Exhibit 10.2
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(New Jersey)
CONTRIBUTION AGREEMENT
among
▇▇▇▇▇▇▇▇ PROPERTIES ACQUISITION PARTNERS, L.P.,
a Delaware limited partnership
and
WOODLAND FALLS ASSOCIATES-I LIMITED PARTNERSHIP
WOODLAND FALLS ASSOCIATES-III LIMITED PARTNERSHIP
WOODLAND FALLS ASSOCIATES-IV LIMITED PARTNERSHIP
LAKE CENTER ASSOCIATES-II LIMITED PARTNERSHIP
LAKE CENTER ASSOCIATES-IV LIMITED PARTNERSHIP
TERRAMICS/CENTERPOINTE ASSOCIATES LIMITED PARTNERSHIP
all of which are New Jersey limited partnerships
and
TERRAMICS PROPERTY ASSOCIATES, a Pennsylvania limited partnership
TPC INVESTORS I LIMITED PARTNERSHIP, a Pennsylvania limited partnership
TERRAMICS/JK LIMITED PARTNERSHIP, a Pennsylvania limited partnership
TERRAMICS/WOODLAND LIMITED PARTNERSHIP, a New Jersey limited partnership
TERRAMICS EQUITY LIMITED PARTNERSHIP, a New Jersey limited partnership
TABLE OF CONTENTS
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Page
ARTICLE I. DEFINITIONS........................................................4
1.1 Definitions.......................................................4
ARTICLE II. TRANSFER OF PROPERTY; DEPOSIT; ACCOUNTING FOR CONTRIBUTION VALUE;
STUDY PERIOD.....................................................10
2.1 Transfer of Property.............................................10
2.2 Transfer Procedures.............................................10
2.3 Deposit..........................................................12
2.4 Study Period.....................................................12
ARTICLE III. PARTNERSHIPS' AND CONTRIBUTORS' REPRESENTATIONS AND
WARRANTIES......................................................16
3.1 Organization and Power...........................................17
3.2 Authorization, Execution and Disclosure..........................17
3.3 Non-contravention................................................17
3.4 No Special Taxes.................................................18
3.5 Compliance with Existing Laws....................................18
3.6 Personal Property................................................18
3.7 Operating Agreements.............................................18
3.8 Condemnation Proceedings; Roadways...............................18
3.9 Actions or Proceedings...........................................19
3.10 Labor and Employment Matters....................................19
3.11 Financial Information and Submission Matters....................19
3.12 Bankruptcy......................................................19
3.13 Hazardous Substances............................................19
3.14 Parties in Possession...........................................20
3.15 Leases..........................................................20
3.16 Leased Property.................................................20
3.17 No Unpaid Charges...............................................20
3.18 Condition of Improvements.......................................20
3.19 Access..........................................................20
3.20 No Commitments..................................................20
3.21 "Foreign Person.................................................21
3.22 Leasing Commissions.............................................21
3.23 Other Agreements................................................21
3.24 Partners........................................................21
3.25 Existing Secured Indebtedness...................................21
3.26 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES...................22
ARTICLE IV. ▇▇▇▇▇▇▇▇' REPRESENTATIONS AND WARRANTIES.........................23
4.1 Organization and Power...........................................23
4.2 Non-contravention................................................24
4.3 Litigation.......................................................24
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4.4 Bankruptcy.......................................................24
4.5 Issuance of Units................................................24
4.6 Securities Filings..............................................24
4.7 Absence of Certain Changes or Events.............................25
ARTICLE V. CONDITIONS PRECEDENT..............................................25
5.1 As to ▇▇▇▇▇▇▇▇' Obligations......................................25
5.2 As to Contributors' Obligations..................................29
ARTICLE VI. COVENANTS OF PARTNERSHIPS AND CONTRIBUTORS.......................30
6.1 Operating Agreements.............................................30
6.2 Warranties and Guaranties........................................30
6.3 Insurance........................................................30
6.4 Independent Audit................................................30
6.5 Operation of Property Prior to Closing...........................31
6.6 No Marketing.....................................................32
6.7 Prospective Subscriber Questionnaires............................32
6.8 Delivery of Tax Information......................................33
6.9 Information Regarding the Restrictions on Beneficial
Ownership of Units...............................................33
6.10 Partnership Agreement...........................................33
6.11 Use of Name "Terramics..........................................33
6.12 Partnership Interests...........................................33
ARTICLE VII. CLOSING.........................................................34
7.1 Closing..........................................................34
7.2 Partnership's Deliveries.........................................34
7.3 ▇▇▇▇▇▇▇▇' Deliveries.............................................38
7.4 Mutual Deliveries................................................38
7.5 Closing Costs....................................................39
7.6 Revenue and Expense Allocations..................................39
7.7 Delinquent Rents.................................................40
7.8 Costs Associated with Certain Leasing Activities.................40
ARTICLE VIII. GENERAL PROVISIONS.............................................41
8.1 Condemnation.....................................................41
8.2 Risk of Loss.....................................................41
8.3 Broker...........................................................42
8.4 Bulk Sale........................................................42
8.5 Confidentiality..................................................42
ARTICLE IX. LIABILITY OF PARTIES; DEFAULT; TERMINATION RIGHTS................43
9.1 Liability of ▇▇▇▇▇▇▇▇............................................43
9.2 Default by Partnership/Failure of Conditions Precedent...........43
9.3 Indemnification by ▇▇▇▇▇▇▇▇......................................44
9.4 Default by ▇▇▇▇▇▇▇▇/Failure of Conditions Precedent..............44
9.5 Costs and Attorneys' Fees........................................44
9.6 Limitation of Liability..........................................45
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ARTICLE X. MISCELLANEOUS PROVISIONS..........................................45
10.1 Completeness; Modification......................................45
10.2 Assignments.....................................................45
10.3 Successors and Assigns..........................................45
10.4 Days............................................................45
10.5 Governing Law...................................................46
10.6 Counterparts....................................................46
10.7 Severability....................................................46
10.8 Costs...........................................................46
10.9 Notices.........................................................46
10.10 Escrow Agent...................................................47
10.11 Incorporation by Reference.....................................47
10.12 Survival.......................................................48
10.13 Further Assurances.............................................48
10.14 No Partnership.................................................48
10.15 Time of Essence................................................48
10.16 Signatory Exculpation..........................................48
10.17 Rules of Construction..........................................48
EXHIBITS
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Exhibit A - Land
Exhibit B - Surveyor's Certificate
Exhibit C - Prospective Subscriber Questionnaire
Exhibit D - Existing Secured Indebtedness
Exhibit E - Registration Rights Agreement
Exhibit F - Limited Partner Signature Page
Exhibit G - Not Used
Exhibit H - ▇▇▇▇ of Sale
Exhibit I - Assignment and Assumption Agreement
Exhibit J - Assignment of Leases
Exhibit K - Tenant's Estoppel Certificate
Exhibit L - Permitted Title Exceptions
Exhibit M - Non-Included Assets
SCHEDULES
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Schedule 1.1 - Excluded Partnership Property
Schedule 2 - Defects in Condition of Improvements
Schedule 2.2(a) - Contribution Value allocations including Unit allocations
Schedule 3 - Lease Agreements
Schedule 3.4 - Special Taxes and Assessments
Schedule 3.5 - Qualifications to Legal Compliance
Schedule 3.13 - Underground Storage Tanks
Schedule 4 - Operating Agreements
Schedule 6.5(g) - New Leases Which Have Been Preapproved by ▇▇▇▇▇▇▇▇
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CONTRIBUTION AGREEMENT
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THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of this _____
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day of September, 1997 among ▇▇▇▇▇▇▇▇ PROPERTIES ACQUISITION PARTNERS, L.P., a
Delaware limited partnership ("▇▇▇▇▇▇▇▇") and WOODLAND FALLS ASSOCIATES-I
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LIMITED PARTNERSHIP, WOODLAND FALLS ASSOCIATES-III LIMITED PARTNERSHIP, WOODLAND
FALLS ASSOCIATES-IV LIMITED PARTNERSHIP, LAKE CENTER ASSOCIATES-II LIMITED
PARTNERSHIP, LAKE CENTER ASSOCIATES-IV LIMITED PARTNERSHIP, and
TERRAMICS/CENTERPOINTE ASSOCIATES LIMITED PARTNERSHIP, all of which are New
Jersey limited partnerships (collectively, the "Partnerships" and each, a
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"Partnership"), and TERRAMICS PROPERTY ASSOCIATES, a Pennsylvania limited
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partnership, TPC INVESTORS I LIMITED PARTNERSHIP, a Pennsylvania limited
partnership, TERRAMICS/JK LIMITED PARTNERSHIP, a Pennsylvania limited
partnership, TERRAMICS/WOODLAND LIMITED PARTNERSHIP, a New Jersey limited
partnership, and TERRAMICS EQUITY LIMITED PARTNERSHIP, a New Jersey limited
partnership, all of which are Pennsylvania limited partnerships (collectively,
the "Contributors" and each, a "Contributor"), with joinders by ▇▇▇▇▇▇▇▇
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PROPERTIES TRUST, a Maryland real estate investment trust ("Company"), and
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▇▇▇▇▇▇▇▇ PROPERTIES I, INC., a Delaware corporation ("OP General Partner").
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R E C I T A T I O N S:
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A. Each Partnership is the owner of a fee estate in certain land and
improvements in the State of New Jersey which collectively comprise the office
building projects commonly known as "Woodland Falls" (in Cherry Hill Township,
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Camden County), "Lake Center" (in Evesham Township, Burlington County), and
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"Centerpointe" (in Mount Laurel Township, Burlington County). A description of
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the land upon which each such project is situate (hereinafter defined and
referred to as the "Land"), and the identification of each Partnership owner
----
thereof is set forth on Exhibit A attached hereto. Each Contributor is, or will
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on or prior to Closing become, a partner in one or more of the Partnerships, and
the Contributors are or will on or prior to Closing collectively comprise all of
the general and limited partners of the Partnerships other than OTR. Terramics
Property Associates is the sole general partner of each Partnership.
B. OTR, an Ohio general partnership acting on behalf of The State
Teachers Retirement Board of Ohio ("OTR"), owns an 89.999% limited partnership
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interest in each Partnership as of the date hereof.
C. On the Closing Date (as hereinafter defined), ▇▇▇▇▇▇▇▇ will acquire
OTR's 89.999% limited partnership interest in each Partnership and in seven (7)
other affiliated partnerships pursuant to an Agreement to Acquire Limited
Partnership Interests dated September ___, 1997 between ▇▇▇▇▇▇▇▇ and OTR (the
"OTR Agreement").
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▇. ▇▇▇▇▇▇▇▇ is desirous of acquiring all of the partnership interests
of Contributors in the Partnerships and their corresponding right, title and
interest in the Property, and the Contributors are desirous of contributing such
interests to ▇▇▇▇▇▇▇▇, for the Contribution Value and upon the terms and
conditions hereinafter set forth. In connection therewith, Contributors have
caused Partnerships to furnish certain certifications, representations and
warranties required.
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by ▇▇▇▇▇▇▇▇ as a condition to the transactions referred to herein, with the
understanding, however, that recourse for any default, misrepresentation or
breach of warranty by a Partnership shall be governed by the provisions of
Recitation Paragraph E below.
E. This Agreement encompasses obligations, rights, covenants,
representations, warranties, actions and conditions (collectively,
"Undertakings") applicable to all of the Contributors and Partnerships, and it
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is understood that performance by all Contributors and Partnerships shall be
required by ▇▇▇▇▇▇▇▇ as set forth herein. However, each Contributor and
Partnership has executed this Agreement only with respect to its separate
partnership interests, property interests and/or rights. For purposes of
convenience, references in this Agreement to "Partnership" or "Contributor"
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shall mean each Partnership or Contributor, acting in its own separate capacity,
regardless of whether a particular referenced document or action may also
encompass similar requirements on the part of the other Partnerships or
Contributors. In such connection, it is acknowledged that (i) each Partnership
and each Contributor shall have responsibility under this Agreement only for its
own Undertakings, and in no event shall any Partnership or Contributor be liable
or responsible for any of the Undertakings of any other Partnership or
Contributor (except to the extent of the specific conditions to ▇▇▇▇▇▇▇▇'
obligations as set forth herein and except to the extent of the sharing of
responsibility for Partnership obligations as hereinafter set forth in this
Paragraph), (ii) any Undertakings of a Partnership or Contributor under this
Agreement which relate or refer to the "Partnership," "Property," "Real
----------- -------- ----
Property," "Land," or any other real or personal property or rights or interests
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therein, shall in fact apply, relate and refer only to the partnership
interests, property or property interests which are owned by, or which are for
the benefit of, the particular Partnership or Contributor in question and not
any of the other Partnerships or Contributors, (iii) as among Contributors, it
has been agreed and it is herein confirmed that liability for any Undertakings
of a Partnership is to shared by Contributors having ownership interests in such
Partnership in proportion to their respective partnership interests therein, but
neither this provision nor any other provision of this Agreement is intended to
otherwise alter the status or liability of any general or limited partner of a
Partnership as provided in the relevant limited partnership act of New Jersey,
(iv) any cure of any breach of warranty or misrepresentation by a Partnership or
of any failure by a Partnership to perform a Partnership's obligations under
this Agreement, whether such cure is effectuated prior to or after Closing,
shall be effectuated so as to impact only the Excluded Partnership Property and
Liabilities (as hereinafter defined), and in no event so as to diminish, reduce
or adversely affect any of the assets of the Partnerships which are intended to
be owned by the Partnerships upon Closing, it being understood that Contributors
shall be obligated to make such contributions or to take such other action as
may be necessary to comply with this requirement, and (v) with respect to the
defined terms "Partnership" or "Partnerships," the singular and plural may be
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used interchangeably, consistent with the provisions of this Recitation
Paragraph E and the preceding Paragraph D.
NOW, THEREFORE, in consideration of the foregoing premises (all of
which are hereby incorporated into this Agreement as a part thereof) and in
consideration of the mutual covenants, promises and undertakings of the parties
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties, it is
agreed:
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ARTICLE I.
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DEFINITIONS
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1.1 Definitions. The following terms shall have the indicated meanings:
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"Act of Bankruptcy" shall mean if a party hereto or any general
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partner thereof shall (a) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general assignment for
the benefit of its creditors, (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), (e) be adjudicated a bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if a proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof, in any
court of competent jurisdiction seeking (1) the liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of debts, of such
party or general partner, (2) the appointment of a receiver, custodian, trustee
or liquidator for such party or general partner or all or any substantial part
of its assets, or (3) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed for a period of sixty
(60) consecutive days; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereafter in
effect) judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60)
consecutive days.
"Applicable Laws" shall mean any applicable building, zoning,
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subdivision, environmental, health, safety or other governmental laws, statutes,
ordinances, resolutions, rules, codes, regulations, orders or determinations of
any Governmental Authority or of any insurance boards of underwriters (or other
body exercising similar functions), or any restrictive covenants or deed
restrictions affecting the Property or the ownership, operation, use,
maintenance or condition thereof (provided that there shall not be deemed to be
a violation of, or noncompliance with, a restrictive covenant or deed
restriction if ▇▇▇▇▇▇▇▇ shall obtain insurance against loss or damage by reason
of such violation or noncompliance from the Title Company).
"Assignment and Assumption Agreement" shall mean one or more
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assignment and assumption agreements whereby (a) Contributor (1) relinquishes
and assigns to Partnership and ▇▇▇▇▇▇▇▇ all right, title and interest which
Contributor may have in the Operating Agreements that have not been terminated
prior to Closing in accordance herewith, (2) relinquishes and assigns to
Partnership and ▇▇▇▇▇▇▇▇ all of Contributor's right, title and interest in and
to the Intangible Personal Property, to the extent assignable, and (3)
indemnifies, defends and holds ▇▇▇▇▇▇▇▇ and its agents, employees, officers,
directors, shareholders and contractors harmless with respect to all
liabilities, claims, costs and expenses (including, without limitation,
reasonable attorneys' fees) arising out of defaults by Partnership under such
Operating Agreements accruing and occurring
4
before the Closing Date; and (b) ▇▇▇▇▇▇▇▇ indemnifies, defends and holds
Contributor harmless with respect to all liabilities, claims, costs and expenses
(including, without limitation, reasonable attorneys' fees) arising out of
defaults by ▇▇▇▇▇▇▇▇ under such Operating Agreements accruing and occurring from
and after the Closing Date, which assignment and assumption agreement shall be
in the form of Exhibit I hereto.
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"Assignment of Leases" shall mean the assignment agreement, in
--------------------
recordable form, whereby (a) Contributor (1) relinquishes and assigns to
Partnership and ▇▇▇▇▇▇▇▇ all right, title and interest which Contributor may
have in and to the Leases, and (2) indemnifies, defends and holds ▇▇▇▇▇▇▇▇ and
its agents, employees, officers, directors, shareholders and contractors
harmless with respect to all liabilities, claims, costs and expenses (including,
without limitation, reasonable attorneys' fees) relating to defaults by
Partnership under such Leases occurring or accruing before the Closing Date; and
(b) ▇▇▇▇▇▇▇▇ indemnifies, defends and holds Contributor harmless with respect to
all liabilities, claims, costs and expenses (including, without limitation,
reasonable attorneys' fees) arising out of defaults by ▇▇▇▇▇▇▇▇ under such
Leases occurring and accruing from and after the Closing Date, which assignment
agreement shall be in the form of Exhibit J hereto.
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"Authorizations" shall mean all licenses, permits and
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approvals required by any governmental or quasi-governmental agency, body,
department, commission, board, bureau, instrumentality or officer, or otherwise
appropriate with respect to the construction, ownership, operation, leasing,
maintenance, or use of the Property or any part thereof.
"▇▇▇▇ of Sale - Personal Property" shall mean one or more
--------------------------------
bills of sale relinquishing and conveying to Partnership and ▇▇▇▇▇▇▇▇ all right,
title and interest which Contributor may have in the Tangible Personal Property
and the Intangible Personal Property, which ▇▇▇▇ of sale shall be in the form of
Exhibit H hereto.
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"Broker" shall mean Realty Capital International, Inc.
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"Closing" shall mean the Closing of the transfer to ▇▇▇▇▇▇▇▇
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of the interests in the Partnerships and Property pursuant to this Agreement.
"Closing Date" shall mean the date on which the Closing
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occurs.
"Closing Documents" shall mean the documents defined as such
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in Section 7.1 hereof.
"Company" shall mean ▇▇▇▇▇▇▇▇ Properties Trust, a Maryland
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real estate investment trust.
"Contribution Value" shall mean the respective amounts
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allocable to each Contributor to be acquired pursuant to this Agreement as are
set forth on Schedule 2.2(a) hereto, and which shall be payable in the manner
described in Section 2.2 hereof.
"Contributor's and Partnership's Organizational Documents"
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shall mean the current partnership agreement and certificate of limited
partnership and all amendments thereto of each Contributor and Partnership and
the articles of incorporation and bylaws and all amendments
5
thereto or partnership agreement and all amendments thereto, as applicable of
Contributor's and Partnership's general partners.
"Deposit" shall mean all amounts deposited from time to time
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with Escrow Agent by ▇▇▇▇▇▇▇▇ pursuant to Section 2.3 hereof, plus all interest
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or other earnings that may accrue thereon. All cash Deposits shall be invested
by Escrow Agent in a commercial bank or banks acceptable to ▇▇▇▇▇▇▇▇ at money
market rates, or in such other investments as shall be approved in writing by
the Contributors and ▇▇▇▇▇▇▇▇. The Deposit shall be held and disbursed by Escrow
Agent in strict accordance with the terms and provisions of this Agreement.
"Environmental Damages" shall mean all third-party claims,
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judgments, damages, losses, penalties, fines, liabilities (including, without
limitation, punitive damages and strict liability), encumbrances, liens, costs
and expenses of investigation and defense of any claim, whether or not such is
ultimately defeated, and of any settlement or judgment, of whatever kind or
nature, contingent or otherwise, matured or unmatured, including, without
limitation, attorneys' fees and disbursements and consultants' fees, any of
which arise as a result of the existence of Hazardous Materials upon, about or
beneath the Property or migrating or threatening to migrate from the Property,
or as a result of the existence of a violation of Environmental Requirements
pertaining to the Property.
"Environmental Requirements" shall mean (i) all applicable
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statutes, regulations, rules, policies, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, and similar items, of all Governmental
Authorities, and (ii) all judicial, administrative and regulatory decrees,
judgments and orders, in each case of (i) and (ii) relating to the protection of
human health or the environment from Hazardous Materials and health and safety
of employees or the public from Hazardous Materials, including, without
limitation, all requirements thereof pertaining to reporting, licensing,
permitting, investigation and remediation of emissions, discharges, releases or
threatened releases of Hazardous Materials into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
"Escrow Agent" shall mean Chicago Title Insurance Company,
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whose address is ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"Excluded Assets" shall mean the real property subject to the
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Right of First Opportunities Agreements.
"Excluded Partnership Property and Liabilities" shall mean the
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assets, rights, liabilities and obligations of the Partnerships relating to the
operation, management, development and ownership of the Property prior to
Closing which are to be distributed, assigned, or assumed to or by Contributors
prior to Closing as set forth in Section 7.1 below.
"Existing Liens" shall have the meaning ascribed to such term
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in Section 2.2 hereof.
"Existing Notes" shall have the meaning ascribed to such term
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in Section 2.2 hereof.
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"Existing Secured Indebtedness" shall mean that certain
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indebtedness secured by liens, assignments or security interests, encumbering
the Property which will not be discharged at Closing pursuant to the provisions
of this Agreement, which Existing Secured Indebtedness is described on Exhibit D
attached hereto and made a part hereof.
"Financial Information" shall mean the financial information
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defined as such in Section 3.11 hereof.
"FIRPTA Certificate" shall mean the affidavit of Contributor
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under Section 1445 of the Internal Revenue Code, as amended, certifying that
Contributor is not a foreign corporation, foreign partnership, foreign trust,
foreign estate or foreign person (as those terms are defined in the Internal
Revenue Code and regulations promulgated thereunder), in form and substance
satisfactory to ▇▇▇▇▇▇▇▇.
"Governmental Authority" shall mean any federal, state,
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county, municipal or other government or any governmental or quasi-governmental
agency, department, commission, board, bureau, officer or instrumentality,
foreign or domestic, or any of them.
"Hazardous Materials" shall mean any chemical substance: (i)
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which is or becomes defined as a "hazardous substance," "hazardous waste,"
"hazardous material," "pollutant," "contaminant," or "toxic," "explosive,"
"corrosive," "flammable," "infectious," "radioactive," "carcinogenic," or
"mutagenic" material under any law, regulation, rule, order, or other authority
of the federal, state or local governments, or any agency, department,
commission, board, or instrumentality thereof, regarding the protection of human
health or the environment from such chemical substances including, but not
limited to, the following federal laws and their amendments, analogous state and
local laws, and any regulations promulgated thereunder: the Clean Air Act, the
Clean Water Act, the Oil Pollution Control Act, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1986, the Emergency Planning and
Community Right to Know Act, the Solid Waste Disposal Act, the Resource
Conservation and Recovery Act, the Safe Drinking Water Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Toxic Substances Control
Act, including, without limitation, asbestos and gasoline and other petroleum
products (including crude oil or any fraction thereof); (ii) which contains
gasoline, diesel fuel or other petroleum hydrocarbons; (iii) which contains
drinking biphenyls or asbestos or asbestos-containing materials or urea
formaldehyde foam insulation; or (iv) consisting of radon gas; provided,
however, the term "Hazardous Materials" shall not include substances of kinds
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and in amounts ordinarily and customarily used or stored in properties similar
to the Property for the purposes of cleaning or other maintenance or operations
and otherwise in compliance with Environmental Requirements.
"Improvements" shall mean all buildings, improvements,
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fixtures and other items of real estate located on the Land.
"Insurance Policies" shall mean all policies of insurance
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maintained by or on behalf of Partnership pertaining to the Property, its
operation, or any part thereof.
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"Intangible Personal Property" shall mean all intangible
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personal property owned or possessed by Partnership and used in connection with
the ownership, operation, leasing, occupancy or maintenance of the Property,
including, without limitation, (1) Partnership's and Contributor's exclusive
right to use the trade name "Terramics" and all variations thereof, with the
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understanding, however, that (i) Contributors and affiliates of Partnerships
and/or the partners thereof will have the continuing right to use such trade
name solely in connection with the use of the current name of the entity or
entities owning the Excluded Assets or the Non-Included Assets and for
regulatory or statutory compliance with respect to any of such assets or
entities owning such assets, and (ii) Partnerships and/or the partners thereof
shall have the continuing right to use such trade name solely in connection with
the collection of accounts receivable (provided, from and after the Closing
Date, no such party may pursue existing tenants of the Property for delinquent
rents without ▇▇▇▇▇▇▇▇' prior written consent), the prosecution of claims and
the maintenance of any defense which are related to the Excluded Partnership
Property and Liabilities and for regulatory or statutory compliance with respect
to any previously owned assets, (2) the Authorizations, (3) escrow accounts (not
including, however, any escrow deposits for a tax, charge or obligation which is
attributable to a period prior to Closing or which is encompassed within the
Excluded Partnership Property and Liabilities), utility and development rights
and privileges, general intangibles, business records, plans and specifications
pertaining to the Real Property and the Personal Property, and (4) any unpaid
award for taking by condemnation or any damage to the Land by reason of a change
of grade or location of or access to any street or highway.
"Land" shall mean each parcel of real estate which is owned by
----
a Partnership, as more particularly described on Exhibit A attached hereto,
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together with all easements, rights, privileges, remainders, reversions and
appurtenances thereunto belonging or in any way appertaining, and all of the
estate, right, title, interest, claim or demand whatsoever of Partnership
therein, in the streets and ways adjacent thereto and in the beds thereof,
either at law or in equity, in possession or expectancy, now or hereafter
acquired.
"Leased Property" shall mean all leased items of Tangible
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Personal Property.
"Leases" shall mean all leases, tenancies and other rights of
------
occupancy or use for any portion of the Real Property, together with any and all
amendments thereto.
"Non-Included Assets" shall mean the properties described on
-------------------
Exhibit M hereto.
---------
"Operating Agreements" shall mean all management, service,
--------------------
supply and maintenance contracts, if any, in effect with respect to the Property
and all other contracts that affect the Property or are otherwise related to the
construction, ownership, operation, occupancy or maintenance of the Property,
which Operating Agreements are described on Schedule 4 attached hereto and made
-----------
a part hereof.
"Operating Partnership" shall mean ▇▇▇▇▇▇▇▇ Properties
---------------------
Acquisition Partners, L.P., a Delaware limited partnership.
"OTR" shall have the meaning ascribed to such term in the
---
Recitals to this Agreement.
8
"OTR Agreement" shall have the meaning ascribed to such term
-------------
in the Recitals to this Agreement.
"Owner's Title Policy" shall mean an ALTA 1992 owner's policy
--------------------
of title insurance issued to Partnerships, at ▇▇▇▇▇▇▇▇' request, by the Title
Company, pursuant to which the Title Company insures Partnerships' ownership of
the Real Property (including the marketability thereof) subject only to
Permitted Title Exceptions but without imputation of any acts of Contributors or
OTR as the prior partners of the Partnerships. The Owner's Title Policy shall
insure each Partnership in the amount allocated by ▇▇▇▇▇▇▇▇ to the value of the
Real Property interests in the Property. ▇▇▇▇▇▇▇▇ may require such deletions of
standard exceptions and such title endorsements as are legally available and
customarily required by institutional investors purchasing property comparable
to the Property in the State where the Property is situated. The description of
the Land in the Owner's Title Policy shall be by courses and distances or by
reference to a legal, subdivided lot and shall be identical to the description
shown on the Survey.
"Partnership Agreement" shall mean the Second Amended and
---------------------
Restated Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇ Properties Acquisition
Partners, L.P. as the same may be amended from time to time.
"Permitted Title Exceptions" shall mean (i) those exceptions
--------------------------
to title to the Real Property that are set forth on Exhibit L hereto, and (ii)
---------
such other exceptions to title as are satisfactory to ▇▇▇▇▇▇▇▇ as determined
pursuant to Section 2.4(d) hereof.
--------------
"Personal Property" shall mean collectively the Tangible
-----------------
Personal Property and the Intangible Personal Property.
"▇▇▇▇▇▇▇▇' Objections" shall mean the objections defined as
--------------------
such in Section 2.4(d) hereof.
--------------
"Property" shall mean collectively the Real Property and the
--------
Personal Property.
"Real Property" shall mean the Land and the Improvements.
-------------
"Registration Rights Agreement" shall mean the agreement in
-----------------------------
the form of Exhibit E hereto.
"Study Period" shall mean the period commencing on August 6,
------------
1997, and continuing through September 26, 1997. Except as expressly noted
herein to the contrary, time periods herein referred to shall mean the time
periods as in effect, from time to time, at Dallas, Texas.
"Submission Matters" shall mean all items Contributor and
------------------
Partnership are required to deliver to ▇▇▇▇▇▇▇▇ pursuant to Section 2.4(b)
--------------
hereof.
"Survey" shall mean the survey defined as such in and prepared
------
pursuant to Section 2.4(d) hereof.
--------------
9
"Tangible Personal Property" shall mean the items of tangible
--------------------------
personal property consisting of all furniture, fixtures, equipment, machinery
and other personal property of every kind and nature located on or used or
useful in the ownership and operation of the Property and owned by Partnership,
including, without limitation, Partnership's interest as lessee with respect to
any such Tangible Personal Property.
"Title Commitment" shall mean the title commitment and
----------------
exception documents defined as such in Section 2.4(d) hereof.
--------------
"Title Company" shall mean Chicago Title Insurance Company, or
-------------
another title insurance underwriter selected by ▇▇▇▇▇▇▇▇.
"UCC Reports" shall mean the reports defined as such in
-----------
Section 2.4(d) hereof.
"Unit Recipient" shall mean the direct or indirect owner of a
--------------
Partnership interest who will receive Units pursuant to Section 2.2(b) hereof.
"Units" shall mean "Partnership Units" in the Operating
-----
Partnership, as defined and described in the Operating Partnership's Partnership
Agreement.
"Utilities" shall mean public sanitary and storm sewers,
---------
natural gas, telephone, public water facilities, electrical facilities and all
other utility facilities and services necessary or appropriate for the operation
and occupancy of the Property as an office building.
"Warranties and Guaranties" shall mean all equipment,
-------------------------
installer's, manufacturer's, contractors and similar warranties and guaranties
relating to the Improvements, or the Tangible Personal Property or any part
thereof.
ARTICLE II.
-----------
TRANSFER OF PROPERTY; DEPOSIT; ACCOUNTING
-----------------------------------------
FOR CONTRIBUTION VALUE; STUDY PERIOD
------------------------------------
2.1 Transfer of Property. In consideration of, and subject to, the
--------------------
terms and conditions hereinafter set forth, each Contributor shall transfer to
▇▇▇▇▇▇▇▇ all of its right, title and interest in the Partnership and in the
Property, including without limitation its entire Partnership interest and all
rights in the capital, profits and losses of the Partnership allocable to the
period from and after Closing, but not including any interest in the Excluded
Partnership Property and Liabilities.
2.2 Transfer Procedures. When the conditions to Closing set forth in
-------------------
Article V have been satisfied, the following shall occur and the transaction
contemplated hereby will be treated, for federal income tax purposes, as a
contribution by the Contributors to ▇▇▇▇▇▇▇▇ of their interests in the
Partnerships in exchange for the Contribution Value:
(a) ▇▇▇▇▇▇▇▇ shall receive a credit against the Contribution
Value in an amount equal to the amount of the cash Deposit.
10
(b) An allocable portion of the Contribution Value
attributable to each Contributor, as set forth on Schedule 2.2(a) hereto, shall
be paid by issuing to Contributor or any Unit Recipient designated to receive
Units the number of Units calculated by dividing such allocable portion of the
Contribution Value by $25.50 and rounding the resulting number of Units to the
nearest integer (.50 rounded down). ▇▇▇▇▇▇▇▇ shall be entitled to a credit
against the Contribution Value for unearned distributions on Units for the
period from the last distribution date through the Closing Date. In connection
with the foregoing, the parties acknowledge that (i) ▇▇▇▇▇▇▇▇ has established a
minimum threshold for the issuance of Units to any one Unit Recipient in the
amount of One Million Dollars ($1,000,000), such threshold to apply to all Units
to be issued to such Unit Recipient under this Agreements and under the
Contribution Agreement of even date entered into among ▇▇▇▇▇▇▇▇ and various
affiliates of Partnerships, (ii) each Unit Recipient has agreed, by the terms of
a separate agreement with ▇▇▇▇▇▇▇▇, to furnish certain limited guarantees of the
nonrecourse indebtedness of ▇▇▇▇▇▇▇▇, (iii) ▇▇▇▇▇▇▇▇ has agreed with the Unit
Recipients and Partnerships, pursuant to the terms of a separate agreement, to
restrict sales or transfers of various components of the Real Property for
certain time periods, and (iv) ▇▇▇▇▇▇▇▇ has further agreed with the Unit
Recipients, pursuant to the terms of a separate agreement, to allow certain
transfers of Units for family and estate planning purposes.
(c) ▇▇▇▇▇▇▇▇ acknowledges that at Closing the Property shall
remain subject to, but ▇▇▇▇▇▇▇▇ shall not personally assume, the unpaid
principal balances on the Closing Date of the promissory note(s) evidencing the
Existing Secured Indebtedness (the "Existing Note") payable to the lienholder(s)
-------------
described in Exhibit D attached hereto and made a part hereof having approximate
---------
unpaid principal balances in the amounts specified in Exhibit D, and subject to,
---------
but without assumption by ▇▇▇▇▇▇▇▇ of, the obligations contained in the
mortgages and other security instruments securing the Existing Notes described
in Exhibit D (said mortgages and other security instruments being hereinafter
---------
collectively referred to as the "Existing Liens"). Notwithstanding the
--------------
foregoing, (i) to the extent that any Existing Note or Existing Liens (or the
loan documents executed in connection therewith) create personal liability for
specified acts, omissions or occurrences ( such acts, omissions or occurrences
being referred to as "Carve-Out Activities" and the associated personal
--------------------
liability being referred to as "Carve-Out Liability"), (A) if Closing occurs,
-------------------
▇▇▇▇▇▇▇▇ shall be responsible for any such Carve-Out Liability attributable to
Carve-Out Activities accruing and occurring from and after the Closing Date, and
shall and does hereby indemnify and hold Contributor (and any of Partnership's
principals who may have liability therefor) harmless with respect thereto, and
(B) Contributor shall and does hereby indemnify and hold ▇▇▇▇▇▇▇▇ harmless with
respect to Carve-Out Liability attributable to Carve-Out Activities accruing or
occurring prior to the Closing Date, and (ii) if and to the extent that any
Existing Secured Indebtedness is paid off or refinanced by ▇▇▇▇▇▇▇▇ within 60
days following the Closing Date, and any prepayment premium is required to be
paid in connection therewith pursuant to the presently existing terms of such
Existing Secured Indebtedness, such prepayment premium shall be the
responsibility of Contributor and ▇▇▇▇▇▇▇▇ shall be entitled to create a cash
reserve therefor out of the Contribution Value; provided that any reduction
which can be achieved in the prepayment premium due to CIGNA on account of its
Existing Secured Indebtedness below the amount due in accordance with the
existing loan documents shall be shared equally by ▇▇▇▇▇▇▇▇ and Contributors.
The provisions of this Paragraph shall survive Closing without limitation.
11
(d) ▇▇▇▇▇▇▇▇ shall pay the balance of the Contribution Value,
as adjusted in the manner specified in Article VII and as set forth below, to
Contributor or other applicable party at Closing by making a wire transfer of
immediately available federal funds to the account of Contributor or other
applicable party as specified in writing by Contributor.
2.3 Deposit. Within three (3) days after the execution hereof by the
-------
parties, and as a condition precedent to the effectiveness of this Agreement,
▇▇▇▇▇▇▇▇ shall deliver to Escrow Agent a wire transfer or check in the sum of
Fifty Dollars ($50.00) payable to the order of Contributor representing the
independent consideration for Contributor's execution of this Agreement and
agreement to provide ▇▇▇▇▇▇▇▇ with the Study Period (which check or the proceeds
of which wire transfer shall thereafter be delivered by Escrow Agent to
Contributor). ▇▇▇▇▇▇▇▇ has previously deposited with the Escrow Agent the amount
of $287,775.50, which sum has been deposited and invested in an interest bearing
account at a financial institution acceptable to ▇▇▇▇▇▇▇▇). If ▇▇▇▇▇▇▇▇ has not
terminated this Agreement on or before the expiration of the Study Period,
▇▇▇▇▇▇▇▇ shall deliver to Escrow Agent a wire transfer or check in the
additional sum of $287,775.50 on or before 5:00 p.m. on the next business day
immediately following the last day of the Study Period. The proceeds of the wire
transfers or checks are referred to herein as the "Deposit" and Escrow Agent
-------
shall hold and invest the Deposit pursuant to the terms, conditions and
provisions of this Agreement. All accrued interest on the Deposit shall become
part of the Deposit. The Deposit shall be returned to ▇▇▇▇▇▇▇▇ if ▇▇▇▇▇▇▇▇,
prior to the end of the Study Period, notifies Contributors in writing, pursuant
to Section 2.4 hereof, that ▇▇▇▇▇▇▇▇ is electing to terminate this Agreement.
-----------
The Deposit (regardless of whether it is the proceeds of wire transfers or
checks) shall be either (a) applied at the Closing against the cash portion of
the Contribution Value, (b) returned to ▇▇▇▇▇▇▇▇ pursuant hereto, or (c) paid to
Contributor pursuant hereto. For purposes of reporting earned interest with
respect to the Deposit, ▇▇▇▇▇▇▇▇' Federal Tax Identification Number is
▇▇-▇▇▇▇▇▇▇, and Contributor's Federal Tax Identification Number is ▇▇-▇▇▇▇▇▇▇.
2.4 Study Period.
------------
(a) ▇▇▇▇▇▇▇▇ and its agents, contractors and duly
authorized representatives shall have the right, until 5:00 p.m., Dallas, Texas
time on the last day of the Study Period, and thereafter if ▇▇▇▇▇▇▇▇ has elected
not to terminate this Agreement prior to the expiration of the Study Period, to
enter upon the Real Property and to perform, at ▇▇▇▇▇▇▇▇' expense, such
economic, surveying, engineering, topographic, environmental, marketing and
other tests, studies and investigations as ▇▇▇▇▇▇▇▇ may deem appropriate. If
such tests, studies and investigations do not warrant, in ▇▇▇▇▇▇▇▇' sole,
absolute and unreviewable discretion, the purchase of the Property for the
purposes contemplated by ▇▇▇▇▇▇▇▇, then ▇▇▇▇▇▇▇▇ may elect not to proceed with
this transaction and shall notify Contributors and Escrow Agent, in writing
prior to the expiration of the Study Period, that ▇▇▇▇▇▇▇▇ has elected to
terminate this Agreement, in which event this Agreement automatically shall
terminate, the Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇,
Partnerships and Contributors shall be released from all further liability or
obligation hereunder except those which expressly survive a termination of this
Agreement. If ▇▇▇▇▇▇▇▇ does not so notify Contributors of its determination to
terminate this Agreement prior to the expiration of the Study Period, then
▇▇▇▇▇▇▇▇ shall be deemed to have waived its right to terminate this Agreement
pursuant to this Section 2.4.
-----------
12
(b) The parties acknowledge that Partnerships or
Contributors have delivered the following to ▇▇▇▇▇▇▇▇ or made same available to
▇▇▇▇▇▇▇▇ for inspection and/or copying at the location of the Property or
Partnerships' business office:
(1) Copies of all Leases in effect as of the date
of this Agreement, together with copies of all material correspondence
received from or sent to tenants of the Property.
(2) a Rent Roll (herein so called) certificate
(with current rent roll attached) for the Property containing the
following information with respect to each Lease: (i) a description of
the space occupied thereby (including square feet, type of space,
floor, suite number and tenant's pro rata share of expense and tax
escalations), (ii) tenant's name, (iii) the commencement date and
expiration date thereof, (iv) the base rental rate per square foot, (v)
the amount of fixed monthly rental, (vi) the amount of any percentage
or other additional rental and/or common area maintenance, tax,
insurance and operating expenses and any other charges payable
thereunder, (vii) the amount of any prepayment or delinquency in rental
or other charges, (viii) the amount of the security deposit or any
other deposit thereunder, (ix) any free rent, concessions, rebates,
refunds, or other inducements which any tenant will be entitled to
receive after Closing, (x) any options provided thereunder, including,
without limitation, any renewal options, expansion options, purchase
options and rights of first refusal, and (xi) any fees or commissions
payable in regard to such Lease. The Rent Roll shall be certified in
writing by the applicable Partnership on or prior to the expiration of
the Study Period to the effect that it is true, complete, and correct
in all material respects as of the date shown on the Rent Roll and
that, to the best of Partnership's knowledge, there has been no
material adverse change with respect to any item shown on the Rent Roll
during the period from the date thereof to the date of such
certificate, except as shown thereon.
(3) To the extent in Partnership's possession or
reasonably available to Partnership, copies of all Authorizations
including, without limitation, all certificates of occupancy, permits,
authorizations, approvals (including drawings and enacting ordinances,
if any), special exceptions, variances, and licenses issued by
Governmental Authorities having jurisdiction over the Property and
copies of all certificates issued by the local board of fire
underwriters (or other body exercising similar functions) relating to
the Property. For the purpose of this Agreement any Submission Matters
in the possession of Partnership's management company shall be deemed
to be "reasonably available to Partnership."
(4) Operating and Financial Statements (herein so
called) showing all income and expenses, profits and losses of the
Property for the previous three (3) calendar years, which shall reflect
(i) ad valorem taxes for the City, County and State; (ii) expenses
incurred for such period for water, electricity, natural gas and other
utility charges; (iii) other operating expenses; (iv) total rents
collected from tenants for such periods; and (v) other revenue
collected and the nature of such revenue; and, to the extent in
Partnership's possession or reasonably available to Partnership,
financial statements for the Property for the previous three (3)
calendar years, including, if available, the reports of accountants
thereon.
13
(5) A complete list of all Operating Agreements in
effect as of the date of this Agreement and complete copies of all such
Operating Agreements.
(6) The operating and capital expenditure budget
for the Property for the current calendar year and, to the extent in
Partnership's possession or reasonably available to Partnership, for
the previous three (3) calendar years.
(7) A complete list of all Tangible Personal
Property.
(8) A complete list of all Leased Property (if
any) and complete copies of all lease agreements related thereto.
(9) To the extent in Partnership's possession or
reasonably available to Partnership, any information in Partnership's
possession or reasonably available to Partnership regarding current
renditions or assessments on the Property or notices relative to change
in valuation for ad valorem taxes.
(10) A complete list of all Warranties and
Guaranties in effect as of the date of this Agreement and complete
copies of all such Warranties and Guaranties.
(11) Copies of all soil tests, structural engineering
tests, inspection reports, asbestos surveys, masonry tests, percolation
tests, water, oil, gas, mineral, radon, formaldehyde, PCB or other
environmental tests, audits or reports, market studies and site plans
related to the Property in Partnership's possession or reasonably
available to Partnership, together with copies of any and all
correspondence, reports and other written documentation regarding the
environmental aspects of the property or any toxic substances or
equipment affecting or related to the Property.
(12) To the extent in Partnership's possession or
reasonably available to Partnership, copies of complete sets of all
architectural, mechanical, structural and/or electrical plans and
specifications used in connection with the construction of or
alterations or repairs to the Property.
(13) To the extent in Partnership's possession or
reasonably available to Partnership, copies of as-built plans and
specifications for the Property.
(14) Parking, structural, mechanical or other
engineering reports or studies related to the Property, if any, in
Partnership's possession or reasonably available to Partnership.
(15) To the extent in the possession of Partnership
or any affiliate of Partnership or Partnership's property manager,
copies of credit reports and financial information on all tenants in
possession of any of the Property and of any guarantors of such
tenants' obligations.
14
(16) Copies of Contributor's and Partnership's
Organizational Documents.
(17) Copies of all documents evidencing or
securing the Existing Secured Indebtedness and copies of all
correspondence from the holder of the Existing Notes since the date of
closing of the Existing Secured Indebtedness.
After the Study Period and thereafter until the Closing, Partnerships shall make
available to ▇▇▇▇▇▇▇▇, its agents, auditors, engineers, attorneys and other
designees, for inspection and/or copying, copies of any additional architectural
and engineering studies, surveys, title insurance policies, zoning and site plan
materials, material correspondence, environmental audits and reviews, and other
material information relating to the Property which are may come into any of the
Partnership's possession or control.
(c) ▇▇▇▇▇▇▇▇ shall indemnify and defend Partnerships and
Contributors against any loss, damage or claim for personal injury or property
damage arising from the entry upon the Property pursuant to this Section 2.4 by
-----------
▇▇▇▇▇▇▇▇ or any agents, contractors or employees of ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇, at its
own expense, shall restore any damage to the Property caused by any of the tests
or studies made by ▇▇▇▇▇▇▇▇. This provision shall survive any termination of
this Agreement and a closing of the transaction contemplated hereby.
(d) ▇▇▇▇▇▇▇▇ shall obtain, at ▇▇▇▇▇▇▇▇' sole cost and
expense, a Survey of the Land and the Improvements, prepared by a Surveyor
licensed to practice in the Commonwealth of Pennsylvania, bearing a date not
earlier than thirty (30) days from the date of its delivery, containing the
certificate attached hereto as Exhibit B, and conforming to the requirements set
---------
forth in such certificate. ▇▇▇▇▇▇▇▇ shall cause the Title Company to furnish to
Partnership, at ▇▇▇▇▇▇▇▇' sole cost and expense, (i) a title insurance
commitment bearing an effective date subsequent to the date of this Agreement
issued by the Title Company covering the Real Property, binding the Title
Company to issue its 1992 Form ALTA Owner's Policy of Title Insurance (without a
creditors' rights exception), in form approved for use in the state where the
Property is located in favor of Partnership, showing title to the Real Estate to
be held currently by Partnership in a good, marketable and insurable condition
subject to the Permitted Title Exceptions, together with legible copies of all
documents identified in such title insurance commitment as exceptions to title
certified as true and complete by the Title Company (collectively, the "Title
-----
Commitment"), and (ii) reports of searches of the Uniform Commercial Code
----------
Records (collectively, the "UCC Reports") of (x) both the county and State in
-----------
which the Property is located with respect to the state of title to the Property
and (y) in the name of each Contributor and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in the State in
which each resides or has its principal place of business. Within ten (10)
business days after ▇▇▇▇▇▇▇▇' receipt of the Title Commitment and Survey,
▇▇▇▇▇▇▇▇ shall notify Contributor and Partnership of any matters shown on the
Survey or identified in the Title Commitment or the UCC Reports, and which are
not included within the Permitted Title Exceptions, that ▇▇▇▇▇▇▇▇ is unwilling
to accept (collectively, "▇▇▇▇▇▇▇▇' Objections"). If any of ▇▇▇▇▇▇▇▇' Objections
--------------------
consist of delinquent taxes, mortgages, deeds of trust, security agreements,
construction or mechanics' liens, tax liens or other liens or charges in a fixed
sum or capable of computation as a fixed sum, then, to that extent,
notwithstanding anything herein to the contrary, Contributor shall be obligated
to pay and discharge (or bond against in a manner sufficient to cause the Title
Company to insure over such ▇▇▇▇▇▇▇▇' Objections) any such
15
▇▇▇▇▇▇▇▇' Objections (other than the documents securing the Existing Secured
Indebtedness), and Escrow Agent is authorized to pay and discharge at Closing
such ▇▇▇▇▇▇▇▇' Objections to the extent not paid and discharged or bonded
against at Closing. For such purposes, Partnership may use all or a portion of
the cash portion of the Contribution Value to close. Neither Contributor nor
Partnership shall be obligated to incur any expenses to cure any non-monetary
▇▇▇▇▇▇▇▇' Objections unless Contributor or Partnership agrees to cure such non-
monetary ▇▇▇▇▇▇▇▇' Objections as hereinafter provided. Partnership or
Contributor shall notify ▇▇▇▇▇▇▇▇ within ten (10) days after receipt of notice
of ▇▇▇▇▇▇▇▇' Objections whether Partnership agrees to cure such non-monetary
▇▇▇▇▇▇▇▇' Objections. If Partnership or Contributor notifies ▇▇▇▇▇▇▇▇ in writing
within such ten (10) day period that either agrees to cure such non-monetary
▇▇▇▇▇▇▇▇' Objections, Partnership or Contributor shall correct such non-monetary
▇▇▇▇▇▇▇▇' Objections on or before the Closing Date to the reasonable
satisfaction of ▇▇▇▇▇▇▇▇. If Partnership or Contributor does not notify ▇▇▇▇▇▇▇▇
within such ten (10) day period of its agreement to cure such non-monetary
▇▇▇▇▇▇▇▇' Objections, Partnership and Contributor shall be deemed to have
elected not to cure such non-monetary ▇▇▇▇▇▇▇▇' Objections, and ▇▇▇▇▇▇▇▇ shall
elect (1) to waive such non-monetary ▇▇▇▇▇▇▇▇' Objections without any abatement
in the Contribution Value or (2) to terminate this Agreement, in which case the
Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇ and the parties hereto shall be
released from all further obligations hereunder except those which expressly
survive a termination of this Agreement. Partnership shall not, after the date
of this Agreement, subject the Real Property to or permit or suffer to exist any
liens, encumbrances, covenants, conditions, restrictions, easements or other
title matters or seek any zoning changes or take any other action which may
affect or modify the status of title without ▇▇▇▇▇▇▇▇' prior written consent.
The Existing Secured Indebtedness and all title matters revealed by the Title
Commitment, UCC Reports and Survey and not objected to by ▇▇▇▇▇▇▇▇ as provided
above (other than those rendering title defeasible and delinquent taxes,
mortgages, deeds of trust, security agreements and other liens and charges that
are to be paid at Closing as provided above) shall be deemed Permitted Title
Exceptions. Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇ shall not be required to
take title to the Real Property subject to any matters which may arise
subsequent to the effective date of the Title Commitment, UCC Reports and
Survey. If a title exception is disclosed by the Title Company which was not
shown in the Title Commitment or Survey and was not the result of Partnership's
acts or omissions, then, unless Partnership notifies ▇▇▇▇▇▇▇▇ in writing by the
earlier of the Closing Date or the date which is ten (10) days following the
date the Title Company has notified ▇▇▇▇▇▇▇▇ and Partnership of such title
exception that Partnership agrees to take such action as may be necessary to
release such title exception on or before the Closing Date, ▇▇▇▇▇▇▇▇ may (i)
terminate this Agreement by written notice to Partnership, in which event the
Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇ and the parties hereto shall be
released from all further obligations hereunder except those which expressly
survive a termination of this Agreement, or (ii) waive its objections to such
title exception without any abatement in the Contribution Value.
ARTICLE III.
-----------
PARTNERSHIPS' AND CONTRIBUTORS' REPRESENTATIONS AND WARRANTIES
--------------------------------------------------------------
To induce ▇▇▇▇▇▇▇▇ to enter into this Agreement and to accept the
Property, and to pay the Contribution Value therefor, each Partnership (and the
Contributors owning partnership interests in each such Partnership with respect
to the representations and warranties of a Partnership) hereby make the
following representations and warranties with respect to the Property, upon each
16
of which Partnerships and Contributors acknowledges and agrees that ▇▇▇▇▇▇▇▇ is
entitled to rely and has relied:
3.1 Organization and Power. Partnership, Terramics/Woodland Limited
----------------------
Partnership and Terramics Equity Limited Partnership are limited partnerships
duly formed and are validly existing and in good standing under the laws of the
State of New Jersey and are qualified to transact business in the State of New
Jersey. Terramics Property Associates ("TPA"), TPC Investors I Limited
---
Partnership and Terramics/JK Limited Partnership are limited partnerships duly
formed and are validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and TPA is qualified to transact business in the
State of New Jersey. Partnership and Contributor have all requisite powers and
all material governmental licenses, authorizations, consents and approvals to
carry on its business as now conducted and to enter into and perform their
respective obligations hereunder and under any document or instrument required
to be executed and delivered on behalf of Partnership and/or Contributor
hereunder. Either (i) each Partnership has previously made an election ("754
---
Election") under Section 754 of the Internal Revenue Code of 1986, and all such
--------
elections are valid and currently in force, or (ii) to the extent that a
Partnership does not have a 754 Election in effect at this time, such
Partnership shall, if requested by ▇▇▇▇▇▇▇▇, file such election on its 1997
Federal income tax return for the period beginning January 1, 1997 and ending on
or after the Closing Date.
3.2 Authorization, Execution and Disclosure. Subject to approval of
---------------------------------------
OTR, this Agreement has been duly authorized by all necessary action on the part
of Partnership and Contributor, has been duly executed and delivered by
Partnership and Contributor, constitutes the valid and binding agreement of
Partnership and Contributor, and is enforceable in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the rights of creditors
generally. Other than OTR, there is no other person or entity who has an
ownership interest in the Property or whose consent is required in connection
with Partnership's or Contributor's performance of its obligations hereunder
which has not been obtained. The persons executing this Agreement on behalf of
Partnership and Contributor have the authority to do so. Neither Contributor nor
Partnership has nor will intentionally conceal any information regarding the
Property which would render any of Partnership's or Contributor's warranties or
representations in this Agreement materially misleading.
3.3 Non-contravention. The execution and delivery of, and the
-----------------
performance by Partnership and Contributor of its obligations under, this
Agreement do not and will not (a) contravene, or constitute a default under, any
provision of (i) Partnership's or Contributor's Organizational Documents, (ii)
applicable law or regulation or any agreement, judgment, injunction, order,
decree or other instrument binding upon Partnership or Contributor or to which
the Property is subject, the result of which could have a material adverse
effect on the value of the Property or Contributor's ability to transfer its
interests in the Partnerships or Property to ▇▇▇▇▇▇▇▇ and/or Partnership's or
Contributor's ability to perform its obligations under this Agreement, or (iii)
result in the creation of any lien or other encumbrance on any asset of
Partnership or Contributor. There are no outstanding agreements (written or
oral) pursuant to which Partnership or Contributor (or any predecessor to or
representative of Partnership or Contributor) has agreed to sell or has granted
an option or right of first refusal to purchase the Property or any part
thereof.
17
3.4 No Special Taxes. Except as set forth on Schedule 3.4 attached
----------------
hereto, neither Partnership nor Contributors have knowledge of, nor have they
received any notice of, any special taxes or assessments relating to the
Property or any part thereof or any planned public improvements that may result
in a special tax or assessment against the Property.
3.5 Compliance with Existing Laws. To Partnership's knowledge,
-----------------------------
Partnership possesses all Authorizations, each of which is valid and in full
force and effect, and no provision, condition or limitation of any of the
Authorizations has been breached or violated. Partnership has no knowledge, nor
has it received notice within the past three years, of any existing or
threatened violation of any provision of any Applicable Laws including, but not
limited to, those of environmental agencies or insurance boards of underwriters
with respect to the ownership, operation, use, maintenance or condition of the
Property or any part thereof, or requiring any repairs or alterations to the
Property other than those that have been made prior to the date hereof, except
as set forth on Schedule 3.5 hereto.
------------
3.6 Personal Property. All of the Personal Property is owned by
-----------------
Partnership free and clear of all liens and encumbrances except for the Existing
Secured Indebtedness and those which will be discharged by Partnership at
Closing, and Partnership has good and merchantable title thereto.
3.7 Operating Agreements. There are no management, service, supply,
--------------------
maintenance, employment or other contracts in effect with respect to the
Property of any nature whatsoever, written or oral, other than the Operating
Agreements listed on Schedule 4 hereof. To Partnership's knowledge, Partnership
----------
has performed all of its obligations under each of the Operating Agreements in
all material respects and no fact or circumstance has occurred which, by itself
or with the passage of time or the giving of notice or both, would constitute a
default under any of the Operating Agreements. To Partnership's knowledge, all
other parties to the Operating Agreements have performed all of their
obligations thereunder in all material respects, and are not in default
thereunder in any material respect. Partnership has received no notice of any
intention by any of the parties to any of the Operating Agreements to cancel the
same, nor has Partnership canceled any of same.
3.8 Condemnation Proceedings; Roadways. Partnership has received no
----------------------------------
notice of any condemnation or eminent domain proceeding pending or threatened
against the Property or any part thereof. Partnership has no knowledge of any
change or proposed change in the route, grade or width of, or otherwise
affecting, any street, creek or road adjacent to or serving the Real Property.
3.9 Actions or Proceedings. There is no action, suit or proceeding
----------------------
pending or known to Partnership to be threatened against or affecting
Partnership or Contributor in any court, before any arbitrator or before or by
any Governmental Authority which (a) in any manner raises any question affecting
the validity or enforceability of this Agreement or any other agreement or
instrument to which Partnership or Contributor is a party or by which it is
bound and that is or is to be used in connection with, or is contemplated by,
this Agreement, (b) could materially and adversely affect the business,
financial position or results of operations of Partnership, Contributor or the
Property, (c) could materially and adversely affect the ability of Partnership
or Contributor
18
to perform its obligations hereunder, or under any document to be delivered
pursuant hereto, (d) could create a lien on the Property, any part thereof or
any interest therein, (e) concerns any past or present employee of Partnership
or its managing agent or (f) could otherwise materially and adversely affect the
Property, any part thereof or any interest therein or the use, operation,
condition or occupancy thereof.
3.10 Labor and Employment Matters. Partnership is not a party to any
----------------------------
oral or written employment contracts or agreements with respect to the Property.
Partnership's management company employs its employees on an at-will basis,
without written contracts.
3.11 Financial Information and Submission Matters. To Partnership's
--------------------------------------------
knowledge, all of Partnership's financial information for the years 1994 through
1997, including, without limitation, all books and records and financial
statements ("Financial Information") is correct and complete in all material
---------------------
respects and presents accurately the results of the operations of the Property
and the condition of Partnership for the periods indicated. Since the date of
the last financial statement included in Partnership's Financial Information,
there have been no material adverse change in the financial condition or in the
operations of the Partnership or the Property.
3.12 Bankruptcy. No Act of Bankruptcy has occurred with respect to
----------
Partnership or Contributor.
3.13 Hazardous Substances. To Partnership's knowledge, neither
--------------------
Partnership nor any previous owner, tenant, occupant or user of the Property,
nor any other person, has engaged in or permitted any operations or activities
upon, or any use or occupancy of the Property or any portion thereof, for the
purpose of or in any way involving the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
any Hazardous Materials on, under, in or about the Property in violation of any
Applicable Laws. To Partnership's knowledge, no Hazardous Materials have
migrated from or to the Property upon, about, or beneath other properties in
violation of any Environmental Requirements. To Partnership's knowledge, neither
the Property nor its existing or prior uses fail or failed to materially comply
with Environmental Requirements. Partnership has no knowledge of any permits,
licenses or other authorizations which are required under any Environmental
Requirements with regard to the current uses of the Property which have not been
obtained and complied with. To Partnership's knowledge, neither Partnership nor
any prior owner, occupant or user of the Property has received any written
notice concerning any alleged violation of Environmental Requirements in
connection with the Property or any liability for Environmental Damages in
connection with the Property for which Partnership (or ▇▇▇▇▇▇▇▇ after Closing)
may be liable. To Partnership's knowledge, no Hazardous Materials are
constructed, deposited, stored or otherwise located on, under, in or about the
Property in violation of any Environmental Requirements. To Partnership's
knowledge, there exists no writ, injunction, decree, order or judgment
outstanding, nor any lawsuit, claim, proceeding, citation, summons or
investigation, pending or threatened, relating to any alleged violation of
Environmental Requirements on the Property, or from the suspected presence of
Hazardous Materials thereon, or relating to any Environmental Damages. Except as
set forth on Schedule 3.13 attached hereto, to Partnership's knowledge, no
-------------
underground or above ground chemical treatment or storage tanks, or gas or oil
▇▇▇▇▇ are located on the Property. The representations and warranties made by
Partnership in this Section 3.13 shall be subject to and shall be deemed to
------------
include the matters disclosed in the
19
environmental reports delivered by Partnership to ▇▇▇▇▇▇▇▇ pursuant to Section
-------
2.4(b)(11) hereof and the matters disclosed in any environmental reports or
----------
studies obtained by ▇▇▇▇▇▇▇▇ pursuant to Section 2.4(a) hereof.
--------------
3.14 Parties in Possession. There are no parties in possession of the
---------------------
Property except for tenants under written leases, copies of which will be
delivered to ▇▇▇▇▇▇▇▇ pursuant to the terms hereof.
3.15 Leases. There are no leases, concessions or occupancy agreements
------
in effect with respect to the Real Property other than the Leases listed on
Schedule 3; and Schedule 3 attached hereto is a complete and correct list of all
---------- ----------
Leases in effect on the date of this Agreement. To Partnership's knowledge, no
party is in default under any Lease except as set forth on Schedule 3. To
----------
Partnership's knowledge, Partnership has performed all obligations heretofore
required of it under all of the Leases and there remain no unfulfilled
obligations of Partnership under the Leases as of the date hereof, the
nonperformance of which could entitle a tenant to damages under such Lease or
could cause Partnership to be in default under such Lease. No tenant has given
notice to Partnership of its intention to institute litigation with respect to
any Lease. None of the Leases and none of the rents or other amounts payable
thereunder have been assigned, pledged or encumbered except for any assignments,
pledges or encumbrances which will be fully released on or before the Closing
Date, except to the holders of the Existing Secured Indebtedness.
3.16 Leased Property. To Partnership's knowledge, all leases of the
---------------
Leased Property, if any, are in good standing and free from default, except to
the extent set forth in the Rent Roll.
3.17 No Unpaid Charges. There are no unpaid charges, debts,
-----------------
liabilities, claims or obligations arising from the construction, occupancy,
ownership, use or operation of the Property which could give rise to any
mechanic's or materialmen's or other statutory lien against the Property, or any
part thereof, or for which ▇▇▇▇▇▇▇▇ will be responsible.
3.18 Condition of Improvements. To Partnership's knowledge, Partnership
-------------------------
has not received (i) any outstanding uncured notice from any third party (other
than a tenant) alleging that any of the Improvements are defective in design or
construction are not in substantially good condition and repair, have roof
leaks, or that any mechanical systems are not in reasonable working order and
repair, or that Partnership has failed to operate the Property in a commercially
reasonable manner consistent with a modern office building, nor (ii) from any
tenant of the Property, any outstanding uncured notice of any such defects which
constitute a material default on the part of the Partnership under any of the
Leases, except in either case for those matters set forth on Schedule 2 hereto;
----------
provided, however, the foregoing representations and warranties shall not
include any representation or warranty as to the aesthetic or other subjective
quality of the design of the Property or any system, element or component
thereof.
3.19 Access. Partnership has no knowledge of any pending or threatened
------
governmental proceeding or any other fact or condition which would limit or
result in the termination of the Property's existing access to and from public
streets or roads.
3.20 No Commitments. No commitments have been made to any Governmental
--------------
Authority, utility company, school board, church or other religious body, or any
homeowners'
20
association or any other organization, group or individual, relating to the
Property which would impose an obligation upon ▇▇▇▇▇▇▇▇ to make any contribution
or dedication of money or land or to construct, install or maintain any
improvements of a public or private nature on or off the Property. Without
limiting the generality of the foregoing, Partnership is not a party to any
paving agreements or undertakings, payback agreements, revenue bonds or utility
debt service agreements.
3.21 "Foreign Person". Neither Contributor nor Partnership is a
----------------
"foreign person" within the meaning of Section 1445 of the Internal Revenue
--------------
Code, as amended (i.e., neither Contributor nor Partnership is a foreign
corporation, foreign partnership, foreign trust, foreign estate nor foreign
person as those terms are defined in the Internal Revenue Code and regulations
promulgated thereunder).
3.22 Leasing Commissions. No brokerage or leasing commissions or other
-------------------
compensations are due or payable to any person, firm, corporation or other
entity with respect to or on account of any of the Leases or any extension or
renewals thereof, except as set forth on the Rent Roll to be delivered to
▇▇▇▇▇▇▇▇ pursuant to Section 2.4 hereof.
-----------
3.23 Other Agreements. There are no options, contracts or other
----------------
obligations outstanding for the sale, exchange or transfer of any of the
Property or any interest therein which would be superior to the rights of
▇▇▇▇▇▇▇▇ under this Agreement or which would survive Closing, except for the
various rights of tenants to lease space by reason of rights of renewal, first
refusal, first offer, expansion and the like as set forth in the Leases.
3.24 Partners. The list of partners in Partnership delivered by
--------
Partnership to the Operating Partnership pursuant to Section 6.7 hereof is true,
-----------
correct and complete as of the date of this Agreement. Each Contributor is the
record and beneficial owner of, and has good title to, its respective
partnership interest in Partnership, free and clear of all liens, security
interests, assignments, options and adverse claims to title of any kind or
character, and such partnership interest is not the subject of any agreement
providing for the sale and transfer thereof. All tax returns for federal, state
and local income, excise, sales and use, personal property and franchise taxes
required by law to be filed by the Partnerships prior to the date of this
Agreement have been filed (or extensions to file have been obtained), and all
taxes, if any, shown on such returns, together with any interest or penalties
thereon, have been paid. All such tax returns required by law to be filed by the
Partnerships prior to the Closing will be paid (or extensions to file will be
obtained), and all taxes, if any, shown on such returns, together with any
interests or penalties thereon, will be paid. None of the Partnerships have
engaged in any business other than owning, leasing and operating the Property.
None of the Partnerships own, directly or indirectly, any capital stock or
interest in any partnership, corporation or other entity or business enterprise
other than the Property. Other than the partnership interests in favor of
Contributor and OTR, there are no partnership interests or other ownership
interests in the Partnerships, and there are no obligations of any of the
Partnerships to issue any interests in any of the Partnerships other than the
partnership interests in Contributor and OTR.
3.25 Existing Secured Indebtedness. The only debt secured by liens on
-----------------------------
the Property, or any portion thereof, which will not be released and discharged
as of the Closing is the Existing Secured Indebtedness. The descriptions of the
Existing Secured Indebtedness, the Existing Note
21
and Existing Liens on Exhibit D hereto are true and correct. Partnership is not
in default under the Existing Note or the Existing Liens, and no event has
occurred which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder.
3.26 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. ▇▇▇▇▇▇▇▇ HEREBY
---------------------------------------------
AGREES AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 3, OR AS
OTHERWISE EXPRESSLY STATED HEREIN OR IN ANY DOCUMENTS EXECUTED IN CONNECTION
HEREWITH, NEITHER PARTNERSHIP NOR CONTRIBUTOR, NOR ANY AGENT, ATTORNEY, EMPLOYEE
OR REPRESENTATIVE OF PARTNERSHIP OR CONTRIBUTOR, HAS MADE ANY REPRESENTATION
WHATSOEVER REGARDING THE SUBJECT MATTER OF THIS TRANSACTION, OR ANY PART
THEREOF, INCLUDING (WITHOUT LIMITING THE GENERALITY OF THE FOREGOING)
REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL NATURE OR CONDITION OF THE
PROPERTY OR THE CAPABILITIES THEREOF, AND THAT ▇▇▇▇▇▇▇▇, IN EXECUTING,
DELIVERING AND/OR PERFORMING THIS AGREEMENT, DOES NOT RELY UPON ANY STATEMENT
AND/OR INFORMATION TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR
IN WRITING, BY ANY INDIVIDUAL, FIRM OR CORPORATION EXCEPT THOSE EXPRESSLY
CONTAINED HEREIN OR DELIVERED PURSUANT THERETO OR IN ANY DOCUMENTS EXECUTED IN
CONNECTION HEREWITH. EXCEPT AS OTHERWISE PROVIDED HEREIN, ▇▇▇▇▇▇▇▇ AGREES TO
ACCEPT THE PROPERTY AND INTERESTS THEREIN "AS IS," AS OF THE DATE HEREOF,
REASONABLE WEAR AND TEAR EXCEPTED. IN ADDITION, EXCEPT AS SET FORTH HEREIN,
PARTNERSHIP AND CONTRIBUTOR MAKE NO REPRESENTATIONS OR WARRANTIES REGARDING THE
COMPLIANCE WITH ANY ENVIRONMENTAL REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON
THE PROPERTY OF HAZARDOUS MATERIALS. THE PROVISIONS OF THIS PARAGRAPH SHALL
SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.
Each of the representations and warranties contained in this Article III and its
-----------
various subparagraphs are intended for the benefit of ▇▇▇▇▇▇▇▇ and may be waived
in whole or in part. All rights and remedies arising in connection with the
untruth or inaccuracy of any such representations and warranties shall survive
the Closing of the transaction contemplated hereby as provided in Section 10.12
-------------
hereof, except to the extent that Partnership or Contributor gives ▇▇▇▇▇▇▇▇
written notice prior to Closing of the untruth or inaccuracy of any
representation or warranty or ▇▇▇▇▇▇▇▇ otherwise obtains actual knowledge prior
to Closing of the untruth or inaccuracy of any representation or warranty, and
▇▇▇▇▇▇▇▇ nevertheless elects to close this transaction. ▇▇▇▇▇▇▇▇ shall be deemed
to have actual knowledge of the untruth or inaccuracy of any representation or
warranty only if (i) ▇▇▇▇▇▇▇▇ receives written notice from Partnership or
Contributor satisfying the foregoing requirements, or (ii) ▇▇▇▇▇▇ ▇. August,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ has actual knowledge of any such
untruth or inaccuracy, or (iii) the matter in question is disclosed in a tenant
estoppel certificate, Survey, Title Commitment, written environmental report or
study, or any other third party written report or study delivered to or obtained
by ▇▇▇▇▇▇▇▇ prior to Closing. Except to the extent otherwise expressly provided
in the immediately preceding sentence, no investigation, audit, inspection,
review or the like conducted by or on behalf of ▇▇▇▇▇▇▇▇ shall be deemed to
terminate the effect of any such representations,
22
warranties and covenants, it being understood that ▇▇▇▇▇▇▇▇ has the right to
rely thereon and that each such representation and warranty constitutes a
material inducement to ▇▇▇▇▇▇▇▇ to execute this Agreement and to close the
transaction contemplated hereby and to pay the Contribution Value to
Partnership.
If any of Partnership's or Contributor's representations and warranties made
hereunder are found or known by ▇▇▇▇▇▇▇▇ to be incorrect prior to Closing to the
extent they affect the Property or its operation in any material respect,
▇▇▇▇▇▇▇▇ shall inform Partnership and Contributor in writing and ▇▇▇▇▇▇▇▇' sole
remedy, except as otherwise expressly provided in clause (a)(ii) of the first
sentence of Section 9.2 hereof, shall be termination of this Agreement on
-----------
account thereof and refund of the Deposit. If ▇▇▇▇▇▇▇▇ elects not to so
terminate this Agreement, any remedy of ▇▇▇▇▇▇▇▇ for breach of warranties and
representations made prior to the Closing shall be deemed to be irrevocably
waived. Notwithstanding anything to the contrary contained in this Article, if
Partnership or Contributor breaches any representation or warranty and if prior
to Closing ▇▇▇▇▇▇▇▇ notifies Partnership or Contributor that it elects to
terminate this Agreement on account of such breach, Partnership or Contributor
may by written notice to ▇▇▇▇▇▇▇▇ given or before the Closing Date agree to cure
the breach (which breach must be cured on or before the Closing Date unless a
cash reserve is established for such purpose in an amount equal to 125% of the
amount reasonably estimated by ▇▇▇▇▇▇▇▇ for cure), and ▇▇▇▇▇▇▇▇ shall thereupon
be obligated to close the transaction and accept such cure as ▇▇▇▇▇▇▇▇' sole
remedy for such breach; provided that ▇▇▇▇▇▇▇▇ shall not be required to accept a
cash reserve if the problem or breach in question precludes a lender of ▇▇▇▇▇▇▇▇
from closing a loan for any financing incidental to this transaction.
The term "to Partnership's knowledge" or "to Contributor's knowledge" or similar
-------------------------- ---------------------------
phrase shall mean the knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ following an inquiry of the personnel involved in the
operation, ownership, maintenance and management of the Property and of its
current manager for the Property, and such inquiry shall include the direction
by Partnership to its personnel and manager to perform a review of all relevant
files in their possession relating to the operation, ownership, maintenance and
management of the Property. Partnership and Contributor covenant that if prior
to Closing either shall obtain actual knowledge that any of the facts
represented and warranted by Partnership or Contributor under this Agreement are
or become untrue or inaccurate in any material respect, they will promptly
inform ▇▇▇▇▇▇▇▇ in writing of the discovery.
ARTICLE IV.
-----------
▇▇▇▇▇▇▇▇' REPRESENTATIONS AND WARRANTIES
----------------------------------------
To induce Contributors to enter into this Agreement and to transfer
their interests in the Partnerships and Property, ▇▇▇▇▇▇▇▇ (and Company and OP
General Partner, by their joinder herein, solely as to the representations and
warranties relating to Company, OP General Partner and their respective
operations) hereby make the following representations and warranties, upon each
of which ▇▇▇▇▇▇▇▇ (and the Company and OP General Partner, by their joinder
herein) acknowledge and agree that Partnership and Contributor are entitled to
rely and have relied:
4.1 Organization and Power. ▇▇▇▇▇▇▇▇ and OP General Partner are duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, and have all
23
corporate and/or partnership powers and all governmental licenses,
authorizations, consents and approvals required to carry on their business as
now conducted and to enter into and perform their obligations as contemplated by
this Agreement and any document or instrument required to be executed and
delivered as contemplated by this Agreement. The Partnership Agreement of
▇▇▇▇▇▇▇▇ which has been delivered to Partnership is a true and correct copy
thereof, including all exhibits and addenda thereto, and the same is in full
force and effect in accordance with its terms and has not been modified,
supplemented or amended.
4.2 Non-contravention. The execution and delivery of this Agreement and
-----------------
the performance by ▇▇▇▇▇▇▇▇ of its obligations hereunder do not and will not
contravene, or constitute a default under, any provisions of applicable law or
regulation, or any agreement, judgment, injunction, order, decree or other
instrument binding upon ▇▇▇▇▇▇▇▇ or OP General Partner or result in the creation
of any lien or other encumbrance on any asset of ▇▇▇▇▇▇▇▇ or OP General Partner.
4.3 Litigation. There is no action, suit or proceeding, pending or
----------
known to be threatened, against or affecting ▇▇▇▇▇▇▇▇, OP General Partner or the
Company in any court or before any arbitrator or before any Governmental
Authority which (a) in any manner raises any question affecting the validity or
enforceability of this Agreement or any other agreement or instrument to which
▇▇▇▇▇▇▇▇, OP General Partner or the Company is a party or by which it is bound
and that is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of ▇▇▇▇▇▇▇▇, OP General Partner or the
Company, or (c) could materially and adversely affect the ability of ▇▇▇▇▇▇▇▇ to
perform its obligations hereunder, or under any document to be delivered
pursuant hereto.
4.4 Bankruptcy. No Act of Bankruptcy has occurred with respect to
----------
▇▇▇▇▇▇▇▇, OP General Partner or the Company.
4.5 Issuance of Units. On the Closing Date, or such earlier date as
-----------------
required by this Agreement, the Partnership Agreement shall be amended to
provide for the issuance of the Units to Partnership and/or any Unit Recipient
which will receive Units. The Units to be issued in connection with the
transactions herein contemplated have been, or prior to the Closing Date will
have been, duly authorized for issuance by the Operating Partnership and by OP
General Partner on behalf of the Operating Partnership to Partnership and/or
such Unit Recipients which will receive Units, and on the Closing Date will be
validly issued. The rights and obligations of Unit holders will be set forth in
the Partnership Agreement, this Agreement and the Registration Rights Agreement.
4.6. Securities Filings. Each of the Company and the Operating
------------------
Partnership has filed all required documents with the SEC since January 1, 1997
including, without limitation, the Annual Report on Form 10-K for the year ended
December 31, 1996 of the Company and the Operating Partnership (collectively,
the "SEC Documents"). To the knowledge of the Company and Operating Partnership
(defined and limited for purposes of this Section 4.6 and Section 4.7 as
---------------------------
information contained in any actual notice received by Company or the Operating
Partnership or information within the actual knowledge of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. August and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇), (i) as of their respective dates,
the SEC Documents complied in all material
24
respects with the requirements of the Securities Act or Exchange Act, as the
case may be, and, at the respective times they were filed, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, (ii) the consolidated financial statements (including any notes
thereto) of the Company included in the SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles (except, in the case of
the unaudited statements, as permitted by From 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly presented in all material respects the
consolidated financial position of the Company as at the respective dates
thereof and the consolidated results of their operations and their consolidated
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein), and (iii) except as disclosed in the SEC Documents or as
required by generally accepted accounting principles, the Company has not, since
June 30, 1997, made any material change in the accounting practices or policies
applied in the preparation of financial statements.
4.7 Absence of Certain Changes or Events. To the knowledge of Operating
------------------------------------
Partnership and Company, except as disclosed in SEC Documents filed with the SEC
prior to the date of this Agreement, since January 1, 1997, (a) neither the
Company nor the Operating Partnership has sustained any loss or interference
with its business or properties from fire, flood, windstorm, accident or other
calamity (whether or not covered by insurance) that has had a material adverse
effect on the Company or the Operating Partnership, and (b) there has been no
event causing a material adverse effect on the Company or the Operating
Partnership, excluding any changes and effects resulting from changes in
economic, regulatory or political conditions or changes in conditions generally
applicable to the industry in which the Company or the Operating Partnership is
involved.
ARTICLE V.
----------
CONDITIONS PRECEDENT
--------------------
5.1 As to ▇▇▇▇▇▇▇▇' Obligations. ▇▇▇▇▇▇▇▇' obligations hereunder are
---------------------------
subject to the satisfaction of the following conditions precedent:
(a) Partnership's Deliveries. Each Partnership and Contributor
------------------------
shall have delivered to or for the benefit of ▇▇▇▇▇▇▇▇, on or before the Closing
Date, all of the documents and other information required of them pursuant to
Sections 7.2 and 7.4 hereof.
--------------------
(b) Representations, Warranties and Covenants; Obligations of
---------------------------------------------------------
Partnership; Certificate. Each Partnership's and Contributor's representations
------------------------
and warranties made in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date as if then made; each
Partnership and Contributor shall have performed in all material respects all of
its covenants and other obligations under this Agreement; and each Partnership
and Contributor shall have executed and delivered to ▇▇▇▇▇▇▇▇ at Closing a
certificate, to the best of their knowledge and belief, to the foregoing effect.
Notwithstanding the foregoing,
25
if there shall be any changes in facts, circumstances or events occurring after
the date hereof and before the Closing Date which would render any Partnership
or Contributor representations or warranties untrue in any material respect and
of which ▇▇▇▇▇▇▇▇ is notified or has knowledge, (i) to the extent the status of
the matter in question nonetheless conforms to an express performance threshold
set forth in this Agreement (for example, tenant defaults which would not
violate the condition of subsection (h) below), then there shall be no effect
caused thereby to the rights and obligations of the parties, (ii) to the extent
the status of the matter in question is governed by an express provision
elsewhere set forth in this Agreement (for example, casualty damage), then such
other express provision shall govern, and (iii) for any other change which is
not attributable to the fault of Contributor or Partnership and which can be
cured by the expenditure of a reasonably ascertainable sum of money in an amount
less than $1,000,000, Partnership or Contributor shall have the option, in order
to cause ▇▇▇▇▇▇▇▇ to consummate the Closing, to establish a monetary reserve as
security for a cure equal to 125% of the amount reasonably estimated by ▇▇▇▇▇▇▇▇
to be necessary for such cure; provided that ▇▇▇▇▇▇▇▇ shall not be required to
accept a monetary reserve if the matter in question precludes a lender of
▇▇▇▇▇▇▇▇ from closing a loan for any financing incidental to this transaction.
(c) Title Insurance. Good and marketable title to the Real
---------------
Property shall be insurable as such by the Title Company, subject only to
Permitted Title Exceptions as determined in accordance with Section 2.4 hereof
-----------
and including, without limitation, all applicable deletions of standard
exceptions and endorsements permitted under applicable state law which are
customarily required by institutional investors purchasing property comparable
to the Property.
(d) Condition of Improvements. The Improvements and the
-------------------------
Tangible Personal Property (including but not limited to the mechanical systems,
plumbing, electrical, wiring, appliances, fixtures, heating, air conditioning
and ventilating equipment, elevators, boilers, equipment, roofs, structural
members and furnaces) shall be in substantially the same condition at Closing as
they are as of the date hereof, reasonable wear and tear excepted. Partnership
shall not have removed or caused or permitted to be removed any part or portion
of the Real Property or the Tangible Personal Property without ▇▇▇▇▇▇▇▇' prior
written consent unless the same is replaced, prior to Closing, with a similar
item of at least equal suitability, quality and value, free and clear of any
lien or security interest.
(e) Utilities. All of the Utilities shall be installed in and
---------
operating at the Property, and service shall be available for the removal of
garbage and other waste from the Property.
(f) Due Diligence Materials. All rent rolls, lists, schedules
-----------------------
and other documents prepared by Contributor or Partnership and furnished to
▇▇▇▇▇▇▇▇ pursuant to the requirements of this Agreement shall be true and
correct in all material respects when so furnished, except for inaccuracies as
to which ▇▇▇▇▇▇▇▇ was given written notice by Partnership or Contributor or
otherwise had actual knowledge prior to the end of the Study Period.
(g) Unit Recipient Certifications. Each Unit Recipient (including
-----------------------------
within such definition for purposes of this subsection (g) a Partnership, if and
to the extent it is to receive any Units), shall deliver to ▇▇▇▇▇▇▇▇ a written
statement wherein it shall represent, warrant and covenant as follows:
26
(1) Unit Recipient is an "accredited
----------
investor" within the meaning of Rule 501(a) promulgated under
--------
the Securities Act of 1933, as amended (the "Securities Act").
--------------
Unit Recipient understands the risks of, and other
considerations relating to, the acquisition of the Units. Unit
Recipient, by reason of its business and financial experience,
together with the business and financial experience of those
persons, if any, retained by it to represent or advise it with
respect to its investment in the Units, (i) has such
knowledge, sophistication and experience in financial and
business matters and in making investment decisions of this
type, that it is capable of evaluating the merits and risks of
an investment in the Operating Partnership and of making an
informed investment decision, (ii) is capable of protecting
its own interests or has engaged representatives or advisors
to assist it in protecting its interests and (iii) is capable
of bearing the economic risk of such investment.
(2) The Units to be issued to each Unit
Recipient will be acquired by each Unit Recipient for its own
account for investment only and not with a view to, or with
any intention of, a distribution or resale thereof, in whole
or in part, or the grant of any participation therein until
the Units are redeemed for Common Stock of the Company
following the lock-up period specified in the Registration
Rights Agreement and this Agreement in accordance with the
Partnership Agreement and the Registration Rights Agreement.
Unit Recipient shall confirm that all documents, records, and
books pertaining to investment in the Operating Partnership
and requested Unit Recipient have been made available or
delivered to Unit Recipient. Unit Recipient has had an
opportunity to ask questions of and receive answers from the
Operating Partnership, or from a person or persons acting on
the Operating Partnership's behalf, concerning the terms and
conditions of the transaction contemplated by this Agreement
and its acquisition of Units. Unit Recipient has relied upon,
and is making its investment decisions, solely upon such
information as has been provided to Unit Recipient by the
Operating Partnership. Unit Recipient was not formed for the
specific purpose of acquiring an interest in the Operating
Partnership.
(3) Unit Recipient acknowledges that (i) the
Units to be issued to Unit Recipient have not been registered
under the Securities Act or state securities laws by reason of
a specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws, (ii) the
Operating Partnership's reliance on such exemptions is
predicated in part on the accuracy and completeness of the
representations and warranties of Unit Recipient referred to
herein, and in the Prospective Subscriber Questionnaires
delivered to ▇▇▇▇▇▇▇▇ pursuant to Section 6.7 hereto, (iii)
-----------
such Units, therefore, cannot be resold unless registered
under the Securities Act and applicable state securities laws,
or unless an exemption from registration is available, (iv)
there is no public market for such Units, and (v) the
Operating Partnership has no obligation or intention to
register such Units for resale under the Securities Act or any
state securities laws or to take any action that would make
available any exemption from the registration requirements of
such laws. Unit Recipient hereby acknowledges that because of
27
the restrictions on transfer or assignment of such Units to be
issued hereunder which are set forth in this Agreement and in
the Partnership Agreement, Unit Recipient may have to bear the
economic risk of the investment commitment evidenced by this
Agreement and any Units acquired hereby for an indefinite
period of time, and that, under the terms of the Partnership
Agreement of the Operating Partnership, as it will be in
effect on the Closing Date, Units will not be redeemable at
the request of the holder thereof for Common Stock of the
Company prior to the first (1st) anniversary of their
issuance.
(4) The address of Unit Recipient's
residence or principal place of business, as applicable, shall
be set forth, together with a statement as to whether such
Unit Recipient has any present intention of becoming a
resident of any country, state or jurisdiction other than the
country and state in which it present principal place of
business or residence, as applicable, is sited.
(h) No Additional Proceedings; Tenant Defaults. Except for
------------------------------------------
matters as to which ▇▇▇▇▇▇▇▇ was given written notice by Partnership or
otherwise had actual knowledge prior to the end of the Study Period, on the
Closing Date, there shall be no (a) litigation pending or threatened, seeking
(i) to enjoin the consummation of the transaction hereunder, (ii) to recover
title to the Property, or any part thereof or any interest therein, (iii) to
increase materially ad valorem taxes theretofore assessed against any of the
Property, (iv) to materially restrict the operation of the Property by reason of
the violation of any law, rule, regulation, restrictive covenant or zoning
ordinance that may be applicable to the Property, or (v) damages or other relief
by any tenant(s) on account of a default by one or more Partnerships under any
Leases which constitutes a Material Tenant Occurrence (as hereinafter defined),
or (b) monetary or other material default by any tenant(s) which constitute a
Material Tenant Occurrence. As used herein, "Material Tenant Occurrence" means
one or more events or occurrences involving one or more tenant(s) of the
Property (taken for this purpose as all of the Property encompassed by this
Agreement) who lease, in the aggregate, at least 7,500 rentable square feet of
area and who, by reason of the event(s) or occurrence(s) in question, are deemed
by ▇▇▇▇▇▇▇▇ (in its reasonable business judgment) to be unlikely to continue
their tenancy or to substantially perform their lease obligations.
(i) Estoppel Letters. The estoppel letters to be delivered at
----------------
Closing pursuant to Section 7.2(g) hereof shall have been obtained and delivered
--------------
and shall reflect no facts at material variance with the facts disclosed on the
Rent Roll and records provided to ▇▇▇▇▇▇▇▇ during the Study Period. For these
purposes, any changes in facts or circumstances occurring after delivery of the
Rent Roll which do not constitute a Material Tenant Occurrence, and which do not
result from a default on the part of Partnership(s), shall not be deemed
material.
(j) Offering of Units. There shall have been no change in any
-----------------
securities or related law or interpretation, nor any change in Partnership's or
any Unit Recipient's status as "accredited investors" under the Securities Act,
that would render consummation of the transfer of the partnership interests for
Units as contemplated by this Agreement a violation of any such laws or
interpretations thereof.
28
(k) OTR Agreement. OTR shall have performed all of its obligations
-------------
under the OTR Agreement.
(l) Lender Estoppel Letters. The lender estoppel letters to be
-----------------------
delivered at Closing shall have been obtained and delivered and shall reflect no
facts at material variance with the facts represented and warranted to ▇▇▇▇▇▇▇▇
hereunder.
(m) Simultaneous Closings. There shall occur, simultaneously
---------------------
with Closing hereunder, (1) closing under (i) the OTR Agreement, (ii) the
Contribution Agreement among ▇▇▇▇▇▇▇▇, certain affiliates of Partnerships and
the partners of such affiliates with respect to assets in Pennsylvania, and
(iii) the Agreement to Assign Property Agreements and Other Assets among
▇▇▇▇▇▇▇▇, Terramics Management Company, Terramics Property Associates and
Terramics Property Company, and (2) the execution and delivery of the Right of
First Opportunities Agreements between ▇▇▇▇▇▇▇▇ and certain affiliates of
Partnerships covering other assets owned by such affiliates, and (3) the
execution and delivery of any other agreements and the satisfaction of any other
conditions precedent which may be required by ▇▇▇▇▇▇▇▇ as a condition to
proceeding to Closing and which are identified prior to the end of the Study
Period and agreed to by Contributors.
Each of the conditions contained in this Section 5.1 are intended for the
-----------
benefit of ▇▇▇▇▇▇▇▇ and may be waived in whole or in part, by ▇▇▇▇▇▇▇▇, but only
by an instrument in writing signed by ▇▇▇▇▇▇▇▇.
5.2 As to Contributors' Obligations. Contributors' obligations
-------------------------------
hereunder are subject to the satisfaction of the following conditions precedent:
(a) ▇▇▇▇▇▇▇▇' Deliveries. ▇▇▇▇▇▇▇▇ shall have delivered to or
--------------------
for the benefit of Contributors, on or before the Closing Date, all of the
documents and payments required of ▇▇▇▇▇▇▇▇ pursuant to Sections 7.3 and 7.4
--------------------
hereof.
(b) Representations, Warranties and Covenants; Obligations of
---------------------------------------------------------
▇▇▇▇▇▇▇▇. All of ▇▇▇▇▇▇▇▇' representations and warranties made in this Agreement
--------
shall be true and correct in all material respects as of the date hereof and as
of the date of Closing as if then made and ▇▇▇▇▇▇▇▇ shall have performed in all
material respects all of its covenants and other obligations under this
Agreement.
(c) Simultaneous Closing under OTR Agreement. There shall
----------------------------------------
occur, simultaneously with Closing hereunder, closing under the OTR Agreement;
provided, the foregoing shall not limit the remedy in favor of ▇▇▇▇▇▇▇▇ set
forth in Section 9.2(c) hereof.
--------------
Each of the conditions contained in this Section are intended for the benefit of
Contributors and may be waived in whole or in part, by Contributors, but only by
an instrument in writing signed by Contributors.
29
ARTICLE VI.
-----------
COVENANTS OF PARTNERSHIPS AND CONTRIBUTORS
------------------------------------------
To induce ▇▇▇▇▇▇▇▇ to enter into this Agreement and to pay the
Contribution Value to Contributors, each Partnership (and each Contributor shall
cause each Partnership to comply with the following, provided, such agreement by
Contributor shall not alter any Contributor's status as a limited partner under
applicable partnership law as to any third party) covenants and agrees to the
following:
6.1 Operating Agreements. Partnership shall not enter into any new
--------------------
management agreement, maintenance or repair contract, supply contract, lease in
which it is lessee or other agreements with respect to the Property, nor shall
Partnership enter into any agreements modifying the Operating Agreements in any
material respect, unless (a) any such agreement or modification is terminable
without substantial penalty on 30 days' notice or (b) Partnership has obtained
▇▇▇▇▇▇▇▇' prior written consent to such agreement or modification. Partnership
agrees to cancel and terminate effective as of the Closing Date any Operating
Agreements which are terminable without substantial penalty if ▇▇▇▇▇▇▇▇ requests
in writing prior to the expiration of the Study Period that such agreements be
so terminated.
6.2 Warranties and Guaranties. Partnership shall not release or modify
-------------------------
any Warranties and Guaranties, if any, except with the prior written consent of
▇▇▇▇▇▇▇▇.
6.3 Insurance. Partnership shall pay all premiums on, and shall not
---------
cancel or voluntarily allow to expire, any of Partnership's Insurance Policies
unless such policy is replaced, without any lapse of coverage, by another policy
or policies providing coverage at least as extensive as the policy or policies
being replaced.
6.4 Independent Audit. The parties acknowledge that Partnership and its
-----------------
management company have provided to ▇▇▇▇▇▇▇▇' representatives and independent
accounting firm access to financial and other information relating to the
Property in the possession of or otherwise available to Partnership, its
affiliates or Partnership's management company which is sufficient to enable
▇▇▇▇▇▇▇▇' representatives and independent accounting firm to prepare, at
▇▇▇▇▇▇▇▇' expense, audited financial statements for 1994, 1995 and 1996 in
conformity with generally accepted accounting principles and to enable them to
prepare such statements, reports or disclosures as ▇▇▇▇▇▇▇▇ may ▇▇▇▇ necessary
or advisable. Partnership shall also provide and/or shall cause its management
company to provide to ▇▇▇▇▇▇▇▇' independent accounting firm, promptly following
execution of this Agreement, a signed representation letter which would be
sufficient to enable an independent public accountant to render an opinion on
the financial statements related to the Property. Partnership shall authorize
and shall cause its management company to authorize any attorneys who have
represented Partnership or its management company in material litigation
pertaining to or affecting the Property to respond, at ▇▇▇▇▇▇▇▇' expense, to
inquiries from ▇▇▇▇▇▇▇▇' representatives and independent accounting firm. If and
to the extent Partnership's financial statements pertaining to the Property for
any periods during the years 1994, 1995 or 1996 have been audited, promptly
after the execution of this Agreement Partnership shall provide ▇▇▇▇▇▇▇▇ with
copies of such audited financial statements and shall cooperate with ▇▇▇▇▇▇▇▇'
representatives and independent public accountants to enable them to contact the
auditors who prepared such
30
audited financial statements and to obtain, at ▇▇▇▇▇▇▇▇' expense, a reissuance
of such audited financial statements.
6.5 Operation of Property Prior to Closing. Partnership covenants and
--------------------------------------
agrees with ▇▇▇▇▇▇▇▇ that, between the date of this Agreement and the date of
Closing (and each Contributor shall cause each Partnership to comply with the
following, provided, such agreement shall not alter Contributor's status as a
limited partner under applicable partnership law as to any third party):
(a) Subject to the restrictions contained herein, Partnership
shall operate the Property in substantially the same manner in which Partnership
operated the Property prior to the execution of this Agreement, so as to keep
the Property in good condition, reasonable wear and tear excepted.
(b) Partnership shall maintain its books of account and
records in the usual, regular and ordinary manner, in accordance with sound
accounting principles applied on a basis consistent with the basis used in
keeping its books in prior years.
(c) Partnership shall maintain in full force and effect all
Insurance Policies.
(d) Partnership shall punctually perform and discharge all
obligations and undertakings of Partnership under the Leases and shall not
permit a default by Partnership to occur thereunder.
(e) Partnership shall use and operate the Property in
compliance with Applicable Laws and the requirements of any mortgage, Lease,
Operating Agreement and Insurance Policy affecting the Property.
(f) Partnership shall cause to be paid prior to delinquency
all ad valorem and other taxes due and payable with respect to the Property or
its operation.
(g) Without the express prior written consent of ▇▇▇▇▇▇▇▇
(which shall not be unreasonably withheld), Partnership shall not: (i) enter
into new Leases of any kind or nature affecting the Property; or (ii) grant a
renewal or extension of any existing Lease, or consent to any assignment,
sublease or expansion of any existing lease or portion thereof which, by the
terms of any such Lease, requires Partnership's prior consent as a condition to
any such renewal, extension, assignment, sublease or expansion. Partnership
shall not, without the express written consent of ▇▇▇▇▇▇▇▇ (which shall not be
unreasonably withheld), in any manner change, modify, extend, renew or terminate
any Lease except as required by the terms thereof, or waive in any material
respect any of the tenant's obligations under any Lease. Partnership shall not
apply all or any part of the security or damage deposit of a tenant under any
Lease to obligations of such tenant unless such tenant has vacated its portion
of the Property as of the Closing Date. Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇
hereby approves the new Leases described in Schedule 6.5(g) hereto.
(h) Partnership shall cause all debts and liabilities for labor,
materials, services and equipment incurred in the construction, operation and
development of the property, including leasehold improvements, to be promptly
paid.
31
(i) Neither Partnership nor Partnership's managing agent shall
(1) make any agreements which shall be binding upon ▇▇▇▇▇▇▇▇ with respect to the
Property or that otherwise cannot be terminated without penalty upon thirty (30)
days notice, or (2) reduce or cause to be reduced any rents or any other
revenues over which Partnership has operational control.
(j) Partnership shall promptly deliver to ▇▇▇▇▇▇▇▇ upon ▇▇▇▇▇▇▇▇'
request such reports showing the revenue and expenses of the Property as
Partnership customarily keeps or receives internally for its own use.
(k) Except as required by the terms thereof or hereof, Partnership
shall not in any manner change, modify, extend, renew or terminate any Operating
Agreement which would be binding on ▇▇▇▇▇▇▇▇ with respect to the Property
without the express written consent of ▇▇▇▇▇▇▇▇ (which shall not be unreasonably
withheld).
(l) Partnership shall promptly advise ▇▇▇▇▇▇▇▇ of any litigation,
arbitration or administrative hearing concerning or affecting the Property of
which Partnership obtains actual knowledge.
(m) Partnership shall refrain from amending, altering or
terminating the partnership agreement of Partnership without the prior written
consent of ▇▇▇▇▇▇▇▇.
(n) Partnership shall keep the Existing Note current, shall comply
with the terms and provisions of the Existing Note and Existing Liens and shall
immediately send ▇▇▇▇▇▇▇▇ copies of all correspondence received from the holder
of the Existing Note. Partnership shall not modify any provisions of the
Existing Note or Existing Liens.
6.6 No Marketing. Partnership shall not market the Property for sale
------------
or enter into discussions or negotiations with potential purchasers of the
Property, nor shall Contributor market any interests in the Partnership for sale
or enter into discussions or negotiations with potential purchasers of such
interests, unless this Agreement has been terminated pursuant to its terms.
6.7 Prospective Subscriber Questionnaires. During the Study Period,
-------------------------------------
Contributors shall deliver to the Operating Partnership a definitive list of all
Unit Recipients to receive Units at the Closing, to the extent different from
those set forth on Schedule 2.2(a). Each Unit Recipient shall deliver to the
---------------
Operating Partnership within the Study Period a completed and duly executed
Prospective Subscriber Questionnaire in substantially the form attached hereto
as Exhibit C, which Questionnaires shall confirm to the satisfaction of the
---------
Operating Partnership that each Unit Recipient is an "accredited" investor
within the meaning of Rule 501(a) promulgated under the Securities Act. Each
Unit Recipient shall also deliver to the Operating Partnership, upon the
Operating Partnership's reasonable request, such other information, certificates
and materials as the Operating Partnership may reasonably request in connection
with offering the Units without registration under the Securities Act and the
securities laws of applicable states and other jurisdictions.
32
6.8 Delivery of Tax Information. In connection with the issuance of
---------------------------
Units to Contributor and any Unit Recipient, Partnership shall deliver to the
Operating Partnership during the Study Period, at Partnership's sole cost and
expense, prepared as of the date of this Agreement, depreciation and
amortization schedules for the assets constituting the Property, as kept for tax
purposes, showing original basis, accumulated depreciation or amortization,
original useful life of such assets, remaining useful life of such assets and
the date(s) when such assets were placed in service.
6.9 Information Regarding the Restrictions on Beneficial Ownership of
-----------------------------------------------------------------
Units. From the date of this Agreement until the Closing, and then so long as
-----
any Unit Recipient holds any Units, each such Unit Recipient shall notify the
Operating Partnership in writing promptly upon any change in the identity or
number of its partners or of its indirect partners as identified pursuant to
this Agreement, and shall provide the information called for in Section 6.8
-----------
hereof with respect to any such change. In addition, so long as any Unit
Recipient holds any Units, without the prior written consent of the Operating
Partnership, each Unit Recipient shall not (i) admit additional partners, (ii)
permit the transfer of interests in Partnership and/or each Unit Recipient to a
look-through entity (as defined herein) or (iii) permit any transfer of
interests in such Unit Recipients if, as a result of the admissions or transfers
described in (i) through (iii) the number of direct or indirect beneficial
owners in such Unit Recipients would increase. Each Unit Recipient shall use its
best efforts to secure the compliance of any look-through entities that hold
direct or indirect interests of Contributor and such Unit Recipients with the
requirements of this Section as if such requirements applied directly to such
entities. Each Unit Recipient acknowledges that the provisions of this Section
are imposed to aid the Operating Partnership in avoiding taxation as a
corporation for federal income tax purposes, agrees that monetary damages may be
insufficient to remedy the potential harm caused by any breach of the provisions
of this Section, and agree that injunctive relief, including specific
performance or another equitable remedy would be an appropriate remedy.
The provisions of this Section shall survive the Closing.
6.10 Partnership Agreement. At or prior to the Closing, each Unit
---------------------
Recipient shall deliver to the Operating Partnership a Limited Partner Signature
Page in substantially the form attached hereto as Exhibit F executed by each
---------
Unit Recipient.
6.11 Use of Name "Terramics". Partnership covenants and agrees not to
-----------------------
transfer the right to use the name "Terramics" or variations thereof to any
party other than ▇▇▇▇▇▇▇▇.
6.12 Partnership Interests. Contributor agrees that it shall not sell,
----------------------
transfer or assign, or create, grant or permit to exist a lien or security
interest in, its partnership interest in the Partnership. Partnership shall
prepare any tax returns or reports of the Partnership which are required to be
filed by the Partnership for any taxable period of the Partnership that ends on
or before the Closing Date. Upon ▇▇▇▇▇▇▇▇' reasonable request, for a period of
three (3) years after the Closing, or, in the event of a governmental
investigation or audit, at any time, Contributor shall make all of the
Contributor's records with respect to Contributor (as they relate to the
Property or the Partnership), the Partnership or the Property available to
▇▇▇▇▇▇▇▇ for inspection, copying and audit by ▇▇▇▇▇▇▇▇' designated accountants.
The foregoing covenants of Partnership and Contributors are for the
benefit of ▇▇▇▇▇▇▇▇ or its assignee of its rights under this Agreement.
33
ARTICLE VII.
------------
CLOSING
-------
7.1 Closing. The Closing shall occur on a business day designated by
-------
▇▇▇▇▇▇▇▇, with at least ten (10) days notice to Contributors (which such day
shall be no later than thirty (30) days following the expiration of the Study
Period). At or prior to Closing, the Partnerships shall have transferred, to or
for the benefit of the Contributors, the Excluded Partnership Property and
Liabilities, such that the only assets and liabilities of the Partnerships shall
be (i) the Property, (ii) the Leases, (iii) the Operating Agreements, (iv) the
Existing Secured Indebtedness, (v) the other assets and rights which ▇▇▇▇▇▇▇▇ is
to acquire at Closing, and the other liabilities and obligations which ▇▇▇▇▇▇▇▇
is to assume or which the Partnership or its assets shall be subject to, as
expressly set forth in this Agreement, and (vi) the rights, powers, privileges
and attendant obligations pertaining to items (i) through (v) above.
As more particularly described below, at the Closing the parties hereto
will meet to (i) execute all of the documents required to be delivered in
connection with the transactions contemplated hereby (the "Closing Documents"),
(ii) deliver the same to Escrow Agent to the extent a temporary escrow is
mutually agreed to or required, and (iii) take all other action required to be
taken in respect of the transactions contemplated hereby. The Closing will occur
at the offices of Blank Rome Comisky & ▇▇▇▇▇▇▇▇, One ▇▇▇▇▇ Square, Philadelphia,
Pennsylvania, or at such other place as ▇▇▇▇▇▇▇▇ shall designate by written
notice to Partnership given at least five days prior to the Closing. At the
Closing, ▇▇▇▇▇▇▇▇ shall deliver the balance of the Contribution Value to Escrow
Agent for disbursement to the intended recipients, Escrow Agent shall update the
title to the Property and, provided there has been no change in the status of
title as reflected in the Title Commitment and Survey which has not been waived
by ▇▇▇▇▇▇▇▇ pursuant to Section 2.4(d) hereof, Escrow Agent shall release and
date, where appropriate, the Closing Documents in accordance with the joint
instructions of Contributors and ▇▇▇▇▇▇▇▇ and shall send, by wire transfer, all
sums owing to Contributors hereunder to Contributors and shall admit the
designated Unit Recipients as partners of the Operating Partnership in
accordance with the Units to be issued pursuant to this Agreement. As provided
herein, the parties hereto will agree upon adjustments and prorations to certain
items which cannot be exactly determined at the Closing and will make the
appropriate adjustments with respect thereto.
7.2 Partnership's Deliveries. At the Closing, Partnership and/or
------------------------
Contributor shall deliver to ▇▇▇▇▇▇▇▇ (or, in the case of records, files and the
like, Partnership shall make same available to ▇▇▇▇▇▇▇▇ at the location of each
Property or at Partnership's regular business office) all of the following
instruments, each of which shall have been duly executed and, where applicable,
acknowledged and/or sworn on behalf of Partnership and shall be dated as of the
Closing Date:
(a) The certificate required by Section 5.1(b) hereof.
--------------
(b) The ▇▇▇▇ of Sale - Personal Property in the form of
Exhibit H hereto.
---------
(c) The Assignment and Assumption Agreement in the form
of Exhibit I hereto.
---------
34
(d) The Assignment of Leases in the form of Exhibit J hereto.
(e) An updated certified Rent Roll dated as of the date
preceding the Closing Date.
(f) An estoppel letter in the form of Exhibit K hereto dated
---------
not more than forty (40) days prior to the Closing Date (i) from each of the
tenants under the Leases covering 10,000 square feet or more (including for such
purpose tenants who occupy more than one location where the aggregate of such
locations cover 10,000 square feet or more), and (ii) from tenants leasing, in
the aggregate, at least eighty five percent (85%) of the total rentable area of
all the Improvements covered by this Agreement. The Contributors of each
applicable Partnership shall execute an estoppel letter certifying to the
matters specified in Exhibit K for any tenant which does not execute an estoppel
---------
letter; provided that (i) Contributors shall be released from liability under
such estoppel letter if and to the extent a conforming estoppel letter is
ultimately obtained from a tenant and delivered to ▇▇▇▇▇▇▇▇, and (ii)
Contributors shall not be obligated to make any warranties or representations on
behalf of a tenant concerning environmental matters.
(g) Such agreements, affidavits or other documents as may be
required by the Title Company to issue the Owner's Title Policy subject only to
the Permitted Title Exceptions and to eliminate such standard exceptions and to
issue the endorsements thereto described on Schedule 7.2 hereto.
------------
(h) The FIRPTA Certificate.
(i) All original Warranties and Guaranties in Partnership's
possession or reasonably available to Partnership.
(j) A valid, final and unconditional certificate of
occupancy for the Real Property and Improvements issued by the appropriate
Governmental Authority, or letters from such Governmental Authority certifying
equivalent compliance.
(k) The originals of all Operating Agreements to remain in
effect at Closing.
(l) Executed originals of all Leases, leases of Leased
Property, permits and, to the extent in Partnership's possession or control,
Authorizations as required hereunder and any other documents or instruments
affecting the Property or the ownership and operation thereof.
(m) All current real estate and personal property tax bills in
Partnership's possession or under its control.
(n) All books, records, operating reports, appraisal reports,
files and other materials in Partnership's possession or control which are
necessary in ▇▇▇▇▇▇▇▇' discretion to maintain continuity of operation of the
Property.
(o) Written notice executed by Partnership notifying all
interested parties, including, without limitation, all tenants under any Leases
directing that all payments, inquiries
35
and the like be forwarded to the address to be provided by ▇▇▇▇▇▇▇▇ (or as
otherwise directed by ▇▇▇▇▇▇▇▇).
(p) A current UCC Report showing no financing statements by
Partnership or Contributor as Debtor covering the Property or Partnership
interests to be acquired by ▇▇▇▇▇▇▇▇, except in favor of the holders of the
Existing Secured Indebtedness.
(q) An opinion from Partnership's and Contributor's counsel
stating that Partnership and Contributor have duly authorized, executed and
delivered to ▇▇▇▇▇▇▇▇ this Agreement and all of the documents to be delivered by
Partnership and Contributor hereunder.
(r) A limited partner signature page to the Partnership
Agreement in substantially the form attached hereto as Exhibit F, executed by
each Unit Recipient..
(s) Any other document or instrument reasonably requested by
▇▇▇▇▇▇▇▇ in connection with the transactions contemplated hereby and which is
reasonably required to effectuate the transactions contemplated herein.
(t) An estoppel certificate executed by the present
holder(s) of the Existing Secured Indebtedness. Any and all fees and charges in
connection with obtaining such written consent or approval (specifically
including, but not limited to, loan transfer fees) shall be at Partnership's
sole cost and expense. In the event such estoppel certificate(s) is/are not
received on or before the Closing Date, ▇▇▇▇▇▇▇▇ may terminate this Agreement at
any time up to and including the Closing Date and receive a full refund of the
Deposit and this Agreement shall thereafter be null and void. If ▇▇▇▇▇▇▇▇ elects
not to so terminate, ▇▇▇▇▇▇▇▇ may extend the Closing Date for a period of time
up to and including thirty (30) days to allow Partnership to obtain such
consents or approvals. The estoppel certificate(s) must refer to ▇▇▇▇▇▇▇▇'
proposed acquisition of the interests in the Partnerships, be dated not more
than forty (40) days prior to the Closing Date and recite: (i) the unpaid
balance of principal and accrued interest due on the Existing Note as of the
date thereof; (ii) the interest rate on the Existing Note; (iii) the amount and
date of payment of the next installment of principal and interest due on the
Existing Note; (iv) the maturity date of the Existing Note; (v) the amount of
funds, if any, held in a tax and insurance escrow under any of the Existing
Liens; (vi) the amount and date of payment of the next installment due under
such tax and insurance escrow; (vii) reference to the Existing Liens evidencing
or securing the Existing Note; (viii) that the Existing Note evidencing the
Existing Secured Indebtedness is current and that, to the best of the holder's
knowledge, there are no defaults thereunder nor any uncured notices of default
sent by the holder; (ix) that the holder(s) consent(s) to the assignment of the
Partnership interests to ▇▇▇▇▇▇▇▇ and that the holder(s) will not accelerate the
Existing Note evidencing the indebtedness or declare a default under any
instruments evidencing or securing the Existing Secured Indebtedness by virtue
thereof; (x) that the holder of the indebtedness will not renew, extend or
otherwise alter or modify the Existing Secured Indebtedness or the Existing
Liens securing the Existing Secured Indebtedness without the consent of
▇▇▇▇▇▇▇▇; (xi) that the holder is the sole holder of the Existing Note and the
Existing Liens; (xii) the amount of holdbacks, if any, retained by the holder(s)
of the Existing Note; (xiii) that the holder of the Existing Note agrees to send
to ▇▇▇▇▇▇▇▇ any notices which must be or may be sent under the Existing Note or
the Existing Liens; and (xiv) that (except in the case of the CIGNA loan) the
Existing Liens securing the Existing Note secure only the Existing Note and
secure no other
36
indebtedness of Partnership to the holder(s) of the Existing Note. Partnership
agrees to use its best efforts to satisfy this contingency and pay all costs and
expenses imposed by the holder(s) of the Existing Note in connection with such
estoppel letters and consenting to the transfer of the Property to ▇▇▇▇▇▇▇▇.
Notwithstanding such best efforts, the lender estoppel certificate shall be
deemed acceptable if it contains, at a minimum, the certifications which are
customarily addressed by institutional lenders for similarly requested estoppel
certificates in connection with the pay-off of a loan and/or transfer of the
secured property. If ▇▇▇▇▇▇▇▇ intends to pay off any Existing Secured
Indebtedness within 60 days following Closing, then the certificate from the
lender need only contain a certification as to the unpaid principal and accrued
interest on the subject indebtedness as of the date thereof together with a per
diem amount of interest following the date thereof and any applicable prepayment
premiums, which would be necessary in order to release any and all liens,
assignments and security interests encumbering the Property.
(u) Each group of Contributors who are the partners in a
particular Partnership, as primary obligors, jointly and severally with ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (said 3 individuals
being referred to as the "Principals") as sureties (each separate group of
Contributors together with the Principals being referred to collectively as
"Indemnitors") shall execute and deliver to ▇▇▇▇▇▇▇▇ an Indemnity and Security
Agreement, pursuant to which (i) Indemnitors shall jointly and severally
(without the obligation on the part of ▇▇▇▇▇▇▇▇ to proceed in any particular
order against any of the Indemnitors) indemnify and hold ▇▇▇▇▇▇▇▇ harmless from
and against any and all claims, costs, penalties, damages, losses, liabilities
and expenses (including reasonable attorneys' fees) that may be incurred by
▇▇▇▇▇▇▇▇ as a result of any breach by the Contributor or Partnership of any of
its representations or warranties or any of its express indemnities set forth
herein or in any document required to be delivered by Partnership (or by any
affiliates of Partnership or Principals) or Contributor to ▇▇▇▇▇▇▇▇ pursuant
hereto, except for any breach of any representation or warranty as to which
Partnership or Contributor has given ▇▇▇▇▇▇▇▇ written notice (or as to which
▇▇▇▇▇▇▇▇ has knowledge) prior to the Closing Date and ▇▇▇▇▇▇▇▇ nevertheless
consummated the Closing and (ii) ▇▇▇▇▇▇▇▇ shall be granted liens on and security
interests in a portion of the Units to be issued by ▇▇▇▇▇▇▇▇ under this
Agreement (such grant to be made pro-rata by all Unit Recipients) in order to
secure the obligations under the Indemnity and Security Agreement. Indemnitors
and the other Unit Recipients shall execute financing statements evidencing the
security interests created under the Indemnity and Security Agreement.
Notwithstanding the foregoing, (i) liability under the Indemnity and Security
Agreement for a particular indemnity, warranty or representation shall extend
only for the time corresponding to the survival period of the underlying
indemnity, representation or warranty (if any, otherwise within the applicable
legal limitation period), (ii) the aggregate maximum liability of all
Partnerships, Contributors and Indemnitors under the Indemnity and Security
Agreement(s) and under any other indemnities, warranties and representations set
forth in this Agreement, including the maximum liability of the affiliated
partnerships and indemnitors under the Contribution Agreement of even date
herewith relating to certain Pennsylvania assets, shall be $4,000,000 for any
claims made within one (1) year after the Closing Date, and ten percent (10%) of
such amount thereafter, and recourse with respect thereto shall, except as set
forth in subsection (iv) below, be limited to the Units pledged to ▇▇▇▇▇▇▇▇ to
secure same, (iii) the number of Units pledged for such purpose shall be
equivalent in value to 110% of the maximum monetary liability established as
aforesaid, such Units to be valued as such as of the Closing Date based upon the
market price for equivalent stock of Company assuming no conversion restriction,
and (iv) to the extent no claim was theretofore made on
37
account of the obligations under the Indemnity and Security Agreement, the
pledged Units shall be released on the first anniversary of the Closing Date,
and thereafter the Indemnitors shall have personal liability for any remaining
obligations thereunder for which the survival period is in excess of 1 year (but
only to the maximum aggregate liability of 10% of $4,000,000 as set forth
above); provided, however, there shall be no limitation of liability applicable
to the indemnities made in Section 2.2(c) hereof.
--------------
(v) The Principals shall execute a guaranty in favor of
Woodland Falls Associates-IV Limited Partnership guarantying, on a joint and
several basis, the obligations of Valleybrooke Executive Suites, Inc. under its
Lease at Woodland Falls Corporate Park; provided, the guaranty shall be released
if ▇▇▇▇▇▇▇▇ exercises its right to purchase such lease under the Right of First
Opportunity Agreement covering such lease.
(w) Contributor shall execute assignments of partnership
interests in the Partnerships to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Properties Limited, Ltd.
7.3 ▇▇▇▇▇▇▇▇' Deliveries.
--------------------
(a) At the Closing, ▇▇▇▇▇▇▇▇ shall deliver to Escrow Agent
for disbursement to the intended recipients, or directly to the Unit Recipients
in the case of Units, the portion of the Contribution Value described in Section
-------
2.2 hereof.
---
(b) At the Closing, ▇▇▇▇▇▇▇▇ shall deliver to Contributors
the Assignment and Assumption Agreement and the Assignment of Leases, duly
executed by ▇▇▇▇▇▇▇▇.
(c) At the Closing, ▇▇▇▇▇▇▇▇ shall deliver to Contributors
(i) all other documents and instruments referred to in this Agreement as are
required to be delivered by it, (ii) any other document or instrument reasonably
requested by Contributors in connection with the transactions contemplated
hereby, and (iii) an opinion from ▇▇▇▇▇▇▇▇' counsel stating that ▇▇▇▇▇▇▇▇ has
duly authorized, executed and delivered to Partnerships this Agreement and all
of the documents to be delivered by ▇▇▇▇▇▇▇▇ hereunder.
(d) At Closing, ▇▇▇▇▇▇▇▇ shall cause to be executed and
delivered to Messrs. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ employment contracts with
▇▇▇▇▇▇▇▇.
7.4 Mutual Deliveries. At the Closing, ▇▇▇▇▇▇▇▇ and Contributors shall
-----------------
mutually execute and deliver each to the other:
(a) A final closing statement reflecting the Contribution
Value and the adjustments and prorations required hereunder and the allocation
of income and expenses required hereby.
(b) Such other and further documents, papers and
instruments as may be reasonably required by the parties hereto in connection
with the transactions contemplated hereby or their respective counsel.
38
(c) At or prior to the Closing, the Company and Unit Recipients
will enter into a Registration Rights Agreement in substantially the form
attached hereto as Exhibit E.
7.5 Closing Costs. Except as is explicitly provided in this Agreement,
-------------
each party hereto shall pay its own legal fees and expenses. References in this
Agreement to payment obligations of Contributors either must be paid out of the
funds of each Contributor or, if made by the Partnerships, must be paid solely
from the Excluded Partnership Assets and Liabilities, except for the prorations
to be made under this Agreement as of the Closing Date. All transfer taxes and
surtaxes due with respect to the transfer of partnership interests or other
transactions required hereunder shall be split equally by ▇▇▇▇▇▇▇▇ and
Contributors. Contributors shall pay for the costs associated with the releases
of any deeds of trust, mortgages and other financing encumbering the Property
and for any costs associated with any corrective instruments, subject to the
provisions hereinabove contained relating to prepayment premiums on Existing
Secured Indebtedness. ▇▇▇▇▇▇▇▇ shall pay all costs for title searches, tax
certificates and all premiums for the issuance of the Title Policy and all
endorsements thereto described on Schedule 7.2 hereto and deletions therefrom
which are customarily required by institutional investors purchasing property
comparable to the Property; all costs of providing the matters described in
Sections 2.4(b) to ▇▇▇▇▇▇▇▇ except for such matters to be paid for by
Partnership as therein provided; and one-half (1/2) of any escrow fees or
similar charges of the Escrow Agent. All other expenses incurred by Contributors
or ▇▇▇▇▇▇▇▇ with respect to the Closing shall be borne and paid for exclusively
by the party incurring same, without reimbursement, except to the extent
otherwise specifically provided herein. The terms and provisions of this Section
7.5 shall survive the Closing without limitation.
7.6 Revenue and Expense Allocations. All revenues and expenses with
-------------------------------
respect to the Property, and applicable to the period of time before and after
Closing, determined in accordance with sound accounting principles consistently
applied, shall be allocated between Contributors and ▇▇▇▇▇▇▇▇ as provided
herein. Contributors shall be entitled to all revenue and shall be responsible
for all expenses for the period of time up to but not including the date of
Closing, and ▇▇▇▇▇▇▇▇ shall be entitled to all revenue and shall be responsible
for all expenses for the period of time from, after and including the date of
Closing. Such adjustments shall be shown on the closing statements (with such
supporting documentation as the parties hereto may require being attached as
exhibits to the closing statements) and shall increase or decrease (as the case
may be) the cash amount payable by ▇▇▇▇▇▇▇▇ pursuant to Section 2.2 hereof.
Without limiting the generality of the foregoing, the following items of revenue
and expense shall be allocated at Closing:
(a) Current rents and escalation charges for taxes and
operating expenses.
(b) Real estate, personal property taxes and special
assessments for the fiscal or calendar year in which Closing occurs.
(c) Revenue and expenses under the Operating Agreements to
remain in effect after Closing.
(d) Utility charges (including, but not limited to, charges
for water, sewer and electricity).
39
(e) Municipal or other governmental improvement liens, which
shall be paid prior to Closing where the work has physically commenced, and
which shall remain in effect at Closing where the work has been authorized, but
not physically commenced.
(f) All other revenues and expenses of the Property, to the
extent customarily prorated by purchasers and sellers of office buildings in the
county in which the Property is located.
(g) Interest on the Existing Note.
Contributors shall pay or furnish a credit to ▇▇▇▇▇▇▇▇ for (i) prepaid rents and
(ii) unforfeited security deposits together with interest thereon held by
Partnership under Leases.
Contributors shall pay or cause to be paid all real estate taxes and
installments for special assessments (prorated to the Closing Date) for the
Property due and payable in, or deferred with respect to the years prior to, the
year in which the Closing occurs. All installments for special assessments
(prorated to the Closing Date) pending, levied or due and payable on or prior to
the Closing Date shall be paid by Contributors on or before the Closing Date.
All unpaid subdivision and platting costs and expenses heretofore incurred by
Partnership, including, without limitation, all subdivision exactions, fees and
costs and all dedication of land for parks and other public uses or payment of
fees in lieu thereof, shall be paid by Contributors on or prior to the Closing
Date.
If accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills and/or real estate or
personal property taxes), the parties shall allocate such revenue or expenses at
Closing on the best available information, subject to adjustment upon receipt of
the final ▇▇▇▇ or other evidence of the applicable revenue or expense. The
obligation to make the adjustment shall survive the closing of the transaction
contemplated by this Agreement. Any revenue received or expense incurred by
Contributors, Partnership or ▇▇▇▇▇▇▇▇ with respect to the Property after the
date of Closing shall be promptly allocated in the manner described herein and
the parties shall promptly pay or reimburse any amount due. The proration
provisions of this Agreement shall survive the closing of the transaction
contemplated hereby for a period of nine (9) months.
7.7 Delinquent Rents. Any rents or other amounts which are delinquent
----------------
as of the Closing shall not be adjusted or prorated at Closing, but ▇▇▇▇▇▇▇▇
shall make a reasonable attempt to collect such amounts for the benefit of
Contributors after the Closing; provided, however, that nothing contained herein
shall be construed to require ▇▇▇▇▇▇▇▇ to institute any lawsuit or other
proceedings to collect such delinquent amounts. In this connection, the first
monies collected by ▇▇▇▇▇▇▇▇ from tenants or other persons owing delinquent
rents or other amounts shall be applied to ▇▇▇▇▇▇▇▇' costs of collection, then
to the current rents or obligations of such person to ▇▇▇▇▇▇▇▇, and the balance,
if any, shall be delivered to Contributors.
7.8 Costs Associated with Certain Leasing Activities. Except as
------------------------------------------------
otherwise expressly set forth in this Section 7.8, all leasing commissions,
-----------
leasing expenses and capital costs of tenant improvements owing or which could
become due and owing with respect to Leases entered into on or before the
Closing Date shall be paid by Partnership when due, and Contributor shall
indemnify and hold harmless ▇▇▇▇▇▇▇▇ for claims brought against the Property or
▇▇▇▇▇▇▇▇ arising
40
therefrom, which indemnity shall survive the Closing. Notwithstanding the
foregoing, ▇▇▇▇▇▇▇▇ shall pay to Contributor at the Closing an amount equal to
the unamortized costs of all leasing commissions paid to brokers other than
affiliates of The Terramics Management Company and capital improvement costs
incurred in completing tenant improvements pursuant to (a) Leases entered into
by Partnership which have been approved by ▇▇▇▇▇▇▇▇ pursuant to Section 6.5(g)
and (b) renewals or extensions of existing Leases which have been approved by
▇▇▇▇▇▇▇▇ pursuant to Section 6.5(g).
ARTICLE VIII.
------------
GENERAL PROVISIONS
------------------
8.1 Condemnation. In the event of any actual or threatened taking,
------------
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, Partnership shall give written
notice thereof to ▇▇▇▇▇▇▇▇ promptly after Partnership learns or receives notice
thereof. If all or any part of the Real Property is, or is to be, so condemned
or sold which has a material adverse effect on the use or value of the remaining
Property, ▇▇▇▇▇▇▇▇ shall have the right to terminate this Agreement pursuant to
Section 9.2 hereof. If ▇▇▇▇▇▇▇▇ elects not to terminate this Agreement, all
proceeds, awards and other payments arising out of such condemnation or sale
(actual or threatened) shall be paid or assigned, as applicable, to ▇▇▇▇▇▇▇▇ at
Closing, and there shall be no reduction in the Contribution Value. Partnership
shall not settle or compromise any such proceeding without ▇▇▇▇▇▇▇▇' written
consent. If ▇▇▇▇▇▇▇▇ elects to terminate this Agreement by giving Partnership
written notice thereof prior to the Closing, the Deposit shall be promptly
returned to ▇▇▇▇▇▇▇▇ and all rights and obligations of Partnership, Contributor
and ▇▇▇▇▇▇▇▇ hereunder (except those set forth herein which expressly survive a
termination of this Agreement) shall terminate immediately.
8.2 Risk of Loss. If any loss or damage occurs to the Property by
------------
reason of casualty prior to Closing which is not, in the opinion of a reputable
contractor or engineer retained for such purpose, reasonably susceptible of
repair and restoration on or prior to December 31, 1997, ▇▇▇▇▇▇▇▇ shall have the
right to terminate this Agreement pursuant to Section 9.2 hereof. If ▇▇▇▇▇▇▇▇
-----------
elects not to terminate this Agreement pursuant to the immediately preceding
sentence or a loss or damage occurs prior to Closing which is reasonably
susceptible of repair and restoration within the aforesaid time period, then, at
the option and election of ▇▇▇▇▇▇▇▇, (i) Closing shall be held as scheduled and
all unused insurance proceeds and rights to proceeds arising out of such loss or
damage shall be paid or assigned, as applicable, to ▇▇▇▇▇▇▇▇ at Closing and
▇▇▇▇▇▇▇▇ shall receive as a credit against the Contribution Value the amount of
any deductibles under the policies of insurance covering such loss or damage,
and there shall be no further reduction in the Contribution Value, or (ii)
Closing shall be postponed for such reasonable time (but not beyond December 31,
1997) as may be necessary to promptly and diligently complete the repair and
restoration, and Partnership shall utilize its best efforts to effectuate same
in a timely and efficient manner. If ▇▇▇▇▇▇▇▇ elects to terminate this Agreement
pursuant to this Section 8.2 by giving Partnership written notice thereof prior
to the Closing, the Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇ and all
rights and obligations of Partnership, Contributor and ▇▇▇▇▇▇▇▇ hereunder
(except those set forth herein which expressly survive a termination of this
Agreement) shall terminate immediately.
41
8.3 Broker. The parties acknowledge that Broker has been the procuring
------
cause of this Agreement. It shall be the obligation of Contributor to pay Broker
its commission, when, as and if the transaction contemplated hereby actually
closes, in accordance with a separate agreement between the Broker and
Partnership. There is no other real estate broker involved in this transaction.
▇▇▇▇▇▇▇▇ warrants and represents to Partnership and Contributor that ▇▇▇▇▇▇▇▇
has not dealt with any other real estate broker in connection with this
transaction, nor has ▇▇▇▇▇▇▇▇ been introduced to the Property or to Partnership
by any other real estate broker, and ▇▇▇▇▇▇▇▇ shall indemnify Contributor and
hold Contributor harmless from and against any claims, suits, demands or
liabilities of any kind or nature whatsoever arising on account of the claim of
any other person, firm or corporation to a real estate brokerage commission or a
finder's fee as a result of having dealt with ▇▇▇▇▇▇▇▇, or as a result of having
introduced ▇▇▇▇▇▇▇▇ to Partnership or to the Property. In like manner,
Contributor warrants and represents to ▇▇▇▇▇▇▇▇ that neither Contributor nor
Partnership has dealt with any other real estate broker in connection with this
transaction, nor has Partnership or Contributor been introduced to ▇▇▇▇▇▇▇▇ by
any other real estate broker, and Contributor shall indemnify ▇▇▇▇▇▇▇▇ and save
and hold ▇▇▇▇▇▇▇▇ harmless from and against any claims, suits, demands or
liabilities of any kind or nature whatsoever arising on account of the claim of
any person, firm or corporation to a real estate brokerage commission or a
finder's fee as a result of having dealt with Partnership or Contributor in
connection with this transaction. This provision shall survive any termination
of this Agreement and a closing of the transaction contemplated hereby.
8.4 Bulk Sale. It shall be the obligation of Partnership and
---------
Contributor to comply with any bulk sale requirements, statutes, laws,
ordinances and regulations promulgated with respect thereto, if any, in the
State in which the Property is located, or in or by any governmental entity
having jurisdiction with respect thereto, and to provide proof of such
compliance or proof that no such compliance is required, to ▇▇▇▇▇▇▇▇, at or
prior to Closing. In any event, Contributor shall indemnify ▇▇▇▇▇▇▇▇ and save
and hold ▇▇▇▇▇▇▇▇ harmless from and against any claims, suits, demands,
liabilities or obligations of any kind or nature whatsoever, including all costs
of defending same, and reasonable attorneys' fees paid or incurred in connection
therewith, arising out of or relating to any claim made by any third party or
any liability asserted by any third party that any applicable bulk sales law or
like statute has not been complied with. The provisions of this Section shall
survive the Closing of the transaction contemplated hereby.
8.5 Confidentiality. Except as hereinafter provided, from and after the
---------------
execution of this Agreement and until the information in question becomes
publicly known by disclosure on the part of ▇▇▇▇▇▇▇▇ or Company, ▇▇▇▇▇▇▇▇,
Contributor and Partnership shall keep the terms, conditions and provisions of
this Agreement confidential and neither shall disclose the terms, conditions and
provisions hereof, except to persons who "need to know", such as their
respective officers, directors, employees, attorneys, accountants, engineers,
surveyors, consultants, financiers, partners, investors and bankers, and such
other third parties whose assistance is required in connection with the
consummation of this transaction or as required by law or order of court of
competent jurisdiction. Neither Contributor nor Partnership shall make any press
release regarding the subject matter of this Agreement without the prior written
approval of ▇▇▇▇▇▇▇▇; and ▇▇▇▇▇▇▇▇ shall issue no press release regarding the
subject matter of this Agreement without first seeking Partnership's comments on
same. Notwithstanding the foregoing, it is acknowledged that ▇▇▇▇▇▇▇▇ is, or is
an affiliate of, a real estate investment trust (the "REIT") and the REIT has,
----
and the REIT, Prentiss or their affiliates may, seek to sell securities to the
general public;
42
consequently, the REIT, Prentiss and their affiliates shall have the absolute
and unbridled right to disclose any information regarding the transaction
contemplated by this Agreement required by law or as determined to be necessary
or appropriate by attorneys for each such entity to satisfy disclosure and
reporting obligations of each such entity. After Closing, ▇▇▇▇▇▇▇▇, Contributor
and Partnerships shall be free to disclose previously confidential information
in its sole, unfettered discretion.
ARTICLE IX.
----------
LIABILITY OF PARTIES;
---------------------
DEFAULT; TERMINATION RIGHTS
---------------------------
9.1 Liability of ▇▇▇▇▇▇▇▇. Except for obligations expressly assumed or
---------------------
agreed to be assumed by ▇▇▇▇▇▇▇▇ hereunder, ▇▇▇▇▇▇▇▇ is not assuming any
obligations of Partnership, Contributor or any liability for claims arising out
of any act, omission or occurrence which occurs, accrues or arises prior to the
Closing Date. Contributor, subject to the limitations of Section 7.2(u) hereof,
--------------
hereby indemnifies and holds ▇▇▇▇▇▇▇▇ harmless from and against any and all
claims, costs, penalties, damages, losses, liabilities and expenses (including
reasonable attorneys' fees) that may at any time be incurred by ▇▇▇▇▇▇▇▇ as a
result of (1) obligations of Partnership or Contributor relating to the
operation of the Property not expressly assumed or agreed to be assumed or taken
subject to by ▇▇▇▇▇▇▇▇ hereunder, or (2) wrongful or negligent acts or omissions
of Partnership, its agents or employees with respect to the Property which
occur, accrue or arise prior to the Closing Date. ▇▇▇▇▇▇▇▇ hereby indemnifies
and holds Contributor harmless from and against any and all claims, costs,
penalties, damages, losses, liabilities and expenses (including reasonable
attorneys' fees) that may at any time be incurred by Contributor as a result of
wrongful or negligent acts or omissions of ▇▇▇▇▇▇▇▇ relating to the Property
which occur, accrue and arise from and after the Closing Date. The provisions of
this Section shall survive the Closing of the transaction contemplated hereby.
9.2 Default by Partnership/Failure of Conditions Precedent. If any
------------------------------------------------------
condition set forth herein for the benefit of ▇▇▇▇▇▇▇▇ cannot or will not be
satisfied prior to Closing, or upon the occurrence of any other event that would
entitle ▇▇▇▇▇▇▇▇ to terminate this Agreement and its obligations hereunder, and
if Partnership or Contributor fails to cure any such matter or satisfy that
condition within ten (10) business days after notice thereof from ▇▇▇▇▇▇▇▇ (or
such other time period as may be explicitly provided for herein), ▇▇▇▇▇▇▇▇, at
its option, may elect (a) to terminate this Agreement, in which event (i) the
Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇, (ii) if the condition which has
not been satisfied is a breach of a representation, warranty or covenant known
by Partnership or Contributor to have been materially inaccurate or misleading
when made, then Partnership shall be obligated upon demand to reimburse ▇▇▇▇▇▇▇▇
for ▇▇▇▇▇▇▇▇' actual out-of-pocket inspection, financing and other costs related
to ▇▇▇▇▇▇▇▇' entering into this Agreement, inspecting the Property and preparing
for a Closing of the transaction contemplated hereby, including, without
limitation, ▇▇▇▇▇▇▇▇' attorneys' fees incurred in connection with the
preparation, negotiation and execution of this Agreement and in connection with
▇▇▇▇▇▇▇▇' due diligence review, audits and preparation for a Closing; provided,
the foregoing shall not limit or include the sums which may be payable by
Partnership pursuant to Section 9.6 below, and (iii) all other rights and
-----------
obligations of Partnership, Contributor and ▇▇▇▇▇▇▇▇ hereunder (except those set
forth herein which expressly survive a termination of this Agreement) shall
terminate immediately;
43
(b) to proceed to Closing; or (c) if the condition described in Section 5.1(k)
--------------
of this Agreement has not been satisfied on the Closing Date solely by reason of
a default by OTR thereunder, to terminate this Agreement, in which case
Contributor agrees to pay to ▇▇▇▇▇▇▇▇ an amount equal to $1,350,000.00, as
liquidated damages, the Deposit shall be refunded to ▇▇▇▇▇▇▇▇, and thereafter no
party to this Agreement shall have any further rights or obligations except as
otherwise expressly provided in this Agreement. If ▇▇▇▇▇▇▇▇ elects to proceed to
Closing and there is either a misrepresentation or breach of a warranty by
Partnership or Contributor (other than a breach of a representation or warranty
of which ▇▇▇▇▇▇▇▇ had notice or actual knowledge prior to the Closing and
nevertheless elected to consummate the Closing) or the breach of a covenant by
Partnership or Contributor or a failure by Partnership or Contributor to perform
its obligations hereunder first discovered by ▇▇▇▇▇▇▇▇ after the Closing Date,
▇▇▇▇▇▇▇▇ shall retain all remedies accruing as a result thereof, including, but
not limited to, the remedy of specific performance of Partnership's covenants
and obligations and the remedy of the recovery of all reasonable damages
resulting from Partnership's breach of warranty or covenant, subject to the
limitations of Section 7.2(u) hereof.
--------------
9.3 Indemnification by ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ hereby indemnifies and holds
---------------------------
Contributor harmless from and against any and all claims, costs, penalties,
damages, losses, liabilities and expenses (including reasonable attorneys' fees)
that may at any time be incurred by Contributor, whether incurred before or
after Closing, as a result of any inaccuracy or breach by ▇▇▇▇▇▇▇▇ of any of its
representations, warranties, covenants or obligations set forth herein or in any
other document delivered by ▇▇▇▇▇▇▇▇ pursuant hereto except for any breach or
inaccuracy of any representation or warranty as to which ▇▇▇▇▇▇▇▇ has given
Contributor written notice prior to Closing of the untruth or inaccuracy or of
which Contributor otherwise had actual knowledge prior to the Closing and
nevertheless elected to consummate the Closing. The provisions of this Section
shall survive the Closing of the transaction contemplated hereby.
9.4 Default by ▇▇▇▇▇▇▇▇/Failure of Conditions Precedent. If any
---------------------------------------------------
condition set forth herein for the benefit of Partnership or Contributor (other
than a default by ▇▇▇▇▇▇▇▇, OP General Partner or Company) cannot or will not be
satisfied prior to Closing, and if that condition is not satisfied within ten
(10) business days after notice thereof from Partnership or Contributor (or such
other time period as may be explicitly provided for herein), Contributors may,
at their option, elect either (a) to terminate this Agreement in which event the
Deposit shall be promptly returned to ▇▇▇▇▇▇▇▇ and the parties hereto shall be
released from all further obligations hereunder except those which expressly
survive a termination of this Agreement, or (b) to waive their right to
terminate, and instead, to proceed to Closing. If, prior to Closing, ▇▇▇▇▇▇▇▇,
OP General Partner or Company defaults in performing any of its obligations
under this Agreement and such default is not cured within ten (10) business days
after notice thereof from Partnership, then Contributor's sole remedy for such
default shall be either (i) to terminate this Agreement and retain the Deposit
as liquidated and agreed-upon damages, it being acknowledged that actual damages
would be impossible to accurately estimate, or (ii) to pursue the remedy of
specific performance.
9.5 Costs and Attorneys' Fees. In the event of any litigation or
-------------------------
dispute between the parties arising out of or in any way connected with this
Agreement, resulting in any litigation, then the prevailing party in such
litigation shall be entitled to recover its costs of prosecuting and/or
defending same, including, without limitation, reasonable attorneys' fees at
trial and all appellate
44
levels. The provisions of this Section shall survive the Closing of the
transaction contemplated hereby.
9.6 Limitation of Liability. Notwithstanding anything herein to the
-----------------------
contrary, except in the case of stipulated liquidated damages as set forth in
this Agreement, liability of each party hereto resulting from the breach or
default by either party shall be limited to actual damages incurred by the
injured party and the parties hereto hereby waive their rights to recover from
the other party consequential, punitive, exemplary, and speculative damages. The
provisions of this Section 9.6 shall survive the Closing of the transaction
-----------
contemplated hereby. Notwithstanding anything herein to the contrary, the
aggregate maximum liability of ▇▇▇▇▇▇▇▇ for any indemnities, representations and
warranties set forth in this Agreement and in the Contribution Agreement of even
date herewith relating to certain Pennsylvania assets and in all documents
executed by ▇▇▇▇▇▇▇▇ in connection with this Agreement and such other
Contribution Agreement shall be $4,000,000 for any claims made within one (1)
year after the Closing Date and ten percent (10%) of such amount thereafter;
provided, however, there shall be no limitation of liability applicable to the
indemnities made in Section 2.2(c) hereof.
--------------
ARTICLE X.
----------
MISCELLANEOUS PROVISIONS
------------------------
10.1 Completeness; Modification. This Agreement constitutes the entire
--------------------------
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. This Agreement may be
modified only by a written instrument duly executed by the parties hereto. Any
waiver of rights under this Agreement shall be effective only if in writing and
duly executed and delivered by the party against whom such waiver is asserted.
10.2 Assignments. ▇▇▇▇▇▇▇▇ may assign its rights hereunder without the
-----------
consent of Contributors but upon notice to Contributors, to any affiliate of the
Operating Partnership or the Company, but only if (i) Contributors obtain
substantially all of the economic and substantive rights and benefits
contemplated to be obtained in the absence of such assignment, and (ii) there is
not thereby caused any material adverse federal income effect to Contributors or
the Unit Recipients; provided, however, ▇▇▇▇▇▇▇▇ shall be permitted to require
that Contributor assign a limited partnership interest of no more than one
percent (1%) in each Partnership to ▇▇▇▇▇▇▇▇ Properties Limited, Inc., a
Delaware corporation. In the event of such permitted assignment, except as
otherwise specified herein, such assignee shall be deemed "▇▇▇▇▇▇▇▇" hereunder;
however, any such assignment shall not relieve the original ▇▇▇▇▇▇▇▇ of its
obligations under this Agreement.
10.3 Successors and Assigns. This Agreement shall bind and inure to the
----------------------
benefit of the parties hereto and their respective successors and permitted
assigns.
10.4 Days. If any action is required to be performed, or if any notice,
----
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required,
45
and such notice, consent or other communication shall be deemed to be given, on
the first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
10.5 Governing Law. This Agreement and all documents referred to herein
-------------
shall be governed by and construed and interpreted in accordance with the laws
of the State of New Jersey.
10.6 Counterparts. To facilitate execution, this Agreement may be executed
------------
in as many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
10.7 Severability. If any term, covenant or condition of this Agreement,
------------
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
10.8 Costs. Regardless of whether Closing occurs hereunder, and except as
-----
otherwise expressly provided herein, each party hereto shall be responsible for
its own costs in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees of attorneys, engineers
and accountants.
10.9 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be delivered by hand, transmitted by
facsimile transmission, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such copies
as designated below. Any notice, request, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) when actually delivered to the intended recipient.
If to Partnership or Contributor: c/o The Terramics Management Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Blank, Rome, Comisky & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
46
If to ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Properties Acquisition Partners, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. August and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent: Chicago Title Insurance Company
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or to such other address as the intended recipient may have specified in a
notice to the other party. Any party hereto may change its address or designate
different or other persons or entities to receive copies by notifying the other
party and Escrow Agent in a manner described in this Section.
10.10 Escrow Agent. Escrow Agent referred to in the definition thereof
------------
contained in Section 1.1 hereof has agreed to act as such for the convenience of
the parties without fee or other charges for such services as Escrow Agent.
Escrow Agent shall not be liable: (a) to any of the parties for any act or
omission to act except for its own willful misconduct; (b) for any legal effect,
insufficiency, or undesirability of any instrument deposited with Escrow Agent
or exchanged by the parties hereunder; (c) for any loss or impairment of funds
that have been deposited in escrow while those funds are in the course of
collection, or while those funds are on deposit in a financial institution, if
such loss or impairment results from the failure, insolvency or suspension of a
financial institution; (d) for the expiration of any time limit or other
consequence of delay, unless a properly executed written instruction, accepted
by Escrow Agent, has instructed Escrow Agent to comply with said time limit; (e)
for the default, error, action or omission of either party to the escrow. Escrow
Agent, in its capacity as escrow agent, shall be entitled to rely on any
document or paper received by it, believed by such Escrow Agent, in good faith,
to be bona fide and genuine. In the event of any dispute as to the disposition
of the Deposit or any other monies held in escrow, or of any documents held in
escrow, Escrow Agent may, if such Escrow Agent so elects, interplead the matter
by filing an interpleader action in a court of general jurisdiction in the
county or circuit where the Real Property is located (to the jurisdiction of
which both parties do hereby consent), and pay into the registry of the court
the Deposit, or deposit any such documents with respect to which there is a
dispute in the Registry of such court, whereupon such Escrow Agent shall be
relieved and released from any further liability as Escrow Agent hereunder.
10.11 Incorporation by Reference. All of the exhibits attached hereto
--------------------------
are by this reference incorporated herein and made a part hereof.
47
10.12 Survival. All of the representations, warranties, covenants and
--------
agreements of Partnership and ▇▇▇▇▇▇▇▇ made in, or pursuant to, this Agreement
shall survive Closing for a period of twelve (12) months and shall not merge
into any document or instrument executed and delivered in connection herewith;
provided that the last sentence of Section 6.12 shall survive for three (3)
------------
years following the Closing Date, and the provisions of Section 7.5, and any
-----------
other provisions which are expressly stated to survive Closing without
limitation, shall survive the Closing without limitation.
10.13 Further Assurances. Contributors and ▇▇▇▇▇▇▇▇ each covenant and
------------------
agree to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon the written
request of the other party, any and all agreements, instruments, papers, deeds,
acts or things, supplemental, confirmatory or otherwise, as may be reasonably
required by either party hereto for the purpose of or in connection with
consummating the transactions described herein. Contributors and ▇▇▇▇▇▇▇▇ agree
to promptly correct any defect, error or omission which may be discovered in the
contents of this Agreement or in any of the Exhibits or Schedules hereto.
10.14 No Partnership. This Agreement does not and shall not be
--------------
construed to create a partnership, joint venture or any other relationship
between the parties hereto except the relationship of Contributors and ▇▇▇▇▇▇▇▇
specifically established hereby.
10.15 Time of Essence. Time is of the essence with respect to every
---------------
provision hereof.
10.16 Signatory Exculpation. The signatory(ies) for ▇▇▇▇▇▇▇▇ is/are
---------------------
executing this Agreement in his/their capacity as representative of ▇▇▇▇▇▇▇▇ and
not individually and, therefore, shall have no personal or individual liability
of any kind in connection with this Agreement and the transactions contemplated
by it.
10.17 Rules of Construction. The following rules shall apply to the
---------------------
construction and interpretation of this Agreement:
(a) Singular words shall connote the plural number as well as
the singular and vice versa, and the masculine shall include the feminine and
the neuter.
(b) All references herein to particular articles, sections,
subsections, clauses or exhibits are references to articles, sections,
subsections, clauses or exhibits of this Agreement.
(c) The table of contents and headings contained herein are
solely for convenience of reference and shall not constitute a part of this
Agreement nor shall they affect its meaning, construction or effect.
(d) Each party hereto and its counsel have reviewed and
revised (or requested revisions of) this Agreement and have participated in the
preparation of this Agreement, and therefore any usual rules of construction
requiring that ambiguities are to be resolved against a particular party shall
not be applicable in the construction and interpretation of this Agreement or
any exhibits hereto.
48
(e) As used herein, the term or phrases "Effective Date,"
--------------
"date of this Agreement" or "date hereof" shall mean the first date Escrow Agent
---------------------- -----------
is in receipt of this Agreement executed by Contributors, Partnerships and
▇▇▇▇▇▇▇▇.
IN WITNESS WHEREOF, Partnerships, Contributors and ▇▇▇▇▇▇▇▇ have caused
this Agreement to be executed in their names by their respective duly authorized
representatives.
▇▇▇▇▇▇▇▇:
--------
▇▇▇▇▇▇▇▇ PROPERTIES ACQUISITION
PARTNERS, L.P., a Delaware limited partnership
By: ▇▇▇▇▇▇▇▇ Properties I, Inc., a Delaware
corporation, its general partner
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Date of Execution: , 1997
--------------
Partnerships:
------------
WOODLAND FALLS ASSOCIATES-I LIMITED
PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
------------------------------------
Authorized Partner
WOODLAND FALLS ASSOCIATES-III LIMITED
PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
WOODLAND FALLS ASSOCIATES-IV LIMITED
PARTNERSHIP
49
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
LAKE CENTER ASSOCIATES-II LIMITED PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
LAKE CENTER ASSOCIATES-IV LIMITED
PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
----------------------------------
Authorized Partner
TERRAMICS/CENTERPOINTE ASSOCIATES
LIMITED PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
Contributors:
------------
TERRAMICS PROPERTY ASSOCIATES
By:
------------------------------------
Authorized Partner
TPC INVESTORS I LIMITED PARTNERSHIP
50
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
TERRAMICS/ JK LIMITED PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
TERRAMICS/WOODLAND LIMITED
PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
TERRAMICS/EQUITY LIMITED PARTNERSHIP
By: Terramics Property Associates, General
Partner
By:
-----------------------------------
Authorized Partner
Date of Execution: , 1997
------------------
51
JOINDER BY COMPANY AND OP GENERAL PARTNER
The undersigned join in this agreement to evidence their consent to the
provisions hereof and to confirm the representations, warranties and
certifications contained in this agreement which are expressly stated to be made
by them by their joinder.
▇▇▇▇▇▇▇▇ PROPERTIES TRUST
By:
------------------------------------
Its:
------------------------------------
▇▇▇▇▇▇▇▇ PROPERTIES I, INC.
By:
-----------------------------------
Its:
-----------------------------------
52
RECEIPT OF ESCROW AGENT
-----------------------
Chicago Title Insurance Company, as Escrow Agent, acknowledges receipt
of the sum of $ __________ by check or by wire transfer, from ▇▇▇▇▇▇▇▇ as
described in Section 2.3 of the foregoing Agreement of Purchase and Sale, said
-----------
check or wire transfer to be held pursuant to the terms and provisions of said
Agreement.
DATED this________day of_________________________, 1997.
CHICAGO TITLE INSURANCE COMPANY
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
53