts or agreements relating thereto (including without limitation
additional leases, renewals or amendments thereto, or additional service
contracts) except for Additional Leases; and
(xiv) The execution and delivery of this Assignment
Agreement and the performance by Contract Vendee of its obligations hereunder
will not conflict with or result in a breach of any law, regulation or order, or
any agreement or instrument to which Contract Vendee is a party or by which
Contract Vendee is bound; and this Assignment Agreement and the documents to be
delivered by Contract Vendee pursuant to this Assignment Agreement will each
constitute the legal, valid and binding obligations of Contract Vendee,
enforceable in accordance with their respective terms, covenants and conditions;
and there are no claims, defenses (personal or otherwise) or offsets to the
validity of or enforceability against Contract Vendee of this Assignment
Agreement and the documents to be delivered pursuant hereto.
(b) Assignee, to induce Contract Vendee to enter into this
Assignment Agreement and to complete the Closing, hereby represents and warrants
to Contract Vendee that the execution and delivery of this Assignment Agreement
and the performance by Assignee of its obligations hereunder will not conflict
with or result in a breach of any law, regulation or order, or any agreement or
instrument to which Assignee is a party or by which Assignee is bound; and this
Assignment Agreement and the documents to be delivered by Assignee pursuant to
this Assignment Agreement will each constitute the legal, valid and binding
obligations of Assignee, enforceable in accordance with their respective terms,
covenants and conditions; and there are no claims, defenses (personal or
otherwise) or offsets to the validity of or enforceability against Assignee of
this Assignment Agreement and the documents to be delivered pursuant hereto.
This representation and warranty is true and correct as of the date of this
Assignment Agreement, and shall be true and correct at and as of the Closing in
all respects as though such representation and warranty was made both at and as
of the date of this Assignment Agreement, and at and as of the Closing.
5. COVENANTS.
Contract Vendee hereby covenants and agrees that between the
date hereof and the Closing, and with respect to the Closing, it shall perform
and observe the following with respect to the Premises and the Sales Agreement:
(a) Contract Vendee shall continue to timely perform and
observe all of the duties, obligations, terms, covenants and conditions of the
Sales Agreement on its part to be performed or observed thereunder;
(b) Contract Vendee shall not modify, terminate, amend,
cancel, surrender or, with the exception of this Assignment Agreement, make any
agreement affecting the Sales Agreement without first obtaining Assignee's prior
written consent, which consent shall not be unreasonably withheld or delayed;
(c) It shall not grant any consents or approvals with
respect to the Premises and shall not enter into or caused to be entered into
any agreements, leases, tenancies, licenses or contracts with respect to the
Premises without first obtaining Assignee's prior written consent, which consent
shall not be unreasonably withheld or delayed;
(d) It will use its reasonable efforts to cause Seller to
operate and maintain the Premises in the ordinary course of business and use
reasonable efforts to cause Seller to reasonably preserve for Assignee the
relationships of tenants, suppliers, managers, employees and others having
on-going relationships with the Premises, and use reasonable efforts to cause
Seller to not defer taking actions or spending its funds, or otherwise manage
the Premises differently, due to the pending sale of the Premises, except as
specifically permitted in the Sales Agreement;
(e) It shall forward to Assignee all notices,
communications, demands or requests received by Contract Vendee with respect to
the Premises promptly after receipt;
(f) In the event Seller shall not consent to this
Assignment Agreement on or before the earlier of the Closing hereunder or the
Closing Date under the Sales Agreement, then at Assignee's request, Contract
Vendee shall exercise its right to extend the Closing Date as provided in
Section 4(b) of the Sales Agreement. In connection therewith, Contract Vendee
represents and warrants to Assignee that the Inspection Period expired April 22,
1996 and that the Closing Date under the Sales Agreement is June 21, 1996. If
Assignee shall make said request, then it shall provide Contract Vendee with the
$50,000.00 to be deposited by Contract Vendee in order to exercise such
extension, and Assignee and Contract Vendee shall enter into a mutually
acceptable letter agreement evidencing Assignee's sole right, title and interest
in and to said amount and that if said amount is to be refunded to Contract
Vendee in accordance with the Sales Agreement or otherwise, said amount shall be
paid directly to Assignee;
(g) At least ten (10) days prior to the Closing, advise
Seller that Contract Vendee has assigned the Sales Agreement to Assignee
effective as of the Closing and use its best efforts to cause Seller to prepare
and execute all documents, items and instruments to be delivered at Closing in
the name and for the benefit of Assignee;
(h) Contract Vendee shall include Assignee and its agents
in all aspects in the closing of the Sales Agreement, including by way of
example and not limitation, closing documents and closing adjustments, provided
that Closing under this Assignment Agreement occurs simultaneously with closing
under this Sales Agreement;
(i) Contract Vendee shall cooperate in all respects with
Assignee in connection with the acquisition by Assignee of the Premises; and
(j) If, as of the Closing Date, there shall occur any
event giving rise to the making of an election under Section 14(b) of the Sales
Agreement, then the following shall apply:
(i) so long as Assignee is nevertheless prepared
to acquire the Premises if the condition can be satisfied by Seller, Contract
Vendee shall not terminate its obligations under the Sales Agreement. In such
event, if Seller consents to the assignment of the Sales Agreement to Assignee,
Assignee shall be obligated to perform its obligations hereunder and Assignee
shall have the sole right to make said election; if Seller does not so consent,
the Closing hereunder shall be extended to the date Seller is obligated to close
under the Sales Agreement and Contract Vendee and Assignee shall each perform
their respective obligations hereunder. If Contract Vendee is prepared to waive
said condition, then Assignee agrees to close hereunder or terminate this
Assignment Agreement on or prior to June 2, 1996; and
(ii) if Assignee is not prepared to acquire the
Premises due to such condition, then this Agreement shall terminate, the Deposit
shall be returned to Assignee, and the parties shall have no further obligations
to the other except as shall specifically survive such termination as provided
herein.
6. INTENTIONALLY DELETED.
7. ITEMS TO BE DELIVERED OR CAUSE TO BE DELIVERED BY
CONTRACT VENDEE ON THE CLOSING DATE
On the Closing Date, Contract Vendee, at its sole cost and
expense, will deliver or cause to be delivered to Assignee the following:
(a) All of the documents, items and instruments to be
delivered by Seller under and pursuant to the Sales Agreement, provided, that
Closing under this Assignment Agreement occurs simultaneously with the Closing
under the Sales Agreement;
(b) Any documents reasonably required by Assignee or
necessary in order to effectuate the transactions contemplated by this
Assignment Agreement, including by way of example and not limitation,
affidavits, assurances, acknowledgements, deeds, and transfer tax returns;
(c) The Assignment;
(d) An affidavit on account of Contract Vendee in the
form of Schedule "N", FIRPTA Affidavit, to the Sales Agreement; and
(e) Any agreements contracts, reports, analysis, studies,
leases, licenses, tenancies, material, documents and items with respect to the
Premises which have not previously been delivered to Assignee.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND OBLIGATIONS
The representations, warranties and obligations of Contract
Vendee set forth in Sections 4(a) (i), (vi) and (vii) shall remain in effect for
a period of one (1) year following the Closing and thereafter if Assignee shall
have given to Contract Vendee notice of a breach thereof within one (1) year
period.
9. OBLIGATIONS WITH RESPECT TO SALES AGREEMENT.
Contract Vendee and Assignee hereby agree as to the following
with respect to certain of the obligations of Contract Vendee under the Sales
Agreement and this Assignment Agreement:
(a) Assignee shall pay an amount which is equal to the
amount Contract Vendee is obligated to pay pursuant to Section 7(d) of the Sales
Agreement less $50,000.00, and one-half (1/2) of all realty transfer,
recordation and documentary fees, stamps and taxes imposed on an amount equal to
the Assignment Price less the Credit. Contract Vendee shall pay the $50,000.00
balance of the amount it is obligated to pay pursuant to Section 7(d) of the
Sales Agreement, and one-half (1/2) of all realty transfer, recordation and
documentary fees, stamps and taxes imposed on an amount equal to the Assignment
Price less the Credit, plus 100% of all realty transfer, recordation and
documentary fees, stamps and taxes imposed on the Credit. Contract Vendee's tax
obligation attributable to the Assignment Price shall be held in escrow by
Pryor, Cashman, Sherman & Flynn ("PCS&F") pending a final determination by the
Pennsylvania Supreme Court regarding taxes of this type. If it is finally
determined that said tax is due, then such amount shall be promptly paid to the
appropriate taxing authority; if it is determined that no such tax is due, then
such amount shall be promptly returned to Contract Vendee;
(b) Any claims arising out of Contract Vendee's entry
upon the Premises shall be the responsibility of Contract Vendee, and any claims
arising out of Assignee's entry upon the Premises shall be the responsibility of
Assignee;
(c) Contract Vendee shall be obligated to make the
payments required of it pursuant to Section 17 of the Sales Agreement; and
(d) Contract Vendee shall be obligated to make all
payments due on account of leasing commissions and costs for tenant improvements
for the Additional Leases and the New Leases (as defined below), or to the
extent applicable as provided in Section 12 herein, Alternative Leases (as
defined below). Assignee shall be obligated to pay leasing commissions pursuant
to the commissions scheduled on Exhibit "G" annexed hereto for renewals or
expansions of Tenant Leases and leasing commissions for renewals or expansions
pursuant to the commissions scheduled on Exhibit "F" annexed hereto with respect
to Additional Leases and New Leases, or to the extent applicable, Alternative
Leases.
10. TITLE.
Notwithstanding anything to the contrary contained in the Sales
Agreement, title to the Premises shall be insured by First American Title
Insurance Company of New York or such other title company selected by Assignee
which is licensed in the State of Pennsylvania (the "Title Company"). Assignee
has procured a report of title from the Title Company, and instructed the Title
Company to forward same to counsel for Contract Vendee. If title to the Premises
is not conveyed to Assignee pursuant to the Sales Agreement and this Assignment
Agreement as a result of any act of Contract Vendee, Contract Vendee shall be
responsible for all title fees, survey expenses and search charges of the Title
Company. In all other events, Assignee shall be responsible for the premiums,
costs and expenses of the Title Company. Contract Vendee shall be responsible
for the costs and expenses of Certified Abstract Co., Inc. as long as Certified
Abstract Co., Inc does not provide title hereunder.
11. CONDITIONS PRECEDENT TO ASSIGNEE'S OBLIGATIONS.
The obligations of Assignee to accept the Assignment, to acquire
the Premises and to perform the other covenants and obligations to be performed
by Assignee on the Closing shall be subject to the following conditions (all or
any of which may be waived, in whole or in part, by Assignee):
(a) The representations and warranties made by Seller in
the Sales Agreement and Contract Vendee in this Assignment Agreement shall be
true and correct in all respects with the same force and effect as though such
representations and warranties had been made on and as of the Closing, except
that for purposes of this paragraph (a), the representations and warranties of
Contract Vendee shall be without regard to any knowledge standard of Contract
Vendee.
(b) Seller and Contract Vendee, respectively, shall have
performed all covenants and obligations undertaken by Seller in Section 10 of
the Sales Agreement and Contract Vendee in Section 5 of this Assignment
Agreement in all respects and complied with all conditions required by the Sales
Agreement and this Assignment Agreement to be performed or complied with by it
on or before the Closing.
(c) The satisfaction by Seller of its obligations as set
forth in Section 14(a) of the Sales Agreement shall be subject to Assignee's
approval.
(d) The Title Company is prepared to issue to Assignee a
Title Policy meeting the requirements set forth in Section 5 of the Sales
Agreement subject only to the payment of the premium therefore by Assignee.
(e) Seller and Contract Vendee, respectively, shall have
delivered to Assignee all of the documents enumerated in Section 15 of the Sales
Agreement and Section 7 of this Assignment Agreement.
12. NEW LEASE OBLIGATIONS.
Contract Vendee is currently negotiating leases with Barnett,
Anixeter and Principal for vacant space at the Premises. As a condition to
Closing hereunder, Contract Vendee hereby agrees as follows:
(a) (i) A portion of the Assignment Price in the
aggregate amount of 110% of the tenant improvement allowances (the "Tenant
Improvement Fund") granted under the New Leases set forth on Exhibit "I" (the
"New Leases"), 100% of the brokerage commissions relating to the New Leases (the
"Brokerage Fund") set forth on Exhibit "I" and 100% of a full year's annual
fixed rent under each New Lease set forth on Exhibit "I" (the "Annual Rent
Fund") be remitted directly to PCS&F and held by PCS&F who shall act jointly
with Adelman Lavine Gold and Levin as escrow agent pursuant to the terms of an
escrow agreement (the "Escrow Agreement") to be agreed upon between the parties
hereto and reflecting the provisions of this Section 12. Interest on said
account, and on account of the escrow for transfer taxes, shall be paid to
Contract Vendee.
(ii) Upon the full execution and delivery of each New
Lease by Contract Vendee, PCS&F shall disburse the escrowed funds as follows:
(x) for tenant improvement costs, on a progress basis out of the Tenant
Improvement Fund pursuant to invoices submitted by the general contractor
provided (i) the work is performed in accordance with the applicable New Lease,
(ii) lien waivers are delivered by the appropriate subcontractors and (iii)
Contract Vendee delivers a certificate prior to each disbursement warranting
that the balance of the Tenant Improvement Fund allocable to said New Lease,
after such payment, will be sufficient to complete the tenant improvements under
such New Lease; (y) for brokerage commissions, the amount then due pursuant to
the applicable brokerage agreements against invoices submitted by the brokers
thereunder, and (z) to Contract Vendee, an amount equal to 80% of the Annual
Rent Fund related to such New Lease, unless (i) such New Lease permits the
tenant to terminate the lease as a result of Landlord's failure to complete the
tenant improvements by a date certain or (ii) such New Lease is executed and
delivered less than thirty (30) days prior to the rent commencement date set
forth in Exhibit "H", in which event the total Annual Rent Fund shall remain in
escrow until the balance thereof is otherwise to be released to Contract Vendee
as provided in (iii) below. Notwithstanding anything to the contrary contained
in this subsection 12(a)(ii), if the New Lease(s) are executed and delivered to
Assignee but Contract Vendee or its affiliate, acting as general contractor, has
failed to commence or diligently continue working on the tenant improvements
under such New Lease, Assignee shall have the right to perform the tenant
improvement work required under the New Lease and utilize the Tenant Improvement
Fund for such purpose.
(iii) If the tenant under a New Lease fails to
commence paying rent by the date set forth on Exhibit "H" as a result of
Contract Vendee failing to complete timely the tenant improvements, Assignee may
draw down and retain on a monthly basis the balance of the Annual Rent Fund, to
pay monthly rent until such time as tenant's obligations to pay rent commences.
Thereafter, the balance of the allocable Annual Rent Fund shall be paid to
Contract Vendee. If the tenant under a New Lease is obligated to commence paying
rent by said date, the balance of the allocable Annual Rent Fund shall be paid
to Contract Vendee.
(iv) Assignee hereby consents to Contract Vendee or
its affiliated construction entity performing the tenant improvements on account
of the New Leases. If Contract Vendee or its affiliated construction entity
shall not perform said work, then Assignee shall have the right to select the
contractor therefor.
(v) Contract Vendee shall have the right to submit
requisitions every fourteen (14) days, and PCS&F shall expedite payment on
account of said requisition by wire transfer to Contract Vendee as expeditiously
as possible.
(b) In the event that one or more of the New Leases are
not executed and delivered to Assignee at Closing, then in substitution thereof,
Contract Vendee shall have the nonexclusive right to pursue an alternative lease
(an "Alternative Lease") for each New Lease not so executed and delivered.
Provided the following conditions are met:
(i) the economic term of the Alternative Lease shall
be equal to or more favorable than those set forth in Exhibit "H" for the
corresponding space, including, at Contract Vendee's election, the payment to
Assignee of the monies held in the Annual Rent Fund;
(ii) the creditworthiness of the tenant under the
Alternative Lease shall be equal to or more favorable than the average of the
creditworthiness of the balance of the tenants at the Premises;
(iii) the Alternative Lease is on a form, and contains
terms and conditions, reasonably acceptable to Assignee and Contract Vendee and
shall be comparable to the leases in the marketplace for such tenants;
(iv) the tenant under the Alternative Lease is a bona
fide third party and has executed the Alternative Lease; and
(v) Assignee has not entered into leases for any of
such space,
then the terms and conditions set forth in Section 12(a) applicable to New
Leases shall apply to the Alternative Lease(s). In addition, Contract Vendee's
obligations with respect to such Alternative Lease shall be deemed satisfied,
whether or not Assignee shall enter into said Alternative Lease.
(c) In the event that one or more of the New Lease(s) are
not delivered at Closing and Assignee secures alternative tenants for the
unleased space, Assignee may use the Tenant Improvement Fund and the Brokerage
Fund for their intended purposes but on account of the leases so procured by
Assignee, and shall be entitled to monthly payments, commencing on the dates set
forth in Exhibit "H", from the Annual Rent Fund in the monthly amounts set forth
on Exhibit "I" until the tenant(s) so procured by Assignee commence rental
payments on a regular basis. On such date, any amounts remaining in escrow for
said space shall be released to Contract Vendee. Assignee agrees not to exercise
the rights in this paragraph (c) for a period of four (4) months following the
Closing hereunder.
13. CLOSING.
The closing under this Assignment Agreement shall take place on
or about May 2, 1996 (the "Closing"), at the time and location specified in the
Sales Agreement, unless extended in accordance with this Assignment Agreement.
This transaction shall be consummated simultaneously with the transaction
covered by the Sales Agreement. The Premises shall be conveyed directly from the
Seller to Assignee at the Closing so as to vest title to the Premises in the
Assignee pursuant to the terms of the Sales Agreement.
14. BROKER
Contract Vendee and Assignee represent that they have not dealt
with any brokers, co- brokers, consultants, finders or salesmen except Jackson
Cross Co. (the "Broker") in connection with this Assignment Agreement, and agree
to indemnify, defend and hold each other harmless from and against any and all
loss, cost, damage, liability or expense, including reasonable attorneys' fees,
which they may sustain, incur or be exposed to by reason of any claim for fees
or commissions by any party acting by, through or under the indemnitor. The
commission payable to Broker shall be paid by Contract Vendee. This Section 14
shall survive the Closing or earlier termination of this Assignment Agreement.
15. REMEDIES.
(a) In the event Assignee fails to perform on the
Closing, Assignee's sole liability and Contract Vendee's sole recourse shall be
limited to the amount of the Deposit. Contract Vendee agrees that retention of
the Deposit constitutes fixed and liquidated damages resulting from Assignee's
default, and Contract Vendee waives any other claim, at law or in equity, either
against Assignee or against any person, known or unknown, disclosed or
undisclosed.
(b) (i) If, after complying with the terms of this
Assignment Agreement, Contract Vendee shall be unable to perform in accordance
with the terms of this Assignment Agreement, Contract Vendee shall direct the
Escrow Agent to refund to Assignee the Deposit, whereupon this Assignment
Agreement shall be deemed cancelled and the parties hereto shall be released of
all obligations and liabilities under this Assignment Agreement, except those
that are expressly stated to survive the cancellation or termination of this
Assignment Agreement.
(ii) In the event of any default on the part of Seller
or Contract Vendee, or Seller's or Contract Vendee's failure to comply with any
representation, warranty or agreement in the Sales Agreement or herein,
respectively, which Contract Vendee has failed to cure within ten (10) days
after receipt of written notice from Assignee of such default, Assignee shall be
entitled to (a) terminate this Assignment Agreement upon notice to Contract
Vendee, in which event the Deposit shall be returned by Escrow Agent to Assignee
and neither party shall thereafter have any further obligations under this
Assignment Agreement, (b) commence an action against Seller, Contract Vendee or
both seeking specific performance of Seller's and Contract Vendee's obligations
under the Sales Agreement and this Assignment Agreement, respectively or (c) in
the event of a willful default by Seller under the Sales Agreement, Contract
Vendee under the Assignment Agreement, or both, Assignee may pursue any and all
of its remedies at law or in equity or any combination thereof against the
defaulting party.
16. ESCROW AGREEMENT
The parties agree that the Deposit shall be held by the Escrow
Agent in escrow and disposed of only in accordance with the provisions of this
Section 16. The parties agree that if the Deposit is cash, such cash shall be
invested in an assignable interest-bearing certificate of deposit, money market
fund, treasury bill or other similar security approved by Contract Vendee and
Assignee, and all interest accruing thereon shall be paid to Assignee, except as
otherwise provided herein.
(a) The Escrow Agent will deliver the Deposit to Contract
Vendee or to Assignee, as the case may be, under the following conditions:
(i) To Contract Vendee at Closing;
(ii) To Contract Vendee upon receipt of written demand
therefor, such demand stating that Assignee has defaulted in the performance of
this Assignment Agreement and specifically setting forth the facts and
circumstances underlying such default. The Escrow Agent shall not honor such
demand until more than five (5) days have elapsed after receipt of such demand
by Contract Vendee or Assignee after transmittal by the Escrow Agent, as the
case may be, nor thereafter if the Escrow Agent shall have received written
notice of objection from Assignee in accordance with the provisions of clause
(b) of this Section 16; or
(iii) To Assignee upon receipt of written demand
therefor, such demand stating that this agreement has been terminated in
accordance with the provisions hereof, or Contract Vendee has defaulted in the
performance of this Assignment Agreement, and specifically setting forth the
facts and circumstances underlying the same. The Escrow Agent shall not honor
such demand until more than five (5) days have elapsed after receipt of such
demand to Contract Vendee or Assignee after transmittal by Escrow Agent, as the
case may be, nor thereafter, if the Escrow Agent shall have received written
notice of objection from the other party in accordance with the provisions of
clause (b) of this Section 16.
(b) Upon the filing of a written demand for the Deposit
by Assignee or Contract Vendee, pursuant to subclause (ii) or (iii) of clause
(a) of this Section 16, the Escrow Agent shall promptly mail a copy thereof to
the other party. The other party shall have the right to object to the delivery
of the Deposit by filing written notice of such objection with the Escrow Agent
at any time within five (5) days after receipt of such copy, but not thereafter.
Such notice shall set forth the basis for objecting to the delivery of the
Deposit. Upon receipt of such notice, the Escrow Agent shall promptly mail a
copy thereof to the party who filed the written demand.
(c) In the event the Escrow Agent shall have received the
notice of objection provided for in clause (b) above and within the time therein
prescribed, the Escrow Agent shall continue to hold the Deposit until (i) the
Escrow Agent receives written notice from Contract Vendee and Assignee directing
the disbursement of said Deposit, in which case, the Escrow Agent shall then
disburse said Deposit in accordance with said direction, or (ii) in the event of
litigation between Contract Vendee and Assignee, the Escrow Agent shall deliver
the Deposit to the Clerk of the Court in which said litigation is pending, or
(iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, in
the Escrow Agent's reasonable opinion, elect in order to terminate the Escrow
Agent's duties including, but not limited to, depositing the Deposit with the
Court and bringing an action for interpleader, the costs thereof to be borne by
whichever of Contract Vendee or Assignee is the losing party.
(d) The Escrow Agent may act upon any instrument or other
writing believed by it in good faith to be genuine and to be signed and
presented by the proper person and it shall not be liable in connection with the
performance of any duties imposed upon the Escrow Agent by the provisions of
this Agreement, except for damage caused by the Escrow Agent's own negligence or
willful default. The Escrow Agent shall have no duties or responsibilities
except those set forth herein. The Escrow Agent shall not be bound by any
modification of this agreement, unless the same is in writing and signed by
Assignee and Contract Vendee, and, if the Escrow Agent's duties hereunder are
affected, unless Escrow Agent shall have given prior written consent thereto. In
the event that the Escrow Agent shall be uncertain as to the Escrow Agent's
duties or rights hereunder, or shall receive instructions from Assignee or
Contract Vendee which, in the Escrow Agent's opinion, are in conflict with any
of the provisions hereof, the Escrow Agent shall be entitled to hold and apply
the Deposit pursuant to clause (c) above and may decline to take any other
action. The Escrow Agent shall not charge a fee for its services as escrow
agent.
17. NOTICE
All notices, demands, requests, or other writings in this
agreement provided to be given or made or sent, or which may be given or made or
sent, by either party hereto to the other or by Escrow Agent, shall be in
writing and shall be delivered by depositing the same with any nationally
recognized overnight delivery service, or by telecopy or fax machine, in either
event with all transmittal fees prepaid, properly addressed, and sent to the
following addresses:
If to Assignee: Cal-Tree Realty Associates L.P.
c/o Cali Realty Acquisition Corporation
11 Commercial Drive
Cranford, New Jersey 07016
Attn: John J. Cali and Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Andrew S. Levine, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
(212) 326-0414 (tele.)
(212) 326-0806 (fax)
If to Contract Vendee: J. Brian O'Neill
443 South Gulph Road
King of Prussia, Pennsylvania 19406
(610) 962-5101 (tele.)
(610) 962-5108 (fax)
with a copy to: Kevin W. Walsh, Esq.
Adelman Lavine Gold and Levin
Suite 1900
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
(215) 568-7515 (tele.)
(215) 557-7922 (fax)
If to Escrow Agent: First American Title Insurance Company
228 East 45th Street
New York, New York 10017
Attention: Escrow Department
(212) 922-9700 (tele.)
(212) 922-0881 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided same is sent prior to 4:00 p.m. on a business day (if sent later, then
notice shall be deemed given on the next business day) and if the sending party
receives a written send verification on its machines and forwards a copy thereof
by regular mail accompanied by such notice or communication. Notices may be
given by counsel for the parties described above, and such Notices shall be
deemed given by Assignee or Contract Vendee, as the case may be, for all
purposes hereunder.
18. MISCELLANEOUS
(a) If any instrument or deposit is reasonably necessary
in order to obviate a defect in or objection or exception to title, the
following shall apply: (i) any such instrument shall be in such form and shall
contain such terms and conditions as may be reasonably required by the Title
Company to omit any defect, objection or exception to title, (ii) any such
deposit shall be made with the title company, and (iii) Contract Vendee agrees
to execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any such instrument and to make any such deposit.
(b) This Assignment Agreement constitutes the entire
agreement between the parties and incorporates and supersedes all prior
negotiations and discussions between the parties.
(c) This Assignment Agreement cannot be amended, waived
or terminated orally, but only by an agreement in writing signed by the party to
be charged.
(d) This Assignment Agreement shall be interpreted and
governed by the laws of the Commonwealth of Pennsylvania and shall be binding
upon the parties hereto and their respective successors and assigns.
(e) Whenever in this Assignment Agreement there is a
provision for the return of the Deposit, the provision shall be deemed to
include all interest earned thereon and paid to Assignee.
(f) The caption headings in this Assignment Agreement are
for convenience only and are not intended to be part of this agreement and shall
not be construed to modify, explain or alter any of the terms, covenants or
conditions herein contained.
(g) If any term, covenant or condition of this agreement
is held to be invalid, illegal or unenforceable in any respect, this agreement
shall be construed without such provision.
(h) Each party shall, from time to time, execute,
acknowledge and deliver such further instruments, and perform such additional
acts, as the other party may reasonably request in order to effectuate the
intent of this agreement. Nothing contained in this Assignment Agreement shall
be deemed to create any rights or obligations of partnership, joint venture or
similar association between Contract Vendee and Assignee. This Assignment
Agreement shall be given a fair and reasonable construction in accordance with
the intentions of the parties hereto, and without regard to or aid of canons
requiring construction against Contract Vendee, Assignee or the party whose
counsel drafted this agreement.
(i) This Assignment Agreement shall not be effective or
binding until such time as it has been executed and delivered by all parties
hereto. This Assignment Agreement may be executed by the parties hereto in
counterparts, all of which together shall constitute a single agreement.
(j) This Assignment Agreement shall not create any rights
in any third parties against Assignee not otherwise heretofore in existence.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this agreement as
of the day and year first above written.
CONTRACT VENDEE:
BRYEMERE, L.P.
By: Bryemere Estate Planning and Construction, Inc.
By: _____/s/____________________________
Name: J. Brian O'Neill
Title:
ASSIGNEE:
CAL-TREE REALTY ASSOCIATES L.P.
By: Cali Sub VIII, Inc.
By: /s/
Name: Roger W. Thomas
Title: Vice President - General Counsel
ACKNOWLEDGED FOR JOINDER PURPOSES
AS TO SECTIONS 4(a)(vi) and 4(a)(vii) ONLY:
BERWIND PROPERTY GROUP, INC.
By: /s/
Name: Stephen M. Spaeder
Title: Vice President
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
By:
Name:
Title:
<PAGE>
LIST OF EXHIBITS
Exhibit "A" - Property Description
Exhibit "B" - Form of Assignment of Sale and Purchase Agreement, as amended
Exhibit "C" - Sale and Purchase Agreement, as amended
Exhibit "D" - Schedule of Litigation/Proceedings
Exhibit "E" - Additional Leases
Exhibit "F" - Schedule of Leasing Commissions for Renewals or Expansions
of Additional Leases
Exhibit "G" - Schedule of Leasing Commissions for Renewals or Expansions of
Tenant Leases
Exhibit "H" - Economic Terms of the New Leases
Exhibit "I" - Tenant Improvements, Brokerage Commissions and Annual
Rent under the New Leases
<PAGE>
EXHIBIT "A"
(Property Description)
<PAGE>
EXHIBIT "B"
(Form of Assignment of Sale and Purchase Agreement, as amended)
<PAGE>
ASSIGNMENT OF CONTRACT OF SALE
THIS ASSIGNMENT OF CONTRACT OF SALE (the "Assignment") dated
this ___ day of April, 1996, made by J. BRIAN O'NEILL, having an address c/o 443
South Gulph Road, King of Prussia, PA 19406 ("Assignor").
FOR AND IN CONSIDERATION of Ten ($10.00) Dollars and other good
and valuable consideration paid by CAL-TREE REALTY ASSOCIATES L.P., a
Pennsylvania limited partnership having an address c/o Cali Realty Corporation,
11 Commerce Drive, Cranford, New Jersey 07016 ("Assignee") to Assignor, receipt
of which is acknowledged, Assignor hereby assigns, sets over and transfers unto
Assignee all of its right, title and interest in and to that certain Agreement
of Sale and Purchase dated as of February 28, 1996, as amended by that certain
Amendment to Agreement of Sale and Purchase dated April ___, 1996 (collectively,
the "Agreement") made by and between Adwin Realty Company, as seller, and
Assignor, as purchaser, pursuant to which Assignor agreed to acquire certain
real property located at 1400 North Providence Road, Media, Pennsylvania (as
more particularly described in the Agreement).
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns forever from and after the effective date of this Assignment.
IN WITNESS WHEREOF, Assignor has executed this Assignment the
day and year first above written.
--------------------------
J. Brain O'Neill
<PAGE>
EXHIBIT "C"
(Agreement of Sale and Purchase, as amended)
<PAGE>
EXHIBIT "D"
(Schedule of Litigation/Proceedings)
None
<PAGE>
EXHIBIT "E"
(Additional Leases)
<PAGE>
EXHIBIT "F"
(Schedule of Leasing Commissions for Renewals or
Expansions of Additional Leases)
<PAGE>
EXHIBIT "G"
(Schedule of Leasing Commissions for Renewals or Expansions of Tenant Leases)
<PAGE>
EXHIBIT "H"
(Economic Terms of the New Leases)
<PAGE>
EXHIBIT "I"
(Tenant Improvements, Brokerage Commissions and Annual Rent under New Leases)
ASSIGNMENT
THIS ASSIGNMENT (the "Assignment") is made as of this 1st day of May,
1996 by and between J. BRIAN O'NEILL (the "Assignor"), and BRYEMERE, L.P., a
Pennsylvania limited partnership (the "Assignee").
BACKGROUND
A. The Assignor and Adwin Realty Company, a Pennsylvania corporation,
and LBA Associates, a Pennsylvania general partnership, are parties to a certain
Agreement of Sale and Purchase dated as of February 28, 1996 (the "Purchase
Agreement").
B. Assignor desires to assign to the Assignee, and the Assignee desires
to accept from the Assignor, all of the Assignor's right, title and interest in
and to the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing background and of the
mutual promises of the parties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Assignor and the Assignee, intending to be legally bound, hereby agree as
follows:
1. Assignment. The Assignor hereby assigns, transfers, sells and
conveys all of his right, title and interest in and to the Purchase Agreement to
the Assignee.
2. Acceptance of Assignment. The Assignee hereby accepts the assignment
by the Assignor of all of the Assignor's right, title and interest in and to
Purchase Agreement and assumes all of the Assignor's obligations under the
Purchase Agreement.
3. Pennsylvania Jurisdiction and Law. This Assignment shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania. The parties hereto agree that sole and exclusive jurisdiction over
and proper venue relating to any controversy or claim arising out of or relating
to this Assignment or the breach thereof shall reside in the United States
District Court for the Eastern District of Pennsylvania. This Assignment shall
be construed without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
4. Successors and Assigns. This Assignment shall inure to the benefit
of, and be binding upon, the heirs, executors, administrators, successors and
assigns of the respective parties hereto.
5. Headings. Paragraph and Section headings herein shall have
absolutely no legal significance and are used solely for convenience and
reference.
6. Counterparts. This Assignment may be executed in one (1) or more
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one (1) and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment to be executed as of the date and year first above written.
ASSIGNOR:
/S/
J. BRIAN O'NEILL
ASSIGNEE:
BRYEMERE, L.P., a Pennsylvania limited
partnership
BY: BRYEMERE ESTATE PLANNING
AND CONSTRUCTION, INC., a
Delaware corporation,
Its General Partner
BY: /S/
J. BRIAN O'NEILL, President
CONSENTED TO AND AGREED:
ADWIN REALTY COMPANY,
a Pennsylvania corporation
BY: /S/
ANNAMARIE C. DONLEY,
Vice-President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
LBA ASSOCIATES,
a Pennsylvania general partnership
BY: ADWIN REALTY COMPANY,
a Pennsylvania corporation,
a General Partner
BY: /S/
ANNAMARIE C. DONLEY,
Vice-President
BY: ADWIN INVESTMENT CO.,
a Pennsylvania corporation,
a General Partner
BY: /S/
ANNAMARIE C. DONLEY,
Vice-President
AMENDMENT TO AGREEMENT OF ASSIGNMENT OF REAL ESTATE SALE AGREEMENT (the
"Assignment Agreement") entered into this 2nd day of May, 1996, between
BRYEMERE, L.P., a Pennsylvania limited partnership ("L.P."), having an office
c/o 443 South Gulph Road, King of Prussia, Pennsylvania 19406 and CAL-TREE
REALTY ASSOCIATES L.P. ("Assignee"), a Pennsylvania limited partnership having
an office c/o Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey
07016.
W I T N E S S E T H:
WHEREAS, J. Brian O'Neill ("O'Neill") and Assignee entered into a
certain Agreement of Assignment of Real Estate Agreement dated April 26, 1996
(the "Original Agreement") with respect to certain premises known as 1400
Providence Road, Media, Delaware County, Pennsylvania and more particularly
described in Exhibit "A" annexed hereto ("Premises"); and
WHEREAS, O'Neill is by agreement of even date herewith assigning all of
his right, title and interest in and to the Original Agreement to L.P.; and
WHEREAS, L.P. and Assignee have agreed to certain modifications to the
Original Agreement as provided below.
NOW, THEREFORE, in consideration of the Premises and the mutual
covenants expressed herein, the parties hereto hereby agree as follows:
1. The Assignment Price is Five Million Six Hundred Thousand
($5,600,000) Dollars.
2. The Credit is Zero ($0.00) Dollars
3. The full Assignment Price is being wire transferred this date by
Assignee to Escrow Agent, and will be further disbursed by Escrow Agent pursuant
to joint disbursement instructions being provided to Escrow Agent.
4. BPG has consented to the transaction contemplated by the Original
Agreement so long as said transaction is consummated and funded prior to the
close of business on May 2, 1996.
5. All terms used and not defined herein shall be as defined in the
Original Agreement.
6. Except as modified hereby, the Original Agreement is hereby
confirmed and ratified in all respects.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
BRYEMERE, L.P.
By: Bryemere Estate Planning and Construction, Inc.
By: ___/s/______________________________
Name: Kevin W. Walsh
Title: Assistant Secretary
CAL-TREE REALTY ASSOCIATES L.P.
By: Cali Sub VIII, Inc.
By: /s/
Name: Roger Thomas
Title: Vice President - General Counsel
ACKNOWLEDGED FOR JOINDER PURPOSES:
BERWIND PROPERTY GROUP, INC.
By: /s/
Name: Stephen M. Spaeder
Title: Vice President
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
By:
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,947
<SECURITIES> 0
<RECEIVABLES> 1,982
<ALLOWANCES> 176
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 392,352
<DEPRECIATION> 58,431
<TOTAL-ASSETS> 371,731
<CURRENT-LIABILITIES> 0
<BONDS> 137,741
0
0
<COMMON> 152
<OTHER-SE> 189,779
<TOTAL-LIABILITY-AND-EQUITY> 371,731
<SALES> 0
<TOTAL-REVENUES> 19,571
<CGS> 0
<TOTAL-COSTS> 12,507
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,569
<INCOME-PRETAX> 6,128
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,316
<DISCONTINUED> 0
<EXTRAORDINARY> (475)
<CHANGES> 0
<NET-INCOME> 9,499
<EPS-PRIMARY> .63
<EPS-DILUTED> .63
</TABLE>
