Exhibit 10.7
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
THIS AGREEMENT OF SALE is made and entered into as of the 5th day of
December, 1997 by and between PAINT WORKS CORPORATE ASSOCIATES-W, a New Jersey
general partnership having its principal office at Scarborough Properties, ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller") and
BRANDYWINE REALTY TRUST, a Maryland real estate investment trust or its nominee,
having an address at ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Buyer").
RECITALS
A. Seller is the owner of a certain tract of land being comprised of
▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇▇▇ ▇.▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Avenue, ▇▇▇ ▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Avenue, Lot 2.01, Block 10 being ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇.▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Avenue, ▇▇▇ ▇.▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Avenue, ▇▇▇ ▇.▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Avenue and
▇▇▇ ▇, ▇▇▇▇▇ 11.02 being ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, together with the buildings
and improvements thereon, including one office building containing approximately
142,000 square feet, all located in Gibbsboro, New Jersey as more fully
described on Exhibit A attached hereto; and
B. Seller desires and hereby agrees to sell, and Buyer desires and
hereby agrees to acquire, all of Seller's right, title and interest in and to
the Property (as hereinafter defined), subject to and on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions Of Certain Terms. For all purposes of this
Agreement, the following terms shall have the respective meanings set forth
below:
"Agreement" shall mean this document entitled "Agreement of
Sale", all exhibits and schedules attached hereto or made a part hereof and all
amendments to this Agreement which are agreed to in writing and signed by all of
the parties hereto.
"Assignments" shall have the meaning ascribed to that term in
Paragraph 5(f) hereof.
"Closing Date" shall have the meaning ascribed to that term in
Paragraph 4 hereof. The date upon which the Closing (as defined in Paragraph 4
below) actually occurs shall be the Closing Date.
"Contracts" shall mean all contracts and agreements with respect
to the management (excluding property management agreements), operation, supply,
maintenance, repair or construction affecting any of the Property, to the extent
assignable by Seller, all as described in Exhibit "B" attached hereto and made a
part hereof.
"Deposit" shall mean the Deposit delivered by Buyer to Escrow
Agent pursuant to Paragraph 3(a) hereof, together with all interest earned
thereon, if any.
"Due Diligence Termination Date" shall mean 5:00 p.m. E.S.T. on
December 9, 1997.
"Effective Date" shall mean the date on which this Agreement has
been fully executed and delivered by both parties hereto to each other.
"Escrow Agent" shall mean Commonwealth Land Title Insurance
Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Escrow Terms" shall mean the escrow agreement to be entered of
even date herewith between Title Company, Buyer and Seller.
"Improvements" shall mean those certain buildings and other
improvements constructed and located on the Land as described on Exhibit A.
"Land" shall mean that certain parcel of real property located at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the parking lots being appurtenant thereto across
United States Avenue, Gibbsboro, New Jersey.
"Leases" shall mean those certain leases (and guarantees thereof,
if any) listed on Exhibit "C" attached hereto and made a part hereof, or
hereafter entered into by Seller, as landlord, in accordance with the terms of
this Agreement, for any space within any of the Improvements located on any of
the Land.
"Licenses" shall mean the licenses, permits, approvals and
agreements affecting any of the Real Property.
"Partnership" shall mean Brandywine Operating Partnership, L.P.,
a Delaware limited partnership whose sole general partner is Buyer.
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"Permitted Exceptions" shall mean with respect to any of the Real
Property (i) the lien of real estate taxes, water rent and sewer charges that
are not due and payable on the Closing Date, (ii) the printed exclusions,
conditions and stipulations contained in the Commitment (as hereinafter
defined), (iii) additional exceptions to title set forth in Exhibit "D" to this
Agreement, (iv) special assessments which become a lien on any of the Real
Property on or after the Closing Date, and (v) such other title matters existing
on the Closing Date which are accepted or deemed accepted by Buyer pursuant to
Paragraph 5 hereof; and (vii) the rights of Tenants of any of the Real Property
pursuant to the Leases for all or any portion of any of the Real Property.
"Personal Property" shall (except as specifically excluded on
Exhibit "E" hereto) mean all of Seller's right, title and interest in and to the
tangible personal property including, without limitation, furniture,
furnishings, equipment, machinery and fixed and movable fixtures, together with
all component and replacement parts, owned by Seller, situated on any of the
Real Property on the Closing Date, and all artwork, renderings, flags, awnings
and trade dress; all architects', engineers', surveyors' and other real estate
professionals' plans, specifications, certifications, reports, data or other
technical descriptions (including, without limitation, all environmental,
structural and mechanical inspection reports) to the extent the same are in
Sellers' possession and are not proprietary in nature, and all building names
and Seller's rights, if any, in and to the name "55 Unites States Avenue."
"Property" shall mean the Real Property and such of the
Contracts, Leases, Licenses, Personal Property and other rights, titles,
interests and obligations which pertain to the Real Property and are intended to
be conveyed, sold or otherwise transferred to Buyer by Seller pursuant to this
Agreement.
"Real Property" shall mean the Land and the Improvements.
"Tenants" shall mean the tenants under the Leases.
2. Acquisition Of The Property. On the Closing Date, and subject to
the terms and conditions set forth in this Agreement, Seller shall sell, assign,
transfer and convey to Buyer and Buyer shall purchase from Seller the following:
(a) All right, title and interest of Seller in and to all of the
Real Property;
(b) All right, title and interest of Seller, if any, in any land
lying in the bed of any street, road, avenue or alley, open or closed, in front
of or adjoining any of the Land, to the center line thereof;
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(c) All right, title and interest of Seller, if any, in any
easements, covenants, rights of way, privileges, hereditaments and other rights
appurtenant to any of the Real Property;
(d) to the extent assignable to Buyer and approved by Buyer, all
right, title and interest of Seller in and to the Contracts and the Licenses
relating to any of the Real Property;
(e) all right, title and interest of Seller in and to the
Leases; and
(f) all right, title and interest of Seller in and to the
Personal Property.
3. Purchase Price And Time Of Payment. The Purchase Price (the
"Purchase Price") to be paid by Buyer to Seller for the Property shall be Four
Million Three Hundred Thousand Dollars ($4,300,000), as adjusted pursuant to
Paragraph 7 of this Agreement, which shall be paid to Seller in the following
manner:
(a) Twenty Thousand Dollars ($20,000) (the "Deposit") by check,
subject to collection, payable to the order of the Escrow Agent, which shall be
held and disbursed pursuant to the Escrow Terms. In addition thereto, by
delivery, within two (2) business days next following the Due Diligence
Expiration Date of Buyer's good check in the amount of $10,000.
(b) The balance of the Purchase Price shall be paid to Seller at
the Closing by wire transfer of immediately available funds to an account
designated by Seller.
(c) The transaction contemplated by this Agreement is
conditioned upon the closing of the sale of the other properties identified on
Exhibit "F" attached hereto (the "Other Properties"), so that no one or more of
the Other Properties and the Property hereunder may be sold without all of the
Property being sold unless expressly provided for in writing by the parties
hereto and in any event the Deposit hereunder and thereunder shall be deemed a
single deposit for the entire transaction.
4. Closing. The closing of the transaction contemplated by this
Agreement (the "Closing") shall be held on or before December 12, 1997, but in
any event no later than fifteen (15) days next following the Due Diligence
Expiration Date, at the offices of Brandywine Realty Trust, Plaza 1000 at ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, commencing at 10:00 a.m., time being of
the essence.
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5. Title And Conveyance Of The Property.
(a) At Closing, title to the Real Property shall be insurable at
regular rates by Commonwealth Land Title Insurance Company (the "Title
Insurer"), free and clear of all liens, encumbrances and restrictions other than
the Permitted Exceptions; provided, however, that if title to any of the Real
Property is not insurable as aforesaid, Buyer's sole right and remedy shall be
as set forth in paragraph 5(b) below.
(b) (i) Buyer has applied for a title insurance commitment
(1992 ALTA Form with Creditor's Rights Exclusion Deleted) to be issued by the
Title Insurer ("Commitment"), agreeing to issue to Buyer, upon recording of the
Deeds (as hereinafter defined) for each of the Real Property, an owner's policy
of title insurance as above specified ("Title Policy"). Said Commitments shall
agree to insure the proposed title of the Buyer to each of the Real Property
subject only to the Permitted Exceptions and such other title exceptions as
Buyer has agreed to accept or is deemed to have accepted pursuant to this
Paragraph. If any of the Commitments disclose any title exceptions in addition
to the Permitted Exceptions and Buyer objects to such additional title
exceptions (the "Title Defects"), Buyer shall notify Seller of such Title
Defects with sufficient specificity to enable Seller to respond. Buyer's notice
of any Title Defects shall be given in writing to Seller no later than the date
which is five (5) business prior to the Due Diligence Termination Date, together
with the Commitments and copies of all matters of record raised therein as
exceptions thereto, after which Buyer shall be deemed to have waived any and all
Title Defects not so raised, except for Title Defects which are disclosed to
Buyer in continuations of title issued subsequent to the issuance of the
Commitments, unless Buyer fails to object to same in writing within three (3)
business days after Buyer's receipt of the continuation of title in which the
same is disclosed, in which case Buyer will be deemed to have waived such
additional Title Defects. Seller shall have the right, but not the obligation
(except as otherwise specifically provided), to cure such Title Defects and, if
Seller elects to attempt to cure the Title Defects but has not cured same on or
before the Closing Date, then the Closing Date may be extended by Seller at its
sole option for up to thirty (30) days to enable Seller to effect such cure.
(ii) In the event that either (a) Seller is unable to convey
title in accordance with the terms of this Agreement, (b) Seller elects not to
cure or cause the removal of any exception to title, except as required in
(iii), below, or (c) if Seller is unable to satisfy any other conditions to
Buyer's obligations under this Agreement, then (except as otherwise specifically
provided in (iii), below) the sole liability of Seller shall be to (A) direct
the Escrow Agent to return to Buyer the Deposit and (B) reimburse Buyer for the
reasonable charges imposed by the Title Company for preparation of the
Commitments (without the issuance of a policy) and for the reasonable fees paid
by Buyer to update the existing surveys (collectively "Buyer's Reasonable
Costs"), and upon such payments being made, this Agreement shall be deemed
canceled and the parties hereto shall be released of all obligations and
liabilities hereunder, except as to any provisions which expressly survive a
termination of this Agreement; and Buyer shall have no rights of action against
Seller in law or in equity, for damages or, except for the purpose of enforcing
Seller's contractual obligations under (iii), below, for specific
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performance. Notwithstanding the foregoing, Buyer shall have the right to waive
any conditions to Buyer's obligations hereunder, in which event Seller shall
make the deliveries provided for herein to Buyer to the extent that Seller is
able so to do, and there shall be no reduction in the Purchase Price in such
event.
(iii) Notwithstanding the provisions of the foregoing
paragraph, if the condition of title to the Real Property at the Closing is
other than that which Buyer is required or agrees to accept hereunder solely by
reason of any mortgages or other monetary liens (hereinafter referred to as
"Liens") which can be satisfied or remedied by the payment of a liquidated
amount of money to the extent of the Purchase Price, Seller shall not have the
right to cancel this Agreement and Seller shall either (aa) discharge, satisfy,
or bond the same or (bb) deliver such funds to be held in escrow required by the
Title Company, in either event so that the Title Company shall affirmatively
insure the full and complete discharge of the foregoing and shall agree to omit
the same as an exception to its title insurance policy.
(iv) Notwithstanding anything to the contrary contained in
this Agreement, Seller shall have no duty nor be required to take any action, to
institute any proceedings or to incur any expense (other than as may be
expressly required in paragraph (iii), above) in order to remedy or remove any
objections to title or otherwise to render title in accordance with the terms
called for in this Agreement.
(c) Buyer expressly understands, acknowledges and agrees that
any failure by Buyer to notify Seller in writing of any Title Defects on or
before the expiration of the Due Diligence, shall for all purposes be deemed to
be an acceptance by Buyer of such Title Defects as if they were one or more of
the Permitted Exceptions.
(d) At Closing, Seller will convey fee simple title to the Real
Property by a Bargain and Sale Deed with covenant against grantor's acts (the
"Deed"), subject in all cases to the Permitted Exceptions, in the forms attached
hereto and made a part hereof as Exhibit "G".
(e) At Closing, Seller will transfer all of its right, title and
interest in and to the Personal Property to Buyer by executing a ▇▇▇▇ of Sale
("▇▇▇▇ of Sale") in the form attached hereto and made a part hereof as Exhibit
"H".
(f) At Closing, Seller will assign all of Seller's right, title,
and interest, and Buyer shall assume all of the obligations from and after the
Closing Date, in, to and under the Leases, Licenses and the Contracts for the
Property, by executing an Assignment and Assumption Agreement in the form
attached hereto and made a part hereof as Exhibit "I" (the "Assignments").
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6. Closing Documents.
(a) At the Closing, as a condition of Buyer's obligation to
close hereunder, Seller shall deliver or cause to be delivered the following:
(i) The Deed, executed by Seller, covering the Real
Property (and separate quitclaim deeds to the Real Property utilizing new ALTA
survey descriptions, if requested);
(ii) The Bills of Sale executed by Seller covering the
Personal Property;
(iii) The Assignments, executed by Seller;
(iv) As many signed originals (or true and correct copies of
same) of the Contracts, Leases, Licenses, and other items covered by the
Assignments as are in the possession or control of Seller;
(v) All machinery and/or equipment operating manuals,
technical data and other documentation relating to the building systems and
equipment, and all machinery, equipment and other building warranties and
guarantees, if any, but only to the extent that any of the same are in the
possession or control of Seller;
(vi) All master and duplicate keys, combinations and codes
to all locks and security devices for the Improvements which are in the
possession or control of Seller;
(vii) Written notice from Seller or Seller's managing
agent to each Tenant in form reasonably satisfactory to Buyer stating that the
Real Property have been sold to Buyer and that tenant security deposits (if
any) in Seller's possession have been transferred to Buyer and directing the
Tenants to make future rental payments to Buyer at the address designated by
Buyer;
(viii) Non-foreign person certification in the form
attached hereto as Exhibit "J";
(ix) All building records and Tenant lease files with
respect to the Real Property which are in the possession of Seller;
(x) Each ▇▇▇▇ of current real estate taxes, sewer charges
and assessments, water charges and other utilities and to the extent in Seller's
possession or control, bills for each of the same for the three (3) years,
together with proof of payment thereof (to the extent same have been paid);
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(xi) All plans, specifications, as-built drawings, surveys,
site plans, and final, written reports of architects, engineers and surveyors,
and any other Personal Property forming part of the Property or any portion
thereof, but only to the extent that the same exist and are in the possession of
Seller or any property manager controlled by Seller;
(xii) An affidavit or affidavits of title in favor of
the Title Insurer on the form used by such Title Insurer, in form reasonably
acceptable to Seller to enable the Title Insurer to issue the Commitments
described in Paragraph 5(b)(i). Buyer shall require affirmative endorsements
against mechanic's liens, consistent with Seller's obligations under Paragraph
5(b)(iii), above;
(xiii) A letter, from the New Jersey Department of
Environmental Protection or its successor ("NJDEP") stating that the provisions
of the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., the regulations
promulgated thereunder and any successor legislation and regulations are
inapplicable to the Real Property (the "Non-Applicability Letter");
(xiv) Subject to the provisions of Paragraph 11(d), below,
Estoppel Letters, if any, received from Tenants;
(xv) Updated rent rolls, which shall be certified by Seller
to be correct and complete as of Closing Date; and
(xvi) Proof as to the due authorization and execution by
Seller of the documents executed and delivered by Seller.
(xvii) Such affidavits of title or other certifications as
shall be required by the Title Company to insure Buyer's title to the Property
as set forth in Section 3, and to provide affirmative endorsements (a) against
mechanic's liens, (b) insuring against any violation of existing covenants,
conditions or restrictions, and insuring that future violation will not result
in forfeiture of title, (c) insuring that all foundations in place as of the
date of such policy are within the lot lines and applicable set back lines, (d)
insuring that the buildings and structures on the Property do not encroach onto
adjoining land or onto any easements, (e) insuring that confirming that there
are no encroachments of improvements from adjoining land onto the Property (f)
removing any exceptions for matters which an accurate survey would disclose, and
(g) providing affirmative insurance with respect to such other matters as Buyer
or its lender shall specify.
(b) At the Closing, as a condition of Seller's obligation to
close hereunder, Buyer shall deliver or cause to be delivered the following:
(i) The balance of the Purchase Price; and
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(ii) The Assignments, executed by Buyer.
7. Prorations And Closing Costs. All matters involving prorations
or adjustments to be made in connection with the Closing and not specifically
provided for in any other provision of this Agreement shall be adjusted as
provided below. Except as otherwise set forth herein, all items to be prorated
pursuant to this Paragraph shall be prorated as of the Closing Date, with Buyer
to be treated as the owner of the Property, for purposes of prorations of income
and expenses, on and after the Closing Date.
(a) Real estate taxes and all other ad valorem taxes, if any,
with respect to the Real Property for the applicable fiscal or calendar year in
which the Closing occurs shall be prorated on a per diem basis. If the amount
of such taxes is not known on the Closing Date, taxes will be prorated on the
basis of the most recently ascertainable tax ▇▇▇▇. There shall be no proration
of Seller's insurance premiums or assignment of Seller's insurance policies and
Seller shall be entitled to cancel all of its existing policies as of the
Closing Date. Buyer shall be obligated (at its own election) to obtain any
replacement policies. The amounts of all telephone, electric, sewer, water and
other utility bills, trash removal bills, janitorial and maintenance service
bills relating to the Property and allocable to the period prior to the Closing
Date shall be determined and paid by Seller before Closing, if possible, or
shall be paid promptly thereafter by Seller or adjusted between Buyer and Seller
immediately after the same have been determined. Buyer and Seller shall to the
extent necessary enter into an agreement to such effect at Closing. Seller
shall attempt to have all utility meters read as of the Closing Date. Seller
shall further attempt to obtain from the provider of same, all other service
statements and bills of account adjusted as of the Closing Date. Seller shall
be entitled to refunds of all deposits, if any, paid by Seller or Seller's
predecessor-in-interest prior to Closing and held by entities providing such
service, or, at Seller's option, Seller shall transfer all of Seller's right,
title and interest in and to such deposits to Buyer at Closing and shall receive
a full credit for the amount of such deposits. All Contracts and other
obligations in connection with the Property, to the extent the same are intended
to be assumed hereunder, shall be prorated as of the Closing Date.
(b) Special assessments which have been filed as a lien against
any of the Real Property on or before the Closing Date and are not payable in
installments shall be paid by Seller. Special assessments which have been filed
as a lien against any of the Real Property but which are payable in installments
shall be adjusted based upon the installment payment for the fiscal or calendar
year in which Closing takes place and the remaining unpaid assessments shall be
assumed by Buyer. Special assessments which are or may be pending, but which
have not become a lien on the Real Property as of the Closing Date, and special
assessments which are filed as a lien after the Closing Date, shall be assumed
and paid by Buyer.
(c) Seller shall pay the cost of State and County transfer taxes
or stamps imposed in connection with the recordation of the Deeds for the Real
Property. Buyer shall pay the expense of the title searches, title premiums and
any other title insurance costs on the owner's title insurance policies and the
cost of obtaining any surveys, if desired by Buyer.
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Buyer agrees to pay the expense of the legal fees of its own counsel. The cost
of all of Buyer's Due Diligence Activities (as defined below) shall be borne
solely by Buyer.
(d) Any base, minimum or similar rents under the Leases
collected by Seller for a rental period or portion thereof from or after the
Closing Date shall be credited to Buyer at Closing on a per diem basis. In
addition, any security deposits held by Seller for any Lease, together with the
interest due thereon, if any and if required under the terms of the Lease or as
required by applicable law, shall either be credited or transferred to Buyer at
Closing at Seller's option. If any tenant is in arrears in the payment of rent
or additional rent on the Closing Date, rents received from such tenant ninety
(90) days after the Closing Date shall be applied in the following order of
priority: (a) to the Buyer, so long as such tenant is in arrears for current or
prior rent arising after Closing, then (b) to Seller for all rent in arrears
prior to the Closing Date; and then (c) to Buyer with no further claim by
Seller thereto. Except as herein provided, Buyer is not under any obligation to
collect rents in arrears for the benefit of Seller. Any rents which are
delinquent or otherwise not paid at the time of Closing, and collected by Buyer
or Seller within ninety (90) days after Closing shall be apportioned as
aforesaid and the portion to which Seller is entitled shall be promptly remitted
by Buyer to Seller. Seller shall have no claim to rents collected ninety (90)
days after the Closing Date. Seller retains the right to pursue its remedies
against Tenants after Closing for any delinquent rents or other amounts owed to
Seller (other than proceedings to evict Tenant or terminate its lease). Buyer
shall not enter into any agreement pursuant to which any sums owed to Seller in
respect of any Lease for periods prior to the Closing are reduced, modified or
waived. Buyer's obligations to collect rent arrearages shall be limited to
commercially reasonable efforts, and Buyer shall under no circumstance be
required to commence litigation against any Tenant to collect the same.
(e) All leasing commissions due or to become due prior to the
Closing Date for any Leases entered into before the date hereof and all
amendments, renewals and modifications thereof entered into before the date
hereof, shall be paid by Seller without contribution by, or reimbursement from,
Buyer. At Closing, Buyer shall pay or reimburse Seller for any leasing
commissions due or to become due prior to Closing for any Leases and for any
amendments, modifications or renewals of any Leases entered into after the date
hereof which are entered into in accordance with the provisions of Paragraph
15(e) hereof. Buyer shall expressly assume and be solely obligated to pay all
leasing commissions payable under all Leases entered into prior to the date
hereof (including all amendments, renewals and modifications thereof) which are
first due or payable on or after the Closing Date, regardless of the date on
which such Leases (including all amendments, renewals and modifications thereof)
were executed or any of the leasing commissions therefor earned, subject only to
Buyer's right to approve any new Leases or amendments, discretionary renewals or
modifications of any Leases which are not otherwise permitted pursuant to
Paragraph 15(e), below. Seller shall be responsible for the costs of, and shall
pay or perform prior to Closing any tenant improvements and allowances for work
performed or required to be performed (or paid, as applicable) prior to the
Closing Date by or on behalf of Seller for all Leases (including all amendments,
renewals and modifications thereof) entered into on or before the date of this
Agreement for any of the Real Property. Buyer shall
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assume, pay or reimburse (as applicable) Seller on the Closing Date for the
costs of any tenant improvements and allowances for work to first be
performed after the Closing Date pursuant to Leases (including all
amendments, renewals and modifications thereof) entered into prior to the
date of this Agreement; and all costs of tenant improvements and allowances
incurred by or on behalf of Seller in connection with any Leases (including
all amendments, renewals and modifications thereof) entered into after the
date of this Agreement for any of the Real Property, provided the same were
approved by Buyer or are otherwise permitted as set forth in Paragraph 15(e)
hereof and provided that such costs are set forth on Exhibit "C" hereto. The
obligations of Buyer and Seller hereunder shall survive the Closing.
(f) Amounts paid or payable as fees or expenses under any of the
Licenses assigned at Closing, shall be prorated as of the Closing Date but all
amounts refundable under unassigned and unassignable Licenses shall belong to
Seller.
(g) Seller shall be solely responsible for the payment of any
"roll back taxes" assessed or imposed upon any of the Real Property under the
"Farmland Assessment Act of 1964," Chapter 58, Laws of 1964, N.J.S.A. 54:4 23-1
et seq., as amended or otherwise, which relate to any period prior to the
Closing Date, and Seller agrees to indemnify, defend and save Buyer harmless
(including attorneys' fees) from and against any claim for such taxes. This
Paragraph shall survive Closing.
(h) Miscellaneous income including, without limitation,
telephone and vending machine income, if any, shall be prorated as of the
Closing Date.
(i) The provisions of this Paragraph 7 shall survive Closing
hereunder.
8. Possession Of Property.
(a) Seller shall deliver possession to the Real Property to
Buyer on the Closing Date, subject only to the Permitted Exceptions.
(b) Buyer shall assume, by execution of the Assignments, all of
Seller's obligations in, to and under the Contracts, the Licenses and Leases.
Notwithstanding the foregoing, Buyer shall not assume management, leasing or
brokerage agreements provided, however, that Buyer shall remain liable for
leasing commissions as set forth in Paragraph 7(e), above.
(c) All of the provisions of this Paragraph 8 shall survive
Closing.
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9. Representations Of Seller And Buyer.
(a) Seller hereby represents and warrants, as follows, all of
which shall be true and correct at and as of the date hereof:
(1) Seller is a general partnership duly organized and
validly existing under the laws of the State of New Jersey, and is in good
standing in such state.
(2) Seller has all necessary power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby, without the consent or
authorization of, or notice to, any third party, except those third parties to
whom such consents or authorizations have been or will be obtained, or to whom
notices have been or will be given, prior to the Closing. This Agreement
constitutes, and the other documents and instruments to be delivered by Seller
pursuant hereto when delivered will constitute, the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms.
(3) Except as set forth in Exhibit "K" attached hereto
and made a part hereof, there is no litigation, proceeding or action pending or,
to the best of Seller's knowledge, threatened against or relating to Seller or
its Property which might materially and adversely affect Seller or its Property
or which questions the validity of this Agreement or any action taken or to be
taken by Seller pursuant hereto. Seller shall remain responsible to defend, and
shall indemnify and hold Buyer harmless from and against all liability, cost and
expense relating to the litigation identified in on Exhibit "K", which
obligation shall survive the Closing.
(4) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will constitute a violation
or be in conflict with or constitute a default under any term or provision of
the Seller's partnership agreement or any other material agreement, instrument
or lease to which Seller is a party, subject to any required consents or
authorizations of, or notices to, third parties from whom such consents or
authorizations will be obtained or to whom notices will be given prior to
Closing.
(5) True, correct and complete copies of all of the
following, together with any modifications or amendments thereof, but only if
and to the extent the same are in Seller's possession or control, have been or
will be delivered, or made available, to Buyer within five (5) days following
the execution of this Agreement: (i) Leases and rent rolls; (ii) Contracts;
(iii) leases of equipment, vehicles and other tangible personal property used by
Seller in connection with the ownership and operation of the Property (the
"Personal Property Leases"); (iv) Licenses; (v) surveys; (vi) title reports;
(vii) engineering reports; and (viii) environmental reports.
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(6) To the best of Seller's knowledge, (i) all of the
Leases, Contracts and Personal Property Leases and Licenses, are in full force
and effect, (ii) there has been no action or failure to act by Seller or any
other party to any Lease, Contract or Personal Property Lease which, with the
giving of notice or the passage of time or both, would constitute a default in
any material respect or otherwise entitle either party to damages or a right to
terminate; and (iii) Seller has not received from any other party written notice
with respect to the condition of the Property or the use or repair of the same
or of any alleged default by Seller under any such Lease, or Personal Property
Lease or License. Except as set forth on Exhibit "L", each of the Contracts is
terminable at will without penalty or cancellation fee upon no more than thirty
(30) days prior written notice but, except as hereinafter expressly provided,
unless otherwise directed by Buyer, the Contracts shall not be terminated by
Seller as of Closing. Anything in this Agreement to the contrary
notwithstanding, any and all existing management agreements and brokerage or
leasing agreements shall be terminated as of Closing. Buyer shall assume all
Contracts not terminated at Closing pursuant to the Assignment.
(7) Seller shall indemnify and hold Buyer harmless of,
from and against any and all claims and liabilities arising out of the
employment of any individuals by Seller and its affiliates, whether as employees
or independent contractors. As of the Closing, there are and shall be no liens
against the Real Property arising under the Employee Retirement Income Security
Act of 1974, as amended, nor any other compensation or employment related lien
or liability that could become the responsibility of Buyer after the Closing.
Buyer shall be under no obligation to assume any of Seller's employees, it being
Seller's sole responsibility and obligation to provide severance arrangements,
if any, for all such employees. This Paragraph shall survive Closing.
(8) To Seller's actual knowledge, there are no public
improvements in the nature of off-site improvements or otherwise, which have
been ordered to be made and/or which have not heretofore been assessed and, to
Seller's actual knowledge, there are no special or general assessments currently
affecting or pending against the Real Property or any portion thereof.
(9) Except as set forth on Exhibit "M", Seller has not
been served with written notice that it has been named as a party in any
litigation, administrative proceeding or investigation naming Seller as a
responsible party or potentially responsible party for any liability for
clean-up costs, natural resource damages or other damages or liability for prior
disposal or release of Hazardous Substances, Hazardous Wastes or other
environmental pollutants or contaminants. For purposes of this Agreement,
"Hazardous Substances" means those elements and compounds which are designated
as such in Section 101(14) of the Comprehensive Response, Compensation and
Liability Act (CERCLA), 42 U.S.C. Section 9601 (14), as amended, all petroleum
products and by-products, and any other hazardous substances as that term may be
further defined in any and all applicable federal, state and local laws
(including, in New Jersey, the New Jersey Industrial Site Recovery Act (ISRA);
and "Hazardous Wastes" means any hazardous waste, residential or household
waste, solid waste, or other waste as
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defined in applicable federal, state and local laws. Seller has not received
any summons, citation, directive, letter or other written communication, from
any governmental or quasi-governmental authority concerning any intentional or
unintentional action or omission on Seller's part which either (a) resulted in
the releasing, spilling, leaking, pumping, pouring, emitting, emptying or
dumping of Hazardous Substances or Hazardous Wastes, or (b) related in any way
to the generation, storage, transport, treatment or disposal of Hazardous
Substances or Hazardous Wastes.
(10) True and correct copies of the income and expense
statements for the Property, and a current rent roll certified by Seller, will
be delivered to Buyer upon execution of this Agreement.
(11) Seller has received no written notice of any
violation of any of the licenses, permits, consents, authorizations, approvals,
and certificates of any regulatory, administrative or other governmental agency
or body, if any, issued to or held by the Seller and related to the ownership or
operation of the Property (collectively, the "Permits"), and there is no pending
or, to the actual knowledge or Seller, threatened proceeding which could result
in the revocation or cancellation of, or inability of Seller to renew, any
Permit.
(12) To the best of Seller's knowledge, except as set
forth in Exhibit "N" attached hereto and made a part hereof, all management
fees, leasing commissions and tenant improvement allowances are fully paid,
there are no brokerage commissions owing by Seller with respect to any of the
Leases or otherwise related to the Property which have not been paid, and there
are no ongoing commission or leasing fee obligations.
(13) Seller has received no written notice from any
insurance company which has issued a policy with respect to the Property or by
any board of fire underwriters (or other body exercising similar functions)
claiming any defects or deficiencies or requesting the performance of any
repairs, alterations or other work, and Seller will promptly notify Buyer of any
such notice or requirement if such notice is received prior to the Closing.
(14) Seller is not a "foreign person" and will deliver
to Buyer, at the Closing, a statement certifying that it is not a "foreign
person" within the meaning of the Internal Revenue Code of 1986, as amended.
(15) Seller has not received written notice from any
governmental agency or authority of outstanding material violations issued by
governmental authorities having jurisdiction over the Real Property.
(16) Except as may be set forth in a Lease as
specifically noted on Schedule C, there are no options, rights of first refusal
or conditional sales agreements regarding the purchase and sale of the Real
Property.
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(17) There are no oral or written leases or rights of
occupancy or grants or claims of right, title or interest in any portion of the
Property other than the leases (the "Leases") listed on the rent roll attached
hereto as Exhibit "C". No tenant has advised Seller that Seller is in default
under any of the Leases, or asserted any claim or basis for any claim for free
or reduced rent or right of setoff against the landlord or the rent under the
Leases, and Seller and its agent have no actual knowledge of any default or any
event which has taken place which, with the passage of time, or the delivery of
notice, or both, could become an event of default. Seller has the sole right to
collect rents under the Leases, and neither such right nor any of the Leases has
been assigned, pledged, hypothecated or otherwise encumbered by Seller except as
additional collateral for the existing mortgage upon the Property which shall be
satisfied at or before Closing. No holder of any such collateral assignment has
asserted or exercised any of its right to collect such rents. Each of the
Leases is valid and subsisting and in full force and effect, the tenant is in
actual possession in the normal course, and the rents set forth in Exhibit "C"
are the actual rents, income and charges being collected by Seller under the
Leases. All obligations of Seller which it is required to complete pursuant to
any Lease (or any unsigned lease proposal or lease amendment) has been completed
as of this date or shall be completed as of Closing, and all costs therefore
have been or shall be paid by Seller, and all of Seller's work has or shall have
been accepted by the Tenant without exception on or before Closing, other than
routine punch list items, which items shall remain the responsibility of Seller
following Closing, and which obligation shall expressly survive Closing. The
amount of each security deposit contains, where required by law or otherwise
applicable, interest which has accrued in accordance with law. No tenant of the
Property under any of the Leases has, and shall not at Closing have, prepaid any
rent under any of the Leases for more than one (1) month. Except as otherwise
set forth on Exhibit "C", no security deposits by tenants have heretofore been
returned or applied to charges against the tenants.
(18) To the best of Seller's knowledge, the Property
and the continued operation and use thereof comply with all applicable
requirements of federal, state and local law, and all applicable requirements of
governmental bodies or agencies having jurisdiction thereof, no portion of the
Property lies within a flood hazard area, flood plain or wetland; and there are
no outstanding notices of any violations issued by governmental authority having
jurisdiction over the Property.
(19) To the best of Seller's knowledge, no Hazardous
Substances (defined below) and no Hazardous Wastes (defined below) are present
on the Property including, without limitation, asbestos, flammable substances,
explosives, radioactive materials, hazardous wastes, toxic substances,
pollutants, pollution, contaminant, polychlorinated bypheryls ("PCBs"), urea
formaldehyde foam insulation, radon, corrosive, irritant, biologically
infectious materials, petroleum product, garbage, refuse, sludge, hazardous or
waste materials, and there has been no use of the Property that may, under any
federal, state or local environmental statute, ordinance or regulation, require,
at any time, any closure or cessation of the use or occupancy of the Property
and/or impose, at any time, upon the owner of the Property any clean-up or other
monetary obligation. Seller hereby indemnifies and holds Buyer harmless
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of, from and against any and all liability, loss or damage suffered or incurred
as a result of a claim, demand, cost or judgment in favor of a third party,
including, without limitation, any governmental authority, arising from the
deposit, storage, disposal, burial, dumping, injecting, spilling, leaking, or
other placement or release in or on the Property of Hazardous Substances or
Wastes during Seller's period of ownership. To the best of Seller's knowledge,
neither the Property nor any portion thereof, have been identified on the
federal CERLIS, the National Priorities List (40 C.F.R. Part 300, App. B) or
any state or local list of potential hazardous waste disposal sites or as an
industrial establishment. Seller has conducted a complete and thorough
inspection and test of the underground storage tanks located on the Property, if
any, and Seller has confirmed that, to the best of its knowledge, the results
thereof show compliance with all requirements of the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Sections 6901 et seq. and all other applicable
federal, state and local laws, and Seller has taken all other necessary and
appropriate action to comply fully therewith.
(20) To the best of Seller's knowledge, all adequate
utilities, useable public sanitary and storm sewers, public water facilities,
electric facilities and, if any, gas facilities (collectively, the "Utilities"),
are installed in, and are duly connected to, the Real Property, and can be used
without charge except the normal and usual metered utility charges and water and
sewer charges. All Utilities required for the operation of the Property either
enter the Property through adjoining public streets or, if they pass through
adjoining public land, do so in accordance with valid public easements or
private easements which will inure to the benefit of Buyer at no cost to the
owner of the Property. All of said Utilities are installed and operating and
all installation, connection and "tap-in" charges have been paid for in full.
(21) No work has been performed or is in progress
at, and no materials have been furnished to the Property which, though not
presently the subject of, might give rise to construction, mechanic's,
materialmen's, municipal or other liens against the Property or any portion
thereof, except that for which full and complete releases have been obtained.
If any lien for any such work is filed before or after Closing, Seller shall
promptly discharge the same.
(22) To the best of Seller's knowledge, none of the
artwork being a part of the Personal Property was prepared on a "work for hire"
basis and none of the artwork was commissioned after 1991.
(23) To the best of Seller's knowledge, all
applicable charges, fees and assessments (including condominium fees, to the
extent applicable) and any and all other sums due under declarations,
cross-easements and like agreements to which the Property or any portion thereof
may be subject, have been paid, and no special assessments thereunder are
pending, and all consents and approvals required to be obtained under any such
declarations, cross-easements and like agreements have been obtained pursuant to
the requirements of such documentation.
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(24) To the best of Seller's knowledge, all debts,
liabilities, and obligations of Seller arising out of the construction,
ownership, and operation of the Property including, but not limited to,
construction costs, salaries, taxes, accounts payable and the like, have been
paid as they became due and payable and shall continue to be so paid from the
date hereof until the Closing Date.
It is agreed and understood that Buyer intends to perform its own due
diligence, investigation and analysis in connection with the transaction
contemplated by this Agreement. If and to the extent that Buyer determines
prior to the Due Diligence Termination Date that any or all of the
representations and warranties made in this Agreement by Seller shall be untrue
as a result of such due diligence, investigation or analysis, Buyer shall not be
entitled to rely on such representation(s) and warranty(ies) contained in this
Agreement and the same shall be deemed to have been deleted from this Agreement
as to such matters. Accordingly, in the event that the Buyer has now or
hereafter acquires prior to the Due Diligence Termination Date actual knowledge
that one or more of the representations and warranties of Seller are not true,
no such fact or circumstance known to Buyer shall be made the basis of a claim
by the Buyer of a breach of representation or warranty by Seller.
Notwithstanding anything to the contrary contained in this Agreement,
in the event any representation, agreement or undertaking made by Seller in this
Agreement shall prove to be false and the cost or expense incurred or likely to
be incurred by Buyer as a result thereof shall not exceed $50,000 in the
aggregate, such misrepresentation, agreement or undertaking shall be deemed
"immaterial" and shall not give rise to any right of Buyer to terminate or
refuse to close title under this Agreement or give rise to any right of action
for money damages or specific performance and Buyer hereby waives all its
rights, claims and remedies relating thereto. Buyer's sole remedy in the event
any representation, agreement or undertaking of Seller which is discovered by
Buyer at or prior to the Closing herein shall prove to be false and the cost or
expense incurred or likely to be incurred by Buyer as a result thereof exceeds
$50,000 shall be to terminate this Agreement by written notice given at or prior
to Closing, which notice shall specify in detail the nature of the
misrepresentation and identify in detail the costs incurred or likely to be
incurred by Buyer, and thereupon Buyer shall receive a refund of the Deposit,
and Seller shall reimburse Buyer for Buyer's Reasonable Costs and Due Diligence
Costs. To the extent Buyer has actual knowledge that any representation,
agreement or undertaking is false at or prior to the Closing, and does not or is
not permitted to terminate this Agreement, Buyer hereby waives all of its
rights, claims and remedies relating thereto.
As to any representation or warranty made in this Agreement which is
qualified as being to the best knowledge of Buyer or Seller, it is agreed and
understood that such party shall be under no obligation to conduct any
independent investigation or inquiry regarding the matters covered by such
representation and warranty. Buyer or Seller will be deemed to have knowledge
of a particular matter only if the facts and circumstances thereof are actually
known to such party making such representation or warranty.
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(b) Buyer hereby represents and warrants as follows, all of
which shall be true and correct at, and as of, the date hereof:
(1) Buyer is a real estate investment trust duly
formed and validly existing under the laws of the State of Maryland, and is in
good standing with the State Department of Assessments and Taxation of Maryland.
(2) Subject to Paragraph 9(b)5, below, Buyer has all
necessary power and authority to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby,
without the consent or authorization of, or notice to, any third party, except
those third parties to whom such consents or authorizations have been or will be
obtained, or to whom notices have been or will be given, prior to the Closing.
This Agreement constitutes, and the other documents and instruments to be
delivered by Buyer pursuant hereto when delivered will constitute, the legal,
valid and binding obligations of Buyer, enforceable against Buyer in accordance
with their respective terms.
(3) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate any
provision of any organizational document of Buyer, or (b) constitute a violation
of or be in conflict with or constitute a default under any term or provision of
any material agreement, instrument or lease to which Buyer is a party.
(4) There is no litigation, proceeding or action
pending, or, to the best of Buyer's knowledge, threatened against or relating to
Buyer which might materially and adversely affect the ability of Buyer to
consummate the transactions contemplated hereby or which questions the validity
of this Agreement or any action taken or to be taken by Buyer pursuant hereto.
(5) The execution and delivery of this Agreement shall
have been approved by the trustees of Buyer on or prior to the Due Diligence
Termination Date and no further action shall thereupon be required on the part
of Buyer to consummate the transaction contemplated hereby. The signatories for
Buyer are authorized and empowered to bind Buyer to this Agreement and all
transactions contemplated herein.
(6) Except as otherwise set forth in Paragraph 9(b)5,
above, no consent, approval or authorization of, or declaration, filing or
registration with, any governmental agency is required in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereunder by the Buyer or the Partnership.
(7) Buyer has sufficient funds available to consummate
the transaction contemplated by this Agreement, without the necessity of
third-party financing other than other than Buyer's existing revolving credit
facility administered by Nationsbank, N.A.
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Buyer acknowledges that its obligations hereunder are not conditioned upon any
third party financing or capital infusion by another party.
(8) The information contained in Buyer's Form 10-K for
the year ended December 31, 1996, was prepared in all material respects in
accordance with and complied in all material respects with the requirements of
the rules of the Securities and Exchange Commission, and did not at the time
that it was filed contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
All of the representations and warranties set forth in this Section 9
shall be deemed renewed by Seller and Buyer on the Closing Date and shall, as a
condition to each party's obligation to close hereunder, be recertified by each
party as being true and correct in all material respects as of the Closing Date
as if made at such time (it being understood that specific, numbered
representations and warranties that speak of a specified date shall only
continue to speak as of the date so specified), and all such representations
shall survive for a period of one year from the Closing.
10. Access To The Property.
(a) Buyer and/or its agents and representatives, during normal
business hours and after reasonable advance notice to Seller, may enter upon any
of the Real Property from time to time prior to the Closing Date, accompanied by
an agent of Seller, for purposes of conducting such inspections, investigations
and/or studies as Buyer deems necessary, including, without limitation,
financial reviews, physical inspections, lease reviews and environmental reviews
and testing, which activities may include test borings and soil samplings
("Buyer's Due Diligence Activities"). Buyer's access to the Real Property shall
be subject to the rights of the Tenants of any of the Real Property, who shall
not be unreasonably disturbed during any such inspection by Buyer. Buyer shall
not engage in any activity in or about the Real Property which directly or
indirectly violates the terms of any governmental or quasi-governmental statute,
rule, regulation, order or practice. Buyer shall not make any physical changes
to any of the Real Property, except for test borings and soil samplings which
shall be performed only by licensed engineers reasonably acceptable to Seller
and only after three (3) business days' prior notice to Seller. Buyer may
contact any governmental or quasi-governmental authorities concerning the
Property without the prior written approval of Seller. Seller shall have the
opportunity to observe any and all action taken by Buyer or its representatives,
consultants, agents, etc. pursuant to this paragraph 10. All information set
forth in any document which Seller has granted to Buyer the express right to
review, if any, shall be held in strict confidence until Closing and thereafter
in the event Closing does not occur. If Buyer violates its obligations under
this Paragraph 10(a) or in the event of any physical damage to any of the Real
Property or any Personal Property resulting, directly or indirectly, from the
exercise by Buyer of its rights under this Paragraph 10(a), Buyer hereby agrees
to restore the Real Property and Personal Property to their respective
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conditions prior to incurring such damage. Buyer hereby agrees to indemnify,
defend and hold harmless Seller from and against all physical damage to any of
the Real Property and Personal Property, personal injury and/or any other claims
or liability which may occur as a result of Buyer's (or Buyer's agents,
employees, invitees or licensees) entry or activities upon any of the Real
Property. The provisions of this Paragraph 10(a) shall survive Closing or other
termination of this Agreement.
(b) Buyer, or any of Buyer's consultants performing physical
tests on the Real Property shall maintain public liability insurance policies
(naming Seller as an additional named insured with respect to any liability
occurring on the Real Property), with combined single limit coverage of at least
$1,000,000, insuring against claims arising as a result of the inspections of
Buyer, its agents, employees or such contractors at any of the Real Property. A
certificate of insurance evidencing the foregoing coverage shall be delivered to
Seller prior to Buyer's or any of Buyer's consultants' entry on to any of the
Real Property.
(c) In the event Closing does not occur or this Agreement is
terminated, Buyer shall promptly return to Seller any documents obtained from
Seller or Seller's agents and deliver, to Seller without charge, copies of all
written test results, studies, reports and similar materials obtained by or on
behalf of Buyer relating to any of the Real Property.
11. Due Diligence Period; Additional Provisions.
(a) During the period commencing on the Effective Date and
ending at 5:00 p.m. E.S.T. on the Due Diligence Termination Date, Buyer may,
subject to the provisions set forth in Paragraph 10 above, review all plans and
specifications, condition of title, agreements relating to and the availability
of utilities, environmental conditions, the physical condition of the existing
improvements, compliance by the Property with zoning, licensing and all other
governmental requirements, Leases for any of the Real Property, operating
statements pertaining to the Property and all other aspects and conditions of
the Property which Buyer may decide to review (collectively, "Buyer's Due
Diligence Activities"), all as Buyer shall deem appropriate). In connection
with Buyer's Due Diligence Activities, Seller has delivered or will deliver to
Buyer various documents, reports and materials (collectively, the "Seller Due
Diligence Materials"). BUYER UNDERSTANDS AND HEREBY ACKNOWLEDGES AND AGREES
THAT THE SELLER DUE DILIGENCE MATERIALS ARE BEING DELIVERED TO BUYER WITHOUT ANY
REPRESENTATION OR WARRANTY WHATSOEVER BY SELLER OR BY THE PREPARER OF SUCH
SELLER DUE DILIGENCE MATERIALS, WITH THE SOLE EXCEPTION OF ANY REPRESENTATION OR
WARRANTY AS TO THE CORRECTNESS, ACCURACY OR COMPLETENESS THEREOF WHICH IS
EXPRESSLY SET FORTH IN THIS AGREEMENT.
(b) If, as a result of Buyer's Due Diligence Activities or
otherwise, Buyer shall conclude, for any reason or for no reason, that it does
not wish to proceed with the transaction contemplated by this Agreement, it may
terminate this Agreement by written notice
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delivered to and received by Seller on or before 5:00 P.M. E.S.T. on the Due
Diligence Termination Date (as to which date time shall be of the essence), with
a simultaneous copy thereof to the Escrow Agent. In the event of such timely
termination of this Agreement by the Buyer, the Escrow Agent shall make the
delivery of funds contemplated under Paragraph 1 of the Escrow Terms, and this
Agreement shall thereupon be null and void and of no further force or effect,
except as to those matters which expressly survive such termination.
(c) Seller shall use its commercially reasonable efforts to
obtain a Non-Applicability Letter for the Land promptly after the Effective
Date, and shall pursue the same diligently and in good faith.
(d) Buyer agrees to prepare and forward to Seller, at Buyer's
sole cost and expense, certificates (the "Estoppel Certificates") for execution
by the Tenants which shall at Buyer's election, either (i) be in such form or
contain such information as the Tenant from whom request is made is obligated
under its Lease to execute and deliver for execution by the Tenants (the
"Required Form"), or (ii) in the form annexed hereto as Exhibit "O". Seller
agrees to deliver the Estoppel Certificates to the Tenants promptly after
Buyer's written election as to the form to be used (which election shall be made
not later than five (5) days after the date hereof), and to use all reasonable
and diligent efforts to obtain executed copies of same from such Tenants prior
to the Closing. It shall be a condition to Buyer's obligations hereunder that,
at or prior to Closing, Estoppel Certificates shall have been obtained from at
least 75% of the Tenants at each Property, including those identified on Exhibit
"P" annexed hereto and made a part hereof (the "Identified Tenants"), BUT ONLY
IF THE INITIAL REQUEST MADE OF SUCH TENANT WAS FOR AN ESTOPPEL CERTIFICATE IN
THE REQUIRED FORM, provided, however, if an estoppel in the Required Form is not
obtained from an Identified Tenant, Seller may, in lieu thereof, deliver its
certificate containing the information set forth on the Required Form, which
certificate shall serve as Seller's representation as to the facts stated
therein, which representation shall survive for a period of six (6) months
following the Closing. In no event shall Buyer's obligations under this
Agreement be conditioned, in whole or in part, upon the delivery of Estoppel
Certificates from any Tenant in other than the Required Form.
12. Condemnation. Seller covenants and warrants that Seller has not
received any written notice of any condemnation proceeding or other proceeding
in the nature of eminent domain in connection with the Real Property, and has no
actual knowledge of any threatened condemnation. As used herein, a "material
taking" shall mean a taking of either an entire Real Property, more than twenty
percent (20%) of a Building or more than 10% of the parking area of a Real
Property. If, prior to the Closing, any such proceeding affecting a material
portion of any of the Real Property is commenced, Seller agrees promptly to
notify Buyer thereof. In the event of a material taking of one or more Real
Property or commencement of proceedings in connection with such a taking, Buyer
may, at its sole option exercised by delivery of written notice thereof within
ten (10) days after receipt of such written notice thereof, (x) proceed to
Closing as provided in this Paragraph 12 without an abatement of the Purchase
Price and at Closing Seller shall assign to Buyer, without recourse, all
condemnation proceeds paid or
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payable with respect thereto; or (y) terminate this Agreement with respect to
the Property as to which a material taking has occurred, whereupon this
Agreement shall terminate with respect to such Real Property and this Agreement
shall continue in full force and effect with respect to all of the remaining
Real Property, and at Closing, Buyer shall pay to Seller the aggregate of the
Allocated Prices for the remaining Real Property. Provided Buyer shall have
waived its right to terminate this Agreement with respect to the Real Property
so taken, as provided above, Seller shall not, from and after the Due Diligence
Termination Date, settle or adjust any claims relating to a condemnation without
Buyer's prior approval, which shall not be unreasonably withheld or delayed.
13. Damage By Fire Or Other Casualty.
(a) Seller shall promptly notify Buyer of damage to the
Improvements occurring by reason of casualty during the period between the
Effective Date and the Closing Date. Seller shall timely notify any insurance
companies with respect to any damage and shall promptly submit claims for such
damage. Provided Buyer shall have waived its right to terminate this Agreement
with respect to the Real Property so damaged, as provided below, Seller shall
not, from and after the Due Diligence Termination Date, settle or adjust any
claims relating to a casualty without Buyer's prior approval, which shall not be
unreasonably withheld or delayed.
(b) If (i) any portion of the Improvements is damaged by fire or
casualty after the Execution Date and the Improvements so damaged are not
repaired or restored on or before Closing to substantially the condition
existing prior to the damage, and (ii) at the time of Closing, the estimated
cost of repairs by reason of such fire or casualty to the Improvements, as
determined by an independent adjuster is, with respect to any of the Real
Property so damaged, an amount equal to or less than ten percent (10%) of the
Purchase Price for such Real Property, there shall be no abatement or adjustment
in the Purchase Price and, provided the loss or damage is a covered loss under
Seller's insurance policy, Buyer shall be required to purchase all of the Real
Property in accordance with the terms of this Agreement and, at Closing, Seller
shall assign to Buyer, without recourse, all insurance claims and proceeds with
respect thereto (less sums theretofore expended, if any, by Seller for emergency
repairs or barricades) and Seller shall credit Buyer at Closing with the amount
of any applicable deductible. Seller shall have no liability or obligation with
respect to the condition of any of the Real Property as a result of any such
fire or casualty. If the repair to, or the restoration of, the Improvements so
damaged has not been completed as aforesaid and, at the time of Closing, the
estimated cost of such repair or restoration, as determined by such independent
adjuster, for any of the Real Property is an amount which is greater than ten
percent (10%) of the Purchase Price for the applicable Real Property, Buyer may,
at its sole option, (x) proceed to Closing as provided in this Paragraph 13(b)
without an abatement of the Purchase Price and at Closing Seller shall assign to
Buyer, without recourse, all insurance claims and proceeds with respect thereto
(less sums theretofore expended, if any, by Seller for emergency repairs or
barricades) and Seller shall credit Buyer at Closing with the amount of any
applicable deductible; or (y) terminate this
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Agreement with respect to the Property which have suffered damage to the
Improvements by fire or other casualty in an amount which exceeds ten percent
(10%) of the Purchase Price for such Real Property(s) whereupon this Agreement
shall terminate with respect to such damaged Real Property(s) and this Agreement
shall continue in full force and effect with respect to all of the remaining
Real Property, and at Closing, Buyer shall pay to Seller the aggregate of the
Purchase Prices for the remaining Real Property. Buyer shall assign all of its
right, title and interest in and to any and all insurance policies and insurance
proceeds relating to such of the Real Property for which this Agreement has been
terminated.
14. Default.
(a) If Buyer shall default in its obligations to pay the
Purchase Price and complete Closing in accordance with the terms of this
Agreement, then, as Seller's sole and exclusive remedy therefor, Seller shall be
entitled to retain the Deposit as liquidated and agreed upon damages for the
losses and injuries which Seller shall have sustained and suffered as a result
of Buyer's default, and thereupon this Agreement and Buyer's obligations
hereunder shall be terminated except as expressly provided in this Agreement.
It is agreed that the provisions of this Paragraph 14(a) for liquidated and
agreed upon damages are a bona fide provision for such and are not a penalty,
the parties understanding that by reason of the withdrawal of the Real Property
from sale to the general public at a time when other parties would be interested
in purchasing such Real Property, that Seller shall have sustained damages which
will be substantial, but will not be capable of determination with mathematical
precision. Therefore, this provision for liquidated and agreed upon damages has
been incorporated as part of this Agreement as a provision beneficial to both
parties.
(b) If Seller shall default in its obligation to deliver any of
the Deeds or other items described in Paragraph 5 hereof, upon Buyer's (i)
tender of the full Purchase Price and (ii) compliance with all of the material
terms and conditions of this Agreement, Buyer shall have the sole option of
terminating this Agreement and receiving the return of the Deposit, together
with payment by Seller of (A) Buyer's Reasonable Costs, and (B) Buyer's actual,
documented out-of-pocket costs and expenses incurred in connection with its Due
Diligence Activity, not to exceed Seventy-Five Thousand Dollars ($75,000) ("Due
Diligence Costs") for the entire Paint Works Property and the Other Properties
or (Y) to seek specific performance of Seller's obligation to convey the Real
Property in accordance with this Agreement. If Buyer elects to terminate this
Agreement, upon payment of the sums described above, Seller shall be released
and relieved of any further liability and this Agreement shall thereupon be null
and void. Except as expressly set forth above, Buyer hereby waives any right
which Buyer may have to any lis pendens or other lien or encumbrance against any
of the Real Property, equitable relief, consequential or punitive damages, loss
of profits, costs related to in-house or other overhead allocations, and
damages. The remedies set forth herein shall be Buyer's sole remedies pursuant
to this Agreement, or otherwise at law or in equity shall become null and void
if Closing occurs (except as to obligations hereunder which by their terms
expressly survive Closing), and shall not
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apply to a defect in title, the remedies for which are set forth in Paragraph
5(b) hereof, or to any inability on the part of Seller to perform its
obligations under this Agreement.
15. Operations Prior To Closing.
(a) Seller agrees to operate the Property between the Execution
Date and the Closing Date in the same general manner as Seller has operated the
Property during the immediately preceding six (6) month period, paying all costs
and expenses as they come due, and in any event prior to Closing, and
maintaining all insurance coverage currently in force.
(b) Seller shall comply with all of the obligations of landlord
under the Leases and all other agreements and contractual arrangements affecting
the Real Property by which Seller is bound or to which the Real Property, or any
of them, are subject, and which will be binding upon Buyer or a lien upon such
Real Property, after the Closing.
(c) Seller shall notify Buyer promptly of Seller's receipt of
any notice from any party alleging that Seller is in default of its obligations
under any of the Leases or any Permit or agreement affecting the Real Property,
or any portion or portions thereof.
(d) No contract for or on behalf of or affecting the Real
Property shall be negotiated or entered into which cannot be terminated by
Seller upon the Closing without the payment of a specific charge, cost, penalty
or premium for such termination.
(e) Except with the prior written consent of Buyer, which Buyer
agrees it shall not unreasonably withhold, condition or delay, Seller shall not
enter into any new leases for any portion of the Real Property. Any new lease
shall be on Buyer's customary form (which may vary to reflect customary
negotiated revisions thereto), or such other form which is reasonably acceptable
to Buyer. Further, except with the prior written consent of Buyer, which Buyer
agrees it shall not unreasonably withhold, condition or delay, or as set forth
above, Seller shall not amend, extend (except where required under the terms of
the Lease in question), terminate (except by reason of a tenant's default),
accept surrender of, or permit any assignments or subleases of, any of the
Leases (except as may be required under such Lease), nor accept any rental more
than one (1) month in advance (exclusive of any security deposit).
(f) Seller shall not make or permit to be made any capital
improvements or additions to the Real Property, or any portion thereof, without
the prior written consent of Buyer, except those made by Seller pursuant to the
express requirements of this Agreement, those made by tenants pursuant to the
right to do so under their Leases, or by Seller if required by applicable law or
ordinance, or as required under any Lease.
(g) Seller shall timely ▇▇▇▇ all tenants for all rent billable
under Leases, and use commercially reasonable efforts to collect any rent in
arrears.
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(h) Seller shall notify Buyer of any tax assessment disputes
(pending or threatened) prior to Closing, and from and after the Due Diligence
Expiration Date, Seller not agree to any changes in the real estate tax
assessment, nor settle, withdraw or otherwise compromise any pending claims with
respect to tax assessments relating to the current or any subsequent year,
without Buyer's prior written consent, which shall not be unreasonably withheld,
delayed or conditioned. If any proceedings shall result in any reduction of
assessment and/or tax for the tax year in which the Closing occurs, it is agreed
that the amount of tax savings or refund for such tax year, less the reasonable
fees and disbursements in connection with such proceedings, shall be apportioned
between the parties as of the date real estate taxes are apportioned under this
Agreement. All refunds relating to any tax year prior to the Closing shall be
the sole property of Seller, and all refunds relating to any year subsequent to
the year in which Closing occurs shall be the sole property of Buyer. Each
party agrees to promptly remit to the other any refund received by it which is
the property of the other.
(i) Seller shall notify Buyer promptly of the occurrence of any
of the following:
(i) Receipt of notice from any governmental or
quasi-governmental agency or authority or insurance underwriter relating to the
condition, use or occupancy of the Real Property, or any portion thereof;
(ii) Receipt of any notice of default from any tenant or
from the holder of any lien or security interest in or encumbering the Real
Property, or any portion thereof;
(iii) Notice of any actual or threatened litigation
against Seller or affecting or relating to the Real Property, or any portion
thereof which may materially and adversely affect the Real Property or Seller's
ability to consummate the transactions contemplated by this Agreement; and
(iv) Vacancy of any demised Property by a tenant, other than
in accordance with a scheduled lease termination.
16. Property Conveyed "AS-IS, WHERE IS". IT IS UNDERSTOOD AND AGREED
THAT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, SELLER IS NOT
MAKING AND SPECIFICALLY DISCLAIMS ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND
OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE ECONOMICAL, FUNCTIONAL,
ENVIRONMENTAL OR PHYSICAL CONDITION OF ALL OF THE Property, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO MATTERS OF TITLE, ZONING, TAX
CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITIONS, AVAILABILITY OF ACCESS,
INGRESS OR EGRESS, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL
APPROVALS, GOVERNMENTAL REGULATIONS OR ANY OTHER MATTER OR THING RELATING TO OR
AFFECTING THE ECONOMICAL,
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FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION OF THE Property INCLUDING,
WITHOUT LIMITATION: (i) THE VALUE, CONDITION, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF ANY OF
THE PROPERTY, (ii) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO ANY OF THE Property AND (iii) THE MANNER, QUALITY, STATE OF
REPAIR OR LACK OF REPAIR OF ANY OF THE PROPERTY. BUYER AGREES THAT WITH RESPECT
TO THE PROPERTY, BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY AGENT OF
SELLER NOT EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER REPRESENTS THAT IT IS A
KNOWLEDGEABLE BUYER OF REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN
EXPERTISE AND THAT OF BUYER'S CONSULTANTS, AND THE REPRESENTATIONS AND
WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT, SUBJECT, HOWEVER, TO THE
LIMITATIONS CONTAINED HEREIN UPON SUCH REPRESENTATIONS AND WARRANTIES, AND THAT
SELLER HAS OR SHALL HAVE AFFORDED BUYER WITH A FULL AND COMPLETE OPPORTUNITY TO
MAKE ITS OWN INDEPENDENT INVESTIGATION OF THE PROPERTY AND ALL MATTERS
PERTAINING THERETO INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF AND, UPON CLOSING, SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT, UPON CLOSING, SELLER SHALL
SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS,"
WITH ALL FAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS
(EXCEPT AS HEREIN SPECIFICALLY PROVIDED), COLLATERAL TO OR AFFECTING ANY OF THE
PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. BUYER EXPRESSLY
AGREES THAT THE TERMS AND CONDITIONS OF THIS PARAGRAPH 16 SHALL EXPRESSLY
SURVIVE THE CLOSING AND NOT MERGE THEREIN AND SELLER IS NOT LIABLE OR BOUND IN
ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION
PERTAINING TO ANY OF THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR
REFERRED TO IN THIS AGREEMENT.
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17. Conditions Precedent to Closing.
The obligations of Buyer hereunder are subject to the fulfillment of
the following conditions prior to or on the Closing Date (any one of which may
be waived in whole or in part by Buyer at or prior to the Closing) and in the
event any of the conditions are not complied with, Buyer may terminate this
Agreement by notifying the Seller and Escrow Agent and thereupon shall be
returned the Deposit and thereafter this Agreement shall be null and void:
(a) Correctness of Warranties and Representations. The
warranties and representations made by Seller in this Agreement shall be true
and correct on the Closing Date as though such representations and warranties
were made on the Closing Date (except for changes in the Leases permitted under
the terms of this Agreement).
(b) Compliance with Terms and Conditions. Seller shall have
performed and complied with all of the terms and conditions required by this
Agreement to be performed and complied with by it prior to or on the Closing
Date.
(c) Buyer's Satisfaction with Inspection. Buyer shall have
notified Seller of Buyer's satisfaction with the inspection performed under
Section 11 of this Agreement, or shall fail to notify Seller on or before the
Due Diligence Expiration Date, of Buyer's dissatisfaction with the results of
such review.
18. Brokers.
(a) Seller and Buyer each represent to the other that neither
Seller nor Buyer has dealt with any real estate broker, dealer or salesman in
connection with the subject transaction.
(b) Seller and Buyer shall and hereby each agree to indemnify,
defend, and hold harmless the other from and against any loss, damage, or claim
resulting from a breach of the representations of Seller and Buyer set forth in
Paragraph 18(a) hereof.
(c) The provisions of this Paragraph 18 shall survive Closing
hereunder, or any other termination of this Agreement.
19. Notices. All notices, requests and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
delivered (i) in person, or (ii) by certified mail, return receipt requested, or
(iii) by recognized overnight delivery service providing positive tracking of
items (for example, Federal Express), or (iv) by confirmed telecopier, in each
case addressed as follows (or at such other address of which Seller or Buyer
shall have given notice as herein provided):
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If to Buyer, addressed to:
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
with a copy in each instance to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Seller, addressed to:
Paint Works Corporate Associates-H
▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ Scarborough
with a copy in each instance to:
▇▇▇▇▇ ▇▇▇▇▇, Esquire
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
If to Escrow Agent, addressed to:
M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
Commonwealth Land Title Insurance Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such-other address or addresses and to the attention of such other person
or persons as any of the parties may notify the other in accordance with the
provisions of this Agreement. All such notices, requests and other
communications shall be deemed to have been sufficiently given for
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all purposes hereof only if given pursuant to the foregoing requirements as to
both manner and address, and only upon receipt (or refusal to accept delivery)
by the party to whom such notice is sent. Notices by the parties may be given
on their behalf by their respective attorneys.
20. Successors And Assigns. Except to a subsidiary or related party,
Buyer may not assign this Agreement or any rights herein or any portion hereof
without the prior written consent of Seller, which may be withheld for any
reason or for no reason, except that no such consent shall be required to an
assignment of this Agreement by Buyer to the Partnership. This Agreement shall
apply to, inure to the benefit of and be binding upon and enforceable against
the parties hereto and their respective permitted successors and assigns, to the
same extent as if specified at length throughout this Agreement.
21. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one and the same Agreement.
22. Time Of The Essence. Time is of the essence of each and every
provision in this Agreement. If any time period or date ends on a day or time
which is a weekend, legal holiday or bank holiday, such period shall be extended
to the same time on the next business day.
23. Judicial Interpretation. Should any provision of this Agreement
require judicial interpretation, it is agreed that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be construed more strictly against the party who itself or
through its agent prepared the same, it being agreed that the agents of all
parties have participated in the preparation of this Agreement.
24. Captions And Recitals. The captions contained herein are not a
part of this Agreement and are included solely for the convenience of the
parties.
25. Entire Agreement. This Agreement and the Exhibits and Schedules
attached hereto contains the entire agreement between the parties relating to
the acquisition of the Property, all prior negotiations between the parties are
merged by this Agreement and there are no promises, agreements, conditions,
undertakings, warranties or representations, oral or written, express or
implied, between them other than as herein set forth. No change or modification
of this Agreement shall be valid unless the same is in writing and signed by the
parties hereto. No waiver of any of the provisions of this Agreement, or any
other agreement referred to herein, shall be valid unless in writing and signed
by the party against whom it is sought to be enforced.
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26. Governing Law; Venue.
(a) This Agreement and the rights and duties of the parties
hereto and the validity, construction, enforcement and interpretation of this
Agreement shall be governed by the laws of the State of New Jersey.
(b) With regard to any litigation arising out of or involving
this Agreement, each party hereto: (i) irrevocably submits to the jurisdiction
of the state and federal courts of the State of New Jersey and agrees and
consents to service of process being made upon it in any legal proceeding
arising out of or in connection herewith by service of process provided by the
law of the State of New Jersey; (ii) irrevocably waives, to the fullest extent
permitted by law, any objection which it now or hereafter may have to the laying
of venue of any litigation arising out of or in connection with this Agreement
brought in the State Courts of New Jersey or the United States District Court
for the District of New Jersey; (iii) irrevocably waives any claims that any
litigation brought in any such court has been brought in an inconvenient forum;
and (iv) irrevocably agrees that any legal proceeding against any party hereto
arising out of or in connection with this Agreement shall be brought in either
the State Courts of New Jersey or the United States District Court for the
District of New Jersey.
27. Confidentiality. Each of the parties to this Agreement covenants
that it shall not communicate the terms or any aspect of this transaction prior
to the Closing with any person or entity other than the other parties to this
Agreement, except for Seller's agents, consultants, counsel and representatives
of Buyer for Buyer's Due Diligence Activities and financing purposes, unless
Buyer is advised by its counsel that applicable securities laws and regulations
require. In addition, Buyer covenants that if it undertakes any investigation
of the Property, it shall conduct such investigation of the Property as
described herein and with the degree of confidentiality as Buyer would apply
with respect to its own proprietary information. Notwithstanding the foregoing,
at any time after expiration of the Due Diligence Period, Buyer may issue one or
more press releases (which shall not disclose financial terms), if necessary or
appropriate to comply with applicable securities laws and regulations.
28. Limitation Of Liability. No recourse shall be had for any
obligation of Brandywine Realty Trust or Brandywine Operating Partnership, L.P.
under this Agreement or under any document executed in connection herewith or
pursuant hereto, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
Brandywine Realty Trust or Brandywine Operating Partnership, L.P., whether by
virtue of any statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released by
the Seller and all parties claiming by, through or under Seller.
Except for a breach of the representations or warranties as stated
herein which shall be full recourse to the general partners of Seller, no
recourse shall be had for any obligation of Seller under this Agreement or under
any document executed in connection herewith or
-30-
pursuant hereto, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future partner or employee of Seller whether by
virtue of any statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released by
the Buyer and all parties claiming by, through or under Buyer.
29. SEC Reporting (8-K) Requirements. For the period of time
commencing on the date hereof and continuing through the first anniversary of
the Closing Date, Seller shall, from time to time, upon reasonable advance
written notice from Buyer, provide Buyer and its representatives, with access to
all financial and other information then in Seller's possession pertaining to
the period of Seller's ownership and operation of the Real Property, which
information is relevant and reasonably necessary, in the opinion of Buyer's
outside, third party accountants (the "Accountants"), to enable Buyer and its
Accountants to prepare financial statements in compliance with any or all of (a)
Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange Commission
(the "Commission"), as applicable; (b) any other rule issued by the Commission
and applicable to Buyer; and (c) any registration statement, report or
disclosure statement filed with the Commission by, or on behalf of Buyer.
Seller shall deliver to Buyer's accountants a representation letter (the
"Letter"), in the form annexed hereto as Exhibit "Q", provided that Buyer (and
any assignee or designee acquiring title to the Real Property) shall indemnify
and hold Seller harmless from and against any claim, damage, loss or liability
including, without limitation, legal fees incurred by Seller in investigating,
defending against or settling any such matter and the amount of any such
settlement to which Seller is at any time subjected, bonafide or not, by any
person who is not a party to this Agreement as a result of its delivery of the
information described in this Paragraph, or delivery of the Letter. The Buyer
acknowledges that the Seller is not making any representation or warranty
regarding such information as is delivered in accordance with the terms of this
Paragraph except to the extent set forth in the Letter or otherwise expressly
set forth in this Agreement.
30. Partial Invalidity. If any term, covenant or condition of this
Agreement, or the application thereof, to any person or circumstance shall be
invalid or unenforceable at any time or to any extent, then the remainder of
this Agreement, or the application of such term, covenant or condition to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby. Each term, covenant and condition
of this Agreement shall be valid and enforced to the fullest extent permitted by
law.
31. No Recordation. Buyer shall not be entitled to record this
Agreement or a memorandum or other notice of this Agreement in any public
office. This Paragraph shall be deemed to be a specific directive to the
officials of such public office NOT to accept this Agreement or a memorandum or
other notice of this Agreement for recordation in any form whatsoever. Any
violation of the provisions of this Paragraph 31 shall constitute an immediate
default by Buyer under this Agreement.
-31-
32. Tender. Formal tender of an executed deed and purchase money is
hereby waived by Buyer.
33. Further Assurances. After the Closing, Seller shall execute,
acknowledge and deliver, for no further consideration, all assignments,
transfers, deeds and other documents as Buyer may reasonably request to vest in
Buyer and perfect Buyer's right, title and interest in and to the Property.
34. Jury Trial Waiver. BUYER AND SELLER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREE THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE
A JUDGE SITTING WITHOUT A JURY.
35. No Offer. THE DELIVERY OF THIS AGREEMENT DOES NOT CONSTITUTE AN
OFFER AND THIS AGREEMENT SHALL NOT BE BINDING AND SHALL HAVE NO FORCE AND EFFECT
UNLESS AND UNTIL A FULLY EXECUTED COUNTERPART HEREOF HAS BEEN DELIVERED TO EACH
OF THE PARTIES. IT IS EXPRESSLY UNDERSTOOD THAT SELLER HAS NO OBLIGATION TO
EXECUTE THIS AGREEMENT.
36. Indemnification.
Without limitation of any other Seller indemnity obligations set forth
herein, from and after the Closing Date, Seller shall indemnify, defend and save
and hold harmless Buyer, and its respective trustees, directors, officers and
employees, of, from and against any and all loss, cost, expense, damage, claim,
and liability, including reasonable attorney's fees and court costs, including,
without limitation, attorney's fees and costs associated with the enforcement of
Seller's indemnification obligations for all claims brought within one year of
such Closing (hereinafter collectively, "Losses") which Buyer may suffer or
incur, resulting from, relating to, or arising in whole or in part, from or out
of (i) any misrepresentation or breach of a representation or warranty by Seller
contained in this Agreement; (ii) any failure to fulfill any covenant or
agreement of Seller contained in this Agreement; (iii) all litigation as set
forth in this Agreement and on Exhibits hereto; (iv) any and all actions, suits,
investigations, proceedings, demands, assessments, audits, judgments, and/or
claims arising out of or relating to any of the foregoing.
Promptly after receipt by Buyer of written notice of the commencement
of any suit, audit, demand, judgment, action, investigation or proceeding (a
"Third Party Action") or promptly after Buyer incurs a Loss or has knowledge of
the existence of a Loss, Buyer will, if a claim with respect thereto is to be
made against Seller due to Seller's obligation to provide indemnification
hereunder, give Seller written notice of such Loss or the commencement of any
Third Party Action; provided, however, that the failure to provide such notice
within a reasonable
-32-
period of time shall not relieve Seller of any of its obligations hereunder.
Promptly after receiving such notice, Seller will, upon notice to Buyer, have
the right to assume and control the defense and settlement of any such Third
Party Action at its own cost and expense; provided, however, that it shall be a
condition precedent to the exercise of such right by Seller that Seller shall
agree in writing that the Loss, or Third Party Action, as the case may be, is
properly within the scope of the indemnification obligation and that as between
the parties, Seller shall be responsible to satisfy and discharge such Third
Party Action. Seller shall not enter into any resolution or other compromise of
a Third Party Action without obtaining the complete release of Buyer for any
liability to all claimants under or pursuant to such Third Party Action. Buyer
shall have the right to participate in any such defense, contest or other
protective action at its own cost and expense.
Notwithstanding the foregoing, Buyer shall have the right to assume
and control the defense and settlement of a Third Party Action (a) if such
action includes claims for equitable relief which, if determined adversely to
Buyer, could reasonably be expected to interfere with its intended business
operations or damage its business reputation or (b) if Seller fails to do so in
a timely manner. In any circumstances in which Buyer undertakes to control the
Third Party Action as provided in this paragraph, it shall (i) not enter into
any resolution or other compromise involving monetary damages without obtaining
the prior written consent of Seller provided that such written consent may not
be withheld if it would interfere with Buyer's business operation and (ii) keep
Seller informed on an ongoing basis of the status of such Third Party Action and
shall deliver to Seller, copies of all documents related to the Third Party
Action reasonably requested by Seller. Buyer shall act to assure that all
attorneys' fees and expenses incurred in connection therewith are reasonable.
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IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
have duly executed this Agreement as of the day and year first above stated.
SELLER:
PAINT WORKS CORPORATE
ASSOCIATES-W, a New Jersey general
partnership
By: /s/▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇. ▇▇▇▇▇▇ Scarborough, its
authorized general partner
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, its
authorized managing general
partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, its
authorized general partner
BUYER:
BRANDYWINE REALTY TRUST, a
Maryland Real Estate Investment Trust
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
The Undersigned Hereby Acknowledges
Receipt Of The Deposit And Agrees To
Hold And Apply The Same In Accordance
With The Provisions Of The Escrow Terms
Commonwealth Land Title Insurance Company:
By: /s/M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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55 UNITED STATES AVENUE
AGREEMENT OF SALE
Between
PAINT WORKS CORPORATE ASSOCIATES-W
and
BRANDYWINE REALTY TRUST
Dated as of December 5, 1997
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LIST OF EXHIBITS
Exhibit A Description of Land
Exhibit B List of Contracts
Exhibit C Certified Rent Roll
Exhibit D Permitted Exceptions
Exhibit E Excluded Personal Property
Exhibit F The Other Properties
Exhibit G Form of Deed
Exhibit H ▇▇▇▇ of Sale
Exhibit I Form of Assignment(s)
Exhibit J Form of Non-Foreign Person Certification
Exhibit K Pending Litigation
Exhibit L Contracts Not Terminable with 30 days Notice
Exhibit M Environmental Notices
Exhibit N Outstanding Brokerage Commissions and TI
Exhibit O Form of Estoppel Certificate
Exhibit P Identified Tenants
Exhibit Q Representation Letter
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